Reganam Pty Ltd v Crossing

[2007] NSWSC 582

CITATION:	REGANAM PTY LTD v CROSSING [2007] NSWSC 582 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	25-26 July 2006
JUDGMENT DATE :	8 June 2007
JUDGMENT OF:	Hulme J at 1
DECISION:	See paragraph 73
PARTIES:	Reganam Pty Limited Phillip BM Crossing Barbara Helen Jones
FILE NUMBER(S):	SC 31884/05
COUNSEL:	Plaintiff: JM White Defendant: M Seymour
SOLICITORS:	Plaintiff: Ormonde Roger Butler 1st Defendant: The Law Company 2nd Defendant: IV Knight
LOWER COURT JURISDICTION:
LOWER COURT FILE NUMBER(S):	N/A
LOWER COURT JUDICIAL OFFICER :	Barbara Helen Jones
LOWER COURT DATE OF DECISION:	27 July 2005

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

HULME J

Friday, 8 June 2007

REGANAM PTY LIMITED v Phillip Barclay Murray CROSSING & ANOR

1 HIS HONOUR: The Plaintiff in these proceedings seeks, inter alia, to have set aside what it asserts was an award made in an arbitration pursuant to the Agricultural Tenancies Act and the removal of the arbitrator. An arbitration provided for under that Act attracts most of the provisions of the Commercial Arbitration Act, including restraints on any appeal - using that term in a broad sense - to this Court.

2 The Plaintiff was the landlord of an agricultural holding which, pursuant to written agreement had been leased to the Defendant from 1 February 1999 to 31 January 2000, and then by annual renewals to 31 January 2004. The Plaintiff claimed that the Defendant was under a contractual obligation to control weed growth and to repair or replace cattle yard gates and rails on the property and that the defendant did not do so, whereupon the Plaintiff, by itself or by a contractor Mr Swift, went on to the property and attended to that weed growth and the repair of the gates and rails. The Plaintiff sought to recover from the Defendant the costs of so doing. In its original claim, of 5 July 2004, the Plaintiff sought to recover amounts totalling $4,690.95 paid between 24 November 2003 and March 2004 and interest thereon. By an amendment to its claim made on 14 January 2005, the Plaintiff sought a further sum of $3,370 by way of an estimated future cost of eradicating or controlling another weed, Chilean Needle Grass, and replacing pasture that would be incidentally damaged in those efforts.

3 In an affidavit of 4 March 2005, the Plaintiff sought to make a further claim in the sum of $1,750 for removing and destroying another weed, Cestrum.

4 In September 2004, the Defendant made his own claim. Originally that claim was in terms which, so far as is relevant, were as follows:-

“$50,000 for harassment, being unable to manage a cattle fattening enterprise at Glenholme because of Mr Simon Kelleher’s interference which includes spraying pastures, turning a first class season into a drought due to burn off from chemicals sprayed by the contractor Mr Kelleher hired.
For harassment and persecution of the Plaintiff when trying to move stock and belongings from Glenholme at the end of the lease.
Cutting fences, immobilising fences, including boundary fences, endangering me, my property and the public, especially motorists using O’Brien’s Lane.”

5 During the course of the arbitration hearing that followed on 5 and 6 May 2005, Mr Crossing sought to expand this claim but the details of what occurred in this regard can be left for the moment.

6 The case which the Plaintiff seeks to make here is that there was an award in one or both of a letter from the arbitrator dated 27 July 2005 to the parties and in what is referred to in that letter as "my judgment in the abovementioned matter". That document occupies some 11 pages and concludes with four paragraphs under the heading “Orders”. The first three of those "orders" really amount to directions concerning the provision of further evidence in the matter, although the fourth paragraph is in terms:

“The applicant is to pay to the respondent by way of damages the sum of $15,000 for the respondent's claim for nuisance.”

7 The letter repeats these and contains other directions which it is unnecessary to repeat.

8 The bases of the Plaintiff’s challenge are: firstly, a denial of natural justice, including a claim that the arbitrator permitted the Defendant to rely on documents and evidence of which the Plaintiff had no notice and refused the Plaintiff time and any adjournment to deal with that evidence; secondly, that the "judgment" of the arbitrator contains manifest errors of law; and thirdly, that pursuant to s44(c) of the Commercial Arbitration Act, the arbitrator should be removed as unsuitable to deal with the dispute.

