Napper & Anor v Bultitude & Anor
[2009] SASC 37
•20 February 2009
SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
NAPPER & ANOR v BULTITUDE & ANOR
[2009] SASC 37
Judgment of The Honourable Justice Gray
20 February 2009
DAMAGES - MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR BREACH OF CONTRACT
MAGISTRATES - JURISDICTION AND PROCEDURE GENERALLY - PROCEDURE - THE HEARING - EVIDENCE AND COURSE OF TRIAL
PROCEDURE - JUDGMENTS AND ORDERS - IN GENERAL - STATEMENT OF REASONS FOR DECISION
Appeal against Magistrate’s award of damages for breach of contract of sale – whether defendants under contractual obligations to maintain property between date of contract and date of settlement – whether evidence sufficient to properly assess claims for damages – whether Magistrate’s reasons adequate.
Held: Appeal allowed - the scope of the obligation to maintain a property between contract and settlement considered - failure to establish a change of condition between contract and settlement with respect to a number of claims - failure to prove particular claims - Magistrate’s award of damages of $14,858.50 set aside – judgment entered for respondents for $3,705.81.
Consolidated Holdings Ltd v Ireland [1946] All ER 284; Clarke v Ramuz [1891] 2 QBD 456; Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515; Jones v Bartlett (2000) CLR 166, considered.
NAPPER & ANOR v BULTITUDE & ANOR
[2009] SASC 37Magistrates Appeal
GRAY J.
This is an appeal against a Magistrate’s award of damages for breach of a contract of sale.
The Magistrate’s award followed a lengthy hearing in regard to a number of claims for damages in respect of what was said to be obligations to maintain a farming property between the date of contract and the date of settlement. I have reached the conclusion that the award made by the Magistrate in respect of a number of the claims should be set aside or substantially reduced.
The proper assessment of the claims, because of their nature, necessarily would require considerable detailed evidence of the precise work performed, materials supplied and associated costs. Evidence led at trial fell short of such detail in respect of many claims. As a consequence there has been some difficulty in making an assessment of loss and damage in respect of those claims which I have found to be justified.
It would be unfortunate for this appeal to result in an order for retrial. The costs of the trial and the appeal are likely to engulf the amount at issue between the parties, and accordingly, I propose to adopt a robust approach to the appeal in an attempt to bring the litigation to an end. Both parties agreed that this would be desirable, and through their counsel, facilitated this approach.
Background
Kim Robert Napper and his mother Edith Clare Napper were the vendors of a rural property known as Clover Downs. They entered into a contract for the sale and purchase of this property on 13 September 2004. Mr Napper died as a result of injuries sustained in a road accident on 6 October 2004. On 25 February 2005, Mr Napper’s wife, Alison Margaret Napper, as executrix of his estate, attended to the settlement of the contract. Alison Napper and Edith Napper are the defendants and appellants in these proceedings. The plaintiffs and respondents, Paul Charles Bultitude and Joanne Margaret Bultitude, were the purchasers of the property.
Clover Downs, a 1,450 hectare farming property, included a house, cottage, sheds and stockyards. The property was divided into 24 paddocks. The water supply was sourced from mains water, and was piped to troughs allowing stock to access water from the paddocks. There was an area of scrub on the property. The defendants had used the property primarily for the raising of beef, and this was the farming intention of the plaintiffs.
Landmark Operations Ltd, through a colleague of Mr Napper, Geoffrey Watts, acted as agent for the sale. A standard form real estate contract was used. The contract included an annexure containing special conditions. The contract identified Landmark as the vendor’s agent.
The primary dispute between the parties was whether the defendants had met their contractual obligations to generally maintain the property in a proper manner between the date of the contract and the date of settlement. A special condition to the contract permitted the purchasers to stock the property prior to settlement.
It is convenient at the outset to set out relevant clauses of the contract:
5.6 Risk
The Purchaser acknowledges that they shall make and rely upon its own inquiries in relation to the following matters.
5.6.1The property is at the risk of the Purchaser in all respects from the date of this Agreement.
5.6.2Notwithstanding clause 5.6.1, the Vendor must farm, graze and manage the Land and the Property, and generally maintain the Property in a proper manner so as to maintain its condition as at the date of this Agreement. In particular, the Vendor must not at any time between the date of this Agreement and Settlement, graze on the Land any greater numbers of Livestock of any class or description than are grazing on the Land at the date of this Agreement other than by way of natural increase.
5.6.3The Vendor gives no warranty that the property is free from any contamination or disease except as set out in the Schedule or that the Property is suitable for the purpose for which the Purchaser intends to use the Property.
…
7 Clearing Sale
7.1The Vendor his agents and or servants reserve the right to hold and conduct a clearing sale on the property prior to the date of settlement.
7.2 Vendor’s Default
7.2.1If the Vendor breaches this Agreement prior to or on the Settlement Date, the Purchaser may without prejudice to any other legal rights or remedies the Purchaser may have, at any time after the occurrence of such breach, give to the Vendor notice in writing requiring such breach to be remedied within the period specified in the notice being not less than three (3) business days after serving of the notice.
7.2.2Unless the breach is remedied within that period, the Purchaser may:-
7.2.2.1treat this Agreement as being terminated at the end of that period; or
7.2.2.2postpone the Settlement Date until after the breach is rectified and notified to the Purchaser and claim from the Vendor (in which case the Vendor must pay to the Purchaser):
7.2.2.2ainterest at the default rate on the full Price from and after the Settlement Date to and including the date when such breach ceases and is notified to the Purchaser, or
7.2.2.2bthe amount of the actual damage suffered by the Purchaser (whichever is the greater amount, at the Purchaser’s discretion).
7.2.3If this Agreement is terminate under the provisions of this clause 7.2 all monies paid by the Purchaser must be refunded to the Purchaser.
7.2.4If the Settlement Date is postponed pursuant to the terms of this clause, all rates and taxes (but not income) shall be re-adjusted to midnight on the day before settlement takes place.
7.3 Time of the Essence
Time is of the essence in respect of any obligation under clause 7.
…
8.1 Notices
Notices under this Agreement:-
8.1.1must be in writing and signed by the party giving notice, or its authorised agent.
