Peter Wilson trading as Sutket Farm v Umilo Bria
[2020] VCC 853
•22 June 2020
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-17-01125
| PETER WILSON trading as Sutket Farm | Plaintiff |
| v | |
| UMILO BRIA | Defendant |
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JUDGE: | LEWITAN | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 25, 26, 27, 28 February, 3 March 2020 and 20 April 2020 | |
DATE OF JUDGMENT: | 22 June 2020 | |
CASE MAY BE CITED AS: | Peter Wilson trading as Sutket Farm v Umilo Bria | |
MEDIUM NEUTRAL CITATION: | [2020] VCC 853 | |
REASONS FOR JUDGMENT
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Subject: Agreement for the service and agistment of mares;
Catchwords: bailment for reward; uncollected goods
Legislation Cited: Ãustralian Consumer Law and Fair Trading Act 2012
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr Zero Partos | Vinci Solicitors & Conveyancers |
| Defendant in person |
HER HONOUR:
1 Peter Wilson, trading as Sutket farm (the plaintiff), operated a stud farm in St Leonards on the Bellarine Peninsula in the state of Victoria. The plaintiff provided agistment and horse husbandry for horses on the stud farm (the Sutket farm). Umilo Bria (the defendant) was the owner of 5 horses known as Instant Glory, Dynamic Lady and Gladiatress (the mares); and Destiny Mine and Ultimate Quest (the additional mares). In 2007 the plaintiff and the defendant agreed that the defendant would deliver the mares to the plaintiff and the plaintiff would provide agistment and horse husbandry services and arrange for the mares to be served by stallions owned by Sutket Farm (the agreement).[1] Pursuant to the agreement the defendant delivered the mares and the additional mares to the plaintiff on 7 September 2007. The plaintiff provided agistment for the defendant’s horses and arranged for the mares to be bred between 2007 and 2016. Over this period the mares were consistently covered and a number of foals were produced.[2]
[1] Amended Defence and Counterclaim dated 31 July 2018 (amended defence and counterclaim), [13] and [14].
[2] Transcript p 88
2 Peter Wilson (Wilson) started managing stud farms when he was 25 years old. He ran a series of horse studs over the last 45 years between Portalington, Drysdale and St Leonards. He has had 1000 clients.[3] He is now retired and is 70 years old.
[3] Transcript pp 59-60.
3 The stud farms were all called “Sutket Farm”. The last stud farm, which the plaintiff ran for 12 years, was at 1009 Murradoc Road, St Leonards.[4] There were between two and four of the plaintiff’s stallions at the stud farm. Over the 45 years, the plaintiff covered about 2000 mares.[5] Over a normal season, the plaintiff’ stallions would cover about 120 mares. Wilson operated as a sole trader. The plaintiff was registered for GST and submitted Business Activity Statements.[6]
[4] Transcript p 62.
[5] Transcript p 60.
[6] Transcript p 63; exhibit 4.
4 The plaintiff seeks recovery of the sum of $264,560.80 for unpaid services (as set out in an invoice dated 24 November 2016)[7]. The defendant claims that the plaintiff failed to render the services with due care and skill. By way of counterclaim, the defendant claims damages for breach of the agreement, breach of duty to take care and breach of the plaintiff’s duty as bailee for reward. The defendant claims that it is entitled to set-off any amount awarded pursuant to its counterclaim against any sum awarded to the plaintiff.
[7] Exhibit 35.
5 The plaintiff called Wilson and Rodney Peter Maher (Maher) to give evidence. The defendant was self-represented. As a result of the restrictions imposed by the COVID-19 pandemic, and pursuant to s49(3)(j) of the Civil Procedure Act 2010, the defendant gave additional evidence and made further submissions by way of an affidavit made on 20 April 2020 (Bria’s affidavit).
The agreement
6 The defendant admitted that the agreement is partially in writing, partially oral and partially implied.[8] The defendant admitted that insofar as the agreement is in writing, it is constituted within the three Stallion Service Contracts, which are undated and which relate to the agreements to breed the three mares; Instant Glory, Gladiatress and Dynamic Lady.[9] Each Stallion Service Contract provides:
4. The Owner agrees to pay all charges + GST applicable to the broodmare and/or progeny for, but not limited to, agistment fees, transport to and from the Stud, all treatments, examinations, swabs and medicines administered whether by the Stud veterinarian, employees of the Company or others, and any other costs incurred by the Company during the broodmare’s and/or any progeny’s stay on Sutket Farm. Interest at the current commercial rate shall be charged on any service fee or agistment account not paid within thirty (30) days after an account has been rendered.
5. Veterinary services for the Mare/Foal will be conducted at the discretion of the Studmaster in consultation with the Stud’s veterinarian. Non-rebateable contract veterinary fees + GST will be payable prior to the 1st August to cover all normal veterinary attention (including standard drugs) for the period from 1st August to 31st January PROVIDED THAT such fee does not cover major or unusual veterinary procedures which shall be separately invoiced and are payable by the Owner.
[8] Amended defence and counterclaim, [3].
[9] Exhibit 7.
7 On one occasion before September 2007, the defendant telephoned Wilson during the day. Wilson was not able to talk to the defendant at that time and said he would phone the defendant back that night, which he did. They spoke for about 45 minutes. In late September 2007 five mares were delivered from Adelaide to the Sutket farm. Two were in foal. The others - Dynamic Lady, Gladiatress and Instant Glory - were consistently covered at the Sutket farm.[10]
[10] Transcript p 88.
8 The plaintiff sent three copies of the unsigned stallion service contract to the defendant.[11] The defendant did not return the documents.
[11] Exhibit 7; transcript p 91.
9 Horse husbandry services including agistment and servicing of the mares were provided by the plaintiff to the defendant between 2007 and 2016.[12] Over this period, the mares were serviced by the plaintiff’s stallions at the Sutket farm and a number of foals were produced.[13]
[12] Exhibits 28, 29 and 30.
[13] Exhibit 8.
10 Invoices and accounts detailing the services provided by the plaintiff were forwarded to the defendant every month or every 60 days.[14] Periodic payments were made by the defendant for the plaintiff’s services. The defendant never paid any account in full.[15]
[14] Transcript pp 127 -128, exhibit 31.
[15] Transcript p 130.
The relevant charges
11 The amount outstanding by the defendant to the plaintiff continued to increase. By 1 June 2011 the outstanding balance for agistment (as opposed to services) was $42,596.50. At that stage 3 mares, 3 yearlings and 3 foals were at the Sutket farm. Agistment fees were $375 per day.[16]
[16] Exhibit 31, Court Book p 475.
12 Wilson said that he no longer has copy invoices for the period between June 2011 and May 2012. I accept Wilson’s evidence that there was a massive thunderstorm in January 2016. Three sheets came off the roof of the shed at Sutket farm. One hundred millimetres of rain fell in less than an hour and half. There were 4 inches of water in the shed and all the paperwork stored in the shed was totally ruined.[17] I accept Wilson’s evidence that he had previously sent the defendant invoices for that period.[18]
[17] Transcript p 128.
[18] Transcript pp 128-129.
13 By July 2012 the amount outstanding for agistment had increased to $84,441.50. The defendant admits that he received an invoice dated 31 August 2012 for that amount.[19]
[19] Exhibit 31, Court Book p 509.
14 I accept Wilson’s evidence that the invoices forwarded to the defendant accurately reflected and represented the services that the plaintiff provided to the defendant for the periods that they related to.[20]
[20] Transcript p 129.
15 The debt was growing. Wilson was under extreme pressure to do something about it. The plaintiff engaged to a debt collecting agency in an attempt to recover monies from the defendant.[21]
[21] Transcript p 130.
16 On 17 August 2012 the debt collector engaged by the plaintiff, Commercial Credit Services, forwarded the following letter to the defendant:[22]
[22] Exhibit 32.
Dear Mr Bria
Our Client: MR PETER WILSON T/AS SUTKET FARM
We refer to your telephone conversation with this office on the 17th August 2012 in respect to your outstanding liability with our above named client.
As agreed, you confirm that you will commit to paying in full your liability with our client by the 30th November 2012. This will allow you the opportunity to progress your business venture to the point that will allow you to raise the necessary funds to discharge this liability. We further advise that we will not take any further action to recover this debt during that period. Please sign the confirmation at the bottom of this letter and return to this office in the stamped self addressed envelope. Please return by 27 August 2012.
However, if you fail to pay this account by the 30th November 2012, we will be left with no other alternative but to instigate proceedings to recover the liability owed.
The liability at the 30th November 2012 will be xxxx to be agreed (initialled UB).
Yours faithfully
Sgd
Commercial Services Pty Ltd
17 The defendant admits that he signed the letter dated 17 August 2012 and agreed to pay “Peter Wilson the monies owed by 30 November 2012 in full satisfaction of my liability owed to him, that has accrued to that date.”[23]
[23] Exhibit 32
18 A further letter by Commercial Credit Services was forwarded to the defendant on 27 August 2011.[24] This letter stated that the liability will be $99,841.50 by 31 August 2012. The amount sought in the letters of demand is made up of outstanding amounts for servicing 4 mares in 2010 and 2011 being $15,400[25] and agistment in the amount of $84,441.50.[26]
[24] Exhibit 33.
