Hornery v McDonald
[2006] QDC 401
•8 December 2006
DISTRICT COURT OF QUEENSLAND
CITATION:
Hornery v McDonald & Anor [2006] QDC 401
PARTIES:
Geoffrey Allan Hornery
(Plaintiff)
&
Sandra Julie Hornery
(Second Plaintiff)
v
Gary Brose
(Defendant)
&
P.A Brose
(Second Defendant)
&
Graeme A. McDonald
(Third Defendant)
&
Susan W. McDonald
(Fourth Defendant)
FILE NO/S:
D72 of 2001
DIVISION:
Civil
PROCEEDING:
Trial
ORIGINATING COURT:
District Court
DELIVERED ON:
8 December 2006
DELIVERED AT:
Mackay
HEARING DATE:
27, 28, 29 November 2006
JUDGE:
Forde DCJ
ORDER:
- The Plaintiffs’ action is dismissed and judgement entered for the Third and Fourth Defendants.
- It is ordered that the Plaintiffs do pay to the Third and Fourth Defendants their costs of and incidental to the action including reserved costs, if any, to be assessed on the standard basis.
- Leave is given to the parties to make further submissions on the costs relating to the First and Second Defendant following the filing of the Notice of Discontinuance.
CATCHWORDS:
CONTRACT – terms oral and written – promissory and representations – breaches alleged – agistment of cattle – failure to mitigate –
Ross v Allis Chalmers Australia Pty Ltd (1980) 32 ALR 561
Savage (JJ) & Sons Pty Ltd v Blakney (1970) 118 CLR 435
COUNSEL:
Mr B. Harrison for the plaintiffs
Mr S.Williams for the defendants
SOLICITORS:
Beckley, Knight & Elliott Solicitors for the plaintiffs
Clewett Corser & Drummond Solicitors for the defendants
Introduction
The plaintiffs, Geoffrey Allan Hornery and Sandra Julie Hornery, breed Wagyu cattle. It is a Japanese breed and requires tick free paddocks for breeding to allow live stock to be exported. In order to allow greater production, the plaintiffs sought to agist some 380 cows and 110 Wagyu calves on land in a tick free area at Blackall. The properties at Blackall, ‘Avonleigh’ and ‘Avondale’ were owned by the third and fourth defendants, Mr and Mrs McDonald (the defendants). It is convenient to refer to the properties as ‘Avonleigh’ as they are now amalgamated under one group. ‘Avonleigh’ was managed by the first and second defendants, Mr Gary Brose and his wife, P.A. Brose.
It has been accepted by the third and fourth defendants, that Gary Brose had the authority at all material times to enter into agistment arrangements with the plaintiffs. The written terms of the agistment agreement were contained in an document dated 20 April 1999.[1] The terms were agreed to by Mr McDonald. There were additional terms agreed to according to Mr Hornery including providing adequate feed to allow an artificial insemination[2] program early the following year. Gary Brose did agree that there were some additional matters discussed including that if the seasons allowed it would be a long term arrangement. It is clear that the written agreement did not encapsulate all of the terms of the agistment agreement. For example, the consolidated Amended Defence also made admissions concerning oral terms.[3]
[1] Exhibit 6.
[2] AI.
[3]Para 6(b).
The plaintiffs claim that the defendants failed to provide adequate feed for the cattle and as a result the AI program was not as successful as it had been in previous years. The poor condition of the cattle, according to the plaintiffs was a factor. The poor pastures, according to Mr Hornery necessitated finding alternative agistment, a shorter cycle for AI and consequential losses.
A Notice of Discontinuance was filed by leave in relation to Mr and Mrs Brose. However, Gary Brose was the principal witness for the defence. Statements were tendered of evidence in chief of most witnesses including Mr Hornery and Mr Brose and further evidence was given by them.
Issues for determination
The main issues for determination were:
a.The nature of the agistment agreement including the oral terms.
b.The condition of the paddocks in which the cattle were held.
c.The condition of the cattle in January and February 2000.
d.Whether the plaintiffs had failed to mitigate any losses by:
i.not obtaining a vet crush earlier
ii.not inspecting the cattle earlier
iii.not arranging alternative agistment earlier
e.The quantum of the claim.
The Nature of the Agistment Agreement
The agreement was both written and oral. Exhibit 6 provided as follows:
1. Payment for Agistment will be one month in advance.
2. All dry Cattle will be $2.00/head/week.
3. All Cows & Calves will be $2.50 /Unit/week.
4. Any Calves born on “Avonleigh” will not be charged till approx four months.
5. Calves under 4 mths at time of muster will be charged at the unit rate of $2.50 at the managers discretion.
6. Unit rate will apply till calves are approx 8 months, then a agistment rate for weaners will apply.
7. Any Calves weaned from Cows going off property will be charged at the weaner rate regardless of age.
8. Weaner rate to be worked out at the time by mutual agreement of P. Hornery, G. Brose and G. McDonald.
9. Wording of “Weaner”. Any cattle bred on “Avonleigh”(sic) or come on as a Cow & Calf unit and is weaned.
10. Only “Avonleigh” Vehicles to be driven on property. (for protection against noxious weeds).
It is pleaded that the agistment agreement contained the following oral terms:[4]
[4] Para. 6 of Further Amended Statement of Claim filed on 11 November 2003.