8.1.2may be served:-
8.1.2.1by being left at the last known residence or place of business of the intended recipient; or
8.1.2.2by being sent by ordinary post in a pre-paid envelope to the address of the party set out in this Agreement; or
8.1.2.3by being transmitted by facsimile machine to the intended recipient’s facsimile machine at the number specified in the Schedule;
8.1.3will be deemed served when posted in accordance with clause 8.1.2.2 two (2) business days after posting;
8.1.4will be deemed served when sent by facsimile machine on the first business day after the sending party’s facsimile machine reports completion of the transmission of the notice to the intended recipient; and
8.1.5will be deemed sufficiently served in accordance with this clause on one of several persons comprising the Vendor or the Purchaser.
9 Right to Store Equipment
9.1 The Vendor and Purchaser hereby agree that the Purchaser shall have the right to store equipment and goods in the cottage and the shed at the cottage prior to settlement, at no costs from the 1st day of October 2004.
9.2 The storage of such equipment and goods by the Purchaser shall be at the Purchasers full risk and responsibility at all times.
10 Purchaser to Depasture Livestock Prior to Settlement
10.1 The Vendor and Purchaser agree that the Purchaser will be entitled to depasture up to 100 Cows and their Calves at foot from the 20th Day of December 2004 and to depasture a further 50 Cows and their calves at foot from the 1st day of February 2005 up to the date of settlement at no cost to the Purchaser but at the Purchasers risk and responsibility in all things at all times.
10.2 The Vendor agrees to allow the Purchaser to depasture up to 100 cows and calves to earlier than the 20th of December 2004 should the Vendor sell off up to 100 cows and calves of the Vendors prior to the 20th of December 2004.
10.3 The Purchaser hereby agrees that prior to any livestock being depastured onto the property, the Purchaser shall provide to the Vendor at the Purchasers [sic] cost a copy of a public risk policy from a reputable insurer acceptable to the Vendor in an amount not less than Ten Million Dollars.($10,000,000.00)
10.4 It is further agreed that the Purchaser shall have full use and enjoyment of all livestock facilities (sheep yards, shearing sheds, cattle yards, laneways etc) up to and until the date of settlement at no cost to the Purchaser other than all electricity consumed in the above listed activities, The Purchaser his agent and or servants shall have the right of egress and regress onto the property at all times for the purpose of livestock management and care.
10.5 The Purchaser will ensure that such Livestock that are entered onto the property by the Purchaser prior to settlement (refer clause 10.1 above) shall be free of all notifiable diseases and noxious weeds.
11. Removal of Rubbish and Debris
11.1 The Vendor agrees to dump all rubbish and old fencing wire in the dump on the property and will remove the old cars etc located in the small paddocks around the house from the property prior to settlement at the Vendors [sic] expense.
The plaintiffs claimed damages of $24,875.80 for breach of the terms of the contract. The dispute between the parties centred on an alleged failure to maintain the property between 13 September 2004, the date of the agreement, and 25 February 2005, the date of settlement. The plaintiffs claimed that both before and following settlement they became aware of a deterioration in and damage to the property. It was said that items were missing from the property, that had been present and in working order during inspections of the property prior to entering into the contract.
At trial the plaintiffs called the one witness, Mr Bultitude. He gave evidence on his observations of the property during inspections before and after entering into the contract. The defendants called three witnesses: Alison Napper, Kim James Herriot, a neighbour to the property, and Geoffrey Noel Watts, the property salesman and land agent involved in the negotiations with the plaintiffs.
The plaintiffs’ particulars of claim, of 9 September 2005, were in the following terms:
The plaintiff claims from the defendant the sum of $24875.80, being for
Breach of contract for the purchase of Sections 33, 54 & 10 Hd of Mcnamara and Laffer, executed on 13th September 2004 with settlement on 24th February 2005. Specifically for failure to comply with the terms and conditions of the contract in relation to the issues listed below where the property was not maintained and items were removed and/or sold from the property prior to settlement.
Repair of cattle yards – materials $388 & labour $220
Reinstatement of garden water timers – materials $280 & labour $40
Repair and reinstatement of machinery shed doors – materials $400 & labour $300
Repair of electric fence switches – materials $360 & labour $160
Repair of cottage roof and verandah – materials $1200 & labour $420
Reinstatement of front entrance gates – materials $360 & labour $80
Repair of wood stove in main homestead – materials $199.80 & labour $80
Repair of internal roads – materials $1500 & labour $800
Removal of domestic rubbish left on the property – labour $320
Clearing and removal of farm dump no. 2 – labour $640
Replacement of curtains removed from main homestead $2020
Replacement of built in office removed from main homestead $3200
Maintenance and repair of property water system – materials $4508 & labour $3200 from 22/12/04 to settlement date, including travel
Maintenance, repair and reinstatement of property fencing – materials $1800 & labour $2400 from 22/12/04 to settlement date, including travel
The defendants, in their defence, admitted the execution and settlement of the contract, but denied any breach of contract.
The Magistrate concluded that the defendants had failed to maintain the property so as to give a rise to a claim for damages under clause 5.6.2 of the contract. In 11 separate respects, this led to a Magistrate awarding the plaintiffs damages of $14,858.50 for breaches of the contract. It is convenient to provide a short summary of each of the Magistrate’s awards.
-$440.00 was awarded for the cost incurred by Mr Bultitude (including $80.00 for his labour) in fixing the front entrance gates that were damaged.
-$408.00 was awarded for damage to the gate to the cattle yards. The plaintiffs replaced the gate, and sought $608 for the replacement. The Magistrate awarded $408 on the basis that the Magistrate had no evidence before it that the gate could not be repaired, and chose $408.00 as a reasonable figure.
-$6,314.69.00 was awarded for the cost of maintenance and repair of the property water system. The plaintiffs claimed $7,698.69 for this but the Magistrate concluded that this included an unreasonable claim for the cost of travel.
-$521.55 was awarded for the cost of installing electric fence switches. The defendants contended that only two switches were operating on the electric fences at the time that the contract was entered into. The Magistrate was satisfied that the plaintiffs entered into the contract in the utmost belief that the switches were in all in place and part of the fence fixtures, and so their omission constituted a breach of the contract.
-$382.36 was awarded for the repair of the machinery shed doors. The plaintiffs had claimed $708, but the Magistrate concluded that although the doors had been damaged there was no obligation to have the doors re-hung, and that the labour claimed by the plaintiffs was excessive.
