KCPC Pty Ltd v Ivamar Pty Ltd

[2024] NSWSC 322

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

KCPC Pty Ltd v Ivamar Pty Ltd [2024] NSWSC 322

Hearing dates:

5 – 8 December 2022, 31 March 2023

Date of orders:

27 March 2024

Decision date:

27 March 2024

Jurisdiction:

Common Law

Before:

Walton J

Decision:

(1) The plaintiffs shall file and serve Short Minutes of Order reflecting this judgment within 14 days of the date of publication of this judgment including the calculation of damages or compensation but excluding interest and costs.

(2) In the event that the defendants dispute the draft orders filed and served pursuant to order (1) they shall file and serve of Short Minutes of Order specifying the variation to those orders sought within 7 days of the receipt of the plaintiffs’ Short Minutes of Order.

(3) The plaintiffs shall file and serve draft orders as to interest and costs, separate and additional to the Short Minutes of Order pursuant to Orders (1) and (2) above, submissions in support of the same (not exceeding 5 pages in length, unless by leave of the Court) and any evidence with respect to interest or costs within 7 days of the receipt of draft orders pursuant to Order (2).

(4) The defendants shall file and serve draft orders as to interest and costs together with submissions (not exceeding 5 pages in length, unless by leave of the Court) and any evidence in response to the plaintiffs’ draft orders, submissions and evidence filed and served pursuant to order (3) within 7 days of the receipt of the draft orders pursuant to Order (3).

(5) The Court shall resolve any disputes arising as to the form of orders, interests or costs on the papers, unless any party seeks an oral hearing with respect to the same.

Catchwords:

CONTRACTS – breach of contract – breach of lease – breach of agreement – maintain herd profile – whether there is a shortfall of cattle – onus of proof – Briginshaw principles - probability of a shortfall

CONTRACTS – construction of a contract – falsa demonstratio non nocet – rectification – error – absurdity – objective intention

CONTRACTS – formation of a contract – offer and acceptance – failure to unequivocally accept

CONSUMER LAW – s 18 of Australian Consumer Law – misleading or deceptive conduct – reliance on representation – loss suffered from sale of cattle - whether relived of obligations otherwise under contract – damages

Legislation Cited:

Competition and Consumer Act 2010 (Cth)

Evidence Act 1995 (NSW)

Cases Cited:

AKAS Jamal v Moolla Dawood Sons & Co [1916] 1 A.C. 175; [1915] 11 WLUK 10

All Options Pty Ltd v Flightdeck Geelong Pty Ltd [2019] FCA 588

Altius Pty Ltd v Abignao nominees Pty Ltd [2023] NSWCA 177

Australia Bank Ltd v Clowes (2013) 8 BFRA 600; [2013] NSWCA 179

Bale v Mills (2011) 81 NSWLR 498; [2011] NSWCA 226

Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34

Campbell Mostyn (Provisions) Ltd v Barnett Trading Co [1954] 1 Lloyd’s Rep 65

Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594; [1990] HCA 11

Director General of Department of Community Services; Re Sophie [2008] NSWCA 250

Egan v Egan [2018] NSWSC 202

Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7

G v H (1994) 181 CLR 387; [1994] HCA 48

Golden Strait Corporation v Nippon Yusen Kubishika Kaisha [2007] 2 AC 353

Goldsbrough Mort & Co Ltd v Quinn (1910) 10 CLR 674; [1910] HCA 20

Hammoud Brothers P /L v. Insurance Australia Ltd [2004] NSWCA 366

Isles & Nelissen (2021) 65 Fam LR 1; [2021] FedCFamC1F 295

Jagatramka v Wollongong Coal Ltd [2021] NSWCA 61

K v The Queen (1997) 22 Fam LR 592

Kizbeau Pty Limited v WG & B Pty Ltd (1995) 184 CLR 281; [1995] HCA 4

Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11

M v M (1988) 166 CLR 69; [1988] HCA 68

Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184

McCormick v Riverwood International (Australia) Pty Ltd (1999) 167 ALR 689; [1999] FCA 1640

Morley v ASIC (2010) 247 flr 140; [2010] NSWCA 331

Neat Holdings Pty Limited v Karajan Holdings Pty Limited (1992) 67 ALJR 170; [1992] HCA 66

New South Wales Land and Housing Corporation v Australia and New Zealand Banking Group Limited [2015] NSWSC 176

New South Wales v Hathaway [2010] NSWCA 184

Nobile v National Australia Bank Ltd [1987] ATPR 40-787; [1987] SC 55-580

Qantas Airways Limited v Gama (2008) 167 FCR 537; [2008] FCAFC 69

Ryan v Wright [2004] NSWSC 749

Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) (2019) 99 NSWLR 317; [2019] NSWCA 11

Vieira v O’Shea [2012] NSWCA 21

Weissensteiner v The Queen (1993) 178 CLR 217; [1993] HCA 65

Wilson v Wilson (1854) 5 HL Cas 40; (1854) 10 ER 811

Texts Cited:

Stephen Odgers, Uniform Evidence Law, 12th Ed, Thomson Reuters)

Justice Dyson Heydon AC, Cross on Evidence (12th ed, 2019, LexisNexis)

Category:

Principal judgment

Parties:

KCPC Pty Ltd (First Plaintiff)
Khatambuhl Somerset Pty Ltd (Second Plaintiff)
Silknote Pty Ltd (Third Plaintiff)
Patricia Anne Wallace (Fourth Plaintiff)
Ivamar Pty Ltd (First Defendant)
Mark Ivan Burke (Second Defendant)
Ivan Burke (Third Defendant)

Representation:

Counsel:
A Connolly (Plaintiff)
P Bolster (Defendant)

Solicitors:
Rockliff Snelgrove Lawyers (Plaintiff)
Manning Valley Legal & Conveyancing (Defendant)

File Number(s):

2020/207061

JUDGMENT

INTRODUCTION

1. These proceedings broadly concern two families: the Wallaces and the Burkes. The Wallace family acquired three properties (“the properties”) near the Manning River and Khatambuhl creek in Northern New South Wales, two in Cundle Flat and one in Mount George, in their own right or through companies established by the Wallace family for the purposes of developing an agricultural business. In the course of developing that business, Harry Wallace employed Ivan Burke as a station hand at one of those properties. Ivan Burke and the Burke family had historically resided in Cundle Flat and undertook farming work in the surrounding Mount George (Manning River) region (“the region”) ^[1] . Over time, a close professional and personal relationship developed between Harry and Patricia Wallace and Ivan and Colleen Burke. This culminated in shared overseas trips and the attendance of special familiar events such as weddings and funerals.

   1. Mount George (Manning River): Ex 6.

2. The employment relationship between the Wallaces ^[2] and Ivan Burke commenced with Ivan performing work as a station hand. However, in 2010 the professional relationship between the families transformed into yearly lease arrangements that delegated complete management of the properties to the Burkes ^[3] including Ivan’s son, Mark, with the central activity being the rearing, maintenance and sale of cattle. Those yearly arrangements continued until 2014 when a four-year lease agreement (“2014 Lease Agreement”) was established. In 2017, another four-year lease agreement (the “2017 Lease Agreement”) was entered into.

   2. A term defined below in the procedural history.

   3. Ibid.

3. At least from the beginning of 2019, the region experienced drought which reached its peak at the end of November 2019. In November and December of 2019 bushfires broke out which burnt boundary fences on one of the properties (the Burkes were involved in fighting the fires).

4. After a meeting between representatives of the Wallaces and the Burkes on 28 November 2019 (“the November 2019 meeting”), the 2017 Lease Agreement was terminated on and from 1 December 2019. ^[4] By the time of the termination of the 2017 Lease Agreement, the Burkes were 10 months in rent arrears.

   4. Plaintiffs’ Chronology, page 2 [note: this chronology was agreed to by both parties per Transcript, 5 December 2022, page 8].

5. Thereafter, the Burke family supplied feed for a short period until the Wallace’s took over the purchasing of feed to maintain the cattle on the properties. ^[5]

   5. The Burkes had supplied feed to the cattle.

6. The Burke family continued to work on the properties. The nature and terms of those arrangements for work were controversial.

7. In December 2019, 309 cattle from the properties were sold by the Burkes. ^[6]

   6. Notwithstanding the figure of 311 cattle sold in the joint chronology, the parties adopted a common position in their written and oral submissions of the sale number being 309. The difference appears to derive from an inconsistency between the National Livestock Identification System (“NLIS”) documentation showing 311 and the ‘European Union Vendor Declaration (Cattle and Waybill)’ showing 309. I shall adopt the common position stated by the parties in their submissions.

8. A meeting between the Wallaces’ and the Burkes’ interests occurred on 20 January 2020 (“the January meeting”). A further agreement emerged from that meeting.

9. Mr John Hannaford (“Mr Hannaford”), a stock and station agent, begun working on the properties in February 2020 and conducted a cattle count on the properties between 26 February and 27 March 2020. The count was initially scheduled to begin on 10 February 2020, but heavy rains caused flooding in Khatambuhl Creek and delayed the commencement of the count until 26 February 2020. ^[7]

   7. CB, p 17, [65].

10. At the conclusion of the count, Mr Hannaford found a significant deficiency in cattle numbers compared to the cattle herd profile stated in the 2017 Lease Agreement.

PROCEDURAL HISTORY

11. By a Statement of Claim, filed on 14 July 2020 (“SOC”), KCPC Pty Ltd (“KCPC”), Khatambuhl Somerset Pty Limited (“KS”), Silknote Pty Limited (“SN”), and Patricia Anne Wallace (“Patricia”), herein after referred to collectively as “the plaintiffs” or “the Wallaces” (or “the Wallace family”), brought proceedings against Ivamar Pty Ltd (“Ivamar”), Mark Ivan Burke (“Mark”) and Ivan Charles Burke (“Ivan”), herein after referred to collectively as the “the defendants” or “the Burkes” (or “the Burke family”).

12. The defendants filed a Defence on 24 August 2020, which was thrice amended. The final amended Defence (“FAD”) was filed on 18 October 2020. The defendants also filed a cross-claim on 24 August 2020, which was thrice amended. The final amended cross-claim (“CC1”) was filed on 18 October 2022.

13. The plaintiffs filed a Defence to the cross-claim (“DCC”) on 17 November 2020. The plaintiffs additionally filed a cross-claim (“CC2”) on 5 December 2022. There has been no Defence to the second cross-cla Annexures (1509009, docx) im filed by the defendants.

14. These proceedings took place over a five-day hearing on 5, 6, 7, 8 December 2022 and 31 March 2023. In between 8 December 2022 and the resumption of the matter in 2023, a mediation between the parties took place under Court order which was ultimately unsuccessful.

DRAMATIS PERSONAE

15. At the outset of this factual background, it is useful to identify key persons (natural or legal) and properties central to this dispute.

16. Patricia, the fourth plaintiff, was married to Mr Harry Lachlan Wallace (“Harry”) who died in January 2018. Patricia and Harry, as well as the Khatambuhl Creek Trust and its trustee, KS and KCPC were parties to the 2017 Lease Agreement, as were Ivan, Mark and Ivamar.

17. Mr John Wallace (“John”) and Ms Kirstie Anne Wallace (“Kirstie”) were the children of Patricia and Harry and took over management of some Wallace family companies, in the capacity of directors, as Harry and Patricia aged. ^[8]

    8. An ASIC company search of 19 February 2021 found that John was a director of the first plaintiff, KCPC, and the third plaintiff, Silknot. As per an ASIC company search of 19 February 2021, Kirstie was a director of the first plaintiff, KCPC, the second plaintiff, KS and the third plaintiff, Silknot. I note, that the agreed Dramatis Personae, provided by the parties during the hearing, identified John and Kirstie as ‘officers’ of those companies rather than directors.

18. The properties, that the Wallace family either owned or controlled through companies, can be described as follows: ^[9]

1. The first property, “Somerset”, was 2,200 acres, on the south bank of the Manning River, and was owned by the second plaintiff, KS.

2. The second property, “Westwood Park”, was 165 acres, on the north bank of the Manning River, and was owned by the fourth plaintiff, Patricia.

3. The third property, “Khatambuhl”, was 8,500 acres, straddled Khatambuhl creek north of the Manning River, and was owned by the third plaintiff, SN.

   9. As per the agreed Dramatis Personae.

19. Most of the Wallaces’ cattle were on Somerset. ^[10] There was a much smaller number of cattle on Westwood. Combined, those two properties were nearly double the size of the cattle on Khatambuhl. ^[11]

    10. The cattle on the properties were, in fact, owed by KCPC: SOC, [9].

    11. Those ratios as at March/April 2020: see email from Hannaford to Mark of 3 April 2020 (J/W-2, p 75-76).

20. Khatambuhl is one of the largest stations in the region. There are two valleys in Khatambuhl that are divided by a range which comes from the south end. There are escarpments of each side of the range. There is a creek which runs through the centre of the property.

