Lam v Truong - [2008] WADC 156

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: LAM -v- TRUONG [2008] WADC 156

CORAM: MCCANN DCJ

HEARD: 8-9 AUGUST, 23-26 OCTOBER 2007 & 28 MARCH 2008

DELIVERED : 17 OCTOBER 2008

FILE NO/S: CIV 1820 of 2005

BETWEEN: THANH VAN LAM
Plaintiff
AND
HOAN THO TRUONG
Defendant

Catchwords:

Partnership dispute - Market gardeners - Breach of agreement - Dissolution agreement - Plaintiff's entitlements - Turns on own facts

Legislation:

Fair Trading Act 1987 (WA), s 10, s 79
Partnership Act 1895 (WA), s 10, s 12, s 27, s 34, s 55

Result:

The partnership was dissolved by agreement on 10 June 2005

The defendant is obliged to pay the plaintiff for labour and expenses up to the date of the dissolution

Representation:

Counsel:

Plaintiff: Ms S Varughese
Defendant: Mr S R Sirett

Solicitors:

Plaintiff: Sucy Varughese
Defendant: Robertson Hayles

Case(s) referred to in judgment(s):

Fox v Percy (2003) 214 CLR 118
Isotomic Pty Ltd v International Raceway Pty Ltd [2007] SASC 111
Jones v Dunkel (1959) 101 CLR 298
Lazarevic v The State of Western Australia [2007] WASCA 156
Secure Parking (WA) Pty Ltd v Wilson & Anor [2005] WASC 264

MCCANN DCJ:

Introduction

This matter arises from the breakdown of a market‑gardening partnership between the plaintiff and the defendant. The plaintiff is a market gardener. The defendant is an electrician and part‑time market gardener who owns a rectangular shaped property of approximately 15.3 acres at 304 Badgerup Road, Wangara ("the Badgerup property"). Both parties emigrated to Australia from Vietnam many years ago.
At all material times the defendant operated a small market garden on a portion of the Badgerup property. The parties entered into a partnership for the purpose of growing strawberries on the property in the 2005 season. In June 2005 the plaintiff retired from the partnership. The defendant continued alone and harvested the crop later that year. The parties now seek rulings from the Court as to the nature of their partnership interests in the light of these and other circumstances.
The trial occupied seven days in three hearings over eight months. Further, both the plaintiff and defendant speak very little English and testified through a succession of different interpreters. Accordingly, there were real difficulties with the flow of the evidence, especially that of the plaintiff, whose inter‑communication with his interpreters, and hence testimony, was markedly less fluent than appears from the transcript. (I have mentioned some examples in these reasons.) There are numerous factual issues and, as will be seen, both parties were unreliable witnesses. For all of these reasons the task of reviewing the evidence and making factual findings has been painstaking and time‑consuming. Regrettably, this has resulted in a lengthy delay in the delivery of this judgment.

The pleadings

The plaintiff pleads that in or about February 2005 he and the defendant entered into an oral agreement to grow strawberries on the Badgerup property in partnership on the following express terms:
(i)The firm would:
(a)Operate under a registered business or trading name.
(b)Open a joint bank account under the firm name.
(c)Enter into a lease with the defendant whereby a portion of the Badgerup property would be leased to the firm at a rent of $1,200 per calendar month.
(d)Purchase and plant 200,000 certified strawberry seedlings at a cost of 28 cents per plant and cultivate the same for harvest and sale.
(e)Reimburse the partners for their expenses from the proceeds of the sale of the crop and pay them for their labour and any hire charges to which they were entitled.
(ii)The plaintiff would pay $12,000 of the cost of the strawberry seedlings and the balance would be paid by the defendant.
(iii)Each partner would hire to the firm at a market rent their respective tractors and such other machinery, tools and equipment as may be needed.
(iv)Each partner and his spouse would work for the firm on an equal time basis and would keep a daily log of hours worked.
(v)Each partner would maintain written records of all accounts paid and monies spent for and on behalf of the firm including a record of the hours worked by any casual labourers that the firm employed.
(vi)The defendant would at the commencement of the partnership or within a reasonable time thereafter:
(a)Register a business or trading name for the firm.
(b)Open a bank account for the firm.
(c)Enter into a lease with the firm.
(d)Install a second electricity meter on the water pump on the Badgerup property to facilitate the separate recording of electricity used by the firm and by the defendant in watering their respective market gardens.
(e)Pay the plaintiff for any time employed clearing the firm's land and installing an irrigation system prior to the commencement of the partnership.
The plaintiff has also pleaded various implied terms of the partnership agreement with similar effect to the alleged express terms under s 10, s 12, s 27, s 34 and s 55 of the Partnership Act 1895 or at common law. It is not necessary to set these out in detail at this point.
The plaintiff pleads that the defendant breached the terms referred to in [4] (iv) and (vi)(a), (b), (d) and (e). The plaintiff further pleads that the defendant's conduct constituted a repudiation of the partnership agreement, which, it is contended, the plaintiff accepted on 6 June 2005, thereby bringing the partnership to an end. The plaintiff further pleads that on or about the same date the defendant agreed to purchase his interest in the partnership ("the alleged dissolution agreement"). He has not pleaded the material terms thereof. The alleged terms emerged in the course of the plaintiff's evidence namely that the defendant would pay him $80,000 in two instalments (the first of which would be paid within two weeks and the second when the crop was harvested and sold). However, a second scenario also emerged in evidence, namely, that the defendant would reimburse the plaintiff for all of his financial outlays, and pay for he and his wife's labour, in respect of the partnership.
The plaintiff further pleads, in the alternative, that the defendant engaged in deceptive or misleading conduct contrary to s 10 of the Fair Trading Act 1987 (WA) by promising to do certain things (namely perform the contractual terms referred to in [4(vi)(a), (b), (d), and (e)] above) when he did not mean, or have the capacity, to do so.
The plaintiff further pleads that following the breakdown of the partnership the defendant wrongfully detained and/or damaged some of the plaintiff's farm equipment that had been used by the firm. It is pleaded that all of this was returned but three items were slightly damaged, namely a Same tractor and two pairs of wire cutters.
The plaintiff claims damages for breach of the partnership agreement and for conversion, or further and in the alternative, pursuant to s 79 of the Fair Trading Act.
The plaintiff further seeks an order that the partnership was dissolved on 6 June 2005 and seeks an account of the partnership's finances, or a declaration that the terms of the partnership agreement are unenforceable against the plaintiff by reason of the defendant's misleading and deceptive conduct.
The defendant admits that he entered into a partnership agreement with the plaintiff for the purpose of growing strawberries on the Badgerup property but pleads that the agreed terms were that:
(i)The partnership was expressly limited in duration to 12 months commencing in February 2005, or alternatively, it was for a single undertaking, namely for growing and harvesting a single strawberry crop.
(ii)The firm would lease 10 acres from him at a rent of $2,200 per month (inclusive of GST), which was varied (on or about 30 March 2005) to include another two acres at a rent "to be calculated by reference to the land area proportionate to the existing lease".
(iii)The partners would contribute equally to the partnership expenses, including the cost of approximately 200,000 strawberry plants and any subcontract labour (but not the labour of the partners or their families).
(iv)The partners would provide their own farm equipment for use in the partnership free of charge (save for fuel).
(v)The partners would share the profits of the partnership equally.
The defendant denies the alleged dissolution agreement was entered into and pleads that the plaintiff quit the partnership in June 2005 after the strawberry crop was damaged by a severe hailstorm and a wind storm a few days later. He pleads that the partnership agreement continued until the agreed term expired or the agreed undertaking ended. He contends that he incurred additional expenses attending to work that the plaintiff ought to have performed and counterclaims for damages.
At the commencement of the trial the parties informed me that they have agreed that the trial should be limited to matters going to liability, and that the assessment of damages, or the taking of any accounts, should be deferred until later. I concurred with that course of action. Thus, the issues for determination are presently limited to establishing:
(i)The terms of the partnership agreement (including terms as to the lease of the land, plant and equipment).
(ii)Whether the defendant engaged in misleading or deceptive conduct regarding his intention or capacity to carry out his obligations.
(iii)Whether the defendant breached the partnership agreement and, if so, whether the plaintiff was thereby entitled to terminate the agreement and did so.
(iv)Whether the parties entered into the alleged dissolution agreement and, if so, what were the terms thereof?
(v)When did the partnership agreement come to an end?
(vi)Whether the defendant wrongfully detained and/or damaged any of the plaintiff's property.
(vii)Whether the defendant is entitled to damages or other recompense for expenses which he incurred after the plaintiff's retirement.