a.that the Agistment Agreement to be long-term;
b.that the plaintiffs would engage in artificial insemination breeding during the life of the Agistment Agreement;
c.That the plaintiffs’ cattle were to perform at all times and if paddocks were light on feed the cattle would immediately be shifted to a fresh paddock;
d.Sheep numbers in the paddocks on which the plaintiffs’ cattle were to be grazed were to be reduced;
e.The first defendant would be available to assist in mustering from time to time at no charge for small musters and if musters went beyond half a day a charge would be applied;
f.The first defendant were to maintain fencing and water;
g.Holding paddocks with fresh feed would be provided for the plaintiffs’ artificial insemination breeding program;
h.The defendants would install a crush for the artificial insemination breeding purposes;
i.Weaner heifers were to be stood in a separate paddock;
j.Weaners would be turned off once they reached maturity;
k.The plaintiffs’ artificial insemination breeding program would start in January 2000;
l.Camping facilities would be made available to the plaintiffs as and when the plaintiffs required the same; and
m.A holding paddock was to be provided to be used in conjunction with the other facilities to be used by the plaintiff in the artificial insemination breeding program.
Evidence of Mr Brose Relating to the Agistment Agreement
It is convenient to deal with the evidence of Mr Brose and relate it to the evidence of Mr Hornery in sequence as pleaded in paragraph 6 of the Further Amended Statement of Claim:
(a) Mr Brose accepted that if there was sufficient rain and the grass available it was intended that the agistment agreement be along term one. In his words “as long as the season was good enough”.[5] This was not really disputed by either Mr Hornery or Derran Hornery who was present during discussions. In fact, by October 1999 Mr Brose had told Mr Hornery to look for agistment and suggested he try Mr Donnelly.[6] This part of the arrangement is confirmed by the fact that Mr Hornery, according to Mr Donnelly, contacted him about agistment before 17 October 1999.[7] Mrs Donnelly confirmed that the call was made.[8] The Donnelly’s property is situate about 70 kilometres from “Avonleigh”.
[5] T178.38-40.
[6] T183.30-34.
[7] T217.27-218.10.
[8] T221.18-34.
(b) Mr Brose did not accept that it was a term that the plaintiffs would engage in an AI breeding program but did accept that he was told that it would occur if the agistment continued. The fact that Mr Brose knew about the possibility of the AI and the intention of Mr Hornery[9] does not make it a term of the agreement. It was a representation by Mr Hornery.
[9] T49.18-22.
(c) Mr Brose gave evidence that he showed Mr Hornery the House Dam paddock and the Road paddock initially. The second paddock would be used when the first paddock had no further feed. This was accepted by Mr Hornery in evidence.[10] When Mr Hornery required a separate paddock for his weaners, the Bore paddock became the second paddock.[11] Mr Brose was adamant that the plaintiffs were to use only those two paddocks.[12] The parties may have spoken of a “rising plan” and “nutrition” but it has not been shown this was a term of the agistment agreement.[13] The plaintiffs or their agents did not visit the cattle for months on end. To measure and maintain nutrition required more intensive husbandry. This was never part of the agreement agreed to by Mr Brose.
[10] T45.50-54. See also D. Hornery T152.5-7.
[11] T180.10-30.
[12] See (a) above; T179.30-180.8.
[13]D.Hornery T149.50-60.
(d) The defendants were carrying out tests on running sheep and cattle together and Mr Brose did not accept that the sheep numbers would be reduced. Mr Hornery stated that on his first visit which was possibly April 1999, Mr Brose agreed to take the sheep out of the paddock.[14] In cross-examination, he did not recall going in April.[15]
[14] Exhibit 1 paras. 51-52.
[15] T65.12-45
(e) Mr Brose did accept that there would be no charge for mustering if it took less than half a day.[16] Mr Brose did accept that adequate water and fences would be provided. He said it was in his interests as well as he had stock in the Bore paddock.
[16] See also Para. 6(b)(i) of the Consolidated Defence
(f) See (c) above. The two holding paddocks were about four acres each in area. No further fresh feed would be provided according to Mr Brose. When Mr Hornery visited in early February 2000 he stated that these paddocks had “a lot of feed in them”. The evidence shows that having feed in the holding paddocks is not crucial as the cattle are let out after AI is done. They are allowed to feed in the larger paddock.[17] This allegation is a non-issue in the case, except on credit.
[17] Mr Hornery T74.10-75.20;Quentin Hornery T.40-50; Dr. Tucker T215.12-20.
(g) At no stage did Mr Brose accept that the defendants would provide a vet crush.[18] He said that Mr Hornery told him that his brother had one.[19] Later, Mr Brose said that he told Mr Hornery that if he could not get one that the defendants had one at Emerald or Springsure and that Mr Hornery would have to pick it up. If it was up to the plaintiffs to decide if and when the AI would take place, it is difficult to find that the provision of the vet crush was a condition of the agistment. In any event, there was a crush made available by the defendants at Emerald or Springsure.[20] Mr Hornery confirmed that the offer was made.[21] Mr Hornery made reference to one which his brother had but that it may not be available. In the context of this case and consistent with the evidence of Mr Brose, it is probable that Mr Hornery mentioned the availability of the vet crush owned by his brother during initial discussions. By February, there was a stand off by both sides. It becomes relevant to the plaintiffs’ duty to mitigate their damages.