[25] Final Notice Invoice dated 31 August 2012, Exhibit 31, Court Book p 510.
[26] Invoice dated 31 August 2012, Exhibit 31, Court Book p 509.
19 The plaintiff forwarded to the defendant an invoice dated 30 October 2012 for agistment for September and October 2012.[27] A payment of $1000 by the defendant on 26 October 2012 is recorded. The debt on the agistment account was then $92,428.50.
[27] Exhibit 31 Court Book p 511.
20 The plaintiff forwarded to the defendant an invoice dated 30 November 2012 for agistment.[28] The debt on the agistment account was increased to $97,230.
[28] Exhibit 31, Court Book p 513.
21 The defendant did not pay the plaintiff the monies owed by 30 November 2012. A letter dated 4 December 2012 was forwarded to Bria by Aston Reid Lawyers, the solicitors for Commercial Credit Services Pty Ltd, (the 48 hour letter of demand) in the following terms: [29]
[29] Exhibit 34.
48 HOUR DEMAND
Your Ref: 300109910216
Amount: $107828.50
Costs: $100.00
Total: $107928.50
Owing to: PETER WILSON TRADING AS SUTKET FARM
We act on behalf of PETER WILSON TRADING AS SUTKET FARM in respect of an outstanding debt for $107928.50.
We have been instructed to commence legal proceedings to recover his debt. In order to avoid incurring unnecessary legal expenses, we give you the opportunity to settle the outstanding debt.
Accordingly, we require you to forward to our office a cheque made payable to PETER WILSON for the above amount within 48 hours of the date of this letter.
There will be NO further warning.
22 The defendant agreed that he telephoned Wilson after the 48 hour letter of demand was sent to him and told him that he was attempting to organise finance for a business venture at Ceduna South Australia.[30] The defendant founded and is the CEO of Ceduna Keys Developments Pty Ltd. Ceduna Keys Developments Pty Ltd was involved in a project to develop a commercial waterfront land division. The defendant said that the South Australian Government had approved the development as a major project. The defendant is also a shareholder in Ceduna Keys Developments Pty Ltd. The defendant said that he stood to benefit from the success of this company. The project required funding.
[30] Transcript p 361.
23 After receipt of the 48 hour letter of demand, the defendant telephoned Wilson that evening and told him that he was pushing further to organise the finance for the Ceduna Keys Development. The defendant told Wilson that he was anticipating funds coming in January and that he would be able to pay the plaintiff when he received the funds.[31] Wilson made a phone call to Commercial Credit the next day and said “we’ll give this guy until the end January and see where we go, because it was December at that stage and nothing was going to happen over that period of time.”[32]
[31] Transcript p 363.
[32] Transcript p133.
24 Having considered the whole of the evidence, I have formed the view that the defendant was a witness who in effect, would say what he thought would assist the defendant’s case as opposed to a witness who was endeavouring at all times to give a truthful and accurate account of the facts. The defendant was evasive when answering questions put to him in cross-examination. For example even though he now denies that he is indebted to the plaintiff, he was prepared to sign documents expressing his intention to pay in full his liability with the plaintiff. Under cross-examination, the defendant stated:
Q Now I’d ask you to be shown Exhibit 32[33] which is at p507 of the court book, if it please,
[33] See letter referred to in the above paragraphs 16 and 17.
Your Honour? Do you want me to do it? Yes.
Q Now, you agree that you received this letter?
A. Most definitely.
Q And you agree that you made handwritten changes to it?
A That is correct.
Q And you also agree that that’s your initials?
A That is also correct.
Q All right. Now, you said you were involved with Ceduna Keys since 2009. I think you corrected me and said since 2009 you actually connected with that – that venture?
A Yes.
Q So you have some experience in business and ventures of – of that kind?
A I would think that I have, yes.
Q Yes. And was that the case back at 2012?
A Yes.
Q Yes. And you would have been quite concerned at receiving this letter from Commercial Credit Services, would you not?
A Yes, I would find it annoying for me, yes. Yes.
Q Yes. Yes. And you took it seriously?
A I take every document that comes to me seriously.
Q And you read it carefully?
A Yes, I did.
Q And you were very, very careful to change the – to make handwritten changes to it. You were very careful about doing that, weren’t you?
A I crossed out the amounts.
Q Yes. And that was – you did that specifically and carefully, didn’t you?
A I did that because I didn’t agree with the amount.
Q No, no, I’m just asking - I’m just asking you. You were very careful about – to make sure that you had done that. Is that – is that right?
A Yes.
Q Because whatever you crossed out, you thought in your mind that was not correct?
A Yes.
Q Right. So you were very careful to cross out in that letter what you did not agree with?
A Yes.
Q So when it says that: ‘As agreed, you confirm that you will commit to paying in full your liability with our client [this is the client of Commercial Credit Services] by 30 November 2012’, that is correct, is it not?
A It is correct. (emphasis mine)
Q And you also said that, ‘This will allow you the opportunity to progress your business venture to the point that will allow you to raise the necessary funds to discharge this liability’. That’s also what you said to the writer of this document in the telephone conversation; is that correct?
A It’s not in this document, not at 507.
Q All right. In 507 – look at that document?
A Yes.
Q The very first paragraph under the line, ‘Our client’, says, ‘We refer to your telephone conversation with this office on 17 August 2012 in relation to your outstanding liability with our above-named client’. Did you have a telephone conversation with the office of Commercial Credit Services on 17 August 2012?
A Yes I did.
Q Yes. And that – then the following paragraph is an accurate reflection of what you said in that telephone conversation, isn’t it?
A Yes.
Q And following receipt of the – of this letter, and following signing it, you did not settle – make any – you did not settle your debt with Mr Wilson, did you?
A I was not able to. I didn’t receive any funding.
Q All right. So you didn’t, is the answer?
A No, I didn’t.
Q Right. So what you’re saying is that if you got funding approved, you would settle your debt?
A I would settle a debt. That had to be confirmed.
Q Yes. And the amount in this letter that was being sought was an amount – well, do you recall what the amount was that was actually in this letter?
A No. I don’t.
Q It was in the vicinity of $100,000. Is that fair?
A It might have been.
Q It was a substantial amount, wasn’t it?
A Yes.
Q And did you understand it to be the case, then, that clearly Mr Wilson was very concerned about an outstanding liability that he said you owed?
A That he said I owed, yes, of course.
Q Yes. But this was just a nuisance to you, wasn’t it?
A It would be proven to be a nuisance, yes.
Q You thought that this matter had been pursued by a debt collector, was a mere nuisance to you, didn’t you?
A It could become problematic for me, yes.
Q So you agree that you just treated it as a nuisance?
A Yes.
Q Not something that you were taking seriously?
A Of course I was taking it seriously.
Q But it was just a nuisance. Yes or no?
A It’s a nuisance that it was going through credit services, yes.
Q A nuisance in that it was a minor inconvenience to you. Is that what you mean by ‘nuisance’?
A I don’t know what I mean by ‘nuisance’. You’ve used the word ‘nuisance’. Define to me what your version of ‘nuisance’ is, because two people can have a different version of what ‘nuisance’ means.
Q I would like the witness to be shown the chronology, please, Your Honour. [34]
[34] Transcript pp 363 – 366.
…
Q You recall the chronology that was done for this trial?
A Yes, I do.
Q And do you recall that you completed your side of that document? I know you don’t have it in front of you, and we can get it in front of you if you want to think about your answer, but..?
A Yeah, I recall.
Q Do you remember the document had – it was like a table, and it had a chronology, then it had ‘accepted’ or ‘rejected’?
A Yes
Q on the right, and you inserted words and whatever you wanted to say in that?
A Yes.
Q And the 17 August 2012 letter was in that chronology, wasn’t it?
A Yes.
Q Tell me if you agree with this. Did you write that, amongst other things in there - and I will show it to you, but you say that, ‘you never admitted I owed any money, which is the reason that I crossed out the amount in the letter which I signed. The reason I did this was simply to leave it open to me to negotiate a settlement of the claim’ This is on p 4?
A Yes.
Q ‘Not because I owed any money to the plaintiff but to get rid of a nuisance’?
A That’s correct.
Q Your words?
A Yes.
Q Well, you used the word ‘nuisance’, didn’t you?
A Yes. I did.
Q And so I’m asking you what you meant by that?
A It’s a nuisance.
Q All right. Okay. So what you’re saying is that you will sign documents agreeing to pay moneys owed simply to get rid of a bothersome matter?
A It’s a commercial decision.
HER HONOUR: Well, can you answer the question?
A Yes.[35]
[35] Transcript pp 366 – 367.
