Peric v Maljovic - [2002] SAWC 1

WARDENS COURT OF SOUTH AUSTRALIA
VLADO PERIC V MILAN MALJOVIC
of Dr A.J. Cannon SSM
13 May 2002
Headnote: Precious stones claims, Partnership dispute, monetary award

:      VLADO PERIC
:      PIP
:     MILAN MALJOVIC
:      DIP
Third Party:

Hearing Date/s:      13 May 2002

File No/s:              DCAAT-01-584

Vlado Peric V Milan Maljovic

Dr A.J. Cannon
Wardens Court

This is an extempore judgment. I reserve the right to make additions and corrections and identify any additions. This is a plaint to determine a partnership dispute. The Act has been recently amended to clarify the fact that this Court does have jurisdiction over partnership disputes. It has exercised jurisdiction over partnership disputes for 20 years in my knowledge and the Warden’s Court Reports show much longer than that. The nature of a partnership in opal mining is a unique arrangement. The tenements themselves cannot be the subject of trading. However, because of the risks in opal mining and specialist equipment needed, opal miners very commonly come to contractual arrangements between themselves which share the cost of mining and the anticipated and hoped for future property in opal that is to be won from opal mining claims.
It is a contractual agreement but it is a contractual agreement to share in future property. This action here commenced on 16 November 2001 but I deal with it under the law that is presently in place giving me clear jurisdiction to do what I will order at the end of this judgment.
Mr Vlado Peric complained of Milan Maljovic in these terms. He said, 'Milan Maljovic has taken me as a partner, 50% of payment as maintenance work which I performed on machinery that Milan Maljovic has. He has now said he will no longer be my partner, he will not give me a percentage and has ordered me off the claims and he seeks that the claims be forfeited in his favour'.
I have heard from Mr Carich who was partisan for Mr Maljovic.
I have heard from Mr Drago Ubiparip who confirmed an agreement in relation to the house, which I shall come to shortly.
I have heard from both parties of course and also from both George Bilalis, senior and junior, who were operators brought into this partnership.
In this Court we make decisions of fact on the balance of probabilities. What is most likely on the evidence. These are my findings of fact
Mr Maljovic has given a notice that on 22 March 2000, he pegged the two claims, the subject of this dispute that is, 67072 and 67073.
67072 has often in these proceedings been called the number one claim. The number two claim is a virgin claim, that is, nothing has yet been done to it. Two years have passed and I warn Mr Maljovic that it is liable that he will lose that claim if he doesn't commence work on it. Work should be done at the rate of 20 hours per week unless there is a suspension in place. Today we are not here for his failure to work on this claim, we are here for the partnership dispute and so that is nothing more than a warning. To work these claims he initially came to an arrangement with Jago Josic who has drills and bulldozers. He was to prospect drill the claims and push them with the bulldozers for 80%. Jago put a few holes down on the number one claim.
In August Mr Maljovic was worried about his eyes. Apparently, he is blind in one eye and he wanted to investigate possible treatment in Europe. He sold his house in Coober Pedy to Mr Peric for $20,000 plus a campervan. During his absence Mr Peric paid some bills for him of the order of $1,000. He paid $18,000, he paid some other expenses but it appears as if Mr Peric has not paid $500 towards that $20,000 purchase price. He says however, that he has been very generous to Mr Maljovic. He let him stay in the house when he returned. He purchased things for him, he bought food and cocked it. He says this should be sufficient for the $500 not paid. I shall come back to that.
Mr Maljovic returned to Adelaide on 27 February 2001 and by April he had made his way up to Lambina. Lambina is a cattle station some 30 or so kilometres North East of Marla. On it, is a group of camps of opal miners operating a field known as Seven Waterholes. This is not a proclaimed field but is operated by miners giving notice of entry to the pastoralist and there are native title agreements in place and an agreement with an opal mining association that guarantees rehabilitation. It is the main place of opal mining in this state at the moment. By April 2001, Mr Maljovic was up there and so was Mr Peric. They were both staying in a camp owned by Big Brother which is the local name for Mr Belosevic.
At some stage Mr Maljovic offered half of his claims to Mr Peric. What was left of his interest in his claims then was 20% after 80% went to Josic. Half of 20% is of course 10%. There is a dispute between the parties as to whether the agreement was that Mr Maljovic was giving Mr Peric a 10% interest in his claims, or half of his interest in the claims, which happened at that time to be 10%. This became significant because Mr Maljovic terminated his agreement with Mr Josic because Mr Jozic was so slow to work the claims. The termination with Mr Josic was on the basis that Mr Josic would retain a 10% stake in opal recovered from claim number one and nothing in claim two. Since Mr Maljovic and Mr Peric were then free of a bulldozer operator they then came to negotiate with Mr Bilalis senior and junior to operate the claims. It was agreed between the four of them that is, Peric, Maljovic and George Bilalis senior and junior, that the Bilalis side of the partnership would do the drilling and bulldozer operating and pay expenses for only 60% of the proceeds of mining, leaving in the claimholder’s hands 40%.
