Granich v Townrow
[2008] WADC 73
•28 MAY 2008
GRANICH & ANOR -v- TOWNROW & ANOR [2008] WADC 73
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WADC 73 | |
| Case No: | CIV:572/2005 | 20-23 AUGUST 2007 & 27-28 FEBRUARY 2008 | |
| Coram: | YEATS DCJ | 28/05/08 | |
| PERTH | |||
| 36 | Judgment Part: | 1 of 1 | |
| Result: | $69,235 in damages awarded to plaintiffs | ||
| PDF Version |
| Parties: | MARK MATTHEW GRANICH HELEN ELIZABETH GRANICH MICHAEL RICHARD TOWNROW JULIA PATRICIA TOWNROW |
Catchwords: | Claim in contract Suggested implied term void Alleged failure to mitigate Causation Contributory negligence not available in contract claim Assessment of damages |
Legislation: | Civil Liability Act 2002 Part 1A Fair Trading Act 1987 s 5, s 6, s 34, s 40 |
Case References: | Astley v Austrust Ltd (1999) 197 CLR 1 Bennett v Minister of Community Welfare (1992) 176 CLR 408 Breen v Williams (1995-1996) 186 CLR 71 Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1981-1982) 149 CLR 337 Fazlic v Milingimbi Community Inc (1982) 56 ALJR 211 Fitzgerald v Penn (1954) 91 CLR 268 Hawkins v Clayton (1998) 164 CLR 539 Hospital Products Ltd v US Surgical Corporation (1984) 156 CLR 41 Jones v Dunkel (1959) 101 CLR 298 NRMA Ltd v Morgan [1999] NSWSC 407 Payne v Parker [1976] 1 NSWLR 191 Plenty v Argus [1975] WAR 155 TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd (1963) 180 CLR 130 Williamson v Murdoch (1912) 14 WALR 54 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- HELEN ELIZABETH GRANICH
Plaintiffs
AND
MICHAEL RICHARD TOWNROW
JULIA PATRICIA TOWNROW
Defendants
Catchwords:
Claim in contract - Suggested implied term void - Alleged failure to mitigate - Causation - Contributory negligence not available in contract claim - Assessment of damages
Legislation:
Civil Liability Act 2002 Part 1A
Fair Trading Act 1987 s 5, s 6, s 34, s 40
(Page 2)
Result:
$69,235 in damages awarded to plaintiffs
Representation:
Counsel:
Plaintiffs : Mr P Mendelow
Defendants : Dr P R McMillan
Solicitors:
Plaintiffs : Granich Partners
Defendants : Gibson Lyons
Case(s) referred to in judgment(s):
Astley v Austrust Ltd (1999) 197 CLR 1
Bennett v Minister of Community Welfare (1992) 176 CLR 408
Breen v Williams (1995-1996) 186 CLR 71
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1981-1982) 149 CLR 337
Fazlic v Milingimbi Community Inc (1982) 56 ALJR 211
Fitzgerald v Penn (1954) 91 CLR 268
Hawkins v Clayton (1998) 164 CLR 539
Hospital Products Ltd v US Surgical Corporation (1984) 156 CLR 41
Jones v Dunkel (1959) 101 CLR 298
NRMA Ltd v Morgan [1999] NSWSC 407
Payne v Parker [1976] 1 NSWLR 191
Plenty v Argus [1975] WAR 155
TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd (1963) 180 CLR 130
Williamson v Murdoch (1912) 14 WALR 54
(Page 3)
1 YEATS DCJ: The plaintiffs (Mark Granich and his wife Helen, "the Granichs") are farmers at Moorine Rock where they raise sheep and grow wheat and occasionally canola. The defendants (Michael Townrow and his wife Julie, "the Townrows") are spraying contractors trading as CWC Professional Ag Contractors engaged in crop spraying operations for farmers out of Merredin.
2 The Granichs sue the Townrows in contract and/or alternatively in negligence for the loss of the Granichs' canola crop in 2004 and for the Townrows failure to control weed infestation in the Granichs' wheat crop in 2004. The claims in contract rely on implied terms that the Townrows would spray with due care and skill and that the spraying would be reasonably fit for its purpose as well as the warranty in s 40(1) and (2) of the Fair Trading Act 1987. In negligence the Granichs allege the Townrows breached their duty of care owed to the Granichs by failing to take reasonable care to perform the spraying with due care and skill.
3 The Granichs claim for the loss of the canola crop is based on the alleged failure of the Townrows to decontaminate the boomspray. Canola is highly susceptible to sulfonylurea ("SU") contamination if the boomspray has been previously used to spray Group B herbicides. If that happens, then the boomspray must be decontaminated with chlorine bleach; otherwise subsequent use of the boomspray on canola will damage that crop.
4 The Townrows admit the boomspray had been previously used to spray Group B herbicides and had not been decontaminated with chlorine bleach before it was used to spray the Granichs' canola. But the Townrows say that as part of the agreement to spray the canola crop Mark Granich accepted responsibility for ensuring the boomspray was decontaminated. The Townrows also rely on an agricultural expert, Mr David Kearny, who said the very even, full paddock damage to the Granichs' canola crop is inconsistent with damage by SU boomspray contamination which he expected to be uneven, not extending over entire paddocks. The Townrows admit they owed the Granichs a duty to take reasonable care and say they did not breach that duty of care. The Townrows further allege that if the Granichs suffered the loss of the canola crop the loss was caused by or contributed to by the Granichs' negligence in failing to ensure the boomspray was decontaminated.
5 The Granichs' claim for the weed infestation in their wheat crop relies on photographic evidence of the canola and the wheat crop. Where the canola crop had been sprayed it was yellowed and stunted but large
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- areas in the corners of the paddocks were clearly missed in the spraying and the canola in the missed areas was thriving. In the wheat crop the missed areas were generally in the corners or in the middle of the paddocks. Those missed areas led to a radish infestation which the Granichs allege requires spraying for five years to eliminate.
6 The Townrows admit they were using a new GPS positioning device that should have ensured the corners were sprayed. The Townrows contend the Granichs never notified them of the missed areas in the wheat crop until 6 December 2004 when it was too late to respray. If notification had been timely the Townrows say they would have resprayed and easily prevented the radish infestation.
7 The Granichs claim $50,508 for the loss of their canola crop and $33,040 for five years of further spraying to control the radish infestation. The Townrows counterclaim for $11,722, the spraying costs for the work done for the Granichs on the canola crop and the wheat crop.
The issues
1. Who was responsible for decontamination of the boomspray prior to the spraying of the canola?
2. Was the damage to the canola crop caused by the failure to properly decontaminate the boomspray after it was used to spray Group B herbicides?
3. Was the radish infestation of the wheat crop caused by the Townrows' failure to properly spray that crop?
4. Was it an implied term of the contract to spray the wheat that the Granichs would notify the Townrows as soon as practicable of any missed areas?
5. Did the Granichs fail to mitigate their loss in the wheat crop by failing to complain about the areas missed in spraying until it was too late to correct the problem?
Issue 1 – who was responsible for the decontamination of the boomspray prior to the spraying of the canola?
8 Mark Granich gave evidence that he had been a farmer all his life and had been farming at Moorine Rock some 320 kilometres east of Perth since 1989. He had been dealing with the Townrows and using the spraying services of CWC Contractors for some nine years prior to 2004. According to Mark Granich on two previous occasions CWC had sprayed canola crops for him but they mainly sprayed his wheat crops. Their
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- usual arrangement was for the Granichs to provide the chemicals and the Townrows through CWC to provide the boomspray and an operator to do the job. Mark Granich gave evidence that he telephoned CWC and spoke to Julie Townrow about the canola job. According to Mark, Julie said they would do it, but Mark Townrow would ring him. Mark Granich said he spoke to Mark Townrow a few days later and they agreed CWC would send a boomspray and operator to spray the canola. After speaking to Mark Townrow Mark Granich ordered the chemicals from Elders in Southern Cross. He wanted the canola crop sprayed with Select, Hasten and Flexi-N, a nitrous fertiliser.
9 Julie Townrow gave evidence. She said she and her husband Michael had the crop spraying business CWC Contractors in Merredin. She handled administration and Michael took care of maintenance. In May 2004 their son Mark Townrow was the operations manager and they had five other employees. Julie Townrow said that their son Scott Townrow was not employed in the business until 30 August 2004. Julie Townrow agreed that she spoke to Mark Granich about spraying the canola, but her evidence was that she did not agree to take the job but only that she would confer with Mark Townrow about it and Mark Townrow would contact Mark Granich.
