Halloran v Wandel - [2014] SADC 190

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
HALLORAN AND ANOR v WANDEL
[2014] SADC 190
Judgment of His Honour Judge Clayton
17 November 2014
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - FORMATION OF CONTRACTUAL RELATIONS
Plaintiffs sought judgment against defendant for a liquidated sum for supply of dam water and work undertaken - the defendant asserted that there were no binding agreements.
Held: judgment entered for the plaintiffs, including pre-judgment interest, in the sum of $112,551.75
District Court Act 1991 ss 39, 39(2)(a), 39(3); Supreme Court Act 1935 s 30C, referred to.
Redman v Klun (1979) 20 SASR 343, considered.

HALLORAN AND ANOR v WANDEL
[2014] SADC 190

The plaintiffs and the defendant are the owners of neighbouring farms on the East West Highway on Kangaroo Island.
In addition to farming the defendant has also conducted a seed business and in recent years has developed a business growing seed potatoes on his farm using water from dams for irrigation.
In addition to their farm the plaintiffs conduct a significant earthmoving business, operate a quarry and operate an aeroplane.
The plaintiffs’ claim is for amounts said to be due by the defendant on various contracts between the parties and for interest.
So far as the claim for interest is concerned the evidence does not establish an agreement by the defendant to pay interest. I find that if the plaintiffs have any entitlement it could only be pursuant to section 39 of the District Court Act for prejudgement interest. I dismiss the claim for interest made in various invoices that were tendered.
The significant items in the plaintiffs claim relate to the hire of an implement called a blade plough during 2009, 2010 and 2011, earthmoving work carried out for the repair of Larcombe’s Crossing in late 2009 and the supply of water from the plaintiffs’ dam in early 2010.
The wife of Mr David Halloran played no role in the events giving rise to the claim and when I refer to the plaintiff in these reasons that is a reference to Mr David Halloran.
Mr Halloran did allow the defendant to pump the water from his dam. The plaintiffs claim an amount of $62,700 (including GST) which is alleged to be an agreed rate per mega litre for 114 mega litres of water. The defendant’s case is that any water provided to him by the plaintiffs was provided free of charge. He also disputes the quantity of water which is alleged to have been provided.
The plaintiff did use earthmoving equipment and provide material in connection with the repair of Larcombe’s Crossing. Again the defendant’s case is that the plaintiff had agreed to carry out the work on Larcombe’s Crossing without charge. There is a further dispute as to the extent of the work performed by the plaintiffs.
The plaintiff also alleges an express agreement for the hire of a blade plough.
The plaintiffs have not argued that they are entitled to payment on a quantum meruit or on equitable principles relating to unjust enrichment but rely solely upon the alleged contracts.
Credibility of witnesses
The differences between the evidence of the plaintiff and the evidence of the defendant are fundamental and irreconcilable. There is no scope for one or other of them to be mistaken. This is a case where one or both of the principal witnesses must have given deliberately false evidence. It is a credibility case.
Neither Mr Halloran nor Mr Wandel was a good witness.
During his evidence Mr Halloran took offence easily and often became aggressive. He was prone to exaggerate and at times was reluctant to descend to detail. His counsel suggested that was because he was tired, angry and frustrated, which he said was not surprising in the circumstances. Mr Halloran gave dogmatic evidence that he did not use rocks from the defendant's property on a site known as the East-West Crossing. That evidence was wrong. However Mr Halloran did call other evidence which corrected the error.
On the other hand Mr Halloran was prepared to make concessions against his interest; for example he acknowledged that the topic of interest had not been discussed between the parties before he delivered the invoices which claimed interest and he conceded that he had said that the defendant did not have to pay the invoice for the hire of the blade plough if he paid the other invoices.
Notwithstanding its imperfections the evidence of the plaintiff is consistent with and corroborated by surrounding events and generally it is supported by logic. I think that basically he was an honest witness.
I accept the submission of Mr Stratton-Smith that the evidence of Mr Wandel was vague even on critical issues. His evidence lacked the supporting fabric that one would have expected. On many occasions he claimed to have a poor memory and was unable to provide detail of critical conversations. He resorted to summaries which supported his cause. Such summaries are not admissible evidence. On other occasions Mr Wandel was reluctant to give straight answers and appeared to be constructing his answers as he went rather than recalling facts from his memory.
In many respects the evidence of Mr Wandel on critical issues was illogical and contrary to objective facts and common sense.
I am not prepared to rely upon the uncorroborated evidence of Mr Wandel on any disputed issue.
The event on 11 July 2009
In July 2009 there was a large dam on the defendant's property which collected water from tributaries of the Herriot River. It had been suggested that the dam was illegal. It is unnecessary for me to consider that suggestion. It was common ground that about 12 months prior to July 2009 the defendant had been served with an order to reduce the capacity of the dam from about 600 mL to about 50 mL and to revegetate the land. As at July 2009 the order had not been complied with.
The dam on the defendant’s property contained more than sufficient water to meet the needs of the defendant’s potato growing activities in the 2009-2010 season.
On 11 July 2009 Mr Wandel, who was in Mt Gambier, telephoned Mr Halloran and advised that his dam was overflowing. He requested Mr Halloran to take an excavator to the site and cut out the overflow to create a passage to allow water to escape and hopefully save the dam. When Mr Halloran drove to the dam the damage had progressed too far and it was not possible to save the dam. The dam did give way and a large quantity of water flooded down the Herriot River causing damage as it went.
At various places crossings had been constructed to allow motor vehicles to cross the Herriot River. As the water flooded down the river crossings which gave access to the property of Mr Larcombe and at the East-West Highway were washed away. The water also caused other damage for which Mr Wandel accepted responsibility.
The East-West Highway was a public road under the control of the local council. Whilst it was a significant Highway on Kangaroo Island it was not bitumenised. After calling for tenders the council awarded the contract for the repair of the East-West crossing to the plaintiff for $35,000.