21. Mark, the second defendant, is the son of the third defendant, Ivan. Mark and Ivan are the sole directors of the first defendant, Ivamar.

22. A description of the additional parties who provided evidence in this hearing are as follows:

1. Mr Hannaford swore an affidavit dated 22 February 2021 indicating that he was a stock and station agent of Hannaford Stock & Land Australia (“HSLA”) who conducted the cattle count on the properties from February to March 2020.

2. Mr Mark Willock (“Mr Willock”), swore an affidavit dated 22 February 2021 indicating that he was the accountant of the plaintiffs and had been an accountant for members of the Wallace family and the companies run by the family for over 15 years.

3. Mr Lindsay Thomas McLoughlin ("Mr McLoughlin”), swore an affidavit dated 7 May 2021, indicating that he was the brother-in-law of Ivan and the uncle of Mark. Mr McLoughlin lived in a house on the Khatambuhl property.

4. Mr Peter Damian Fry, swore an affidavit dated June 2021, indicating that he was employed by the Burke family and undertook work at the properties between 2013 and 2020.

5. Mr Benjamin John Lockhart, swore an affidavit dated 18 May 2021, indicating that he transported cattle for the Burke family.

ISSUES AND CLAIMS

23. The parties prepared a joint memorandum of issues (“JMOI”). Whilst the parties did not delineate the issues by reference to causes of action, it is appropriate that issues be corralled in this way. The three broad causes of action were as follows:

1. Breach of contract (and cross-claims by the defendant in that respect);

2. Breach of Australian Consumer Law (“ACL”); and

3. Miscellaneous claims made by the defendants.

Breach of contract (and cross-claims)

24. Under the first of those causes of action, the plaintiffs prosecuted a claim on these alternative bases:

1. breaches of the 2017 Lease Agreement;

2. breaches of an agreement said to be reached in consequence of the termination of that lease in November 2019 (which included a contest as to whether such an agreement was reached);

3. breaches of the agreement on or about 23 January 2020 (the “January Agreement”).

25. The particularisation of those claims only fully materialised during the course of the plaintiffs’ submissions. The claims for damages in these respects were as follows:

1. Payment of $34,000 plus interest, equalling $37,400, for outstanding rent from the defendants due under the 2017 Lease Agreement;

2. Payment of $49,500, for the unpaid portion of the purchase price for the sale of “Plant & Equipment” under cl 3 and appendix I of the 2017 Lease Agreement;

3. Payment for the unpaid portion of sale proceeds, being 15% of the total sales over $700,000 (as per cl 11 of the 2017 Lease Agreement), for the financial year from 1 July 2017 to 30 June 2018;

4. Payment for the unpaid portion of sale proceeds, being 15% of the total sales over $700,000 (as per cl 11 of the 2017 Lease Agreement), for the financial year from 1 July 2018 to 30 June 2019;

5. Damages for the market value of the shortfall in the number of cattle counted, between February and March 2020, in comparison to the ‘heard profile’ set out in cl 1(d) of the 2017 Lease Agreement or in the Agreement that followed the termination of the 2017 Lease Agreement;

6. Damages for breach of the 2017 Lease Agreement that required regular maintenance of the fences on the properties.

26. The claims in 1 and 2 of the proceeding paragraph were admitted by the defendants (collectively “the admitted matters”).

27. I also note at this juncture that the plaintiffs confirmed (in their written submissions) that they abandoned their pleaded claims for damages in four respects: for the return of missing property of the first plaintiffs; arising from a breach of the defendants’ obligations under the 2017 Lease Agreement to manage the herd profile via ensuring each animal received a NLIS tag arising from diverted feed from the first plaintiffs’ cattle to cattle not owed by the plaintiffs; arising from the agistment of cattle not owed by the plaintiffs on the plaintiffs property.

28. The issues from the JMOI that correspond to those causes of action were stated as follows:

The Lease

1. The parties to the 2017 Lease Agreement and whether Ivan and Mark are parties to it;

2. Whether the number of cows required for the full complement of the KCPC herd was 1222 (as contended for by the plaintiffs) or 1122 (as contended for by the defendants);

3. Whether the numbers of cattle in the herd on 1 December 2019 were below the herd profile numbers (1222 or 1122 cows, 556 calves, 620 weaners, 29 bulls);

4. Whether the defendants breached their obligation under the 2017 Lease Agreement to maintain the Herd Profile;

5. How much the defendants are liable to pay the plaintiffs under cl 11 of the 2017 Lease Agreement in respect of sales of cattle in the year ended 30 June 2018;

6. How much the defendants are liable to pay the plaintiffs under cl 11 of the 2017 Lease Agreement in respect of sales of cattle in the year ended 30 June 2019;

7. Title to the plant and equipment on the properties other than the Sale P&E (listed in Appendix 1 to the 2017 Lease Agreement);

8. Whether the defendants wrongly removed the chattels listed in [41] of the SOC (excluding irrigation pipes) from the properties and are liable either to return those chattels to the plaintiffs or pay damages for their value;

9. Whether the defendants failed to carry out regular maintenance of fences on the properties in breach of the 2017 Lease Agreement;

10. Whether the defendants are liable to pay damages, and if so their quantum, for the cost of maintenance work to fences on the properties incurred by the plaintiffs.

The Agreements Reached subsequent to termination of the 2017 Lease Agreement

1. Whether the matters set out in sub-paragraphs 17(a) to (q) of the SOC were agreed upon by the plaintiffs and the defendants at the November 2019 meeting or at the January meeting, and whether the matters set out in subpars 17(b) (in part), 17(h) and 17(l) were agreed upon at all;

I interpose to set out sub-pars 17(a)-(q) of the SOC:

17. On or about 28 November 2019, the plaintiffs and the defendants agreed as follows:

a. The 2017 Agreement would be terminated with effect on and from 1 December 2019.

b. On 1 December 2019, the defendants would hand the herd over to KCPC with cattle numbers in accordance with the Herd Profile and thereafter manage the herd for KCPC in accordance with the usual practices of the beef cattle industry and otherwise manage the Three Properties in accordance with good rural land management practices.

c. On and from 1 December 2019, the defendants would not be permitted to sell any animals in the herd without the consent of the plaintiffs.

d. The defendants would be permitted to sell up to 400 head from the herd (being cattle surplus to the Herd Profile) during December 2019 and retain the proceeds from the sales after paying arrears of rent and the outstanding balance of the purchase price for the Sale P&E.

e. The defendants would not be required to pay rent for any month later than November 2019.

f. The plaintiffs would be responsible for all outgoings for Khatambuhl Creek, Westwood Park and Somerset after November 2019.

g. The plaintiffs would be responsible for paying for ongoing feed for the herd after mid-December 2019.

h. Until the earlier of 30 April 2020 and the date when all the cattle in the herd had been sold, the plaintiffs would pay the defendants a total of $2,400 per week to cover the labour of the second and third defendants and fuel for each of them.

i. The defendants would invoice the plaintiffs on a monthly basis for the cost of any casual labour by other workers.

j. In the period from 1 January 2020 to 30 June 2020 inclusive, the defendants would receive 10% of the proceeds of the sale of any cattle from the herd net of the costs of sale and the costs incurred by the plaintiffs in feeding the cattle.

k. In respect of all sales of cattle from the herd:

i. the sales had to be sales on behalf of KCPC;

ii. documentation of the sales had to be sent to the plaintiffs; and

iii. funds from the sales had to be deposited into the bank account of KCPC

l. The defendants were to provide the plaintiffs with a plan for feeding the cattle in the herd (on the assumption that the herd would pe de-stocked by 30 April 2020).

m. KCPC would pay for all stockfeed itself, rather than reimburse purchases made by lvamar.

n. The second defendant would vacate and clean up Somerset house and the bunkhouse by 30 June 2020.

o. The plaintiffs would pay for materials for any new fencing.

p. Any bulldozer work, timber harvesting or other additional work was to be discussed and agreed between the plaintiffs-and the defendants.

q. The agreement of 28 November 2019 was without prejudice to the plaintiffs' accrued rights under the 2017 Agreement.

I continue with the issues under the heading ‘Agreement reached subsequent to the termination of the 2017 Lease Agreement’:

2. Whether the defendants were under an obligation under the alleged November 2019 Agreement to hand over the herd with cattle numbers in accordance with the Herd Profile, and whether that obligation was breached;

3. Whether the defendants were liable under an alleged agreement made in January 2020 to pay the plaintiffs the market value of the shortfall of cattle found on the 2020 cattle count;

Cross-claims by the defendants under the January Agreement

29. The issues associated with the defendants CC1 was as follows:

1. Whether the email from John to Mark on 23 January 2020 (“the January 2020 email”) records the terms of an agreement made between the plaintiffs and the defendants at that time;

2. If the January 2020 email does record an agreement, whether the defendants are estopped from relying on the terms referred to in the particulars to par 14 of the CC1;

3. Whether the plaintiffs are liable by virtue of the January Agreement to pay three invoices issued to KCPC;

4. Whether in April 2020 the defendants were engaged by Mr Hannaford (as the agent of the plaintiffs);

5. Whether the plaintiffs are liable by virtue of the January Agreement to pay two invoices issued by the defendants to Mr Hannaford;

6. Whether the defendants are entitled to remuneration as pleaded in par 24 of the CC1.

30. The claims advanced by the defendants in this respect were not clearly articulated in the CC1. I will take a moment at this juncture to discuss them.

31. By the time of the final submissions, the claims made by the defendants, in this respect appear to be as follows:

1. Payment of $160,338.75 for unpaid invoices for works completed by the Burkes after the termination of the 2017 Lease Agreement; and

2. Payment of 10% of the net proceeds of cattle sold by the plaintiffs between 1 January 2020 and 30 June 2020; and

3. Payment of $20,000 to cover “all old issues of expenditure” on the properties by the defendants; and

4. Return of the defendant’s property, listed in a table that appears in the CC1.

32. I will now break down, one by one, each claim. Prayer 1 is extracted from CC1 and affirmed in the closing written submissions. Prayer 1 comes from both the CC1 and closing written submissions.

33. Prayer 3 appears in the closing written submissions as “[t]he agreement [sic] regarding the $20,000 should be enforced”. I have made the assumption that the “agreement” being referred to appears in the January 2020 email that alleges to sum up the January meeting between the Wallace’s and the Burke’s where it was allegedly agreed there will be a one-off payment by the Wallace family to the Burke family of “$20,000 to cover all old issues i.e./equipment, hay sheds etc this will be paid prior to 30th June”.

34. Prayer 4 appears in the CC1 as “[a]n order permitting the Cross-Claimants to access the Cross-Defendants’ properties for the purpose of retrieving the Cross-Claimants ‘plant & Equipment located on the properties”. The same claim appears in the defendant’s closing written submissions as “[t]he plaintiffs should also be required to deliver up the Burkes personal property”. The personal property being referred to appears in the table in CC1 at [41].

35. There were some claims pursued in CC1 which remained at the end of the proceedings unsupported by evidence and/or were not referenced in the defendants’ closing written or oral submissions. I will refer briefly to those particular matters at the close of this judgment.

Australian Consumer law

36. The plaintiffs claimed damages under ss 236 and 237 of the ACL (which appear in Schedule 2 of the Competition and Consumer Act 2010 (Cth)), for misleading and deceptive conduct pursuant to s 18 of the ACL, in relation to the representation that there were enough cattle for the defendants to sell 400 animals in December 2019 and the ‘herd profile’ would still remain intact. The issues identified in that respect of the JMOI were as follows:

1. Whether the defendants at the November 2019 meeting represented to the plaintiffs that there were enough animals in KCPC’s herd on the properties that the defendants could sell 400 animals from the herd in December 2019 and the herd profile would remain intact;

2. Whether the defendants represented to the plaintiffs on or about 20 January 2020 that the herd profile of 1222 cows, 556 calves, 620 weaners and 29 bulls was then intact;

3. Whether the plaintiffs relied on that herd number representation in the manner pleaded at [36] of the SOC, or on the January herd profile representation in the manner pleaded in [6] of the CC2.

Paragraph 36 of the SOC was as follows:

36. The plaintiffs relied on the Herd Number Representation:

a. by agreeing with the defendants on or about 28 November 2019 that the defendants would be permitted to sell up to 400 animals from the herd in December 2019;

b. by not requiring on or about 28 November 2019 and later that a count of the cattle on the Three Properties be undertaken in late November or early December 2019;

c. by agreeing with the defendants on or about 28 November 2019 that the defendants would manage the herd after 30 November 2019 and would be remunerated for doing so;

d . by agreeing with the defendants on or about 28 November 2019 that the defendants would receive 10% of the proceeds of the sale of any cattle from the herd net of the costs of sale and the costs incurred by the plaintiffs in feeding the cattle.

