R C & M B Steinhardt Pty Ltd v Cunningham & Ors

[1996] QSC 163

IN THE SUPREME COURT

OF QUEENSLAND  Writ No. 2019 of 1990

Brisbane

Before the Honourable Justice Fryberg

[R C & M B Steinhardt Pty Ltd  v  Cunningham & Ors]

BETWEEN:
  R.C. & M.B. STEINHARDT PTY LTD

Plaintiff

AND:
  ALISON MEGAN CUNNINGHAM
  First Defendant
AND:
  LEONA CAROL DEI ROSSI
  Second Defendant
AND:
  ANTHONY JOHN SALISBURY
  Third Defendant
AND:
  GEOFFREY PAUL CUNNINGHAM
  Fourth Defendant
AND:
  KEN WILLIAM BLOWERS
  Fifth Defendant
AND:
  RUSSELL NEIL DEI ROSSI
  Sixth Defendant

REASONS FOR JUDGMENT - FRYBERG J.

Judgment delivered 22/08/1996

CATCHWORDS:      Torts - Negligence - Economic loss - Careless advice - Professional advisers - Damage - Causation

COUNSEL:L. Bowden for the plaintiff

B. O'Donnell QC for the defendants

SOLICITORS: Bowdens for the plaintiff

Clayton Utz for the defendants

HEARING DATES:   21 November - 20 December 1994

IN THE SUPREME COURT

OF QUEENSLAND  Writ No. 2019 of 1990

Brisbane

Before the Honourable Justice Fryberg

[R C & M B Steinhardt Pty Ltd  v  Cunningham & Ors]

BETWEEN:
  R.C. & M.B. STEINHARDT PTY LTD

Plaintiff

AND:
  ALISON MEGAN CUNNINGHAM
  First Defendant
AND:
  LEONA CAROL DEI ROSSI
  Second Defendant
AND:
  ANTHONY JOHN SALISBURY
  Third Defendant
AND:
  GEOFFREY PAUL CUNNINGHAM
  Fourth Defendant
AND:
  KEN WILLIAM BLOWERS
  Fifth Defendant
AND:
  RUSSELL NEIL DEI ROSSI
  Sixth Defendant

REASONS FOR JUDGMENT - FRYBERG J.

Delivered the 22nd day of August, 1996

The parties

The Steinhardt family have been farming in the Bundaberg area for over 30 years.  Since about 1984 they have specialised in growing tomatoes.  Ownership of the land upon which this is done is spread among various members of the family - it is unnecessary to describe it in detail.  Since 1st July 1989 the tomato growing business has been conducted by the plaintiff company under the business name Steinhardt Family Farms.  Prior to that date the family (or some of them) used that name, but after that date only the plaintiff was registered as carrying on business under it, and only the plaintiff used it.

The fourth defendant, Mr Geoffrey Cunningham, graduated from Queensland Agricultural College in 1986, taking a degree of Bachelor of Applied Science with first class honours.  In 1987 he became an employee of Crop Tech Research Pty Ltd ("Crop Tech"), a company owned by Mr and Mrs J Hall, which carried on business around Bundaberg as a crop consultant.  In 1988 he and the sixth defendant, Mr Dei Rossi, became directors of Crop Tech.  Until the end of 1989 his work for Crop Tech included monitoring various fruit crops for pests.  He left Crop Tech at the end of 1989 and established his own consultancy business at Bundaberg.  That business lasted for two years and was devoted to crop monitoring.  Ninety percent of the monitoring involved tomato crops.  After 1991 he returned to Gatton College, occupying a research and teaching position which he continued to occupy at the time of the trial of the present action.  The first defendant is his wife.

Crop monitoring is a relatively new occupation in Queensland.  Crop monitors are persons whose professional training is in applied science and agriculture.  As a separate occupation it first appeared in this State in the early 1970s in the cotton industry.  When crop monitors demonstrated their success in that industry, other farming industries began to employ them to assist in the production of their crops.  They are employed to monitor, and advise in relation to, the health and growth of crops.  This may include monitoring and advice in relation to water and irrigation, insect and disease management and control, and nutritional management.  It is the function of a monitor regularly to inspect the crops under his or her care for insects, diseases and malnutrition, and to advise in relation thereto.  In 1990 there were fewer than a dozen crop monitors in Queensland.

Steinhardt Family Farms engaged Crop Tech as a crop monitor in 1987.  Mr Cunningham carried out the work on behalf of Crop Tech from then until he left that company at the end of 1989.  Thereafter he continued to act as crop monitor for Steinhardt Family Farms until the events giving rise to the present litigation, regardless of and indifferent to the precise persons comprising the business.  The business structure under which he operated was unusual, and explains the presence of the other defendants in the litigation.  It is undisputed that Mr Cunningham carried on business using the business name Bundaberg Agricultural Management Consultants.  That name was registered as a business name on 24th November 1989.  The records of the Consumer Affairs Office state that that business commenced on 3rd November 1989.  They show that the persons then carrying on the business were Mr Cunningham, the fifth defendant Mr Blowers and the sixth defendant Mr Dei Rossi.  They further disclose that on 10th July 1990 the first defendant Mrs Cunningham, the second defendant Mrs Dei Rossi, and the third defendant Mr Salisbury also commenced to carry on the business.  They indicate that all six carried on the business until 18th December 1990.  That date was very shortly after the plaintiff's tomatoes were damaged.  On that date, the three persons who had joined the business in July that year left it, together with Mr Dei Rossi.  Thereafter, according to the records, only Mr Blowers and Mr Cunningham carried on the business.  According to the records, they continued to do so until 27th March 1992 when the name was deregistered.

Standing alone, that evidence suggests that from July to December 1990 (the critical period for the purposes of this case), the six persons named in the records were carrying on business in partnership.  However both Mr Cunningham and Mr Blowers gave evidence before me and asserted that this was not so.  Mr Cunningham testified that he, Mr Dei Rossi and Mr Blowers all left Crop Tech at the same time and set up independent and separate consultancy businesses.  They decided to open a single bank account "just to share the paperwork involved in each of our separate businesses".  He said that their bank would not open an account in a trading name unless that name was a registered name.  He said that Mr Salisbury was added so that he also could use the account when he started doing some consultancy work of his own, and the two wives were added so that they could be signatories on the account.  He admitted in his defence that from July 1990 he and his wife jointly carried on business.

There is no doubt that at the relevant time each of the male defendants carried on business in the name Bundaberg Agricultural Management Consultants.  Stationery was printed in that name and they all used it.  Each had a business card in that name.  Invoices were rendered in that name and all monies received were banked to the common bank account.  They shared a common post office box.  However, Mr Cunningham testified that each had his own list of growers for whom he worked; each was responsible for his own expenses; and at the end of each month, each was paid from the shared bank account the income which he had earned.  Neither joint accounts nor a partnership tax return were prepared.  He was not cross-examined on these points.

Mr Blowers generally corroborated Mr Cunningham's evidence as regards the business arrangements, although he gave a different explanation for them.  He testified that the reason for the business name was to bring the consultants together under a common banner so they could discuss problems that might exist on a district basis and benefit from each other's experience.  He also agreed that the name was registered as part of a business image, although he asserted that it was the individual consultant who received business promotion, not the business name. 

I accept the explanation of Mr Blowers in preference to that of Mr Cunningham.  No doubt it is true, as both of them said, that the bank required the business name to be registered if an account was to be opened in that name.  However I do not believe that every signatory on the account would have been required to be registered as a person carrying on the business.  Mr Cunningham was inexperienced and his explanation makes no sense.  I find that the arrangement was made to create a business image, to facilitate discussion among consultants and to provide the convenience of a common bank account.  I am satisfied that the arrangement did not amount to a partnership.  Mr Cunningham carried on business only with his wife.  No arguments based on ostensible authority or estoppel were advanced to me.  There is therefore no basis upon which the second, third, fifth and sixth defendants could be bound by liabilities incurred by Mr Cunningham.  That is the only basis upon which they are alleged to be liable.  The action against them must therefore be dismissed.  In the circumstances I am not minded to make any order for their costs, but I will hear counsel on that matter.

The claims

The plaintiff's primary complaint against Mr Cunningham is that he negligently failed to detect the presence of tomato russet mite in its crop on Trevors Farm in the period September - November 1990.  Alternatively, it alleges that if he did detect it, he negligently failed to advise appropriate treatment.  As a result, the crop was severely damaged.  It sues in both tort and contract.  Mrs Cunningham is sued as his partner.  The defence case is that Mr Cunningham did detect those mites in September 1990, that he told the plaintiff of their presence and advised appropriate treatment, but that his advice was not followed.  He also makes allegations of contributory negligence, and counter-claims for his fees.

The background

The plaintiff's farming activities were conducted on three separate blocks of land.  These were known as Elliott Farm (sometimes called Mahogany Creek), Trevors Farm and Home Farm.  Elliott Farm had 200 acres of which 140 acres were cultivated.  Trevors Farm had 66 acres and the Home Farm 140 acres, all of which were cultivated.  From time to time parts of each farm were left fallow for varying periods.  Each year a planting program was devised.  Elliott Farm, where the sandy soil was slightly warmer, produced better results in the winter and was usually planted first.  Trevors and Home Farms would be planted later.  Each year they would be subdivided into temporary "blocks", some of which would be planted while others remained fallow.  The blocks had names like Trevors 1, Home 2 and so on.  These names did not denote a permanently defined area but rather referred to a part of the farm planted for a particular year. 

Mr Cunningham provided three main crop consultancy services to Steinhardt Family Farms: irrigation scheduling, pest monitoring and nutrient monitoring.  This required him to visit the Steinhardt properties twice a week.  On these visits he would inspect the crop and take leaf samples and would probe the ground with a neutron probe.  He would take the leaf samples to a laboratory and after they were analysed would supply his client with a written report on plant nutrition.  He would also provide a written report, in the form of a graph, showing levels of ground water and recommendations for irrigation.  Finally, he would provide a written report (called a "spray sheet" by those involved) on pests and diseases present, rating the severity of the presence of the pests and recommending appropriate chemicals and rates of application to deal with them.  The defence admitted that it was an implied term of Mr Cunningham's agreement with Steinhardt Family Farms that when acting in accordance with the instructions of the Steinhardts he would exercise reasonable skill and care.