-$1,541.90 was awarded for the repair of the veranda roof area, that had been damaged by a tree branch falling on it. $74.95, claimed for the replacement of a double sensor floodlight, was rejected on the basis that there was no reference to it in the evidence and nor was it raised by the plaintiffs.
-$200.00 was awarded for the repair of the woodstove and replacement of firebricks. The Magistrate held, however, that the defendants had no obligation to replace the baffle and so did not award damages for its replacement.
-$320.00 was awarded for the removal of domestic rubbish.
-$640.00 was awarded for the removal of rubbish in paddock 8.
-$1,890.00 was awarded for the repair of roads on the property, which had suffered wear and tear from heavy vehicular traffic during the clearance sale.
-$2,200.00 was awarded for maintenance, repair and reinstatement of property fencing.
Other claims advanced by the plaintiffs were rejected.
The Appeal
Adequacy of Reasons
The defendants contended that the Magistrate’s reasons fail to disclose the basis upon which Mr Bultitude’s evidence was apparently preferred on a number of topics to that of the Nappers’ witnesses. The Nappers also contended that there was a lack of reasoned explanation of the bases upon which damages were assessed. The plaintiffs submitted that a fair reading of the reasons in their entirety adequately disclosed the route taken by the Magistrate to reach his conclusions.
The evidence of the witnesses was not directly in conflict. For example, Mr Bultitude spoke of his observations prior to entering into the contract and acknowledged the restricted nature of those observations. Mrs Napper’s evidence and that of the witnesses for the defendant did not directly negate those observations. However, they generally spoke of the condition of the premises being conditions of which Mr Bultitude had not made observation. The witnesses presented as honest, straightforward deponents. When dealing with the individual claims the Magistrate’s reasons allow a clear conclusion to be reached as to the evidence he considered relevant to any particular claim. In these circumstances it is understandable that the Magistrate would not make findings as to credibility.
During the course of submissions on appeal, counsel were initially unable to point to any evidence to justify the Magistrate’s determination of the starting point of several of the Bultitude’s claims - one example was the precise amount claimed of $7,698.69 for replacing the watering system. This did not accord with the filed particulars of claim. An examination of the Magistrate’s file disclosed very detailed schedules apparently provided as particulars for mediation by the plaintiffs for each of their claims. It is evident that the Magistrate used this material, at least in part, in his assessment of damages. When, on the hearing of the appeal, this was drawn to the attention of the parties, it was accepted that this probably had occurred. The Magistrate used a number of the schedules as particulars of the claims. It would appear that Mr Bultitude’s evidence was given on the understanding that all concerned had these particulars.
Counsel agreed that each of the schedules relevant to the claims in dispute on the appeal should be received by this Court as further particulars of the claims. However, the schedules were not to be treated as evidence.
During the course of argument, I indicated to counsel that one possible view that may be taken of the appeal was that the amounts allowed by the Magistrate were too high, but that some lesser allowance should be made. Both parties were given the opportunity to present further evidence on the appeal to address this possibility. There was no application to lead any further evidence.
Although it is not possible from the Magistrate’s reasons to discern precisely how damages were assessed with respect to a number of the claims, the Magistrate’s process of reasoning can be clearly inferred and, where necessary, reconstructed. The Magistrate’s reasons have allowed the appeal to be fully argued, and have been sufficient to allow the appellate court to properly exercise its jurisdiction. It is to be observed that the Magistrate was asked to resolve a multitude of claims on less than complete evidence, and in respect of events that occurred some years earlier. In these circumstances, it is my view that the criticisms advanced with respect to the adequacy of reasons should be rejected.
Construction of the Contract
Earlier in these reasons the terms of the plaintiffs’ statement of claim have been set out. It is to be observed that the claim alleged a breach of the obligation to maintain the property in a proper manner. This, it may be taken, was a reference to the terms of clause 5.6.2, the text of which has been set out and emphasised earlier in these reasons. Clause 5.6.2 casts an obligation on the vendors to “generally maintain the property … so as to maintain its condition as at the date of this agreement”. The inquiry that was necessary was whether, at the date of settlement, there had been a failure to maintain the condition of the property as at the date of the agreement. This necessarily involved the need for the plaintiffs to establish the condition of the property as at the date of the agreement, and to demonstrate there being a material deterioration in that condition as at the date of settlement.
Although paragraph 5.6.2 speaks severally of the land and the property, the definition section defines “property” to include the “land”, and the “land” is further defined as being the land described in the Schedule, including all buildings, fences, tanks, bores, piping and other improvements on the land.
Although the defendants accepted that as vendors they had a contractual duty to farm, graze and manage the property in a proper manner so as to maintain its condition as at the date of the agreement, the risk of loss or accidental damage passed to the plaintiffs, as purchasers, on execution of the contract of sale. It was said that the plaintiffs bore any loss to, or destruction or deterioration of, the property unless caused by the defendants’ breach of the contractual obligation to maintain.
It was submitted by the defendants that the Magistrate failed to define, by reference to clause 5.6.2 of the contract, the nature and extent of the obligations imposed in relation to managing and maintaining the property. It was submitted that the defendants complied with their duty to deliver possession of the property in the same general condition as it was at the date of execution of the contract.
The defendants submitted that the Magistrate imposed a higher than reasonable standard of proper maintenance in relation to the cattle yard gate, the water system, the wood stove and the internal roads.
The defendants contended that the contract did not impose any obligation to maintain any part of the property damaged by an “act of God, fire, storm or similar occurrence”. It was said that the cottage roof was damaged in a storm by a falling tree branch, and the machinery shed doors were blown over, and so there was no obligation to repair these.
It is helpful to reflect on a vendor’s obligations in equity. They were discussed by Greene LJ in Consolidated Holdings Ltd v Ireland:[1]
In considering this argument it is important to bear in mind the duties of a vendor pending completion. His position is that of a quasi-trustee for the purchaser. As was said in Lysaght v Edwards, by Sir George Jessel:
He is not entitled to treat the estate as his own. If he wilfully damages or injures it, he is liable to the purchaser; and more than that, he is liable if he does not take reasonable care of it.
An action for damages for breach of these obligations can be brought after conveyance (Clarke v Ramuz), at any rate in the absence of waiver.