The plaintiff's evidence

The plaintiff testified that he first met the defendant in early 2002 when the defendant carried out some electrical work for him. Subsequently, they became friends. At a party at the defendant's house on or about 30 December 2004 the defendant asked him if he was interested in growing strawberries with him at the Badgerup property in 2005. He told the defendant that he would think about it and let him know in a few weeks. Approximately two weeks later the defendant came to his house and enquired about his proposal. The plaintiff said that he was interested but they would have to discuss the financial arrangements. They had a meeting for that purpose between 6 pm and midnight at the plaintiff's house on 15 January 2005. The defendant told him that he already had 20,000 strawberry plants and some string beans growing on the Badgerup property. (The plaintiff later saw those crops and estimated that they occupied three acres.) The defendant told him that he had ordered 200,000 strawberry plants at a cost of 28 cents each.
During the meeting they discussed, and agreed, to form a partnership for one year as follows:
(i)The defendant told the plaintiff that he had to contribute $12,000 towards the cost of the plants. The plaintiff agreed to this.
(ii)They calculated that 10 acres would be needed to grow the 200,000 plants, which the firm would rent from the defendant for $1,200 per month. The plaintiff denied that the defendant said that the rent would be $2,000 per month and testified that he would never have agreed to enter into the partnership on that basis. He further denied that at a later date he and the defendant discussed or agreed upon the firm leasing more land from the defendant.
(iii)They discussed the need to clear and irrigate the 10 acres which, according to the plaintiff, was covered with small plants, trees and rubbish. The defendant said that he was too busy to do this work. The plaintiff agreed to do so on the basis that he would be paid by the defendant when the clearing was finished.
(iv)The defendant agreed to install a new meter to measure electricity consumed by the firm's irrigation system.
(v)They agreed that they, and their wives, would work on the venture on an equal‑time basis, and the firm would hire casual labour as and when required. It was agreed that accurate records would be kept of all labour which would be paid $16 per hour. The plaintiff denied that the defendant ever said to him that he (the defendant) would charge $30 per hour for his labour. He said that he would not have agreed to enter into the partnership if he had known this, and that it was unfair and ridiculous for him to be paid $16 per hour and the defendant $30 per hour. He testified that he arrived at the rate of $16 per hour after speaking to his accountant. He said that he was aware that there were minimum award rates which varied, depending on the nature of the employee, between $15 and $16.50 per hour. I had difficulty with this aspect of the plaintiff's evidence which implies that he and the defendant agreed upon the hourly rate some time after the January meeting since the plaintiff did not testify that he obtained these figures before or during the meeting.
(vi)He and the defendant agreed to call the firm "Market Gardens Strawberry" followed by their names. (I also had difficulty comprehending what the plaintiff meant by this evidence.) They also discussed procuring a tax file number, an Australian Business Number and a joint cheque account, and agreed that all expenditure and income would be passed through this account. The defendant said to him that he would see his accountant and attend to the registration of the business name. The plaintiff denied that there was any discussion between he and the defendant about borrowing money from the bank.
(vii)He and the defendant agreed that all partnership expenses, including their own wages and expenses, would be reimbursed out of proceeds of the strawberry sales, and any profits would be split between them in equal shares. There was no discussion about losses.
(viii)The defendant said that he would arrange for the agreed terms to be recorded in a document to be settled by an accountant.
The plaintiff testified that many other issues were discussed during the meeting which he could not now remember.
The plaintiff testified that a week after the meeting he and the defendant had a discussion about purchasing or leasing equipment, namely a tractor, a forklift, a rotary hoe and a spraying machine. A further week later they attended some machinery specialists in Wattleup and Boya to inspect new machinery. However, they decided that it would be too expensive to purchase new equipment and dropped that idea. The plaintiff then suggested that they hire his equipment for $500 per week, which the defendant accepted. The plaintiff took his truck, tractor, forklift and sprayer to the defendant's property and later used them there. He testified that the defendant did not provide any of his farm equipment or machinery for use by the firm.
The plaintiff testified that he cleared the firm's 10 acre plot ("the firm's 10 acres") over a period of a few days in late January 2005. He then installed an irrigation system at the defendant's cost. The defendant arranged for a man named Phat Nguyen ("Mr Phat") to help him with the irrigation. He did not know whether Mr Phat was paid by the defendant and he never asked. The plaintiff testified that the defendant never paid him for clearing and irrigating the 10 acres (but did not testify as to when he asked for payment or as to the amount due to him).
The plaintiff testified that he paid $12,000 to the defendant in February 2005. He gave the money (in cash) to his younger sister who deposited it into the defendant's bank account (the details of which had been given to the plaintiff by the defendant). He said that on this day he reminded the defendant about installing a new electricity meter and the defendant told him that the work would be done, but nothing was ever done about it.
The plaintiff testified that 200,000 strawberry seedlings were delivered to the Badgerup property over two or three days on and after 24 April 2005. Between 24 or 25 April and 1 May 2005 these were planted in the firm's 10 acres which he had already prepared and fertilised. The planting was carried out by the plaintiff, his wife, the defendant's wife and six casual workers that the plaintiff hired and paid.
The plaintiff was asked whether he and the defendant ever discussed purchasing another 50,000 plants at some stage. He denied this and said that there was no land available, or need, for any more plantings.
The plaintiff testified that he sprayed and weeded the plants and kept their lines tidy, and fabricated metal frames for them to grow on. He said that the defendant did not help or assist in any of this work and that the only assistance he received was from his wife.
The plaintiff testified that he kept a record of the hours that he, his wife and the six casual labourers worked in wage books. Exhibit 1 was for himself and recorded 1,147 hours' work between 3 February and 5 June 2005. At $16 per hour this was worth $18,352, which has not been paid. Exhibit 2 was for his wife and recorded 647 hours of work between 30 March and 5 June 2005. At $16 per hour this was worth $10,352,which has not been paid. Exhibit 3 was for the casual employees, all of whom were paid $16 per hour. Ms Ba worked 143 hours and was paid $2,288. Phat Nguyen (not the same person as Mr Phat), Oadh Tran, Minh Nguyen, Tuy Et and Ly Truong each worked 77 hours and was paid $1,232 by the plaintiff. He has not been reimbursed by the firm for these expenses (totalling $8,448).
The plaintiff testified that he also incurred, or paid, the following expenses on behalf of the firm:
(i)Fertilisers and other goods from PN Chemfert (exhibit 7): $15,216.10, of which he paid $4,000.
(ii)A welding machine and steel cutting blades from Bunnings (exhibit 8): $681.85.
(iii)Steel rods from OneSteel (exhibit 9) which were welded onto his tractor to form a frame to hold the sprayer: $37.40.
(iv)Steel lengths purchased from Tony Nguyen (exhibit 10) which were used to fabricate climbing frames for the strawberries: $15,194.
(v)A 1,000 litre tank purchased from Bill's Machinery (exhibit 11) for mixing fertiliser: $220.
(vi)100 bags of sheep manure.
(vi)Filters and equipment purchased from Whitford Fertilisers in 2003 (exhibits 12 and 13) and later taken and used on the Badgerup property.
The plaintiff ceased working on the farm on 6 June 2005 (ie, 5 June was his last working day) because he believed the defendant had not done certain unspecified things that he had promised to do. The plaintiff testified in his evidence‑in‑chief that he had a discussion with the defendant on or about 6 June about those matters. The defendant declined to attend to them, so the plaintiff told him that he would "stop right now". The plaintiff then testified (at T47):
"Yes, I told him that if he didn't give promise, and he didn't do as he told me that he will do, that we should stop right now him and I run my business. He told me that he doesn't want to sell his business to me, but to buy my business. He asked me how much would it cost for my business. I told him that his cost about $80,000. Yes, I told him that the money I spend for the material on the farm is – I don't take it into account. Just pay me $80,000 for my business. I told him about the sheep manures. Fertiliser, not sheep manure. Sorry, the fertiliser. It is in my name, because I bought it. This in my name. I still owe them $11,000 from – I bought it from Mr Phan. I told him about my business. This cost $80,000. But he told me that he would pay me in two weeks time $40,000 first, and for the other $40,000 he would pay me when he have the strawberry sold out. Yes, and I ask him about the fertiliser money owing to – still owing to keep the supplier, and he said that he will take this account to him. I want to take with me the tractor, and he said he want to – the tractor, the sprayer, the forklift. I told him that I want to take with me. He said that he want to borrow for two weeks – borrow that tractor and sprayer for two weeks. I said to him, okay, he can borrow it."
(In re‑examination at T123, the plaintiff repeated his evidence that the defendant agreed to pay him $80,000 in two instalments.)