In the years before 1990, the Steinhardts had contended with a variety of tomato pests.  These included the leaf miner, the heliothis moth and the two-spotted mite.  In those years chemical control was the primary method of defence against these pests - in 1990 biological control methods had only recently begun to be introduced.  To counter them, the Steinhardts applied chemicals from a mobile boom spray.  This consisted essentially of a trailer, upon which were mounted a 3,000 gallon tank, a pump with associated piping and a boom arm which deployed horizontally from the trailer, perpendicular and to the right of its line of travel.  Pre-mixed chemicals were placed in the tank.  They were pumped through piping along the boom to ten outlets evenly spaced along the underside of the boom.  When the boom was deployed five of the outlets were above the gaps between the rows of tomatoes and the other five were above the rows.  From the former group drop pipes were hung, containing nozzles in their sides; and nozzles were directly attached to the latter group.  The length of the drop pipes was adjustable, as was the height of the boom from the ground, to take into account the growth of the tomatoes.  I shall describe the nozzles in a little more detail later.  In operation, the trailer was towed behind a tractor with the boom deployed to the right of the line of travel.  Five rows of tomatoes could be sprayed at once.  A general idea of the operation of the equipment can be gained from some of the photographs in exhibit 8 and from part of the video tape exhibit 7.  This equipment was typical of spraying equipment in the region. 

Members of the Steinhardt family had different responsibilities for the operations of Steinhardt Family Farms.  Mr Trevor Steinhardt was responsible for ground preparation.  Mr Kevin Steinhardt was responsible for growing.  This included the nursery and the harvesting process.  He was thus responsible for implementing (or deciding not to implement) any advice given by Mr Cunningham.  Other family members were responsible for sorting, packing, marketing and accounting.  Mr Kevin Steinhardt made the final decision on what chemicals would be sprayed.  He would make that decision primarily on the basis of the spray sheet recommendations, but he would also take into account what stocks of spray the plaintiff had on hand and, I find, the cost of spray.  He had considerable practical knowledge of sprays and made his own decisions about them.

Spraying - the spray diary

Mr Steinhardt did not himself administer the spray.  That was done by Mr Ross Bainbridge, an employee.  Where possible it was done at night.  Mr Bainbridge would get his instructions from Mr Kevin Steinhardt in the late afternoon after collecting any spray sheets which might have been left by Mr Cunningham.  It was common ground between the parties that the spray sheets and any other reports would be left in a prearranged place in the irrigation shed on Trevors Farm if Mr Kevin Steinhardt were not present.  Mr Cunningham said that if he were present (which happened, he said, about half the time), the reports would be handed to him and there would be a half hour conversation about their contents.  That Mr Steinhardt denied.

Mr Bainbridge gave evidence that at the conclusion of each day's spraying he made a record of what he had sprayed and where he had sprayed it.  He did that, he said, because Kevin Steinhardt had told him to do so.  He kept the record in what he called a spray diary.  He said its purpose was "so I can look back and have a look what I'd sprayed a week or a fortnight ago or something".  Mr Cunningham had never been told of its existence.  He said that Kevin Steinhardt supplied the stationery on which he kept it.  He was unable to remember when he was told to start keeping it, nor could he remember whether the diary in respect of the period July - November 1990 was the first one which he kept.  No copy of any earlier diary could be found, nor of any subsequent diary except the one current at the time of trial.  By then, Mr Kevin Steinhardt testified, it was required by law. 

Mr Bainbridge identified the pages in exhibit 3 as the diary which he kept for the period July - November 1990.  Exhibit 3 contains the pages of a Coles foolscap-sized scribbler pad, lined on one side and made of cheap paper.  They are aged and stained.  They appear to have been written with several ball point pens of slightly different colours. They can be divided into five sequential sections by ink colour.  There was no suggestion that Mr Bainbridge constructed the whole document in one sitting after the event.  However in cross-examination Mr Bainbridge denied a suggestion that he would write up a few pages, then a few more pages, then a few more pages.  He insisted that he would always write it every morning after he had finished spraying.

During the course of the trial exhibit 3 was examined by Mr G K Marheine, the officer in charge of the Queensland Police Document Examination Section.  Mr Marheine was of opinion that the writings in the diary were more consistent with having been written in at least five distinct sessions rather than on an individual daily basis.  He found a high level of consistency within the handwriting within each of the five sections, which he would not have expected to have found in the writing of someone unskilled in penmanship.  Mr Bainbridge was plainly a person so unskilled.

I thought Mr Bainbridge an unsatisfactory witness.  He often avoided committing himself to a definite answer and at times I felt this avoidance inconsistent with any attempt at frankness.  The spray diary contains an entry for 20th November 1990, "October-November mites very bad".  Mr Bainbridge asserted that he wrote that on 20th November "to let myself know that between those months the mites were bad, so when that month comes around again I would know that the mites were bad".  He denied that he wrote it to try to help the Steinhardts - he said, "I didn't even know what was going on then".  He denied the suggestion that he was aware when he wrote it that the Steinhardts had a complaint against Mr Cunningham relating to mites.  I cannot accept that, any more than I can accept his claim that the note was intended for reference in October and November in future years.  Indeed Mr Bainbridge himself had said earlier that the diary was kept as a record so he could look back to see what he had sprayed a week or a fortnight earlier.  The nature of the writing material on which it was kept is inconsistent with any intent that it should be kept as an annual record.  I think Mr Bainbridge made the notation to assist his employer's case.  His denial of that proposition was false and was motivated by a misguided sense of loyalty to his employer.

I am also satisfied that Mr Bainbridge did not maintain the diary on a daily basis.  I accept Mr Marheine's opinion that the diary was written in a number of continuous sessions.  It is possible that these sessions occurred from time to time during the period nominally spanned by the diary, but I think it more likely that they occurred shortly after the discovery of the problem with the tomatoes in November 1990.  Mr Bainbridge agreed that he kept Mr Cunningham's spray sheets in the filing cabinet at his home.  No doubt that would have assisted in the reconstruction of the diary.  I find that I am unable to place any weight on the diary as a contemporary record of chemicals actually applied to the crop, though I am satisfied it was a genuine attempt by Mr Bainbridge to record what he had sprayed.

The mites
           The two types of mite involved in this case, the tomato russet mite and the two-spotted mite are quite different.  The latter had become endemic in the Bundaberg area by 1990.  Ironically, it seems that its prevalence was largely due to excessive use of chemicals.  Mites are arachnids, not insects.  The two-spotted mite spins a tiny web and "hang glides" or is blown by the wind from place to place.  It causes damage by rasping the underneath of the leaves of the tomato bushes, thereby reducing the photosynthetic sufficiency of the bush.  As a result the leaves go yellow.  Adult two-spotted mites are visible to the naked eye.  They reduce the quality of the fruit but do not prevent a crop from being harvested.  They also reduce yield. 

The tomato russet mite is a known problem in the hotter, drier tomato growing areas around Bowen, but until 1990 it was not a major problem in the Bundaberg area.  Mr Hall, an experienced crop consultant in the area, said that three or four paddocks with some russet mites in them might be found each year.  It attacks the stem and the leaves of the tomato plant in the same way as the two-spotted mite, but also it attacks the fruit, feeding on the young fruit and causing damage manifested as white blotching with uneven skin texture.  Damage may also be caused by an allergic reaction in the plant to the action of the mite.  The mites generally start at the bottom of a bush and work their way upwards.  As they work their way up the stem they leave a bronzing effect, with secondary silvering of the leaves.  This is specific to the russet mite.  Russet mites are much smaller than the two-spotted mites.  Adults are visible using a 10-times hand lens to somebody who is reasonably practised.  The nymphs and the young are not - to see them a 30-times or at least a 20-times microscope is necessary.  They are a semi-translucent pale pinkish colour.  The mites have a seven day life cycle in hot weather, and populations can multiply rapidly.

The russet mite was described in 1986[1] thus:

[1]      Exhibit 31, an article by Mr I. Kay.

"The tomato russet mite (Aculops lycopersici Massee) has re-emerged as a major pest of tomatoes in Queensland.  The mite can severely damage, and even kill, tomato plants with a resultant loss of yield. 

The pest was first recorded early this century in Queensland but it is known now to have almost worldwide distribution.  It was regarded as a serious pest of tomatoes in Queensland until the 70's when its incidence declined in commercial plantings.  However in the last few years it has reappeared and is again a major pest of the crop, especially in the northern growing areas.

Life History

Tomato russet mites are too small to be seen by the naked eye, but are visible under a powerful hand lens. 

Adults are about 0.15 - 0.2 mm long and 0.05 mm wide, torpedo shaped, and cream to light grey-brown.  They have two pairs of legs and are quite active.  The round, colourless to white eggs are laid on the leaves and stems of the plant.  Nymphs, which hatch after a couple of days, are white and the same shape as the adults, but a lot smaller and less active.  There are two nymphal stages. 

Both adults and nymphs feed by puncturing the surface cells of the host plant.  They feed on all green surfaces.

Tomato russet mites prefer warm to hot conditions.  The lifecycle, from adult to adult, takes about a week under optimum conditions for development.  Hence, populations can build up rapidly under suitable conditions.  The pests do not have a dormant stage, but are able to survive cold winter conditions on their host plants in protected positions. 

The mites cannot fly.  They are dispersed by being blown in the wind, and by being carried on machinery, pickers and possibly animals and insects that move through the fields.

...

