Tasmanian Machinery Ring Co-operative Society v Hill
[1999] TASSC 124
•22 November 1999
[1999] TASSC 124
CITATION: Tasmanian Machinery Ring Co-operative Society v Hill [1999] TASSC 124
PARTIES: THE TASMANIAN MACHINERY RING
CO-OPERATIVE SOCIETY
v
HILL, Richard Karl
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 81/1997
DELIVERED ON: 22 November 1999
DELIVERED AT: Hobart
HEARING DATE/S: 5 October 1999
JUDGMENT OF: Underwood J
CATCHWORDS:
Trade and Commerce - Trade and commerce generally - Statutes relating to misleading or deceptive conduct in trade - Other States or Territories - Tasmania - Nature of representation - Whether misleading.
Fair Trading Act 1990 (Tas), ss11,14.
Given v Pryor (1979) 24 ALR 442; Thompson v Riley McKay Pty Ltd (1980) 29 ALR 267, followed.
Aust Dig Trade and Commerce [36]
Trade and Commerce - Trade and commerce generally - Trade practices and related matters - Enforcement and remedies - Assessment of damages - Other matters - Condition precedent to relief is proof that loss or damage was caused or likely to be caused by the relevant conduct.
Fair Trading Act 1990 (Tas), s41.
Marks v GIO Holdings Pty Ltd (1998) 73 ALJR 12, applied.
Aust Dig Trade and Commerce [139]
REPRESENTATION:
Counsel:
Plaintiff: W M Griffiths
Defendant: S B McElwaine
Solicitors:
Plaintiff: Philip Gunton
Defendant: S B McElwaine
Judgment ID Number: [1999] TASSC 124
Number of paragraphs: 54
Serial No 124/1999
File No 81/1997
THE TASMANIAN MACHINERY RING CO-OPERATIVE SOCIETY v
RICHARD KARL HILL
REASONS FOR JUDGMENT UNDERWOOD J
22 November 1999
Introduction
The plaintiff is a Co-operative Society. It is registered pursuant to the provisions of the Co-operative Industrial Societies Act 1928. Its members are owners of agricultural machinery mainly, I understand, farmers who are keen to better utilise the capital invested in their machinery by doing contract work for other farmers. The plaintiff's manager is Mr Speed. His principal job is to find contract work for the members of the Co-operative.
The defendant is a farmer and cheesemaker. He has a 3,000 acre dairy property at Musselroe Bay on the north east coast of Tasmania.
In about November 1996, as a result of discussions between Mr Speed and the defendant, members of the plaintiff's Co-operative cut silage on the defendant's property to provide winter feed for the defendant's stock. This litigation concerns the cost of doing that work.
The issues
By these proceedings, the plaintiff seeks to recover $24,430.53 claimed to be the cost of work done for the defendant by the plaintiff at the request of the defendant, pursuant to terms of an agreement made between them.
By his defence, the defendant admits that there was an agreement, alleges that there were certain terms not pleaded by the plaintiff and further alleges that he was induced to enter into the agreement by misrepresentations made by Mr Speed as agent of the plaintiff. It is convenient to encapsulate the case for each party by setting out some material allegations in the pleadings. The defendant admits the following allegations made in the statement of claim:
"2In or about the month of October 1996 the Plaintiff and the Defendant entered into an agreement whereby the Plaintiff was to provide for and at the request of the Defendant mowing and raking and the supply of a forage harvester and associated equipment all at a property in North-Eastern Tasmania, and together with transportation of equipment to and from such property.
3It was a further term of the agreement referred to in paragraph 2 above that the Defendant would pay to the Plaintiff the following rates:
(a) Mowing: $ 55.00 per hour (b) Raking: $ 50.00 per hour (c) Forage Harvester: $130.00 per hour (d) Trucks: $ 45.00 per hour (e) Forage Harvester - waiting time: $ 25.00 per hour (f) Trucks - waiting time: $ 15.00 per hour (g) Transportation:
Forage Harvester:
Trucks:$ 50.00 per hour
$600.00(h) Commission at rate of 2%"
As it was common ground that the plaintiff did cut silage for the defendant, the substantial issues in this litigation arise out of the following allegations in the defence and counterclaim:
"4 The following were also terms of the agreement which have not been pleaded by the plaintiff viz:
(i)The plaintiff would produce for the defendant 600 tonnes of silage;
(ii)The plaintiff's total cost to the defendant would be $21.33 per tonne for 600 tonnes, or $12,798.00 in total.