25 On 19 December 2012 two horses were sent to D Weir, trainer. On 21 January 2013 the plaintiff issued an invoice for the agistment account recording payments of $17,000. The defendant made these payments to the plaintiff for the plaintiff’s services so that the plaintiff would release the horses.[36]
[36] Transcript p 151.
26 The plaintiff stated that as a result of advice he received, he stopped the agistment account under $100,000 and commenced a new agistment account in late 2012 and early 2013.[37]
[37] Transcript p 133.
27 The plaintiff’s accounts to the defendant were then split into three accounts.[38]
[38] Transcript pp 151- 152.
· Account 1 for $80,230, being the existing agistment account as at 21 January 2013.[39]
[39] Exhibit 31, Court Book p 542.
· Account 1a for $15,400 being an account for services (coverings) in 2010 and 2011.[40]
· Account 1b for $105, 834.80 for agistment from 1 December 2012 to 31 July 2015.[41]
[40] Exhibit 31, Court Book p 510.
[41] Exhibit 31, Court Book p 597.
28 Rodney Peter Maher, Finance Consultant, spoke to the defendant in 2014. Maher was looking into the plaintiff’s financial situation. Wilson had informed him that the plaintiff was owed a large amount of money which was causing financial stress for the plaintiff’.[42] After a couple of conversations with Maher, Wilson spoke to the defendant. The defendant asked Maher to give him a call to discuss his circumstances in relation to why he had not paid the money to the plaintiff. Maher telephoned the defendant. They had a couple of conversations.
[42] Transcript p 48.
29 The first conversation lasted for 45 or 50 minutes. Maher and the defendant discussed the plaintiff’s situation. The defendant told Maher that he was involved in a development in Ceduna that had to be completed.
30 I found Maher to be a straightforward and truthful witness. His evidence is largely consistent with the written documents. I accept Maher’s evidence that the defendant told Maher that he would be able to pay the plaintiff the full amount of money that the plaintiff was owed once the Ceduna development was completed. The defendant also told Maher that if the plaintiff issued proceedings against him prior to that, the defendant would not be able to pay anything and the defendant would just tie Wilson up in court for years and bankrupt him.[43] Maher said that the defendant made it very clear that the plaintiff would get his money as long as the plaintiff allowed the defendant time to get his development through. The defendant was adamant that once the development was approved “he’d be able to fix up Peter” and “fix up the amount he owed to Peter Wilson.”[44]
[43] Transcript p 48.
[44] Transcript p 49.
31 The defendant told Maher that Ceduna Keys was a large development reliant on funding from the government of South Australia and that is why he could not afford to have any judgments or defaults against him. The defendant said that he would lose millions and if that was the case, no one would get anything. “[H]e just begged us, basically, to sort of hold off.”[45]
[45] Transcript p 50.
32 The defendant then forwarded details of the Ceduna Keys proposal[46] to Maher and told Maher that it was within months of being approved. Maher said that he checked the Ceduna Keys proposal about 12 or so months later and saw in the newspapers that it was off the ground.[47]
[46] Exhibit 2.
[47] Transcript p 51.
33 By 31 July 2015 the new agistment account (account 1b) had reached $105,834.80.[48] On 31 July 2015 the plaintiff issued an invoice for the outstanding service fees ($15,400), the agistment account as at 31 August 2012 ($80,230) and the agistment account from 1 December 2012 to 31 July 2015 ($105,834.80).[49]
[48] Exhibit 31, Court Book p 597.
[49] Exhibit 31, Court Book p 598.
34 The defendant compiled a list of payments he made to the plaintiff.[50] It records the defendant’s last payment to the plaintiff on 11 February 2015. The plaintiff agrees with the list but disputes the payment of $10,000 on 28 July 2014. I accept Wilson’s evidence that the defendant paid that money for the purchase of a horse called Boags. The purchase price of the horse was $15,000 which was divided into three lots of $5000. The defendant paid $10,000 for a share of two thirds of that horse. The defendant did not pay the $10,000 to the plaintiff in satisfaction of the debt he owed to the plaintiff for agistment of the mares.[51]
[50] Exhibit 9.
[51] Transcript pp 101 – 103.
35 On 5 February 2016 the defendant instructed the plaintiff to “organise the sale or disposal of my mares Instant Glory and Dynamic Lady as soon as possible”.[52] Attempts were made by the plaintiff to find owners for the defendant’s horses.[53] However there was a difference between what people were offering to pay and what the defendant wanted. Wilson told the defendant that “I’m really wasting my time”. “They are your horses. You disperse them.”[54]
[52] Exhibit 38.
[53] Transcript p 139.
[54] Transcript p 139.
36 The plaintiff continued to provide horse husbandry services to the defendant after the 17 August 2012 letter.[55] Wilson stated that the amount owed by the defendant was growing. Wilson spoke to the defendant weekly. In April 2016 the defendant told Wilson that he had a very good chance to sell the Ceduna property and get investors in the property. In the middle of September 2016 Wilson telephoned the defendant and asked “How close have you gone?” The defendant said that “I’m receiving the deposit cheque” “next week with further settlement at the end of the month.”[56] By then the defendant had received the deposit. Wilson asked “Can you do me a cheque out of that?” Wilson did not know how big the deposit was and said “I need 10 or 20 grand off you”. The defendant replied “I can’t help you until I get the settlement funds”.[57]
[55] Exhibit 32.
[56] Transcript pp 134 – 135.
[57] Transcript p 135.
37 By September or October 2016 the plaintiff was becoming concerned that something had to be done about the defendant’s horses.[58] Wilson offered to send the horses to the defendant’s home in South Australia but the defendant refused, saying that if this was done “I’ll send them straight back to you.”[59]
[58] Transcript p 138.
[59] Transcript p 138.
38 In the third or fourth week of October 2016 the defendant said that he was receiving his final payment and his words were “And I’ll look after you”.[60] A couple of days after that Wilson phoned the defendant to see how things were going and the defendant said “I’ve received me money”. Wilson said “Well, how do I go”. Wilson said “If you’ve got all your money now”, “put $50,000 in my bank account for me”. The defendant said “I’m coming over next week” which was Melbourne Cup weekend. “I’ll bring me trainer over, and we’ll sort it all out when I come over.”[61] The defendant failed to visit the plaintiff after the Melbourne Cup 2016 as he said he would.[62] A few days after the Cup weekend the defendant told Wilson “I’m not paying you. I don’t owe you any money”.[63]
[60] Transcript p 135.
[61] Transcript p 134.
[62] Transcript p 135.
[63] Transcript p 136.
39 Wilson told the defendant:
“Hang on, mate.” I said “You’ve been looked after for three years. I’ve hung in there, done the right thing. I could have wound you up any time. You know, and he said “Well, I don’t owe you anything.” [64]
[64] Transcript p 136.
40 Wilson hung up and finalised a final account and emailed it to the defendant. [65] On it was a notice in red that if payment was not received, the plaintiff would arrange for a “disbursement of the 8 horses in 14 days.” At that stage, 8 of the defendant’s horses remained at the Sutket farm.
[65] Exhibit 35; transcript p 136.
41 The final account dated 24 November 2016 (the final account) was emailed to the defendant on that day. The final account was also sent to the defendant by registered mail on that day. The final account is in the following terms:
Tax InvoiceDate 24/11/16
Mr Umilo Bria
Overdue Amount C/F $201,464.80 (Incl GST)
Agistment from 2/08/15 to 31/10/16
8 Horses @450.00 ea.per month = $3600 x 15 months $54,000.00
Drenches $ 480.00
Agistment from 1/11/16 to 17/11/16
8 Horses @$15 per day x 17 days $ 2040.00
Agistment from 18/11/16 to 24/11/2017
8 horses @15 per day x7 days $ 840.00
3 Mares – Dynamic Lady, Gladiatress, Instant Glory
2011 Mare ex Dynamic Lady
2012 Filly ex Gladiatress
2013 Colt ex Dynamic Lady
2013 Filly ex Gladiatress
2015 Filly ex Gladiatress
SALEAMOUNT $258,824.80
GST $ 5,736.00
AMOUNT DUE: $264,560.80
If payment is not received we will arrange disbursement
of the 8 horses in 14 days. We await your instructions.[66]
[66] Exhibit 35.
42 The defendant submitted that the final account stated that the plaintiff charged agistment fees for 8 horses @$15 per day from 18/11/16 to 24/11/17” . The defendant submitted that the plaintiff gave evidence that the filly was picked up on 28 December 2016 by Murray Sargent (Sargent), a licensed knacker, and was put down and taken away.[67] I accept Wilson’s evidence that the reference to 24/11/2017 in the final account was made in error and that it should have read 24/11/2016. As is apparent from the invoice, the defendant has only been charged for agistment of the horses for 7 days which would be from 18/11/16 to 24/11/16.
[67] Transcript p 358.