Damage

Tomato plant injury due to feeding by the tomato russet mite usually starts at the base of the plants and spreads upwards.  The first sign of injury is a silvering of the undersurfaces of the lower leaves, which then become bronze coloured, wither and die.  The lower part of the stem loses its surface hairs, becomes smooth, rusty-brown or smoky coloured, and may develop small superficial cracks.  As the infestation develops, the mites move up the plant discolouring the stems and destroying the foliage, with the greatest concentration of mites being on the green tissue just ahead of the obvious damage.  Eventually, all the leaves may be destroyed and the plant may die."

Spray for mites

The two forms of mite were different also in their responses to various chemical sprays used against them.  Some description of those sprays is necessary.

The chemical of choice against the tomato russet mite, was marketed under the name kelthane.  This was a specific miticide, the active ingredient of which was dicofol.  If for some reason alternatives were required, azodrin and nuvocron were available.  These were the trade names of products containing monochrotophos as the active ingredient.  They were not specific miticides and probably were less effective than kelthane.

A good deal of evidence was given about another chemical marketed under the name helothion, the active constituent of which was sulprofos.  Helothion was an insecticide, not a specific miticide.  Its primary use on tomatoes in the Bundaberg region was in combatting the tomato grub (heliothis) and the leaf miner (larvae of the potato moth phthorimaea operculella).  It was marketed for these purposes - the brochure exhibit 65 is an example of its marketing, tailored specifically for the Bundaberg region.  In all States agricultural chemicals must be registered for use under State legislation.  In Queensland alone, helothion was registered for use on tomatoes against tomato russet mite, and the brochure reflected that fact in an afterthought: "Also controls tomato russet mite when used in a regular program".  This claim was supported by experimental work done by officers of the Department of Primary Industries in North Queensland in the early and mid-1980s.  That work suggested that it could be used preventively, although dicofol was recommended to control an infestation.  Nonetheless it was also recognised that pests could develop resistance to the product.  The label noted:

"The effectiveness of this product may be reduced or nullified as a result of pests developing a tolerance or resistance to the product.  ...  This product should not be used where the user suspects that a tolerant or resistant strain is present."

By 1989 a number of experts in the Bundaberg region had formed the view that for this reason the use of broad spectrum organo-phosphates such as helothion should be avoided if specific chemicals or biological control methods were available alternatives.

A different approach was adopted in relation to two-spotted mite.  It was apparently less destructive than the russet mite and small populations could be tolerated.  It was also more difficult to control.  The chemical tedion, the active ingredient of which was tetradyfon was a specific miticide recommended for use against the eggs of this mite (but not against the tomato russet mite).  Adult mites were more difficult to control.  A product called omite was used with only reasonable results.  Up until some time in 1988 products called plictran and parapal, the active constituent of which was cyhexatin, were used.  In that year they were withdrawn, although growers were allowed to exhaust their existing stocks.  In their place, growers in the Bundaberg region began to use a specific miticide marketed by the Shell company under the trade name torque, the active ingredient of which was fenbutatin oxide.  Torque had been the subject of trials conducted by officers of the Department of Primary Industries as early as 1983.  It was registered under the Queensland legislation for use against the tomato russet mite on several plants, but curiously, not on tomatoes.  That meant that its use on tomatoes was unlawful.  Nonetheless, it came into widespread use on tomatoes in the Bundaberg region in the late 1980s.  The Steinhardts began using it, and Mr Cunningham knew this. 

Credibility: Mr Kevin Steinhardt and Mr Cunningham

I turn now to the events of 1990.  Some of those events are controversial.  The witnesses who were best able to give direct evidence of many events were Mr Kevin Steinhardt on behalf of the plaintiff and Mr Cunningham.  Unfortunately I have formed the view that neither was a reliable witness.  I thought each was guilty of embroidering his evidence in an attempt to improve his case.  Neither was in my view completely truthful.  For example, on the one hand, I cannot believe that Mr Steinhardt was unaware that Mr Bainbridge was not keeping a daily spray diary.  It was he who provided the stationery for it.  On the other hand, on a number of important occasions Mr Cunningham asserted as facts, and as true facts, matters which at best were inferences on his part and at worst were no more than pious hopes.  On other occasions I thought his evidence was coloured by his desire for a successful outcome.  I will not attempt to catalogue every piece of evidence which has led me to doubt the reliability of both these witnesses.  Enough will appear from the discussion which follows.

The damaged crop at Trevors Farm

In 1990 three blocks were marked off on Trevors Farm.  At the beginning of the year what became blocks 2 and 3 were under sorghum, the last tomatoes having been removed from that land the previous August.  The plan was to keep the blocks free from tomatoes for 12 months.  Sorghum is what is known as a cover crop, that is, a crop grown in the fallow to reduce the weed population and to enhance the organic matter in the soil.  The farm plan provided for a winter harvest from a crop on Trevors 1.  That crop was planted in March 1990 and harvested between 20th July and 23rd August 1990.  Mr Cunningham began to monitor it on 23rd March of that year.  It was common ground that there was some tomato russet mite in this crop, but there is no suggestion that it caused any noticeable damage.  Mr Cunningham's claim to have detected it is disputed. 

Trevors 2 and 3 were planted with seedlings on and from 30th July and 22nd August 1990 respectively.  These seedlings had been grown in the nursery from seedings made during June.  They were timed to be harvested for the period of peak demand in December.  Mr Cunningham monitored them from 7th August until 23rd November 1990.  Harvesting commenced in early November and continued until 23rd November.  Thereafter it was abandoned as uneconomical due to the poor condition of the fruit.  The reasonableness of that decision was not challenged.  The blotchy condition of the fruit was almost entirely due to the effects of the tomato russet mite, although some signs of damage from the two-spotted mite were present.  Some fruit was sold at reduced prices, but most of it was unsaleable.  It seems to be common ground that the russet mites probably spread to Trevors 2 and 3 from Trevors 1.

11th September 1990

I turn now to the plaintiff's primary case: its contention that Mr Cunningham failed to detect the presence of tomato russet mites in the crop in Trevors 2 and 3.  The plaintiff's attempt to demonstrate this focussed upon Mr Cunningham's spray sheets.  For the plaintiff it was argued that the spray sheets for the relevant period neither reported the existence of the russet mites nor recommended any treatment for them.  Mr Cunningham asserted that he detected the presence of the russet mites on 11th September 1990 and recommended appropriate sprays, viz helothion, from that date, and kelthane from 30th October.  He claimed he also orally reported the presence of the mites to Mr Kevin Steinhardt.  To understand the parties' analyses of the spray sheets, I annex a sample to this judgment[2].

[2]      Annexure A: spraysheet for 11th September 1990.

It will be seen that the sheet makes provision for identification of the area the subject of the report and then contains three sections: a pest report, a disease report and treatment recommendations.  Mr Cunningham explained that the sheets constituted a record of his monitoring inspections.  However, he said, they were not intended to be comprehensive.  In particular, he said, pests would be mentioned in the pest report only if he considered them economic pests.  By that he meant pests which could cause economic damage in the crop.  Pests would neither be commented upon  nor rated unless they were present in such numbers as to cause economic damage.  Rating was done on a scale of 1 to 5.  A rating of 5 was the highest and indicated so much damage that the crop was probably not worth going on with.  A rating of 1 meant "that the pest has reached a level where some type of control can be justified economically to control that pest".  The action column related to whether action was currently being recommended.  That column was either ticked or not ticked.  Mr Cunningham said that as he was writing the chemicals down (presumably, in the recommendation section), he would tick off which of the pests the chemical related to.  However Mr Cunningham also said that he did not attach much importance to the action column and he did not use it as a major part of the decision making.  He did not suggest that he had communicated either of these reservations to the Steinhardts.

Mr Cunningham's claim that he detected the tomato russet mite in Trevors 2 and 3 for the first time on 11th September 1990 naturally led to attention being focussed on the spray sheet for that day.  The "mites" line of that sheet is blank.  Indeed, that is true of all spray sheets for Trevors 2 and 3 up to 30th October 1990.  Mr Cunningham explained this by saying that while he had detected mites, they were not present in economic quantities and therefore were not recorded on the sheet.  Despite this, he said, he had in fact prescribed treatment for them by introducing helothion into the treatment recommendations. 

The first thing I would observe about Mr Cunningham's explanation is that it does not happily accord with his own form.  The form seems to contemplate the reporting of the presence of pests of the named varieties, with the action column indicating whether any chemical is to be applied to those pests.  Completing the form on the basis suggested by Mr Cunningham would have created the potential to mislead the grower; for only pests which required treatment would on his approach be listed.  Thus a grower would remain ignorant of the presence of pests with the potential to build up rapidly.  That was surely undesirable[3].  The second point to be made is that the spray sheets for earlier periods appear to be inconsistent with Mr Cunningham's suggestion.  There are numerous examples in exhibits 76, 77 and 78 (up to March 1990) where the presence of mites has been recorded but no action has been recommended in respect of them.  In such cases, there is no tick in the action column and no chemical prescribed for the mites.  The rating in such cases is 1 or 2 or occasionally "<1" and the comments range from "slight" to "active" and "moderate".  Mr Cunningham conceded in cross-examination that a number of these entries related to incursions of two-spotted mite at levels which could be tolerated without treatment. 

[3]      Even the fifth defendant, Mr Blowers, said he would have noted mites in such circumstances.

In that light, I find it surprising that, if Mr Cunningham did indeed find tomato russet mites on 11th September 1990, there should be no mention of them in the spray sheets.