Mr Halloran gave evidence that the repair of the East-West crossing was easier work than the repair of Larcombe’s Crossing. He said Mr Wandel was aware of the cost of that work. In fact Mr Wandel had expected the council to ask him to pay for the repair to the East-West crossing, but that never happened. Mr Wandel was also aware that Mr Halloran had carried out similar work on a crossing over the Cygnet River five years earlier at a cost of $35,000. (T 33 to T 34)
As the person likely to be held responsible for the damage to Larcombe’s Crossing the defendant assumed responsibility to have the repairs carried out. Work in connection with the repair of Larcombe’s Crossing is one component of the plaintiffs’ claim.
Having lost the water from his dam the plaintiff needed to find other water for the coming season. There were several dams in the area. To the east of Mr Wandel’s farm there was a dam on the property of Mr Nathan Trewthewey. A short distance north-east of Mr Trethewey’s dam there was a dam owned by members of Mr Trethewey’s family. There was another dam on the property of the plaintiff on the other side of the East-West Highway which was immeidately to the south of Mr Trethewey’s property. After negotiations the plaintiff acquired first the water in the dam of Nathan Trethewey and when that was exhausted, the plaintiffs’ dam. The plaintiffs claim the cost of the water which was taken by Mr Wandel from their dam.
The hire of the blade plough – Invoice No.2
A blade plough is an implement towed by a tractor for the purpose of facilitating the removal of rocks from land preliminary to the planting of a crop. For some years the defendant had used a blade plough owned by Mr Eichner but his tractor experienced a difficulty pulling Mr Eichner’s plough and Mr Halloran suggested that Mr Wandel should try his blade plough which was slightly smaller and easier for a tractor to pull.
Mr Wandel did try the plaintiffs’ blade plough. He must have found that satisfactory because he continued to use the plaintiffs’ blade plough for about two years until Mr Halloran went on to the defendant’s property and recovered it.
There is dispute between the parties as to the terms on which the plaintiffs’ plough was used. Mr Halloran claims that the defendant agreed to hire the plough at a cost of four or five dollars per acre while the defendant’s case is that the plough was loaned free of charge.
There is also a dispute as to the extent the blade plough was used by Mr Wandel.
In his cross-examination Mr Halloran agreed that when he presented Mr Wandel with the invoice for the use of the blade plough Mr Halloran conceded that if Mr Wandel paid other unpaid invoices he would not have to pay for the hire of the blade plough.
Mr Wandel had the use of the blade plough during 2009, 2010 and 2011. No charge was made by Mr Halloran in respect of the blade plough until an invoice for $9126.70 (including GST) was presented on 21 August 2011.
During the period Mr Wandel was using the plough, no record was kept by either party of the acreage ploughed.
Mr Halloran gave evidence that he had flown his plane over the defendant’s farm and had observed the defendant or his employees ploughing certain pivots (the areas cultivated and watered for the purpose of growing potatoes) and he calculated the area that had been ploughed with the blade plough by adding those areas. Mr Halloran said "my calculation, from the air and from the ground, was how many sites had been done and I actually seen the drivers working with that machine and leaving us to do them twice." (T 56-26). He continued:
The method I used was the size of the pivots sites and I believe the majority were 100 acres, or 40 ha sites, multiplied by seven, multiply that by two, to come up with 1400, and when I handed this account to Mr Wandel, he didn't dispute the acreage on it, he could have and I would have said "Okay, I'll give you a discount back to what you say", but he didn't (T 56-33)
He said it was very easy to see the sites where the machine had been working. (T 57-4) He calculated Mr Wandel had ploughed 1400 acres. Mr Wandel produced a document which asserted that the total area ploughed by the blade plough was 492 acres (MFI D49)
The evidence of Mr Halloran as to the agreement to hire the plough is succinct. He said that he said to the defendant:
Take it for a trial period, if you're happy with the way it works, the hire rate in 1984 was four dollars an acre plus grader blade and any breakages associated (T 55-4)
He said the response of Mr Wandel was "as normal, he nods his head and looked down at the ground and shuffles his feet like James Wandel does." (T 55-9)
After Mr Wandel’s trial of the plough there was a further conversation relating to grader blades. The plaintiff gave evidence:
And I said, again, the hire rate in 1984 was four dollars, which was a very reasonable price, and 20 something years later that's what I need. (T 55-29)
When asked what Mr Wandel’s response was Mr Halloran said:
The agreement is, as I said, look down at the ground and nod his head and off he walks. (T 55-34)
After that conversation Mr Wandel continued to use the blade plough.
The issue is whether the evidence establishes that Mr Wandel agreed to pay for the use of the blade plough.
Mr Halloran said that the blade plough seemed to be never coming home and that after learning of the whereabouts of the plough from one of Mr Wandel’s workers he drove onto Mr Wandel’s property and retrieved it.
In cross-examination Mr Halloran affirmed his evidence-in-chief, although he did concede that he might have said that if the defendant paid the other invoices he did not have to pay the invoice for the hire of the blade plough.(T 129-37, T 130-13).
In cross-examination Mr Halloran said that when he gave Mr Wandel the invoice he asked him to open the invoice and check it. He agreed that Mr Wandel didn't really make any comment about the invoice at the time. (T 124-12). He said that if Mr Wandel had told him that he was wrong as to the acreage he would have adjusted the account accordingly, but Mr Wandel ‘never rendered any assistance.’ (T 127 -14)
Mr Wandel described the arrangement in the following terms:
In 2008 in general conversation with Mr Halloran on a number of occasions, at least three, he offered for us to borrow his blade plough because he said he hadn't used it for at least 10 years and it was sitting, just sitting on a property west of us on Michael Florence’s property. (T 480-30 and T 502-28)
Mr Wandel said "it was offered on a neighbour to neighbour basis to borrow the same as I was borrowing Leith Eichner’s at the time." (T 505-1). Later he said:
Like there was these two or three or four conversations where we just discussed it, he offered and then re-offered and he-like he said we could use it. You know, there was definitely never anything that we were hiring it, it was-I just can't remember whether there were specific words that whereby like I made sure that I wasn't paying a hire fee because I brought to his attention or made sure that he knew that I was borrowing one and I was clear in my mind that I was borrowing his. But I can’t remember what- I made sure I wasn’t going to be charged for it but can’t remember the words we used because I was borrowing one already, and you know Mr Halloran had offered it on a number of occasions. (T 508-22)
Mr Wandel said Mr Halloran definitely did not say “take it for a trial period, if you’re happy with the way it works, the hire fee in 1984 was $4 an acre plus grader blade and any breakages associated.” (T 507-7)
Even on the evidence of Mr Halloran the arrangement with respect to the blade plough was loose. Mr Halloran was never prompt with the delivery of invoices but in the case of the blade plough Mr Wandel had the use of the plough for several seasons before any invoice was delivered. Up until the time the invoice was delivered no attempt was made by either party to record the use of the blade plough and there had been no discussions between the parties as to the extent of Mr Wandel’s use. A claim for hire of the plough was first made on invoice No 02 dated 21.8.11 (Exhibit P12). On that invoice claim was made for 1400 acres at $5.00 per acre together with claims for $1,100 for a tyne, $135 for a ripper boot and $191.40 for two grader blades.