The plaintiff clarified his evidence in re‑examination as follows (T123):
"What were the things you discussed with Mr Truong that day?‑‑‑ … I reminded Mr Truong again that he would have to, firstly, install a separate meter box and, secondly, open the account for the partnership – you know the cheque book – and he refused to do that, so I said to him, 'So in that case you know, you just do it on your own' and he agreed to take over."
Counsel for the defendant objected to this evidence being given in re‑examination, on the grounds that it touched upon an issue which had not arisen in cross‑examination. In my view, this objection came too late, but I accept that the evidence did not properly arise from cross‑examination. That having been said, I would not be inclined to attach much weight to the evidence anyway for reasons referred to later.
The plaintiff testified that there had been no hailstorm at the Badgerup property when he retired from the partnership and, as far as he was aware, one did not occur afterwards either. He denied that the defendant ever told him that the strawberry plants had been damaged in a hailstorm. As far as he was concerned, when he last saw the plants they were in very good condition and were nearly ready for harvesting to begin.
The plaintiff testified that two weeks later he telephoned the defendant, who informed him that he did not have the money to pay him as promised. The plaintiff asked him why he had promised to pay him if he did not have the money, to which the defendant replied that he had seen a lawyer and that he (the plaintiff) was banned from visiting the farm. At that point the plaintiff also decided to seek legal advice. He did so and a letter of demand was sent to the defendant on his behalf on 27 June 2005 (exhibit 17). It is necessary to set out the contents of that letter in full:
"Re:     GROWING STRAWBERRIES – TERMINATION OF PARTNERSHIP UNLAWFUL RETENTION OF MACHINERY/EQUIPMENT & MONEYS PAYABLE
I confirm that I act for Mr Thanh Van Lam ('my client'), who has instructed me to write to you in respect of the above matter.
My client says as follows:
1.That in or about February 2005 you and my client entered into an informal arrangement ('the Partnership') to jointly grow strawberries on a farm ('the Farm') owned by you.
2.However, in or about mid‑June 2005, by reason of your failure, prior to entering into the above arrangement with my client, to make full and frank disclosure to my client, of planting restrictions imposed by the local Council as to permissible hours of cultivation, and ongoing disagreements between you and my client, leading to a deterioration in the relationship, the above Partnership was terminated.
3.That, between February and mid‑June 2005, my client had incurred expenses for and on behalf of the Partnership, in respect of the purchase, planting and cultivation of the current crop of strawberry plants, in the sum of $76,209.10, which is as follows:
Particulars
(a)Costs to Labour (x 4 months):
(i)Client & Wife  $20,000.00
(ii)Casual farmhands x 6  $ 8,000.00
$28,000.00
(b)Supplies of:
(i)Fertilisers, chemicals, irrigation
parts, etc from PN Chemfert
Supplier$15,215.10
(ii)Sheep manure (x 100 bags)               $     450.00
(iii)Steel for ramps  $15,194.00
(iv)Plate to cut wire  $     150.00
(v)Welder stick  $     200.00
(vi)Cash to purchase strawberry
plants$12,000.00
(vii)Use of client's tractor, other
machinery & equipment                   $ 5,000.00
$48,209.10
TOTAL$76,209.10
4.That you had offered and my client had accepted your offer to buy out my client's interest in the Partnership by way of reimbursing my client for expenses my client incurred to‑date for an on behalf of the Partnership.
5.Furthermore, as of mid‑June 2005, without the consent of my client, you had also taken possession of and are unlawfully retaining on the Farm, the following of my client's machinery and equipment ('the Machinery Equipment'), valued at $54,950.00.
Particulars
(a)Same tractor  $40,000.00
(b)Attachments to tractor x 2  $ 3,000.00
(c)Spraying equipment, plus arm  $ 3,500.00
(d)Rotary hoe  $ 7,000.00
(e)Wire cutter x 2  $     400.00
(f)Welder  $     400.00
(g)Spray arms x 2  $ 1,400.00
(h)Plastic tank (1000 litre)  $     250.00
TOTAL$54,950.00
In the above premises, kindly be advised that UNLESS:
(a)you deliver to my client or allow my client access to the Farm for the purposes of taking possession of the said Machinery & Equipment; and
(b)you forward to this office a bank cheque, made payable to THANH VAN LAM, in the sum of $76,209.10,
by close of business Friday 1st July 2005, my instructions are to commence proceedings forthwith in the appropriate jurisdiction for loss and damage, with costs."
The plaintiff testified that the defendant returned some of his equipment in August 2005, namely his tractor, sprayer, forklift, rotary hoe, welder and two blades.
In cross‑examination, the plaintiff reiterated that Mr Phat only assisted him to install the irrigation for the firm's 10 acres and denied that he helped with the clearing. He said that otherwise Mr Phat only worked for the defendant, not the firm. He did not know when Mr Phat worked because he (the plaintiff) busied himself doing his work "at the back".
The plaintiff denied that his first discussion with the defendant about the formation of the partnership occurred in December 2004. He reiterated that the defendant first raised the matter at the party on 30 December 2004. He testified that the first occasion that he and the defendant actually discussed the details was on 15 January 2005 at his house (as he said in his evidence‑in‑chief). He denied that the defendant initially told him that he had ordered 150,000 plants and insisted that their discussion always centred around growing 200,000 plants. He did accept that the defendant did not explicitly tell him how many plants had actually been ordered (T71).
The plaintiff agreed (T72) that he was aware that some of the plants that the defendant had ordered cost 30 cents each, as opposed to 28 cents each, and said that the price difference depended on the variety concerned. He denied the suggestion that the more expensive plants comprised a second or extra batch of 50,000 plants.
The plaintiff stated that he and the defendant discussed and agreed upon the need for 10 acres at their meeting on 15 January. He denied the suggestion that in March 2005 they realised that 10 acres was insufficient.
The plaintiff agreed that the defendant's plot was already planted with established crops, including strawberries (described in evidence as "second year plants"), hot chillies and approximately 30 to 40 capsicum plants. The plaintiff denied that any of the second year strawberry plants were removed to make way for the firm's plants. He said that the defendant did not want to do that because he wanted to continue harvesting them (suggesting, it would seem to me, that the subject was at least discussed at some stage). He agreed that the capsicum plants were removed in March 2005 to make space for the firm's strawberries, but denied that any stringer beans were removed. He maintained that only 10 acres was ever used by the firm. (He clarified this evidence in re‑examination. He said that the capsicum crop occupied three acres which he and the defendant's wife cleared. He insisted that he personally cleared the remaining seven acres).
The plaintiff agreed that during the January meeting the defendant said that he was too busy with his electrical business to take part in any clearing work, but denied that the defendant said that his wife would help or that the defendant said that he would pay for someone else to do his share.
The plaintiff was questioned about the farm equipment. As I understand it, he agreed that the defendant already had two tractors, a boom spray and a rotary hoe, but maintained that none of that equipment was used in the firm's enterprise. He testified that approximately four to five acres of the Badgerup property was already irrigated when he started.
The plaintiff was closely cross‑examined about a number of documents. It was suggested to him that exhibits 1, 2 and 3 were not contemporaneous records and that he compiled them after he left the partnership in books which he purchased for that purpose. The plaintiff denied this. However, he was unable to provide any details as to where and when he purchased them, other than to say that he believed he bought them either at the Newpark Centre or the Mirrabooka Shopping Centre. He said that his practice was to note down the hours worked by the labourers (including himself and his wife) on a small, spiral bound notebook that he kept in his shirt pocket, and that he regularly transferred the notes from the pocket book to exhibits 1, 2 and 3. He did this to save taking those books (i.e., exhibits 1, 2 and 3) to the farm. He testified that he has since lost the pocket notebook.
The plaintiff was shown three very rough and partly damaged handwritten documents (exhibits 19, 20 and 21). Exhibit 19 appears to be a list of expenses (totalling $60,858 – see [68] below) and exhibits 20 and 21 appear to be lists of labour costs (see [70] and [107] below). It was suggested to the plaintiff that he gave these to the defendant during a meeting with the defendant on the Badgerup property some time in June 2005 after he had resigned. He denied this, said that he did not recognise the handwriting and that he had not seen them before. So, in effect, he testified that he could not shed any light on the origins, nature or purpose of the documents. It was put to him that exhibit 19 represented a list of expenses that was similar to those in the letter of demand (exhibit 17). For example, the figure of $20,000 in exhibit 19 for the wages of two people correlated with the amount of $20,000 which he and his wife claimed in exhibit 17. The plaintiff seemed to be unable to grasp the significance of this point and I had some difficulty comprehending his evidence about it.
It was next pointed out to the plaintiff that the figure of $20,000 for he and his wife's labour in exhibit 17 did not correlate with the total of the figures in exhibits 1 and 2 ($28,504). He was asked whether his solicitor had access to exhibits 1, 2 and 3 when exhibit 17 was prepared. He said that he first saw his solicitor on 18 June 2005, and again on 24 June 2005 when a draft of the letter of demand was ready for him to settle. He said that his solicitor had exhibits 1, 2 and 3 at that time but the letter of demand was based on estimates that he had previously given to her. He said that his sister (who was present) translated the draft letter to him, and he thought he understood it, but he did not notice the discrepancy between the sums of $20,000 and $28,504. As I understand it, he believed that the discrepancy was lost in translation, but I had difficulty understanding his evidence about this or how the correct figures could have been mis‑translated as he suggested, or not picked up by his solicitor if she then had exhibits 1 and 2.
The plaintiff was questioned about the claim in the letter of demand for $5,000 for the use of his tractor and other machinery. He said that this amount was based on an agreed rate of $500 per week for approximately four or five months. When it was pointed out to him that the arithmetic would, or should, result in a bill somewhat higher than $5,000, it emerged that the figure of $5,000 was really just his estimate of a fair charge to which he felt entitled.
The plaintiff was questioned about the contention in the letter of demand that he had terminated the partnership agreement because of, inter alia, the defendant's failure "to make full and frank disclosure … of planting restrictions imposed by the local Council as to permissible hours of cultivation". He was asked how this allegation came to be made in the letter when it was not relied on in the litigation. Once again he had some difficulty explaining himself. As I understand it, he accepted that it was possible that he gave his solicitor instructions about the matter, but he could not be sure if the passage in the letter accurately set out those instructions. He said that he was reliant on his sister to accurately interpret for him. He said he had difficulty remembering what transpired because the instructions were given two years earlier.
The plaintiff was shown a book of consignment notes for a company known as "Bullfrog International" (exhibit 22). This book appears to have been used by someone to record the hours worked by various people. The plaintiff testified that he knew nothing about it.
It was suggested to the plaintiff that in June 2005 he asked the defendant to lend him $20,000 so that he could pay labourers for the imminent harvest. The plaintiff denied that this occurred and insisted that "everything is finished" and that he and his wife could handle the workload and that he did not need any more money for labour (T94). He most emphatically denied that the defendant ever told him that he had obtained a bank loan of $20,000 for him and looked genuinely bemused at the entire idea.
The plaintiff was questioned about the alleged dissolution agreement, and whether he told the defendant that the defendant could pay him an initial instalment of $20,000 and the balance of his money when the strawberry crop was harvested. He said: (T98)
"I didn't say that. But at the time when he said that – when he said so I agreed that he would let me have the amount – if he didn't have enough money and he paid the rest at the – but he refused to go with me to either see the lawyer or the accountant for the witness signature."
As I understand it, the plaintiff here testified that an advance of $20,000 was discussed and agreed upon, but that the proposal came from the defendant and not him, and he was content to be paid the balance of his money later when the defendant was in funds, and the defendant refused to commit the agreement to writing.
I found the plaintiff's evidence very difficult to follow in places. He tended to be definite about everything that suited his position, but bereft of insight when confronted with matters which contradicted him or needed some explaining.

Other evidence adduced by the plaintiff

Mr Van Phat Nguyen (known as "Dr Phat") testified that he is the owner of PN Chemfert. He trained as a medical practitioner in Vietnam and arrived in Australia in 1980. Since then he has been involved in market gardening and Vietnamese community activities. He was President of the Vietnamese community association for 15 years. He is a Justice of the Peace and from time to time has been an adviser to the West Australian Government on various matters. He has been involved in agriculture for approximately 25 years and the fertiliser industry for five years. He has known the defendant for over 10 years and the plaintiff for approximately five years.
In early 2005 he was approached by the plaintiff to supply chemicals and fertilisers to the firm. He allowed the firm to open an account and subsequently supplied it with fertilisers and chemicals to the value of $15,216.10 of which the plaintiff paid the sum of $4,000. The balance was not paid until on or about 1 December 2006, when the plaintiff's brother‑in‑law paid him $12,423.09, which included some interest. Dr Phat agreed to waive interest in the sum of $2,000.
Dr Phat testified that the goods which he sold to the firm were delivered to the Badgerup property. At the time he was already aware that the defendant had a market garden of approximately one or two acres. He observed that the rest of the defendant's land had been cleared. He sometimes saw the plaintiff working there as well as another worker. On one occasion he observed the defendant working on the cleared land.
Dr Phat testified that in early June 2005 the plaintiff telephoned him and said that he and the defendant were no longer in partnership and that the defendant would be paying the firm's outstanding PN Chemfert account. A few days later the defendant's wife telephoned him and said that they would pay the outstanding account, but they had very little ready money and that he would be paid later. Approximately a week later she telephoned Dr Phat again and arranged to meet him at the Badgerup property to settle part of the account. He did so and, upon arrival, was greeted by Mrs Truong. However, at the very moment that she went to hand him some money the defendant arrived and stopped the payment and said that it was "for the court to sort it out" (T62).
In cross‑examination, and later in re‑examination, Dr Phat was asked about his knowledge of the defendant's market garden and in particular whether any of that land was cleared to make way for the firm's garden. He agreed that the defendant's original garden consisted of two acres of strawberries and capsicums, some of which was cleared to make way for the new strawberry plantings.
I accept Dr Phat's evidence about the events to which he referred, but I bear in mind that his evidence as to the timing of certain events, and the intervals between them, were only estimates. His evidence was not challenged in any material respect, and he is quite clearly a person of considerable standing and integrity in the community. He had a vested interest in the events that he recalled and thus a reason to remember them. He gave his evidence in a clear, helpful manner.