5 In breach of the agreement the plaintiff:
(a)Produced 400 tonnes of silage only;
(b)Charged the plaintiff at the rate of $62.42 per tonne.
…
11 Prior to execution of the agreement referred to at paragraph 2 of the statement of claim the plaintiff, by John Speed, orally represented to the defendant as follows:
(i)That the plaintiff would produce 600 tonnes of silage;
(ii)That the plaintiff would charge the defendant the all up rate of $21.33 per tonne;
(iii)The plaintiff would spend approximately 30 hours in doing the work the subject of the agreement:
(the representations)."
By the counterclaim, the defendant alleges that the representations were misleading or deceptive within the meaning of the Fair Trading Act 1990, s14, and seeks relief pursuant to the provisions of that Act, s41.
All these issues arise out of a conversation between Mr Speed and the defendant at the latter's home on 8 August 1996. There were no independent witnesses to this conversation.
Silage
Before turning to the evidence of this conversation, it is necessary to interpolate a word of explanation about making silage. The first step is for a mower to cut the grass in the paddocks. The second step is for a rake to rake it into windrows where it remains until a pre-determined percentage of the water in the plant material has dried off. In the defendant's case it was desired to produce silage containing 65 per cent dry material. Depending upon the weather, the windrows may have to be re-raked. The third step is for a specially designed harvester to harvest the windrows of semi-dried grass by scooping it up, chopping it to a pre‑determined degree and by blowing it out of a funnel into a truck moving alongside the harvester. The truck is then driven alongside a self-feed wagon next to the storage facility and the silage unloaded. From the self‑feed wagon the silage is fed into a blower which blows it up and into the storage facility. In the present case, the defendant was responsible for the silage after delivery to the self-feed wagon.
The conversation on 8 August 1996
In the end, there was very little difference between the evidence of Mr Speed and the evidence of the defendant with respect to this conversation. It was common ground that the plaintiff cut silage for the defendant the previous year and that there had been some disagreement about the price to be paid for the work done. However, this disagreement was resolved between the parties without resort to litigation. The defendant said, and I accept, that he was anxious to avoid a dispute about the price for the work to be done in 1996. It was also common ground that Mr Speed called on the defendant at his property on 8 August 1996 and that in general terms, they looked at the paddocks from which the silage was to be cut in October or November that year. The two men had lunch together and remained seated at a table in the defendant's house discussing the cost of harvesting the silage.
The defendant said that he told Mr Speed that he wanted to fill his silo with silage. Mr Speed agreed that he knew that the defendant wanted to fill his silo. The only evidence that the defendant gave about this was that he said to Mr Speed that "he wanted to fill the silo, which was 600 tonnes" and that Mr Speed's response was to acknowledge the defendant's wish. There was no evidence that Mr Speed represented that the plaintiff would produce 600 tonnes of silage as is pleaded in the defence, par11(i).
The discussion between the two men about this job occupied more than an hour. The defendant made notes on a single piece of paper during the course of the conversation and made calculations with a calculator. He noted the calculations on the same piece of paper which was tendered in evidence, D3.
In his evidence-in-chief, Mr Speed said that in the discussion on 8 August 1996 he simply told the defendant the hourly hire rate for the mower, the raking machine, the harvester and other equipment, although he did say that "Mr Hill asked me to give him some estimations of the rates the various machines could work at." He said that he told the defendant that he could do no more than give him an hourly rate because there were many "variables". Mr Speed instanced as "variables" rain, wind, the nature of the paddocks to be cut and the size of the crop.
The defendant accepted that the work involved "variables" and for that reason, did not ask Mr Speed to give him a firm quotation for the work to be done. He said that in the light of his experience the previous year he was anxious to obtain an estimate of the cost per tonne of silage. In cross-examination Mr Speed conceded that the defendant was anxious to have his best "guesstimate" of what the work would cost him. I find that the purpose of the conversation between the defendant and Mr Speed was to ascertain the likely per tonne cost of harvesting silage. Calculation of this cost was difficult as the harvest date was some two or three months distant, and required an estimation of the likely yield per hectare.
The cross-examination made it clear that Mr Speed had little independent recollection of the conversation on 8 August 1996. Although, as I have said, in the end, there was little difference between the two witnesses with respect to what was said at this meeting, where there is a difference I prefer the evidence of the defendant where it is corroborated by a note on D3.