10 Mark Townrow gave evidence that the Granichs had been a major client of CWC for some 10 years prior to 2004. He said he spoke with Mark Granich about spraying the canola crop. At the time Mark Townrow was in Kalbarri after knee surgery during the June/July school holidays. It was later confirmed in Exhibit 33 that the school holiday days were 10-25 July 2004. Mark Townrow claimed that Mark Granich was concerned about the risks of SU damage to his canola crop and mentioned a neighbour who had had trouble with canola and had pulled the filters out of a boomsprayer and cleaned them with a toothbrush before spraying canola. According to Mark Townrow Mark Granich wanted to make sure his canola crop was not damaged. Mark Granich denied in his evidence that he discussed this with Mark Townrow. Mark Granich said he only learned about the damage to his neighbour's canola crop later that year in October 2004 after the Granichs' crop was sprayed. Mark Townrow then gave this evidence about the agreement made with Mark Granich (T378):
"Well, my response was, I said why we didn't spray a lot of canola generally in our line of business, because it wasn't a major crop there; that, you know, I accepted the fact that we may not necessarily go to those lengths normally in our due course but we had never had problems in our limited dealings
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- with them prior, but ultimately because I wasn't there and couldn't go and do the spraying myself and we weren't busy at the time, I said to Mark 'Look, we'll do it so long as, you know, you make sure that you're happy with the boomspray being decontaminated before it starts spraying'."
11 According to Mark Townrow Mark Granich was happy with that arrangement.
12 Mark Granich denied any such arrangement was made and denied any agreement to that effect. His evidence was that no such conditions were ever put to him. Mark Granich said he had never been asked to supervise the cleaning of the boomspray. He denied he had ever been required to supervise or flush out the boomspray before any crop was sprayed by CWC.
13 The canola crop was sprayed on 6 July 2004 by a CWC operator named Garry Davies. Mr Davies' evidence was that Mark Townrow told him to meet Mark Granich at his property and to make sure he flushed the boom out in front of Mark Granich and to make sure that Mark Granich was happy with the way he flushed the boomspray out before he started spraying the canola.
14 Both Garry Davies and Julie Townrow gave evidence they flushed the boomspray three or four or five times prior to going to the Granich property with a mix of Omo and water and tested the sections to ensure they were spraying evenly. Once at the Granich farm Garry Davies said he met Mark Granich at the Flexi-N tank and continued to flush out the boomspray with Mark Granich watching. Initially Garry Davies did not recall any conversation with Mark Granich other than to get the chemical rates off him; but under cross-examination he agreed Mark Granich said "That's good, you're giving the boomspray a flush" (T 434) and, when asked by Mark Granich what he was using Garry Davies told him "Just basically Omo". Garry Davies' evidence was that Mark Townrow told him to use Omo. It was a general practice at CWC. CWC never used chlorine to flush out the boomspray. Although Garry Davies had heard of Group B herbicides he denied any knowledge of SU contamination or any knowledge of the need to use chlorine to decontaminate the boomspray before it was used to spray canola.
15 Garry Davies explained that the boomspray tank had a capacity of 3,800 litres and there were about 80 nozzles. He said he was told by Mark Townrow to make sure Mark Granich was happy with the flushing of the
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- boomspray and that is why he gave the boomspray a further flush with water and Omo upon arrival at the Granichs' farm. Garry Davies explained the general procedure for a flush was to put a few hundred litres of water in the tank with a couple of handfuls of Omo and just agitate it a bit and then spray it out through the nozzles.
16 Garry Davies gave evidence that after flushing the boomspray he commenced spraying the canola crops in the paddocks directed by Mark Granich with a mixture of Select, Hasten and Flexi-N. Garry Davies said he had a GPS computer system fitted that controlled the boomspray switching it on and off as he sprayed 102.6 hectares of canola in paddocks H1, H4 and H5 as marked by Mark Granich on the map of his property, Exhibit 3. The only incident he experienced was a flat tyre. Garry Davies and Mark Granich gave evidence that Mark Granich helped him change the tyre but it took Garry Davies five hours to drive to Merredin to repair the tyre before he was able to return and continue the spraying.
17 Mark Granich gave evidence that Garry Davies arrived on 6 July 2004 and was flushing out the boomspray when Mark Granich saw him. Mark Granich remembered saying "That's good, you're giving the boomspray a flush". But he said he never saw any white powder in a bucket, nor did he notice Garry Davies putting handfuls of Omo into the boomspray. Mark Granich thought Garry Davies gave the boomspray a water flush.
Issue 1: the pleadings
18 The evidence of Julie Townrow, Mark Townrow and Garry Davies on behalf of the Townrows does not support the case pleaded by the Townrows. Paragraph 3.3 of the Re-Amended Defence and Counterclaim is in these terms:
"As part of the Canola Agreement it was agreed between Mark Granich and Mark Townrow in the week prior to 6 July 2004 that given the sensitivity of canola to chemical spray, the plaintiffs accepted responsibility for ensuring that the boomspray was cleaned and free from any chemical contamination prior to spraying the crop and to that end the plaintiffs would direct and supervise the defendants in the cleaning of the boomspray on the defendants' property in any manner and with any cleanser chemicals required by the plaintiffs in order to decontaminate the boomspray and would inspect the boomspray to ensure it had been cleaned to a
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- satisfaction prior to spraying and until that occurred, the operator was forbidden to commence spraying the crop."
19 In answer 1 further and better particulars were provided of this alleged agreement:
"On or about 1 or 2 July 2004, Mark Townrow telephoned Mark Granich from Kalbarri and asked in effect what he wanted done. Mark Granich said he wanted his canola crop sprayed and his wheat crop sprayed. Mark Townrow said in effect that CWC did not routinely spray canola as it was a sensitive crop. Mark Granich mentioned that he had heard of his neighbour, Bill Maddock, having had a canola crop damaged by contamination of boomsprays with a chemical called 'SU'. He mentioned that Mr Maddock now cleans the boomspray by pulling the filters out and scrubbing them with a toothbrush.
Mark Townrow said that as a result of Mr Granich's concerns and because Mr Townrow was away in (sic) would not be able to supervise operations, CWC would only do the job on the basis that the boomspray was cleaned and decontaminated at Mr Granich's direction and under his supervision at his property and that he was to be completely satisfied that it had been decontaminated before the spraying commenced. Mr Granich in effect said that he agreed to those terms. It was agreed between Mr Granich and Mr Townrow that Mr Granich would supply the chemicals to be sprayed on the property and Mr Townrow would supply the boomspray and an operator."
20 It is immediately obvious that the pleading in par 3.3 is itself inconsistent with the further and better particulars. Paragraph 3.3 asserts "The plaintiffs would direct and supervise the defendants in the cleaning of the boomspray on the defendants' property" while the particulars refer to Mr Granich agreeing that the boomspray was cleaned and decontaminated at Mr Granich's direction and under his supervision "on the plaintiffs' property".
21 Furthermore, at its highest, if I accept Mr Townrow's evidence at T 378, the agreement went no further than an agreement that spraying would not commence until Mark Granich was happy with the boomspray being decontaminated. Mark Townrow gave no evidence of Mark Granich agreeing to direct and supervise the cleaning of the boomspray on the Townrows' property or the Granichs' property. Garry Davies gave no
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- evidence of Mark Townrow informing him of any such agreement as pleaded by the Townrows. These divergences between the evidence and the agreement pleaded in par 3.3 of the defence and particularised cast doubt on whether such an agreement was ever made.
22 The defendants rely on Garry Davies' evidence and Exhibit 32, a CWC accident/hazard reporting form filled in by Garry Davies on 26 August 2004. On that document he recorded:
"On 6/7 Thursday I was sent to Mark Granich's to spray his canola. Before I left the yard I had flushed the boom and again when I got to farm in front of farmer. He said he was happy with the method in which I flushed out. I then check with him the chemical rates and also the amount of chemical I would be using. While spraying my first paddock – I got a flat tyre on the boomspray which I had to take to Merredin. The boomspray was stationary for approximately 5 hours. I then continued to spray with no problems."
23 The defendants rely on this evidence and submit that it is evidence of the agreement pleaded in par 3.3. The defence case is that it was not normal practice to flush the boomspray on arrival at a farm. The defence relies on Garry Davies' evidence that Mark Townrow gave him a special instruction – to make sure Mark Granich was happy with the flush of the boomspray. Exhibit 32 is relied on as confirmation of that special instruction.