The defendant's evidence

The defendant testified that he is 57 years of age and has lived in Australia for approximately 26 years. He bought the Badgerup property in September 2001. Approximately seven acres at the rear of the property was uncleared bush at the time. The balance was cleared. Improvements included a house, an old shed and a pump. Some of the land was reticulated. The property was being leased to a third party for a market garden. The defendant and his family began living in the house and he worked as an electrical contractor. In 2003 he obtained approval from the Western Australian Department of Agriculture to clear the seven acres of bush at the rear of the property. The work was carried out in 2004. He then began market gardening. To that end he acquired some equipment, including a tractor, a rotary hoe, a forklift and a boomspray. He planted 20,000 strawberry plants, bok choi and string beans in an area of approximately five acres. He built a new shed for processing and packaging the produce.
He first met the plaintiff in 2003 when he did some electrical work for him in relation to the installation of a cool room. At some point he asked the plaintiff if he would be interested in growing strawberries in partnership on the Badgerup property because the plaintiff had once told him that it was quite profitable. The plaintiff told him he would think about it. He was unsure where this discussion occurred but said that it was either at the plaintiff's house or his own. On a later occasion he asked the plaintiff if he had thought about the proposal. By this stage he had already ordered 150,000 strawberry plants for the 2005 season. (The order was placed in or about July or August 2004.) He testified that the plaintiff later told him that 150,000 plants would not be enough and that he should order another 50,000, which he did. He was unsure when this occurred but said that it was in about "October or December, maybe December".
The defendant testified that he was unable to remember when he and the plaintiff entered into the partnership agreement, but as far as he knew it was prior to December 2004. They calculated that they would need 10 acres to grow 200,000 plants. They agreed that they would rent that land from him for $2,000 per month. He denied that the agreed rent was at $1,200 per month and said that $2,000 was the only figure mentioned. He testified that he and the plaintiff also agreed that the partnership would initially be for one year. They agreed that they would each contribute 50 per cent of the costs of the enterprise including the strawberry plants, plastic ground sheeting, irrigation equipment, labourers, fertiliser and other items. The plaintiff agreed to bring his own tractor and boom spray and he (the defendant) agreed to make his two tractors, a sprayer and a rotary hoe available. He testified that there was no discussion at all between them about payment for the use of each other's equipment because, he said, they both had their own equipment which they would use to do their own work.

The defendant testified that it was discussed and agreed that the parties and their spouses would all work on the farm and proper or appropriate allowances for their wages would be made in the firm's accounts after the harvest was sold. He said that no specific rate of payment was mentioned. As to the division of labour, he said as follows (T154):
"Was there any discussion about how much Mr Lam should get at the end of the harvest?‑‑‑For example, like if my wife worked for up to 10 hours per day for example, and if both parties shared equal amount of man‑hours, so at the end of the harvest time it was deducted from all the expenses, and then we just share equally."
He said that it was agreed that the plaintiff would hire casual workers but no specific rate of pay was mentioned. He said that he told the plaintiff that he would only pay whatever other people paid, that is to say, the going‑rate.
The defendant testified that there was no discussion between he and the plaintiff about opening a bank account, registering a business name or obtaining any assistance from an accountant. He was adamant that there was no discussion between he and the plaintiff at any time about a separate electricity meter for the firm's irrigation system. He said that the amount of electricity needed to water the firm's 10 acres could be calculated using a simple device which was easy to install. Later he testified that the electricity usage of the two areas could be easily estimated without separate meters, and that approximately $200 worth was used by his own garden between April and June 2005.
The defendant testified that they agreed that they would meet expenditure from their own resources on an ad hoc basis, with the object of making equal contributions by the end of the venture. So, for example, if he paid $62,000, the plaintiff would be obliged to pay $62,000 for other expenses, such as fertiliser and labour.
The defendant testified that after the agreement was entered into the plaintiff promised to help him install an irrigation system on the new, seven acre area on a voluntary basis. This area needed to be cleared but the work was straight‑forward, because it was only covered in weeds which were easily cleared with a rotary hoe.
The defendant testified that he hired Mr Phat to do his share of the partnership work because he needed to keep working as an electrician to earn an income. He said that Mr Phat was recommended to him by the plaintiff a few months earlier when he needed help with his capsicum crop. He testified that Mr Phat did whatever work the plaintiff asked him to do in connection with the partnership affairs, beginning in January 2005. He paid Mr Phat $15 or $16 per hour based on the plaintiff's recommendation. He continued doing so until October or November 2005. The defendant's wife also worked for the partnership, under the plaintiff's direction.
The defendant testified that he was made aware when the plaintiff paid $12,000 into his Westpac bank account, but said that afterwards the plaintiff asked him to pay $10,000 for plastic sheeting (for the partnership) and also requested an advance of $2,000 which he wanted to lend to Mr Phat. He testified that he did so and that he gave the $2,000 to Mr Phat in the plaintiff's presence.
The defendant testified that in late April 2005 he and the plaintiff realised that they had 20,000 strawberry plants left over (ie, the firm's 10 acres was insufficient). At the plaintiff's suggestion a two acre string bean crop was ploughed in, which increased the firm's area from 10 to 12 acres. He testified that the plaintiff agreed to pay an additional $200 per month rent for this area (bringing the total rent to $2,200 per month). He said that but for their removal the string beans would have gone to market in May or June when prices were at their highest (usually about $5 per kilogram). He said that the plaintiff agreed to compensate him for this.
The defendant denied that on 6 June 2005 the plaintiff complained to him that he was failing to meet his obligations. He said that in early June 2005 the plaintiff came to see him and told him that he had run out of money to pay the labourers and asked for $20,000. He was reluctant to help but felt that he had no choice. Therefore he obtained an overdraft facility from the National Australia Bank. The loan was approved on or about 9 or 10 June and he had to wait approximately a week before the funds became available. He produced a bank statement (exhibit 26) which disclosed that an application fee and other expenses of $682.40 were paid on 14 June 2005. He informed the plaintiff as soon as he obtained approval from the bank and the plaintiff confirmed that this would enable the firm to pay for its labour requirements.
By this stage the strawberry crop was very healthy, had flowered and the plants were already bearing small berries. Harvesting was planned to commence in late June, when the strawberries were easy to pick and market prices were relatively good. However a few nights after he told the plaintiff about the loan approval the Badgerup property was hit by a severe hailstorm. The storm damaged the leaves, flowers and fruit of the plants and, in his opinion, the crop was virtually destroyed. He and the plaintiff inspected the damage the morning after the storm. The plaintiff said very little, except that he no longer wanted to be in the partnership. He asked the plaintiff to explain what he meant. The plaintiff simply said that he no longer wanted to be involved and asked the defendant to repay him his financial contribution.
The defendant testified that he was unable to remember the exact date of the hailstorm but it occurred approximately four days prior to 18 June 2005. He obtained that date by reference to an invoice from Healy's Stores (exhibit 23) from whom he sought advice and purchased chemicals. He sprayed the chemicals on the damaged plants and arranged for workers to systematically remove the damaged leaves and berries. Gradually the plants recovered, re‑flowered and bore fruit which he harvested from mid‑July or early August until mid‑November when market prices became too low to continue.
The defendant testified that one or two days after the hailstorm the plaintiff came to see him with exhibits 19, 20 and 21. He showed these to him and said that they were a summary of his financial outlays.
The plaintiff did not go through the figures with him. The defendant looked at exhibit 19 which provided as follows:
•40 bags of chicken manure   $     400.00
•Deposit into the defendant's trust account   $12,000.00
•Iron (ie. steel)  $15,200.00
•Two iron cutters  $    398.00
•One welder  $     390.00
•Two boomsprayers  $     700.00
•Iron cutting disc  $     100.00
•Two cans of diesel oil  $      50.00
•Two trays for workers to sit on when planting
strawberries      $     900.00
•1,000 litre tank  $     250.00
•1,000 litre tank  $     150.00
•Tractor hire  $ 5,000.00
•Boomspray hire  $     300.00
•Fertiliser  $ 4,000.00
•Wages for two  $20,000.00
•Filters  $     400.00
•Filters  $     400.00
•Filters  $     400.00
•Welding rod  $     100.00
•Liquid fertiliser 10 litres  $     120.00
•Total  $60,858.00
The defendant told the plaintiff that he did not have the money to pay him. The plaintiff replied that he would accept an immediate payment of $20,000 and would wait until after the strawberry harvest for the balance. The defendant replied that he would only pay $20,000 in full payment which the plaintiff refused to accept.
The defendant testified that exhibit 21 contained the names of various labourers who worked for the partnership. These were Chi Ba, Gi Oanh, Thien Minh and Chu Phat. He said that Chi Ba was the first worker to arrive and stayed on after the plaintiff. All of the others had stopped by that time. He said that he hired another worker to assist Chi Ba.
The defendant identified exhibit 22. He said that it was kept on top of the refrigerator in the shed on the Badgerup property and was still there after the plaintiff left. He saw the plaintiff's wife writing in it on five or six occasions, but saw no one else doing so.
The defendant testified that he sought and obtained legal advice on or about 20 June 2005. He said that he received a letter from the plaintiff's solicitor (exhibit 17) and instructed his own solicitors to handle the matter.
The defendant gave very little detailed evidence‑in‑chief as to the quantity of work that he, his wife, and Mr Phat did on the farm for the partnership. He testified that his tractor and rotary hoe were used by the partnership. He said his four‑wheel drive tractor was the only tractor which was powerful enough to plough the land and install the plastic sheeting. He said that his wife maintained the plants (by fixing plastic sheeting and weeding, for example) and he himself did ploughing, installing plastic sheeting and spraying chemicals. But, no evidence was given as to the time spent doing those activities. He testified that Mr Phat was hired from January to do his share of the work and was placed under the plaintiff's instructions. However, he gave no particulars of the making or working out of this arrangement, or of the work that Mr Phat actually did.
In cross‑examination the defendant was asked about the sequence of events leading up to the partnership agreement being entered into. He insisted that the negotiations took place in late 2004, but he was most indecisive about when this occurred. He agreed that at one time the plaintiff attended a party at his house, and that he later attended a party at the plaintiff's house. But, he insisted that the partnership agreement had already been entered into by then. He said that initially their discussions about growing strawberries did not involve a joint venture. He said that only arose when the plaintiff's lease of his own market garden ended and he was looking for a replacement. This was before the defendant's party. He was not particularly interested and did not respond. He also said that in December 2004 the plaintiff and his wife were working for him picking capsicums.
The defendant agreed that the clearing and reticulation of the seven acre area was not provided for in the partnership agreement. He said that the main irrigation piping and new pumping facilities were installed by a contractor, and that the plaintiff helped to install the branch lines and taps. He said that the plaintiff did this on an entirely voluntary basis.
It was pointed out to the defendant that his defence pleads that the partnership agreement was entered into "on a day in 2005", but in his evidence he said that the clearing and reticulation of the seven acre plot occurred in January 2005, that is to say, before the partnership agreement was entered into (T219).
The defendant was cross‑examined at length as to how the rent for the firm's 10 acres was arrived at. It was put to him that at the relevant time the market rate in the district for 10 acres was $1,200 to $1,400 per month. He insisted that the only figure that was discussed was $2,000 per month and denied that the plaintiff suggested any other figure. He did not specifically accept the proposition that the market rental for 10 acres was $1,200 ‑ $1,400. However, he did say that in his opinion the firm's land attracted a premium because it was "new land", that is to say "virgin" land that was, in effect, more arable. He also pointed out that the firm's land had a new irrigation system. He said that the extra acres that were brought into the partnership in late April or early May 2005 was "old" land which had already been farmed and treated with chemicals and was less valuable, and hence was only worth $100 per acre per month. The defendant denied that he invented the figure of $2,000 per month after the dispute arose when he was preparing his defence.
It was put to the defendant that his evidence about the firm using his rotary hoe was wrong because he did not own one, or if he did, it was broken down. In support of this contention the defendant was referred to the depreciation schedules attached to his accounts which listed a wide range of equipment, but made no mention of a rotary hoe. The defendant insisted that he did own a rotary hoe, that it was in working order at all times, and that no market gardener could operate without one. He said (and repeated in re‑examination) that he purchased the rotary hoe at the same time as a second hand tractor and that both items were incorporated in his depreciation schedule by his accountant as one item, namely "tractor".
He was cross‑examined in a similar fashion about some evidence that he gave in chief about having installed a new pump on the Badgerup property. It was put to him that there was no new pump and that the old pump, which was used by the firm, needed to be repaired. The defendant denied this and testified that a new submersible bore pump was installed in 2002 or 2003. He said that this did not appear in his tax accounts because it was installed by a friend for whom he had done electrical work. He agreed that the old pump was repaired on 30 June 2005 (see exhibit 34).
The defendant was cross‑examined at length as to when the hailstorm occurred. It was pointed out to him that prior to the trial he pleaded in his defence that the storm occurred on or about 22 June 2005, but that this was amended during the trial to a date between 14 and 18 June. He accepted that this was so, but said that he was unable to pinpoint the date more accurately until just prior to trial when he obtained a copy of the invoice from Healy's Stores (exhibit 23). He was shown a document which was not tendered in evidence, but which was described as being a publication of the Commonwealth Bureau of Meteorology which summarised the weather conditions in Perth in June 2005. His attention was directed to a section which was apparently entitled "Brief Summary of Conditions" and asked whether he still maintained that the strawberry plants were badly damaged by hail between 14 and 18 June. After reading the document he said that it indicated that the hailstorm was on 12 June, but as far as he could remember it was approximately in the period 14 to 18 June.
The defendant was taken to exhibits 19, 20 and 21. It was put to him that these documents did not appear in his list of discoverable documents, and had only been produced for the first time at trial. The defendant said that he took these documents and exhibit 22 to his solicitor's office when he first sought legal advice on or about 20 June 2005 (he could not remember the date exactly). He said that the solicitor made copies and returned the originals to him. He said that he could not exactly remember seeing the list of discoverable documents (there were "too many documents") which was prepared and signed by his solicitor in March 2006. He said that he was unaware what his solicitor put in the list. He denied the suggestion that exhibits 19, 20 and 21 were actually his and intended to record his claim on the plaintiff.
Also, the defendant was cross‑examined about some labour records of his own which related to Mr Phat (see [118] – [119] below.
The cross‑examination of the defendant was extremely lengthy. He remained patient and calm throughout. He was not argumentative nor did he ever give the impression of trying to push his case. In summary, his demeanour and delivery were composed which gave the overall impression that he did not much mind if he was wrong about a matter of detail, or if he could not provide the same, and that he is quite resigned about the whole matter.