9 When I embarked upon the hearing on 12 July last, both counsel and I saw some virtue in firstly addressing the question of whether the plaintiff should be granted leave under section 38(4)(b) of the Commercial Arbitration Act and whether the Plaintiff's claim based on a denial of natural justice required leave. In a judgment delivered that day I concluded that no leave was required for an application to set aside an arbitrator's award upon the ground of a denial of natural justice. I was also satisfied that leave was not required under sections 42 and 44 of the Commercial Arbitration Act before this Court could intervene under those sections.

10 I further concluded that there was manifest error in a number of respects in the arbitrator’s “judgment”. At least one of those errors led to the order that I have quoted requiring that the Plaintiff pay the Defendant $15,000.

11 Another led to the directions to which I have referred. The arbitrator had found that the Defendant had breached the terms of the lease between the parties but said that for the Plaintiff to succeed it needed to persuade her that the value of the property had have been decreased by a “quantified amount" and it was not sufficient merely to establish the amount of costs that had been incurred in seeking to rectify the Defendant’s failure to control weed growth as the lease had required. However, I concluded that there was not yet any award in respect of the Plaintiffs' claim.

12 Nevertheless, for the totality of matters to which I then referred, I thought it appropriate to grant the Plaintiff leave and did so. The matter was then adjourned for some 2 weeks. After the matter resumed the parties proceeded to call evidence and address on the balance of issues. Regrettably - for the amounts at issue apart from costs total only some $23,000 - it will be necessary to canvass a number of the matters covered in some detail although it might be mentioned now that when the matter resumed the Defendant also indicated a desire that the arbitrator be removed, because of conduct of the Plaintiff in, after her judgment was reserved, writing to the arbitrator complaining about the conduct of the hearing and seeking her concurrence in other steps that the Plaintiff wished to take.

13 When the Plaintiff forwarded its application for arbitration and the Statement of Claim to the Director-General of the Department of Agriculture as required by the Agricultural Tenancies Act, it included a number of documents to be relied upon. The Department forwarded the Defendant’s Claim to the Plaintiff under cover of a letter of 11 October 2004. That letter was signed by Kellie Wilson, described as “A/Registrar, Agricultural Tenancies Act for B D BUFFIER DIRECTOR-GENERAL”. Other letters from the Department contained relevantly similar notations. In that letter the Department wrote, inter alia:-

“Prior to this matter proceeding to arbitration, I have requested that Phillip Barclay Murray Crossing serve on you by 8 November 2004 an indexed bundle of documents which includes affidavits of all witnesses, expert reports, and any other documents, to be introduced into evidence at an arbitration hearing of this matter.
Once you have received these documents from… Crossing, you must provide, no later than 22 November 2004 an indexed bundle of documents which includes affidavits of all witnesses, expert reports, and any other documents to be introduced into evidence at an arbitration hearing of this matter. A copy of these documents must be served on (Mr Crossing and the Registrar).
You must also provide the Registrar with:-
(i) Details of how many witnesses you intend to call for an arbitration hearing; and
(ii) A list of dates you will be available…”

14 By letter of 8 November the Acting Registrar advised that she had “given” the Defendant an extension of time “to provide an indexed bundle of documents which includes affidavits of all witnesses, expert reports, and any other documents to be introduced into evidence at an arbitration hearing” and the Plaintiff “will now have until” a later date to provide an indexed bundle of documents to be introduced into evidence.

15 On 10 December Ms Wilson wrote enclosing a bundle of documents “which Mr Crossing wishes to introduce into evidence” at the arbitration hearing. Following receipt of an extension of time Mr Kelleher, who is the sole director of the Plaintiff, on 14 January 2005 forwarded the Plaintiff’s bundle and recorded that it had filed an amended Statement of Claim. The Department replied although that letter is not in evidence. On 3 February 2005 the Plaintiff wrote again and, although some of the detail does not matter, the terms of the letter are eloquent in indicating what the Plaintiff expected to occur. The letter includes the following:-

“My discovered document SK84 is an Affidavit of Mr Michael Swift dated 11th January 2005 would you please advise me if it is necessary to call Mr Swift to give evidence.
I may be incorrect but my view is that the Swift Affidavit would suffice as Mr Crossing has the opportunity to test Swift’s sworn evidence if he wishes to do so. Mr Crossing also has the opportunity to submit evidence of his own if he wishes to contest Mr Swift’s evidence. So as not to be surprised I will of course require notice of any evidence being put by Mr Crossing to contest the Swift Affidavit.”