24 It is readily apparent this evidence falls well short of proving the agreement pleaded in par 3.3 of the defence – that "the plaintiffs would direct and supervise the defendants in the cleaning of the boomspray on the defendants' property". There is no evidence Mark Granich directed or supervised Garry Davies in flushing the boomspray. While I accept Garry Davies' evidence that evidence does not establish the defendants' case on this issue.
25 There was evidence that Mark Granich's first complaint about the damage to his canola crop was in late July, two to three weeks after spraying, when he spoke to Julie Townrow by telephone and said words to the effect that he did not blame CWC for the damage to the crop. Mark Granich gave evidence that because CWC were professionals, he had assumed they had properly decontaminated the boomspray using the proper chemicals to clean it. The Townrows rely on this conversation and suggest Mark Granich said that because he had agreed to direct and
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- supervise the decontamination of the boomspray and that he – not the Townrows – was to blame.
26 The history of this matter provides some support for the Granichs' case that there was no such agreement. The Granichs issued the writ with attached statement of claim in March 2005. The Townrows filed their defence in April 2005 (Exhibit 26). In par 11 of that original defence no agreement was pleaded as in par 3.3 of the re-amended defence. The defence gave no notice of this alleged agreement until a year later on 5 April 2006 (Exhibit 23) when they sent the Granichs notice of their proposed amended defence and counterclaim. But par 11 of the original defence was in these terms: (Exhibit 26)
"11. The Defendants do not admit the allegations made in paragraph 8b of the Statement of Claim and say that the spraying service was reasonably fit for the purpose other than all chemicals for spraying were to be and were used as provided by the Plaintiffs to the Defendants and the Defendant spraying equipment was inspected by the Plaintiffs prior to the Defendants carrying out their duties pursuant to their agreement with the Plaintiff."
27 The reference to "inspected by the plaintiffs" and the reference to "an agreement with the plaintiff" bear some resemblance to what is now pleaded. I do not accept the Granichs' submission that there was no mention of any agreement by Mark Granich to be responsible for decontaminating the boomspray until 2006.
28 I have also received documentary evidence of correspondence between the parties during the period from July 2004 until the writ was issued in March 2005. There is no mention in any of that correspondence of any agreement similar to that pleaded in par 3.3 of the amended defence. It was surprising, for example, after the Granichs wrote to Mark Townrow on 19 August 2004 (Exhibit 12) telling him that two agronomists had confirmed the damage to the canola crop was caused by a Group B herbicide contaminating the boomspray, that Mark Townrow did not respond to the letter. If the agreement had been that Mark Granich would be responsible for decontamination of the boomspray I would have expected Mark Townrow to have said so at that time. But, instead, Mark Townrow appointed Mark Sheppard to mediate a settlement of the dispute. Under cross-examination Mark Townrow claimed he told Mark Sheppard about the agreement that Mark Granich would be responsible for decontaminating the boomspray. I find that unlikely to be true
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- because none of the correspondence between Mark Sheppard and the Granichs (Exhibits 13, 14 and 20) in September, October and November 2004 made any mention of such an agreement. Mark Sheppard was not called as a witness in the trial.
Credibility
29 The defendants submit that Mark Granich's evidence was confused and unreliable and that I should not accept it. To support that submission they rely on Mark Granich's explanation for initially telling Julie Townrow that he did not really blame CWC for the damage to the canola crop. Mark Granich was extensively cross-examined about that conversation. He said this in answer (T 104):
"Why I said that I didn't blame her was because I assumed that the boomspray had been cleaned with the proper chemicals."
30 He also said he expected as professional contractors that the Townrows would have properly decontaminated the boomspray.
31 The defence contends that that explanation is inconsistent with Mark Granich's further evidence that during the same conversation he told Julie Townrow to make sure that she sprayed the boomspray out thoroughly before she damaged John Butcher's peas (T 40). Mark Granich explained that he said that because he thought there must have been some residue in the tank that damaged his crop. He went on to explain that he believed what he saw Garry Davies doing flushing the boomspray with plain water was the second part of the decontamination process – that the boomspray had already been decontaminated with chlorine bleach before it arrived on his farm.
32 The defendants rely on that remark to Julie Townrow as evidence that Mark Granich knew he had undertaken responsibility for decontaminating the boomspray. I do not accept that submission. I found nothing confusing about Mark Granich's evidence on this issue. On the contrary, I found his evidence consistent and coherent. I found it very reasonable to expect a professional organisation such as CWC to properly decontaminate its sprayer before providing that sprayer as part of an operation to spray canola – particularly after the discussion Mark Granich and Mark Townrow had about the need to do so.
33 The defence also asked me to draw an inference adverse to the plaintiffs for their failure to call a neighbouring farmer, Bill Maddocks, to confirm Mark Granich's evidence that he did not hear about the damage to
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- Bill Maddocks' canola crop until October 2004. The defendants apparently know who Bill Maddocks is and if he had any relevant evidence to give that would contradict Mark Granich's evidence the defendants were certainly free to call him. The rule in Jones v Dunkel (1959) 101 CLR 298 does not require a party to call a witness unless there were some expectation that the particular witness would be called by that party rather than by the other party (Payne v Parker [1976] 1 NSWLR 191 at 201-2). No such expectation reasonably arises in this case. There is no basis for drawing an adverse inference in this case.
34 I found both the Granichs – Mark and his wife Helen to be honest witnesses. Each gave their evidence in a forthright manner. They never avoided difficult questions nor engaged in any subterfuge when questioned by opposing counsel in cross-examination. I accept their evidence and rely on it.
35 The credibility of the Townrows is a different matter. I had no confidence in the evidence of the Townrows – particularly Mark Townrow. He did not answer questions in a direct and forthright manner. He attempted to avoid difficult questions when under cross-examination. Mark Townrow's cross-examination at T 456 is an example of this. Mark Townrow was evasive about his knowledge in 2004 of the problem of SU contamination when spraying canola saying first he "probably" knew and, then when questioned about the source of his knowledge, claiming he knew "anecdotally". Under cross-examination at T 458 Mark Townrow claimed he did not think he had ever been told the canola crop was damaged by SU contamination. He gave that evidence despite being the recipient of the letter from the Granichs dated 19 August 2004 (Exhibit 12) which stated the opinions of two agronomists on this issue. It was also obvious that Mark Townrow well knew from the beginning that CWC was not insured. He admitted that he knew that under cross-examination, but he never told the Granichs' there was no insurance despite that letter of 19 August 2004 (Exhibit 12) ended with the words: "We are expecting to hear from your insurer within 14 days". Mark Townrow admitted he never answered that letter. The effect of that was to mislead the Granichs who believed for some time that this was a simple insurance matter when there was no insurance.
36 There were a number of inconsistencies in the evidence given by Julie Townrow that caused me some concern. In important areas her evidence changed during her cross-examination. For example, in her evidence about flushing the boomspray with Garry Davies the number of flushes and the number of occasions when the boomspray was flushed
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- changed (T 287: T 330-331). That could be explained by the lapse of time between the 2004 events and the trial. But it was confusing evidence on an issue of considerable importance where I would have expected Julie Townrow to have considered her evidence before coming to court. An abrupt turnaround in Julie Townrow's evidence occurred when she first repeatedly denied Mark Townrow ever told her Mark Granich had agreed to decontaminate the boom (T 304), later said he did tell her but she could not remember the words he said (T 306), but later said she remembered the conversation "very clearly" (T 322). On one occasion in Julie Townrow's evidence I had to intervene when she avoided answering the question (T 313). Overall I did not find Julie Townrow's evidence to be consistent or reliable.
37 Taking account of all the evidence and accepting as I do the evidence of Mark Granich I am satisfied on the balance of probabilities that there was no agreement as pleaded in par 3.3 of the defence and I am satisfied that Mark Granich never accepted responsibility for the decontamination of the boomspray.
38 There is no dispute that the Townrows as professional agricultural contractors agreed to provide a boomspray and an operator to spray the Granichs' canola crop. I am satisfied there was no special agreement about decontaminating the boomspray other than to ensure that Mark Granich was happy with the flush. I accept Mark Granich's evidence that his normal arrangement was that CWC provided the boomspray and, in those circumstances, under the contract for services, the Townrows were responsible for decontaminating the boomspray.
Issue 2: was the damage to the canola crop caused by the failure to properly decontaminate the boomspray after it was used to spray Group B herbicides?