Other evidence for the defendant

The defendant's daughter, Loan Hoang Truong, testified that in 2005 she was a Year 12 student and lived with her parents at the Badgerup property. From time to time she studied at home during the day. Accordingly, she was aware of the firm's strawberry garden and she regularly saw the plaintiff. She recalled an occasion in approximately June 2005 when an overnight hailstorm damaged the strawberry crop. She said that she heard the storm and the hail during the night. The following morning she inspected the strawberry crop with the defendant. They walked up and down the rows of plants and she saw damaged and bruised leaves. She said that she did not notice the plaintiff at the property after the hailstorm. In cross‑examination Ms Truong testified that she was not sure of the date of the hailstorm and could not say if it was in early or late June. She said that between 70 and 80 per cent of the plants were damaged by the hailstorm. She agreed that she saw the plaintiff at the property on a couple of occasions after the storm speaking to the defendant, but she could not remember if this was in June. She said that prior to the hailstorm he was regularly at the property.

Findings of fact - introduction

It is not necessary to summarise the parties' submissions. It suffices to say that I have very carefully considered them and taken them into account.
In considering the credibility of the parties I have only obtained limited assistance from my assessment of their demeanour when they testified, because the process of testifying through interpreters was very stilted and artificial. Both counsel accepted this in their closing submissions. My difficulties have been compounded by the matters to which I referred at [3] above and the fact that no evidence was adduced from the spouses of the plaintiff and defendant, or from any of the casual workers. (Neither party relied on the principle enunciated in Jones v Dunkel (1959) 101 CLR 298.) Wherever possible I have had regard to "contemporary materials, objectively established facts and the apparent logic of events" in assessing the parties' reliability and credibility (see Fox v Percy (2003) 214 CLR 118 per Gleeson CJ, Gummow and Kirby JJ at [30] ‑ [31]). But, ultimately, I am required to decide between the direct evidence of the plaintiff and the defendant. In limited instances I am confident that I can make a finding based on my appraisal of the demeanour of one or the other of the parties when answering a specific question.

The formation of the partnership agreement

I have come to the conclusion that the plaintiff's evidence in relation to the timing of the partnership agreement was more credible than that of the defendant. The defendant's recall of the chronology was most uncertain. It was my impression during this part of his evidence, and it is my finding, that he had a very poor memory about this aspect of the case. It was also my impression that the defendant is not a person who places importance on matters of detail and he had a very laissez‑faire attitude to the venture until June 2005. It was the plaintiff who was inclined to concern himself with detail and forward planning. Accordingly, I find that the partnership agreement was entered into at a meeting between the parties at the plaintiff's house on or about 15 January 2005 ("the January meeting").
I have concluded that neither party's evidence was particularly reliable in relation to the terms of the partnership agreement.
The starting point is the fact that the partnership agreement was very informal in nature (which was recognised by the plaintiff's solicitor in the first paragraph of exhibit 17). I have no difficulty accepting that during a meeting of several hours' duration the plaintiff and the defendant discussed a great many matters pertaining to the partnership venture, many of which the plaintiff could not recall. I accept that they formed a plan. But the fact that a step or event was discussed and/or formed a part of the firm's business plan does not necessarily entail that it became a term of the partnership agreement. For reasons which will become apparent, I believe that the plaintiff has a tendency to regard any matter that he and the defendant discussed as an agreement of contractual force based simply on his impression that the defendant agreed, or did not disagree. He also has a tendency to magnify events into a greater importance than they warrant. So, I find that although the proposed partnership venture was discussed carefully and at great length in the January meeting, the agreement itself was informal, short and basic. I am fortified in this conclusion by the nature of the relationship between the plaintiff and the defendant. They were friends in January 2005. They trusted each other to a very significant degree in terms of the business arrangements.