43 The defendant submits that the plaintiff was in breach of agreement by charging GST on invoices. The defendant submitted that he requested on many occasions for GST not to be included as the defendant was not registered for GST and did not claim any GST input credits. However as stated in the above paragraph 3, the plaintiff was registered for GST and was required by law to charge GST on the supply of services.
44 I found Wilson to be a straightforward and truthful witness. He answered questions directly and frankly to the best of his ability. He was prepared to make concessions. His evidence is largely consistent with the cheques and the written documents. I accept Wilson’s evidence that in the period from 2007 to 2016, the defendant never expressed concerns in relation to the invoices and never questioned an account.[68]
[68] Transcript p 130.
45 The defendant submits that there has been a total failure of consideration by the plaintiff under the agreement “in that the plaintiff has failed to deliver any part of his bargain to I, the Defendant under our agreement”.[69] The plaintiff submits that “total failure of consideration” has not been pleaded in the amended defence and counterclaim.
[69] Paragraph 25, Bria’s affidavit.
46 In any event, I do not accept the defendant’s submission. I have had regard to the documentary evidence recorded in contemporaneous documents such as the plaintiff’s diaries from 2007 to 2016[70] and the plaintiff’s accounts.[71] The spreadsheets for Instant Glory,[72] Gladiatress[73] and Dynamic Lady[74] indicate ongoing provision of services by the plaintiff. The defendant has made admissions acknowledging indebtedness to the plaintiff.[75] I accept Maher’s evidence that in 2014 the defendant told him that he would pay the “full amount that [the plaintiff] was owed” on settlement of a property development at Ceduna.[76] I accept Wilson’s evidence that the defendant told him that as soon as “he got paid for that particular property or development, I would get paid.”[77] The defendant has made periodic payments in respect of the debt.[78] The last payment made by the defendant was on 11 February 2015.[79] The defendant has not produced any documented complaint or challenge by the defendant to any of the plaintiff’s accounts over the entire 2007 – 2016 period. I accept the plaintiff’s evidence that the defendant never queried a single account during the entire relationship.[80] The only complaints put to the plaintiff in relation to the accounts in cross examination concerned complaints about being charged GST.[81]
[70] Exhibit 27.
[71] Exhibit 31.
[72] Exhibit 28.
[73] Exhibit 29.
[74] Exhibit 30.
[75] Exhibit 32.
[76] Transcript p 48.
[77] Transcript p134.
[78] Exhibit 9.
[79] Exhibit 9.
[80] Transcript p 243.
[81] Transcript p 245.
47 I am satisfied on a balance of probabilities that the services the subject of the total amount in the final account were performed. I am also satisfied on a balance of probabilities that the defendant is indebted to the plaintiff in the sum of $264,560.80 for the provision of those services.
The dispersal of the horses
48 The final account was emailed to the defendant every day for about a fortnight.[82] The plaintiff also sent a copy of the final account to the defendant by registered post to an address that he had been using for over 10 years.” [83] There was no response.[84]
[82] Exhibit 36.
[83] Transcript p 137; exhibit 37.
[84] Transcript p 137.
49 The defendant never phoned Wilson after the words they had after the cup day weekend in November 2016. “For a bloke that was phoning me once a week, never phoned me.”[85] “It cost [the plaintiff] $100 a day to feed [the horses] and [the defendant] had been on a gravy train for that amount of time and put us under enormous financial pressure.”[86]
[85] Transcript p 136.
[86] Transcript p 136.
50 Being under extreme financial pressure, the decision was made that the horses must be dispersed.[87] Despite the final account giving 14 days, the plaintiff waited until after Christmas to act.[88] The plaintiff did not charge the defendant for the agistment of the horses for the period after 24 November 2016.
[87] Transcript p 136.
[88] Transcript p 136.
51 The plaintiff engaged Sargent to attend the property to destroy some foals and remove the mares. On 28 December 2016 two horses were humanely destroyed at the Sutket farm.[89] This was more than 30 days after the final account. On 3 January 2017 the three mares Dynamic Lady, Gladiatress and Instant Glory were removed from the Sutket farm in a truck.[90] The three remaining foals were also destroyed on the Sutket farm on that day.[91]
[89] Transcript p 141; Exhibit 51 Court Book pp 620, 621, 623 and 624.
[90] Transcript p 143, Exhibit 51 Court Book p 626.
[91] Transcript p 143.
52 The plaintiff was subsequently forced to sell the Sutket farm.[92]
[92] Transcript p 51.
The defendant’s counterclaim
53 The defendant claims that he is entitled to set-off all or any amount awarded pursuant to his counterclaim against any sum awarded to the plaintiff. The defendant contends that it was a further term of the agreement that the plaintiff would:
a. safely keep and take proper care of the Mares and their progeny;
b. attend to matters required to obtain a foal identification card for all foals including:
i. submit mare returns;
ii. blood typing;
iii. branding;
iv. identification of the correct mating and foaling dates; and
v.prevent the defendant from the incurring late return or other fees from the Australian Stud Book
so that the foals could be include [sic] in the Australian Stud Book and eligible to race.
PARTICULARS
These terms are implied as a result of standard industry practice and to give business efficacy to the Agreement. If a foal identification is not prepared the progeny cannot race and is of no value.[93]
[93] Paragraph 15 amended defence and counterclaim
54 The plaintiff admits that it was its responsibility to brand any foals produced by the servicing of the defendant’s mares. The plaintiff admits its responsibility to provide the correct mating dates and stallion identification to the defendant. The plaintiff submits that this was done. The plaintiff said that every time a foal is born:
I phone up the owner and tell them they’ve got a colt or a filly, they have the day and when the foal was born, I give them the sex, whether it’s a male or a female, and, as you know, I’m good at sending at photos, everyone gets photos.[94]
[94] Transcript p 176.
55 Wilson also stated that when he sent the stallion return to the Australian Stud Book, he filled out the names of all the mares that the stallion had covered, and the dates they were covered.[95] When cross-examined, Umilo Bria (Bria) agreed that Wilson would send him photographs of the progeny produced from the mares.[96]
[95] Transcript pp 176 -177; exhibit 39 (Lord Jim); exhibit 40 (Town of Dragon); exhibit 41 (Beaufort Scale);
exhibit 42 (Ice Point).
[96] Transcript p 374.
56 The defendant submits that the plaintiff failed, neglected and/or refused to attend to matters required to obtain identification certificates, which resulted in said horses not being eligible to race, subsequently rendering the said horses as worthless. The defendant contends that the plaintiff’s failure, neglect and/or refusal to obtain identification certificates, caused the total failure of consideration by the plaintiff under the agreement.
57 I do not accept the defendant’s submission. I am not satisfied on a balance of probabilities that the agreement contained the contractual terms alleged in paragraph 15 (b)(i)(ii) and (v) of the amended defence and counterclaim.
58 The agreement with the plaintiff was one for services. The agreement is admitted. The defendant was paying for the plaintiff to “cover” his mares and for the plaintiff to agist and look after the mares and their progeny while they were at the Sutket farm.
59 Under the Rules of the Australian Stud Book (the Rules) all horses must be accurately identified before they are accepted into the Stud Book. The Rules state:
All horses must be accurately identified before they are accepted into the Stud Book official records. The benchmarks of the identification process are the description of the natural features of the horse, the freeze brand and the blood type or DNA type. All horses can be checked against these three benchmarks throughout their life to verify their identity.[97]
[97] Exhibit 1, Court Book p 71.
60 DNA testing is a requirement under the Rules as the last step in the identification process.[98]
[98] Exhibit 1, Court Book p 82.
61 For the purposes of the Rules, the defendant was the breeder responsible for the broodmares. This is confirmed by:
(a) the Stud Book Records for the mares that list the defendant as the contact;[99]
[99] Exhibits 45, 46 and 47.
(b) the Stud Book Records for Bria himself;[100]
(c) the Foal Stud Book Records show progeny as being “bred by Mr U Bria, SA.”[101]
[100] Exhibit 47, Court Book p 245.
[101] Exhibit 46, Court Book p 255.
62 As the breeder responsible for the mares, it was the defendant’s responsibility to arrange for DNA testing and submit mare returns. It was the defendant’s responsibility to submit the mare returns on time so as to avoid incurring late return or other fees payable to the Australian Stud Book.
63 The defendant referred to an error made by the plaintiff when it submitted foal identification documents to the Australian Stud Book. The documents stated that a foal had been produced from servicing Gladiatress by Town of Dragon. The Australian Stud Book rejected the alleged parentage and rejected the foal identification documents submitted by the plaintiff.
64 I accept Wilson’s evidence that the error was made because the stallion, Town of Dragon, had “copped a boot” and that he switched the sire to Lord Jim. Wilson explained that Gladiatress had to be covered that night because if she had not been covered that night, she would not have been covered for the rest of the season. Wilson said that this was an unintentional unprecedented[102] mistake and no more than a “bookkeeping fault”.[103] This was not a mistake as to the foal’s owner or the foal itself. It was only a mistake as to the correct sire.
[102] Transcript pp 76 and 273.