At the start of his cross-examination, Mr Speed repeated that he did no more than tell the defendant the hourly rates for the hire of the necessary machinery. He said that all the calculations made by the defendant while they were sitting around the table and recorded on D3, were made without input from him, other than the provision of the hourly hire rate. He protested that he was unable to do anything further to assist calculate the likely cost of harvesting the silage, because of the "variables". However, as the cross-examination progressed, he conceded that there was considerable input from both him and the defendant with respect to these variables, the upshot of which was the calculation of various figures. Ultimately, Mr Speed was shown D3 and he conceded that it was produced as a result of discussion between him and the defendant. In addition to this concession from Mr Speed, the probabilities are that in the circumstances, the conversation about the likely cost of producing a tonne of silage would have included expressions of views by both men about the factors that may have an effect on the likely yield and the time that would be required to do the work.
The defendant said, and I accept, that the two men discussed the likely yield after the defendant had told Mr Speed that he wanted to fill his silo. Mr Speed acknowledged that he had some experience in estimating the likely future yield per hectare.
I accept the defendant's evidence that with respect to the mowing, raking and harvesting, he asked Mr Speed what the hire cost would be for each of those pieces of machinery. The defendant agreed that he provided these costs and added that he would have to confirm them after he had spoken to the owners of the machinery. I also accept the defendant's evidence that he then asked Mr Speed what was "a reasonable amount to expect to be done per hour because [he] wanted to get to a rate per hectare or acre and then be able to reduce that to a cost per tonne because the cost per tonne is all [he] was interested in: what was it going to cost [him]."
With respect to mowing, the defendant said that Mr Speed told him that the machine could mow at the rate of 3 hectares per hour. Mr Speed denied this and said that he told the defendant that the mower would cut 3 acres per hour. Under cross-examination, Mr Speed conceded that the mower had cut three hectares an hour under "absolutely ideal conditions at Woolnorth", and further conceded that he had told the defendant this, but added that he "made it very clear that there was no way it would do it at [the defendant's] property". In further cross examination Mr Speed accepted that $18.33 per hectare was the figure that Mr Hill calculated in his presence. At first, he said that it was based upon his statement that the mower could probably work at the rate of 3 acres, not 3 hectares per hour, but he then agreed that he and the defendant "discussed mowing about $7.33 per acre" and that figure was "the best estimate that was available on the information that [he] had." As it was common ground that the hourly hire of the mower was $55, it follows that if the likely cost was $7.33 per acre, Mr Speed did say that the mower would cut at the rate of 7.5 acres or 3 hectares. This is corroborated by D3 which notes a calculation based on mowing at the rate of both 7.5 acres per hour and 3 hectares per hour and I find that Mr Speed did tell the defendant that this was the rate at which the mower would probably be able to work. The defendant's calculation of the cost of mowing at a yield of 2.5 tonnes per hectare, at the rate of 3 hectares per hour at a hire cost of $55 per hour, is correctly noted on D3 as $7.33 per tonne. It is unlikely that the defendant would have recorded a rate at which the mower would be likely to work, other than that given to him by Mr Speed after discussion between the two men about the variables, such as the slope of the paddocks, the condition of the ground and the likely weather conditions. To have done so would have defeated the defendant's objective, namely, to obtain an estimation of the cost of the work to be done.
The note contains similar calculations based on the rake working at the rate of 2.5 hectares per hour and the harvester working at 20 tonnes per hour. The resultant cost to cut, rake and harvest, noted on D3, is $21.33 per tonne.
The defendant said that Mr Speed told him that the rake would be likely to rake 2.5 hectares per hour. With respect to this, Mr Speed's evidence in cross-examination proceeded as follows:
"We will go to raking now. Do you accept that you told him that raking would cost $50 per hour? ... Yes, I did.
Do you accept - did you discuss with him about how many hectares or acres the raking machine could do per hour? … Yes, I suggested that because the conditions were rough two and a half acres an hour was a realistic figure.
And that as a result of that did you accept that you discussed that the approximate cost per hectare for raking would be about $20? ... Yes.
Or about $8 an acre? ... Right."
Although Mr Speed said that he estimated 2.5 acres an hour for raking, the figures which he accepted in the last two answers set out above, are consistent with raking at the rate of 2.5 hectares, or 6.25 acres per hour, not 2.5 acres per hour. This was not a slip, as later in his cross-examination, when specifically asked, Mr Speed agreed that it was $8.00 per acre and not $8.00 per hectare. Again, this is corroborated by D3 which notes raking at the cost of $20 per hectare. I find that after there had been some discussion about the terrain on which the rake would be working and the possible weather conditions at the time of harvest, Mr Speed told the defendant that the rake would rake at the rate of approximately 2.5 hectares per hour and would cost $50 per hour to hire.