Mr Halloran acknowledged that at the time he presented the invoice he told Mr Wandel that if the other invoices were paid he would not require payment of the invoice for the blade plough.
In the case of the blade plough the evidence does not permit me to make any finding, even on the balance of probabilities, as to the true nature of the arrangement. While there can be no doubt that the defendant did have the use of the plough the circumstances surrounding its use show it was a very loose arrangement. I am influenced by the fact that several years passed before an invoice was presented, no record was made of the usage of the blade plough from year to year and Mr Halloran conceded that he would not pursue the charge for the blade plough if the other invoices were paid.
The blade plough has now been recovered by the plaintiff.
Mr Wandel gave evidence that a ripper tyne, ripper boot and grader blade which are referred to on Exhibit P12 are available for collection. The plaintiff has never made a demand for those items. There is no evidence of any contract which could support Mr Halloran’s claim in respect of those items. (T 98) The claim in respect of them is dismissed.
I find that the plaintiff has not proved on balance that that there was an agreement by the defendant to pay the alleged hire fee. I make no finding as to what the terms of the arrangement were. I dismiss that part of the claim which relates to the use of the blade plough, the ripper tyne, ripper boot and grader blade. (Invoice No.2 - Exhibit P12)
Larcombe’s Crossing – Invoice No.18
As I have mentioned the defendant assumed responsibility for repairing the damage to the crossing over the Herriot River to Mr Larcombe’s property.
The crossing had been constructed by placing two lines of pipes in the river bed to permit the flow of water along the course of the river. The pipes were covered by rocks, gravel, soil and concrete so that the crossing acted as a bridge over the river.
When the crossing was washed away Mr Larcombe was unable to transport his fat lambs to market and he was anxious to have the crossing reinstated as quickly as possible.
Since 1978 the plaintiffs had conducted an earthmoving business. They owned various items of heavy machinery including three bulldozers. Their business included work constructing dams and work on highways. The work required for repair of Larcombe’s Crossing was the type of work normally carried out by the plaintiffs.
The plaintiff normally charged an hourly rate for the hire of his equipment. He also charged a "shift fee" to move equipment from one site to another. Mr Halloran said that for a bulldozer he charged the standard hourly rate determined by the "contractors union". (T 12-18.)
Prior to 2008 Mr Wandel had used another contractor for any earthmoving which he needed to be carried out. Since 2008 the plaintiffs have on occasions carried out earthworks for Mr Wandel.
Mr Halloran gave evidence of his accounting procedures. He and his late brother, who worked for him, had pocket notebooks in which they recorded the hours they worked. His practice was to wait until he finished a job before preparing an invoice. Also he was in the practice of waiting until he had a number of invoices to prepare at the same time. (T 14) He was not always prompt with the delivery of his invoices.
The plaintiff's case is that Mr Wandel was under pressure from Mr Larcombe to have the crossing repaired and Mr Wandel approached Mr Halloran for a price to do that work. Five years earlier the plaintiff had carried out similar work on the Cygnet River at a cost of about $35,000. Also the plaintiffs’ quote for $35,000 to repair the East-West Highway Crossing had been accepted by the council. The plaintiff's case is that he told Mr Wandel that it would cost about $22,000 to get the crossing to concrete stage. It was proposed that concreting at the sides and on the top of the Larcombe’s Crossing would be carried out by the defendant’s workmen.
The plaintiffs claim an amount of $26,391.75 inclusive of GST, for work which Mr Halloran carried out at the request of Mr Wandel on Larcombe’s Crossing. The plaintiffs allege that there was a contract between them for the work. Mr Halloran justifies the reasonableness of his price by reference to the contracts for the Cygnet River and the East-West crossing.

Mr Wandel disputes that there was a contract. The defence case is that Mr Halloran had carried out work using his equipment and supplying material gratuitously and that Mr Halloran was not entitled to charge. Mr Wandel also disputes the extent of the work listed in the plaintiffs’ invoice No.18. (Exhibit P4).
In paragraph 4.2 of his defence the defendant pleads:
…there was not the agreement between the parties to the effect is the plaintiff has set out in paragraph 10.1 of the Statement of Claim as the parties mutually agreed that the repair work required to "Larcombe’s Crossing" would be affected firstly by the plaintiffs supplying some of his equipment to affect such repair work at the same time as he was affecting other similar repair works for the local council in the vicinity of "Larcombe’s Crossing" and secondly with the defendants supplying the plaintiff with rock as fill for both the "Larcombe’s Crossing" and the other nearby repair work being undertaken by the plaintiff and his employees labour for the repairs to be effected to Larcombe’s Crossing
The reference to "other similar repair works for the local council" is a reference to the work which the plaintiff had contracted to carry out for the council at the crossing of the East-West Highway.
Para 4.2 suggests there was an agreement that the plaintiff would carry out the work on Larcombe’s Crossing in return for rock which he could use at the East-West crossing.
Mr Halloran gave evidence that following the damage to Larcombe’s Crossing he was "asked (by Mr Wandel) to put the crossing back in order, to take a B double semitrailer, which is two big semitrailers, and also asked for a price to get to that stage." (T 33-27) Mr Halloran said he could do the work and Mr Wandel then asked for an approximate price. Mr Halloran said that he had done large crossings in the Cygnet River five years earlier for $35,000. He had also just submitted pricing for the Kingscote Council on the East-West crossing for a price of $35,000, which the council had agreed to. He said "so Mr Wandel knew what these prices were, I said this one will be 22 and a half thousand dollars approximately plus GST to be solid." Mr Wandel wanted to do the concreting himself. Mr Wandel told Mr Halloran "go ahead immediately" and Mr Halloran proceeded to carry out the work. (T 34-16)
If the evidence of Mr Halloran is correct it establishes the plaintiffs’ case.