39 The Granichs called Trent Kensett-Smith, an experienced agronomist, to give expert evidence of the cause of the damage to the Granichs' canola crop. Mr Kensett-Smith admitted that he had no formal qualifications, although he studied at the university level for a number of years. He had, however, 10 years of experience since 1996 as an agronomist which he described as a specialist in crop husbandry. He had experience regarding farming practices, chemical use practices, fertiliser practices, disease identification, disease control, just all aspects pertaining to production of crops particularly (T 240). He admitted he had no formal training as a chemist or an industrial chemist, but he based many parts of his opinion on what he had seen in the field examining crops and his
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- experience of the way products react. Mr Kensett-Smith admitted that his opinions were in fact informed guesses which he described as an educated guess, a guess based on his 10 years of experience. Mr Kensett-Smith made two reports, one dated 23 October 2004 and the second one dated 16 July 2007. Both reports are contained in Exhibit 21, the plaintiffs' book of expert reports.
40 Mr Kensett-Smith had been working on a neighbour's property on 16 September 2004 when he noticed the adverse result in the Granichs' canola crop. He entered the paddock and observed firsthand the condition of the canola. He observed that some 90 to 95 per cent of the paddock had been affected in an adverse way and he noticed that in the corners of the paddock in areas that had not been sprayed the canola was thriving. Mr Kensett-Smith's opinion was that it looked as though it had been sprayed with a sub-lethal application of a Group B chemical. Mr Kensett-Smith took photographs on 2 October 2004 and those photographs (Exhibit 4 and pp 11-18 of Exhibit 21) graphically show the stunted crop as affected by what he believes was Group B chemical application. The canola in the areas missed by the sprayer was chest height, in full flower and quite vigorous.
41 Mr Kensett-Smith gave evidence that Mark Granich rang him on 1 October and sought his advice as to what had happened to his crop. The rainfall chart records for the season and an index of the chemicals that had been applied to the paddock (Exhibit 9) were supplied to Mr Kensett-Smith. In his opinion the rainfall throughout the season should have had the crop in a very good position to finish and ripen in fairly favourable conditions. Mr Kensett-Smith gave detailed evidence about the chemicals Flexi-N, Select and Hasten that were sprayed on the canola crop. In his second report in 2007 he indicated that although the use of Flexi-N with Select is not registered, any resulting damage from that combination would be scorch damage. He saw no evidence of anything of that nature. He did note that the material related to Select indicated that "Select was incompatible with the nitrate Flexi-N" but he said that was a very broad statement and had flaws in it. He said that the use of Flexi-N was a very recent development and that if one gets scorching, the plant does return to 90 per cent or better of its full production. That certainly did not happen in this case where the canola was 90 to 95 per cent destroyed.
42 Mr Kensett-Smith admitted the mixing of Select and Flexi-N was not registered in July 2004 and admitted that the manufacturers of Select had indicated that it should not be mixed with any nitrates and Flexi-N is a
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- nitrate. Mr Kensett-Smith also agreed that Hasten is a spray oil and again was not to be used with Flexi-N. However, in Mr Kensett-Smith's opinion there were so many advantages to using the fertiliser and herbicide mix that it was being done widely even though it was not registered. He also mentioned that it is a very effective way of fertilising and weed control in one pass and that most agronomists were using it (T 260-261). The problem as Mr Kensett-Smith saw it was that the cost of registering the mix was such as to make it financially unviable for the manufacturer. To justify spending that amount of money to get a mix registered that was already in common use would be prohibitive in his opinion.
43 After considering all factors and in particular the appearance of the crop Mr Kensett-Smith's opinion was that the damage to the crop was caused by SU contamination.
44 Mr Kensett-Smith gave evidence about the decontamination of a boomspray. He was not familiar with the boomspray used on the Granichs' canola crop, but he explained that if a boomspray had been used to spray a Group B herbicide before it could be used to spray canola it needed to be decontaminated with a mixture of water and household bleach. Both Glean and Logran are Group B herbicides and in each case the manufacturer provides that decontamination with household chlorine bleach is required (see pp 40 and 46 of Exhibit 21). That process is set out in Mr Kensett-Smith's report consistently with the process on the Logran and Glean labels:
1. Rinse tank and boom thoroughly with clean water; allow to stand for at least 10 minutes.
2. Fill tank with clean water and add 0.3 per cent of household chlorine bleach (4 per cent chlorine). Rinse hoses and boom and let stand for at least 15 minutes whilst agitating. Drain through nozzle.
3. Repeat Step 2.
4. Filters, filter housings and nozzles should be cleaned in the same mix of water and household bleach separately.
5. Rinse tank, hoses, boom, filters, filter bodies and nozzles thoroughly to remove all traces of chlorine bleach.
6. Dispose of cleaning and rinse water responsibly.
45 The evidence established that only the use of chlorine bleach would dissolve Group B herbicides to ensure that no residue in the boomspray could contaminate and thus harm a subsequent crop such as canola if the
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- boomspray were used on that crop. The parties have agreed that the boomspray in this case was previously used to spray Glean and Logran. There was no evidence of any chlorine bleach being used to decontaminate the boomspray.
46 In its defence the Townrows in par 4.2 contend that they had taken preliminary steps to clean the boomspray by flushing it three times with water and washing powder containing chlorine at the defendants' premises. In her evidence Julie Townrow gave no evidence of Omo being used and no evidence of any chlorine being used. Her evidence was that at the time there was a belief that there was chlorine in the Omo (T 350). Mark Townrow gave evidence that he was positively sure that Omo contains chlorine. He said that was the reason they were using it to clean the boomspray (T 449). Mr Kensett-Smith's evidence was that chlorine was used because a reaction takes place between the chlorine and the SU type herbicides making those chemicals inert (T 228). His evidence was that if you used Omo to decontaminate the boomspray it would not be sufficient to remove all traces of a Group B herbicide.
47 Mr Kensett-Smith agreed that the damage to the canola crop was general affecting every part of the crop that had been sprayed. He said the level of contamination and the effect on the canola would depend on what part of the boomspray was contaminated. If the contaminate was in the agitating system of the tank, it would be foreseeable that the whole paddock may have been damaged. If it was merely in the tank, he would not have expected whole of paddock damage. Also, if the contamination was in the filters of the boomspray, then the widespread rather uniform damage would be expected.
48 Mr Kensett-Smith did admit that if there was contamination that if the boomspray were flushed out two or three or four times eventually it would reduce to such a low level that it would have little or no effect; but he did not consider himself qualified to say whether it would need 10 flushings or a hundred or a thousand. Mr Kensett-Smith guessed it would be between 10 and 15 flushings before the contamination would be reduced by flushing.
49 The plaintiff also called expert evidence from David Williams in relation to the wheat crop. He was an agricultural consultant and consulting agronomist with a Bachelor of Science in Agriculture from the University of Western Australia and some 12 years experience. Mr Williams primarily gave evidence about the spraying of the Granichs' wheat crop, but in that process identified Logran as a Group B herbicide
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- or SU chemical that had been applied with the boomspray. Mr Williams' evidence was that decontamination is required after using these chemicals prior to spraying any sensitive crops such as lupins or canola as a residue in the tank can kill or seriously retard these crops. Mr Williams also mentioned that the standard industry practice is to fill the boom with a 4 per cent chlorine product at a rate of 300 millilitres per 100 litres of water in order to clean the tank. According to Mr Williams who was familiar with Omo washing powder it was not a chlorine based product, and from his experience, the only way to fully decontaminate a boomspray is to use a chlorine based product. It was his opinion that any method other than a chlorine based decontamination would be inadequate and likely to result in significant crop damage on a susceptible crop such as canola. Under cross-examination Mr Williams said that nearly every year a farmer failed to decontaminate the boomspray with chlorine after using the boomspray to spray a Group B herbicide and in every case it resulted in the significant death of a canola crop. Mr Williams said he had never come across a successful decontamination using successive flushings of Omo detergent. It was always necessary to use chlorine. Both Mr Williams and Mr Kensett-Smith gave evidence that Omo does not contain chlorine.
50 The Townrows called an agronomist, Mr David Thomas Keamy to provide expert evidence. He had no university qualifications, but had been working for some 20 years in the field for Wesfarmers and was involved in the use of herbicides and insecticides and boomspraying equipment as he was selling those to farmers in Western Australia. In the late 90s he was involved in training agronomists and in 2004 was the manager for the central wheatbelt areas of Western Australia based in Merredin. Mr Keamy said he had employed Mr Kensett-Smith when he was manager of Merredin. Mr David Keamy's opinion was that in all of the cases he had ever seen where SU related contamination has caused damage to a broadleaf crop such as canola, the damage had been very uneven. In his opinion in such cases most visual yellowing occurs in the first few hundred metres up to the worse he had seen some five laps of the paddock. Mr Keamy's experience was that after these distances the crop retains more and more of its colour and the damage becomes visibly less. He has never seen yellowing damage over a full paddock attributed to SU contamination. Mr Keamy's experience was that contamination generally came from a section of a boomspray or maybe two sections or three sections, but the use of the boomspray and the continual water passing through would dissolve and make the contamination less as the spraying continued. Mr Keamy admitted that he had never seen the Granichs'
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- canola crop and he admitted that if the boomspray had stopped for some time, say five hours while the tyre was repaired, the Select would draw out the SU herbicides. But Mr Keamy denied that there could be a homogenous mixture of contaminant from all nozzles at the same time. Mr Keamy admitted that he could not say that the damage to the paddock was not a result of SU contamination because he did not see the paddock. But from the photos and his experience dealing with photographs and emails and the fact that he had seen very even damage to the canola crop he could only point out that that was not consistent with his experience of SU contamination.