[103] Transcript p 107.
65 In any event, no loss and damage flows from the mistake. The mistaken details as to the sire were ultimately resolved. The mare returns were lodged.[104] A Foal Identification Card was issued on 13 April 2011.[105]
[104] Paragraph 13, Bria’s affidavit.
[105] Exhibit 10.
66 The defendant further submitted that the plaintiff failed in his duty of care by not providing DNA tests. The defendant stated that the plaintiff stopped DNA testing in January 2011 after the mistake with Lord Jim. Despite this, on the defendant’s evidence, he continued with the plaintiff for a further four years before “demanding” the plaintiff to DNA test the horses and provide proof and identification papers for the horses” in November 2015.[106]
[106] Paragraph 20, Bria’s affidavit.
67 When cross-examined, Wilson said that he has employed Geelong Veterinary Clinic to provide veterinary services for 35 years and during that period of time Dr Vanner had attended to the whole of the plaintiff’s business. The plaintiff has never employed another vet. The defendant did not pay the veterinary bills and the plaintiff was not in a position to arrange for the provision of veterinary services to provide DNA tests for Bria’s horses.[107] The plaintiff did not call Dr Vanner to give evidence. I accept the defendant’s submission that Dr Vanner’s evidence, if adduced, would not have assisted the plaintiff’s case. On the other hand, it cannot be inferred that the evidence would have been favourable to the defendant’s case. The failure by the plaintiff to call Dr Vanner cannot fill an evidentiary gap in the defendant’s case. Further, the failure cannot be used to discount the probative value of evidence that has been called or tendered by the plaintiff in support of the plaintiff’s case.[108]
[107] Transcript p 256, exhibit K.
[108] Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345, (French CJ., Gummow, Hayne, Crennan, Kiefel and Bell JJ at 413 -414; Heydon J at 442).
Defendant’s claim in negligence
68 The defendant claims that the plaintiff owed the defendant a duty to take proper care of the Mares and their progeny and that in breach of the duty, the plaintiff failed to take reasonable care of any foals and deliver such foals in proper condition.[109] The particulars to the defendant’s claim stated that “The three or four foals produced by the Mares were in poor condition. They lacked muscle tone, their ribs were visible from the coats and they were undergrown.”[110] The defendant stated that the horses were “underdeveloped, undernourished and well below the equal industry standard required for horses of a similar age.”[111]
[109] Paragraphs 20 and 21 amended defence and counterclaim.
[110] The particulars to paragraph 19(a) amended defence and counterclaim.
[111] Paragraph 8, Bria’s affidavit.
69 I do not accept the defendant’s evidence that the horses were undernourished. This was never put to Wilson in cross-examination and there is no independent evidence to support the defendant’s claim. There are no photographs or documentary or contemporaneous evidence. The defendant stated that he complained to the plaintiff that the horses should be “fed better”, but that this request “was ignored and nothing changed.” Despite this, the defendant on his own evidence continued to “patronize” the plaintiff’s business until 2016.[112]
[112] Paragraph 4, Bria’s affidavit.
70 The defendant stated that the horses proved to be unviable to go on with because they would fail as a racing proposition due to their lack of constitution. I accept the Wilson’s evidence that the agreement between the plaintiff and the defendant was that the plaintiff would provide the stallions and the service[113]. The plaintiff was not the trainer.[114] The plaintiff did not guarantee that any foals would be “viable” for horseracing. Even if the horses were “unviable”, it was not a term of the agreement that the plaintiff assured or guaranteed that any foals would be “successful”.
[113] Transcript p 75.
[114] Transcript p 74.
The number of the defendant’s horses in the plaintiff’s possession on 24 November 2016?
71 There is a dispute about the number of the defendant’s horses at Sutket farm as at the date of the final account dated 24 November 2016. I accept the plaintiff’s evidence that the plaintiff had possession of 8 of the defendant’s horses on that date.[115] The defendant has conceded that there were 8 horses at the Sutket farm in November 2016. In his counterclaim the defendant makes a claim for “the fair market value of each of the remaining 8 horses that were shot and killed by the plaintiff.”[116]
[115] Transcript p 141.
[116] Paragraph 80, Bria’s affidavit.
Was the plaintiff a bailee for reward ?
72 The question of bailment was only briefly referred to in the amended defence and counterclaim. The defendant alleges that the plaintiff was under a duty as a bailee for reward to take reasonable care of the mares and their progeny and return them to the defendant on demand.[117] The defendant alleges this duty was breached because he requested delivery of the mares and foals in or about 2010, and that instead of doing so, the plaintiff used the mares and foals for profit and sold or otherwise disposed of the same without the defendant’s permission.[118]
[117] Paragraph 22, amended defence and counterclaim.
[118] Paragraphs 23 to 26, amended defence and counterclaim.
73 There is no evidence that the defendant requested the return of the mares and foals in 2010 and that the plaintiff refused to return them. In cross-examination Wilson stated that he told the defendant that the defendant could take the horses if the defendant paid the outstanding accounts.[119] The plaintiff was entitled to do so because the plaintiff possessed an equitable lien over the defendant’s horses due to the debt owing. In September or October 2016 the plaintiff informed the defendant that it would deliver the defendant’s horses to the plaintiff to his home address.[120] The plaintiff was unable to return the horses to the defendant because the defendant would not accept them.[121] Moreover, contrary to the defendant’s allegation[122], there is no evidence that the plaintiff used the defendant’s horses to make a profit. In fact, the defendant’s horses have been costly to the plaintiff.
[119] Transcript pp 271 - 272.
[120] Transcript p 138.
[121] Transcript p 276.
[122] Paragraph 26, amended defence and counterclaim.
74 As neither side made submissions as to the operation of part 4.2 of the Australian Consumer Law and Fair Trading Act 2012 (Fair Trading Act) the parties were requested to provide further submissions on four questions. I propose to deal with each of the questions in turn.
(a)Were the horses uncollected goods for the purposes of s.54 of the Fair Trading Act ?
75 Although “Goods” is not a defined term in the Fair Trading Act the plaintiff conceded that the reference to goods is wide enough to include horses.[123]
[123]Fearnley v Finlay [2014] 2 Qd R 392,[18].
76 Section 3 of the Fair Trading Act defines “bailment” to include “bailment for reward, bailment in the course of business, gratuitous bailment and involuntary bailment”. The plaintiff concedes that the agreement between the plaintiff and the defendant commenced as a bailment. The plaintiff was a bailee for reward because the defendant handed over the mares for service by the plaintiff, and the plaintiff would receive consideration in exchange.
77 Under the heading of uncollected goods, s54 of the Fair Trading Act relevantly provides:
(1) Goods under bailment are uncollected goods if –
(a) the goods are ready for delivery to the provider in accordance with the terms of the bailment, but the provider has not taken delivery of the goods and has not given directions as to their delivery; or
…
(d) the provider has not paid the relevant charge payable to the receiver in relation to the goods within a reasonable time after being informed by the receiver that the goods are ready for delivery.
(2) Goods are not uncollected goods for the purposes of subsection (1)(a) if the provider’s failure to take delivery arises from –
(a) the receiver refusing to make delivery; or
(b) the receiver preventing the provider from taking delivery.
78 The defendant’s horses constituted “uncollected goods” by reason of s54(1)(d) of the Fair Trading Act.[124] Section 54(1)(d) of the Fair Trading Act is engaged in this case because the mares were provided to the plaintiff under a bailment for reward arrangement and the defendant failed to make payment to the plaintiff in relation to the defendant’s horses within a reasonable time after being informed that the defendant’s horses were ready for delivery. The plaintiff informed the defendant that it would deliver the eight horses to his home address in September or October 2016.[125]
[124] See Scandi International Pty Ltd v Larkfield Industrial Estate Pty Ltd [2019] VSCA 109 (Scandi).
[125] Transcript p 132.
79 Section 57 of the Fair Trading Act provides:
The common law relating to the bailment of goods remains in force to the extent to which it is not affected by this Part and a person is entitled to exercise any rights that the person may have at common law in relation to the recovery of goods or compensate for the loss of or damage to goods except to the extent to which this Part otherwise provides.
(b) Was the plaintiff entitled to dispose of the uncollected goods through the operation of ss58 and 69 of the Fair Trading Act?
80 Section 56(4) governs the operation of part 4.2 of the Fair Trading Act. It provides:
This Part applies to the disposal of uncollected goods-
(a)if there is no agreement between the provider and the receiver about their disposal; or
(b)if there is an agreement about their disposal, only in respect of matters not dealt with by the agreement.
81 In Tasman Logistics Services Pty Ltd v Seaco Global Australia Pty Ltd[126](Tasman Logistics) there were a series of large containers being held in a storage yard. Garde J observed:
27.Sections 56(4) and (6) uphold the private rights of providers and receivers of goods to agree about the disposal of uncollected goods. If they do so, the agreement has primacy and takes effect according to its tenor. Part 4.2 of the ACLFTA may not apply at all, or may apply only in respect of matters not dealt with by the parties in their agreement.