[1] Consolidated Holdings Ltd v Ireland [1946] 1 All ER 284 at 286 (footnotes omitted).
In Clarke v Ramuz,[2] Coleridge CJ observed:
It appears to be well established in equity that, in the case of a contract for the sale and purchase of land, although the legal property does not pass until the execution of the conveyance, during the interval prior to completion the vendor in possession is a trustee for the purchase, and as such has duties to perform towards him, not exactly the same as in the case of other trustees, but certain duties, one of which is to use reasonable care to preserve the property in a reasonable state of preservation, and, so far as may be, as it was when the contract was made. Of course, where from any cause a long period of time elapses during which such possession of the vendor continues and deterioration of the property takes place, other considerations may come in
and Bowen LJ noted:[3]
It is clear that a vendor remaining in possession of the property after a contract for sale, as the defendant did, is bound to use some care to preserve the property
Kay LJ observed:[4]
[F]or some purposes the vendor in possession after a contract for sale of land is in the position of a trustee for the purchaser. He has certain duties towards the purchaser, on of which is – I am only putting into my own words what the decided cases have established – to take reasonable care that the property is not deteriorated in the interval before completion and while it is in his possession as such trustee.
[2] Clarke v Ramuz [1891] 2 QBD 456 at 459-460.
[3] Clarke v Ramuz [1891] 2 QBD 456 at 461.
[4] Clarke v Ramuz [1891] 2 QBD 456 at 462.
It should also be observed that in equity, where a purchaser has been let into possession before settlement, he is bound to take due care of the property, and to act in such a manner so as not to lessen the vendor’s security for the balance of the purchase money.
Before coming to discuss the particular terms of the contract, it is also important to recall the principle of caveat emptor. In Woolcock Street Investments Pty Ltd v CDG Pty Ltd,[5] Callinan J described this rule in the following terms:
[T]he rule of caveat emptor … is little more than a rule that people should act diligently, prudently and carefully in their own interests …. As Stonham in The Law of Vendor and Purchaser puts it:
“The rule of caveat emptor applies to contracts of sale of land. The purchaser takes that which he sees, or which, as a prudent and diligent purchaser, he ought to have seen, and is not entitled to have anything better.”
In Jones v Bartlett,[6] Gummow and Hayne JJ observed:
In an influential Pennsylvania decision in 1872, Moore v Weber, it was said that:
“[t]he rule here, as in other cases, is caveat emptor. The lessee’s eyes are his bargain. He is bound to examine the premises he rents, and secure himself by covenants, to repair and rebuild.”
[5]Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 at [227] (footnotes omitted).
[6] Jones v Bartlett (2000) 205 CLR 166 at [164].
It is apparent that the terms of the agreement in the present proceeding altered the position in equity. Under clause 5.6.1, it was agreed that the property was at the risk of the purchasers in all respects at the date of the agreement. This overarching obligation was then subject to the qualification in clause 5.6.2, and as earlier discussed, the obligation to generally maintain the property in a proper manner so as to maintain its condition as at the date of the agreement. This obligation to maintain is consistent with the approach of equity.
Counsel for the plaintiffs acknowledged that there was limited, and in some respects no, evidence of the condition of the property in relevant respects as at the date of the contract. However, it was submitted that in most respects there was sufficient evidence to allow the inference to be drawn that there was a failure to maintain, and that in particular, there was sufficient evidence to justify each of the Magistrate’s findings of breach and damage. The defendants submitted to the contrary. As a consequence, this Court is required to consider each of the claims, to address the evidence relevant to each of the awards made by the Magistrate, to address the evidence relevant to those awards, and to reach a conclusion as to whether the Magistrate’s findings should be reversed. This has been a time consuming and laborious task.
Returning to the construction of clause 5.6.2, it is my view that in determining whether there has been a breach of that clause, it is necessary for a comparison to be made between the condition of the property as at the date of the agreement and its condition as at the date of settlement. In making this comparison in the present proceeding, it is important to recognise that the agreement was entered into in early spring, and settled in late summer. One would expect in these circumstances that seasonal changes in the condition of the property would occur naturally. Such changes would not give rise to a failure to generally maintain in a proper manner. This may be a relevant consideration when considering, for example, the state of the watering system on the property, and the state of roads.
It is also important to record that the plaintiffs’ claims were not made in most respects until well after the agreement had settled and that the plaintiffs, in a number of respects, claimed damages for works undertaken more than 15 months later and materials purchased well after the settlement.
Another unusual aspect of the proceedings is that the plaintiffs, having entered into possession of the property, effected, on their case, major repairs to the watering system without any real attempt to give the Nappers notice of their claim of a lack of maintenance, and in particular, contrary to the Nappers’ evidence of a specific request for notice of complaints about the watering system.
This appeal raises for consideration the correct approach to a purchaser’s claim for damages, when the suggested work is undertaken prior to settlement, and effectively without notice to the vendors.
In equity, it has been suggested that the obligation of a vendor is to maintain the property so that its value is not reduced by the time of settlement. There is no evidence in the present case that the overall value of the property had been reduced in any way by any alleged failure to maintain.
The Findings of Loss and Damage
Front Entrance Gates
In respect of this claim, the Magistrate concluded:[7]
As to the front entrance gates, it was contended that these were damaged due to the moving of a strainer post in order to accommodate large vehicles. The damage caused was in fact the gates now not closing completely and having dropped. It was contended that this occurred about the time of the clearance sale due to increase vehicular activity. As the gates were not repaired it was contended to be a breach of contract. Mr Bultitude himself attended to their repair and makes a claim of $360 for materials, delivery charge and generator use. A claim of $80 is also made for labour. Whilst this claim was disputed by the defendants the court is satisfied that the claim and the costs of $440.00 is reasonable and so finds in this instance in favour of the plaintiffs for that amount.
[7] [230].