Paragraph 6 of the CC2 was as follows:

6. The Plaintiffs relied on the 2020 Herd Profile Representation:

a. by agreeing with the Defendants on or about 20 January 2020 that the Defendants could retain the proceeds of the sale in December 2019 of up to 400 head of cattle from the herd;

b. by agreeing with the Defendants on or about 20 January 2020 that, as an incentive, from 1 January 2020 to 30 June 2020 only and inclusive, from all sales of KCPC cattle the Defendants would receive 10% of the sale price less the costs of sales (being commission, fees and transport costs) and the cattle feeding costs (including freight and feeding equipment);

c. by agreeing with the Defendants on or about 20 January 2020 that, from 1 December 2019, subject to the provision of invoices containing correct information and weekly activity reports, the Plaintiffs would pay the Defendants $6,000 plus GST per week to cover all labour of both management and casuals to run the Three Properties seven days a week, all workers' on-costs (including workers' compensation, superannuation and overtime), all equipment (whether the Defendants' own or from an external source) and running costs (being fuel, repair and maintenance, registration and insurance), and further subject to review of the arrangement in April and June 2020 based on cattle numbers and general workload;

d. by agreeing with the Defendants on or about 20 January 2020 that the Plaintiffs would pay to the defendants a one-off payment of $20,000 prior to 30 June 2020 in relation to all claims by the Defendants for compensation in relation to past improvements made by the Defendants to the Three Properties, to equipment and to the use of the Defendants' own hayshed.

The particulars of issue 3 concerning the ACL were as follows:

1. by agreeing with the defendants that the defendants would be permitted to sell up to 400 animals from the herd in December 2019 and retain the proceeds;

2. by not requiring at the November 2019 meeting and later that a count of the cattle on the properties be undertaken in late November or early December 2019;

3. by agreeing with the defendants that the defendants would manage the herd after 30 November 2019 and would be remunerated for doing so;

4. by agreeing with the defendants that the defendants would receive 10% of the proceeds of the sale of any cattle from the herd net of the costs of sale and the costs incurred by the plaintiffs in feeding the cattle;

5. by agreeing with the defendants at the January Agreement that the plaintiffs would pay the defendants a one-off payment of $20,000.

4. Whether the herd representations in November 2019 or January 2020 constitute conduct engaged in in trade or commerce;

5. Whether the herd number representation or the January herd profile Representation was correct;

6. Whether the making of the representations in November 2019 or January 2020 constituted conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL;

7. Whether the plaintiffs have suffered loss or damage by reason of the making of those representations;

8. Whether the defendants used feed that had been purchased by KCPC as feed for KCPC cattle between mid-December 2019 and the end of April 2020 to feed other cattle;

9. Whether the defendants wrongly caused or permitted cattle other than KCPC’s cattle to be agisted on Somerset between 1 December 2019 and 31 March 2020 and, if so, the quantum of damages to be paid by the defendants;

10. If the January 2020 email does record an agreement, whether the representation in January 2020 was conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL and the plaintiffs should be relieved of their obligations under the agreement.

Miscellaneous Other Issues

37. The JMOI identified three miscellaneous claims brought by the defendants as follows:

1. Whether the defendants have suffered any loss in relation to silage from a sorghum crop and, if so, in what quantum; (The claim relating to the silage by the defendants was not pressed in the defendants’ closing written or oral submissions. I will treat the claim as not pressed).

2. Whether the defendants are entitled by virtue of the January Agreement to payment of 10% of all net cattle sales between 1 January 2020 and 30 June 2020; (This issue is already addressed under the breach of contract heading).

3. Whether the defendants have been unable to retrieve equipment left by them on the properties because they have been locked out of the properties and, if so, whether they have suffered any loss or damage. (This issue is mentioned in relation to the defendants’ cross-claim).

FINDINGS OF FACT (INCORPORATING THE CONSTRUCTION OF THE 2017 LEASE AGREEMENT AND ANY SUBSEQUENT AGREEMENT AFTER TERMINATION OF THAT AGREEMENT)

38. The relationship between the Wallace and Burke families, as briefly outlined in the introduction, begun in the 1970’s between Harry and Patricia Wallace and Ivan and Colleen Burke and over the decades developed into a significant professional and personal relationship.

39. In 1974, Ivan was appointed as a station hand at the Khatambuhl property which was purchased by Harry some years prior to that date. During Ivan’s employment at the property, he undertook work to renew and upgrade fences, construct new steel cattle yards, clear areas of regrowth and slash and fertilize open areas of the property to assist in the development of the agricultural business of the Wallace family overall.

40. The close relationship between the Burke and Wallace families was demonstrated by occasions attended by both families outlined in Ivan’s affidavit sworn on 9 June 2021:

“(b) Along with my late wife Colleen we went as Harry 's guests to Zimbabwe, along with Wallace family members and other friends, to celebrate Pat Wallace' 60th Birthday.

(c) Colleen and I also went to Vanuatu as guests of Harry and Pat Wallace and family.

(d) When Colleen died suddenly in December 2002, Pat Wallace delivered a moving eulogy which outlined the connected association and closeness which our families enjoyed, along with her personal friendship with Colleen.

(e) Along with members of my family, I went to India for Andrew Wallace’s wedding.

(f) I and members of my family enjoyed a time with the Wallace Family in the Cook Islands.

(g) When my daughter, Kate and her husband Clem Ayres were married at Woolgoolga, in July 2017, Harry and Pat Wallace were our guests.

(h) I had gone to Scotland and Thailand with Harry and Pat Wallace, during which Harry Wallace would introduce me to extended family and acquaintances as "my other son".

(i) In 2006 Craig Burke and Mark Burke and myself and my brother-in-Law, Hilly Dunn went on a Kokoda Track walk with John Wallace, Andrew Wallace and other Wallace Family members, Hunter Johnson and Jake and Dan Knight.”

41. Ivan described the relationship as familial, stating the following in his affidavit of 9 June 2021:

“over the years from the 1970’s me and my family had many associations with Harry Wallace, Pat[ricia] Wallace and their family. We had developed such a close relationship to the extent that from my observation it was as though Harry and Pat Wallace thought of, or at least treated, me and my family as an extended part of their family.”

42. On 20 June 1990, SN was registered. Patricia was appointed as a director to SN in December 1990 and Kirstie was appointed as a director in August 2001. Harry Wallace was the registered proprietor of Khatambuhl until 24 June 2019. At some point thereafter, SN became the registered proprietor. SN was also the trustee for the Khatambuhl Creek Trust.

43. On 12 May 2004, KS was registered. Patricia was appointed as a director on 12 May 2005 and Kirstie was appointed as a director on 1 September 2008. KS was the registered proprietor of Somerset at the time of the proceedings. The evidence does not reveal when the Somerset property was purchased and who was the original registered proprietor.

44. On 25 January 2005, KCPC was registered. Kirstie was appointed as a director on 15 May 2007, Patricia was appointed as a director on 28 February 2018 and John was appointed as a director on 12 September 2018. KCPC was the owner of the cattle on the properties.

45. It is unclear when Westwood Park was purchased and by whom. Patricia Wallace was the registered proprietor of the land at the time of the proceedings.

46. The Wallace and Burke Families entered into a yearly lease agreement for the financial year of 2010 to 2011. The lease does not appear in evidence. That lease agreement was followed by a number of other yearly lease agreements between the families between 2011-2012, 2012-2013 and 2013-2014.Those leases also do not appear in evidence.

2014 Lease Agreement

47. The next lease in sequence was titled “LEASE AGREEMENT v5” but for the purposes of this judgment will be referred to as the “2014 Lease Agreement”.

48. The 2014 Lease Agreement was entered into between Harry, Patricia, SN as the trustee of Khatambuhl Creek Trust, KS, KCPC and Ivan, Mark and Ivamar. ^[12] The 2014 Lease Agreement was signed on 5 May 2014 and the term of the agreement was from 1 April 2014 to 30 June 2017. ^[13] Each page of the agreement is initialled by five signatories to the 2014 Lease Agreement: Harry and Patricia, Mark and Ivan, and Kirstie on behalf of the SN as trustee of the Khatambuhl Creek Trust and KCPC.

    12. Ivan and Mark were the sole directors of Ivamar: FAD at [12] and [14].

    13. Lease Agreement v5, Cl 7.

49. The assets stated under cl 1 of the lease were: ^[14]

“a) the property known as Khatambuhl Creek Pastoral but excluding the Top and Bottom houses and Hardes house but including Tommy’s Hut

b) the property known as Westwood Park but excluding Westwood house

c) the property known as Somerset including the Somerset house and Bunkhouse

d) the cattle herd profile that existed at 1 July 2010 being 1222 cows (being 941 cows, 194 replacement heifers and 87 culls), 556 calves, 620 weaners and 29 bulls, being a total of 2377 head (See Appendix II)

e) the P&E list as attached to the 2010/11 Lease Agreement less the Toyota Ute driven by Ivan Burke plus the Excavator plus the Kubota Tractor (part-time) plus a Post Hole driller but excluding Item A(14) being the ride-on mower, Item A(18) being 3 Hiilux Utes and Item B(2) being the FIAT tractor with attachments, but with the third Hilux Ute and the FIAT tractor ownership being subject to the April and May 2014 Lease payments being made before 8 May 2014.”

14. Lease Agreement v5, Cl 1.

50. Clause 1(a) to (c) concerns property, cl 1(e) concerns motor vehicles but of most significance is cl 1(d), which deals with the number of cattle.

51. The 2014 Lease Agreement spans five pages with the first three pages making up the primary agreement. An appendix begins halfway down page three that lists the “main plant & equipment items” at the Khatambuhl and Somerset properties. Page five contains a handwritten tally (“the tally”) which deals with the total cattle asset under the lease with a delineation of the cattle on each property as of 1 July 2010. The tally records 1065 cows counted at the Khatambuhl property, 70 cows counted at the Westwood Park property and 87 cows counted at the Somerset property. The sum of those numbers is 1222 cows, which is recorded correctly as the total number of cows in the tally and in cl 1(d) of the 2014 Lease Agreement. The tally further showed a total of 556 calves, 29 bulls and 620 weaners being the total cattle counted across the three properties.

52. Clause 1(d) refers to the cattle asset as the “cattle herd profile”, however, the parties generally used the expression “herd profile”. The common meaning of herd profile, conveyed throughout both parties’ submissions, was that it meant the total number of cows, calves, weaners, and bulls, and I will use that term consistently in this judgment. The term “cattle” will also be used to refer to a group of animals regardless of whether they are cows, calves, weaners, or bulls.

53. The tally in the appendix to the 2014 Lease Agreement also provides the herd profile (across the properties). However, the Appendix incorrectly records the herd profile as 2377 (a fact accepted by all the parties). The correct sum is 2,427 cattle.

54. Various forms of ‘maintenance’ were required under the 2014 Lease Agreement. Clause 2 read:

“a) Herd Maintenance – BF [Burke Family] will maintain the herd profile and will progressively improve the genetics so that a premium product is produced

b) Property Maintenance – all buildings, houses, grounds including Tommy’s Hut are to maintained in good order and condition by BF

c) Paddock Maintenance – BF will maintain all the pastures with regular programs of pasture improvement together with regular maintenance of roads, dams, cattle grids and fences. All fencing materials, gates, gate fittings and accessories are to be supplied by WF [Wallace Family] and constructed by the BF.

d) P&E Maintenance – BF will maintain all P&E in good working order. WF will not be responsible for replacing any P&E item which has reached the end of its working life and should any item of P&E be no longer required then WF is to be paid the trade-in or market value of such item if it is sold or otherwise disposed of.

e) Insurance – BF will insure all the properties including all houses and outbuildings for fair replacement value and take out Public Liability insurance for $20 million on all 3 properties and BF will arrange to have various owner’s interest noted on such policies with copies of all policies when renewed being forwarded to WF within one month of renewal

f) Other services – BF to pay all rates, levies, taxes, irrigation and other fees incurred by the above 3 properties and to pay for all services to the properties except for the phone and electricity charges for the Top house, Bottom house, Westwood house and Hardes house.”

55. There were additional clauses in the agreement that required the Burke family to report on the status of the herd. Clause 3 was titled ‘Heard Count’ and read:

“BF will do full stock-takes at 30 June of each year and by 1 August each year will advise WF of the results.”

56. Clause 4 was titled ‘Reporting’ and read:

“BF will give WF a hard copy report by 7^th of each month of the BF major activities carried out during the previous month, including but not limited to: calves branded, sales, deaths, Al-ing, pasture treatment, P &E maintenance, property maintenance.”

57. Reporting of cattle numbers and maintenance, as I understand, occurred during meetings every few months between KCPC and Burke Cattle Co Pty Ltd. Figures were sometimes reported in a word document form or communicated verbally. Attendees of these meetings were usually John, Kirstie, Mark and Ivan.