[126] [2020] VSC 100, [27]..
82 In that case Garde J held that the Fair Trading Act did not apply in relation to the sale of the containers as the parties had made express provision for sale in the services agreement between the parties. On the other hand Garde J held that the Court had jurisdiction to make an order in relation to the disposal of the contents of the containers to landfill as this was not a matter dealt with by the parties in their agreement. Garde J stated:
92.Under s56(4) of the ACLFTA [Fair Trading Act], pt 4.2 applies only in respect of matters not dealt with by the parties in the services agreement. It does not apply in relation to the sale of the containers by public auction or private treaty, as the parties have made express provision for sale in either manner in cl 14(a).
93.The Court’s jurisdiction to make an order for the disposal of the contents of the containers to landfill is available, as this is not a matter dealt with in the services agreement …[127]
Was there an agreement between the plaintiff and the defendant about the disposal of uncollected goods?
[127] [2020] VSC 100, [92], [93].
83 There was an agreement between the parties about the payment of agistment and horse husbandry services.[128] The plaintiff contends that there was also an agreement between the plaintiff and the defendant about the disposal of uncollected goods. The plaintiff referred to Clause 6 of the Stallion Service Contracts which provides:
It is an express condition of this Agreement that the Company shall have a lien over the mare and/or any progeny in respect of any unpaid fees or charges and further that the Company shall have the power to sell the mare and/or progeny to recover such unpaid fees or charges should the same not be paid within thirty (30) days (unless other arrangements are agreed to) after an account has been rendered and in this respect the Owner hereby appoints the Company as the Owner’s Attorney with the power to sell the mare and/or any progeny if such fees or charges are unpaid as aforesaid and to execute all necessary documents to achieve that end.[129]
[128] See above paragraphs 6 – 10.
[129] Exhibit 7.
84 Section 56(4) of the Fair Trading Act, Part 4.2 applies only in respect of matters not dealt with by the parties in the agreement.[130] Clause 6 of the Stallion Service Contracts applies to the sale of the defendant’s horses. There is no evidence that the destruction of the defendant’s horses is dealt with in the agreement. In this case Division 2 of Part 4.2 of the Fair Trading Act applies to the destruction of the defendant’s horses
[130]Tasman Logistics Services Pty Ltd v Seaco Global Aust Pty Ltd & Ors [2020] VSC 100.
85 The plaintiff referred to the defendant’s email to the plaintiff dated 5 February 2016 directing the plaintiff to “organise the sale or disposal of my mares instant glory and dynamic lady as soon as possible.”[131] The plaintiff contends that the email indicates that the defendant consented to the disposal of Instant Glory and Dynamic Lady and that Division 2 of Part of the Fair Trading Act does not apply to the disposal of Instant Glory and Dynamic Lady.
[131] Exhibit 38.
86 Section 58 of the Fair Trading Act deals with the disposal of uncollected goods by the plaintiff, the receiver of the defendant’s horses. It provides:
58 Receiver may dispose of uncollected goods
(1)Subject to subsection (2), a receiver may dispose of uncollected goods under this Division.
(2)A receiver must not dispose of uncollected goods if-
(a)a dispute exists between the provider and receiver regarding the relevant charge, including such a dispute about the condition of the goods or the nature or quality of any repairs or other work done in connection with the goods; and
(b)an application has been made to the court under section 69.
(3)Subsection (2) does not prevent the receiver from giving notice under this Division of the receiver’s intention to dispose of the uncollected goods.
(4)A receiver who disposes of uncollected goods in accordance with this Division is not liable in relation to the goods by reason of the disposal.
87 The defendant disputes he owes the money to the plaintiff. I do not accept the plaintiff’s submission that a dispute did not exist between the plaintiff and the defendant regarding the relevant charges. The defendant denied that he owed money to the plaintiff in November 2016.[132]
[132] See above paragraphs 38 and 39.
88 In the alternative the plaintiff claims that it was entitled to dispose of the defendant’s horses under s65 of the Fair Trading Act which provides that a receiver may dispose of perishable uncollected goods. “Perishable” is not defined in the Fair Trading Act. The plaintiff referred to Sachs v Miklos[133]. I do not accept the plaintiff’s submission that the reference by Lord Goddard CJ to livestock in Sachs v Miklos brings the horses within the ambit of “perishable goods” such as fruit. Lord Goddard C.J. stated that a bailee would have the power to provide fodder of uncollected livestock and would be able to recover the cost from the owner.[134] He said:
[133] [1948] 2 KB 23.
[134] [1948] 2 KB 23,35.
It is certainly my opinion that the court should be slow to increase classes of those who can be looked upon as agents of necessity in selling or disposing of other people’s goods without the authority of the owners.[135]
(c)If the plaintiff was entitled to dispose of these goods through s58 of the Fair Trading Act, did the plaintiff do so in accordance with the prescribed steps of this division (namely ss60, 61, 62, 65, 66, 67)
[135] [1948] 2 KB 23, 36.
89 As the horses meet the definition of “uncollected goods” within s54 of the Fair Trading Act, the plaintiff needed to act in accordance with part 4.2 when he arranged for the disposal of the defendant’s horses.
90 Disposal of uncollected goods is permitted under s58(1) of the Fair Trading Act. The ways in which the disposition of uncollected goods under division 2 is permitted depends on the value of the uncollected goods.[136] “Low value uncollected goods” may be disposed of by sale, destruction, appropriation or any other means.[137] Low value for goods means the goods are of a value less than $200.[138] “Medium value uncollected goods” must be disposed of by public auction or by private sale and with reasonable care to ensure that the goods are sold for the best price that can be reasonably obtained having regard to the circumstances existing when the goods are sold.[139] Medium value for goods means the goods are of a value less than $5000.[140] “High value uncollected goods” must be disposed of by public auction advertised at least seven days in advance, or held over a period of at least seven days.[141] High value for goods means the goods are of a value more than or equal to $5000.[142]
[136]Tasman Logistic Services Pty Ltd v Seaco Global Australia Pty Ltd [2020] VSC 100.
[137] Section 60(3) Fair Trading Act.
[138] Section 3 Fair Trading Act.
[139] Section 61(3) Fair Trading Act.
[140] Section 3 Fair Trading Act.
[141] Section 62((3) and (4).
[142] Section 3 Fair Trading Act.
91 The plaintiff submitted there is no reliable evidence of the value of any of the remaining horses. The state of the evidence is that the younger horses had little or no value at all[143] and were “worthless”[144].
[143] Transcript p 143.
[144] Paragraphs 18 and 46, Bria’s affidavit.
92 Section 60(2) of the Fair Trading Act provides that a receiver may dispose of low value uncollected goods if 60 days have elapsed since the goods became uncollected goods.[145]
[145] Section 60(2) Fair Trading Act.
93 In this case the final account was dated 24 November 2016.[146] I accept the Wilson’s evidence that the horses were dispersed on 28 December 2016 and 3 January 2017.[147] Although the final account stated that the plaintiff would “arrange disbursement of the 8 horses in 14 days”, the plaintiff waited 34 days.[148]
[146] Exhibit 35.
[147] Transcript p 140.
[148] Transcript p 136.
94 There is no prescribed form of notice under Divison 2 part 4.2 of the Fair Trading Act. Section 66 of the Fair Trading Act provides:
A notice of the receiver’s intention to dispose of uncollected goods under this Division must specify –
(a) the receiver’s name;
(b) a description of the goods;
(c) an address at which the goods may be collected;
(d)a statement of the relevant charge payable to the receiver for the goods and, if the relevant charge is likely to increase, a statement of the current relevant charge and an estimate of further charges that will accrue;
(e) a statement to the effect that on or after a specified date the goods will be disposed of unless they are collected and the relevant charge paid;
95 The plaintiff has failed to adhere to disposal obligations for low, medium and high value goods (as contained in ss 60, 61 and 62 of the Fair Trading Act) including a 60-day notice requirement for low value goods.
96 The plaintiff’s decision to destroy the horses without seeking court permission is contrary to the stipulations in Division 3 of Part 4.2 of the Fair Trading Act. Section 68 of the Fair Trading Act requires a receiver to apply to a court for an order to dispose of uncollected goods. Section 69 of the Fair Trading Act provides that if a dispute exists between the provider and the receiver regarding the relevant charge for uncollected goods, either party may apply to a court for an order determining the amount of the relevant charge payable to the receiver. Section 70 of the Fair Trading Act provides:
(1)on an application under section 68 or 69, the court may make any of the following orders –
(a)an order authorising the disposal of specified goods under bailment;
(b)an order determining the relevant charge payable to the receiver;
(c)any other orders that it considers necessary to give effect to an order made under paragraph (a) or (b).
(2) An order under subsection (1)(a) must specify the following –
(a) the authorised means of disposal of the goods;
(b) the date by which the goods may be disposed of;
(c)the amount of the relevant charge payable to the receiver for the goods.