The defendants submitted that the only evidence about the condition of the front entrance gates, at the time of entry into the contract, came from Mrs Napper. She gave evidence that her late husband worked on the entrance gates prior to the date of the contract, and that they were in the same state at the date of the contract as they were at the date of settlement. The Magistrate summarised Mrs Napper’s evidence as follows:[8]
When asked about the front entrance gates that Mr Bultitude in evidence had stated did not close completely and that there was a gap between the two gates, Mrs Napper stated that originally they did meet, but with new drainage works that went alongside the fencing her husband moved the strainer post to enable trucks to come through the gates with a bit more ease. She stated that when the gates were put back on they did not meet in the middle. She also stated that as a general rule those gates were left open. She agreed that there was a section of gate wired to one of the gates so that when they were closed the gap was closed up. She stated that the gates were closed up when they had cattle graze around the house and the implement shed to keep the grass down for fire reasons. She further stated that because of the gap between the gates, they wired on to them another spare gate on the property so that they would shut, and that yard was used as an extra holding yard. She stated that this was the position from before July 2004.
It is to be observed that there was no evidence to the contrary. The Magistrate summarised Mr Bultitude’s evidence as follows:[9]
Mr Bultitude stated that he did not take any note of the front gates when first inspecting the property on 16 July 2004 nor on 20 July 2004. He stated that the gates had been swung open back against the driveway entrance. He did not know whether or not, at that time, they would meet in the middle and that they did not get out and open and close them. He also stated that he did not know when it was that the front gates ceased to close together, so as to effectively provide a fence to close off access completely. He stated that he did not know when the vendors moved the strainer and rehung the gate.
[8] [77].
[9] [27], [28], [55].
The Magistrate made no finding as to the condition of the gates at the date of the contract. The evidence of Mr Bultitude did not establish their condition as at the date of the contract, and accordingly there was no evidence that that condition had changed by the time of settlement. As earlier observed, critical to the plaintiffs’ claims was the need to establish that there had been a deterioration in aspects to the property between the date of the contract and the date of settlement.
For these reasons the finding and award in respect of the front entrance gates should be set aside.
Damage to Cattle Yards
In this respect the Magistrate concluded:[10]
A claim of $608.00 is made in relation to damage to the cattle yards and in particular of the gate which top bar was bent due to one of the cattle landing on it when attempting to jump over. It was argued by the defendants that notwithstanding this the gate continued to perform its function effectively and did not require any significant repair other than straightening out the bar. The plaintiffs however, contended that it needed to be fixed and the gate restored to its original height. There is no doubt that the gate was damaged and ought to have been properly dealt with by the defendants but instead chose not to do anything about it. On the other hand, the plaintiffs instead of repairing it chose to acquire a new gate. Whilst not rejecting the plaintiffs’ right to take action on the gate, the court had no evidence before it that the gate could not be repaired or in the alternative a quote as to the cost of repairing it. What the court is confronted with is a claim for the sum of $608 for its replacement inclusive of labour costs. In light of the court not having such evidence before it, it is reluctant to grant the amount sought but is of the view that the plaintiffs are entitled to a reasonable amount and so finds. Accordingly, the court allows the amount of $408 in lieu of the amount of $608.
[10] [231].
The Magistrate summarised Mr Bultitude’s evidence in chief as follows:[11]
Mr Bultitude stated some of the rails in the cattle yard were also found to be split and ‘smashed’. He offered the suggestion that this may probably have happened by livestock kicking them (Exhibit P5). He stated that the damaged parts were removed and replaced. There was also damage done to a gate. He stated that is was alleged that a bull had jumped up and crushed the top of the gate. In carrying out the repairs to the yards, Mr Bultitude stated that the materials used he already had which, on moving to this property, he had moved from other properties owned by him.
[11] [13].
Mrs Napper’s evidence was summarised in the following terms:[12]
Mrs Napper stated that after the death of her husband, decisions about where her stock would be grazed was made by her in consultation with both the neighbour, Kim Herriot, and her stock agent, Colin Hall of AWB. She stated that the whole property was used for grazing cattle. She also stated that a decision was made that she sell off the majority of her stock prior to 23 December 2004, being the date the plaintiffs proposed to bring their cattle on to the property. She further stated that the bulls were sold first and that one of them went over one of the back gates in the yards. She stated that she was aware that the bull had caused some damage to the top of the gate, which was made of pipe work. She stated that it was bent down. She also stated that notwithstanding the bend in the pipe work, there was no difficulty in using that gate as it functioned properly and did not cause any inconvenience.
Mrs Napper stated the wooden rails around the yard were made of hardwood timber. Whilst she was not sure if any of the rails were split, she stated that there may have been one split rail in what was known as the penning yard, being the main running yard which ran up to the race. She stated that this split rail was caused in about 2002, when pushing the cattle up through the raceway one of the cattle put its nose under the gate. She stated that this movement lifted the gate totally off its hinges allowing the cattle to escape. She further stated that they placed the gate back under temporary measures. She stated that after this incident in 2002, she did not see any other damage to the yards affecting the rails up to February 2005 when she vacated the property. She stated that the damaged rail had not been repaired at any time. In fact she further stated that it did not need to be repaired unless one was very fussy and to make it look ‘pretty’. She also stated that the gate had been re-hung back and a black belting piece was put on it to prevent cattle again putting their nose through it.
[12] [75], [76].
It is to be observed that the Magistrate made no finding about the condition of the rails in the cattle yards. A review of Mr Bultitude’s evidence discloses that he did not examine the cattle yards, until a point in time well after the entering into of the contract. In these circumstances there was no evidentiary basis for a finding that there had been a failure to maintain the cattle yards, with the exception of the gate, between contract and settlement. Accordingly, that component of the plaintiffs’ claim cannot be sustained.
As far as the gate is concerned, there was no evidence to suggest that it could not have been bent back into shape at a minimal cost. Although there was no evidence of this cost an allowance of $100 is appropriate.
The Watering System
The Magistrate’s conclusions were in the following terms:[13]
A claim by the plaintiffs of the sum of $7,698.69 for maintenance and repair of the property water system raised considerable argument. Without delving into the evidence which is set out fully on this issue the court is satisfied and finds that the defendants had an obligation to ensure that the water system was functioning properly. The court noted that on many occasions Mrs Napper’s attention was not drawn to the existence of problems and whilst it could be said that by not knowing she could not attend to issues as they arose, nevertheless responsibility commenced and ends with her. The evidence is clear that Mr Watts refrained on a number of occasions from informing her whilst Mr Herriot stopped checking the water system after the last of the defendants’ cattle was removed from the property. On the evidence before it the court is satisfied that the plaintiffs are entitled to be compensated. However, the amount to be awarded needs to be determined. The cost of the materials and that for labour appear reasonable. The court has difficulty with the amount of $2,184.00 sought for travel and feels that such is excessive but at the same time feels that an allowance should be made of the sum o $800. With this amount the court allows for this issue of maintenance and repair of property water system by the plaintiffs the amount of $6,314.69.