16 The balance of the letter deals with the topic of the income Mr Swift might lose if required to attend and the topic of legal costs in connection therewith. In his affidavit, dated 11 January 2005, Mr Swift had indicated that there was a significant infestation of weeds on the property, described what he had done to eliminate them, referred to having to use more chemical than would have been necessary had the weeds been sprayed at a more appropriate time and said that the pasture had since recovered.

17 On 22 February Mr Kelleher was advised the hearing was set down for 5 May, that Mr Crossing had forwarded more documents to the department and that these would be sent to the Plaintiff. They never were. Despite a number of communications between the Plaintiff and the Department prior to 5 May, there is nothing to suggest that prior to the arbitration commencing the Plaintiff complained about the non-receipt of these further documents.

18 As required by the Agricultural Tenancies Act the arbitrator, who was required to be a legal practitioner, was appointed by the Director-General of the Department of Agriculture. This was a Ms Barbara Jones, the Second Defendant in the proceedings before me. Section 26J of the Act provides that the Director-General may also appoint a person who, in the Director-General’s opinion, has knowledge and experience that may assist in the arbitration as a technical assessor to assist the arbitrator. Sub-section 3 of that section provides that a technical assessor may assist and advise the arbitrator, but must not adjudicate on any issue before the arbitrator. On 17 March 2005 Ms Fitzsimons, who seems by that time to have become the Registrar or Acting Registrar, advised the Plaintiff that the Department intended to appoint such a person. Mr Kelleher’s file note of the conversation - the accuracy of which I accept - includes the following:-

“Kelleher: I do want to know what evidence he intends to give and I want to know what he is qualified to give evidence about – I believe I am entitled to that information so it can be tested.
Ms F That’s right. You will get a letter in a few days.”

19 By letter of 29 March the Plaintiff was advised:-

“… Mr Hugh Allan has been appointed as technical assessor… Mr Allan is an Agronomist who specialises in farming systems…
The technical assessor will be required to advise the Arbitrator (Barbara Jones) on any industry specific questions arising from the management and maintenance of the subject property…
If you would like to discuss the content of this letter or any matter regarding the abovementioned arbitration, please do not hesitate to contact me…”

20 The Plaintiff responded on 12 April to the effect that he agreed an independent expert should be appointed to advise about matters which he was qualified to comment on and that he had some reservations about an agronomist’s limitations in respect of “management and maintenance”. The letter continued:-

“Perhaps you could speak to Mr Allan and ask him to tell you which claims he is qualified to provide the hearing with advice about. I am of course more than happy for him to advise on matters relating to weed control and pasture maintenance. …”

The Arbitration Hearing

21 As has been said, the arbitration occurred on 5 and 6 May. The detail of what occurred is not completely clear. A form of contemporaneous record of the proceedings, described by the arbitrator as “laptop notes … taken for the purposes of assisting me in reaching my decision” was made by Ms Fitzsimons. The document purports to record statements made by the various participants but on its face it obviously falls very far short of being a transcript. Given the time the arbitration took, the extent, and to some degree the terms, of the laptop notes, it is apparent that a deal more was said than is recorded.

22 In an affidavit of 25 August 2005 in these proceedings Mr Kelleher detailed a number of other statements he asserts were made during the hearing. In an affidavit of 20 December 2005, the Defendant agreed with some of these assertions but denied most. During the hearing on 12 July 2006 it became apparent to me that there were other points of disagreement with the “laptop notes” and I directed that the paragraphs in it be numbered and the parties prepare responses to the document, addressing its terms paragraph by paragraph.

23 They did so. To a very large degree the Defendant said that the laptop notes were accurate and represented a fair reflection of the 2 day hearing as a whole. Although when he said that he agreed with what the laptop notes contained he was no doubt speaking of their substance rather than their precise wording, his evidence provides little account of what, other than that recorded in the laptop notes, occurred.