97 As the parties were not in a position (unlike those in Tasman Logistics) to sell or dispose of the goods by self-help, the plaintiff should have applied to the court for permission to destroy the horses under the Fair Trading Act Part 4.2 Division 3). The plaintiff failed to do so.
(d)If the plaintiff has contravened any provision of the Fair Trading Act (either in disposal and/or notification of disposal), has the defendant suffered loss entitling him to damages (including damages for loss of opportunity)?
98 Section 217 of the Fair Trading Act is entitled “Actions for Damages” and reads:
(1) A person who suffers loss, injury or damage because of a contravention of a provision of this Act may recover the amount of the loss or damage or damages in respect of the injury by proceeding against any person who contravened the provision or was involved in the contravention.
…
(3) A proceeding under this section may be brought before VCAT or in any court of competent jurisdiction.
(4) A proceeding under subsection (1) must not be commenced more than 6 years after the date on which the cause of action accrued.
99 Order 44.05 of the County Court Civil Procedure Rules 2018 (County Court Rules) prohibits a party from adducing expert evidence “unless the substance of the evidence is contained within a report or reports which the party has served under this Order.” Order 44.02(2) of the County Court Rules states that “[t]his Order does not apply to the evidence of a party who would, if called as a witness at the trial, be qualified to give evidence as an expert in respect of any question in the proceeding.”
100 The plaintiff submits that the defendant is attempting to adduce expert evidence by establishing the defendant as an “expert valuer”’.[149] The plaintiff submits that “[i]t is too late and unfair to the plaintiff to permit the defendant to do this.”[150]
[149] Plaintiff’s Further Submissions & Objections to Defendant’s Affidavit Sworn 20 April 2020 (Pursuant to the Direction of the Court dated 21 April 2020), para 31.
[150] Plaintiff’s Further Submissions & Objections to Defendant’s Affidavit Sworn 20 April 2020 (Pursuant to the Direction of the Court dated 21 April 2020), para 32.
101 According to the orders of His Honour Judge Cosgrave dated 3 July 2019, the parties were required to file with the Court a trial sheet setting out “the expertise of any expert witness” by “4:00pm on 21 February 2020.”[151] The Trial Running Sheet dated 21 February 2020 states “Expertise of any expert witness – Defendant: Not Applicable.”[152] Therefore, the defendant has failed to comply with the orders of His Honour Judge Cosgrave dated 3 July 2019.
[151] Orders of His Honour Judge Cosgrave dated 3 July 2019, para 14(c)(iii).
[152] Trial Running Sheet dated 21 February 2020, para 1(iii).
102 Pursuant to the orders of His Honour Judge Cosgrave dated 3 July 2019 the plaintiff filed a reply and defence to counterclaim dated 30 July 2019 (the reply). Paragraph 27 of the reply states:
Wilson denies that Bria has suffered any loss and damage as alleged in paragraph 27 or at all. Further, Wilson says in open Court on 3 June 2019 before His honour Judge Cosgrave, Bria:
(a) abandoned his counterclaim for damages;
(b)stated that he does not seek on the counter claim damages for loss of mares or progeny, nor is he seeking return of the mare or any progeny; and
(c)limited his claim to return of monies he claims he has already paid to Wilson and to recover costs of this litigation including costs already awarded in his favour.
103 At the commencement of this trial the defendant referred to the hearing before Judge Cosgrave. The defendant told the court:
The question that was put to me was whether I was calling an expert to give evidence in – to seek the valuation of the lost – losses et cetera, expert witnesses.
I advised His Honour that due to the – the huge cost that will be involved – and it’s quite a lengthy process, um, because it’s year-by-year – and the – I had no confidence that I would recover the costs from the plaintiff; that I would be capping my, um counter-claim at 135,000, which would be – which aligns with the amount of moneys that I paid the plaintiff from 2009 to two thousand – to the current date of proceedings.
That’s the amount that I would be capping my counter-claim at. Plus costs they’ve already awarded, and other costs, and if the court has seen fit to award any other damages or – so be it, but that’s what I was doing. Now, what has happened since is that the plaintiff has put in a reply and defence to a counterclaim, um, document, dated 30 July 2019.[153]
[153] Transcript pp 13 – 14.
104 The defendant now states:
I, the defendant, based on my knowledge and experience say that the fair market value of each of the remaining 8 horses that were shot and killed by the plaintiff was $25,000 each making a total value of $200,000. I also say that the fair market value of the mare “Gladiatress” at the time she was shot and/or disposed of, without my consent or knowledge, was $15,000.[154]
[154] Bria’s affidavit, paragraph 80.
105 The plaintiff submits that the defendant’s evidence is opinion evidence contrary to section 76 of the Evidence Act 2008 (Vic). Section 79(1) of the Evidence Act 2008 (Vic) excludes from the opinion rule “evidence of an opinion of” a person who “has specialised knowledge based on the person’s training, study or experience” if the evidence is “wholly or substantially based on that knowledge”.
106 The defendant has no formal qualifications as an expert valuer of racehorses but submits that he is “an expert valuer of racehorses because of [his] 40 years knowledge and experience in the Thoroughbred Racing and Breeding Industry”.[155] The defendant then sets out the experience and knowledge that he alleges make him qualified to be an “expert valuer”.[156] The defendant states that he has had a passion for racehorses that started when he was 18 years old. The defendant says that he has “valued” more than “50 racehorses” and has “always selected [his] own racehorses without seeking advice from anyone”.[157] He has “attended hundreds of racehorse sales over the years” and monitored “sale prices closely and regularly including sales ‘online’”.[158] The defendant has “hundreds of friends and associates in the race horsing Fraternity seeking [his] expert advice and opinion in relation to the fair market value of racehorses.”[159] The defendant appears to be arguing that, by purchasing racehorses without the advice of an expert valuer, he has himself become an expert valuer.
[155] Bria’s affidavit, paragraph 62.
[156] Bria’s affidavit, paragraphs 63 – 78.
[157] Bria’s affidavit, paragraphs 65, 69.
[158] Bria’s affidavit, paragraph 76.
[159] Bria’s affidavit, paragraph 76.
107 The plaintiff submitted that simply having “passion” for racehorses does not make the defendant an expert valuer. The witness must not be an “enthusiastic amateur”.[160] The value of expert evidence “depends upon the authority, experience and qualifications of the expert and above all the extent to which his evidence carries conviction”.[161] Furthermore the evidence of a witness with an interest in the outcome of the proceeding, although admissible, is to be ‘very closely scrutinised indeed.”[162]
[160]R v Robb (1991) 93 CR App R 161, 166.
[161]Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705, 729 (Heydon JA).
[162]Idoport Pty Ltd v National Australia Bank Ltd [1999] NSWSC 828 [275] (Einstein J).
108 The plaintiff submits that the defendant’s evidence lacks “methodology” and is merely “speculation and opinion”.[163] The prime duty of experts in giving opinion evidence is to furnish the trier of fact with criteria enabling evaluation of the validity of the expert’s conclusions.[164]
[163] Paragraph 33, Plaintiff’s Further Submissions & Objections to Defendant’s Affidavit Sworn 20 April 2020 (Pursuant to the Direction of the Court dated 21 April 2020), para 33.
[164]Makita (Australia) Pty Ltd v Sprowles 52 NSWLR 705, 729.
109 In Makita (Australia) Pty Ltd v Sprowles[165] (Makita) Heydon JA (as he then was) referred to the statement of Fullagar J in R v Jenkins; Ex parte Morrison[166] that “Courts cannot be expected to act upon opinions the basis of which is unexplained.”
[165] [2001] NSWCA 705, 730.
[166] [1949] VLR 277, 303.
110 In Pollock v Wellington[167] Anderson J said:
Unless the process of inference by which an opinion is reached is expressed in a manner which permits the conclusions to be scrutinised and a judgment made as to its reliability, the opinion can carry no weight.
[167] (1996) 15 WAR 1, 4.
111 In Makita Heydon JA stated that if evidence tendered as expert evidence is to be admissible:
it must be agreed or demonstrated that there is a field of “specialised knowledge”:
there must be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert;
the opinion proffered must be “wholly or substantially based on the witness’s expert knowledge”;
so far as the opinion is based on facts “observed” by the expert, they must be identified and admissibly proved by the expert; and
so far as the opinion is based on “assumed” or “accepted” facts, they must be identified and proved in some other way;
it must be established that the facts on which the opinion is based form a proper foundation for it;
and the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached: that is, the expert’s evidence must explain how the field of “specialised knowledge” in which the witness is expert by reason of “training, study or experience”, and on which the opinion is “wholly or substantially based”, applies to the facts assumed or observed so as to produce the opinion propounded.
If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible, and, so far as it is admissible, of diminished weight…. (emphasis mine).[168]
[168] (2001) 52 NSWLR 705, 743 – 744.