Now, although there is some variation in the percentage that a bulldozer operator will insist on receiving when he works a claim, people on the field know and in particular, I know, as Senior Warden from experience in having many suspension applications and other matters dealing with bulldozer operators, that 60% is an unusually low percentage for a bulldozer operator at Lambina or anywhere. It could only be explained if something unusual was in place. One thing that might explain a low percentage was well established presence of opal on a claim. That was not the case here. The case here was that Mr Peric agreed to do mechanical work on the Bilalis bulldozer and drill, free of charge. He made that contribution and that was what made it attractive to Mr Bilalis to take a lower than normal percentage because their drill and bulldozer would be put in operating condition and kept in operating condition. Why would Mr Peric do that if he was only ever going to get 10%? Mr Peric offered to work for nothing because that would increase the percentage that he would receive. The only way that is understandable is if Mr Peric was going to get half of the claimholder percentage and that claimholder percentage could be increased by him doing work for nothing. He would get half the benefit of the increase, so it must be and it was my finding, that it was agreed that Mr Peric was to get half of what was left of the 40% in the claimholder’s hands.
I point out and remind myself that Mr Josic had to be squared away in claim one. As to claim two, the effort was first to be on claim one but it is clear that if claim one went well, the same arrangement was to occur for claim two at the option of Bilalis. Mr Bilalis could have insisted on working claim two but would have still been limited to 60% and Mr Peric would have still had to do the maintenance for nothing. Mr Peric and Mr Maljovic were both to check behind the bulldozer when it was operating. Work occurred on the drill and it was made to operate. There is a dispute of exactly what work was done and how many hours were done. Mr Peric says he did in all, about 120 hours. It is clear that he had to pull hydraulic rams from the drill, there was some work done on an air valve on the drill, there was a tumbler put on to catch the dirt from the drill and direct it neatly to a heap. There was work done on the header plate and other work on the drill. There was work done on the bulldozer removing the big ram, some hydraulic part had to be specially sent to in Sydney. That took only a week in Sydney but a couple of weeks to return it. There was work done on a shaft that tensions the track. The shaft had been broken in two places and had to be welded up. Mr Peric is a skilled boilermaker. He used equipment of Big Brother and his own. He clearly did a substantial amount of work.
There were some delays as you would expect at a place as remote as Seven Waterholes Lambina, an address not heard of by most people in South Australia. During delays Mr Peric earned money by doing work for cash for Ken Rosewarne, another bulldozer operator at Lambina. He also gained some experience working on a drill for Mr Rosewarne. When working for cash for Mr Rosewarne, he did it for $30 an hour. He said that at one stage but then later he says he charged $60 an hour for his work. I have other evidence that suggests that from Mr George Bilalis senior, an experienced miner of many years, that at Lambina one could pay anywhere between $15 an hour and $60 an hour to have mechanical work done, depending on the relationship and obligations that existed between you and the mechanic. There was some tension between these parties because Mr Bilalis felt that sometimes Mr Peric gave undue priority to the cash pay work he was getting from Mr Rosewarne and others, rather than his obligations to this partnership.
There was tension the other way because Mr Peric thought that Mr Maljovic and George Bilalis junior spent too long sitting around drinking coffee and playing chess and being late in starting in the morning, while he was trying to get work done. Also, they smoked in an area that he slept in and this offended him. These might seem relatively trivial matters but they are matters that led to the breakdown of this agreement.
The actual incident that led to the breakdown of the agreement was a drill bit that was stuck or bogged. To get it out, it was decided to do some bulldozing to get down to free the drill and also to use an excavator to get down to free the drill. It is the case at Lambina that the opal is variable in its location and quality. It is not at well defined levels as it is on some other fields. It can be found in little pockets and maybe not so little pockets at all sorts of levels, so much so, that the nickname for the field, I'm told today, is Hiroshima as if all the opal had been blown up and spread around.