58. Clause 9 specified that a lease payment of $13,000 was payable every calendar month (plus GST), paid in advance on the 28^th day of each proceeding month, until 30 June 2015. After 30 June 2015, for each subsequent year, the lease payments would increase by the greater amount of either (1) a 3% per annum increase or (2) the NSW CPI increase for the previous 12 months until 31 March.

59. Clause 10 in the agreement dealt with profit share from cattle sales between the Wallace and Burke families and reads as follows:

“BF will commit 10% of total revenue for cattle or other sales originating from the above three properties above $500,000 in each financial year commencing 1 July 2014 to environmental outcomes that will improve productivity and reduce carbon emissions such as solar panels for pumping water or reducing electricity grid consumption.”

60. The termination clause of the agreement read as follows:

“BF may terminate this agreement by giving three (3) month’s notice in writing. WF may terminate this agreement by giving six (6) month’s notice in writing or by giving fourteen (14) day’s notice in writing in the event that BF has not made the Lease Payments for two consecutive or non-consecutive months without the prior written consent of WF or there is some other significant breach of the commitments made by BF. In the event that either BF or WF terminates this agreement then a herd count will be made prior or on the date of termination and BF will pay WF market price for any cattle that are less than the original 1 July 2010 cattle profile (Appendix II as detailed in 1(d) above). Any cattle which are more than that profile will be the property of BF. A stocktake will be done of all P&E and payment made to WF of reasonable value for any missing itwm. Any outstanding Lease Payments, trade creditors or other charges real or contingent as at the date of termination will continue to be the responsibility of BF.”

61. The 2014 Lease agreement ran its term.

2017 Lease Agreement

62. The 2017 Lease Agreement substantially replicated the 2014 Lease Agreement. It was entered into between the same parties. These parties are specified in the preamble to the 2017 Lease Agreement, the signature provision of the 2017 Lease Agreement and John’s affidavit of 22 February 2021 at [12].^[15] It was signed by the Burke parties on 3 April 2017 and the Wallace parties on 24 April 2017. The anticipated term ^[16] of the agreement was from 1 July 2017 to 30 June 2021. ^[17]

    15. I note that the pleadings in the SOC do not refer specifically to SN as the trustee of Khatambuhl Creek Trust.

    16. Anticipated term is referred to as the term of the contract was not fulfilled.

    17. 2017 Lease Agreement, cl 9

63. The assets stated under the 2017 Lease Agreement in cl 1 were very similar to those under the 2014 Lease Agreement. In relation to the real property and motor vehicle assets, cll 1(a)-(c) were the same except the “Jane Russell blocks” were included in cl 1(a) rather than “Tommy’s Hut”, and cl 1(e) does not appear. Most significantly, cl 1(d) in the 2017 Lease Agreement is identical to cl 1(d) in the 2014 Lease Agreement but does not contain the parenthetical words “(being 941 cows, 194 replacement heifers and 87 culls)” to describe the make-up of the herd of cows­. Clause 1 is extracted below:

“1. Assets

The assets included in this agreement are:

a) the property known as Khatambuhl Creek Pastoral Co but excluding the Top and Bottom houses and Hardes house but including the Jane Russel blocks.

b) the property known as Westwood Park but excluding Westwood house

c) the property known as somerset including the somerset house and bunkhouse,

d) the cattle herd profile that existed at 1 July 2010 being 1222 cows, 556 calves, 620 weaners and 29 bulls, being a total of 2377 head (See Appendix II)”

64. The 2017 Lease Agreement spans five pages with the first four pages making up the primary agreement. Appendixes I and II appear on page five and are both typed. Appendix I of the 2017 Lease Agreement provides a “Valuation of equipment for Mark Burke”. Appendix II is titled “Cattle numbers” for 30 June 2010 and consists of a table with columns bearing the titles, “year”, “cows”, “calves”, “weaners”, “bulls” and “total”. The entries for each column are as follows: the cows are recorded as “1122”, the calves are recorded as “556”, the weaners are recorded as “620”, the bulls are recorded as “29” and the total is recorded as “2377”. I note that Appendix II provides less details of the breakdown of the herd profile compared with the tally that appears in the 2014 Lease Agreement. As earlier mentioned, both parties accept that 2377 is an incorrect sum of the total cattle.

65. The number of cows mentioned in Appendix II of the 2017 Lease Agreement, being “1122”, stands in contrast to the number of cows specified in cl 1(d) of the 2017 Lease Agreement, being “1222”. As such, there is an inconsistency between the terms of the agreement, as specified in cl 1(d) and Appendix II as to the number of cows (as mentioned, the 2014 Lease Agreement refers to the number of cows as 1222 in both cl 1(d) and in the Appendix to that agreement). The defendants maintained that the parties agreed that the 2017 Lease Agreement provided for the number of cows being “1122”. That is disputed by the plaintiff.

66. This issue will be addressed shortly, under the heading ‘Issue of Number of cows specified in the 2017 Lease Agreement,’ which appears immediately after the remaining outline of the terms and form of the 2017 Lease Agreement.

67. The maintenance clause of the 2017 Lease Agreement (cl 2), is different to the 2014 Agreement and reads as follows:

“a) Herd Maintenance – As summarised in Appendix II, BF will maintain the herd profile and will progressively improve the genetics so that a premium product is produced.

b) Paddock Maintenance – BF will manage all the pastures with regular programs of fertiliser and pasture improvement together with regular maintenance of roads, dams, cattle grids and fences.

Before this agreement comes into effect BF will set out its broad plan for such improvements and maintenance for WF’s approval.

c) Insurance – BF will insure all the properties including all houses on the properties, including those not included in this Agreement, at values to be agreed and take out Public Liability Insurance for $20 million on each of the 3 properties and BF will arrange to have the various owner’s interest noted on such policies with copies of all policies when renewed being forwarded to WF within one month of renewal.

d) Other services – BF to pay all rates, levies, taxes, irrigation and other fees incurred by the above 3 properties and to pay for all services to the properties except for the phone and electricity charges for the Top house, Bottom house, Westwood house and Hardes house.”

68. Similar to the 2014 Agreement, cl 4 and 6 of the 2017 Lease Agreement provide reporting responsibilities of the Burkes. Clause 4 was titled “Herd Count” and read as follows:

“BF will do a full stock-takes at 30 June of each year and by 15 August each year will advise WF of the results of the count.”

69. Clause 6 was titled “Reporting” and read as follows:

“WF requires BF to give quarterly report on the activities of that month including mating, weaning, sales, fence maintenance, ploughing, clearing, fertilising. WF will provide a draft template for this purpose.”

70. Clause 11 specified the lease payment of the agreement would be $17,000 per calendar month (plus GST) paid in advance on the 28^th day of the preceding month. Clause 11 also had an additional section, titled “PLUS” that dealt with profit shared under the agreement. This read as follows:

“PLUS:

A profit share which BF will pay WF by 15^th August of each year, being the additional amount of 15% of all the prior year’s total sales over $700,000 and WF agrees that such amount will be spent on improvements to the properties.

Note: GST will be in addition to all the above Lease Payments and the Plant & Equipment amounts.”

71. Lastly, the termination clause of the 2017 Lease Agreement, cl 10, read as follows:

“Both WF and BF may terminate this agreement by giving six (6) month’s notice in writing. WF may terminate this agreement in the event that BF has not made the Lease payments in full for two consecutive months without the prior written consent of WF or BF has made a serious breach of the undertakings specified in Clause 2.

In the event that either BF or WF terminates this agreement then a herd count will be made immediately prior to or on the date of termination and BF will pay WF market price for any cattle that are less than the cattle profile as set out in Appendix II. Any cattle which are more than that profile will be the property of BF.

If WF terminates this agreement for reasons other than BF failing to make two consecutive lease payments or a major failure to meet conditions as specified above, then WF will pay BF the sum equal to three month’s lease payments for each year or part thereof as from 1 July 2017 plus or minus any amounts appropriate for adjustments to cattle numbers or liabilities which BF was due to pay but has not paid and to cover the value of any improvements, crops, hay, fertiliser, chemicals, or other supplies on the properties at the Termination date.”

72. The terms of the 2017 Lease Agreement are not in issue except the inconsistent figure of cows stated in cl 1(d) of the primary agreement and in the table of appendix II. This issue is addressed below.

Construction of the 2017 Lease Agreement: Issue of cattle numbers specified in the 2017 Lease Agreement

73. Counsel for the plaintiffs submitted that ascertaining the correct “definition of the herd profile” in the 2017 Lease Agreement is to be resolved as a matter of construction. Counsel for the defendants did not identify the means of resolving the issue or, in substance, address this issue other than making reference to 1122 cows in his closing written submissions. In my view, the plaintiffs are correct.

74. As mentioned, there is an inconsistency between the figure of cows stated in cl 1(d) of the 2017 Lease Agreement, being “1222”, and the figure of cows stated in Appendix II of the 2017 Lease Agreement, being “1122”. The resolution of this discrepancy is a matter of construction as it requires the Court to construe the 2017 Lease Agreement.

75. A related issue, is what is the correct total number of cattle under the herd profile having regard to the 2017 Lease Agreement. It was common ground that the number of cattle was incorrectly recorded in both the 2014 and 2017 Lease Agreements as 2377. The plaintiffs submitted a finding of cow numbers at 1222 would yield a total of 2427 cattle, whereas the defendants contended the herd profile was a total of 2327 cattle corresponding to its contention as to the proper construction of the 2017 Lease Agreement as to the number of cows.

76. As to the first proposition, counsel for the plaintiffs submitted that the figure for cow numbers under the 2017 Lease Agreement and corresponding sum of cattle under the herd profile “can be corrected as a matter of construction of the 2017 Agreement either by applying the principle of falsa demonstratio non nocet or by recourse to the surrounding circumstances in which the 2017 Agreement was made”.

77. Counsel sought to rely on the authority of Ryan v Wright [2004] NSWSC 749 (“Ryan v Wright”) stating that “Gzell J found that a restraint provision in a contract was not unenforceable due to inaccuracy in the contract’s definition of “business” and that the inaccurate description should be struck out as a falsa demonstratio”.

78. Ryan v Wright was a case where Mr Ryan and DeMorgan Pty Ltd (“DeMorgan”) brought proceedings against Mr and Mrs Wright for contempt of Court for breaching an undertaking given to the Court to refrain from, in broad terms, directly or indirectly carrying on a business in competition with DeMorgan and directly or indirectly approaching a customer of DeMorgan (at [3]). Mr Ryan was a shareholder of DeMorgan and Mr and Mrs Wright were former shareholders of DeMorgan. Mr and Mrs Wright were sole shareholders of Ridges Estate Pty Ltd (“Ridge”). The undertakings given to the Court resembled cl 13.1(a) in the shareholder agreement of DeMorgan, which counsel for the plaintiffs referred to as the ‘restraint clause’, which read as follows:

“Notwithstanding any other provisions of this Agreement, the Shareholders must not do any of the following things during the period commencing on the date of this Agreement and ending three (3) years after a Shareholder ceases to be a Shareholder or a Director ceases to be a Director of the Company without the prior written approval of the holders of at least 90% of the Shares:—

(i) directly or indirectly carry on a business in competition with the business of the Company or its Associates;

(ii) directly or indirectly approach an agency who is a customer of the Company or its Associates.”

79. Additionally, cl 1.1 defined the term ‘business’ to mean the development and sale of the “product” in Australia and overseas. There was no definition of “product”. Counsel for Mr and Ms Wright submitted that the defendants were only restrained from carrying on a business of development and sale of a “product” in competition with DeMorgan and since neither DeMorgan nor Ridge carried on such a business, the provision was meaningless. Counsel submitted DeMorgan and Ridge provided security services to users of computer systems not sale of a “product”.

80. In that respect, Gzell J held as follows: :

“I do not accept that construction. In this commercial document the parties intended that there should be a constraint upon the carrying on of business in competition with DeMorgan. It was its business that the parties intended to protect and, being inaccurate, the definition of “business” in cl 1.1 of the shareholder’s agreement should be struck out under the falsa demonsrtatio non nocet (a false description does not injure) maxim.”

81. Gzell J held consideration of cl 13.1(a) was not strictly relevant to whether Mr and Mrs Wright were guilty of contempt of court for breaching an undertaking. However, his Honour determined that the undertakings might be construed in light of cl 13.1(a) (at [15]) but that the final determination must be made upon the terms of the undertaking per say. In that respect, Mr Wright was found to have breached the undertaking. The Court found a contempt of Court with respect of that breach (at [62]), but not by dint of cl 13.1 as such.

82. This case offers some support for the plaintiff’s contention, in that Gzell J stated in obiter that ­cl 1.1 of the shareholders agreement could be “stuck out” under the falsa demonstratio non nocet (a false description does not injure) maxim (at [9]) on account of the consideration that “in this commercial document the parties intended that there should be a constraint upon the carrying on of business in competition with DeMorgan” (at [9]). However, that is a case far removed from the present circumstances and, in any event, there must be at least some doubt that the principle extends as far as was contemplated by his Honour in obiter dicta.