[13] [234].
It is to be observed in this finding that the Magistrate concluded that the defendants had an obligation to ensure that the water system was functioning properly. With respect, that was not the relevant contractual obligation. Their obligation was to generally maintain the property so as to maintain its condition between contract and settlement as at the date of the contract. Critical to the assessment of the plaintiffs’ claim was the state of the water system existing as at the date of the contract. As the Magistrate has addressed the wrong question, it follows that his conclusion should be reviewed.
An immediate difficulty confronted the plaintiffs. There was no evidence led as to the state of the watering system at the time of the contract. At best, all that could be established were matters of inference drawn from later observations. It is clear from the evidence that the plaintiffs did not become aware of suggested water system problems until they moved cattle onto the property in December 2004. It is possible that there were some ongoing water maintenance needs between contract and settlement, but on the evidence these are impossible to quantify. A finding on the probabilities was not and cannot be made.
There are a number of other problems facing the plaintiffs’ claim. Before discussing these in detail, it is relevant to point out that the effect of Mr Bultitude’s evidence was that he discovered an aged and rundown watering system that needed to be substantially replaced. The state of the watering system must have been, on his evidence, substantially rundown prior to the date of the contract of sale. These were matters that he could have examined prior to the contract, and, if appropriate, sought special conditions or warranties to protect the plaintiffs’ position. The plaintiffs did not do so.
The filed particulars of claim assert that the maintenance and repair of the property water system took place between 22 December 2004 and 25 February 2005. Those particulars included a breakdown of materials of $4,508 and labour of $3,200, including travel.
The detailed schedules disclosed a very different position. A combination of the breakdown of the claim and supporting documentation suggest that the claim includes the provision of nine new troughs, being installed at different times including in March, April, June, July and August 2005 and January 2006. A review of the invoices said to support the items suggests that four troughs were purchased in 2003, one in May 2006, one in September 2006. Other parts were said to have been purchased at a variety of dates, the majority being purchased between late 2005 and late 2006. The claim for travel for $2,184, without any specification as to the means of travel, the date of travel, or the cost involved. The charge for labour was simply put at 46 hours without any back-up material at all to support it. The evidence at trial did not address or explain those differences. It is to be recalled that the contract settled on 25 February 2005.
To compound these difficulties, the evidence about the state of the troughs at the time of the contract was all but non-existent. Rather, the evidence led by the plaintiffs suggested, as earlier observed, that there was a long-standing dilapidated system that must have predated the contract by a lengthy period. A system in need of substantial refurbishment. The major part of this refurbishment appears to have occurred from late 2005 to September 2006 – well after settlement in February 2005.
A further difficulty confronting the plaintiffs related to their discovery of water problems. There is no evidence suggesting any material water problem prior to the plaintiffs moving their stock onto the property in December 2004. The evidence revealed that the plaintiffs had sought advice about the mains pressure and were told that the pressure was too great for the system. This evidence suggests that problems in the system may have become apparent through the over-pressurising of the system by the plaintiffs.
As earlier discussed, in the event of the plaintiffs’ making a complaint that the defendants were not attending to their contractual obligations, the contract provided for written notice to be given of the complaint. This would allow the defendants the opportunity to address the issue. However, contractual notices pursuant to clause 7.2.1 were not given. Rather, it appears that Landmark were notified of the existence of problems, and advised that the plaintiffs were fixing those problems. There was no suggestion at that time that a claim would be advanced for a money sum. Mr Bultitude explained that he feared that if he gave the required contractual notice then the defendants would act to cancel the contract. If the plaintiffs wished to pursue the defendants with respect to these particular matters, there needed to be compliance with their contractual obligations.
The Magistrate rejected the plaintiffs’ claim for travel expenses. This was unsurprising, given the absence of evidence to explain or justify the claim. The Magistrate appears to have made an ad hoc allowance of $800 for travel. There was no proven basis for this allowance. Equally, the claim for materials, in the main, so far postdates the settlement of the contract to seriously call into question the credibility of the claim.
A combination of these matters, together with the review of the evidence including the particulars of claim, the later formulation of the claim, and the detail in the allegedly supporting vouchers, allows the conclusion that the plaintiffs did not prove this claim.
There is one final difficulty that confronted the plaintiffs. Proceedings were issued in the Federal Court by the plaintiffs against Landmark. Those proceedings raised a number of complaints, including a complaint about the water system on the property. The plaintiffs alleged in those proceedings that Landmark had made false statements, including a representation that the water system was reliable, in good condition and maintained in accordance with good practice. It was further alleged in the Federal Court that these representations were false, that the troughs and water system on the property were dilapidated and had not been maintained in accordance with good practice. A claim was advanced for the cost of repairing the damage and to make improvements to restore the property to the state as had been represented including a claim in respect of the water system and troughs.
Ultimately, the plaintiffs produced to this Court the deed of settlement compromising the Federal Court proceedings. It is not possible to discern from the terms of the deed what allowance, if any, was made on account of this claim. However, there was no evidence to suggest that the claim was abandoned or was not in an appropriate way brought to account in the final settlement.
It was open to the plaintiffs to call evidence in the present proceedings to demonstrate that they were not seeking double compensation, and had not been adequately compensated for any suggested problems with the watering system. They were offered the opportunity to do so on this appeal. The ability to present evidence on this topic rested with the plaintiffs. The defendants were not a party to the proceedings and were not aware of the detail of the settlement. In my view the onus lay on the plaintiffs in these circumstances to demonstrate that they were not pursuing double compensation – that is, to be paid twice for the same loss. The defendants, through the evidence, had established that there was a real possibility of double compensation and it was for the plaintiffs to demonstrate, on the balance of probabilities that this had not occurred. This is a further reason for allowing the appeal in respect of this particular award of damages.
The award of the Magistrate under this claim is set aside.