The work at Larcombe’s Crossing is itemised in the plaintiffs invoice No.18 dated 22 February 2010 (Exhibit P4). The work which is listed is quite extensive and is said to have occupied the period from 9 September 2009 until 9 October 2009. Mr Halloran said that the work included making good the damage to the old crossing, installing new pipework, and carrying rocks to the site to place around the pipework. It was necessary to have a number of separate items of heavy machinery available on the site although only one item might have been used at a time. The equipment listed in the invoice included a low loader, JD4 WD, Cat Loader 966c, D6D dozer, excavator and Tandem tipper. The invoice stated work was carried out on 9 September, 12 September, 13 September, 22 September, 25 September, 26 September, 27 September, 28 September, 29 September, 30 September to October 5 October, 6 October, 7 October, 8 October and 9 October. There are 3 shift fees for which a total charge of $840 was made, and charges for placing rocks, 12 loads of rubble ($1800) levelling the rubble and grading.
The invoice stated that while six machines were on-site the plaintiffs only charged for three machines and that while work was carried out on 13 days the invoice only charged 10 days at an average of six hours per day, that is 60 hours at $340 per hour. The total of the charges for all the items on the bill was $26,311 including GST of $2399.25, which was in accordance with Mr Halloran’s estimate.
The defendant’s case is that the work was carried out, the materials were supplied and the machinery was provided gratuitously. Mr Wandel’s case is that he had the machinery and the men to carry out the work on Larcombe’s Crossing himself. I am not convinced that the evidence establishes that. If the submission is correct why didn’t Mr Wandel carry out the work himself in the same way that his men did the concreting. His counsel submitted that Mr Wandel did not do all the work himself “Because Mr Halloran offered to assist him and was doing it as a neighbor with no mention of any cost or price involved at all.” (T 735-36)
If Mr Halloran was working without charge and Mr Wandel had the machinery and men to do the job one would have expected Mr Wandel to have provided Mr Halloran with more assistance than he did. Given the size of the project and the cost associated with it the defendant’s case is completely unbelievable.
Mr Halloran said that before he rendered the invoice for the work at Larcombe’s Crossing Mr Wandel said to him "I'd like this invoice Dave so I could get this tidied up" (T 41-17). Mr Halloran provided the invoice thinking that he was going to be paid. He said "I was expecting a cheque for Larcombe’s Crossing." (T 138)
Mr Halloran said that when he delivered the invoice Mr Wandel who opened the envelopes in front of him and appeared to look at the invoice. Mr Wandel did not dispute anything on the invoice. (T 41) It was not until later that Mr Wandel said that Mr Halloran would have to issue proceedings.
There is objective evidence that Mr Halloran carried out extensive work at Larcombe’s Crossing. It was work of the type normally carried out by the plaintiffs' earthmoving business.
During the course of the case it was revealed that Mr Wandel had received $10,000 from Mr Larcombe in respect of the work on the crossing.
I do not accept the evidence of Mr Wandel as to the arrangement with respect to Larcombe’s Crossing or his evidence as to the extent of the work. The extent of the work shown in photographs speaks for itself. It is significant that Mr Wandel did not challenge the invoice at the time that it was delivered or within a reasonable time thereafter.
The evidence of Mr Wandel’s workmen does not contradict the evidence of Mr Halloran as to the work that the plaintiffs carried out. Mr Wandel was only at Larcombe’s Crossing himself on one day. (T 539-16).
The agreement pleaded in paragraph 4.2 of the defence is unlikely and is not supported by the defendant's own evidence. Mr Halloran did take rocks from the defendant's property but there is no reliable evidence of any agreement the rocks were payment for the work carried out by the plaintiffs. I accept the evidence that the plaintiff was doing the defendant a favour by removing rocks from his property. The defence raised by paragraph 4.2 is not consistent with the evidence of Mr Wandel.
It is completely improbable that the plaintiff would incur expenditure for fuel and other items of overhead and incur wear and tear on his machinery without making any charge for work which involved many days of his own time.
I accept unreservedly the evidence of Mr Halloran with respect to Larcombe’s Crossing. It is supported by common sense and the objective facts. The evidence establishes work was carried out. I find that the parties entered into a contract in the terms stated by Mr Halloran and that Mr Halloran carried out all of the work which is itemised in his invoice No.18. (Exhibit P4). I find that the amount which has been charged for that work was a proper amount for the work.
I find that the plaintiff has established an entitlement to $26,311.75, including GST, with respect to Larcombe’s Crossing. The invoice was delivered on 22 February 2010 and it was payable on or before 7 March 2010.
Claim for water from the plaintiffs’ dam – Invoice No.31
As a consequence of the damage to his dam on 11 July 2009 Mr Wandel lost the water which he proposed to use for his crop during the 2009/2010 season. Almost straight away Mr Wandel started to negotiate alternative arrangements. Possibilities which were available to him included purchasing water from Mr Nathan Trethewey, from Mr Trethewey’s family or from the plaintiff.
Initially Mr Wandel contracted to purchase the water from the dam of Mr Nathan Trethewey. It was necessary for piping to be laid to convey the water from Mr Trethewey’s dam to the pivot which would water the defendant’s crop. Mr Wandel agreed to meet the cost of that piping. In return for the water Mr Wandel also agreed to lay at his cost additional piping from Mr Trethewey’s dam to the location where Mr Trethewey intended to install a pivot on his own land for use in the future. The transaction was evidenced by an invoice (Exhibit P18) which Mr Trethewey handed to Mr Wandel sometime after the event. The invoice is described as a bill for:
Complete use of all water contained in the "Lyndhurst" dam. Approx. Total volume of dam 120 ML used 87 ML (by flowmeter) $39,150 GST $3915 amount $42,345.
The works were said to include "Access and agreement to re-route temporary line across four separate padlocks. Final site clean-up and remediation of temporary line. Ability to refill and use dam as required.