Findings on issue 2
1. I accept the evidence of Mr Kensett-Smith as to the effect on the canola crop being consistent with SU contamination.
2. Given the evidence that the boomspray was used to spray Group B herbicides and was never decontaminated properly using chlorine bleach, I am satisfied on the balance of probabilities that the boomspray contamination was the source of the damage to this canola crop.
I have carefully considered Mr Keamy's evidence that the very even damage was inconsistent with his experience, but as he never saw this crop I rely on and prefer the evidence of Mr Kensett-Smith who saw it on more than one occasion.
3. I am satisfied based on Mr Kensett-Smith's evidence that the appearance of the canola was consistent with SU contamination of the boomspray and not the effect of scorching which could develop in extreme weather conditions with the use of the combination of chemicals sprayed on the canola.
4. I am satisfied on the balance of probabilities that the flushing of the boomspray with water and/or Omo was not effective as it did not contain any chlorine and did not remove the SU contamination from the boomspray.
51 Based on these findings I am satisfied on the balance of probabilities that the damage to the canola crop was caused by the failure to properly decontaminate the boomspray.
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Issue 3 - was the radish infestation of the wheat crop caused by the Townrows' failure to properly spray that crop?
52 Mark Townrow gave evidence there were three sprayings needed for his 2000 hectare wheat crop in 2004. There had been a lot of summer rain and consequently a lot of weeds so that he employed CWC for:
(1) summer spraying to get rid of those weeds;
(2) a pre-sowing spray in April and May with Logran (a Group B herbicide) to kill emerging weeds; and
(3) a post-sowing spray from 14 July to 5 August to control weed that came up with the crop.
53 The Granichs rely on the photographs taken by David Williams and his report (Exhibit 21). Mr Williams inspected the wheat crop on 7 December 2004 and gave his opinion:
"In my opinion it appears that the spraying of wheat crops by Central Wheatbelt Contractors has not been completely effective and has resulted in many weeds, particularly wild radish, growing that might have otherwise been controlled with a proper application of herbicides. Any crop that has been sprayed by Mark Granich as opposed to the spray contractor has virtually no weeds present in the crop. This would indicate that the spraying contractor has not sprayed the paddocks properly or has had significant problems with faulty equipment." (Exhibit 21, p 73)
54 Mr Williams considered the chemicals provided by the Granichs for the pre-sowing spray and the post-sowing spray and considered the mixtures and rates of application. He concluded that there was "no reason to expect weeds to survive after the application of such products" (Exhibit 21, p 74).
55 Mr Williams included photographs he had taken to show the radish infestation in the wheat paddocks sprayed by CWC (Exhibit 21, photos 1 and 2, p 75). He also included a photograph of a paddock of wheat sprayed by Mark Granich (Exhibit 21, photo 3, p 75). The difference is obvious in that there is no radish growing in photo 3.
56 Under cross-examination Mr Townrow disputed photo 2 on p 75, but admitted that photo 1 showed the corners of the paddock had been missed (T 489). He admitted he never went out and inspected the paddocks. He
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- admitted there must have been something wrong with the settings on the computer GPS controller on the boomspray (T 490).
57 Both Mark Granich and Mark Townrow said that missed areas would not be immediately evident after spraying. Spraying is not like painting a paddock; the operator would not have been able to see the results of the spraying until two or three weeks after spraying occurred. Only then would weeds be seen flourishing amidst the wheat.
58 I accept the evidence of Mark Granich and David Williams. In particular I accept David Williams' evidence that if all the areas of the wheat paddocks had been sprayed with the chemicals used the weeds would not have survived. I accept that in the wheat paddocks Mr Granich sprayed weeds were controlled. I also accept that during 2004 CWC missed corners of the Granichs' canola paddocks as well. The only reasonable inference taking account of all these factors is that the radish infestation of the wheat crop was caused by the Townrows' failure to properly spray that crop and I make that finding.
Issue 4 - was it an implied term of the contract to spray the wheat that the Granichs' would notify the Townrows of any missed areas as soon as practicable after completion of the spraying?
59 In his evidence about the wheat crop Mark Granich admitted that Mark Townrow had explained to him that the boomspray had been fitted with new auto-switching equipment and there was an automatic shut off on it and that if any areas were missed Mark Granich should let the Townrows know.
60 The Townrows contend that as a result of this discussion it was an implied term of the wheat contract that:
(a) the plaintiffs were as soon as practicable after completion of the spraying to assess the weeds in the crop;
(b) the plaintiffs were to notify the defendants if such assessment showed that the spraying had been ineffective in that areas of the crop had been left unsprayed.
61 If the contract is a written contract the conditions necessary to ground the implication of a term are those discussed in Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1981-1982) 149 CLR 337 at 347 per Mason J. But where, as in this case, the contract has not been recorded in writing, a different rule applies:
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- "The most that can be said consistently with the need for some degree of flexibility is that, in a case where it is apparent that the parties have not attempted to spell out the full terms of their contract, a court should imply a term by reference to the imputed intention of the parties if, but only if, it can be seen that the implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case. That general statement of principle is subject to the qualification that a term may be implied in a contract by established mercantile usage or professional practice or by a past course of dealing between the parties."
Hawkins v Clayton (1998) 164 CLR 539 at 573 per Deane J: Associated Alloys Pty Ltd v ACN 001452106 Pty Ltd (2000) 202 CLR 588 at [46].
62 In an earlier decision in Hospital Products Ltd v US Surgical Corporation (1984) 156 CLR 41 at 121 Deane J suggested it was also necessary that the term be "so obvious as to go without saying" (Codelfa at 347) but, where there is no formal contract, as Dawson and Toohey JJ said in Breen v Williams (1995-1996) 186 CLR 71 at 91, after referring to Hawkins v Clayton (1998) 164 CLR 539:
"That is to say, no question of there being an obvious implication arises in such a case because that which is obvious will be a term of the contract as a matter of inference. Moreover, the line between inference and implication will not always be easy to draw."
63 In order to determine what the parties have not said it must first be determined what they have said (Hawkins v Clayton [569-70]). Deane J in that case identified two distinct stages in ascertaining the contract terms:
"In these circumstances, it is necessary to identify two distinct stages in the ascertainment of relevant terms. Those stages may well overlap and it will often be unnecessary to distinguish between them in practice. The first stage is essentially one of inference of actual intention: what, if any, are the terms which can properly be inferred from all the circumstances as having been included in the contract as a matter of actual intention of the parties? The second stage is one of imputation: what, if any,
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- are the terms which are, in all the circumstances implied in the contract as a matter of presumed or imputed intention?"
64 The contract in this case was a contract to provide spraying services made between the Townrows as service providers and the Granichs as service consumers. The Townrows had provided such services to the Granichs for 9 or 10 years prior to 2004. It was the intention of the parties that the terms of the contract were that the Townrows would provide the boomspray and operator: the Granichs would provide the chemicals and designate the paddocks to be sprayed on Exhibit 3, a map of their farm. It was a term of the agreement that the Granichs would pay a reasonable price for the spraying services. Such a reasonable price was evidenced in the CWC invoices in Exhibit 25. The issue then is whether the implication of these proposed terms is "necessary for the reasonable or effective operation of a contract of this nature".
65 It is difficult to see that such terms are necessary. The fact that on this occasion the parties specifically discussed the new auto-switching equipment seems to negate such a necessity in all contracts of this nature. It could not have been necessary if it had not been a part of all previous contracts between the parties.
66 Another problem arises from the nature of the deficiency in a contract necessitating the implication of a term. With an implied term "the deficiency and the expression of a consensual agreement is caused by the failure of the parties to direct their minds to the particular eventuality and to make explicit provision for it" (Codelfa at 346). In this case the parties did direct their minds to the issue and reached an understanding about it. That understanding can more readily be classified as an inferred term of the contract (Hawkins v Clayton at 570: Breen v Williams at 91). It is a matter the parties put their minds to and reflected their actual intention. It is an inappropriate term to imply.