24 To a substantial degree Mr Kelleher added to what was contained in the laptop notes, and at times in a manner that indicated that what was recorded was misleading. There was very limited cross-examination of either witness concerning this evidence apart from some of Mr Kelleher which referred to the arbitrator and expert assessor having private conversation. Such cross-examination as there was I found of limited benefit on the issue of whose version I should accept. There was certainly nothing in the demeanour of either witness which argued against accepting what he had to say.

25 It is appropriate also to record that even before his affidavit of 25 August 2005 Mr Kelleher had complained of events occurring during the arbitration and which find no reflection in the laptop notes. The fullest account in this regard is a letter Mr Kelleher wrote as early as 10 May 2005 and in which he asserted that throughout the hearing Mr Crossing kept introducing new material which took Mr Kelleher by surprise. That material included:-

Documents being further claims (or invoices) for the purchase and spreading of fertiliser;
A copy of a report signed by Tamworth Regional Council’s Weeds Agronomist, Mr Andrew Storrie dated Friday November 28, 2003 together with accompanying material;
An invoice dated 29/10/03 for the purchase of 2 litres of “Taskforce”; and
A 16 page document entitled “Spraying Weeds at Glenholme”.

26 In the letter Mr Kelleher asserted that he had objected to all of the new documents which had in fact been allowed into evidence subject to a reservation that the arbitrator might still decide against their admission and that he had been seriously disadvantaged by the second document mentioned as he was not afforded an opportunity to engage an agronomist to deal with the report or seek advice. Among many other complaints in the letter Mr Kelleher also claimed that the arbitrator had changed Mr Crossing’s claim for fertiliser to an entirely different one in which Mr Crossing could claim for the value to an incoming tenant of all the fertiliser he had applied.

27 That the arbitrator did allow Mr Crossing to rely on these documents and that they were additional to those previously provided to the Plaintiff is clear. Mr Kelleher’s evidence in this Court to that effect was not challenged. In her letter of 27 July 2005 enclosing her award, the arbitrator wrote:-

“ Late Presentation of evidentiary material
It is at the discretion of the Arbitrator whether to accept into evidence any material presented at the arbitration hearing. It will be evident to you, upon reading the attached judgment, that, despite accepting late evidence at hearing, this evidence was not overly pertinent to me in making my final decision. I do not agree, therefore, that you were disadvantaged by the late presentation of this material.
Andrew Storrie’s documents
You mention in your facsimile dated 13 July 2005 that documents provided by Andrew Storrie were not received by you until the day of the hearing, 5 May 2005. It appears that this was an administrative oversight. However, you were given access to it on Day one of the two day hearing and, upon reading the judgment you will find that this document was not pivotal to my decision on the weeds issue or the claim made by Mr Crossing for interference.”

28 Furthermore, in a letter of 3 August 2005, Ms Jones observed that “I considered your request for subpoenaing documents on 5 May 2005 relating to the substantive issues of the case to be sought too late”.

29 It should be mentioned that, while it is not possible to define with certainty what the further documents referred to in the Department’s letter of 22 February, it is clear that they did not include that entitled “Spraying Weeds of Glenholme” which contains reference to a further claim of the Plaintiff “dated 4.3.05”, or some documents from the Tamworth Regional Council forwarded under cover of a letter of 4 May 2005, and one of which is dated 23 February 2005. They may have included the report dated 28 November 2003 and other documents from Mr Storrie. These had been forwarded to the Registrar under cover of a letter dated 9 December 2004, albeit by the Tamworth Local Court (where they were received in response to a subpoena) and not by Mr Crossing.

30 Despite evidence from Mr Crossing to the contrary it is also clear that he was allowed to extend or change his fertiliser claim. Paragraphs 294 et seq. of the laptop notes and particularly the arbitrator’s judgment make this clear.

31 In his accounts of what occurred at the arbitration hearing, Mr Kelleher has made many other assertions beside those mentioned. Given Mr Crossing’s denials in this regard and his evidence that the laptop notes represent a fair reflection of the 2 day hearing, a question which I must address is the extent to which I should accept what Mr Kelleher has asserted.