The invoice included the notation "Paid in Full through negotiation of installation of 2.48 km of 8 inch pipe."
The capacity of Mr Tretheway’s dam was claimed to be 120 mL but when the dam had been emptied a flow meter on the line between the dam and Mr Wandel’s property only measured 87 mL. The difference was partly attributed to evaporation during the time when Mr Wandel was making arrangements to pump the water from the dam.
The net effect of the transaction is that Mr Wandel provided piping valued at $39,150 plus GST of $3915, a total of $42,345 in return for 87 mega litres of water. The cost of the water to Mr Wandel, ignoring GST was $450 per mega litre.
When it became apparent that Mr Trethewey’s dam would not be sufficient satisfy his needs Mr Wandel had to look elsewhere. First he considered acquiring the water in the dam owned by Mr Trethewey’s family. When it became apparent they did not wish to sell he recommenced negotiations with Mr Halloran.
In 2009 there was no market for water on Kangaroo Island. Mr Wandel gave evidence that he was the first person to use water for irrigation on Kangaroo Island. (T 495-30)
The one thing that is not in dispute is that an arrangement was reached in about December 2009 whereby Mr Halloran would make the water in his dam available to Mr Wandel. There are disputes as to the terms on which the water was provided by the plaintiffs and the volume of water that was provided.
Mr Halloran said that in about October 2009 he had a conversation with Mr Wandel who was very concerned because he did not have water for his seed potatoes. He gave evidence of a conversation in which he said to Mr Wandel:
James what I can do is if we run of 3 inch poly pipe direct from my big dam in a north-westerly direction to your pivot area I can let you have some water perhaps (T 42-14).
The response of Mr Wandel to the 3 inch poly pipe proposal was that he did not need it. No arrangement was arrived at at that time.
Mr Halloran gave evidence that he had a later conversation with Mr Wandel about water at Christmas time. He said:
My dam was there. At the time I didn't quite know what volume it was but I had measurements. He was - James Wandel was running out of water quickly … (T 43-3)
Mr Wandel had told Mr Halloran "Nathan is doing very well. He is getting his dam paid for". The plaintiff believed that Mr Trethewey had paid $45,000 or $55,000 for his dam (T 45-11).
Mr Halloran gave evidence that he said to Mr Wandel: “Okay $45,000, okay my dam actually cost about that too.” (T 43-14)
Mr Halloran was asked what was specifically said to him about water and he replied:
Originally when he said he didn't want water from my place because he had plenty in Mr Trethewey’s, I said "okay that offer is gone, the original offer" then he went on to say about how the price is $45,000. I said "I'm happy as long as I get the same as Nathan" and that's where I arrived at the price for a mega litre of water. (T 43-22)
Later Mr Halloran said:
As before, I said Mr Wandel had said about Nathan's dam, the cost of it "he is doing very well, he is getting piping in the ground to the cost of $45,000 and I believe it was 55, but anyway 45, that's where I arrived at the price $500 a mega litre plus GST for water. (T 44-15)
Mr Halloran gave evidence that Mr Wandel said to him that he “wanted water out of my dam, as much as he could get." (T 44-21). Mr Wandel said there was urgency because he was out of water halfway through the growing period of a very valuable crop of seed potatoes (T 44-24).
Mr Halloran said that Mr Wandel organised for pipe work to be extended across Nathan Trethewey’s property beyond the piping already installed by Mr Wandel and across the East-West Highway through to Mr Halloran’s dam. Mr Wandel installed a pump borrowed from another potato grower and pumped water from the plaintiffs’ dam to Mr Nathan Trethewey's dam. (T 45-1). From there the water was pumped through the existing piping to Mr Wandel’s pivot.
As to the price of the water, Mr Halloran said that:
The words I used "I'm happy with the price, the same price as Nathan. You discussed 45,000 for the dam that is the end of that.” He said "Mr Wandel is in agreeance; he is usually looking down on the ground and shuffling his feet and walks off.” (T 45-15).
Mr Halloran said in cross examination:
Discussion on price of water was discussed and it was put to me by Mr Wandel the price of the neighbour’s dam at $45,000 or 55, and he said he's getting the equivalent monies worth of piping in the ground and I agreed that I'd be happy with a similar price. (T 75-6)
Later in his cross-examination Mr Halloran agreed with the cross-examiner’s suggestion that he had orally agreed "That Mr Wandel would pay for each mega litre of water at a rate that was stated in the Stock Journal magazine." (T 77-29) That is the plea in paragraph 16.2 of the Statement of Claim.
Mr Halloran denied the suggestion of the cross examiner that the evidence "about the cost of the dam and Mr Trethewey" was a recent invention. (T 78-16) Later he was asked again about his recollection and he said:
To my knowledge, it was the Stock Journal prices and/or the breakdown of price per dam pro rata back… The price of Nathan Trethewey’s dam, which James Wandel said he is getting out of the pipework in the ground for his water. I didn't suggest the price. James Wandel did." (T 78 to T 79)
When pressed to state the precise words of the conversation Mr Halloran said:
The pricing of Mr Trethewey's dam came in, what Mr Wandel told me, and I said as long as I get a fair price which works out to what Mr Tretheway got per mega litre. That was all. (T 79-30).
The cross-examination continued:
QDid you ever hear at any time from Mr Wandel how much per mega litre he had agreed with Mr Trethewey.
AYes, only his statement was at the price of his dam and that was the equivalent money of piping that Mr Trethewey was going to get for the water in his dam. In equating that, I will add this: that Mr Wandel never came forward after, and after the water was all gone, to discuss any further thing. He was gone, last seen, gone. I sent the account. That is all I'm saying.
QIs this the case: in your discussion with Mr Wandel before he started receiving the water, the two of you never agreed that he would pay a specific dollar amount per mega litre. By that I mean $150 a mega litre, $210, $500. There was never a specific dollar amount discussed between the two of you per mega litre, was there.
ANo. That goes back to the pricing of the dam. No.
QWhen you say "pricing of the dam", were you referring there to how much it cost to build the dam.
AThat's correct.