Mr Cunningham also contended that the introduction of helothion on 11th September 1990 reflected his discovery of the tomato russet mites in Trevors 2 and 3.  He pointed out that right from the first planting of Trevors 2 in early August[4], infestations of leaf miner moths had been moderate to heavy, with ratings of 2 to 3.  He said that his preferred treatment for heavy infestations of leaf miner was spraying with orthene or nitofol and that until 11th September he had alternated between these two chemicals.  They were in his opinion the two best chemicals against leaf miner.  The period from 7th August to 7th September inclusive comprised eight visits.  On 11th September, he said, despite the fact that the leaf miner moths were still described as heavy, with a rating of 3, he changed his strategy by introducing helothion to his recommendations in place of orthene at weekly intervals.  This was to target both the tomato russet mite and the leaf miner.  He suggested that because there was no additional action apart from the change in leaf miner strategy, there was no need to record the mites, give them a rating or record any action in respect of them.

[4]      Trevors 2 was planted before Trevors 3 and Mr Cunningham's first spray sheet in relation to it was dated 7th August.

It seems to me unlikely that Mr Cunningham would have changed his spraying strategy in such a significant way without making some sort of record of it.  On his own version, the change did not simply involve targetting an additional pest which was not present in numbers sufficient to warrant recording it.  It also involved changing from what Mr Cunningham said was his preferred chemical for use against leaf miner to what he thought was a less effective chemical, at a time when the leaf miner was recorded as "heavy".  Asked if his recommendation would have been any different if there had not been any tomato russet mites there, Mr Cunningham replied, "Yes, I would have - with very, very high levels of leaf miner I would have continued using the orthene".  Indeed Mr Cunningham said that he had adopted orthene to deal with the pressure from the leaf miner because "something stronger than helothion was needed".  I find it difficult to believe that, with the leaf miner pressure continuing, he would abandon orthene in favour of helothion without making a record of it.  Such a change would seem to be of sufficient importance to require reporting to his principal, not just orally, but as part of his formal documented report.  Since he did not keep a field diary, the carbon copies of the spray sheets were also his own record of what had taken place, and one would have thought that such a change of strategy would be important enough to be noted for his own future reference.

It is also worth noting that at the same time as he switched his recommendation from orthene to helothion, he also switched nitofol (his second preferred chemical against leaf miner) to monitor[5].  He gave no explanation for that change, but there is no suggestion it related to the russet mites.

[5]      Nitofol and monitor are trade names for two products whose active constituent is methamidophos.

Mr Cunningham claimed that one of the reasons he detected tomato russet mites in Trevors 2 and 3 while their numbers were still very low was that he was aware of their presence in Trevors 1 and was expecting them to spread.  He said he had first detected them in Trevors 1 on 3rd July 1990.  At that stage they were present in greater numbers than he detected in Trevors 2 and 3 in September and he recorded their presence in the spray sheet for Trevors 1 of 3rd July, rating them at 1 and describing them as "slight".  He said he restarted the use of helothion to deal with them.  It had earlier been used for the sole purpose of targetting leaf miner, but its use had been discontinued after 8th June.  Mr Cunningham recorded the presence of mites in every spray sheet for Trevors 1 from 3rd July until 17th August, the last sheet before the completion of harvest of that block.  He gave them a rating of 1 up until 7th August and a rating of 2 on 10th and 17th August, describing them on those two occasions as "active".  He recommended helothion on 3rd July, 24th July and 10th August.  I accept his evidence that he then believed helothion, used regularly, was effective to prevent the build-up of tomato russet mite.  However, despite the above ratings, at no stage did he prescribe a specific miticide for Trevors 1.

On behalf of the plaintiff Mr Bowden submitted that although the russet mite had been present in Trevors 1[6], Mr Cunningham had not detected it and had recommended no spray for it.  He submitted that the mites referred to in the spray sheets for Trevors 1 were two-spotted mites, which Mr Cunningham agreed were present in significant numbers throughout this period.  The absence of crop damage from the russet mites, he submitted, was probably due to the colder weather.

[6]      Indeed, the plaintiff asserted this fact: see statement of claim para.10(i).

There is some support for the view that Mr Cunningham's recommendation of helothion was not aimed at tomato russet mites.  On his own admission, Mr Cunningham had been using helothion up until 5th June against leaf miner.  Leaf miner was present in the crop from its inception.  It had a rating of 2 throughout April; it fell to a rating of 1 for the first three weeks of May; it returned to a rating of 2 on 23rd May but then fell to a rating of 1 on 27th May, 5th June and 8th June.  Helothion was discontinued on 12th June.  However on 26th June the leaf miner rating returned to 2 and this rating was repeated on 3rd July.  That was the day on which helothion was reintroduced.  That pattern is consistent with its use to target the re-emerging leaf miner. 

Mr Cunningham's evidence must be assessed against his stated view that if tomato russet mite had a rating of 1 or greater, helothion would not normally be used against it:

"You can see that you suggested Helothion for the following Monday.  Do you see that on the right-hand side?--  Yes, that's right.

That was inappropriate for any sort of commercial - rather, economical infestation, wasn't it, of tomato russet mite?--  Helothion could still be used approximately up to a rating of one, but once it got over one I wouldn't consider it appropriate.

You say Helothion can be used up to a rating of one, do you?--  Well, one is the balance point where it has just reached the economic threshold.  Normally it would be used to suppress prior to that level."

Implicit in this is the proposition that normally a specific miticide would be indicated once the russet mite achieved a rating of 1 or greater.  I have already observed that on the last two inspections of Trevors 1 conducted by Mr Cunningham, he rated mites at 2 and on his earlier inspections at 1.  There is therefore a degree of inconsistency in his approach. 

It was generally accepted, and must have been known to Mr Cunningham, that whatever success might be achieved by using helothion against tomato russet mite could only be achieved by applying it on a schedule.  The label exhibit 17 recommended a weekly schedule; the article by Mr Kay exhibit 35 (which was known to Mr Cunningham) recommended its use at least fortnightly.  The gaps between Mr Cunningham's recommendations exceeded these periods.  That is another inconsistency.

Mr Cunningham sought to explain both of those inconsistencies by reference to the colder weather.  He suggested that at that time of year greater latitude was possible.  It is true that the mites are less of a problem in winter - indeed, the plaintiff's case is that the cold weather alone was enough to suppress them.  However it seems an unlikely reason for a departure from the manufacturer's recommendation.  I also note that on 10th August, when mites were described as "active" and given a rating of 2, there is no tick in the action column, despite the fact that helothion was recommended on that day.  In my judgment the omission of a tick is likely to have some significance[7].  It suggests the mites observed were two-spotted mites.

[7]      On the other hand, I would be disinclined to attribute much significance to the presence of a tick against a pest when the spray sheet in fact did not make any recommendation for treatment.  As Mr Cunningham hinted, that could, result from carelessly going through the sheet ticking everything.

On balance it seems to me more likely than not that Mr Cunningham did not identify tomato russet mites in Trevors 1 in July or August 1990.  It follows that there was no particular reason for him to be watching out for them in September in Trevors 2 and 3.

Why then did Mr Cunningham introduce helothion on 11th September?  Later in his cross-examination, Mr Cunningham's attention was drawn to the article at pp.31-2 of exhibit 80.  That article reported an experiment conducted at Bundaberg in December 1988 to establish the mortality of leaf mining potato moth larvae when subjected to a single application of a range of insecticides.  These insecticides included acephate (orthene) and sulprofos (helothion).  The results of the experiment indicated that helothion was the best performer of all chemicals tested against the leaf miner larvae, and was significantly better than orthene.  Mr Cunningham admitted that he was aware of this work and took it into account.  However he did not see his specific preference for orthene over helothion in a very specific situation as a departure from it.  He said that his field observations were that when you had a specific situation of leaf miner in a young block, orthene was a superior chemical to helothion.  In other words, he distinguished the situation of a young block from that which applied in the experiment. 

Examination of the spray sheets in exhibit 1 shows that up until 11th September, Mr Cunningham recommended orthene and nitofol in alternation with a return period of a week.  From 11th September he recommended helothion and monitor on the same basis, with the only break in the pattern being 21st September when orthene was recommended.  I find that the new rotation reflected Mr Cunningham's view that orthene was superior to helothion against leaf miner in a young block, and that he changed his recommendation to helothion as the crop grew.

I find that Mr Cunningham did not discover the tomato russet mite in Trevors 2 and 3 on 11th September 1990.  It follows that I also reject his evidence that he told Mr Kevin Steinhardt of such a discovery on that day.  I would add only that I have reached these conclusions without preferring the evidence of Mr Kevin Steinhardt to that of Mr Cunningham.  For reasons which I have already explained, I do not feel able to prefer either of them over the other in controversial matters.

September - October 1990

Mr Cunningham claimed that throughout September and October 1990 two-spotted mite was also present in low numbers in Trevors 2 and 3.  He claimed that he spoke to Mr Kevin Steinhardt approximately weekly throughout those two months and mentioned the presence of both types of mite on each occasion.  Mr Steinhardt denied any such conversation.  There was no evidence to contradict Mr Cunningham's assertion of the presence of two-spotted mite and I am inclined to accept it.  Such a presence would not be surprising; indeed it would almost be expected.  Two-spotted mite was endemic in the area and it was to some extent tolerated by both Mr Cunningham and the Steinhardts.  Mr Cunningham's spray sheets for previous years suggest that he would wait until this mite became active, with a rating on his scale of 2 or 3, and then recommend the use of miticide and tedion.  Miticide was for the adults, tedion for the eggs.  Nothing in the spray sheets or the remainder of the evidence suggests that Mr Cunningham discovered the russet mite between 11th September and 30th October.  I reject Mr Cunningham's evidence that he spoke of the mites to Mr Kevin Steinhardt during that period and find that in the period until 30th October 1990, he was unaware of any russet mites on the blocks. 

30th October 1990

The spray sheet for 30th October shows a distinct change from the previous pattern.  On that day Mr Cunningham recorded the presence of mites with a rating of 2.  He described them as "light".  A tick in the action column of the pest report was consistent with the specific recommendation for the use of "miticide + tedion".  From that time forward until the last monitoring of Trevors 2 and 3 on 23rd November, the spray sheets reported the presence of mites with a rating of either 2 or 3. 