67 But the Townrows face what I consider to be an insurmountable obstacle to the implication or incorporation by inference of the suggested terms. That obstacle arises from the provisions of the Fair Trading Act 1987 (FTA). This contract for the supply of services is governed by s 40 of the FTA:
"40. Warranties in relation to the supply of services (TPA s 74)
(1) In every contract for the supply by a person in the course of a business of services to a consumer there is an implied
- warranty that the services will be rendered with due care and skill and that any materials supplied in connection with those services will be reasonably fit for the purpose for which they are supplied.
- (2) Where a person supplies services (other than services of a professional nature provided by a qualified architect or engineer) to a consumer in the course of a business and the consumer, expressly or by implication, makes known to the supplier any particular purpose for which the services are required or the result that he desires the services to achieve, there is an implied warranty that the services supplied under the contract for the supply of the services and any materials supplied in connection with those services will be reasonably fit for that purpose or are of such a nature and quality that they might reasonably be expected to achieve that result, except where the circumstances show that the consumer does not rely, or that it is unreasonable for him to rely on the supplier's skill or judgment."
68 It was not disputed in this case that the Townrows agreed to provide spraying services to the Granichs "in the course of a business of services" (as defined in s 5 FTA) provided by CWC. Nor was it in dispute that the Granichs' were "a consumer" as defined in s 6(1)(b)(i) of the FTA as "persons who propose to acquire services".
69 This was a contract to provide spraying services for the Granichs' wheat crop and the Granichs "made known to the suppliers the particular purpose" – to control weed (particularly radish) in the wheat crop. There was no evidence in the circumstances to show that the Granichs did not rely or that it was unreasonable for the Granichs to rely on the Townrows' skill and judgment in spraying the wheat.
70 The Townrows seek to rely on the suggested implied terms to restrict the implied warranty imposed on them by s 40(2) FTA "that the services supplied under the contract … will be reasonably fit for that purpose". Any term that would have that effect is void (s 34(1) FTA).
71 For these reasons I am satisfied there was no implied term of the contract to spray the wheat that the Granichs would notify the Townrows of any missed areas as soon as practicable after completion of the
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- spraying. If any such term could be implied or be incorporated into the contract by inference it would be void.
Issue 5 - did the Granichs fail to mitigate the damage in the wheat crop by failing to complain about the areas missed in spraying until it was too late to correct the problem?
72 The Granichs were not free of any obligation to inform the Townrows of missed areas in wheat spraying. Damages cannot be recovered for any loss if the loss could have been prevented by reasonable mitigating action on the part of the injured party. The party in breach has the onus of establishing failure to mitigate. (Cheshire and Fifoot's "Law of Contract": 8th Australian ed, pp 1014-5; TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd (1963) 180 CLR 130 at 138). A plaintiff is not obliged to act otherwise than in the ordinary course of business and the standard is not a high one because the defendant is the wrongdoer (the "Law of Contract" at p 1016: NRMA Ltd v Morgan [1999] NSWSC 407).
73 A similar rule applies in assessing damages in tort; the test is "whether a reasonable person in the circumstances as they existed for the plaintiff" would have failed to do what the plaintiff failed to do (Fazlic v Milingimbi Community Inc (1982) 56 ALJR 211: Plenty v Argus [1975] WAR 155: Fleming "The Law of Torts" 9th ed, p 286).
74 In this case I accept that in the normal course of business it would be reasonable to expect the Granichs to advise the Townrows as soon as practicable after spraying of any areas missed by the contractor. It is in the nature of spraying that the operator would not know on the day whether any areas had been missed; missed areas would only have become obvious two to four weeks after spraying occurred. The notification would give the Townrows the opportunity to respray any missed areas so as to rectify the problem. Mark Townrow said that respraying those missed areas would have been a simple procedure had they been notified of the missed areas. The Townrows' case is that they were never notified of any missed areas in the wheat until they received the letter at the time of harvest dated 6 December 2004 (Exhibit 11). By that time there was nothing that could be done.
75 That letter was addressed to CWC in these terms:
"We are writing to ask you to advise your insurer that we intend to make a claim for compensation over the poor results of the contract spraying that was completed by yourselves at our farming property at Moorine Rock.
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- The problem has occurred on all the corners throughout our cropping program, resulting in a nursery of weeds which will lead to future problems with chemical resistance and more spraying required in 2005 and beyond.
Mark Townrow was advised of the problem during summer spraying and assured me the problem would be rectified before the pre-sowing spray program began. The problem continued to persist during pre-sowing and post-sowing.
I requested that Scott Townrow bring his operators here to check the misses in general spraying and I have shown Mark Townrow several paddocks that haven't been sprayed in the centre. Resulting in future problems with weeds.
This has also led to difficulties during harvest, with blending required before delivering grain.
If you or your insurer wish to make any further inspection of crop please let us know immediately as we are currently harvesting." (The letter was signed Mark and Helen Granich)
76 David Williams, the plaintiff's expert agronomist, explained the purpose of spraying wheat was largely to eliminate radish which competes for moisture, fertiliser and light and can have significant economic outcomes on crop yield. Pre-sowing spraying is quite critical because if large weeds are left uncontrolled they will impact most significantly and lead to reduced yield. The same is true of post-sowing spraying. Besides reduction in crop yield uncontrolled weeds create their own seed bank so that research indicates a farmer will need at least four years of effective control to run the seed bank down to a manageable level after a radish infestation occurs. In this case Mr Williams' opinion was that five years of increased spraying will be needed by the Granichs.
77 The photos on p 82 of Exhibit 21 demonstrate the problem created by lack of weed control. Photos 1(a) and 2(a) were taken in December 2004 and show areas of radish infestation in the wheat crop. Mr Williams returned on 15 August 2005 and photographed the same areas of those paddocks. The severe infestation of radish is demonstrated by the yellow flowering radish weeds in photos 1(b) and 2(b).
78 In this case the post-sowing spray was done between 14 July and 5 August. Mr Williams agreed that missed areas would have been apparent two to four weeks after spraying from around the middle of
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- August to the end of August. At that point Mr Williams agreed the missed areas and in some cases whole paddocks could have been resprayed, but once you get close to head emergence your options are limited because some of the herbicides can affect flowering and grain formation. Mr Williams said Logran could have been used but, in the normal course head emergence occurs in late August, early September so that the time frame would be very tight in getting a second effective application on the crop. If re-spraying had occurred prior to head emergence he would have anticipated 100 per cent control of weed. He was unable to say whether spraying with Logran after that time would have had a 100 per cent effect, a 10 per cent effect or no effect. That is because when the weeds are old you can get variable results. The results will also depend on the history of the use of Logran on those paddocks by the Granichs. Logran has been around for 10 or 15 years and can become ineffective.
79 Mr Williams said that it is not a normal time for spraying wheat. The farmer would suffer a 1 per cent to 2 per cent loss of crop as a direct result of wheel damage driving the boomspray through the wheat. Normal industry practice would not be to spray at that time. The most effective time to control weeds is when they are young in June, July and August. It becomes increasingly difficult to eradicate weeds depending on how old they are.
Were the Townrows ever notified of missed areas in the wheat?
80 All three of the Townrows gave evidence there had been no complaint about missed areas in the wheat spraying until the letter (Exhibit 11) was received from Mark Granich in December 2004 when it was too late.
81 Julie Townrow said two boomsprays went to the Granichs for the wheat spraying and she found it hard to believe that both boomsprays were missing areas of the paddocks. Julie Townrow said she was not aware of any complaints during spraying or at any time about spraying the wheat until Exhibit 11 was received in December. Julie Townrow admitted they never sought payment from the Granichs for the wheat invoices, but she said that was because of the ongoing dispute about the canola crop. She denied being aware of any complaints about the wheat spraying.
82 Scott Townrow gave evidence he commenced working for CWC when he was 17 years old in 1994 but left to pursue other occupations, only returning to take up the position of operations manager in late
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- August 2004. He denied visiting the Granichs' farm in September 2004 and denied having a discussion with Helen Granich at their kitchen table in relation to the canola crop. He denied ever being requested by Mark Granich to check missed areas in the wheat crop. Despite Mark Granich's letter (Exhibit 11) stating this had occurred, Scott Townrow said he never set the record straight because his brother Mark was handling it. Scott Townrow said that if there had been any complaints of missed areas in the spraying CWC would have immediately dealt with it.