83. The counsel for the plaintiffs also sought to rely on the case of Egan v Egan [2018] NSWSC 202 (“Egan v Egan”). In Egan v Egan the defendant “executed a mortgage to secure a loan from the plaintiff” (at [1]) but failed to make any repayments. The plaintiffs sought possession of the property.

84. An issue arose as to whether the “Deed of Loan” was effectively incorporated into the mortgage as neither the mortgage or Annexure A of the mortgage referred to a “Deed of Loan”. Instead, Annexure A of the mortgage referred to “the Deed of acknowledgment of loan” rather than “the Deed of loan”.

85. At [83], Davies J followed what had been said by Kunc J in New South Wales Land and Housing Corporation v Australia and New Zealand Banking Group Limited [2015] NSWSC 176 at [46] that “A ‘misnomer’ is an error in naming something or someone” and that the test for a misnomer was “whether the misnomer was the product of a mistake made in circumstances in which it would have been plain to all who are concerned with the relevant document as to who the party was that was referred to in the document” (at [49]). Following that principle, Davies J held (at [84]) that it would have been plain to the parties to the present arrangement that what was meant by the words “Deed of acknowledgement of loan” was the “Deed of loan” because the only documents executed on the date of the mortgage was the mortgage and the “Deed of Loan” and there was no such document as a “Deed of acknowledgement of Loan”. The words “Deed of acknowledgment of loan” were found to be falsa demonstratio and Annexure A did incorporate the “Deed of loan” into the mortgage.

86. In reliance upon that authority and the principle of falsa demonstratio, counsel for the plaintiffs submitted that “the figures of 1,122 and 2,377 are the products of mistakes made in circumstances in which it would have been plain to the parties that 1,122 is a typographical error for 1,222 and that 2,377 is a restatement of the error found in the second appendix to the 2014 agreement”.

87. That submission may be accepted for two reasons. Firstly, cl 1(d) of the 2017 Lease Agreement not only refers to 1222 cows but references Appendix II in such a way as would indicate that figure was intended to be reflected in the Appendix. The words in brackets “(See Appendix II)” gives that impression. It may also be noted that the number for calves, weaners and bulls in cl 1(d) were accurately translated into Appendix II.

88. I also accept the submission of the plaintiffs that the same conclusion may be reached by reference to the relevant surrounding circumstances known to both the plaintiffs and the defendants at the time of the formation of the 2017 Lease Agreement. These were as follows:

1. The wording of the 2017 Lease Agreement closely follows the wording of the 2014 Lease Agreement between the same parties. Clause 1(d) of the 2014 Lease Agreement is identical to cl 1(d) of the 2017 Lease Agreement, save that the earlier agreement includes a parenthetical calculation of the cattle making up the 1,222 cows (a grouping of 87, 194 heifers and 941 cows).

2. Appendix II of the 2014 Lease Agreement sets out the same figures for cows (and otherwise) as those found in cl 1(d) of that agreement.

3. Each page of the 2014 Lease Agreement, including the Appendix was initialled by Ivan and Mark.

4. Ivan and Mark agreed in cross-examination that Appendix II to the 2014 Lease Agreement accurately set out the calculation of the cattle count as at 1 July 2010.

5. There is no evidence that the parties to the 2017 Lease Agreement agreed there was a change in the number of cows such that it may be reflected in the 2014 Lease Agreement.

89. Of particular note, in cross-examination, Ivan acknowledged that at various places in his affidavit evidence when he referred to a “cattle quota” he understood that to be made up of 1,222 cows. The questions immediately prior to the reference to cattle quota concerned the 2017 Lease Agreement which indicates that Ivan’s answers concerned the 2017 Lease Agreement, rather than the 2014 Agreement. The relevant part of the transcript from 7 December 2022 is extracted below:

“Q. I wonder if you could turn over to page 1147 in the Court book.

A. 1147. Yes, I have it now. Yes, I'm right now.

Q. Do you recognise that document?

A. Yes.

Q. That's the lease agreement between the Burke interest and the Wallace interests in April 2017, isn't it?

A. Yes.

Q. On that page, 1147, do you see that there's a paragraph marked, "One assets"?

A. Yes.

Q. At paragraph D, there's a description of the herd profile that existed at 1 July 2010.

A. Yes.

Q. Do you agree with me that the description there is the same as the one in the lease agreement that I took you to a moment ago from 2014?

A. Yes, looks like it.

Q. Mr Burke, can I ask you to turn over to page 1151?

A. Yes.

Q. You see at the bottom of the page there, there's an appendix 2, cattle numbers.

A. Yes, yes.

Q. Then underneath that is a list of numbers for various categories of cattle.

A. Yeah, cows, calves, weaners and bulls.

Q. As at 30 June 2010.

A. Yes.

Q. Do you see there that it says, "Cows, 1,122"?

A. Yes.

Q. Did you understand that that was a mistake for 1,222 that appears on the front page?

BOLSTER: I object, your Honour.

WITNESS: No, I don't.

BOLSTER: There's no mistake case pleaded here.

CONNOLLY: I'm just asking for Mr Burke's understanding.

BOLSTER: It's not relevant unless there is.

HIS HONOUR: Yes.

CONNOLLY

Q. Mr Burke, were you aware of the number written in appendix 2 for cows, 1,122?

A. I presume that would be right.

Q. What did you think was the correct number of cows making up the herd profile?

BOLSTER: I object. Can't be relevant, your Honour. The agreement says what it says. There's no application for rectification. What he thought about the agreement is material to how it's to be construed or enforced.

HIS HONOUR: That must be right.

CONNOLLY: It may make a difference, your Honour, as to what was intended by the alleged representation in 2019.

HIS HONOUR: That's a different matter. You're testing him on the agreement, and his intention as to the agreement or what he understood it to be is irrelevant as a matter of construction of the agreement.

CONNOLLY: Yes, your Honour. I'll put the question a different way.

Q. At various places in your evidence, you refer to a cattle quota, and cattle that are excess to quota. Do you remember saying that in your affidavits?

A. Yes.

Q. When you refer to the cattle quota, you’re referring, are you not, to the figures that are on the front page of this agreement

A. That would be right.

Q. 1,222, 556, 620, and 29.

A. Yes, yes.

90. The same conclusion may be reached by application of principles that a contract may be reconciled by construction. Leeming JJA in Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) [2019] NSWCA 11 provides a useful summary of principle where a contract can be rectified by construction (at [6] – [8]):

“Rectification by construction

6. At common law, if the error is clear, and it is also clear what a reasonable person would have understood the parties to have meant, then the mistake may be corrected as a matter of construction. This is old law. Lord St Leonards said in Wilson v Wilson (1854) 5 HL Cas 40 at 66–67; 10 ER 811 at 822:

“Now it is a great mistake if it is supposed that even a Court of Law cannot correct a mistake, or error, on the face of an instrument: there is no magic in words. If you find a clear mistake, and it admits of no other construction, a Court of Law, as well as a Court of Equity, without impugning any doctrine about correcting those things which can only be shown by parol evidence to be mistakes — without, I say, going into those cases at all, both Courts of Law and of Equity may correct an obvious mistake on the face of an instrument without the slightest difficulty.”

7. Examples may be found in linguistic errors, such as “inconsistent” being read as “consistent” in Fitzgerald v Masters (1956) 95 CLR 420; [1956] HCA 53, or conceptual errors, such as “lessor” being read as “lessee” in McHugh Holdings Pty Ltd v Newtown Colonial Hotel Pty Ltd (2008) 73 NSWLR 53; [2008] NSWSC 542. The language of a contract is not read like a computer program, such that any slip is fatal.

8. Two conditions are necessary in order to correct the contractual language in this manner: (a) that the literal meaning of the contractual words is an absurdity and (b) that it is self-evident what the objective intention is to be taken to have been: see Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184 at [117]–[119], approving National Australia Bank Ltd v Clowes (2013) 8 BFRA 600; [2013] NSWCA 179.”

91. The sole place the cow numbers are recorded as 1122 in the 2017 Lease Agreement is in Appendix II. The terms of the 2017 Lease agreement appear before the Appendix. Clause 1(d) specifies 1222 cows in the herd profile (which incidentally accords with cl 1(d) in the 2014 Lease Agreement). The erroneous sum figure of 2377 cattle, that is mistakenly carried across from the 2014 to the 2017 Lease Agreement, additionally demonstrates a pattern of mistaken figures in the Appendix and is supportive of the conclusion that the figure of 1122 cows in Appendix II of the 2017 Lease Agreement was a plain mistake.

92. Notwithstanding the error in Appendix II to the 2017 Lease Agreement being numerical, in my view, the principles of rectification by construction apply. The figure for cows in Appendix II of the 2017 Lease Agreement as “1122” is an absurdity. as it is plainly inconsistent with the terms of the agreement. It is self-evident that the objective intention of the parties is that the figure was intended to read as “1222”.

93. It follows that the figure for cows, being “1122”, in Appendix II of the 2017 Lease agreement is an error and should be read “1222.

94. Taking into account all the above factors, the correct construction of Appendix II of the 2017 Lease Agreement, in my view, is that the figure for cows in Appendix II of the 2017 Lease Agreement should be read as “1222” not “1122” so as to rectify a mistake or error. It follows that the 2017 Lease Agreement specifies the number of cows in the herd profile as 1222.

95. It is unnecessary to make reference to subsequent events to reach that conclusion. However, I record the plaintiff’s contention in that respect as an introduction to other aspects of the factual background and because they are, in their terms accurate. They are as follows:

1. The figures of 1,222 cows, 556 calves, 620 weaners and 29 bulls were referred to by John without protest at the November 2019 meeting.

2. The figures of 1,222 cows, 556 calves, 620 weaners and 29 bulls were set out in the email from Kirstie to Mark and Ivan on 29 November without subsequent demur from the Burkes.

3. Those figures were also endorsed by the Burkes at the January meeting with John, both as the full complement of the herd and as a basis for calculating a notional value of the herd. Those figures were also set out in writing by John in the January 2020 email to which the Burkes raised no objection.

4. At the meeting between the Wallace and the Burke families on 21 January 2019, Mark reported that the number of cows was approximately 1400 and there was a buffer of 100 to 150 cows for sale if necessary. If Mark had thought that the herd profile number for cows was 1122, the buffer would have been 200 to 250.

96. At the meeting between the Wallace and the Burke families on 20 March 2019, Mark reported that 150 old cows had been culled and that, when 62 heifers that had been put with bulls were included, the cows then numbered 1,250. ^[18]

    18. “Cattle Numbers – March 2019”, CB p 1210.

97. In the light of this analysis and the FAD, the following pleadings in the SOC with respect to the terms of the 2017 Lease Agreement may be accepted. These are extracted below (adjusted to the style of this judgment):

“15. There were terms of the 2017 Agreement as follows, among others:

a. The term of the agreement was from 1 July 2017 to 30 June 2021.

b. The Wallace Family Entities would lease to the defendants:

i. Khatambuhl Creek (except the Top and Bottom Houses and Hardes House, but including the Jane Russell blocks);

ii. Westwood Park (except Westwood House);

iii. Somerset (including the Somerset house and bunkhouse); [together "the properties"] and

iv. the plant and equipment on the properties (except the plant and equipment sold to the defendants pursuant to the 2017 Agreement) ("the Lease P&E").

c. KCPC would provide the defendants with a herd of cattle on the properties having the following profile: 1222 cows , 556 calves, 620 weaners and 29 bulls ("the Herd Profile") .

d. The defendants would do the following (among other things):

i. for the term of the 2017 Agreement pay the Wallace Family Entities $17,000 plus goods and services tax per month in advance on the 28^th day of the preceding month;

ii. pay the Wallace Family Entities by 15 August of each year 15% of all the prior year's sales over $700,000, plus goods and services tax;

iii. maintain the Herd Profile;

iv. progressively improve the genetics of the herd so that a premium product was produced;

v. manage all the pastures of the Three Properties with regular programs of fertiliser and pasture improvement, together with regular maintenance of roads, dams, cattle grids and fences on [the properties];

vi. pay all rates, levies, taxes, irrigation and other fees incurred by [Khatambuhl] , Westwood Park and Somerset and pay all services to them except for the telephone and electricity charges for the Top house, Bottom house, Westwood house and Hardes house;

e. KCPC would sell to the defendants all the items of plant and equipment listed in Appendix 1 to the 2017 Agreement ("the Sale P&E") .

f. For the Sale P&E, the defendants would pay a total of $95 ,000 plus goods and services tax in the following instalments:

i. $25,000 plus goods and services tax on 28 June 2017;

ii. $25,000 plus goods and services tax on 28 December 2017;

iii. $25,000 plus goods and services tax on 28 June 2018; and

iv. $20,000 plus goods and services tax on 28 December 2018.

g. The defendants were agents for KCPC for the sale of KCPC's cattle on the [properties] (subject to their obligations to maintain the Herd Profile and to improve the genetics of the herd) and were entitled to retain the net proceeds of the sale of such cattle (subject to their obligation to pay the Wallace Family Entities 15% of each year's sales over $700,000, plus goods and services tax) .