I mention this because it explains why it was thought to be prudent to check behind the bulldozer and the material that the excavator was digging out to free the drill bit. Mr Maljovic attended to do that but Mr Peric had cash work to do. He did go out to the claim for a short period but he did not stay. He says he did not stay because the driving of the bulldozer by George Bilalis Junior was so erratic and dangerous that he thought it was unsafe to stay. I wont go into detail of the nature of George Bilalis Junior's driving, because it is obvious to me that the primary reason why Mr Peric did not stay for the two days whilst the drill bit was recovered was that in his mind he had better things to do. This caused tension with the other partners. To this tension was added the disputes about smoking, coming late in the morning, not working hard enough, sitting around too much, which all boiled up so that Mr Peric demanded that Mr Maljovic and George Balalis Junior not be in his camp, although he left permission for them to still use the workshop. That was ultimately withdrawn as well. This, is the view of Mr Maljovic, brought the partnership to an end and he then negotiated a new arrangement with Bilalis. Bilalis now went up to 65% (Exhibit D2) and there was a new checker Lalic who was to get 10%. There was nothing of course for Mr Peric. Mr Peric commenced this plaint and I made an injunctive order. I advised Mr Maljovic of the injunctive order through the medium of Mr McDougall at a phone conference. I merely say that it is essential that miners observe injunctive orders when they are put in place to avoid opal been won and dissipated and the court has power to gaol people if they ignore injunctions. I am not saying it happened here. If some mining did go on, I accept that no opal was recovered. For completeness I mention that Sid Absolom did a little bit of work on the claim with his son Mark. He put some drill holes down but that was initially for 70% and he decided having put a few holes down, he wanted 80%. This is further evidence that that's the sort of percentage that a dozer operator wants to work a claim at Lambina.
Those are the facts. What conclusions should I make in relation to the result between these parties? I note that Mr Peric apparently first obtained his precious stones prospecting permit on 22 May 2001. I am satisfied that the original arrangement of an offer of half the claims, and I have found it was half, was made before he even had a precious stones prospecting permit. Probably the agreement was not enforceable with someone who had no right to mine but he remedied that in May 2001. Until April 2001 it was only a gift. Mr Peric had done nothing to earn an entitlement to the claims. The house transaction was a separate transaction. There was nothing in that giving rise to a debt for which Mr Maljovic had to compensate Mr Peric with a percentage of his claim. Indeed the debt is the other way, $500 is still owing in my finding. Until Mr Peric did some work on the Bilalis equipment, he was in the position of having been given as a gift a half interest in these claims at a time when he had no right to mine. That is a weak position. Then he cemented his position by getting a right to mine and coming to an arrangement with new operators, the father and son, George Bilalis with an increased percentage and the increase was due to his promise of work and he did do work. I have arguments to the quality of his work and the extent of it but they are arguments after the event. He clearly did the work and he did enough work that the equipment worked, although it did break down again. He had earned his percentage. Then they had an argument. I think there is fault on both sides of the argument and I don't try and untangle whose fault it was on each side. What is clear is that the parties have parted in their ways and I need to make an order that properly compensates Mr Peric but I should not, in the in my finding, in all the circumstances here, forfeit a claim in his favour. His effort and interest does not justify that.
What I should do is make the claimholder pay him compensation for the work he has put in.
I make it clear that Mr Peric did this work not for Bilalis' benefit, he did it for Maljovic's benefit. Bilalis in effect paid for the work by reducing his percentage from the claim.
I pause while George Bilalis Junior explains to his father what I am saying.
It is my finding that Mr Maljovic having taken back all the claimholder's entitlement to the claim has to pay out Peric a reasonable cost for the work that Peric did that was meant to be for the mutual benefit of the claimholder Mr Maljovic and himself.
I use a broad axe. I accept the 120 hours, though that might be slightly generously stated and I allow the relatively low rate of $30 an hour as the sort of rate you would charge to a fellow claimholder. That is $3,600. I have already found that there is still $500 still owing for the house. I will take a round figure of $3,000 as judgment for the plaintiff against Mr Maljovic.
Each party is to pay their own costs. Neither was legally represented at the trial. I order payment of the sum of $3,000 in 60 days. After 60 days it attracts interest at 5% per annum.
I make it clear Mr Peric has no share in the partnership.