With respect to the harvester, the defendant said that Mr Speed told him that it would harvest at the rate of 60 tonnes per hour, but he rejected that as being far too optimistic. He said that he had owned and operated a small harvester, and from this experience he thought that a realistic rate of harvesting was 20 tonnes per hour. Mr Speed denied that he estimated 60 tonnes per hour. He said in cross examination:
"Well whatever figure you suggested to Mr Hill, you accept that he said 'No, I think we ought to discount it. I think that's a bit too much'? … I don't argue with that, yes. I knew it was as well for what that, for what we were doing.
And he discounted the chopping to about 20 tonnes per hour, didn't he? … That's correct.
And that's a figure with which you generally agree, just being appropriate for the conditions at Icena? … In the correct conditions it was perfectly possible.
20 tonnes per hour is the rate noted on D3. I find that this rate was suggested by the defendant to Mr Speed and the latter agreed that it was the probable rate at which the harvester would work.
With respect to the estimation of the yield, D3 notes "Based 2.5T/hec." When first asked in cross-examination who nominated that figure, Mr Speed said "I think that Mr Hill nominated that figure." Two questions later he was absolutely certain that the defendant nominated that figure. Throughout the whole of his evidence Mr Speed maintained that it was the defendant who made the estimation of a likely yield of 2.5 tonnes per hectare. The defendant said that there was discussion between him and Mr Speed about the likely yield and the figure arrived at "was really a consensus figure." It is most unlikely that a farmer of the defendant's experience would not held and expressed an opinion about the likely yield from his paddocks, although it is equally likely that Mr Speed expressed his views about this as well. I find that figure of 2.5 tonnes per hectare yield was one at which the defendant and Mr Speed arrived together following discussion in which the defendant took the leading role. There was much cross-examination of the defendant as to whether this yield was after the grass had lost 35 per cent of its moisture or before, but I have come to the conclusion from the defendant's evidence that the likely position is that neither man considered whether the estimated yield of 2.5 tonnes was of silage or wet grass.
Although D3 sets out the likely yield at 2.5 tonnes per hectare, the defendant said in his evidence-in-chief that the estimation was 2.5 tonnes per acre. The following is taken from his evidence in chief: (I have had the accuracy of the transcript checked by listening to the tape.)
"MR McELWAINE: (Resuming) And was there any discussion about where on the property the grass would come from to fill the silo? ... It was coming from both the - sorry, was there discussion, yes.
What was discussed? ... Where it would come from and the sort of acreage that would be needed.
Did you reach any figure as to the sort of acreage? ... Yes, we needed, because we discussed, we to and froed on what was a reasonable expectation of tonnes per acre. We agreed that the two and a half that two and a half tonnes, a good crop could even go three and a half tonnes but we'd go for two and a half tonnes, so that meant that two and a half into 600 was the number of acres that he needed to cut to fill the harvest store. Well two and a half into 600 is er what is it two, 250 it's 250 or something. It's 200 250 acres.
And who came up with the figure of two and a half tonnes per acre? ... I can't recall whether it was at the end of the discussion with John and I as to what was a reasonable amount and could be expected, so it was really a consensus agreement that two and a half was a reasonable figure."
I have concluded that the reference to acres instead of hectares was an inadvertent error by the defendant. I do so because D3 refers to 2.5 tonnes per hectare, and because later in his evidence the defendant said:
"The two and a half tonnes to the hectare was arrived at after discussion of let's go for a medium crop, not a good crop, not a bad crop, let's take it as what do we reckon."
In summary then, I find that in order to obtain an estimate of the likely cost of producing a tonne of silage, Mr Speed specified the hourly hire costs of the mower, the rake and the harvester and, after discussing the "variables" with the defendant, the likely area that the mower and the rake would be able to cover in an hour in accordance with the figures noted on D3. I find that the defendant expressed the opinion that the harvester would be likely to work at the rate of 20 tonnes per hour and that Mr Speed assented to this proposition. I find that the two men reached a consensus that the likely yield would be 2.5 tonnes per hectare.
I find that in the presence of Mr Speed, the defendant calculated the estimated cost per tonne of mowing, raking and harvesting the grass and called out the results of his calculations to Mr Speed.