83 Mark Townrow said he was the operations manager at CWC in 2004. He admitted CWC did wheat spraying for the Granichs in 2004, but vigorously denied Mark Granich ever spoke to him about missed areas. If there had been any complaint Mark Townrow said CWC would have gone out to rectify it because it would have been cheap and easy to fix. Mark Townrow said radish in wheat sticks out and CWC works in the community so it would always have been in their best interest to spray missed areas at no cost to the Granichs. Mark Townrow said if they had been notified in August the radishes could have been rectified. He agreed that once head emergence occurs it is not normal practice to spray with further herbicides.
84 Mark Granich gave evidence to quite a different effect. He said the summer spraying was done in March and because it takes up to two weeks for the weeds to die it was not until late March or early April that he noticed there were little squares missed during spraying. Mark Granich said when he reported the problem to Mark Townrow he was told CWC had a new automatic GPS system on the boomspray. According to Mark Granich, Mark Townrow told him the new system was obviously faulty. Mark Granich's evidence was that he told Mark Townrow to make sure the problem was rectified before the pre-sowing spray and Mark Townrow agreed to do that.
85 The pre-sowing spray took place in late April ending in late May and Mark Granich admitted he did not have a real inspection after that spraying. From 14 July until 5 August CWC did the post-sowing spraying. Mark Granich said he noticed problems with uneven spraying – too much chemical and Flexi-N on one section had severely damaged the crop while not enough Flexi-N and chemicals had gone on in other strips. In other paddocks sections had been missed and the centres of paddocks had not been sprayed out properly.
86 Mark Granich said he complained to CWC half a dozen times in July and August during and after the post-sowing spraying about various
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- problems. Mark Granich's evidence was that Mark Townrow inspected the paddocks several times in July and August but nothing was done about the problem. Under cross-examination Mark Granich's evidence about complaints changed. This cross-examination occurred at T 150-151:
"Prior to late September 2004, as far as your wheat crop is concerned, any areas that were missed in the wheat crop you regarded as acceptable? – That of areas that I noticed I regarded as acceptable
Acceptable. So prior to late September 2004 you had no cause to complain to the Townrows about missed areas in your wheat crop, did you? – I think I did but as I said ---
Well, what was the reason, Mr Granich? – Well, because I didn't realise the extent of the damage.
Yes, but as of late September 2004, as far as you knew, you didn't have any cause to complain to the Townrows about your wheat crop spraying? – I had cause.
Well, what was that? – As I said to you ---
Well, what was the cause? – Just general – spraying in general was – I didn't feel it was up to standard.
We're talking specifically here about missed areas. You have said that prior to late September 2004 the missed areas you had noticed in the wheat crop you regarded as acceptable. Correct? – That I noticed, yes.
So as far as you knew, in late September 2004 you had nothing to complain about to the Townrows about missed areas in your wheat crop? – No."
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88 As cross-examining counsel pointed out that is contrary to the Granichs further and better particulars in answer 1(IV) which stated only two or three of those complaints related to missed areas in the wheat; the other three or four complaints related to the boomspray delivering too much or too little chemical. Mark Granich denied the purpose of the complaint was to have the missed areas resprayed; he said the purpose was to make sure it did not happen again. He did not believe there was anything that could be done to rectify the problem with the 2004 wheat crop. Mark Granich said that by the time he realised he extent of the problem the wheat was flowering and any further spraying would have damaged the crop.
89 There was other evidence about the wheat spraying. Exhibit 25, pp 1 to 3 was tendered as CWC's comprehensive invoice for the canola spraying and the wheat spraying in 2004 totalling $11,722.20. Also included in Exhibit 25 are the individual invoices for each day's spraying. The first three pages are a comprehensive statement of the money owed to CWC for all of the spraying of canola and wheat in 2004. Julie Townrow admitted CWC never sought payment on the wheat invoices from the Granichs; she said that was because of the ongoing dispute about the canola crop. The only mention of the wheat invoices is in Exhibit 29, an offer made by Mark Sheppard the Townrows' mediator to the Granichs on 1 December 2004. The offer was in these terms:
"CWC Professional Ag Contractors on a without prejudice basis offer you $11,796.93 to assist you with your shortfall in anticipated harvested of your canola crop. This offer is not negotiable and is only valid for a period of seven (7) days from the date of this letter."
90 Then payment of the outstanding canola and wheat invoices was used as a sort of veiled threat:
"Should you not act upon this offer as proposed above, then a summons will be issued for the amount of $11,722.20 you owe to CWC Professional Ag Contractors which well exceeds the agreed trading terms between you and CWC Professional Ag Contractors."
91 Mark Sheppard was not called as a witness and there was no further evidence about Exhibit 29.
92 I found it surprising that the Townrows did not act on the unpaid wheat invoices if there had been no complaints to them about the spraying
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- of the wheat. It is even more surprising that they did not counterclaim for the amount of these invoices in their defence (filed in April 2005) to the Granichs' statement of claim (filed 18 March 2005). The Townrows' counterclaim for the wheat spraying invoices came a year later in 2006. It was submitted on behalf of the Granichs that payment of the wheat invoices was not pursued by the Townrows because they well knew their spraying of the wheat was not reasonably fit for the purpose of controlling radish in the wheat crop. That inference is reasonably open on the evidence and I draw that inference. But it does not assist in considering the issue of failure to mitigate.
93 The burden of proof is significant in resolving this issue. The burden lies on the Townrows to satisfy me on the balance of probabilities that the Granichs failed to mitigate their loss by failing to complain about the areas missed in spraying until it was too late to correct the problem.
94 I did not find any of the Townrows to be honest, credible witnesses. Much of their evidence involved shuffling responsibility among themselves and on to Mark Sheppard and avoiding difficult questions. Mark Townrow shifted everything to Mark Sheppard. Scott Townrow denied any knowledge or involvement because he said Mark Townrow was dealing with it. Julie Townrow denied receiving any complaints about the wheat. I have already given reasons for my lack of confidence in the evidence of Mark and Julie Townrow. I include Scott Townrow's evidence in that category as well. By contrast, as I noted earlier I found both Mark and Helen Granich to be honest witnesses.
95 When I consider whether Mark Granich did complain I rely on his evidence of early complaints to Mark Townrow after the summer spraying about missed areas. I also rely on his evidence of complaints to Mark Townrow in July and August and to Scott Townrow in August about problems with the wheat spraying. I also rely on the letter he and Helen Granich wrote in December 2004 (Exhibit 11) wherein they specified complaints made to Mark Townrow and to Scott Townrow. Both Mark and Scott Townrow admitted seeing or receiving that letter. Neither of the Townrows ever answered that letter or put the record straight if what was in the letter was untrue.
96 The time when spraying would have been effective was at pre-sowing in April and May. The real cause of the radish infestation was the failure to respray those missed areas in June or July and failure to correct the problem with the new positioning device before the post-sowing spraying in July and early August. I accept Mr Williams'
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- evidence that spraying at those times would have been effective. I also accept Mr Williams' evidence that there was a very small window of opportunity after the post-sowing spray before the wheat headed in late August or early September when a further spray with Logran would have been able to provide 100 per cent weed control in the wheat. But it was not a normal time for wheat spraying. That time had passed.
97 Taking account of all the evidence and having regard to my findings on credibility I am not satisfied on the balance of probabilities that the Granichs failed to mitigate their wheat losses by failing to complain about the areas missed in spraying until it was too late. I accept Mark Granich's evidence that he did complain earlier but nothing was done. I do not consider that to be inconsistent with his admission (T 151) that he had no cause to complain about missed areas in the wheat before the end of September. He went on in that cross-examination to explain that he had complained during the course of the whole spraying. The difficulty was that he did not realise the extent of the radish infestation until it was too late to do anything about it.
98 Given all of these circumstances I do not consider that the plaintiffs were obliged to complain within that small window of opportunity in middle to late August when the extent of the radish infestation was not necessarily yet evident. That would place too high a standard on the plaintiffs when the defendants in this case are the wrongdoers (NRMA Ltd v Morgan).
Causation
99 The findings I have made on issue 5 cover the issue raised by the defendants – that the alleged failure of the Granichs to complain about missed areas in spraying was the real cause of the radish infestation. Their submission was that even if they had missed areas there would have been no radish infestation if CWC had received timely notification of the missed areas.
100 Only a loss that is caused by the defendants' breach is compensable and in determining causation the same general principles apply in tort and contract. The question whether a particular loss was caused by a particular breach is determined by applying the criteria of commonsense rather than those of logic, philosophy or science (Fitzgerald v Penn (1954) 91 CLR 268 at 277-8; Bennett v Minister of Community Welfare (1992) 176 CLR 408 at 413, 428). The "but for" test may not be enough. In this case applying commonsense in all the circumstances on the findings of fact I have made I am satisfied on the balance of probabilities
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- that it was the failure of the defendants to spray all areas of the wheat crop that was the substantial cause of the radish infestation.