[18] T189.38-39.
[19] T49.30.
[20] Mr McDonald T163.48-164.15.
[21] T18.40-19.20.
(h) The weaners were put in a separate paddock when Mr Hornery requested it. The request to do so was made in October 1999.[22]
[22] T79.1-15.
(i) The weaners were turned out by Quentin Hornery. No evidence was lead that this was a term of the agreement. It is really a non-issue except on credit.
(j) Mr Brose was not aware initially when the AI program would commence. By January 2000, he believed that steps were being taken.[23] He in fact referred to January 15 in an invoice and suggested that the plaintiffs obtain a portable crush.[24] The fact that the AI was to start in January 2000 was a statement made by Mr Hornery which post dated the date of the agistment agreement as pleaded viz. 20 April 1999.
[23] T188.28-44.
[24] Invoices 3 January and 27 January 2000 being attached to the statement of Mr Hornery Exhibit 1.
(k) There was a shearer’s shed available to be used. It was not proved to be part of the agistment agreement.
(l) There were some horse yards capable of herding some cattle.[25] There was no suitable crush. The plaintiffs decided if and when the AI would proceed. It was not a requirement of the agistment agreement that they do so. The vet crush has been discussed in (g) above.
[25] 200-300.
The defence case is that representations made by the plaintiffs who were represented by Mr Hornery did not become a term of the contract:[26]
“He (the trial judge) recognised that in order to make good his case the Plaintiff had to establish that the relevant statement was ‘promissory and not merely ‘representational’ applying the test enunciated by this court in Savage (JJ) & Sons Pty Ltd v Blakney (1970) 118 CLR 435 at 442, and it is not enough that without the statement the contract to buy the machine would not have been made.”
[26] Ross v Allis Chalmers Australia Pty Ltd (1980) 32 ALR 561 at 565.
Applying that test to the oral terms as pleaded, it could be said that there was included in the agistment agreement certain additional terms including that the agistment of some 300-400 head of cattle be on a long term basis subject to the seasons, that two paddocks would be used as needed[27] and that there would be charges for mustering if it took longer than half a day. It has not been proved that the provision of a vet crush was a term of the agreement.
[27] Varied subsequently to substitute the Road paddock for the Bore paddock.
Implied Terms
It was conceded by Mr Williams for the defence that the implied term pleaded in paragraph 7(b) of the Further Amended Statement of Claim applied:
“(b) that the Defendants would provide such feed and water to the agisted cattle as was necessary for their proper support and well being.”
As was discussed in the addresses, this is probably the main issue for determination in the case. The plaintiffs’ case is that when Mr Hornery inspected the cattle on 7 February 2000, he observed that they had “lost substantial condition” and that there was “virtually no feed left in the paddock” where most of his cattle were.[28] He observed that there was no fresh paddock available and that the other paddock was in worse condition.[29] Mr Hornery expressed the view that the loss of condition would affect the AI program and its outcome. He added that:
“It was pointless trying to conduct AI with cattle that were losing condition as opposed to gaining condition.”
[28] Exhibit 1 para. 65.
[29] Ibid. para.66.
In evidence, Mr Hornery stated:
“…so I went out there on the 7th February, if that’s when it says in my diary, but when I got out there I was just dumbfounded to see the condition of the cattle and the condition of the country, I mean of Avonleigh and Avondale. The holding paddocks it was – well, when we inspected them they had a lot of feed in them but he was obviously done his shearing…”[30]
[30] T20.46-53.
Having seen the cattle in that condition, he said that he realised that he would have to take them elsewhere. It should be pointed out that there was no comment made to Mr Brose about the condition of the cattle. Mr Hornery gave evidence that he told Mr Brose “I’m going to have to shift the cattle, it’s that simple”.[31] Mr Brose said that he made no mention of the condition of the cattle.
[31] T23.13-18.
The plaintiffs called other evidence on the issue of the condition of the cattle. Their son, Quentin gave evidence. In his statement,[32] Quentin Hornery stated that “overstocking was a problem, because our cattle were all in very poor condition”. He observed that sheep were running with their cattle. In October, when Quentin visited “Avonleigh” to educate the weaners, he observed the cattle to be in “above average” and “good condition”.[33] When he returned in March, he said that the cattle had “dropped condition a little more than when we went and seen them in February”.[34] Quentin agreed that with some supplementary feed between February and March that it would have prevented a loss of condition.[35] In view of the good follow up rains in November and Mr Brose’s invoices referring to the cattle being in good condition up to 27 January 2000 and the CSIRO report in December, the evidence of Quentin Hornery as to the condition of the cattle on 7 February is not accepted.
[32] Exhibit 8 second para.
[33] T121.52-60.