16 Pursuant to the 2017 Agreement, the defendants had possession of the [properties] and the plant and equipment and the herd provided with them on and from 1 July 2017.”

98. I note that pars [15](a), (b), (f) and [16] were admitted in full per the FAD.

99. The defendants admitted [15](c) but stated that the herd profile was overstated by 100 cows (in that the true number was 1122 cows, rather than 1222 as alleged by the plaintiffs). That issue has been resolved above in favour of the plaintiffs.

100. The defendants also admitted [15](d) but repeated the response “pleaded at [15](g) of the defence as above”.

101. Similarly, the defendants admitted [15](e) but repeated “the grounds pleaded at 15(f) of the defence as above”.

102. While the caveats in the FAD in [15](d) and [15](e) are not entirely clear, they appear to be a reference to the defence of [15](g) of the FAD.

103. In that respect, the defendants admitted [15](g) but stated that “agency was implied and not specified, in the written agreement.”

104. Specifically, the 2017 Lease Agreement provided, inter alia, that the defendants had an obligation to maintain the herd profile as specified in that Agreement. The sole disputed issue raised by the defendants, in that respect, was the correct number of cows under the agreement. I have found, as a matter of construction, that number was 1222. The herd profile was, therefore, a total of 2427 cattle consisting of 1222 cows, 556 calves, 620 weaners and 29 bulls.

105. It appears likely the defendants moved cattle around nine different properties available to them to assist in raising the cattle: six properties controlled by the Burkes and three properties owned by the Wallace family.

106. Counsel for the plaintiffs submitted that the Burkes moved cattle around eight different properties on account of the oral evidence from Mark where he stated that the Burkes only weighed cattle at one of the eight properties available to them.. Ivan outlined nine properties (6 Burke properties and 3 Wallace properties) available to the Burke family more precisely in cross-examination and, therefore, his evidence in this regard will be preferred.

107. Ivan referred to six properties that the defendants and his other son, Craig Burke, raised cattle on. ^[19] These included one property owned by Ivan that adjoined the Khatambuhl and Westwood property (“Burke Khatambuhl”), a second property owned by the Burke family located 45 minutes from Somerset (“Rushfield”), a third property owned by the Burke family located 20 minutes from Somerset (“Burrell Creek”) ^[20] , a fourth property leased by the Burke family located 45 minutes from Somerset (“Gloucester”) ^[21] , a fifth property owned by Craig Burke located nearby at Mount George (“Mount George”) and a sixth property leased to Ivan near Nowendoc River (“Nowendoc River”). ^[22] When combined with the properties, there are nine separate properties.

     19. Transcript 7 December 2022, p 168–169.

     20. Also referred to as ‘Martin’s’.

     21. Also known as Stanton’s’.

     22. Transcript 7 December 2022, p 168 - 169

108. There were separate Property Identification Codes (“PICs”) in the NLIS for each of the Burke properties. It emerged in the cross-examination of Mark that the Burke family did not record the movement of cattle from Wallace properties to Burke properties in the NLIS. It was also noted by Ivan in cross-examination that the Burke family bought or leased other properties to provide additional space for cattle to graze in order to relieve the pressure on the Somerset property in the drought conditions when there is less grass for grazing.

109. The undertaking of the 2017 Lease Agreement was carried out in line with the terms of the agreement until September 2018, where the Burke family were beginning to have difficulty in making the monthly lease payments. An ongoing drought in the Manning River region had an impact on the grass grown on the properties and consequently on the amount of feed the defendants had to purchase to ensure the cattle were maintained. The extent of the drought is an issue in dispute between the parties in these proceedings. I will return to this issue later in this decision.

110. As previously mentioned, meetings between KCPC and Burke Cattle Co Pty Ltd ^[23] occurred every few months where reports were received and discussions were had on matters concerning the lease. At a meeting on 21 January 2019, the Burkes were four months in rent arrears and reported they had to spend “$180,000 on grain this past season” ^[24] . Mark advised “cattle numbers were up and they have a buffer of 100-150 to sell if worse comes to worse”. The Burkes estimated that there were approximately 1400 cows. ^[25] In item 3 of the meeting, it was indicated, as an “action”, Mark would provide overall cattle numbers to KCPC within the coming week. That did not occur. Mark also discussed fencing issues with power outages and electric fences losing electricity, resulting in cows getting out.

     23. It is not entirely clear the status of that company but Ivan and Mark were at the meeting and were described as directors.

     24. JW/2, p 13.

     25. Ibid.

111. At a meeting on 20 March 2019, the Burkes were five months in rent arrears. Meeting minutes recorded that cattle numbers were discussed during that meeting. It was agreed by Ivan that the Burkes wanted to demonstrate in that meeting they had adequate assets given the rental arears and the outstanding equipment payments and that those assets included cattle numbers. The minutes recorded that year-to-date cattle numbers were “sitting at 2617 head + 55 steers + 85 wagyu = 2755.” It was further recorded that “the lease states a total of 2377 head so the extra cattle as Burke equity = 378. Calving rates estimated to be around 80%.”

112. A document was provided by Mark to John at the meeting outlining in greater detail the cattle numbers as of March 2019 (extracted in Annexure A). The typed entries on the document were made by Mark. The handwritten entries at the bottom of the document were made by John. A further handwritten entry in the box, indicating sales forecast, was also made by John. Mark accepted in cross-examination that the estimates of cow numbers were speculative. Nonetheless, Mark reported that 150 old cows had been culled and that, when 62 heifers that were put with bulls were included, the cows were numbered at 1250. Those numbers were consistent with what Mark said in January 2019 about 1400 cows and a buffer of 100-150 but, as I shall find, this did not mean the estimates were reliable. This reflected his estimate of how many cows formed part of the Wallace herd at that time.

113. There was an objection taken in the cross-examination of Ivan by counsel for the defendants that was not raised in submissions as to whether the document was “minutes” of the meeting or just a “note”. ^[26]

     26. Transcript 7 December 2022, p 174–175.

114. Whilst the record of the meeting of 20 March 2019 was not titled meeting ”minutes”, I have treated the record as minutes because that is the way John, in his affidavit of 22 February 2021, and Kirstie, in her affidavit of 22 February 2021, refer to them. This appears to be the regular form which is used to record the meetings held between the Wallaces and the Burkes. There was no cross-examination of John or Kirstie on this issue.

115. Furthermore, there was no rejection of that characterisation of the document by Ivan or Mark and, in cross-examination, Mark referred to a document (recording the contents of the meeting of 21 January 2019) in essentially the same way, as “minutes”.

116. Whilst Mark raised some difficulties with making corrections to minutes, and that the minutes principally focused on information concerning the Burkes, the evidence does not suggest inaccuracy as such in the text of the minutes. On the balance of probabilities, the meeting “minutes” are accurate.

117. Item 5 of the minutes dealt with Fencing and Yards and stated the following:

“Mark spoke about waiting to get feedback from electricity company. Problem is MB doesn't get power outage notifications when the communication tower gets outage so is unaware when fences aren't electrified.

We spoke about need to do some work on fencing at Somerset and KCPC . Materials are around but budget $5k until the end of this financial year .

538. Additionally, it was submitted that the plaintiffs’ proposition, that a deficiency in the number of cattle would have meant that none of these matters would have been pursued by the Wallaces flies in the face of the agreement that protected the Wallaces, namely, the provisions in cl 10 of the 2017 Lease Agreement. Put another way, the Wallaces were always protected by a backstop whereby the Burkes would have to make up the difference in the case of a deficiency in any stock count.

539. My conclusion is that the evidence discloses that the plaintiffs relied upon the defendant’s representation at the November meeting.

540. As a broad proposition, I accept the submission of the plaintiffs that “it seems impossible that the plaintiffs in those circumstances would have agreed that the Burkes would keep money on the sale of the 309 if they had understood that they were just giving the cattle to the Burkes in effect. So the whole of the arrangement that went forward after that meeting was predicated on the sure, firm assurances from the defendants that the herd profile was there and that there were substantial numbers of cattle in excess of that, such that the defendants could sell up to 400”.

541. That submission was plainly available on the evidence and accords with the findings that I have otherwise made in this judgment. It is also commercially realistic.

542. Turning to the particular matters referred to by the defendants responsively to the plaintiffs’ written submissions, my conclusions are as follows:

1. The contention advanced by the defendants concerning the sale of up to 400 head appears to hinge upon the proposition that the true purpose of the sale of the 400 head was to provide a means of the Burkes paying outstanding arrears.

2. It may be accepted on the evidence that the proceeds from the sale of up to 400 head would be used to defray the outstanding arrears under the 2017 Lease Agreement. However, it is an entirely different proposition to suggest that the plaintiffs would have agreed to such an approach had they not believed that the Wallace’s the 400 cattle were in excess of the herd profile. The plaintiffs were correct to suggest that otherwise they would have been permitting the defendants to delve (for sale) into the cattle within the herd profile (producing a breach of the 2017 Lease Agreement) to fund the very payments due by the defendants in rent under the agreement. The proposition is non-sensical.

3. I have earlier rejected the defendants second proposition as to the deferral of the stock count and the circumstances of the termination of the lease. In particular, I have accepted that the termination was mutual and there was an agreement to conduct the count in the following year. The Burkes assured the Wallaces that there were, in fact, excess cattle on the properties. It would have been unnecessary to conduct the count, in November 2019, in those circumstances, particularly where there was a mutual arrangement for a count to be held in only 2020 and there was an urgency to management of the consequences of the drought.

4. The engagement of the defendants to manage the herd after the termination of the 2017 Lease Agreement is consistent with the notion that the herd was intact. Many of the conditions that were established in the aftermath of the determination were consistent with those circumstances.

5. As to the fourth proposition, it is true to say that a fee of this kind might have been expected to be paid upon the continuation of the Burkes management of the property. However, the condition that the defendants would receive 10% of the proceeds of the sale of any cattle from the herd, between 1 January 2020 and 30 June 2020 net] of the costs of sale and the costs incurred by the plaintiffs in feeding the cattle, has as its foundation a conception of the state of the herd within the requisite period and the prospects of sale of cattle in that respect.

543. Overall, it is a commercially unreal proposition to suggest that the plaintiffs would have proposed or agreed to the sale of 400 head unless the representation had been made giving the assurance that the herd profile was intact.

Loss occasioned from the November 2019 representation

544. The plaintiffs made the following submissions with respect to damages arising from the sale of the 309 cattle as follows:

“148. These 309 animals were moved pursuant to the agreement for the sale of up to 400 head in December 2019 (Mark Burke XXN, T236.40-42, T237.40-42, T238.40-T239.5).

149. The 309 cattle sent to Edwards Livestock in December 2019 were not in fact surplus to the herd profile and their removal caused substantial loss to the first plaintiff. The 309 head comprised 131 heifers and 178 steers. The 131 heifers would have reduced the shortfall of cows to 169. The 178 steers would have reduced the shortfall of weaners to nil and, applying the additional 21 weaners to the shortfall of calves, would have reduced the shortfall of calves to 66. Applying the figures in Kirstie Wallace’s affidavit of 4 December 2021 (at EX10-CB1.224) the damages for the loss of the cattle sold in December 2019 are as follows (not including interest):

a. Cows: $139,132.48 (131 at $1,062.08);

b. Weaners: $153,538.15 (157 at $977.95);

c. Calves: $20,536.95 (21 at $977.95);

d. Calves that would have been born to the missing cows: $101,706.80 (104 (being 131 x 80/100) at $977.95);

3. Total: $414,914.38.

150. Interest should run from the dates of the removal of the animals, 4 and 11 December 2019.”

545. The defendant’s alternative case in reply was that if the plaintiffs did suffer any loss, in respect of permitting the sale of 400 head in December 2019, the damages were limited to the value of the stock sold.

546. The defendants submitted that the plaintiffs’ case is that it suffered a loss by reason of permitting the sale of 309 head as part of the agreed 400 sale in November 2019. The measure of damages claimed are the prices for comparable stock that were achieved by the plaintiffs after the drought broke. It was submitted that relying on this does not represent that actual loss, as the animals were sold in December 2019 before the drought broke. Relying on post drought prices to fix a loss that accrued during the drought is impermissible as it does not reflect loss.

547. I accept the defendants’ submissions in this respect. The calculation of the damages will be, therefore, based upon the assessment of loss in that respect.

548. The parties did not directly address the calculation of damages in that respect. I will provide an opportunity for them to deal with that question following the publication of this judgment.