QSo however much money Mr Trethewey paid somebody to build the dam, say that was $45,000, you say you agreed with Mr Wandel that he would pay you a total amount for the water that was the total cost that Mr Trethewey paid to have his dam built.
ANo it was to a mega litre price. That's why Mr Wandel put the meter in there so we could work it out. I didn't have any money to spend on meters, I'm afraid. (T 80-5 FF)
Mr Wandel pumped water from the plaintiffs’ dam. A flow meter had been installed on the line between plaintiffs’ dam and Mr Trethewey’s dam. Mr Halloran checked the meter readings periodically and when Mr Wandel had finished pumping the water to Mr Wandel the meter read 114 mega litres. Mr Halloran had seen the meter being installed and noticed it was a new meter with all zeros.
In due course Mr Halloran presented his invoice number 31 dated 29 May 2010 (Exhibit P6) for 114 mega litres of water at $500 a mega litre.
Mr Heinrich has pointed out the difference between the terms of the water supply contract pleaded in paragraph 16.2 of the Statement of Claim and Mr Halloran’s ultimate evidence. He submitted that in December 2009, when the alleged contract was negotiated, no one knew that the volume of water in Mr Trethewey’s dam was 87mL. In paragraph 16.2 of the Statement of Claim the plaintiffs alleged:
…that the defendant would make payment to the plaintiff for each mega-litre of water pumped from the plaintiffs’ property to the defendant’s property at a rate equal to the amount prescribed in the (Stock Journal) at any given time.
The observations of Mr Heinrich are correct. Also the plea in paragraph 16.2 is nonsense because of the reference to the price “at any given time”.
The evidence of Mr Halloran is not consistent with paragraph 16.2. His evidence was jumbled and was internally inconsistent. It confused a market price per mega-litre, a price equated to the value of the piping which Mr Wandel provided to Mr Trethewey and the cost of installing Mr Trethewey’s dam. They are three different concepts.
The plaintiffs’ claim is not to be determined on the basis of clause 16.2 but on the basis of the evidence before the court.
Notwithstanding the confusion I am satisfied that it was clear to the parties that Mr Halloran wanted the same price for his water that Mr Wandel was paying for the water of Mr Trethewey. I am satisfied that the evidence as a whole establishes on the balance of probabilities that Mr Wandel agreed to pay Mr Halloran the same price that he had agreed to pay Mr Trethewey.
Mr Halloran said that he knew the price Nathan Trethewey had sold the water for from Mr Wandel himself. He also said that at the time he did a bit of research himself and Stock Journal prices were around $430. (T 48-5)
Mr Halloran said that he delivered invoice Number 31 himself. He asked Mr Wandel to open it and Mr Wandel "opened it, looked at it, didn't query." (T 48-14). Mr Halloran said Mr Wandel put it on the wall in his office. He also said that it was not until "a later date he queried it, said my dam wasn't 114 mega litres." (T 145-31). A challenge to the volume of water supplied is different from a denial of liability to make any payment at all or payment at the rate claimed by the plaintiff.
As I have mentioned Mr Wandel’s case is that Mr Halloran offered the water in his dam free of charge. That invites consideration of why should Mr Wandel in the first instance, have agreed to pay a significant sum to Mr Trethewey for his water if there was free water available from the plaintiff? Why should Mr Wandel have approached the Trethewey family in December 2009 to purchase their water if Mr Halloran had offered free water? Also, why did Mr Wandel install a metre on the line from the plaintiff’s dam to Mr Trethewey’s dam? The answers given by Mr Wandel to these questions were not convincing.
The evidence of the plaintiff was jumbled, particularly as to formula to calculate the price of water. Nevertheless, I find that in its entirety the evidence does establish a contract pursuant to which the defendant agreed to purchase water from the plaintiff at the same price that the defendant paid to Mr Trethewey. As I have mentioned that price has now been calculated to be $487 per mega litre.

The plaintiffs claim is for 114 mL at $550 per mL including GST, a total of $62,700.
Mr Halloran denied that he had ever told Mr Wandel before he started pumping the water from his dam that he wanted to drain the dam to make it bigger. (T 71-25) His response was that the dam was "already enlarged". His evidence was "no, this dam had just been built, and it cost me some 25 or 30,000 with my own machinery, fuel and drivers. He's talking, Mr Wandel is talking rubbish, so no " (T 84-4) After the dam had been drained Mr Halloran did not enlarge the dam. Mr Halloran said that he had no intention to enlarge the dam which was comparatively new.
It was put to Mr Halloran that during discussions with Mr Wandel about whether he could use water from the plaintiffs’ dam Mr Halloran said that Mr Wandel was lucky because Mr Halloran "kept it for him just in case he needed it." T 84-13). Mr Halloran denied that he had said anything like that. It is unlikely that the plaintiff would have said anything like that because there was no reason for the statement at the time as the plaintiff had no other use for the water. In any event such a statement is equivocal and it is not evidence of what was agreed between Mr Halloran and Mr Wandel.
Mr Halloran, in cross-examination, agreed that in the discussions there was no was express agreement that the charge would be $500 a mega litre plus GST. However that is not the plaintiff’s case.
In cross-examination it was suggested to Mr Halloran that he had not actually calculated the volume of water in his dam. His answer was:
I’m answering your question yes or no. The first instance when you asked me about the reading I said no, in the instance I was queried on the 114 mega litres I then did my own measurements of the dam, which I could do quite easily, I calculated it myself to close on exactly what it was. And I read the meters on Nathan Trethewey’s property down there. I was not reading the meter out to the pivot. I was told by Nathan what the readings were as it went so it is two questions. (T 87-28)
So far as the volume of water is concerned there is evidence which I accept that the plaintiff’s dam was spring fed so that the volume of water in the dam over time would increase as the spring provided further water. It was possible therefore for the volume of water taken from the plaintiff’s dam to exceed the capacity of the dam when it was full. (T 27-19).
Other than the evidence of the plaintiff which I have referred to above that he was able to calculate the quantity of water himself there is no satisfactory evidence as to the volume in the dam. The defendant did call evidence of various measurements which established the surface area of the dam but that evidence, by itself, is not sufficient to establish the volume of water in the dam.