32 I believe I should accept most of it. Firstly, there is the support to which I have referred for some of what he said. Secondly, what both Mr Kelleher and Mr Crossing are recorded in the laptop notes as saying provides some indication that Mr Kelleher seems to have taken a more intense interest in detail than did Mr Crossing. Mr Kelleher’s file notes and correspondence tend in the same direction. Mr Kelleher’s evidence to the effect that the document entitled “Spraying Weeds on Glenholme” and that of Andrew Storrie were received very late was, as I have indicated, not challenged and if that did occur it would be surprising if it was not the subject of complaint at the arbitration, particularly in light of the attitude of Mr Kelleher in the pre-hearing correspondence. Not only do these matters tend to support Mr Kelleher’s account but many argue persuasively against Mr Crossing’s evidence to the effect that the laptop notes are a fair reflection of events.

33 Although I do not need to rely on it, Mr Kelleher’s early adverse reaction to the conduct of the arbitration also argues in his favour on this issue.

34 One matter however I am not persuaded of, is some evidence from Mr Kelleher to the effect that the arbitrator and Mr Allen had something of a private tete-a-tete and there was protest by him about this. The topic is dealt with in Mr Kelleher’s commentary on paragraph 142 of the laptop notes and was the subject of significant cross-examination. As I have said, there was nothing in Mr Kelleher’s demeanour to cause me any reservations but the complaint is such an obvious one to have raised in the letter of 10 May 2005, in Mr Kelleher’s first affidavit or, given the form that it took, the summons, that the absence from these documents of any mention of that complaint leads to my failing to be persuaded that the events the subject of it occurred.

35 Mr Kelleher’s evidence and the terms of the laptop notes themselves also lead me to the view that, while it is probable that what is recorded in those notes reflects statements made, great care must be exercised before one can infer that something recorded is sufficiently complete to be a fair summary of what was said.

Other Factors bearing on the Issue of a Denial of Natural Justice

36 Before turning to the significance of the material introduced during the hearing and to the question of whether what occurred did amount in any way to a denial of natural justice or otherwise justifies some interference by this Court, it is appropriate to record that prior to the supply of the document entitled “Spraying Weeds on Glenholm”, the documents provided by neither party contained any evidence or significant statement by Mr Crossing supporting any aspect of his claims save and except for what he had said in contentious correspondence between the parties. However his letters, dated 7 and 8 October, 15, 18, and 25 November, and 2 December 2003 are relevant and important.

37 On 1 October 2003 Mr Kelleher had written asserting that (unspecified) weeds were out of control and he had obtained a quote to spray those in the river paddock. Mr Kelleher also asserted that Chilean needle grass needed spraying (with Glyphosate) and he would arrange for this to be done unless Mr Crossing addressed the matter appropriately. Mr Kelleher also complained of Mr Crossing’s dealing with electric fences.

38 On 7 October Mr Crossing replied, contending that any chemicals used to kill thistles, wild turnip or dockweed would also kill lucerne clover and that over 80% of the feed in the river paddock would be badly affected or killed if it was sprayed as envisaged, that cattle in the paddock would need to be moved before the paddock was sprayed and advocating some non-chemical options.

39 On 7 October Mr Kelleher wrote again indicating in a little detail that he had had no change of heart. On 8 October Mr Crossing replied, offering to spray certain areas with “MCPA” and again asserting that “the lucerne will not stand the spraying that you have indicated to me. It will kill it” and that the relevant pasture stand was the best cattle fattening feed on the property.

40 On the same day Mr Kelleher replied saying that Mr Crossing had had years to spray the paddocks and had ignored requests to do so, that he (Mr Kelleher) could not cancel the contract with Mr Swift, that there might be some knock-down effect on the lucerne and had the spraying occurred when it should have, the chemical rate would have been less and had no effect on the lucerne.

41 Mr Swift sprayed the river paddock on 9 October using a mixture of Amine and Lontril. Mr Kelleher wrote again on the same day. It is unnecessary to detail the contents of this letter beyond saying it referred again to spraying and gave some directions concerning electric fences. On 14 November Mr Kelleher wrote saying that the top paddock was also covered in many weeds, that he had asked for a quotation to spray them and that he proposed to have the contractor carry out the work unless Mr Crossing did so. In connection with the latter possibility he asked for details of any chemicals and application rate proposed and a copy of Mr Crossing’s chemical accreditation certificate. The letter also dealt with electric fencing, Mr Kelleher saying, inter alia, that he had unhooked parts of the “porta” fence for reasons he had previously given.