Mr Cunningham's evidence in relation to the spray sheet of 30th October is of some importance and I set it out:

"Now, we have been discussing the period at the end of October?  You have to say 'yes'?--  Yes, we are.

Not just nod.  Did you make any decision to continue what you had been recommending or to change what you had been recommending?--  At the end of October I made a change to the strategy that I was using for the russet mite.  The change was the addition to the weekly helothion sprays.  I recommended a specific miticide as an additional separate spray at that time for the russet mite.

What about the two-spotted mite?--  Because I was using a specific miticide for the tomato russet mite, I added tedion as a specific miticide for the two-spotted mite, and it kills the eggs and causes the population to flatten off because there is a new mite - two-spotted mite hatching.

Could you show us on your spray recommendation sheets where you have made this recommendation?--  On 30 October I have added that into the spray recommendations.

HIS HONOUR:  What have you got there for the adult two-spotted mites?--  There was no direct recommendation for the adult of the two-spotted mite.  The level of two-spotted mite at that time, I decided that just the tedion would be enough to cause a suppression in the population.  If I hadn't decided to use a specific miticide for the russet mite, I wouldn't have actually used a specific miticide for two-spotted mite.  It was just if we were going to go in and do a separate spray, then we may as well add in the tedion to start taking the top off the two-spotted mite.

MR O'DONNELL: Mr Cunningham, you have written the word 'miticide'.  Why did you write that word?--  The reason I used to use miticide as the general recommendation was when I wrote these sheets I had no specific knowledge of the miticides that the grower had at the time.  At this time the block was approaching picking.  I didn't have knowledge of the picking schedule to make a decision based on withholding periods, so I wrote 'miticide' so that I could source the extra information and then discuss that with Kevin Steinhardt in this situation and then they could settle on the best choice for their situation at that time.

There is also an entry at the top of the page against the word 'mites'?--  Yes, that's right.

What is that a reference to?--  That's to tomato russet mite.

I am sorry, I missed that answer?--  That's a reference to tomato russet mite in Trevor's 2 and 3.

Why did you not identify the species of mite?--  The russet mite was the only mite that I considered was capable of causing any economic damage at that time, and I would discuss the specific control in relation to the species of mite when I talked to Kevin."

The plaintiff argued that the reference to mites was to two-spotted mites, and that the recommendation for "miticide + tedion" was a recommendation for the use of torque and tedion, (both useless against the russet mite).  Mr Cunningham asserted that while two-spotted mites were present, they were present at tolerable levels - they were not starting to turn the whole block yellow and the level of economic damage which they could cause was lower. 

Mr Cunningham was cross-examined about this evidence in the light of his answers to interrogatories.  The relevant answer was:

"(k)There is a reference to tomato russet mite and two-spotted mite in the spray sheet.

(l)(i)        The level of tomato russet mite and two-spotted mite is listed as light with a rating of 2 on the economic threshold scale of 1 to 5.  In relation to the spray recommendations I repeat and rely upon my answers to interrogatory no. 1(j)(i) and (ii)."

Under cross-examination Mr Cunningham asserted the truth of his evidence-in-chief and denied the accuracy of the answers to interrogatories.  His only comment was, "I didn't spend enough time going through [the interrogatories] step by step".  That explanation seems to me to be inadequate. 

In submissions, Mr Bowden sought to place some weight on Mr Cunningham's failure to distinguish between the two species in the comments relating to mites.  Whether or not it was negligent of Mr Cunningham to fail to distinguish between the species is not presently material.  The immediate question is whether the failure to specify the mite is so odd that it casts doubt upon Mr Cunningham's testimony that the reference was to the tomato russet mite.  I do not think the omission is so surprising.  Indeed the layout of the form in my view tends to discourage such a distinction, or at least, to render it less likely that it would be noted.  I do not think this omission can be used as the foundation for any inference as to the truth or otherwise of Mr Cunningham's testimony.

Mr Cunningham did not contend that the information on the spray sheet was sufficient to inform the Steinhardts what they should spray.  Quite the contrary.  He said his intention was to discuss the specific control in relation to the species of mite when he talked to Mr Kevin Steinhardt.  Such a discussion occurred, said Mr Cunningham, on 30th October after he completed his inspection of the various blocks.  He gave evidence in these terms:

"Can you tell us, as best you can recall, what was said in the discussion?‑‑   I told Kevin Steinhardt that the russet mite in Trevor's had reached a level that I considered that we needed to spray a separate miticide for its control.  I told Kevin that we could use a separate spray of helothion because miticides give a much greater effect when they are sprayed separately but that we had been using helothion and it would probably be better to rotate to something different at that time.  I said that kelthane would be good control, but the problem with kelthane was it had a seven day withholding period and that could have been a problem with the approaching picking in the block.  I said that azodrin or nuvocron would give a reasonable level of control and they had the advantage of only having a four day withholding period and that they could be used safely within the normal picking schedule[8]. 

[8]      My emphasis.

What did he say?‑‑  He said he wasn't sure exactly when they were going to go in and pick the block, but that they would spray a miticide.  I asked him whether he had any of the specific miticides and Kevin said he thought he only had some tedion at that time.  I told Kevin that mites are a very good indicator of spray coverage and I asked Kevin whether he had been changing the nozzles and calibrating the equipment as to my recommendations for changing nozzles every 50 hours and Kevin said he had been.  During that conversation we also talked about the ‑ why I had included rogor into the spray schedule at this time.  I told Kevin that we had to start applying rogor at this stage so they could get their fruit into the southern markets when they started picking. 

What did he say?‑‑  He said yes, they would do that. 

And were there other matters discussed or was that all that was said?‑‑  That's all I can recall from that conversation. "

Mr Kevin Steinhardt completely denied any such conversation.

The question of what miticide Mr Cunningham recommended, and for what purposes, was also dealt with in Mr Cunningham's answers to interrogatories:

"(j)(i)A miticide, Kelthane, was recommended for control of tomato russet mite and 2 spotted mite.  A miticide, Tedion, was recommended for control of 2 spotted mite.  An insecticide, Rogor was recommended for control of tomato russet mite.

(ii)See above."

In cross-examination Mr Cunningham admitted that rogor had not been prescribed specifically to combat the russet mite.  However he adhered to his assertion that he had recommended kelthane.  He asserted that it was not the only option orally recommended to Mr Steinhardt, but offered no explanation for his failure to refer in the answers to interrogatories to azodrin or nuvocron.

I find the discrepancy between Mr Cunningham's evidence and his answers to interrogatories disturbing, particularly given the importance of this alleged conversation.

Mr Cunningham said it was his practice to use the word "miticide" whenever he was recommending a specific miticide (as opposed to an insecticide such as helothion which happened to have some effect on mites).  There are numerous examples of his use of the term in the spray sheets for the period 1987-1990.  In most if not all cases he recommended it in conjunction with tedion.  It is I think the only case where he has not used a trade name for a pesticide.  As appears from the evidence quoted earlier, he gave two reasons for using a generic term: first, he had no specific knowledge of the miticides which the grower had in stock at the time; and second, he did not know the picking schedule and was therefore unable to make a decision based on withholding periods[9].  On the other hand, the plaintiff suggested a different reason for the use of the term.  According to the argument advanced on behalf of the plaintiff, Mr Cunningham used the term as a synonym for, and to avoid the use of, "torque", whenever he was recommending a specific miticide for the treatment of two-spotted mite.  In Mr Bowden's submission, this was to avoid the embarrassment which might flow from recommending in writing the use of a chemical unregistered for tomatoes. 

[9]      A withholding period is the period of time which must elapse after spraying before sprayed fruit may lawfully be picked.

The evidence relied upon in support of this argument was given by Mr Kevin Steinhardt:

"Is there any basis, in terms of your previous discussions with Mr Cunningham, for you saying miticide and Tedion means Torque and Tedion?‑‑  It happened like this: we were over at the Elliott Farm and the fellows were spraying‑‑‑‑‑ 

When?‑‑  About a year and a half, two years prior to this date.  I was getting the fellows, the spray operators, to spray directly off the spray sheets and I would just tell them which blocks to spray with.  I went down to the pump shed and one of the spray operators come up to me and said, 'What's this miticide mean?', and I said, 'I don't know.', and I said, 'I'll go and check.', as Geoff was monitoring a block in the field over at the Elliott at that particular time.  I went and asked Geoff what it was and he said, 'Torque', and he said, 'I couldn't write Torque on the spray sheet as it is unregistered.', so I went back and told the spray operators it means Torque. 

Did he give you any advice about rates to apply or anything of that nature?‑‑  Yes, he gave me the rates to apply, which is half a litre per 1,000 litres. 

At any stage subsequently did you apply Torque wherever miticide was seen?‑‑  Yes, every time miticide was written on the spray sheets I applied Torque. 

Did you have any knowledge about the use of Torque on mites ‑ I mean, what sort of mites was it useful for?‑‑  Two‑spotted mite. 

Do you have any knowledge about the Tedion?  It just seems to me a combination of miticide meaning, on your evidence, Torque and Tedion.  How do the two relate to each other?‑‑  Tedion is, to my knowledge, to be good for the nymphs ‑ that is, the young, tiny mites, and the egg in the mites and the Torque is good for the adult mites, and the combination of the two is good to get a good result."

The first point to be made about that passage is that it simply does not support the proposition that from the time of the discussion onward Mr Cunningham used "miticide" as a synonym for "torque".  The evidence deals with only one occasion and the focus of the conversation is upon what was to be sprayed on that occasion, not upon Mr Cunningham's use of words.  Even as a foundation for a submission that Mr Cunningham recommended the use of torque on that occasion it could not be said to be a strongly expressed body of evidence. 

The second point about it is that, even assuming the conversation took place in April 1989 (a time for which Mr Bowden was inclined to contend) rather than six to 12 months later (as Mr Steinhardt remembered it), there had been at least 16 prior occasions (by my count) on which Mr Cunningham had recommended "miticide + tedion".  Unless both Mr Steinhardt and Mr Bainbridge[10] were new to the job at the time of the conversation (and there is no suggestion that they were), it is difficult to see how the operation was previously being conducted without their having any idea of Mr Cunningham's code.