The January Meeting: Representations

549. I will briefly repeat and elaborate upon earlier conclusions as to representations arising from the January meeting. These conclusions are coextensive with the conclusions reached as to misleading and deceptive conduct in the November 2019 meeting. They are mirrored in the January meeting. The relief available to the plaintiffs in that respect is equivalent to the assessment of loss under the ACL with respect to November 2019 meeting.

550. The claims for damages and other relief arising from representations made during the January meeting were pleaded at CC2 ([5]-[10]) and the relief claimed appeared at [2]-[4]. No defence to the CC2 was served by the defendants.

551. I accept the submissions of the plaintiffs in this respect which may be summarised as follows:

1. At the January meeting, the defendants represented to the plaintiffs that there were enough animals in the first plaintiff’s herd on the properties that the herd profile (of 1,222 cows, 556 calves, 620 weaners and 29 bulls) was then intact.

2. Although Mark refused in cross-examination to concede that he had told John at the January meeting that the cattle were all present, his own evidence was that in early January 2020 he thought that most of the cattle were present so far as he could tell. In cross-examination Mark conceded that, in early January 2020, the cattle at Somerset were “close to the number” and that he was not at Khatambuhl to see what deaths had occurred there, but Ivan would have told him if there had been many deaths at Khatambuhl. The calculation of the value of the herd carried out by John at the meeting proceeded on the basis that cattle corresponded to the full herd profile in the 2017 Lease Agreement and that the cattle might be sold on that basis. I agree that it may, therefore, be concluded that Mark did make the representation at the January meeting.

3. Similar to the circumstances of the representation at the November 2019 meeting, the representation made at the January meeting was made in a context where the plaintiffs and the defendants engaged in further commercial negotiations about the terms on which the defendants would continue to work for the plaintiffs. It was, therefore, made in trade or commerce for the purposes of s 18 of the ACL.

4. Mark and Ivan continued to be the directors of Ivamar at that time.

5. For the reasons earlier given with respect to the state of the herd in November 2019, the representation was incorrect as the herd numbers were substantially below the herd profile numbers as specified in the 2017 Lease Agreement.

6. The representation as to the herd profile in the January meeting constituted, therefore, misleading or deceptive conduct or conduct likely to mislead or deceive under s 18 of the ACL.

7. The plaintiffs relied upon the representation of the aforementioned representations, at least to the extent that they took no steps to reverse the previous agreement that the defendants could retain the proceeds of the sale in December 2019 of up to 400 head of cattle from the herd. Nor did the plaintiffs claim for restitution of the cattle sold in conformity with the representations.

8. The plaintiffs also contended that there was reliance indicated by certain parts of the January agreement which correlate to claims made under the cross-claim and also relate to the proposition by the plaintiffs that any claims arising with respect to those entitlements under the January agreement may be defeated under the ACL.

552. Given that I have found that an agreement was made in January 2020 in terms of the January 2020 email, it is appropriate to turn to the factors identified by the plaintiffs to establish reliance. It is convenient in that respect to commence the consideration of the cross-claims brought by the defendants in that same context. Three parts of the January agreement that are relevant in that respect are set out below, (acknowledging that there is repetition of an earlier extract:

1. Paragraph 4 of the January agreement provides as follows (“10% incentive”):

“4. As an incentive, from the 1st January - 30 June 2020 only and inclusive, all sales of the cattle will garner the Burkes 10% of the cattle sale prices, less costs of sales (commission/fees/transport) and the cattle feeding costs (including freight & feeding equipment) incurred by the WF.

General estimate of herd

Cows       1,222 @ $750      = $916,500

Weaners    620 @ $850      = $569,500

Calves    556 @ $400      = $222,400

Bulls       29 @ $800      = $ 23,200

$1, 723, 600.”

2. Paragraph 6 of the January 2020 Agreement provides as follows (the “management fee”):

“6. Operations management from 1^st Dec, WF will pay the BF $ 6,000 + GST per week to cover- (invoices to be supplied with correct info)

a. All labour for both management and casuals to run all the properties across the 7 day week.

b. All workers on -costs- (workers comp, superannuation, over-time etc ..)

c. All equipment (whether it be Burke's or external) and running costs (fuel/R&M/Rego/insurance)

d. This will arrangement be reviewed in April & June based on cattle numbers and general work load

e. BF to provide a weekly activity report

f. WF will be appointing a selling agent- John Hannaford to assist with the cattle sales and managing the sale of Somerset, and leasing of KCPC and Westwood. BF to work with John Hannaford to organise the cattle, review feed reqs, prepare for the stock count on the 27^th Feb and review the work program and have a more defined cattle sales program.”

3. Paragraph 7 of the January Agreement provides as follows (the “one-off payment”):

“7. 1 off payment WF will pay BF $20,000 to cover all old issues ie/ equipment, hay sheds etc this will be paid prior to 30th June.”

(collectively the “January agreement provisions”).

553. I will first turn to considerations of reliance and the claim by the plaintiffs under the ACL to counter the cross-claim.

Reliance and the operation of ACL regarding claims under the January agreement

554. The plaintiffs submitted that they would not have agreed to the January agreement provisions if the defendants had not made the aforementioned representations in the January meeting.

555. It was further submitted that the first plaintiff lost the 309 cattle sold by the defendants in December 2019 and the proceeds of those sales. The plaintiffs sought damages being equal to the value of the 309 animals plus interest in the same terms I have discussed with respect to the loss arising from the misleading and deceptive conduct in the November 2019 meeting.

556. Upon the basis that the Court had found, as it has, the existence of the January agreement containing the January agreement provisions, then the plaintiffs’ sought orders under s 237 of the ACL relieving them of the burden of each of those obligations.

557. The plaintiffs’ submission in this respect derived from written submissions of the plaintiffs which focused upon the November 2019 meeting and the purported November 2019 agreement.

558. I will focus upon those submissions presently so far as they concern the January agreement and the January agreement provisions.

559. The plaintiffs’ submission in support of them being relieved of the obligation to make payment in accordance with to the January agreement provisions in whole or in part was based upon the following submissions:

1. The shortfall of the cattle numbers from the herd profile was 22.57% of the herd, a substantial difference that undermines the basis of any agreement on remuneration. The plaintiffs thought that they were paying remuneration underpinned by an asset pool containing a further 548 head of cattle.

2. If the defendants are to be paid any remuneration in relation to management fees, the rate should be adjusted to reflect the substantial reduction in the herd.

3. If it is found that the plaintiffs agreed to pay the defendants the incentive payment, the incentive payment was underpinned by the larger asset pool of the intact herd. The value to the Wallaces of the 548 missing animals would have covered the whole of any incentive payment that would have been payable to the defendants if the herd had been intact. It is unconscionable on the part of the defendants to demand a 10% share that had been negotiated on a false basis, requiring the plaintiffs both to give up that 10% and also to bear the losses resulting from the shortfall in the herd numbers.

4. Other factors that weigh in favour of the elimination or reduction of management fee and 10% incentive are:

1. The defendants ought to have provided invoices containing correct information weekly activity reports but did not do so (par 6 and par 6(e) of the January 2020 email).

2. The defendants had their own and Craig Burke’s cattle running on Khatambuhl Creek and Somerset after November 2019. On 20 February 2020, Mark told John that the defendants had 18 heifers and 8 cows on Somerset and 60 cows on Khatambuhl, and that Craig Burke had cattle on Somerset. The defendants were doing work on the Wallace properties for their own benefit also.

560. The primary basis upon which the plaintiffs resisted the defendants’ contentions as to reliance and claims made under the ACL with respect to the January agreement provisions was that the plaintiffs did not suffer loss of damage by reason of the operation of the January agreement.

561. The defendant’s submissions in this respect were as follows (following the order in which the January agreement provisions were set out above):

1. The incentive in the form of an agreement to pay 10% of ongoing sales was offered in November as a means of enticing the Burkes to “stay and oversee”. The Wallaces could not suffer loss from such a commitment and it is tied to the obligation to remunerate the Wallaces for their work.

2. The clearest demonstration of an absence of loss or damage was the remuneration that was agreed for the ongoing management of the herd from the date of termination onwards. If the plaintiffs had not agreed to pay the Burkes for this work, they would have had to pay someone else, most likely Mr Hannaford. After the Burkes left the property, this is what eventuated.

3. The agreement to pay $20,000 was designed to resolve other outstanding disputes. This had no connection to the size of the herd. This promise was not a loss attributable to any misleading and deceptive conduct on the part of the Burkes.

562. The defendants also submitted that the 2017 Lease Agreement provided “the clearest and fullest remedy to the plaintiffs in respect of any deficiency in the herd”.

563. Returning to the question of reliance, I do not accept the submission of the defendants that the plaintiffs have failed to demonstrate reliance upon the representations with respect to the 10% incentive.

564. The 10% incentive had its origins in the proposal advanced by the plaintiffs in the MOU. In my view, it is clear that the incentive offered in 2019 was predicated upon the representation of the Burkes that the herd profile was intact. Numbered par 2 of the November 2019 email referred to the herd profile under the 2017 Lease Agreement immediately following a statement that there was a mutual agreement to terminate that lease (which I have earlier found was in fact the case).

565. The specification of the herd profile in that paragraph principally performed the function in the Wallaces’ proposal of restating provisions of the 2017 Lease Agreement as to the maintenance of the herd profile. This restatement acted as the foundation upon which the provisions in the MOU then following were based.

566. The 10% incentive was not a generic incentive but one predicated upon the sale of cattle and therefore had a direct connection to whether or not the herd profile was intact because the cattle were being sold from that herd.

567. John emphasised in his affidavit that he would not have put forward an “incentive agreement” in par 8 of the MOU if he had known there was a shortfall in cattle numbers. He emphasised that he had approved the expenditure of substantial sums by KCPC on providing food to the herd.

568. The connection between the MOU and the January agreement with respect to the 10% incentive was made clear in John's evidence in cross-examination as follows:

“Q. You had to do that in order to maintain the stock that were there on 1 December; correct?

A. We put in our MOU, we put the proposal of the incentive on the basis that and very clearly on the basis that they had told us that all the stock was there, and there was excess. That's what we put that in. They then responded in that email, which we got on the 9th, saying they wanted 7%, and I agreed to 10% on the basis that their representation was that they would have all the stock in to meet the lease agreements, and they also said they had excess.”

569. Furthermore, the reliance by the Wallaces upon the representation of herd numbers in agreeing to the 10% incentive in entering into the January agreement is demonstrated by the following evidence:.

1. In [36] of his affidavit of 22 February 2020 John states “… I would also not have put forward the incentive agreement in [8] of the MOU Email, if I'd known that there was a shortfall in cattle numbers…”

2. In cross-examination John stated as follows:

“Q. You ended up entering into an agreement with them in 2020 in those terms; didn't you?

A. In January we came to an arrangement on the incentive agreement on the basis that the herd was intact, that the herd numbers, as I confirmed in the evidence, that the cows, calves, heifers and bulls were there, and they confirmed that there was excess. On that basis I then put together the incentive scheme.”

3. As I have found, the Burkes made representations as to the herd numbers in the January 2020 meeting. The reliance placed upon those herd numbers in coming to the 10% incentive is obvious on the face of the January 2020 email which was the foundation for the January agreement. In cl 4, which establishes the 10% incentive, the agreement provides estimates for the herd for the purposes of calculating the incentive which are predicated upon the herd numbers in the 2017 Lease Agreement.

4. Further, the value to the Wallaces of the missing animals would have covered substantially any incentive payment that would have been payable to the defendants if the herd had been intact.

5. I also accept the submission by the plaintiffs that it is unconscionable on the part of the defendants to demand a 10% share that had been negotiated on a false basis, requiring the plaintiffs both to give up that 10% and also bear the losses resulting from a shortfall in the cattle numbers.

570. In short, the incentive payment was underpinned by a larger asset pool of the intact herd. Whether or not the 10% incentive was an enticement to the Burkes to “stay and oversee” or not, it is clear from the above considerations that the Wallaces would suffer loss from any such commitment in the manner described.

571. A different scenario arises however in relation to the management agreement.

572. Paragraph 6 of the January agreement provides that the management fee is for all labour, to run the properties across seven days per week, together with worker’s on-costs and equipment. The defendants were correct to submit that the plaintiffs have failed to demonstrate loss or damage in this respect. The management fee is simply remuneration for the ongoing management of the herd from the date of termination onwards. I also agree with the submission of the defendants that, if the plaintiffs did not agree to pay the Burkes for this work, they would have had to pay someone else, most likely Mr Hannaford.

573. I note, in this respect, that I do not consider that a proper basis for any offset has been established as a result of the defendants running their own and Craig Burkes cattle on Khatambuhl and Somerset after the November 2019 meeting, particularly when no specific basis for the claim, in that respect, has been pursued by the plaintiffs.