[34] T127.14-19
[35] T128.1-5
Mr Matthew Monds gave evidence as to the condition of the cattle as at early March when they were moved to “Avington”. The cattle were in poor condition according to Mr Monds. He had seen the plaintiffs cattle over many years. He was a friend of Quentin Hornery. He stated that the cattle were usually in good condition prior to AI. Also, there were still weaners sucking on cows which had their own calves. The effect of this was to adversely affect the condition of the mother.[36] Mr Monds stated that the holding paddocks did not have a “spec” of grass on them. That is contrary to the other witnesses. It reflects on his credit to say that. He may have believed that he was helping the plaintiffs to say that. In any event, even if there was no grass in the holding paddock, it is of no moment except on credit. He also observed that there were sheep in the second paddock at “Avonleigh”. Mr Monds assisted to drive the cattle to “Avington”. He also observed some of the spayed cattle of the defendants to be in good condition by way of comparison with the plaintiffs’ cattle. Mr McDonald, whose evidence is accepted, stated that he never had spayed cattle.[37]
[36] Dr. Turner T215.28-38.
[37] T163.19-22
In correspondence, Mr Brose stated that the cattle were in good condition. Although I accept that Mr Brose may have suggested that the plaintiffs look for another agistment in October, no further demand to move the cattle was made thereafter. Given the good rains particularly in November, Mr Brose assured the plaintiffs that their cattle were in good condition as late as 27 January 2000.[38] A relevant question is: if Mr Brose expected Mr Hornery to visit as early as 15 January, why would he mislead him about the condition of the cattle? I find that it would be unlikely that he would do so. As far as Mr Brose was concerned, there was sufficient feed and the cattle were in good condition. One explanation for the inconsistency between what the plaintiffs’ witnesses said and the evidence of Mr Brose is that the plaintiffs expected their cattle to be in above average condition for AI. Mr Hornery’s original statement[39] stated that “the cattle had lost substantial condition” by February 2000. They were not described as “in poor condition”. Of course obtaining optimum results from the AI program required that the cattle be gaining condition.
[38] Exhibit 1, Invoices dated 7 November 1999, 5 December 1999, 3 January 2000 and 27 January 2000.
[39] Exhibit 1 para. 65.
Consistent with the various invoices from Mr Brose whose evidence is accepted on the issue that there was good rain in November 1999,[40] it is open to find that:
[40] 550 points or five and a half inches.
(a) The cattle probably lost condition between 17 January and early March 2000 particularly in the warmer conditions;[41]
[41] Exhibit 5 particularly January
(b) The plaintiffs required their cattle to be in good condition for AI and gaining condition but that they were not in poor condition as at 7 February 2000;
(c) The loss of condition between 7 February 2000 and early March 2000 could have been avoided by supplementary feeding. The cost of this for one month would have been about $32,700.00. This is based on a cost of $2.50 per head for say 436 head for 30 days.[42] The plaintiffs had hand fed on other occasions;[43]
[42] Mr Hornery T117.39
[43]D. Hornery T.155.50-55
(d) The cattle were probably in good condition from the view point of Mr Brose in January for cattle on agistment but not for cattle to be the subject of an AI program and for optimum results. Had Mr Hornery visited as planned on 15 January to commence AI, the further loss of condition may have been avoided by finding alternative agistment or undertaking supplementary feeding. It was not a condition of the agreement that the defendants keep the cattle in such condition as was usually required by the plaintiffs for AI. In fact, had the plaintiffs arranged inspections of their cattle the situation could have been monitored. Mr Hornery failed to attend regularly. He ordered the semen on 11 January 2000. Thereafter, he failed to attend until 7 February 2000. The dispute about the vet crush may have been a factor. However, there was alternative agistment and AI facilities at the Donnellys’ property “Dunraven”. There was adequate pasture available.[44] It would have been an hour travelling time in trucks for the cattle to be re-positioned. The cost to bring the cattle 1000 odd kilometres from Moranbah to two different venues[45] assists in finding that the cost of trucking to “Avington” would not have been excessive or unreasonable as far as the plaintiffs were concerned;
[44] T219.30-38.
[45] Exhibit 6 “D2” Invoice from Robertsons Transport dated 20 December.
(e) By the time Mr Monds saw the cattle in March, their condition would have deteriorated. However, the cattle were then driven some 25 kilometres to “Avington” for AI. This would have had an adverse affect on the AI program.[46] The fact that there was no complaint about the condition of the cattle on 7 February 2000 or thereafter up until they were taken away supports the view that the condition of the cattle was not something for which the defendants were held responsible by the plaintiffs. Mr Hornery realised that he had to take them elsewhere either because of a lack of a vet crush or because of their deteriorating condition. The availability of other paddocks at “Avonleigh” was not explored. In fact, Mr Brose gave evidence that he returned cattle owned by the defendants to the Bore paddock after the plaintiffs had drafted their cattle off in March 2000;[47]
(f) Mr Hornery accepted that the written agistment agreement was “consistent with what we discussed in terms of the rates and the overall arrangement”.[48] Of course, the exact number of cattle had not been determined.
[46] Dr. Tucker T211.50-60.
[47] T186.20-42.