Two other matters which may be considered together were planting tomatoes both in autumn and spring on the Trevors Farm; and failing to plough in the old crop on Trevors 1 soon after harvesting, so as to eliminate the spread of mites to the new plantings.  In his oral address Mr O'Donnell seemed to limit these two counts also to the circumstance that I might find for the plaintiff on its alternative position.  However in case it be said that either count might apply in the circumstances which I have found, I would say that in my view, even assuming the facts were found in Mr Cunningham's favour, contributory negligence is not made out.  It could be said that each matter involved actions which might have increased the risk of infection of the new crop by pests.  However any conduct of the sort alleged by Mr Cunningham was undertaken by the plaintiff as part of its commercial operation and the risks were no more than could have been expected to result from commercial decisions of the nature referred to.  Mr Cunningham was fully aware of the situation, and his task was rendered no more difficult by it.  They were decisions sufficiently ordinary to prevent its being said that the plaintiff failed to exercise the skill and care in looking after its own interests which a reasonable person in its position would have exercised.  The defendants have not demonstrated that the plaintiff's decisions were unreasonable, or indeed, that they were anything other than workable managerial decisions. 

Finally, it was argued on behalf of the defendants that the plaintiff was negligent in failing properly to maintain its spray equipment.  It was argued that had the equipment been in good order in late October and November, the helothion would have been effective in suppressing the outbreak of tomato russet mites.  I have already found that the equipment was not in good order at that time.  However I have also found that, whatever Mr Cunningham believed at the time, helothion was not effective to destroy an infestation of these mites.  The evidence is insufficient to persuade me that the impact of the helothion on the infestation would have been materially different even if the nozzles had not been excessively worn.  As I have said, the effect of the wear will be taken into account in calculating the notional lost crop.

Damages

The plaintiff abandoned the crop on Trevors 2 and 3 on 23rd November 1990.  At that stage harvesting had been under way on Trevors 2 for three weeks and on Trevors 3 for 12 days.  At that time, by Mr Hall's estimate, an average of about 15 fruit, marketable but for the effects of the russet mite, remained on each bush.  On any view, this was a considerable proportion of the total production[36].  These fruit were simply ploughed in with the bushes.  Of the fruit that had been picked, 10,884 cartons were consigned to the markets.  The remainder were either discarded in the field at the time of harvesting or discarded in the packing shed at the time of sorting and grading.  A visual idea of the volumes discarded can be gained from exhibit 7 and exhibit 8.  It was not suggested that there was any economical salvage value in the tomatoes discarded.  The quality of those which were marketed was reduced and therefore the price obtained for them was lower than otherwise it would have been.  Additional picking, packing and fertiliser costs were incurred.  The plaintiff also claimed that unaffected fruit from its other farms sold at reduced prices because buyers were afraid that the cartons might contain some affected fruit. 

[36]  Mr Cunningham estimated the total marketable production would have been about 25 fruit per bush; Mr Hall thought the crop was equivalent to the district average which he estimated at 35 fruit per bush.

The crop on Trevors 2 and 3 was destined mainly for the Melbourne and Sydney (including Newcastle) markets, with a small quantity of fruit intended for Brisbane.  Such fruit as was sold went through those markets.  The first consignment was dispatched on 3rd November and the last consignments were dispatched on 1st December[37].

[37]  Fruit dispatched between 23rd November and 1st December had been kept in cold storage at the farm.

The prices which ought to have been achieved: fruit sold

Because the prices achieved by this fruit were lower than would have been achieved had the fruit not been damaged by russet mites, it was necessary to determine what the latter price would have been.  The parties approached this task in different ways.  The defendants, relying upon the evidence of Mr David Hanlon, an agricultural economist and marketing specialist with considerable litigation experience, sought to rely upon average weekly market prices during the relevant period as supplied by the various marketing authorities.  This figure was apparently calculated across all grades of tomatoes.  As Mr Hanlon conceded, it therefore did not account for daily price variations, variations in quality due to other factors and the proportion of the crop marketed at various size and colour ranges (grading).  He believed these variables were "immaterial" given the uncertainties associated with the process.

The plaintiff accepted this approach in respect of fruit marketed at Brisbane because the volume marketed there was very small.  It took a different approach in respect of fruit marketed at Sydney[38] and Melbourne.  Evidence was called from the plaintiff's produce agents in Sydney (Mr Callaghan) and Melbourne (Mr Raftopolas).  They handled all of the relevant fruit at the Sydney and Melbourne markets.  At the end of November or in December, each was given a summary of consignments handled by his firm up to early December.  The summary was prepared by Mrs Gerry and showed the date and contents of each consignment, the grading of the fruit in it, the price achieved for that fruit and a blank column headed "Net price should have obtained".  Mr Callaghan said that he filled in that column.  He said that for each consignment he entered against the respective grades of fruit the top price obtained on the market for fruit of that grade on the day the consignment was sold.  He said the plaintiff's fruit always attracted top price in the respective grades.  Mr Raftopolas did the same thing with the sheet forwarded to him, and on a similar basis, except that he entered the top price obtained in the Melbourne market for Bundaberg fruit.  The plaintiff used the two produce agents' figures not only to calculate the loss on the fruit sold, but also to calculate the loss on the fruit destroyed (lost sales). 

[38]  Including Newcastle - it was common ground that the prices at these two centres were the same.

The grading of the fruit which appears on the documents sent by Mrs Gerry to Mr Callaghan and Mr Raftopolas was the grading put on the consignment in the plaintiff's packing shed.  It was not challenged in other evidence, nor in cross-examination.  It was not clear to me to what extent that grading was adversely affected by the russet mite damage, but the plaintiff made no claim for such downgrading, and it may be ignored hereafter.  Any error is against the plaintiff.

I regret that I do not find either the plaintiff's or the defendants' calculations wholly satisfactory.  The average prices used by Mr Hanlon reflect prices actually obtained for fruit from all sources.  In November, the major sources of supply to the Sydney and Melbourne markets were the Bundaberg region and the Bowen region.  Bowen tomatoes were approaching the end of their season with the advent of hot weather.  There was no reason in the evidence to suppose that either the quality of the fruit from Bowen or the mix of grades was equivalent to that from Bundaberg in November.  Nor was there evidence of how the November weekly averages were calculated.  I do not think that they are a very reliable foundation for the assessment of damages.

Mr Callaghan and Mr Raftopolas had the advantage of familiarity not only with fruit from Bundaberg but also fruit from the plaintiff generally and the damaged fruit in particular.  Unfortunately, I formed the view that their evidence was coloured by some unconscious exaggeration.  Mr Callaghan in particular displayed in Court some enthusiasm for the plaintiff's cause which is not reflected in the transcript.  Cross-examination of Mr Raftopolas revealed a number of examples of imprecision in his evidence.  The advantage of the approach based upon their evidence is that it largely reflects the actual mix of gradings achieved by the plaintiff's tomatoes.  However it assumes that the plaintiff's fruit would always have attracted the top price for each grade.  I am not satisfied that this would have occurred.  The historical material prepared by Mr Hanlon tends to suggest otherwise, and Mr Hall's evidence was that when he saw the crop on 28th November it looked to be an "average" crop. 

In my judgment, the best way to approach the problem is that adopted by the plaintiff, but without accepting the figures propounded by Mr Callaghan and Mr Raftopolas to their full extent.  I shall discount their estimated prices for November by 10% of the amount by which their estimates exceeded actual prices.

Loss by sales at reduced prices
           The first head of damage claimed was loss suffered by reason of sales at reduced prices.  This loss was incurred on fruit actually sold.  There was no dispute as to the number of cartons actually sold, nor as to Mr MacGregor's evidence regarding selling expenses, including commission.  One cannot simply adopt Mr MacGregor's figures, since they are based upon the evidence of Mr Callaghan and Mr Raftopolas; nor can one adopt Mr Hanlon's figures for the reasons which I have already elaborated.  However the figures given by Mr MacGregor in exhibit 54 can be adjusted to take account of the reduction to the estimates of Mr Callaghan and Mr Raftopolas to which I have already referred.  Doing so produces the following result:

LOSS BY SALES AT REDUCED PRICES
Market						Agents' estimates $	Actual receipts $	Difference $	Putative receipts $	Loss $
Sydney						34113.77	22303.69	11810.08	32932.76	10629.07
Melbourne						45714.80	29454.22	16260.58	44088.74	14634.52
Brisbane						4060.80	2851.20	1209.60	4060.80	1209.60
Newcastle						15955.20	8251.01	7704.19	15184.78	6933.77
Total						99844.57	62860.12	36984.45	96267.09	33406.97
Less Brisbane levies										16.63
Total net loss										33390.34

Rounding off the final figure, I assess damages under this heading in the sum of $33,390.00.

Value of lost sales

The largest item in the plaintiff's claim was the value of lost sales.  All parties agreed that in broad terms, the proper way to calculate this value was to multiply the quantity of fruit lost by the average market price for the week when that fruit would have been marketed.  Average weekly prices were used because it would have been impracticable to try to estimate on which precise days particular quantities of fruit would have been marketed; and averaging also avoided the need to hypothesise about the variations in mix of grades.  Within this general area of agreement however, a number of differences remained.  First, the parties differed on the quantity of fruit lost.  Second, they differed on when the lost fruit would have reached market.  This mattered because of a considerable rise in market price in December 1990.  Third, they differed on whether the average weekly price should be based on broad market averages or the specific evidence of the two produce agents referred to above. 