42 On 15 November Mr Crossing wrote asserting that most of the lucerne was dead and enclosing a chemical information brochure for “Amicide 625” which indicated it should not be used if lucerne were present. (It was common ground during the hearing before me that “Amicide 625” was relevantly the same as “Amine”).

43 On 15 November Mr Kelleher replied saying the information brochure did not say the chemical would kill the lucerne, the dead look described was only a knock-down effect, and the lucerne would revive with sufficient rain.

44 On 17 November Mr Kelleher wrote advising he had received a quote for spraying the top paddock and giving Mr Crossing 48 hours to respond appropriately if he wished to carry out the work “on the first fall of rain”.

45 On 18 November Mr Crossing replied asking for specification of the weeds to be sprayed so he could identify them, for Mr Kelleher to identify the Chilean needle plants that needed to be sprayed and what was meant by the “the first fall of rain”. Mr Crossing also raised issues concerning some electric fencing.

46 On 19 November 2003 Mr Kelleher responded in respect of all the issues raised though not in any way that could be regarded as a retreat from any previous stance.

47 On 25 November 2003 Mr Crossing wrote saying that on inspection of the top paddock he could not see any noxious weeds that needed spraying immediately. When there were he would carry out the work, asserting that Mr Kelleher had details of his “ChemCert” identification and saying that if Mr Kelleher personally identified the noxious weeds that offended him it would be easier to carry out a control program. The letter also asked for the supply of some new yard rails.

48 On 27 November Mr Kelleher wrote again in some detail and adhering to his previous stance, added that he had instructed his contractor to spray the top paddock, that this would involve a temporary knock down effect and that stock should be moved. The letter also asserted that Mr Crossing had not advised what he intended doing about the Chilean needle grass.

49 On 30 November Mr Kelleher wrote enclosing the contractor’s account and seeking reimbursement. and again asking for Mr Crossing’s intentions regarding the spraying of Chilean needle grass.

50 A further letter from Mr Kelleher of 2 December acknowledged receipt of a letter from Mr Crossing of 2 November (not included in evidence) but not advancing matters appreciably.

51 On 2 December 2003 Mr Crossing wrote:-

“Swift’s account and your previous letter mentions Saffron, St Barnaby and Star thistles which were sprayed in the top paddock.
After lengthy inspections of the paddock, including one with an agronomist, no Star thistles could be found.
Would you please personally identify this plant and in what areas that it was so bad that it needed spraying as you have sent me a account for spraying of it.”

52 This correspondence clearly indicates that the extent of spraying that was necessary, whether the spraying that occurred had killed the pasture or had some lesser impact (and one may infer the extent thereof), and the appropriateness of the chemicals used, were live issues. Furthermore, given that the arbitrator was not bound by the rules of evidence – Commercial Arbitration Act s19 - the assertions in Mr Crossing’s correspondence, which had been included in the Plaintiffs' bundle of documents, provided some evidence on these topics.

53 That said, each of the document of Andrew Storrie and that entitled “Spraying Weeds on Glenholme” went considerably further in providing support for Mr Crossing’s complaints. Mr Storrie was a weeds agronomist in the employ of the Department of Primary Industries and his work was apparently known to Mr Allan. The document from him said that on 7 October 2003 he had inspected paddocks adjacent to the river, found “Plains grass” and a reasonable sprinkling of turnip weed, and he had suggested that MCPA would control the weeds but they were passed the most effective time for this to occur. He also stated that MCPA would damage any lucerne in the paddock.

54 The document also recorded that he had visited the property on 22 October 2003and been told of the spraying 2-3 weeks earlier with the use of particular quantities of “Amicide 625” and “Lontrel”. The document recorded he had informed Mr Crossing that this would be very damaging to the lucerne, that Mr Crossing needed to defoliate the lucerne without delay and that Mr Storrie estimated that at least 20% of the lucerne plants were likely to die. Mr Storrie also observed that on leaving the property he noticed Chilean needle grass which he pointed out to Mr Crossing.

55 The document further recorded that Mr Storrie visited the property on 20 November, looked at the Chilean needle grass and inspected the hill paddock which contained a reasonable number of Saffron thistles beginning to flower. He suggested the use of particular chemicals and technique.