Mr Heinrich submitted that knowing the surface area I could assume that the dam was of insufficient depth to hold 114 mL. The evidence does not permit me to make any finding as to the depth of the dam and I am unable to accept that submission.
There is no evidence to contradict the evidence of Mr Halloran or the reading of 114 mL on the flow meter.
As to the volume of water I find the best evidence is the reading on the flow meter on the line leading from the plaintiff’s dam to Mr Trethewey’s dam. That is the reading of 114 mega litres. There is also the evidence of Mr Halloran that he had done his own measurements. (T 86-15, T 87-28)
Mr Stratton-Smith referred to Redman v Klun (1979) 20 SASR 343 where the Full Court referred to a presumption in favour of the accuracy of scientific instruments.
Mr Heinrich argued that the presumption does not apply to the flow meter and he delivered a comprehensive supplementary submission. He referred to the conflicting evidence on the other flow meter on the line from Mr Trethewey’s dam to the defendant’s pivot. I am not satisfied that the evidence as to the readings on that other meter is reliable. Mr Halloran never observed the reading on that flow meter himself. (T 28-22), Mr Heinrich never put his client's case to Mr Trethewey who could have given relevant evidence. I have disregarded hearsay evidence from the plaintiff about what Mr Trethewey told him.
On this topic I am influenced by the plaintiffs own evidence that he calculated the quantity to be close to 114 mega litres. I am also influenced by the fact that the defendant did not challenge the charge for 114 mega litres when the invoice was first presented to him. The flow meter had been installed for the purpose of measuring the water from the plaintiffs’ dam. I do not know how else the parties might have measured the quantity of water.
Mr Trethewey said he had no reason to doubt the reading of 114 mega litres on the flow meter. He said “it was running fine. It was working how I would expect it to work”. (T 182-26).
Mr Heinrich tried to suggest that the meter was inaccurate because water was not coming from the full area of the pipe and there was air at the top. (T 198). I find that the evidence does not establish that the meter was inaccurate.
I accept the evidence of the plaintiff that when water started to be pumped from his dam, his dam was close to completely full. (T 224-17)
On the basis of the evidence of the plaintiff and the reading of the meter, I find, on the balance of probabilities, that the plaintiff supplied approximately 114 mega litres of water to the defendant.
In cross-examination Mr Halloran denied that he had told Mr Adrian Williams that there wasn't going to be any charge to Mr Wandel for the water. (T 189-32) He also denied that he had told Mr Williams that he wanted to empty his dam to enlarge it. (T 190-4) He said he would not have said that because the dam had only just been built and was full. He denied that he said that he needed to seal the bottom of the dam because there was a leak in it. (T 190-7) and that he wanted to help his neighbour (Mr Wandel) saying something like "what are neighbours for?". (T 190-12)
Even if the plaintiff did have the alleged conversations with Mr Williams, as to which I make no finding, those conversations are not determinative of what was agreed between Mr Halloran and Mr Wandel.
Mr Wandel gave evidence of the negotiations that led to him utilising the water in the dam of Mr Trethewey. He said that before coming to the arrangement Mr Halloran had brought to his attention that he had a dam and that he could pump the water to his property. He said that in the first instance he chose Mr Trethewey’s dam because he believed there was enough water. (T 421-23). He said the plaintiffs originally talked about running the water with a 3 inch poly pipe but you could not transfer a sufficient volume of water in 3 inch poly pipe "so while the offer was there, it was not practical." (T 422-1)
Mr Wandel said that while he was dealing with Mr Trethewey Mr Halloran kept bringing it up and “he really wanted to let me use his water, help with using his water and it's just a number of times." (T 422-16)
Mr Wandel said that during the course of the conversations Mr Halloran said that he wanted to enlarge his dam and that the plaintiff thought that the dam was leaking in the bottom. He said "he was just going to pump the water out the back and enlarge it and he believed at the time that it was leaking in the bottom and he wanted to reseal the bottom." (T 422-22). Mr Halloran has not extended his dam since 2008. He has no reason to. He has never had a problem with the dam leaking. (T 191-1). I do not accept the evidence of Mr Wandel which is inconsistent with the objective facts.
Mr Wandel was asked whether there was any discussion about price and his reply was: they were still getting along well and “he was still keen to help me and was happy to let me use the water. It was helping him out..." (T 422-29). I do not accept that evidence.
I asked Mr Wandel why he decided to pay for water from Mr Trethewey if Mr Halloran had offered water free without charge. His response was "it's just more practical." I do not accept that answer. It is most improbable that he would have agreed to pay Mr Trethewey tens of thousands of dollars if the plaintiff had offered to provide him water without charge.
Mr Wandel said he started pumping from Mr Trethewey’s dam in the middle of December and had only pumped for a short time when he noticed "the dam was going down alarmingly fast." (T 425-9). He had further discussions with the Trethewey family about using the water in their dam and then had discussions with the plaintiff and opted to go with his dam. (T 426-12). Mr Wandel could not remember how the discussions with the plaintiff recommenced. He said it took one or two weeks for him to sort out the best option and that:
Mr Halloran said to me at one stage that he hadn't emptied his dam out, quote unquote, just in case I needed to water. T 427-16)
They had discussions about putting a mainline across the road to permanently link the Halloran dam and the Nathan Trethewey dam so that water could be transferred either way.
In considering the negotiations between Mr Wandel and Mr Halloran it is important to distinguish what was said in the first round of discussions before Mr Wandel came to his arrangement with Mr Trethewey and the later discussions at about Christmas 2009 after it became apparent that the water in Nathan Trethewey’s dam would be insufficient. The agreement which Mr Halloran and Mr Wandel arrived at was different from the original proposal to run a 3 inch poly pipe direct from the Halloran dam to Mr Wandel’s pivot.
Mr Wandel was asked whether in the "restarted discussions with Mr Halloran at any time was the topic of cost, price, money to be paid by anyone, that sort of topic mentioned at all". He replied "no, no, it was still the water was to be free at that stage." (T 428-30). He said that Mr Halloran had said "I'm helping you out, I will help you out, you can have my water, get you back on your feet, make sure you're here next year, don't want to see a good neighbour go down." (T 429-1). “He said that there was just no mention of the price or cost or anything like that.” (T 429-4).