Quantity of fruit lost

Mr Hall saw the crop on Trevors 2 and 3 on 23rd November 1990 and again some time before 28th November 1990.  He gave evidence that the crop looked to be an average crop; and that in his estimate, the average yield for the district, taking into account losses for bad weather, leaf miner, heliothis etc. was 35 fruit per plant.  In the event of above average damage from leaf miner, he said, that average would have to be reduced.  Mr MacGregor measured the spacing between plants on the farm and calculated that on the basis of 35 fruit per plant, the total crop would have been 54,264 cartons, or 6,500 cartons per hectare.  This meant that after deducting the 10,884 cartons marketed, the loss of production was 43,380 cartons.  There was no challenge to Mr MacGregor's measurements or mathematics.

Mr Cunningham disagreed with Mr Hall's estimate of 35 marketable fruit per bush.  He thought the crop would have yielded approximately 25 marketable fruit per bush.  He gave two reasons for the reduced number.  First, he said that because the fruit was set "during relatively the end of winter, cold nights", there was a pollination problem (which he checked at the time) affecting the shape and size of the fruit on the lower part of the bush.  Second, he said there was major damage caused by leaf miner: 40-50% of the fruit in the lower set had leaf miner damage or leaf miner larvae in them, and approximately 20% of the fruit in the middle section.  Applying Mr MacGregor's mathematics to Mr Cunningham's estimate results in a yield of 4,650 cartons per hectare.  It was common ground that picking starts from the bottom of the bush.  The consequence was that by the time Mr Hall inspected the crop, he would not have been able to have seen the lower fruit which Mr Cunningham said were worst affected.

I reject Mr Cunningham's evidence.  In cross-examination of Mr Kevin Steinhardt, what was put was that there was 30-40% damage to the first picks, not 40-50%.  Nothing was put regarding the middle section of the plant.  Nothing was put regarding poor pollination; and Mr Hanlon, the expert called by the defence, agreed that the dry conditions of the 1990 season helped better pollination.  While it was common ground that Mr Cunningham's duties did involve checking pollination, there was no evidence that he ever reported poor pollination to the plaintiff or even made a record of it.  It is true that he did report heavy leaf miner activity; but the plaintiff sprayed appropriately and controlled that problem.  Mr Hall saw leaf miner in the crop but did not recall it as being highly significant.

I am not prepared to infer that there was above average leaf miner damage to the plaintiff's crop merely because of the evidence of Mr Barnes.  Mr Barnes was growing a trial crop for DPI, but he was doing variety trials.  He recorded no data regarding leaf miner loss.  His information was hearsay told to him orally by one of his researchers.  He also gave hearsay evidence of a 1990 trial conducted by Mr Kay which showed 25% of fruit damaged by leaf miner notwithstanding the use of helothion.  I give that evidence some weight, particularly as confirming the presence in the Bundaberg district of heavy leaf miner infestations; but its brevity, vagueness and hearsay nature make me unwilling to draw any inference that the figure of 25% can be applied to the plaintiff's crop.

Another reason for not transposing that figure is that on 20th December 1990, Mr G Fullelove, an extension horticulturalist with the DPI wrote to the plaintiff in the following terms[39]:

[39]  Exhibit 56.

"The average yield of tomatoes in the Bundaberg region grown out of the spring to harvest in late spring to early summer I would consider to be in the 5,000 to 5,500 cartons per hectare range.

Considering the crop history of your block, the pre-crop inputs the block had such as a cover crop, filter-press and super, and the good growing conditions we have had this spring, a yield as quoted above should be easily attained."

That letter formed the foundation for the plaintiff's claim as originally pleaded - the plaintiff originally claimed a loss of 5,500 cartons per hectare.  Mr O'Donnell submitted that I should rely upon a footnote in Mr Hanlon's report referring to an unnamed district agronomist's report to the DPI for the 1990 season.  I was told nothing of how the figures in that report were compiled, nor was the report put before me.  I prefer Mr Fullelove's letter.

I prefer it also to Mr Hall's estimate of 35 fruit per bush in the district.  Mr Hall readily conceded that his estimate was an arbitrary average, and it seems to have had no particular scientific basis.  Indeed it is by no means clear that it was even specific to 1990.  While Mr Hall's average does make some allowance for losses due to pests, disease and weather, I am not satisfied that the plaintiff would have harvested more than 5,500 cartons of tomatoes per hectare even with an efficient application of kelthane at an appropriate time.  I take into account here the levels of leaf miner activity shown in the spray sheets.  In my judgment 5,500 cartons per hectare is the best basis to use for calculating the plaintiff's claim for lost sales.  Applied to the 8.34 hectares of Trevors 2 and 3, it results in a total crop yield of 45,870 cartons.

Timing to market

Because market prices fluctuated from day to day, a precise calculation of the plaintiff's loss could only be achieved by determining how much fruit would have reached the various markets on particular days.  It was not possible to determine this precisely.  There were a number of reasons for this.  First, the bushes[40] in Trevors 2 and 3 were planted on different dates and with different varieties of tomato.  This meant that they became ready for harvest on different dates and the duration of the harvest period was different for each.  Second, although the fruit was picked every two or three days, not all of each pick was consigned to market immediately.  Some might be placed in cold storage; and others might be placed in ripening rooms.  Third, the plaintiff was for part of the period harvesting other blocks besides Trevors 2 and 3, but no distinction appears to have been made in the packing shed records between tomatoes from different blocks.

[40]  Tomato plants were grown to the stage of seedlings in boxes in a nursery on one of the farms and were then transplanted to whatever block on whichever farm was intended to be used for the new crop.  Mr Kevin Steinhardt said that he kept a contemporaneous record of nursery plantings.  He said the book was lost or misplaced (without explaining when or how), but he produced a photocopy of it.  That document became exhibit 2.  Its authenticity was not challenged and I therefore accept it.  It shows the date and type of tomato seed planted in pallets or trays at the nursery and the date when those pallets were planted out on the farm.

Both Mr MacGregor and Mr Hanlon gave evidence regarding timing to market.  Each had prepared a report; but it became apparent during the trial that each report needed to be modified to take account of evidence discovered after the report was written.  Apparently a conference took place between these two experts, with the result that a very large measure of agreement was reached regarding many aspects of the calculation of this head of loss.  I commend the parties and the witnesses involved for their work in this regard.  The approach which they have taken is one which the Court would encourage other litigants to adopt more frequently.

The evidence disclosed that Trevors 2 was planted with the variety floradade and Trevors 3 with pirate.  The floradade were seeded[41] in two periods, the first commencing 6th June 1990 and the second commencing on 14th June.  Planting out of the seedlings began on 30th July and 7th August respectively.  Two hectares were planted from the earlier seeding and 2.34 hectares from the later seeding.  Harvesting of the former commenced on 2nd November and the latter on 6th November[42].

[41]  That is, the seeds were planted into seed boxes.

[42]  Mr MacGregor explained that although the two seedings were eight days apart, the later plantings would have caught up to the earlier, so that by the time of harvest there would have been very little difference between them.

The pirate variety was planted in Trevors 3.  They too were seeded in two batches, the first beginning on 23rd June and the second on 30th June.  The batches were transplanted from 13th and 22nd August respectively.  Each batch occupied two hectares of Trevors 3.  The first batch was ready for harvesting on 12th November and harvesting of it began on that date. 

The parties disagreed as to when the second batch of pirate tomatoes was ready for harvest.  The plaintiff's harvest records did not separately identify these tomatoes and none of the plaintiff's witnesses gave direct evidence of when they were first harvested.  They were seeded a week after the first batch, and on that basis Mr MacGregor proposed 19th November as the first harvest date.  However that ignored the direct evidence of Mr Cunningham, who said that by November the second batch had caught up with the first batch.  That evidence was not entirely satisfactory, in that counsel for Mr Cunningham never put that suggestion that Mr Kevin Steinhardt.  However Mr Cunningham was not cross-examined about the point and Mr MacGregor had agreed that the second batch of the floradade probably caught up some four days of the eight it was planted behind the first batch.

I find that the second batch of pirate caught up at least three days on the first batch and that consequently harvesting of them began not later than 16th November 1990.  That finding is sufficiently precise having regard to the evidence and findings which I make below regarding marketing of this crop.

The next issue is, over what period would the tomatoes have been harvested and in what concentrations?  As regards the floradade variety, both Mr MacGregor and Mr Hanlon ultimately agreed that a period of six weeks was appropriate, and they also agreed on the proportion of the crop which would have been harvested in each week.  As regards the pirate variety, I formed the view that they were essentially in agreement also.  Both were inclined to allow a five week harvest period, although Mr MacGregor under cross-examination did accept a four week period.  Mr Hanlon had done far more work in this area than had Mr MacGregor and in my view his assessment of the duration of the period and the proportion of the crop which would have been harvested in each week of the period is to be preferred.

The remaining point is when each week's crop would have been marketed.  Because of the difficulties already referred to, Mr MacGregor adopted a statistical approach based on the assumption that fruit harvested in one week would be marketed in the following week.  Statistically that implied an average time from pick to sale of one week.  That was certainly longer than the minimum time which would have been taken, but given the uncertainties that surrounded the withholding of fruit in cold storage and the fate of fruit arriving in Sydney or Melbourne on weekends it seems to me a not unreasonable approach.  Mr Hanlon accepted it in relation to sales of the floradade variety from Trevors 2.  However when it came to fruit harvested from Trevors 3 beginning on 12th November, Mr Hanlon contended that some of the pick should be attributed to sales in the week ending 16th November.  In his opinion it was legitimate to allow three days for fruit to reach market, but not four days.  Hence, fruit picked on 12th November could have been marketed on 16th November.  While I am satisfied that this could have been done, I am not satisfied that it would have been done.  Moreover, it seems to me that to approach the sale of one particular day's harvest by trying to assess the actual minimum time for getting it to market while adopting a statistical average for the remainder of the crop is invalid.  If one were to adopt Mr Hanlon's implied assumption that the fruit would generally be marketed at the end of the minimum time for transportation to market, one would need to adopt a marketing period of (say) four days and calculate in respect of every week's harvest the likely time of marketing, breaking the harvest week into at least two parts.  I am not persuaded that the increased accuracy that might result from such an approach would be worthwhile.  Mr Hanlon conceded that neither he nor Mr MacGregor had tried to divide the parts of any given week's pick; that was because when they started their work the information available was insufficient.  He accepted that the weekly approach which they had adopted was appropriate to come up with a best estimate of a global figure and was a legitimate statistical technique if that was the basis of the best available data.  In my view, consistency requires that the technique be applied across the board.  I think that all fruit harvested in the week commencing 12th November (i.e. the week ending 16th November) should be treated as marketed in the week ending 23rd November.