Electric Fence Switches
The Magistrate’s finding in this respect was as follows:[14]
As to the electric fence switches, the defendants argued that there were only two switches operating on the electric fences and that other switches found in a bucket and sold at the clearing sale were introduced onto the farm by the late Mr Napper who had acquired them from another site. The plaintiffs on the other hand were strongly of the view that there were a number of switches in operation and seen by Mr Bultitude during the inspection of the property in July 2004 being prior to entering into and signing a contract. The court also notes that Mr Watts who accompanied Mr Bultitude during the inspection did not contradict nor dispute Mr Bultitude’s contention that there were switches on the appropriate fences at the time. On the evidence before it the court can only find that the version of the plaintiff is that to be accepted. However, Mr Howard for the defendants submitted that as such if it was the case existed before the signing of the contract but was then non-existent at the time of signing the contract then no breach can be said to have occurred. The court must look closely at the circumstances as a whole and of the intention of the parties. On the evidence before the court it can only be concluded that when entering into the contract the plaintiffs did so in the utmost belief that the switches were all in place and part of the fence fixtures and hence together with the contract provisions to maintain the proper care of the property their omission formed a breach. The court is satisfied that the amount claimed inclusive of labour for the amount of $521.55 is reasonable and makes an order to that effect in favour of the plaintiff.
[14] [235].
Mr Bultitude gave evidence of his observations of switches on fences prior to the signing of the contract. This evidence was not contradicted or disputed by Mr Watts who gave evidence for the defendants. It was open to the Magistrate to accept Mr Bultitude’s evidence and to make a finding that the switches had been removed following the entry into the contract.
The plaintiffs’ claim has been made out with respect to this claim. No basis has been established to disturb the Magistrate’s findings.
Machinery Shed Doors
With respect to the machinery shed doors, the Magistrate observed:[15]
The claim for repair and reinstatement of the machinery shed doors of the sum of $708 was disputed by the defendants. It is shown by the evidence that the doors were leaning upwards against the shed wall and had been in this position for a few years. During the inspection of the property in July 2004 they were seen in this position by both Mr Bultitude and Mr Watts. Also this was not disputed by Mrs Napper, and that Mr Herriot stated that they were in this position at the time of the clearing sale. Subsequent to the clearing sale for reasons not clear, other than a possible strong wind, the doors fell and were damaged. The defendants took no action to repair them and so Mr Bultitude attended to this. The court is satisfied that there was an obligation on the defendants to repair the doors and hence by failing to do so were in breach and the plaintiffs were entitled to be compensated for their repair. The amount for repair was disputed as to the timber used. The court, however, is satisfied that the materials used were appropriate and their cost reasonable. The defendants also disputed the right for the plaintiffs to be compensated for having the doors rehung on the basis that these were not properly operative as previously stated for several years. The plaintiffs argued that there was an obligation to restore and maintain the property, which includes having the doors re-hung. The court in this instance rejects this argument and is satisfied that there was no obligation on the defendants to have the doors re-hung and makes no allowance for this in the amount claimed. The court is also of the view that the labour claim for 14 hours’ work is not reasonable and whilst making an allowance does so by awarding a lesser amount. The amount allowed by the court in favour of the plaintiffs for the repair only of the machinery shed doors of the amount of $382.36.
[15] [236].
The evidence accepted by the Magistrate allowed the finding that the shed doors had been damaged. In the ordinary course it might be expected that limited maintenance would address such damage. On appeal this claim was only faintly challenged by the defendants. In my view the Magistrate’s conclusions in this respect were open.
The plaintiffs’ claim has been made out with respect to this claim. No basis has been established to disturb the Magistrate’s findings.
Cottage Veranda Roof
With respect to the cottage veranda roof, the Magistrate observed:[16]
It was not disputed between the parties that tree branch fell on the veranda roof area of the cottage. The court is satisfied that this happened and so finds. The plaintiffs maintained that there had been damage and that the fascia board had been cracked or split and had to be repaired. Mr Bultitude stated that there had been significant damage within the roof space and that water was finding its way into the cottage in consequence of the damage that had been done. Mr Bultitude was the only witness in this matter to have inspected inside the roof space. Other than looking at the veranda from a short distance Mr Watts’ only contribution was that the roof and veranda areas appeared alright whilst Mr Herriot could only comment on what the surface of the roof and the outside of the cottage was like. Whilst not having looked inside the roof space Mrs Napper denied the allegation that there was water running down the walls. Also in issue is whether or not the plaintiffs should have exercised their right to make a claim for the repairs through their insurance company rather than a claim on the defendants. The plaintiffs contended that the damage occurred prior to settlement and the defendants were under an obligation to undertake the repairs. Without elaborating, the court is satisfied that the plaintiffs were within their rights in making a claim against the defendants. Mr Bultitude’s evidence is quite emphatic that there was damage and that the defendants took no steps to effect the repairs properly. The court is satisfied that the version given by Mr Bultitude is to be preferred. The court notices that an amount of $74.95 is claimed for replacement of double sensor floodlight. There is no reference to such in the evidence nor was it raised by the parties hence this amount is denied. The court is satisfied that by Mr Bultitude undertaking the repairs himself the balance amount sought is reasonable and accordingly makes an order in favour of the plaintiffs on this issue of the amount of $1,541.90.
[16] [237].
Damage to a roof, in my view, gave rise to an obligation to maintain. The damage needed to be repaired so that water would not enter and cause damage. The cottage formed part of the property and was to be used in the course of the operations of the property. In my view there was an obligation to maintain.
The plaintiffs’ claim has been made out with respect to this claim. No basis has been established to disturb the Magistrate’s findings.
Woodstove
The Magistrate found with respect to the woodstove:[17]
The repair to the woodstove was not overly disputed by the defendants who felt that there may have been an obligation to replace the firebricks that were damaged. At the same time the defendants disputed any obligation to replace the baffle and preferred the view that it is an appliance for which there was no obligation to maintain. The plaintiffs rejected the notion that there was no obligation on the defendants to maintain the woodstove. The court is of the view that the defendants had an obligation to maintain the woodstove and to ensure that it worked effectively. The court being satisfied that the claim in relation to the firebricks so finds. As to the baffle the court is not satisfied that the evidence appropriately indicates the responsibility and obligation of the defendants and in the light that the court is unable to reach a conclusion has no alternative but it disallow this item. The court allows for the plaintiffs an amount of $200 inclusive of the firebricks and labour.