56 The “Spraying Weeds on Glenholme” document dealt with a variety of topics. (It was divided into sections and paragraphs which Mr Kelleher numbered for ease of reference. Mr Crossing has placed asterisks beside some and at paragraph 173 of the laptop notes is recorded as saying that it was only the asterisked paragraphs that he wished to read. In the summary that follows I have included an approximate reference to the paragraphs dealing with the topic and, in parenthesis, an indication of the paragraph numbers that bear an asterisk in what appears to be a copy of the original document.) The topics dealt with were:-

The extent of weed infestation, the extent of treatment Mr Crossing had carried out, that there had never been the need for broad acre spraying, the receipt of advice on the topic, the history of Green Cestrum in the area including its distribution by flooding, inspection by Mr Birch, discussions with Mr Swift and as to the effect of the spraying he carried out - paragraphs 4 to 58, 110 – 113 (27,30,33, nearly all between 110 and 113);
The nature and condition of the yards and work done by Mr Crossing - paragraphs 59 to74;
Fencing and interference therewith - paragraphs 50 - 53,75 – 100 (most between 80 and 99);
Harassment - paragraphs 101 – 113 (nearly all).

57 The reference to inspection by Mr Birch related to another document in the group of documents provided by the Tamworth Regional Council and also provided late. Mr Birch was from the Central Northern County Council and the document was a report by him of an inspection of the property in October 2003. The report, read in conjunction with explanatory documentation, was to the effect that there was very light weed infestation.

58 It should also be noted that the document “Spraying Weeds on Glenholme” was provided to Mr Kelleher only after the conclusion of proceedings on 5 May. He said, and I accept, that by working until about midnight he prepared a 7 page paragraph-by-paragraph response which he provided to the arbitrator on 6 May.

59 During the second day, the issues raised in that document were the subject of remarks by Mr Allan who, inter alia, was critical of Mr Swift’s choice of chemicals on account of their detrimental effect on lucerne with which the weeds were interspersed, commented on the results of soil tests conducted in 2001 and February 2004, observed that Mr Crossing had spent a fair bit on money on fertiliser – one may infer relying on the newly produced documents in that regard - and said that the results would be ongoing for about 10 years.

60 During the course of the arbitration, Mr Allan was asked for and expressed his own views on the topics of how weeds should be or might be dealt with – see particularly paragraphs 217 – 264. He also referred to Mr Storrie in a number of his answers, at one time saying that Mr Storrie recommended MCPA and in another, relied upon by the arbitrator in her judgment, said “The work that Storrie has done up the road indicates that if you use Lontril on plants it will kill off about 40-50% of the Lucerne”.

61 The laptop notes make it clear that Mr Crossing also placed a deal of reliance on what Mr Storrie had said.

62 What conclusions should flow from the above?

63 Firstly, I am satisfied that there was a denial of natural justice. The pre-hearing documents from the Department made it clear that the arbitration would be conducted on the basis of the documents provided by the parties to it and then passed on or, in the case of those referred to in the letter of 22 February, at least received. Given the terms of that correspondence the parties were entitled to prepare their cases on that basis.

64 Despite the correspondence from the Department to the effect that any evidence proposed to be relied on had to be notified, at the time of commencement of the hearing there was no evidence of the matters he complained of from Mr Crossing beyond that contained in the correspondence to which reference has been made and this. By inference there was a disclaimer of any intention to challenge the evidence of Mr Swift. The extent of the change to this situation by the evidence in the form of the document of Mr Storrie and the document entitled “Spraying Weeds on Glenholme”, even if confined to the asterisked paragraphs, was unfair. That unfairness was compounded when the Plaintiff was denied the opportunity Mr Kelleher apparently sought to obtain material in an attempt to deal with the further material.

65 In so concluding, I do not ignore the fact that there was a degree of commonality in what Mr Crossing had said in the correspondence and what was contained in the “Spraying Weeds on Glenholme” document. Nevertheless, that latter document went further and to a degree that was not insignificant. Nor do I ignore the fact that Mr Allan gave evidence supportive of Mr Crossing’s case and even without the Storrie document the arbitrator might well have reached the same conclusion on matters to which Mr Storrie’s statement was relevant. Nevertheless, it is impossible to predicate that the latter document had no impact, even on the arbitrator’s thinking and as tending to reinforce her confidence in Mr Allan or his views.