I accept that during the January meeting the parties discussed the need for a name for the firm, the need for statutory compliance such as an Australian Business Number and a Tax File Number, the need for a joint bank account and for the installation of a separate device to measure electricity consumption ("the governance matters"). But I do not accept that any agreement of a contractual nature was reached as to who would attend to those matters. The parties were simply canvassing the need for basic business essentials to be attended to, and planning, and did not intend to enter into any legally binding agreement as to who would attend to such matters. I cannot even find that the defendant personally undertook to attend to any of the governance matters. My reasons are set out below. (I have had regard to events which occurred after the partnership agreement was entered into. However, I am doing so in order to assist me to identify whether a matter was agreed and not to construe what was agreed: see Isotomic Pty Ltd v International Raceway Pty Ltd [2007] SASC 111 per Anderson J at [54] and Secure Parking (WA) Pty Ltd v Wilson & Anor [2005] WASC 264 per Le Miere J at [82]:
(i)It helps to start with exhibit 17, the plaintiff's letter of demand. That letter sought to enforce the alleged dissolution agreement, but it made no reference to any alleged breaches of the partnership agreement. It mentioned a problem pertaining to planting restrictions that has not been referred to since, and some unspecified "disagreements". I am mindful of the language barrier between the plaintiff and his solicitor, and that the letter of demand was written in English, and make allowances accordingly. Nevertheless, the plaintiff accepted that his sister translated it for him. Assuming that (as seems to be justified by the plaintiff's evidence) the defendant's refusal to attend to the governance matters was the subject of the "disagreements" referred to in exhibit 17, such intransigence does not seem to have been regarded as sufficiently serious to be relied upon, at that stage, as being a contractual breach.
(ii)So far as the firm's bank account is concerned, it is noteworthy that the plaintiff paid the sum of $12,000 into the defendant's bank account without any apparent qualms about the absence of a joint account and, on his evidence, only took the occasion to remind the plaintiff about the need to install a new electricity meter.
(iii)I accept the defendant's evidence that a separate electricity meter box was not important and I find it most improbable that he agreed to install one. The installation of a separate, approved electricity meter was a major step to take simply to monitor the difference between the small amounts of electricity that the defendant's plot consumed compared to the firm's 10 acres, particularly given that the need might only exist for one year.
(iv)The other governance matters (the ABN and TFN) were matters that either of them could attend to.
I find that the governance matters also arose for discussion during the February to June period, because to varying degrees they did need to be attended to. I accept that they had not been attended to by June and that this irritated the plaintiff quite considerably. The plaintiff was most adamant in his very brief evidence about it and the fact that there were disagreements was referred to in exhibit 17, so it was a "live" issue in his mind at the time. However, I find that the defendant did not agree to attend to the governance matters at any time. Therefore, I find that there was no term of the partnership agreement to the effect that the defendant would install a separate electricity meter, attend to the registration of a business name or the opening of a joint bank account or obtain an ABN or a TFN.
Next, I find that the parties did not agree during the January meeting to hire their equipment to the firm and there never was any agreement to that effect. The plaintiff's evidence about this aspect was difficult to follow and not credible. I accept his uncontested evidence that he and the defendant inspected some new machinery and equipment after the partnership agreement was entered into, but nothing came of it because the machinery was too expensive. That exercise was inconsistent with the plaintiff and defendant having already agreed during the January meeting to hire their own plant and equipment to the firm. I accept the defendant's evidence that he owned various items of equipment and that this was used from time to time in the partnership business. I accept that the plaintiff did likewise. The little inconsistencies in the defendant's depreciation schedules which were pointed out in cross‑examination were understandable and I accept that he needed a tractor, a rotary hoe and such like for his own market garden. Further, the plaintiff's evidence as to the calculation of his claim for $5,000 was most unconvincing and eventually he accepted that it was just his estimate of a fair charge. That is to say, he basically accepted that there never was an agreement. (This aspect of the plaintiff's evidence exemplifies his tendency to reconstruct or embellish events on an ex post facto basis to suit his own case.)
Both parties relied upon provisions of the Partnership Act as implying terms, or precluding them. However, this matter falls to be considered under the express terms of the partnership agreement.
Against this background, I find that the express, agreed terms of the partnership were, simply, as follows:
(i)The plaintiff and defendant would trade in partnership for a period of 12 months. A fixed term was agreed because the length of the strawberry season could not be accurately predicted, and some certainty as to the duration of the venture was important. I have no doubt that this was discussed and agreed.
(ii)The firm would lease 10 acres from the defendant for $1,200 per month. There are no objective facts to corroborate the plaintiff's evidence in relation to this issue but I prefer it for the following reasons. First, the defendant seemed to accept that a rent of approximately $120 per month per acre was justifiable for "used" land. Next, he sought to bolster his own evidence with the contention that the firm's 10 acres was high grade, virgin land that had never been cultivated before. That evidence sounds plausible, but it predicated that the virgin portion of the firm's 10 acres (ie, 7 acres) should attract a premium of approximately 100 per cent (given the other three acres were only worth $120 each per month). The defendant proffered no independent support for his self‑serving opinion and I am not satisfied that he had any experience of a professional or practical nature to suggest that he could have prevailed over the plaintiff on this issue. On the contrary, the plaintiff had market gardening experience and gave me the impression that he was in a position to make an informed and shrewd assessment of the rental value of the firm's 10 acres. This is another instance where I am comfortable acting upon my assessment of his demeanour in evidence. His dismissal of the idea that the firm's 10 acres was worth $2,000 a month, or that he would pay such an amount, looked quite genuine to me. Although it was not mentioned by the plaintiff in his evidence, or by counsel in submissions, it also occurs to me that any benefits which the firm obtained by reason of having access to virgin land would be counterbalanced to some extent by the fact that the defendant would be left with the sole ownership of the strawberry garden at the end of the 12 month term. This "residual" benefit had some commercial value given the evidence (which appeared to be supported on both sides) that the defendant's second year plants had some productive value.
(iii)The parties agreed to purchase 200,000 strawberry plants which the defendant had already ordered. I accept the plaintiff's evidence that the agreement as to the area to be leased (10 acres) and the agreement as to the number of strawberry plants (200,000) were inter‑dependent, that is 20,000 plants per acre. The fact is that all of the plants were delivered at the same time in late April 2005 in accordance with orders that the defendant was required to place in 2004, that is, well before the January 2005 meeting.
(iv)The plaintiff would pay $12,000 towards the cost of the strawberry seedlings and the balance would be paid by the defendant.
(v)Each partner and his spouse would perform labouring work for the firm, in approximately equal amounts. Both parties testified about this provision which was sensible having regard to the fact that they agreed to share the profits equally. But I find that the parties understood that the degree of equality would be reasonably approximate. It would have been quite impractical to arrange matters in such a way that the labour contributions of the parties and their spouses could be exactly equal. It was for this reason that the parties agreed that each partner and his spouse would be paid (eventually) for their labour (see (vii) below), that is, there was a means of adjusting for any actual differences in their labour contributions. Also, the defendant was entitled to hire a labourer to work in lieu of his services. I am confident that this exception was agreed because it made sense for the defendant to continue working as an electrician rather than as a labourer. I accept that Mr Phat was employed by the defendant for the purpose of discharging his obligation. Whether he did so is another matter.
(vi)The plaintiff was authorised to hire casual labour when he needed it, initially at his own, but eventually at the firm's expense.
(vii)Each party, and his spouse, would be paid at the same rate as the casual labour for time spent working in, or for, the partnership. These accounts would be settled, and paid, from the proceeds of the strawberry sales.
(viii)Each partner would be reimbursed for expenses incurred on behalf of the partnership at the conclusion of the strawberry harvest or at the end of 12 months, whichever was the earlier.
(ix)The profits of the firm would be shared equally between the plaintiff and the defendant.
As to the keeping of labour records, I accept that this matter was discussed during the January meeting in the same way that many other matters of a managerial or administrative nature were discussed, but I am not satisfied that the need for them was ever translated to a contractual term. I cannot accept that the parties intended that each's entitlement to payment for their own labour (and that of his spouse) would be conditional upon that party keeping a record of it. In my opinion, such a provision would be harsh and untrusting in nature and neither the plaintiff or the defendant would have seen a need for it as at January 2005. I do not accept that the parties envisaged disputing each other's claims about labour and forcing each other to have recourse to records before they could be brought to account. I find there was a consensus of sorts, namely that they would accept each other's records as evidence of the labour provided. These observations apply mutatis mutandis to the plaintiff's allegation that it was an agreed term that each partner would maintain written records of all accounts paid and monies spent. Once again, I accept that these matters were discussed, and that there was a consensus as to accepting each other's records, but there was never any consensus that such records were a contractual pre‑condition to being paid or brought to account. In my view, the plaintiff's allegation about an express agreement about such records provides another example of him elevating a simple consensus beyond its true purpose.

Other events between January and June 2005

I turn now to make a series of findings in relation to other events that occurred between January and June 2005.
First, I find that the plaintiff spent a few days in January 2005 clearing seven acres of the Badgerup property of rubbish, light vegetation and weeds. I find that this was relatively light work, which was easily accomplished with a rotary hoe (as the defendant said). All of the heavy clearing of this land had already been carried out (in 2004). I am not satisfied that the defendant agreed to remunerate the plaintiff for this work, that is to say, I accept the defendant's evidence that the plaintiff carried out this work voluntarily. My reasons are four‑fold. First, as I have just said, the work was not particularly heavy. Second, although the plaintiff testified that the defendant agreed to pay him, as far as I can tell he never made a claim for it. He testified that the defendant did not pay him, but gave no evidence as to when, if ever, he asked for payment, or as to the amount to which he was entitled. Third, the plaintiff and the defendant were friends and it is not inconceivable that the plaintiff tidied up the seven acres without expecting payment. Fourth, both the plaintiff and the defendant appeared to accept that the clearing work was removed from the partnership business. This is illustrated by the fact that there was no mention of the work in either exhibit 1 or exhibit 17.
I turn now to the defendant's allegation that the firm agreed to lease another two acres of land from the defendant in order to finish off the strawberry planting, and that two acres of stringer beans were cleared for that purpose. I accept that the defendant grew some stringer beans in his personal garden – the plaintiff mentioned them in his evidence (T18). However, it would be a serious matter for the defendant to turn in two acres of valuable stringer beans which were nearing harvest in order to grow strawberries in which he would have a half interest. The mathematics of the defendant's evidence did not measure up either, because only one acre or thereabouts would have been required for the 20,000 plants that he said were left over (on the basis that 180,000 plants were planted in 10 acres). Therefore I do not accept that he and the plaintiff agreed to lease another two acres or that two acres of stringer beans were turned in for that purpose.
It follows, that I find that the firm's strawberries were all planted in an area of approximately 10 acres comprising the seven acres referred to at [96] above, and three acres of the defendant's personal market garden which the plaintiff and the defendant's wife cleared. It is difficult to make a finding as to the precise area of this original garden, as the evidence about it varied. But, it was common ground that approximately three acres was cleared to make way for the firm's strawberries.
Next, I find that the firm's 200,000 strawberries were planted over a period of several days in late April and early May 2005. Exhibit 22 would suggest that most of the work was done between 28 April and on or about 2 or 3 May, during which period the casual worker numbers were at their peak. (See [107] – [111] below where I have made findings specifically about exhibit 22.)
Next, I accept the plaintiff's evidence that he incurred expenses for fertiliser, steel and equipment. I am not called on to make findings as to the actual quantum in respect of those items at this time, but my preliminary view would be that the amounts set out in exhibits 7, 8, 9, 10 and 11 are correct.
I find that the plaintiff paid $12,000 into the defendant's bank account in February 2005. However, I can make no finding in relation to the defendant's evidence that $10,000 was used to buy plastic sheeting and $2,000 was lent to Mr Phat. There is very little to choose between the plaintiff and the defendant's evidence about this matter. The defendant made a bare assertion, unsupported by any corroboration, that the funds were dispersed as he alleged, and the plaintiff denied it. It is not a pleaded issue and its resolution does not impact upon the ultimate determination of the matter.