That finding explains why I said earlier that it made no difference whether the second batch from Trevors 3 began harvesting on 12th November or 16th November or some date in between.  For the purposes of calculating damages, any fruit harvested on or between those dates must statistically be attributed to the week ending 23rd November.

Mr Hanlon presented his evidence in the format shown in Table 5.1 of his report.  That is a convenient format and I adopt it with some slight variations for the purposes of the findings which I have made up to this point.

Sales Distribution
Block/  variety															Seed dates	Trans­plant start dates	First pick			Area (8.34 ha)			Sales (% of crop ) - Week ending
Weeks		Start date	ha		%	9/11								16/11	23/11	30/11	7/12	14/12	21/12	Total
Trevors 2/  flora­­­­dade															6 Jun 90 14 Jun 90	30 Jul 90 7 Aug 90	13.5 13.1		2 Nov 90 6 Nov 90	2.00 2.34		46 54	7.50								20.00 7.50	25.00 20.00	20.00 25.00	20.00 20.00	7.50 20.00	7.50	100 100
Trevors 3/    pirate															23 Jun 90 30 Jun 90	13 Aug 90 22 Aug 90	13.0 12.0		­­­­­­­­­­­­­­­12 Nov 90 12 Nov 90	2.00 2.00		50 50	7.50 7.50	20.00 20.00	25.00 25.00	40.00 40.00	7.50 7.50	100 100

From that distribution of sales, the gross notional crop can be calculated week by week and a net crop (after deductions for spraying losses and actual sales) can also be calculated.  The value of that lost net crop can then be calculated by multiplying the average market price per carton by the number of cartons lost. 

Average weekly prices

Both Mr MacGregor and Mr Hanlon agreed that using average weekly prices was the only sensible way in the circumstances to carry out that calculation.  Mr Hanlon proceeded by calculating a weighted weekly average whereas Mr MacGregor used actual weekly averages and repeated the calculation for each week.  I was told that (if the data is the same) the end result should be the same whichever method is used.  I have preferred Mr MacGregor's method, but for the reasons already given I have not adopted the figures of either expert.  For the week ended 9th November Mr MacGregor did not calculate an average.  I have calculated it myself from the figures supplied by Mr Callaghan and Mr Raftopolas for that week.  For that week and also for each other week in November, I have reduced the produce agents' estimated prices by 10% of the amount by which their estimates exceeded actual prices, consistently with my earlier findings.  The calculation of the averages for November is Annexure B to these reasons.  For the week ended 7th December I have followed Mr MacGregor in adopting the actual values obtained for sound fruit from the Home Farm block 1.  For the weeks ending 14th and 21st December, Mr MacGregor again relied upon estimates provided by the produce agents.  The reason for taking these estimates rather than actual prices is explained below in relation to losses due to buyer resistance.  As will be seen, I have there adjusted the agents' estimates for the same reason as their estimates for November were adjusted.  As explained below, the estimates are $0.30 per carton too high.  I have reduced Mr MacGregor's averages for the weeks ending 14th and 21st December by that amount.

The results appear in the following table:

Lost Sales
Block/  variety											Seed dates	Area (ha)	Cartons (@ ­5,500/ha)	Sales (cartons ) - Week ending
9/11							16/11	23/11	30/11	7/12	14/12	21/12
Trevors 2/											6 Jun 90	2.00	11000	825							2200	2750	2200	2200	825	0
flora­­dade											14 Jun 90	2.34	12870	0							965	2574	3218	2574	2574	965
Trevors 3/											23 Jun 90	2.00	11000	0							0	825	2200	2750	4400	825
pirate											30 Jun 90	2.00	11000	0							0	825	2200	2750	4400	825
Total												8.34	45870	825							3165	6974	9818	10274	12199	2615
Less 15% for spraying contingencies													6881	124							475	1046	1473	1541	1830	392
Notional production													38989	701							2690	5928	8345	8733	10369	2223
Less actual sales (ctns)													10884	252							875	5926	3426	405	0	0
Lost sales (ctns)													28105	449							1815	2	4919	8328	10369	2223
Average weekly price after deducting freight   $														6.69							6.71	7.71	7.23	11.90	13.74	21.78
Value of lost sales after deducting freight   $														3004							12179	15	35564­	99103	142470	48417
Total value of lost sales after deducting freight  = $340,752

From that figure, the net loss as a result of lost sales can be calculated by deducting statutory levies and picking and packing costs payable by the plaintiff.  No levies were payable in Victoria at the relevant time.  New South Wales levies on the above sales would have been $1,011.78[43], and Queensland levies would have been $297.58[44].  The parties were agreed that picking and packing costs should be calculated at $2.66 per carton, a figure which must be applied to the 28,105 cartons of lost sales.  Deductions to be made are therefore:

[43]  Ibid: 60% of 28,105 cartons @ $0.06 per carton.

[44]  Ibid: 1.25% of 110% of ((6% of $340,752.00) + (6% of 28,105 cartons @ $0.71 per carton)).

New South Wales levies  $1,011.78

Queensland levies  $297.58

Picking and packing costs  $74,759.30

Additional picking and packing costs[45]  $1,350.00

[45]  See exhibit 54 p.17.

$77,418.66

The rounded net value of lost sales is therefore $263,330.00.

Additional expenses

The parties agreed that as a result of defective fruit, the plaintiff incurred $22,500.00 expenses in additional picking and packing shed expenses.  It was left to me to reduce that figure by such amount if any as was necessary to allow for fruit which would have been defective even in the absence of negligence on the part of Mr Cunningham.  In respect of the lost production, I have allowed a deduction from the total crop of 15% for spraying losses.  It is appropriate to reduce the agreed figure by that amount.  I allow $19,125.00 for additional picking and packing expenses.  The parties also agreed that $500.32 should be allowed in respect of additional fertiliser expenses.  Rounding those amounts, I allow $19,625.00 by way of damages for additional expenses. 

Losses due to buyer resistance
           Both Mr Callaghan and Mr Raftopolas gave evidence that for a number of weeks after the cessation of consignments of damaged tomatoes they encountered considerable buyer resistance toward the plaintiff's tomatoes.  At the time fruit was sold at the market it was either green or in a partially coloured state.  In many cases, the blotch in the damaged fruit had not appeared until after it had been sold.  Consequently, even after consignments from Trevors 2 and 3 ceased, buyers were suspicious that what looked like good quality fruit might again turn out to be damaged.  While this resistance remained, the two agents had to offer discounts in order to sell the plaintiff's fruit, even though it was not in fact from Trevors 2 or 3.  Mr Callaghan gave discounts of $2.00 to $4.00; Mr Raftopolas thought that $4.00 was a fair estimate of the average discount.  The plaintiff claimed an average loss of $3.00 per carton in respect of all fruit consigned to market from 8th December to 19th December.  Mrs Gerry said that this was the earliest period when no damaged fruit was on the market.  Using $3.00 per carton as the average discount and the volumes deposed to by Mrs Gerry, Mr MacGregor calculated the loss due to such discounts at $46,116.00.  While some aspects of the calculation may seem a little loose, there was no challenge to the methodology, and I am content to adopt it in the circumstances.  However for reasons already set out, I have found the agents' estimates rather too high.  Consistently with the approach adopted earlier, their average estimated discount should be reduced by 10% or $0.30 to $2.70 per carton or a total of $41,505.00.

The defendants submitted that nothing was recoverable under this heading because the damage was too remote.  I do not accept that submission.  In my judgment the loss of market reputation was a foreseeable consequence of Mr Cunningham's negligence and can reasonably be said to have arisen from his breach of contract "in the ordinary course of things".  Although not a lot of evidence was led on this topic I am satisfied that this damage was not too remote.

Mr Hanlon did not accept this head of claim, but only because he did not believe the two agents.  I am not prepared to adopt Mr Hanlon's approach, because it was not suggested to the agents that they were mistaken or untruthful in their evidence on this point.

In summary I assess the plaintiff's claim as follows:

Loss on actual sales  $33,390.00

Net value of lost production  $263,330.00

Additional expenses  $19,625.00

Loss on buyer resistance  $41,505.00

$357,850.00

Interest

The plaintiff has claimed compound interest in accordance with the decision in Hungerfords  v  Walker[46].  The evidence advanced in support of this claim was complex and incomplete.  In particular, no evidence was called from either the plaintiff's accountants or its bankers to verify the precise financial arrangements in existence at relevant times.  Nor have I been given the tools with which to carry out a calculation of interest in the light of the findings which I have made;  or if I have been given them, I have not been told how to use them.  I shall therefore reserve for further argument the questions whether the plaintiff is entitled to interest and if so on what basis and how much for further argument.

[46] (1989) 171 C.L.R. 125.

Counterclaim

Mr Cunningham counterclaimed for his fees.  The parties agreed that if the plaintiff succeeded against him, he should recover on the counterclaim the sum of $4,110.00 together with statutory interest.  I accept the submission that that interest should run from 1st December 1990.  I calculate it to be $2,296.00 to this date. 

Judgment
           I propose to give judgment for the plaintiff against Mr Cunningham in the sum of $357,850.00 before any interest and for Mr Cunningham against the plaintiff in the sum of $6,406.00.  I will hear the parties on questions of interest and costs.