66 Nor do I ignore the fact that Mr Kellher seems not to have pursued the obtaining of the further documents in the letter of 22 February. Had all the further documents relied on by Mr Crossing been included in this group one would not be able to say that their production at the hearing was unfair, but this is not the situation. Furthermore, although Mr Kellher provided no explanation for why he did not pursue obtaining copies of these document, given the totality of the evidence, it is not possible to draw the inference that he simply did not care.

67 Secondly, I am satisfied that the only appropriate order to give effect to this conclusion is to set aside the award. Also, given that the extent of the conclusions reached by the arbitrator, both leading to her award and on other issues in respect of which she has not yet made an award but given directions for the provision of further evidence directed to the topic of damages, it is not appropriate that she be involved further. I am satisfied that she is unsuitable to deal further with the particular dispute – see Enterra Pty Ltd v ADI Ltd [2002] NSWSC 700, Corin v McKinness (1990) VR 723.

68 That latter conclusion is reinforced by the nature of the errors of law to which I referred in my previous judgment. As I then said, those errors were manifest and it is not unfair to describe them as fundamental and elementary.

69 Some of the findings in her award tend the same way. Included in her reasons was the following:-

“I am of the opinion that the landlord in entering upon the leased premises to inspect the weed situation on Glenholme and to examine the fences has obstructed the lessee’s rights under the agreement. Despite the fact that notice was given to the lessee regarding the quotation obtained from Swift Spraying Services Pty Ltd, the constant inspections of the weeds on the leased part of “Glenholme” by the lessor could be deemed an interference.”

70 While recognising the inadequacies in the laptop notes, I am not conscious of any evidence that would justify the conclusion that the landlord’s entering upon the premises to “inspect” the weeds or “examine” the fences was of a frequency or nature such as to amount to any obstruction of the lessee or such as could be described as “constant”. Indeed, while Mr Crossing was strident in his criticism of Mr Kelleher in some areas, I am not conscious of any complaint as to the landlord’s conduct in the respects relied on by the arbitrator in the passage just quoted.

71 The Arbitrator’s conclusion that the damages to be paid by the Plaintiff should be $15,000 argues in the same direction. While as the arbitrator pointed out s26L of the Agricultural Holdings Act permits an order for the payment of compensation in the nature of damages to be made without proof of actual loss or damage, that power does not permit figures to be simply plucked out of the air when evidence of the loss or damage is reasonably available to the party claiming but not produced. Mr Crossing gave evidence that because of the interference with fences he felt obliged to attend the property more often but seems to have given no significant detail of this. Nor did he provide any evidence as to the value of the loss of pasture which was his major complaint.

72 These conclusions mean that the Plaintiff is entitled to an order for costs of proceedings in this Court. Although in large part the reasons for allowing the appeal are actions of the arbitrator during the hearing of the arbitration, the occasion for those actions lies in some measure in the actions of Mr Crossing in failing to comply with the requirement for the provision of the evidence before the hearing and possibly in the failure of the Department to supply to the Plaintiff documents it had received. It may be that, in not pursuing the supply of the documents referred to in the Department’s letter of 22 February, the Plaintiff was also at fault. However, in this Court the Defendant elected to oppose the Plaintiffs' claim for relief and, even when the Defendant also sought that the arbitrator be removed, sought that this not occur because his complaints and not the Plaintiffs'. In these circumstances the costs order must be made against the Defendant.

73 No submissions were made concerning the costs of the arbitration. Nor did the parties deal comprehensively with what should occur in the result I came to the conclusions I have. There was no significant submission as to what ancillary orders might be necessary and whether the Court can or should appoint another arbitrator that task must again fall to the Director General of the Department . In these circumstances, the orders that seem appropriate are:-

(i) That the award of the Second Defendant made on 27 July 2005 in the arbitration of disputes arising out of the leasing of the property “Glenholme” from the Plaintiff to the Defendant be set aside;
(ii) That the Second Defendant be removed as arbitrator of the said disputes;
(iii) That the First Defendant pay the Plaintiffs' costs of proceedings in this Court; and
(iv) That the parties have liberty to apply on 7 days written notice.

**********

03/07/2007 - File Number - Paragraph(s) n/a