Exhibits 1, 2, 3, 19, 20, 21 and 22 – Labour issues and expenses

The cross‑examination and submissions of the parties lacked any sustained focus on exhibits 1, 2, 3, 19, 20, 21 and 22. This was both surprising and unfortunate because the defendant alleged that the plaintiff fabricated exhibits 1, 2 and 3, and the plaintiff effectively alleged that the defendant lied about exhibits 19, 20, 21 and 22. As will be seen, a very close analysis of the content and even the appearance of those documents has been warranted, yet there was little or no analysis or close questioning along those lines in evidence or in closing submissions. Having said that, I recognise that each party flatly denied the relevant allegations against him and it might be said that a cross‑examination which entered into the analysis which I have carried out would have been otiose. In this regard I am mindful of the comments of the Court of Appeal about the scope of the rule in Browne v Dunn in Lazarevic v The State of Western Australia [2007] WASCA 156 per McLure JA (with whom the other members of the Court agreed) at [14] – [20]. That is to say, the rule must be moulded to the realities of the case. If the findings being pressed in submissions, or which are made by the court, are plainly in prospect, such that questioning could only be met with one answer (a denial), then the finding(s) need not be put in cross‑examination.
I have formed the view that the plaintiff's evidence in relation to the contemporaneity of exhibits 1, 2 and 3 (the wages books) was not credible and I accept Mr Sirett's submission that they are ex post facto reconstructions. They certainly bear the hallmarks of being so. There is an unconvincing uniformity in the handwriting and an absence of the little mistakes and "grubbiness" which one might expect to see in authentic, contemporaneous records. I take into account the plaintiff's explanation that these books were transcribed (at home) from temporary records which he kept in his pocket notebook, but their near‑complete uniformity and pristine condition is difficult to reconcile with them having been written on separate occasions.
I refer to exhibit 1 by way of example. According to that document, the plaintiff worked without interruption of any kind from 7 am until 5 pm every single day (except weekends) from 3 February 2005 to 5 June 2005, except for 27 April to 3 May when he worked uninterrupted from 7 am until 6 pm. I am not here dealing with the issue as to whether the plaintiff worked those hours, only the unwavering regularity of the entries about them in exhibit 1. According to the plaintiff's evidence, he noted all those hours down in his pocket notebook and transcribed them into exhibit 1 on a regular basis. He said that he did the same for his wife from 30 March to 5 June (exhibit 2). This seems highly improbable. I cannot see the need for the plaintiff to carefully write out all these entries in exhibits 1 and 2 separately for every single day, or even do so in his little notebook, over such long periods. I would expect that he would soon tire of it, and cease doing it, when the entry was virtually the same more or less day in, day out. Similarly, in my view there was no need to follow this notebook to wage‑book routine in relation to the casual workers' hours either – they were all the same according to exhibit 3 (exhibit for Ms Ba).
Also, one would expect exhibits 1, 2 and 3 to have formed the basis of the labour claims in exhibit 17, if they really existed on 27 June 2005, particularly given that they justified larger claims than those which were made in exhibit 17 ($37,152 vs $28,000). But that was not done and the plaintiff was unable to explain why to my satisfaction. (To this day, the amounts of the labour components of the particulars of loss and damage pleaded in the statement of claim are the same as in exhibit 17.) Also, the plaintiff's explanation about buying the three wage books was very indecisive. Moreover, whilst it is believable that the plaintiff purchased exhibits 1, 2 and 3 at the same time after June 2005, it is less believable that he had the foresight, or would have felt it necessary in February 2005, to purchase separate books for himself, his wife and the casual labour. (I cannot see the point of even having separate books.) Lastly, the rejection of the plaintiff's evidence in relation to exhibits 1, 2 and 3 is consistent with findings which I have made about exhibits 19, 20, 21 and 22, to which I now turn.

Conversely, there are reasons to reject the plaintiff's version of the sequence of events of June 2005:
(i)By June 2005 the plaintiff had a very significant investment in the strawberry crop which was nearing readiness for harvest. It is difficult to comprehend why the plaintiff would regard the governance matters, or the defendant's recalcitrance regarding the labour, as sufficiently important to forego a return on his investment, which suggests that there must have been another very good reason, viz, the hailstorm damage. On the other hand, there was no doubt in my mind when the plaintiff briefly testified about the dissolution agreement that he was very irritated with the defendant at the time. And, as I have said, the defendant adopted a somewhat laid‑back approach to the governance side of the business, which would have clashed with the plaintiff's more committed attitude, particularly as the commencement of harvesting, and all that it entailed from a monetary and taxation point of view, was imminent. Moreover, there was no evidence that the potential profits from the partnership venture would be significant. The plaintiff testified (T71) that in January 2005 he did not know what profits the firm stood to make and said: "I know that if we work on the farm we should be able to make some income."
(ii)I accept the defendant's evidence that exhibit 23, the invoice from Healy's Store, relates to the purchase by him of products which he used to salvage the storm‑damaged strawberry crop. As far as I can ascertain, this is the first, independent documentary evidence of him having taken part in the actual cultivation and care of the strawberry crop after it was planted. This would place the hailstorm in mid‑June, possibly a few days prior to 18 June and within a time‑frame that could possibly accommodate the plaintiff's retirement..
(iii)The last entry in exhibit 22 (the casual labour records) is for Ms Chi Ba. I accept the defendant's evidence that he continued to employ her after the storm, but no entry was made in exhibit 22 after 17 June. An implication is open that exhibit 22 fell into disuse at or about that date because that was when the plaintiff and his wife ceased their involvement and the defendant took over.
(iv)In exhibit 17 the plaintiff's solicitor stated on three occasions that the dissolution of the partnership occurred in "mid‑June". On the other hand "mid‑June" is somewhat imprecise, and the solicitor was also imprecise in the same letter when referring to the date of the partnership agreement namely "in or about February".
(v)Ms Truong only recalled seeing the plaintiff visit the Badgerup property on a couple of occasions after the hailstorm, which ties in with the defendant's evidence about the plaintiff coming to see him (with exhibits 19, 20 and 21) to discuss money matters after he suddenly quit. On the other hand it is very possible that her recollections as to the plaintiff's presence on the Badgerup property on and around the date of the hailstorm could be unreliable that is, the plaintiff could have retired a week or so prior and visited their property once or twice to see her father without her being aware of the changed state of affairs between the two men.
(vi)Mr Sirett submitted that the defendant was casting around in his evidence for pretexts (the governance matters) to justify his unilateral, non‑consensual resignation. That might be true of his motives after the litigation commenced, but, I feel that it lacks force if it is applied to test the plaintiff's motives in June 2005. As I have said, one of the reasons given in the letter of demand (the alleged planting restrictions) was a false issue, and the governance matters evidently did not justify terminating the partnership agreement at that time. Those matters were only raised in exhibit 17 to explain the background to the alleged dissolution agreement. The plaintiff had no need to employ pretexts when all that he was claiming was that the defendant had agreed to buy his interest. The pretexts only materialised in earnest in the litigation when it was evidently felt necessary to vindicate or justify his actions on an alternative basis, namely, repudiatory breach by the defendant. (Such ex post facto rationalisation is entirely consistent with the plaintiff's evidence in this matter.)
(vii)Mr Sirett also placed great weight on the fact that exhibits 1, 2 and 3 were created by the plaintiff after the event and passed off in evidence as being contemporaneous. To this I would add his dissembling about exhibits 19, 20, 21 and 22. I accept these matters as reasons to treat the plaintiff's evidence with great caution and I do so. But, this must be placed in perspective. It does not automatically follow from the fact that the plaintiff was untruthful about those documents that his evidence as a whole, or on other matters, must be rejected. Unfortunately, people do sometimes fabricate, or embellish their evidence for various reasons, including a misplaced zeal to bolster what they perceive to be a just cause. I mention this as a mere possibility, and can make no finding about it, because the plaintiff did not testify that such had occurred in this case. But I note that exhibits 1, 2, 3, 20 and 21 relate to only one issue, namely, the number of hours that he, his wife and the casual labourers worked, about which there might ultimately be little or no dispute. I do not feel able to reject all of the plaintiff's evidence because of his dissembling about those exhibits.
(viii)Finally, I take into account the following evidence that was given by the plaintiff very early in his evidence (T9):
"Did you grow strawberries with Mr Truong for one year. Could you check on that?‑‑‑Yes, we did grow the strawberries in that year, but within the year the strawberry was damaged and the – while the strawberry is growing, the business was going wrong and the strawberry wasn't harvested." (Emphasis added.)
This evidence was not taken up by the defendant's counsel in cross‑examination of the plaintiff or in his closing submissions. It does at least disclose that, contrary to his evidence, the plaintiff did become aware at some stage that the strawberry crop was seriously damaged.
I propose to place no weight on the evidence which suggested that the Bureau of Meteorology recorded hailstorms in the Perth area on 12 June. The evidence about that event was in itself unsatisfactory, but it says little or nothing about the weather conditions in the Badgerup Road area on 12 June 2005 or any other day.
Having considered the matter very carefully and at considerable length, I am satisfied on the balance of probabilities that the plaintiff's evidence as to the timing of the events of June 2005 should be accepted. (I stress that I am here addressing what happened and when it happened, and not necessarily the construction to be placed upon such events.) In my mind there is sufficient corroborative evidence to justify me in setting aside my doubts about the veracity and reliability of the plaintiff's evidence generally to enable me to accept his evidence as to the timing of events. I am mindful that no one witness could speak with any precision about the timing of events, and that the events of June described by Dr Phat could have occurred over a period commencing more towards mid‑June, rather than early June. Nevertheless, I accept both of their evidence that the events began in early June. My reasons are as follows.
First, the plaintiff told Dr Phat that the partnership was over. At about the same time the defendant's wife confirmed to Dr Phat that the defendant would accept responsibility for PN Chemfert's outstanding account. Later she arranged to pay but was suddenly stopped from doing so by her husband. This is not something that one would easily forget. Second, whilst the taking out of the bank loan by the defendant is consistent on one view of the evidence with the parties having entered into an agreement for the defendant to financially support the plaintiff (as alleged by the defendant), it is also consistent with the defendant having a need for funds arising from the plaintiff's retirement and/or the alleged dissolution agreement. The amount ($20,000) tends to support the latter hypothesis. It seems to me to be a large amount for labour having regard to the fact that the costs of casual labour for the project to that point were only a fraction of $20,000 and the harvest (and hence a cashflow) was imminent. Also, the defendant adduced no clear evidence of his own outlays on labour once the harvest finally began which would support the idea that $20,000 was urgently needed by the firm for that purpose in early June. Also, the defendant's evidence as to the circumstances or occasion for the "bail out" of the plaintiff was a bare contention and lacked detail. For instance, he did not explain how the overdraft would be used by the plaintiff to pay the casual labourers, or put at his disposal for that purpose. The plaintiff's surprise, or even bemusement, on being asked about this loan in cross‑examination appeared to be genuine. Based on the plaintiff's evidence, and the advanced state of the crop, in my opinion the notion that the plaintiff was in urgent need of $20,000 to pay labourers for the run‑up to the harvest, and for the harvest, is improbable and I do not accept the defendant's evidence that that was why he took out the loan. This leaves open a finding that there was a meeting in early June, as the defendant testified, but for a different purpose, but which still occasioned the defendant's need to borrow $20,000.
I have not lightly put aside the plaintiff's evidence which I have referred to at [124(viii)] above. It certainly could be treated as evidence that damage caused by the hailstorm was the reason for the plaintiff wanting to quit the partnership. But, it must be remembered that the plaintiff's evidence was delivered, via an interpreter, in a very disjointed manner. My impression was that in this particular piece of evidence the plaintiff was attempting to tell the story of the whole year. I believe he was saying that "the business was going wrong" – and therefore he wanted to quit – while the strawberries were still "growing" and before they were "harvested" or "damaged".
As to the actual day of the plaintiff's retirement, there is nothing to corroborate the plaintiff's evidence that it occurred on 6 June. If anything, exhibits 20 and 21 would suggest that the date was 10 June which is also consistent with the time‑frame in respect of the defendant's application to the bank for the overdraft. At any rate, it was before the hailstorm.