D3 has some other notes on it. There is a reference to "2+! Carters". There was no dispute that Mr Speed told the defendant that in addition he would have to pay for the cost of cartage which would involve two trucks if the distance they had to travel was short, and three trucks if it was not. There are some calculations noted of the cost of the silage if it turned out to be 65 per cent dry material and if it turned out to be 50 per cent dry material. There is also written on D3 "Maybe 30 hours max = 3 long days." With respect to this last matter the defendant's evidence was:
"Now below that what have you written, below the 50% figure you were just giving me? ... Maybe 30 hours max because three long days.
Where did that information come from? ... That came from Mr Speed's, because I specifically asked him because of previous problems. I wanted to know what it was going to cost me, so I said, well how long is it going to take to do the job."
I do not accept that evidence as accurate. A moment's consideration shows that if the yield is 2.5 tonnes per hectare and if the mower cuts at the rate of 3 hectares per hour, only 225 tonnes of grass will be cut in 30 hours, far short of the 600 tonnes the defendant was hoping to cut in order to fill his silo. Further, the evidence made it clear that the mowing, raking and harvesting would be done on different days so that the grass could dry out before it was gathered up and chopped. No one contemplated that the whole operation could or would be done in 3 long days. With respect to this entry of 30 hours, it was put to Mr Speed in cross-examination that he told the defendant that this was the time that "this job, the whole thing" would take. Mr Speed responded:
"Mr Hill worked that figure out for the forage harvester alone based solely on the guesstimate output I gave him for the forage harvester."
A division of the output of the harvester at the agreed rate of 20 tonnes per hour, into 600 tonnes, being the capacity of the defendant's silo, produces the time of 30 hours, or 3 long days for the harvesting operation. I find that the reference to 30 hours or 3 long days is a reference to the estimated time the harvester would work, based on a yield of 2.5 tonnes per hectare and a harvesting rate of 20 tonnes per hour. The evidence does not permit a finding to be made that either party made a representation to that effect.
The harvest
The unchallenged evidence was that the nett result of the harvest was that the defendant's silo was about two thirds full or contained only 400 tonnes. It appeared that there might have been some wastage due to no fault of the plaintiff. Doing the best I can with the evidence, I estimate that this wastage was in the order of 30 - 50 tonnes. Thus, I find that the total weight of silage that the plaintiff cut for the defendant was in the order of 450 tonnes. For the work done, the plaintiff sent the following bill to the defendant:
"details of item/service paid for including invoice/statement number account
number
amount
$ c
Mowing @ $55/hr 87 hrs 4785 00 Raking @ $50/hr 141 hrs 7050 00 Forage Harvester @ $130.00/hr 50.3 hrs 6539 00 Trucks @ $45/hr
D B McGee
S McGeePrevens
54.5 hrs
16.5hrs34.5 hrs
2452
7421552
50
5050
Waiting Time Harvester $25/hr
2 x Trucks $15/hr
6.00 hrs
6.00 hrs
150
180
00
00
Travelling and Delivery
Forage Harvester
2 - Trucks - 3 Trips say 15 hrs$100 each
300
200
00
00
Travelling 3 Tractors
5 hours per unitsay
$80/unit
240
00
Replacement Parts
Tyres 22 x NH
6 x JF
$2.50
48.15288
78
cheque
total $$24,480
28"
With respect to that account:
· the plaintiff makes no claim in its statement of claim for "Travelling, 3 Tractors, $240" nor for "Replacement Parts, $288.78";
· the rate charged for the harvester, $130, is $10 more than the stated price at the conversation on 8 August 1996; and
· there is no claim for commission at 2%.
· Mr Speed explained that only two trucks were needed, but one of them was driven by two men at different times.
With respect to the hire rate for the harvester, Mr Speed sent the defendant a letter after the meeting in August 1996. It is dated 1 November 1996 and opens, "I would confirm our arrangements and prices". The letter sets out the hourly hire rates of the mower, the rake and the harvester in accordance with D3 except that the harvester is charged at the rate of $130 per hour. I find that by proceeding with the work after receipt of the letter the defendant accepted the hire rate of $130 per hour for the harvester. The letter also refers to the hire of trucks at $45 per hour each and the estimated cost of transporting the harvester at $300. Although the letter does not refer to waiting times for trucks, the defendant accepted that he is obliged to pay for any reasonable waiting time for trucks, as well as for the cost of transporting the trucks. It also seemed not to be in dispute that the defendant was to pay 2 per cent commission on the total account.