[48] Exhibit 1 para.44
Credibility issues
In relation to the alleged oral terms, the defendants have accepted that there were certain additions to the written agistment agreement.[49] In finding that the cattle were likely to be in good condition up to January 2000, reliance is placed on the contemporaneous invoices from Mr Brose who knew that Mr Hornery was coming as early as 15 January 2000. The description of the cattle as “having lost condition” does not then allow a finding that the cattle were in “poor condition”. By March, their condition may have deteriorated to that stage as far as the plaintiffs were concerned relative to what they required in their AI program. Given that the plaintiffs’ case is that the cattle were in poor condition, some comments on credit issues may assist. The issue of overstocking will be dealt with elsewhere.
[49]See para 10 hereof and Para 6(b) of the consolidated Amended Defence.
Mr Hornery
The defence attack the credibility of Mr Hornery on various grounds. These include:
(a) That the plaintiffs’ business was running at a loss in the years prior to the present events and subsequently. In fact there was a net profit for the year ended 30 June 1999 of $11,383.00 and $98,194.00 for the year ended 30 June 2001.[50] Primary producers were allowed to average their income over five years. This was allowed to reflect the reality that in some years there were losses and in other years profits. This point is not of much assistance to the defence;
[50] Exhibit 7.
(b) The plaintiffs failed to disclose any relevant documents relating to the AI program except for an invoice for the purchase of semen on 12 January 2000. This is a most telling omission. The plaintiffs assert a high success rate for AI of 80-90% yet there are no records to confirm this. Mr. Ahern does assert that the plaintiffs were technically outstanding in their operation of AI;
(c) The evidence of Mr Hornery at trial differed in many respects to that in his statement.[51] These include:
[51] Exhibit 1.
(i) In paragraph 84, Mr Hornery denies there was any agreement to pay for mustering. In the pleading,[52] the plaintiffs accept that if musters went beyond half a day a charge would be made. In cross examination Mr Hornery conceded this.[53]
[52] Further Amended Statement of Claim para. 6(e).
[53] T60.30-40.
(ii) In his statement, Mr Hornery asserted[54] that he went out to “Avonleigh” in April 2000 that is when the cattle were first delivered. He resiled from this in cross examination;[55]
[54] Exhibit 1 para. 51.
[55] T65.12-45.
(d) Mr Hornery could not recall ringing the Donnellys about agistment after a conversation with Mr Brose in October 1999. That failure to recall was significant. If he had accepted that he did, it meant that he would have been aware of alternative agistment. The Donnellys gave evidence, which was not really disputed and which is accepted, that Mr Hornery did ring them, they informed him that agistment was available with suitable yards for AI and yet he did not ring them back.[56] His evidence that he may have just been making a general inquiry about agistment unrelated to the subject cattle was not convincing.[57] His call to the Donnellys was, I find, related to the request by Mr Brose to look for other agistment;
[56] T218.1-10.
[57] T82.32-42.
(e) The evidence of Mr Hornery about the need for feed in the holding paddocks during the AI process was confusing and inconsistent. On one hand he was saying that it was an oral term that fresh feed in the holding paddocks would be provided by the defendants. Yet, he gave evidence that[58]“… they don’t eat of a day time anyhow … they’re not eating it during the day”. The latter is probably correct and accords with the evidence of Dr. Tucker, Quentin and Derran Hornery. Whereas Quentin and Derran Hornery accepted that hand feeding by way of supplements during the AI program was acceptable, and had been done by the plaintiffs on several occasions, Mr Hornery denied this. The reason for the denial was it would place the onus on him to perhaps feed his cattle with supplements once he realised on 7 February 2000 that they lacked condition. As was submitted by the defence,[59] it was of no consequence that the cattle might stand in the holding paddock without feed whilst the AI process was carried out;
(f) After the cattle were taken to “Avington”, Mr Hornery stated that Mr Dexter stated that they could not leave the cattle for any length of time in the holding paddocks. This necessitated fitting the AI program into 10 days. It meant no second process resulting in a lower success rate for impregnation. Mr Dexter was not called. There was no explanation given about his non-availability. He may have commented on the condition of the plaintiffs cattle when they reached “Avington”. In some cases it would be open to more readily accept the evidence of the defence on say the condition of the cattle.[60] However, on the facts of this case after 25 kilometres on the road with temperatures in the mid-thirties[61] one is loath to draw such an inference. Mr Dexter may have been of assistance in relation to the time restraints but was not called. That issue is of less consequence, as it was really the conduct of the plaintiffs which led to that situation, not the defendants. The plaintiffs delayed their AI program because of the vet crush and then failed to act in relation to alternative agistment or supplementary feed.
[58] T50.60-51.
[59] Exhibit B p.8 being the written submissions by counsel for the defence.
[60]Jones v Dunkel [1958-9] 32 ALJR 395 at 400 per Menzies J;(1959) 101 CLR 298.
[61] Exhibit 5.
Generally, the evidence of Mr Hornery was unconvincing. His failure to take steps to obtain a vet crush or complain about the condition of his cattle or contact the Donnellys about alternative agistment or provide supplementary feed reflects adversely on his credit.
Mr Brose
Some of the credit issues relating to this witness have been discussed above. It is convenient to deal with the plaintiffs’ submissions in this respect:[62]
[62] Exhibit B paras.2.1(f).