I do not accept the evidence of Mr Wandel. As I have said it is extremely improbable that Mr Wandel would have chosen to pay for water from Nathan Trethewey if the plaintiffs had offered water free of charge. I find it most improbable that even a generous neighbour would offer such a quantity of water free of charge. I find it difficult to accept any of the evidence of the defendant.
Additionally, during the second round of discussions in December, why would Mr Wandel have even considered purchasing water from the Trethewey family if he had the option of free water from the plaintiff? By the time Nathan Trethewey’s dam had been emptied Mr Wandel had constructed the permanent line from Nathan Trethewey’s dam to the pivot site. That line provided a way of pumping water from the Halloran dam to Nathan Trethewey’s dam that had not been a possibility during the first round of discussions.
The fact that a meter was installed to measure the water taken out of the plaintiffs’ dam gives rise to an inference that Mr Wandel was to pay for the water.
It is significant that at the time that it was delivered to him Mr Wandel did not challenge the invoice charging for the water. I accept the evidence of Halloran that when Mr Wandal did challenge the invoice he challenged the volume of the water provided but did not challenge the fact that a charge was being made.
If the evidence of Mr Wandel was correct I would have expected that when Mr Halloran first handed the invoice to him or shortly thereafter, Mr Wandel would have protested that the water had been given to him free of charge. The fact that Mr Wandel did not challenge the invoice either when it was handed to him or within a reasonable time thereafter is telling. I do not accept the explanation of Mr Wandel that he did not raise the matter because he suffered from a condition which caused him to avoid conflict. It would have been possible to write stating his case. However the real point is that I do not accept the evidence of Mr Wandel. When looked at in the light of the objective facts his evidence is quite improbable.
The price of the water
I accept the case of Mr Halloran as to the price that was to be paid by Mr Wandel for the water. The formula by which the price was to be calculated is so esoteric that it has the ring of truth. It is consistent with the objective facts.
There is evidence of a market price of water which was published in the Stock Journal. Mr Trethewey said that he knew the price of water which he got from the paper. (T 157-5) He valued 120 mL at between $30 and $40,000. (T 157) He said there was a market price of water in the Stock Journal alongside current commodity prices. It was trading between $400 and $500 a mega-litre at that stage. (T 162-5 and T 157-2). In his case Mr Trethewey wanted pipework rather than cash. (T 169) He repeated that he valued the water at somewhere between $400 and $500 per mega litre. (T 179-5) He put a value of $42,435 on the work carried out by Mr Wandel in return for his water and said that Mr Wandel actually valued the pipe and the digging higher than that at over $50,000. (T 179-19)
While the evidence as to the price to be paid for the water is jumbled the one clear fact that can be distilled from the evidence is that Mr Halloran wanted the same price as Mr Trethewey. If the 87 mega litres which Mr Trethewey supplied had a value of $42,435 the value of each mega litre was $487. I find that Mr Wandel agreed to pay the plaintiffs’ the same price as he was paying Mr Trethewey for water. I find that the plaintiffs’ claim should be calculated at 114 mega-litres at $487 per mega-litre. That is $55,600 plus GST of $5,560, making a total of $61,160 which is slightly less than the amount of $62,700 claimed in the Statement of Claim.
Interest
I have rejected the invoices claiming interest at the rate of 10% on the basis that there was no agreement to pay interest.
Unless there is an agreement between the parties or a recognised term of trade in the particular industry a debt is payable on demand. In this case the terms of payment are stated on the invoices delivered by the plaintiffs to be either payment within 14 days of the invoice or payment within seven days of the invoice. I have proceeded on the basis that the time for payment of the particular debts in question is the time stated on the invoices.
I have found:
·The sum of $26,391.75 including GST was payable in respect of Larcombe’s Crossing. That amount was due within 14 days of 22 February 2010 that is, by 7 March 2010. From 7 March 2010 until 7 November 2014 is a period of four years and eight months.
·The sum of $61,160 including GST was payable in respect of 114 mega litres of water. That amount was due to be paid within seven days of 29 May 2010 that is, by 5 June 2010. From 5 June 2010 until 7 November 2014 is a period of about four years and five months.
There is no evidence as to the plaintiffs’ taxation arrangements. In particular there is no evidence that they had paid the GST on the invoices. They are not entitled to interest on GST which they had not paid. Accordingly I have ignored GST for the purpose of calculating interest. The plaintiffs’ entitlement for Larcombe’s Crossing is $23,912 and for water $55,600. Interest should be calculated on those amounts.
I find that the plaintiffs are entitled to interest calculated pursuant to s 39 of the District Court Act. I do not have a calculation setting out the amount of the plaintiffs claim on this basis. A calculation could not have been prepared until the amount of any judgment was determined.
Rather than attempt a precise calculation I propose to award a lump sum pursuant to sub-s 39 (3) of the District Court Act. In the case of the water I take into account that the debt has been due for a period of four years and five months. In the case of Larcombe’s Crossing I take into account that the debt has been due for a period of four years and eight months.
Subsection 39 (2) (a) provides that prejudgment interest should be calculated at a rate fixed by the court.
Lunn Civil Procedure states that for economic loss the Court must fix a rate which compensates the plaintiffs for being held out of their damages until judgment. (Paragraph 30C.20). Supreme Court Practice Direction 13.3 provides that the appropriate rate for the calculation of interest on prejudgment economic losses under s 30 C of the Supreme Court Act is a matter for determination by the judge. The Practice Direction provides that as a guide the Court may calculate interest at the rate set by the Reserve Bank of Australia plus 4%. Mr Stratton-Smith submitted I should use that formula.
Counsel have provided me with a table which sets out the Reserve Bank rates from 2 December 2009 until 8 October 2014. The Reserve Bank rate varies from month to month and I do not wish to descend to the precision of carrying out a separate calculation for each six-month period. For the purpose of fixing a lump sum I have assumed an average rate of 7% for the whole period.
For prejudgment interest I fix a lump sum of $25,000.
Conclusion
I find that the plaintiffs are entitled to judgment for the following:
114 mega litres of water including GST                $61,160.00
Larcombe’s Crossing including GST  $26,391.75
Lump sum prejudgment interest  $25,000.00
TOTAL  $112,551.75.