112 In his evidence the defendant provides criteria for the determination of fair market value: “bloodlines, percentage of winners to runners no less than 70%, the conformation (physique) of the horse, the maturity, a large windpipe, powerful rump and back legs”.[169] His methodology is to “calculate to value and select a horse by the cost of the service fee plus the cost of rearing the horse and allow for a 20% profit margin for the breeders”.[170] However, it is not clear how the criteria have been applied to reach the conclusions in this case. The defendant merely states that “the fair market value of each of the remaining 8 horses that were shot and killed by the Plaintiff was $25,000 each making a total value of $200,000”.[171] Moreover, the Defendant estimates that each of the 8 horses killed, which included foals and mares, have the same market value. This is inconsistent with some of the criteria that the defendant has supposedly relied on such as “the maturity” and “the cost of rearing the horse”. The defendant’s criteria do not enable the Court to evaluate the validity of the defendant’s conclusions.
[169] Paragraph 70, Bria’s affidavit.
[170] Paragraph 71, Bria’s affidavit.
[171] Paragraph 80, Bria’s affidavit.
113 The defendant’s valuation also does not refer to or take into account the statements the defendant made to the Court on the first day of the trial that the damages he claims for loss of horses would be capped at $135,000.[172] On that day the defendant was reminded that he bears the onus of proof as to the basis of his claim for loss and damage Bria stated:
[172] Transcript p 13.
But that would require me to get a – an expert to do a year-by-year valuation.
HER HONOUR: Yes.
MR BRIA: And then a, um-um, what’s the word I’m looking for – a depreciation as well…
HER HONOUR: Yes.
MR BRIA: on a year-by-year basis…
HER HONOUR: Yes.
MR BRIA: …to say, well, at this particular year the horse is worth X amount. As time goes on, it’d obviously deteriorate because in – in the horse racing, if the horse doesn’t produce, it goes down in value, it doesn’t go up in value. So that it could have been worth $1 a year ago, and it could be worth 50 cents a year after.[173]
[173] Transcript p 17.
114 For the reasons stated in the above paragraphs 99 - 113, I am not satisfied that the fair market value of each of the 8 remaining horses that were “shot and killed by the plaintiff was $25,000 each making a total value of $200,000”. The evidence does not permit and the court is not able to guess the value of the horses as at the date of their disposal. The defendant also said that the “fair market value of the Gladiatress was $15,000.[174] This is “double dipping” as the defendant also claims $25,000 for all remaining 8 horses, which includes Gladiatress.
[174] Paragraph 80, Bria’s affidavit.
115 Further despite the plaintiff acting outside the parameters of part 4.2 of the Fair Trading Act, I am not satisfied on a balance of probabilities that the defendant has suffered loss. The defendant’s own evidence is that the defendant’s horses were “worthless”.[175] Of the three remaining mares, Dynamic Lady, Instant Glory and Gladiatress, the defendant had expressly instructed the plaintiff to sell or dispose of Dynamic Lady and Instant Glory.[176] There is no reliable evidence of the value of Gladiatress. While the defendant’s affidavit puts a “fair market value” on the mare Gladiatress at $15,000, the defendant does not state the basis upon which he makes that assessment. The defendant refused to accept the horses when the plaintiff offered to make delivery in September 2016.[177]
[175] Bria’s affidavit, paragraph 46.
[176] Exhibit 38.
[177] Transcript p 138.
116 It is a general rule of law that a party cannot recover “losses” that he or she had not actually suffered. In Livingstone v Rawyards Coal Co[178] Lord Blackburn stated the principle that:
Where any injury is to be compensated by damages, in settling the sum of money to be given for reparation of damages you should as nearly as possible get at that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been if he had not sustained the wrong for which he is now getting his compensation or reparation.
[178] (1880) 5 App Cas 25, 39.
117 The High Court referred to Livingstone v Rawyards Coal Co in Haines v Bendall[179] and held that “a plaintiff cannot recover more than he or she has lost”.
[179] (1991) 172 CLR 60, 63 (Mason CJ, Dawson, Toohey and Gaudron JJ).
118 In paragraph 81 of Bria’s affidavit the loss and damages suffered by the defendant includes “$250,000 which I have already paid to the plaintiff plus over $150,000 out of pocket expenses, which I have paid since 2007.” I refer to the above paragraphs 1 – 47. I am satisfied on a balance of probabilities that any sums paid by the defendant to the plaintiff were paid in accordance with the agreement.
Loss of opportunity
119 In the amended defence and counterclaim the defendant alleges that he suffered loss and damage because of a “loss of opportunity to produce progeny from the Mares so they could be raced”.[180] In Bria’s affidavit the defendant claims “loss of any future breeding of Gladiatress.”[181]
[180] Paragraph 27(a), amended defence and counterclaim.
[181] Bria’s affidavit, paragraph 12.
120 In Sellars v Adelaide Petroleum NL[182] the High Court stated that where a party alleges a lost opportunity to acquire a benefit, the party alleging the loss must prove causation and loss on a balance of probabilities. Brennan J stated:
Where a loss is alleged to be a lost opportunity to acquire a benefit, a plaintiff who bears the onus of proving that a loss was caused by the conduct of the defendant discharges that onus by establishing a chain of causation that continues up to the point when there is a substantial prospect of acquiring the benefit sought by the plaintiff. Up to that point, the plaintiff must establish both the historical facts and any necessary hypothesis on the balance of probabilities. A constant standard of proof applies to the finding that a loss has been suffered and to the finding that the loss was caused by the defendant’s conduct, whether those findings depend on evidence of historical facts or on evidence giving rise to competing hypotheses. In any event, the standard is proof on the balance of probabilities.[183]
[182] (1994) 179 CLR 332.
[183] (1994) 179 CLR 332, 368.
121 In this case the defendant must establish on a balance of probabilities:
(i) that the destruction of the horses without statutory protocol caused the defendant to suffer loss; and
(ii) that the defendant has suffered some loss or damage
122 It is only if the defendant satisfies the above the criteria that the court turns to ascertain the quantum of the loss. An assessment of loss is made according to “the degree of probability that an event would have occurred or might occur.”[184]
[184]Sellars v Adelaide Petroleum (1994) 179 CLR 332, 350 (Mason CJ, Dawson, Toohey and Gaudron JJ).
123 In this case the defendant provided the mares to the plaintiff in September 2007 to arrange for the mares to be served by stallions owned by the plaintiff. However the defendant only made irregular payments between 2007 and the date of destruction in December 2016 and January 2017. In fact, the defendant provided three assurances to the plaintiff that payment would be arranged. But by failing to make the payments promised, the defendant strung the plaintiff along. As the defendant’s debts increased, in February 2016 the defendant instructed the plaintiff to organise sale or disposal of two of his mares “as soon as possible”.[185] Moreover, the defendant refused to accept his horses when the plaintiff offered to arrange redelivery in September 2016. In addition, despite being aware that the plaintiff intended to destroy his horses, the defendant became non-communicative in late 2016.
[185] Exhibit 38.
124 I am not satisfied on a balance of probabilities that the destruction of the defendant’s horses by the plaintiff caused the defendant to suffer loss. The defendant has not established a chain of causation that continues up to the point “when there is a substantial prospect of acquiring the benefit sought by the [defendant].” [186] The defendant’s conduct demonstrates that he did not view the horses as profitable commodities that he would have nurtured and financed to produce race winning progeny, had they not been destroyed.
[186]Sellars v Adelaide Petroleum (1994) 179 CLR 332, 368 (Brennan J).
125 I am also not satisfied on a balance of probabilities that the defendant has suffered some loss and damage for loss of opportunity to produce progeny from the “mares that could be raced”.[187] The defendant’s evidence was that “very few people make money out of horses.”[188] There is no evidence that the defendant would have arranged for the service of the mares. There is no evidence that the defendant would have been prepared to pay agistment and horse husbandry services for the mares. In the absence of any evidence or particulars to substantiate the defendant’s claim for damages for loss of opportunity to produce progeny from the mares “that could be raced”,[189] I am not satisfied on a balance of probabilities that the defendant has suffered loss or damages for loss of opportunity to produce progeny from the defendant’s horses.
[187] Paragraph 27, amended defence and counterclaim, [27].
[188] Transcript p 374.
[189] Bria’s affidavit, page 12.
126 Whilst the plaintiff may have acted outside the parameters of Part 4.2 of the Fair Trading Act, the defendant is not entitled to damages in accordance with s217 of the Fair Trading Act. As a result of the matters referred to in paragraphs 53 - 125, I propose to order that the defendant’s counterclaim be dismissed.
127 I order that judgment be entered for the plaintiff in the sum of $258,824.80 together with interest.
128 The Court Orders that on or before 4pm on 24 June 2020 the plaintiff must file and serve short minutes of the order to give effect to the reasons for the judgment delivered today.
129 On or before 4pm on 24 June 2020 the plaintiff must file any application or submissions as to costs.
130 On or before 4pm on 26 June 2020 the defendant must file any submissions in reply.
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