[17] [238].
The Magistrate concluded that the plaintiffs were entitled to damages with respect to the replacement of damaged firebricks. This finding was open on the evidence. Mrs Napper observed that they usually replaced about four firebricks a year. It is also to be observed that the Magistrate has not provided any explanation as to how he reached the figure of $200 and an analysis of the evidence and documents fails to support this amount. Mr Bultitude explained that he set about a substantial rebuilding of the heater, including the purchasing of a complete set of firebricks, as well as a brick container. He also claimed for travel to collect materials and labour. The best view that could be taken of the evidence was that four or five bricks had been damaged and needed replacing, and the cost in that respect would be about $35. Some small amount for labour and collection costs should be added – an allowance of $50 is appropriate.
The appeal should be allowed to reduce the damages for this claim to $50.00.
Removal of Domestic Rubbish
With respect to the removal of domestic rubbish, the Magistrate observed:[18]
Without elaborating on the issue of the removal of domestic rubbish the court takes into account the evidence relevant to this issue and has no hesitation in accepting the explanation of the plaintiffs and so finds. The court is satisfied that the defendants had an obligation to attend to this but failed to do so. The court also finds that it was reasonable for Mr Bultitude to remove the rubbish and taking it to the Keith landfill and accordingly makes an order for the plaintiffs to be compensated for the amount of $320.00 as sought.
[18] [240].
The Magistrate was correct to conclude that there was a contractual obligation to remove the rubbish and that the plaintiffs were entitled to a recovery in the amount sought. No basis has been advanced on appeal to challenge these findings.
Removal of Rubbish from Paddock 8
With respect to the removal of rubbish in paddock 8, the Magistrate observed:[19]
[T]he defendants had an obligation to remove the rubbish in paddock 8 but failed to do so and so it was feasible for the plaintiffs to undertake this. Furthermore the court is satisfied that it was reasonable for the plaintiffs to remove the rubbish to the Keith dump in lieu of placing in the farm dump in paddock 21. The court is satisfied that the amount sought by the plaintiffs is reasonable and hence orders the amount of $640.00 inclusive of labour costs and dump fees against the defendants.
[19] [241].
The Magistrate was correct to conclude that there was a contractual obligation to remove the rubbish and that the plaintiffs were entitled to a recovery in the amount sought. No basis has been advanced on appeal to challenge these findings.
Road Repairs
The Magistrate observed:[20]
There is no doubt that during the clearance sale there was heavy vehicular traffic which was confirmed by both Mr Herriot and Mr Watts. The court is satisfied that the evidence is clear of the roads experiencing wear and tear below their standards prior to the clearance sale. As far as Mrs Napper was concerned the roads were in much the same condition in February 2005 as in September 2004. This did not quite fit in with the evidence of Mr Bultitude and to a lesser extend [sic] that of Mr Watts. The plaintiffs were justified in seeking for the roads to be repaired. Mr Bultitude obtained a quote form a Mr Rayner of Keith Sand and Metal who gave a quote for the grading of the main road and two quotes for the provision of rubble being for good quality and poor quality rubble. The court is satisfied that the plaintiffs are entitled to an amount for the repair of the internal roads but is not prepared to provide the full amount sought. Accordingly, an order for the sum of $1,890 is made in favour of the plaintiffs.
[20] [242].
It is to be observed, as was conceded by counsel for the plaintiffs, that the Magistrate misunderstood the quote of Mr Rayner. The quote related to work on a drain and not on the road. Further, it is apparent that the work was not undertaken until some years after settlement, during which time, no doubt, the road further deteriorated. There was evidence that the road deteriorated between contract and settlement, and it was open for the Magistrate to accept that evidence. There are a number of possible causes for that deterioration, including the de-stocking of the property by the defendants and the re-stocking on two occasions by the plaintiffs. Additionally, there was heavy traffic at the time of the clearing sale.
The following difficulties confront the plaintiffs’ claim:
-There is no clear evidence about the state of the road at the date of the contract, and accordingly it is difficult to evaluate the cost of maintaining it to that standard. Mr Bultitude’s case was that he was entitled to have a new road base built of superior material. To require the vendors to meet this obligation goes beyond their contractual obligation. They only had to maintain the existing road, made of limestone rubble, not to build a road of a different base.
-As observed above, the work was not undertaken for some years, suggesting the road was serviceable over a lengthy period, including two winters.
-The quote provided, and acted on by the Magistrate, related to other work. Evidence was not given of the cost of the roadwork.
-The Magistrate made a reduction from the full amount claimed without providing any clear basis for the reduction.
The plaintiff has failed to make out this claim.
Fencing
The Magistrate observed:[21]
The court is satisfied that the plaintiffs are entitled to receive some compensation for maintenance, repair and reinstatement of property fencing but feels that the amount sought is excessive. On taking the evidence into consideration the court is satisfied that the provision of materials such as some wood posts and other is reasonable. The court allows an amount of $2,200 for the plaintiffs.
[21] [243].
The reasons of the Magistrate do not disclose fully his reasoning or the basis of his calculation. Counsel for the plaintiffs was unable to explain how the amount of $2,200 was arrived at.
A review of the evidence of Mr Bultitude discloses that his account of the state of the relevant fencing was less than adequate. In respect of the principal claim for the costs of erecting a fence between the paddock and the cottages, Mr Bultitude made an assumption that there was a fence. He provided no evidence that the fence existed at that position. Mrs Napper’s evidence was that there was no fence and that the cattle were allowed to graze around the cottage and sheds, and the gates at the main road prevented them from leaving the property.
The plaintiffs on the evidence did not establish that the fencing between the paddock and the cottages had been in existence. No observation was made of such a fence and there is no reason to doubt Mrs Napper’s evidence. Accordingly, this aspect the claim for fencing costs should be rejected. There remained a claim for some work and re-stringing of some fencing that had been taken down to allow the access for the clearing sale. There was no specific evidence of the time involved or cost involved in this activity and in all the circumstances, it might be expected that there would be a cost. Having regard to the evidence I would make an allowance of $100.
Conclusion
I set aside the Magistrate’s award of damages of $14,858.50. Judgment should be entered for the plaintiffs for $3,705.81. I will hear the parties as to interest and costs.
3
3
0