(a) The evidence by Mr Brose concerning his request for the plaintiffs to find alternative agistment: It was submitted that this issue showed what an evasive witness Mr Brose was. He asserted that he had wanted the plaintiffs’ cattle off the property since October 1999 yet there were no demands made thereafter. Consistent with that initial demand, Mr Hornery, as has been found, did approach the Donnellys. The reason why Mr Brose made the initial demand was because of a possible decline in the condition of the cattle. This is borne out by the CSIRO report.[63] Mr Brose referred to that report. Subsequently, Mr Brose said that the condition improved but he still wanted the plaintiffs’ cattle off to allow growth of winter grass. At no stage did he tell Mr Hornery of his concerns after October. That may well be explained by the report from the CSIRO in December which showed ‘a great spike in diet quality’.[64] There had been substantial rains in November. Mr Brose gave reports to the plaintiffs that the cattle were in good condition. Why would he want them to leave? Perhaps he did want to look after the pasture for the winter but at the same time was getting a good return. He merely let things run on after the initial demand to leave. In my view, that does not mean that he is unreliable as a witness. He conceded in cross examination[65] that there was less urgency to shift the cattle after the 550 points of rain in November.
(b) Condition of the cattle: This matter has been discussed above.[66] One other point is that the CSIRO report of December reports that the cattle in the Bore paddock showed ‘a great spike in diet quality’. That is consistent with the cattle being in good condition as described by Mr Brose on his invoices.[67] Mr Brose gave evidence that the plaintiffs caused the cattle to be sprayed in March 2000 for Buffalo Fly. This problem only arises when the pasture is good because the Buffalo Fly will not survive unless they have got good fresh dung to live in.[68] Mr Brose added that the season has to be good and the condition of the cattle good for there to be a problem with Buffalo Fly. This evidence was not challenged.
[63] Exhibit 15.
[64] Exhibit 15.
[65] T198.35-45.
[66] See para.17.
[67] Exhibit 1 invoices 5 December 1999, 3 and 27 January 2000.
[68] T261.50-262.13.
Alleged Overstocking of House Dam Paddock and Bore Paddock
The plaintiffs’ cattle were delivered in two lots: the first lot was delivered in April 1999 and consisted of 47 cows, 47 calves and 103 female heifers. The balance were delivered in July 1999. This lot included 63 cows, 63 calves and 167 heifers. The total was 380 females and 110 calves. The latter are not considered in calculating the desirable numbers in a particular paddock.
Initially the cattle were to feed on the House Dam paddock (2000 acres) and thereafter at the Road paddock (2000 acres). When the last of the heifers arrived (85), Mr Hornery insisted that they be kept separate in the House Dam paddock. This left some 295 females in the House Dam paddock.
On 13 October 1999, some wiener steers were taken from “Avonleigh” to the feedlot. The 85 heifers were put in the Bore paddock (4000 acres) with some 60 head of the defendant’s cattle. The Bore paddock was probably understocked as was conceded by the plaintiffs’ counsel.[69] There were about 145 cattle in that paddock, together with some sheep.
[69]T285.40-45
The House Dam paddock had about 150 head between April and July 1999. Quentin Hornery visited there in October 1999. There was no suggestion that the condition of the pasture or the cattle was poor or below par. In fact, in the reports from Mr Brose dated 18 June 1999 and 89 September 1999 reference was made to both the pasture and the condition of the stock in a positive way.[70] By November, the heavy rainfall arrived. The effect of this on Avonleigh’s capacity to carry stock was not explored.
[70] Ex 1, invoices; the 9 July 1999 invoice shows that 85 Heifers arrived on 9.7.99. The numbers discussed in this section are taken from the invoices sent by Mr Brose and which were accepted and paid by the plaintiffs.
Mr Hornery did not see the cattle between August 1999 and 7 February 2000. His only comment in February was that “they had lost substantial condition”. There is no suggestion that the condition of the cattle in the Bore Paddock which was understocked (145 head of which 85 belonged to the Plaintiffs) and those in the House Dam Paddock were different. The defendants continued to use the Bore paddock for their own use once the plaintiffs’ cattle left. One cannot, therefore, be satisfied that the defendants were in breach of any terms of the agistment agreement. The agistment was only to continue whilst the two subject paddocks provided feed.
Originally there was some 150 females in the House Dam paddock. With the arrival in July, this increased to around 295 or 297. Mr McDonald was asked[71] about the carrying capacity of the paddocks at “Avonleigh” in April 1999. The average capacity he said was about one beast per acre, ie. for 2000 acres 105 beasts. Originally 400 head were to go into the House Dam paddock which as at April 1999 would have allowed feed for say 3 months.[72] As it turned out only 150 head were placed there.
[71]T173.48
[72]T174.3-5 per Mr. McDonald. One can infer the capacity of 1:19 is over one year.
Mr McDonald went on to explain[73] that a beast equivalent for determining what a paddock would carry is 400 kilo. It is not known what weight the plaintiffs’ cattle were. A beast usually eats 3.75 per cent of its body weight. Absent any detail of the make up of the herd, one cannot be satisfied as to the capacity of the Home Dam paddock. As at October 1999, Quentin Hornery confirmed that the plaintiff’s cattle were in good condition.