Conclusions on liability
101 I have made findings of fact and law on the five major issues. As a consequence of those findings I am satisfied that:
1. The Townrows through CWC held themselves out as professional agricultural spraying contractors.
2. The oral contracts with the Granichs to provide spraying services for the Granichs' canola crop and wheat crop were contracts for the supply of spraying services to a consumer in the course of a business (s 40 FTA) and there was an implied warranty that "the services would be rendered with due care and skill" and the services would be reasonably fit for the purpose understood between the parties – that of controlling weeds in the crops.
3. The Townrows breached the contract to provide spraying services for the canola crop by failing to decontaminate the boomspray and thereby damaged the crop to the extent that the crop was lost.
4. The Townrows breached the contract to provide spraying services for the wheat crop by failing to spray all of the crop.
5. The Townrows owed the Granichs a duty to take reasonable care in spraying the canola and the wheat crops (Mark Townrow admitted this).
6. The Townrows breached their duty of care in spraying the canola crop by failing to decontaminate the boomspray.
7. The Townrows breached their duty of care in spraying the wheat crop by failing to spray all of the crop.
8. The breach of the canola crop contract caused the loss of the entire canola crop.
9. The breach of the wheat contract caused an infestation of radish to grow among the wheat.
10. The Townrows' negligence in failing to decontaminate the boomspray caused the loss of the entire canola crop.
11. The Townrows' negligence in failing to spray all of the wheat crop caused an infestation of radish to grow among the wheat.
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- 12. The Granichs did not fail to complain about the areas missed in spraying the wheat crop until it was too late to correct the problem.
13. The Townrows failed to correct the problem with their new positioning device after the pre-sowing spraying and failed to respray the missed areas after that spraying when respraying would have been most effective.
Damages
"The plaintiff is entitled to full compensation for the loss which he sustains in consequence of the defendants' breach, subject to the rules as to the remoteness of damage and to the plaintiff's duty to mitigate his loss."
(Hungerfords v Walker (1989) 171 CLR 125 per Mason CJ and Wilson J at 143)
102 Damages are awarded for a breach of contract if a compensable and measurable loss has occurred which was caused by the breach, is not too remote, and could not have been avoided. (Cheshire and Fifoot: "Law of Contract" 8th Aust ed, p 973). My findings on liability confirm all of these conditions have been met.
103 In tort the plaintiff is entitled to damages to cover the loss he suffered (valued at the time of the tort) caused by the defendants' negligence. There are circumstances where the assessment of damages differs depending on whether the plaintiff brings the action in contract or in tort. This is not such a case.
104 The Granichs claim damages for loss of the canola crop calculated by reducing the anticipated income from the canola crop less the expenditure required for growing and selling the crop. Mark Granich gave evidence that he received an offer from the Australian Wheat Board (AWB) in early September 2004 to purchase his canola crop (Exhibit 7). He said it was a very good price at the time and if his canola crop had not been destroyed he would have signed the contract with AWB by filling out the form and sending it back to AWB.
105 Jane Laird worked for AWB Grain Marketing in 2004 and gave evidence she sent Exhibit 7 to the Granichs. If they had replied offering their canola crop for sale Ms Laird said the AWB would have accepted the offer and purchased the canola for $415 per tonne. But the canola needed to meet the oil content of 42 per cent. If it had less oil content the
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- base price would have been 1.5 per cent less for every 1 per cent of oil below 42 per cent. Similarly, a higher oil content would have led to an increased price per tonne for the crop.
106 Both Mark Granich and Trent Kensett-Smith gave evidence that 2004 had been a good rain season for the canola, but Mr Kensett-Smith explained that there are difficulties in predicting yields. His best guess was a yield somewhere between 1.1 and 1.4 tonnes per hectare. Mr Kensett-Smith conceded that it is almost impossible to predict the oil content of canola. He said he would expect an average oil content to fall somewhere between 40 and 44 per cent and saw no reason to believe this crop would have been any different.
107 The Granichs' canola crop covered 102.6 hectares. The Granichs calculate the value of their crop on the basis of a yield at 1.3 tonnes per hectare. I believe a yield of 1.25 tonnes per hectare would be more reasonable and more consistent with Mr Kensett-Smith's evidence. 102.6 x 1.25 x $415 = $53,224 which I accept as a reasonable estimate of the anticipated income from the crop.
108 That estimate of income needs to be reduced by expenditure incurred. The Granichs calculate this as:
1. The costs of transporting the crop to Perth at $22 per tonne ($22 x 106.6 x 1.25) = $2,931.50.
2. The costs of spraying: $510.
3. The cost of harvest ($10 per hectare): 102.6 x $10 = $1,026.
4. Retained fertiliser: $1,400.
109 The total estimated expenditure is $5,868. $53,224 - $5,868 = $47,356. Therefore I award damages for loss of the Granichs' canola crop in the amount of $47,356.
110 The Granichs did not lose their wheat crop. The damage they suffered as a result of the Townrows' failure to spray all areas of the wheat crop was that radish grew up among the wheat and went to seed in the wheat. Mark Granich explained that when the wheat was harvested that process scattered the radish seed over the wheat paddocks. He referred to an old farmers' saying "One year's weeds are seven years' seeds". He said if you let weeds get out of control it takes years to control them (T 80). David Williams' evidence confirmed this. He spoke about the build-up of the weed seed bank and the costs the Granichs will incur to control radish in the paddocks. He inspected the Granichs' property on 15 August 2005
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- to assess the radish burden present in the paddocks and set out a five year program of extra costs. In his report (Exhibit 21) at p 81 and p 84 he sets out his calculation of the loss the Granichs suffered: in 2005 they incurred extra costs of $10,988. He further estimated that for the next four years in 2006, 2007, 2008, and 2009 the Granichs would incur costs of $5,608 per annum controlling the radish in these paddocks.
111 The Granichs' calculations of loss claimed are somewhat different but slightly less than David Williams' estimate:- the Granichs claim $10,608 for expenses incurred in 2005 and $5,608 per annum for the four further years = total costs of $33,040.
112 I consider these costs are reasonably incurred and I award $33,040 to the Granichs for the cost of controlling the increased radish in the wheat paddocks caused by the Townrows' failure to spray all areas of the wheat in 2004.
Contributory negligence
113 Because of my findings of fact, the issue of contributory negligence on the part of the Granichs in failing to complain about missed areas in the wheat crop, does not arise. If it had arisen I note that the statutory provisions extending contributory negligence to cases involving breach of contract (Part 1A: Civil Liability Act 2002) did not come into force until 1 December 2004. They would have no application in these proceedings.
114 The previous provisions allowing reduction of damages awards for contributory negligence in tort (Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947) do not apply to contract claims (Astley v Austrust Ltd (1999) 197 CLR 1). In this case reduction of damages for contributory negligence in the contract claim would not have been available to the defendants in any case.
The counterclaim
115 The defendants counterclaim for the costs they incurred in spraying the canola and spraying the wheat and claim a total sum of $11,722.20 (Exhibit 25) for the costs of spraying. I accept that the costs claimed are reasonable and consistent with the course of business between the parties.
116 The defendants submit that they have done the spraying and are entitled to payment for the work done (Williamson v Murdoch (1912) 14 WALR 54). Such an allowance for the value of the work done would be a deduction from the damages to which the plaintiffs are otherwise entitled.
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117 The cost of spraying the canola crop was $561 (Exhibit 6). The plaintiffs did not receive any benefit to their canola crop from that spraying. The canola crop was severely damaged and lost as a result of the spraying. In these circumstances the defendants are not entitled to any allowance for the value of that spraying.
118 The spraying of the wheat crop was a different matter. The wheat crop was harvested. The plaintiffs did not claim damages for any reduction in that crop due to the failure to spray all areas of the crop, although from the evidence of the experts they may well have incurred some losses. The plaintiffs' damages claim is for the cost of ridding their paddocks of the radish infestation caused by the defendants' failure to properly spray the wheat in 2004. In these circumstances I accept the defendants' submission that they are entitled to an allowance for the value of the work done. The invoices for wheat spraying total $11,161.33. Therefore I reduce the damages awarded to the Granichs for the wheat losses ($33,040) by the value of the spraying services ($11,161.33) = $21,879.
119 For these reasons I award damages to the Granichs for both canola and wheat losses in the amount of $69,235.
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