574. A similar conclusion may be reached with respect to the one-off payment. The $20,000 was stipulated under the agreement as being to “cover all old issues” which included equipment, hay sheds and the like. In other words, it was designed to deal with outstanding disputes as to property. I do not accept that it had any connection to the size of the herd profile and whether it was kept intact. The promise was not a loss attributable to any misleading or deceptive conduct on the part of the Burkes.

THE DEFENDANTS’ CROSS-CLAIM

575. The defendants claimed 10% of the net proceeds of sale of cattle between 1 January 2020 and 30 June 2020.

576. In that respect, I accept that the representations made by the Burkes were made in trade and commerce and were misleading and deceptive or likely to mislead and deceive in contravention of s 18 of the ACL. The plaintiffs relied upon the representations in entering into the January agreement and suffered loss by reason of the defendant’s contravention. Nevertheless, for the reasons I have given above, the plaintiffs should be relieved of any liability under the January agreement by orders under s 237 of the ACL.

577. The plaintiffs also claimed that it would be unconscionable for the defendants to rely upon the onerous and adverse terms produced by the 10% incentive and, in the result, the defendants were therefore estopped from doing so. It is unnecessary to decide that matter in view of the conclusion I have reached under the ACL.

578. Different considerations arise in relation to the management fee. By the cross-claim, the defendants submitted that they had agreed to supply labour to run the properties across a seven-day period without the responsibilities of management, which had ended with the termination of the 2017 Lease Agreement ([15] of the CC1).

579. It was also pleaded that, at the January meeting, the plaintiffs appointed Mr Hannaford to act as a Regional Manager in relation to properties and that on 1 April 2020, the defendants received an email from Mr Hannaford as agent for the plaintiffs requesting the defendants to provide work on a casual contractor basis. That offer was accepted and they undertook work. On 5 and 13 May 2020, the defendants issued invoices to Mr Hannaford for payment of work undertaken at his request. No payment has been made for those invoices.

580. At [22] of the CC1, the defendants made the following claim:

581. The plaintiffs pleaded that the defendants had agreed to provide labour to run the three properties, denied that the supply of labour was without management and responsibility and otherwise did not admit the claim.

582. In relation to the management agreement, in addition to the earlier arguments to which were referred the plaintiffs responded to the cross-claim as follows:

1. The representations made in the January meeting found an estoppel against the defendants for reliance on the terms of the January agreement in relation to the claims.

2. Two of the claims were based on invoices issued by the defendants for remuneration for work performed for HSLA totalling $26,137.75 (inclusive of GST) in invoices issued to HSLA. It was contended that the entitlement of the defendants to any payments from HSLA for work done for HSLA is a matter between the defendants and HSLA. No liability arises in that respect.

583. I reject the plaintiff's submissions in this respect in relation to the management fee for the following reasons:

1. For the reasons earlier given, the defence under the ACL was not established.

2. In my view, an estoppel does not arise from reliance as to this term of the January agreement. There is no unconscionability in relying upon this payment notwithstanding the representation, as the payment was for work performed under the contract. There is no other basis for estoppel argued in the plaintiffs’ case.

3. The work referred to in par 22 of the cross-claim was performed during the relevant period [between 1 December 2019 – 22 February 2020]. The tax invoices in respect of the same are in evidence and clearly reflect the agreement to perform the work. ^[81]

4. The plaintiffs contended that the last two invoices for 5 and 13 May 2020 appearing in the above-mentioned table from the cross-claim were issued to Mr Hannaford as the plaintiff's agent and that no liability can therefore arise. However, I agree with the submissions of the defendants that the January agreement is clear. That the agreement was with the Wallaces and the fact that the invoices were sent to Mr Hannaford cannot detract from that fact. Paragraph 6 of the January agreement provides that the Wallaces will be appointing Mr Hannaford as the selling agent to assist with cattle sales and managing the sale of Somerset, leasing KCPC and Westwood. Further, the Burkes were to work with Mr Hannaford to organise the cattle, review fee requirements and prepare the stock count, review the work program, and have a more defined cattle sales program. I reject the plaintiffs’ contention in this respect.

   81. CB Vol 4 at 1471, 1472, 646 and 1654.

584. For reasons earlier given, a one-off payment has no relationship to the representation, there was no reliance upon it and there is no protection available under the ACL. In my view, no issue of estoppel arises in that respect. The cross-claim in that respect is, in my view, successful.

585. The oral submissions for the defendants make clear that this claim would engulf the fifth item in [22] of CC1 vis-a-via compensation for non-replacement of a hayshed by the Wallaces. Accordingly, that claim will be treated as not pressed. This concession results in the Court no longer having to consider that claim. As earlier outlined in this judgment, the defendants claimed in CC1, “[a]n order permitting the Cross-Claimants to access the Cross-Defendants’ properties for the purpose of retrieving the Cross-Claimants ‘plant & Equipment located on the properties”. The specific plant and equipment claimed is outlined in a table referred to in [41] of the CC1. The same claim appears in the defendant’s closing written submissions as “[t]he plaintiffs should also be required to deliver up the Burkes personal property”.

586. There is limited evidence in support of this claim but in so far as there is evidence from Ivan about certain pieces of personal property, it is uncontested. Apparently, certain items of plant and equipment were not able to be collected after the Burkes were excluded from the properties. The written submissions of the defendants do not deal in any detail with the particular items of plant and equipment listed in [41] of CC1 that were the subject of evidence. Without the Court receiving the benefit of that assistance by the defendants’ counsel in that respect, my understanding on the evidence of the plant and equipment that was not obtained by the defendants consisted of the follows:

1. The air compressor,

2. 2 small box trailers,

3. 2 horses,

4. Molasses tank and shed.

587. The defendants claim for relief in this respect was expressed as a primary claim and two alternative claims; in prayers for relief 5, 6 and 7 of the CC1. No submissions were made on these alternatives. The defendants should have relief as to the specified plant items but the form of relief can be the subject of discussion and, if necessary, further submissions by the parties. That approach will be accommodated in the final conclusion and directions of this judgment.

588. By prayer for relief 4 of CC1, the defendants sought damages for “breaches of certain lease obligations”. Those alleged breaches were particularised at [38] of CC1 which placed reliance upon cl 7 of the 2017 Lease Agreement.

589. I have some doubt as to whether cl 7 of the 2017 Lease Agreement operates in the manner suggested by this claim as the provision states that where major capital expenditure is required then the Wallaces and the Burkes will “mutually agree” on the expenditure to be made. There was no evidence of such an agreement. The provision also refers to the Wallaces providing new material for replacement fencing but there is an absence of evidence which would suggest a breach in that respect.

590. In any event, this claim may be dismissed as not being pursued by the defendants. Counsel for the plaintiffs expressly raised in his closing oral submissions that the defendants had raised no submissions about this matter and that he presumed therefore the claim was not being pursued. Nothing further was said by the defendants in their oral submissions or at any other time before judgment was reserved.

591. The same conclusion, for the same reasons, may be reached with respect to the defendants’ silage claim.

592. In my view, the defendants cross-claim should be resolved as follows:

1. The claim based upon the 10% incentive is dismissed.

2. The claim based upon the management fee is granted.

3. The claim based upon the one-off payment is granted.

4. The claim for the return of plant and equipment is granted in part and subject to resolution of the primary or alternative claims advanced by the defendants.

5. The claim in relation to silage is dismissed.

6. The claim for the breach of obligations by the plaintiffs under the 2017 Lease Agreement specified in [38] of CC1 is dismissed.

CONCLUSION

593. In the circumstances, the plaintiffs have established that the defendants breached their obligations under the 2017 Lease Agreement in the following respects:

1. A failure to make payments with respect to the admitted matters.

2. A failure to make payment for the unpaid proportion of sale proceeds for the financial years 1 July 2017 to 30 June 2018 and 1 July 2018 to 30 June 2019 in accordance with cl 11 of the 2017 Lease Agreement.

3. A failure to maintain the herd profile and return to the plaintiffs the cattle in the herd profile in accordance with cl 2(a) and Appendix II (as properly construed) of the 2017 Lease Agreement as at the date of mutual termination of that agreement on 1 December 2019.

4. A failure to maintain fences in accordance with cl 2(b) of the 2017 Lease Agreement.

594. The plaintiffs shall have judgment under the SOC in those respects in accordance with the findings of the Court in this judgment for damages or compensation with respect to claims arising from those breaches. The loss will be assessed by reference to the sales of cattle by the Burkes in December 2019. It should be noted that the calculation of the shortfall of the herd on the termination of the 2017 Lease Agreement was adjusted for the sale of 309 cattle in December 2019 (those losses will be reflected in rectification of loss or damage under the ACL).

595. There is a counterpart breach to the January agreement with respect to the shortfall in the herd profile as at 1 December 2019. In that respect, the plaintiffs may have judgment under the CC2 corresponding to the findings as to the shortfall of cattle in this judgment but it must be noted that the claim under CC2 in this respect is a true alternative to the claim for the shortfall in cattle under the SOC. The loss will be assessed by reference to the sales of cattle by the Burkes in December 2019.

596. The Court has found that, at the November 2019 meeting, the defendants represented to the plaintiffs that there were enough animals in the herd on the properties that the defendants could sell 400 animals from that herd in December 2019 and the herd profile would remain intact. The plaintiffs relied upon that representation which was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL and, in that respect, suffered loss and damage upon the sale of 309 cattle from the herd in December 2019. The plaintiffs should have relief under s 18 of the ACL in that respect and judgment under the SOC.

597. Essentially the same conclusion arises with respect to representations made in the January meeting, and in that respect the plaintiffs may have judgment under CC2 although the claim was pursued as an alternative claim with respect to the sale of cattle in December 2019.

598. By virtue of the January agreement, the plaintiffs had obligations to the defendants with respect to the 10% incentive, the management fee, and the one-off payment. The plaintiffs sought relief from those obligations under the ACL upon the basis that they were induced to take them by the defendants’ misleading and deceptive representations.

599. The Court grants that relief under s 18 of the ACL with respect to the 10% incentive but not the management fee and one-off payment. The defendants shall have judgment under CC1 in those latter respects.

600. The Court has granted, in part, the defendants claim with respect to certain personal plant and equipment. However, the final disposition of that claim, and in particular, the granting of the primary or alternative claims in that respect will require resolution in accordance with the terms of this judgment. The Court has otherwise dismissed various claims raised by the defendants under the CC1 on the basis that they were not pursued or there was insufficient evidence. Those claims were as follows:

1. Alleged breaches of obligations by the plaintiffs under the 2017 Lease Agreement referred to in [38] of CC1.

2. The claim in relation to silage.

601. The plaintiffs shall produce Short Minutes of Order reflecting these conclusions and in particular, in that respect, shall calculate damages or compensation in accordance therewith.

602. In the event that there is any dispute as to those draft orders, the Court will make directions providing for the resolution of the same, on the papers.

603. The plaintiffs claimed interest from various dates. The parties should confer as to the calculation of interest. The plaintiffs’ claim for interest should be reflected in separate and additional Short Minutes of Order representing an agreement as to interest or alternatively the plaintiffs claim in that respect. In the event of a dispute, both parties will be given an opportunity to make submissions about claims for interest.

604. Upon the basis of this judgment, it would seem to be appropriate to have an apportionment as to costs. However, the Court has not received submissions from the parties in that respect. The plaintiffs should include in the separate Short Minutes of Order the orders sought by the plaintiffs with respect to costs, either as an agreed matter or alternatively as stating the plaintiffs claim in that respect. The defendants will be given an opportunity to propose alternative costs orders. Both parties will be provided the opportunity to make submissions in writing with respect to costs, and call evidence with respect to the same.

ORDERS AND DIRECTIONS

605. The Court makes the following orders and directions:

1. The plaintiffs shall file and serve Short Minutes of Order reflecting this judgment within 14 days of the date of publication of this judgment including the calculation of damages or compensation but excluding interest and costs.

2. In the event that the defendants dispute the draft Orders filed and served pursuant to Order (1) they shall file and serve Short Minutes of Order specifying the variation to those orders sought within 7 days of the receipt of the plaintiffs’ Short Minutes of Order.

3. The plaintiffs shall file and serve draft orders as to interest and costs, separate and additional to the Short Minutes of Order pursuant to Orders (1) and (2) above, submissions in support of the same (not exceeding 5 pages in length, unless by leave of the Court) and any evidence with respect to interest or costs within 7 days of the receipt of draft orders pursuant to Order (2).

4. The defendants shall file and serve draft orders as to interest and costs together with submissions (not exceeding 5 pages in length, unless by leave of the Court) and any evidence in response to the plaintiffs’ draft orders, submissions and evidence filed and served pursuant to order (3) within 7 days of the receipt of the draft orders pursuant to Order (3).

5. The Court shall resolve any disputes arising as to the form of orders, interests or costs on the papers, unless any party seeks an oral hearing with respect to the same.

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Endnotes

Amendments

17 May 2024 - Paragraph [587], second sentence - changed "plaintiffs" to "defendants".