[73]T. 174.39-50
With the high rainfall in November, the period of time for holding 300 odd cattle in the House Dam paddock was extended. If there was little food left by 7 February 2000, as was suggested by the plaintiffs’ case, then the plaintiffs ought to have some something about it. As concluded by Mr Hornery the agistment, although seen as a long term arrangement was always subject to the seasons.
Quantum of Damages
In view of the above findings, it is probably unnecessary to determine quantum but in the event that some breach of the agistment agreement is established by the plaintiffs, it is convenient for the matter to be discussed at this point. The plaintiffs claim is based essentially on the loss of production because of their inability to conduct a 42 day program at ‘Avonleigh’ from mid January onwards.[74] This claim has two aspects it is submitted: first the failure of Mr Brose to provide a vet crush as allegedly agreed and the subsequent delay due to the poor condition of the cattle which led them to be delivered to ‘Avington’.
[74] Exhibit A para.3.1.
The first point has been discussed. The provision of the vet crush was not a condition of the agistment agreement. In any event, the plaintiffs had the option of driving to Emerald or Springsure and picking up the one offered by the defendants. They also had the option of hiring or buying one for $3000.00 to $5000.00.[75] I am satisfied that Mr Hornery had led Mr Brose to believe that his brother had one in any event. Mr Hornery said that he did mention his brother’s crush later but in the context that his was not available. Mr Hornery was well aware that AI facilities were available at the Donnellys’ property.
[75] T18.35-37.
Any suggestion that the cattle ‘had lost substantial condition’ has to be looked at in the context that the plaintiffs had failed to visit for some months. They admittedly had been assured that the cattle were in good condition. However, Mr Hornery failed to arrive at ‘Avonleigh’ on 15 January 2000. When he did arrive on 7 February 2000 he failed to avail himself of the options referred to relating to the crush. Had he arrived some weeks earlier the condition of the cattle would not have been as bad as he alleged or at least he could have commenced supplementary feeding if he was not satisfied that they were up to the standard he expected for the AI program. It was not suggested that he made a direct complaint about the condition of the cattle to Mr Brose.
Given the good rainfall in November and the positive December report from the CSIRO, it can only be assumed that the condition of the cattle deteriorated from January to March 2000 in order to assess any losses attributable to the defendants.
There is also some force in the argument of the defence that the plaintiffs had inseminated their cattle in March of 1999. The basis for that is that in paragraph 10 of the Further Amended Statement of Claim, the plaintiffs allege that during ‘the period from October-November 1999 335 calves were born to the 380 cows of the Plaintiffs that were than on agistment on “Avonleigh”.’ It is submitted by the defence that if the gestation period of nine months is taken into account then the cows were subject to AI in March. It may have occurred in late February. However, the point of the submission was that the plaintiffs may never have intended to start the program until around March. According to Dr Tucker there is a low success rate for subjecting cows to AI if they had calved within three months. This is particularly so if nutritional conditions are not optimal.[76]
[76] Exhibit 14 p.5 of facsimile
Plaintiffs’ case on quantum
The submissions on behalf of the plaintiffs included the following points:
(a) That in the past, the plaintiffs had achieved conception rates of 90%. The evidence of Mr Cameron confirmed that Mr Hornery had a good reputation for AI.[77] Mr Ahern, a qualified veterinarian, stated that Mr Hornery was an excellent technician in AI;[78]
[77] T39.42.
[78] 138.25-35.
(b) Dr Tucker conceded that a 65-70% success rate for a one cycle AI program is reasonable. Mr Ahern also a qualified veterinarian stated that where there is a large percentage of F1 Wagyu cattle it could be higher for a 21 day program.[79] A breeder of Wagyu might achieve up to 80% in that instance. The make up of the plaintiffs’ Wagyu cattle was 15% F1, 75-80% F2 and the balance F3 being the more pure stock. A 42 day program would produce a higher rate of success. It is accepted that in ideal conditions, Mr Hornery would achieve success rates of up to 90% in a 42 day program. Mr Ahern did not think that temperatures of 35 degrees would affect an AI program. He was not asked about the scenario put to Dr Tucker viz. driving cattle 7 and 25 kilometres in two days respectively in temperatures of mid thirties and then attempting AI within a few days. Dr Tucker said that by so stressing cattle it would affect the success rate for AI whatever the condition of the cattle at the outset;
[79] T135.10-50.
(c) For the purposes of the case, the plaintiff accepted that a reasonable success rate in the circumstances could be 80%, that is, cattle which are not stressed, in good condition and improving. On that basis, the plaintiffs suggests that 80% of 433 head available for the program produces a figure of 346. On the basis that 50% are usually male and 50% female, then a production of 173 steers and 173 heifers was feasible. In actual fact, some 81 steers and 90 heifers were produced making a loss of 92 steers and 83 heifers. The defence say that the rate is 65% of the 80% identified in cycle for AI to occur. Dr Tucker stated[80] that the usual detection rate for the cycle would be 80-90% of the females actually inseminated, a conception rate of 65% would be a good average. Allowing for the expertise of Mr Hornery and the type of cattle 75% of say 85% in cycle is reasonable. This produces a percentage of around 64%. If this figure is adopted, the plaintiff would have lost 67 steers and 58 heifers;
[80] Exhibit 14 p.6 of facsimile.