The terms of the plaintiff's retirement

I turn now to consider the terms upon which the plaintiff retired from the firm or, in other words, the terms of the dissolution agreement (if any), having found that the plaintiff retired in early June 2005 and before the hailstorm.
It was common ground between the parties that the plaintiff retired during a meeting with the defendant at the Badgerup property. However, the plaintiff's evidence in relation to the details of the meeting, which he said occurred on 6 June, was very disjointed. I propose to make a series of preliminary findings about what took place in the meeting before returning to consider the construction to be placed on what took place. I find that:
(i)After complaining about some issues that he had, the plaintiff told the defendant that he wanted to retire from the partnership and the defendant agreed to allow him to do so.
(ii)The plaintiff returned a few days later and submitted exhibits 19, 20 and 21 to the defendant by way of claim for his expenses and labour.
(iii)The defendant agreed to pay him his wages (and those of his wife) and his expenses (ie, his "partnership account") and also agreed to pay the outstanding account with PN Chemfert. (This led the defendant to apply to the National Australia Bank for an overdraft of $20,000.)
These findings are supported by the following facts. First, payment of the plaintiff's wages (and those of his wife) and expenses was no more than would become payable pursuant to the partnership agreement once strawberry sales commenced and the defendant could hardly refuse the plaintiff. Second, there were reasons for the defendant to be content to release the plaintiff, and go it alone, if that is what the plaintiff wanted to do. The crop was in good condition and nearly ready for harvesting to commence and the plaintiff was unhappy and quarrelsome. Third, both the plaintiff and the defendant agreed in their evidence that there was discussion about a pay‑out figure. The issue was not whether the plaintiff would be paid, but how much he would be paid. The plaintiff prepared exhibits 19, 20 and 21 for the purpose of discussing his entitlements with the defendant.
Next, I find that there was no agreement during the second meeting (at which the plaintiff produced exhibits 19, 20 and 21) as to the total amount that was payable to the plaintiff or when it would be paid. I accept the defendant's evidence that he baulked at agreeing to those matters. This is highly probable because he lacked the ready money to pay in full. He needed to fund the ongoing venture and there was no reason why he should agree to accelerate the payment of the plaintiff's partnership account which was not repayable under the partnership agreement until sale proceeds were received. Further, there were items on exhibit 19 to which the plaintiff was not entitled (such as hire charges for plant and equipment) or which needed to be vouched for. (I note that the defendant said in evidence that he sought legal advice because the plaintiff was "asking me too much money" – T251.) Finally, the plaintiff's evidence about the defendant agreeing to pay two lump sums of $40,000 was not pleaded and was not mentioned in the letter of demand. It bears the hallmarks of another unreliable construct on his part (the explanation for which is at [133] below). I find that the plaintiff and defendant only agreed that the latter would pay an immediate advance of $20,000 including PN Chemfert's outstanding account. In other words, I find that the plaintiff's evidence (at T98) set out at [44] above is the truth. This finding is corroborated by the fact that the amount which the defendant borrowed from the bank was $20,000.
Next, I find that the plaintiff genuinely but wrongly believed that the defendant agreed to pay him $80,000. If one adds the total of exhibit 19 ($60,858) and the amounts for casual wages in exhibit 21 ($7,413.10) and an indemnity for the PN Chemfert account of $11,216.10, one arrives at a total of $79,487.20 (that is, approximately $80,000). The plaintiff took the fact that the defendant had expressed no objection to paying him his entitlements and constructed an agreement that he would be paid that sum.
These findings are consistent with the fact the plaintiff had a telephone conversation with the defendant approximately two weeks later (it could have been less than two weeks) in which the defendant did not deny that he had agreed to pay him something but said that he did not have the money to do so. I accept the plaintiff's evidence about this. This is another instance in which I feel it is appropriate to have regard to the manner in which the plaintiff gave his evidence, that is to say in a somewhat emotional and embittered tone of voice. I gained the impression that the plaintiff genuinely believed that he had been let down by the defendant.
I am mindful of the fact that I have arrived at these findings by a slightly unusual path, namely by accepting part of the evidence of each of the plaintiff and defendant, and rejecting or not accepting other parts of their evidence. But, this is an unusual case in which, as I have said previously, the evidence was adduced in a piecemeal and disjointed fashion and neither party was a fully reliable witness.
I turn now to consider the construction which should be placed upon these findings. This is rendered problematic because the terms of the dissolution agreement have not been pleaded. Nevertheless, I am in a position to make findings on the proven facts and will hear submissions from the parties about the pleadings.
In my opinion a very simple construction is to be placed upon the events of early June. The plaintiff was permitted to retire from the partnership (that is, dissolve it) in consideration of him selling or ceding his share in the firm to the defendant, who became sole proprietor and solely entitled to the profits (if any). The plaintiff remained entitled to the repayment of his partnership account (his expenses and wages) from the proceeds of strawberry sales, as was the case under the partnership agreement. The parties simply drew a line across the partnership accounts when the plaintiff retired. The parties also agreed that the defendant would make an immediate advance of $20,000 which would include payment of PN Chemfert's account.

Other findings

I turn now to make some additional findings.
First, I am unable to make any finding as to the plaintiff's claim that his tractor and other equipment was returned to him in a damaged state in August 2005. The plaintiff simply failed to condescend to any particulars which would enable me to make a finding, and the allegation is dismissed.
Next, I dismiss the plaintiff's claim that the defendant engaged in deceptive or misleading conduct contrary to s 10 of the Fair Trading Act. The gravamen of the allegation is that the defendant made certain contractual promises which he did not intend to carry out, or lacked the means to carry out. I am not satisfied that he made those promises.
This brings me back to the consequences of the defendant's breach of contract, that is his failure to make an equal contribution towards the firm's labour requirements. The options available to the plaintiff upon the breach occurring were as follows. First, if the breach was fundamental or repudiatory in nature, to elect to either affirm the contract and pursue damages (if any) or terminate the agreement and pursue damages. Second, if the breach was not fundamental or repudiatory in nature, to pursue damages. Third, on either scenario, to affirm the contract and/or negotiate a resolution of the partnership issues. I find that the plaintiff elected the third option, that is to say, he did nothing until he met with the defendant in June and entered into the dissolution agreement. In my opinion, that brought the partnership agreement to an end and any causes of action which the plaintiff previously enjoyed merged into the dissolution agreement, to which he must now look for all of his entitlements.
If I am wrong in finding that the parties entered into the dissolution agreement (in other words, were it not for the dissolution agreement) I would not be satisfied that the plaintiff was entitled to terminate the partnership agreement in June. My reasons are as follows. The relevant term of the partnership agreement was an important condition and the defendant was in repudiatory breach by failing to comply with it during the first few weeks of the venture. But I find that the defendant remedied his breach well before June, as I accept that the defendant caused Mr Phat to work in the firm's affairs more or less full‑time from late April. The plaintiff was entitled to be aggrieved by the defendant's recalcitrance prior to that time, but the consequences of the defendant's breach of the partnership agreement, which could be measured in a few thousand dollars' worth of damages, could not justify the plaintiff continuing on with the partnership into June 2005 before purporting to terminate. In my opinion he was put to his election whether to terminate while the defendant was in breach and chose to affirm the partnership agreement. As such, by early June the plaintiff was confined to his remedy in damages, was not entitled to quit the partnership, and the partnership agreement remained on foot until dissolved by agreement.

Finally, the defendant was not in breach of the partnership agreement by failing to attend to any of the governance matters. They were not the subject of expressly agreed terms and even if they fell within the field of joint partnership responsibility under the Partnership Act, the defendant's own failure to attend to them by June 2005 did not constitute a breach.

Conclusion

In conclusion I make the following findings:
(i)The parties entered into a partnership agreement on 15 January 2005, the terms of which are set out in [94] hereof.
(ii)The defendant breached the partnership agreement by failing to make an adequate contribution towards the labour requirements of the firm. However, the plaintiff affirmed the agreement and the breach was remedied by June 2005.
(iii)The parties entered into an agreement to dissolve the partnership in early June 2005, the terms of which are set out in [137] hereof. Those terms have not been pleaded in the statement of claim.
I propose to invite further submissions from the parties as to the further disposition of this matter in the light of these reasons.