(d) The plaintiffs’ calculation for the loss of the steers is based upon the actual price received for those produced i.e. $873.00 per head making a total of $80,316.00.[81] However, it is proposed to allow only a loss of 67 head which produces a financial loss of $58,491.00;
[81] Exhibit 1 “D1” being the invoice from the Success Pastoral Company.
(e) The loss per head of the 58 heifers is more problematical. Based upon the reputation of Mr Hornery that the calves would have been heavier in weight and better grow on average, Mr Cameron, a cattle expert, estimated that the value of a pregnant Wagyu heifer would be $1,000.00.[82] On the facts of this case, the plaintiffs failed to prove that the agistment agreement provided for the defendants to keep the cattle in such above average condition to allow such healthy progeny. I would allow the lower figure in the range estimated by Mr Cameron viz. $530-$800.00 per head for ready to breed heifers which is the basis suggested in the written submissions.[83] The plaintiffs did not come near the cattle for many months. It is not open to find that they would keep their cattle in such above average condition or that the defendants were expected to do so. Loss for the heifers at $530.00 per head is allowable. The loss to the plaintiffs for the heifers is $30,740.00;
[82] Exhibit 3(b).
[83] Ex.A para.3.15. It was not based on the fact that they were pregnancy tested and in calf.
(f) The other category of loss sought is for 17 cows which would have failed to inseminate in the initial program the following year and which would have to be sold. A loss of $500.00 per head is allowed producing a total of $8,500.00. Added to the other two heads the losses are:
Loss of steers 58,491.00
Loss of heifers for breeding 30,740.00
Loss of cows 8,500.00
_________$97,731.00
To be deducted from the potential income lost is the related expenditure to produce such cattle. The plaintiffs have submitted the following expenses, which have not been challenged (allowing also for the adjustments forming part of these reasons):
a.Cost of agistment:
For the steers (67), $2.00 per week for 91 weeks
from January 2000 to September 2001 11,194.00
For the heifers (58), $2.00 per week for 91 weeks 10,556.00
For the cows sold (17), $2.00 per week for 112 3,808.00
________
$ 25,558.00b.Artificial insemination costs
Labour ($150 per day for two persons for 42 days
Travel and camp expenses and storage of semen 15,000.00
(75% of original 42 day program)
c.Four inspections per year
wages for one person for 2 days at $150.00 per day
plus allowance for travelling expenses 6,500.00d.Freight costs for 92 steers at $36.00 per steer
(Exhibit 7: shows the costs of the 81 actually sent) 3,312.00
_________
$50,370.00
_________
Summary Total Loss 97 731.00
Less Expenses 50,370.00
_________Net Loss $47,361.00
Failure to mitigate
Part of the discussion above has touched upon the plaintiff’s failure to mitigate their loss. This only becomes relevant if it were found elsewhere that the defendants were in breach of the agistment agreement. The failure to act includes:
(a) Failing to appear at “Avonleigh” by 15 January 2000 to commence the AI program. Mr Hornery did not see the cattle between July 1999 and 7 February 2000;
(b) Failing to take steps to acquire a vet crush to facilitate the AI by 15 January;
(c) From 7 February 2000, failing to make alternative arrangements for agistment particularly at “Dunraven” with the Donnellys. There were facilities at “Dunraven” for long term agistment, an AI program and adequate pastures;
(d) Failing to provide supplementary feed. Derran Hornery confirmed that they had to provide supplementary feed when times got dry;[84]
[84] T155.1.
(e) Walking the cattle 32 kilometres in two days knowing that there was some immediacy to commencing the AI program;
(f) Failing to allow the cattle to settle in at “Avington” before commencing the AI program;[85]
(g) As a result of the position which was created by Mr Hornery, some cattle were not detected as in cycle because it happened at night.
[85] T104.1-15.
If Mr Hornery had appeared on 15 January 2000, observed the condition of the cattle which he alleges “had lost substantial condition” he could have taken steps to agist them with the Donnellys. This would have allowed nearly two months for the cattle to improve their condition, settle into their new surrounds and moreover guarantee a better success rate for impregnation. If that had occurred, it would be difficult for the plaintiffs to say that any conduct of the defendants was causative of any loss, unless the cattle were in poor condition and required handfeeding.
Conclusions
The plaintiffs have failed to prove that any agreement made in April 1999 contained all of the oral terms pleaded in paragraph 6 of the Further Amended Statement of Claim. It was an implied term of the agistment agreement that the defendants would provide such feed and water to the agisted cattle as was necessary for their proper support and well being. This was done. If it had been a term of the agreement whereby the defendants were required to provide such care so to ensure that the cattle were in above average condition, the plaintiffs have failed to prove that any such breach was causative of their losses. The failure to mitigate their damages has resulted in their failing to prove any losses as claimed were caused by any breach of agreement by the defendants or their agent, Mr Brose.
Orders
- The plaintiffs’ action is dismissed and judgement entered for the Third and Fourth Defendants.
- It is ordered that the plaintiffs do pay to the Third and Fourth Defendants their costs of and incidental to the action including reserved costs, if any, to be assessed on the standard basis.
- Leave is given to the parties to make further submissions on the costs relating to the First and Second Defendant following the filing of the Notice of Discontinuance.
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