In the certificate of readiness it was agreed, in effect, that the times specified in the account with respect to each piece of machinery for working or waiting as the case may be, were the times actually worked or waited. Accordingly, the plaintiff's claim is quantified at $24,430.53. The defendant says that he should not have to pay that sum. In essence, he claims that the estimate was to produce 600 tonnes of silage at a cost of $21.33 per tonne, plus the reasonable cost of trucks, transport, waiting time and commission. The plaintiff only harvested 450 tonnes and therefore should not be entitled to recover more than approximately $10,000 plus trucks, transport, waiting time and commission.
The evidence about why each piece of machinery had to work for as long as it did and why only 450 tonnes were produced was sparse to say the least. Mr Speed's uncontradicted evidence was that 250 acres were harvested. 250 acres is approximately equal to 100 hectares. This makes the yield 1.8 tonnes per acre or 4.3 tonnes per hectare. Mr Speed said that it rained "two or three times" and "in the early paddocks the crop was extremely light and therefore to get any sort of a windrow for the forage harvester we had to rake two or three rows into one to get anything decent for the forage harvester to go for." Mr Speed also said that the reason the harvester did not harvest at the rate of 20 tonnes per hour was that "there was no grass." The plaintiff called a Mr D McGee to give evidence. He drove one of the trucks. He described the weather as fine but windy, although he added "only at one stage it rained." Unlike Mr Speed, he described the crop as "average". Apart from the wind, which Mr McGee said "slows the process down slightly", he did not suggest that there was anything about the harvesting operation that was out of the ordinary. I find accordingly. In accordance with the agreed facts the time taken to mow 100 hectares was 87 hours or 1.15 hectares an hour, well under the specified rate of 3 hectares per hour. The raking took 141 hours or 0.71 hectares per hour, again well under the specified rate of 2.5 hectares per hour. The harvesting took 50.3 hours or 8.95 tonnes per hour. This was also well below the rate of 20 tonnes per hour. It followed that the trucks, which run alongside the harvester, worked for an equivalent length of time, 54 hours in the case of one truck and 51 hours in the case of the other.
The law and its application to the facts
The provisions of the Fair Trading Act 1990, ss11 and 14 mirror the provisions of the Trade Practices Act 1974 (Cth), ss51A and 52 respectively. The former Act, s14(1) provides:
"A person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive."
The misleading or deceptive conduct pleaded by the defendant is set out in the defence and counterclaim, par11, viz:
"(i)That the plaintiff would produce 600 tonnes of silage;
(ii)That the plaintiff would charge the defendant the all up rate of $21.33 per tonne;
(iii)The plaintiff would spend approximately 30 hours in doing the work the subject of the agreement:"
All of the above representations are with respect to future conduct. Absent the provisions of the Fair Trading Act, s11, the fact that the representations with respect to future conduct or events do not come to pass does not, per se, make the representations either misleading or deceptive. Such representations are no more than statements of the state of mind of the maker of the statement at the time the representations are made and are not misleading if there was a basis for that state of mind. See James v ANZ Banking Group Ltd (1986) 64 ALR 347 at 372; Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82. However, the Fair Trading Act, s11 makes special provision with respect to "inaccurate representation[s] with respect to any future matter". It provides:
"(1) For the purposes of this Act, where a person makes an inaccurate representation with respect to any future matter (including the doing of, or the refusing to do, any act) the representation shall be taken to be misleading unless the person has reasonable grounds for making the representation.
(2) For the purposes of the application of subsection(1) in relation to a proceeding concerning a representation made by a person with respect to any future matter, the person shall, unless the person adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation.
(3) …"
A representation includes an oral statement communicated by one person to another. See Given v Pryor (1979) 24 ALR 442; Thompson v Riley McKay Pty Ltd (1980) 29 ALR 267 at 271 and 276 - 277. Such oral statements fall within the purview of the Fair Trading Act, ss11 and 14 if they are with respect to any future matter and are misleading or deceptive or likely to mislead or deceive.
For the reasons already given, I find that the plaintiff, by its agent Mr Speed, did not make a representation that "the plaintiff would produce 600 tonnes of silage". The defendant said that he wanted to fill his silo, and at its highest for the defendant, the evidence establishes no more than that Mr Speed acknowledged that this was the defendant's desire.
With respect to the rate at which the harvester would be likely to work I find that Mr Speed's statement was merely an assent to the proposition propounded by the defendant that a rate of 20 tonnes per hour was reasonable and as such, was no more than an expression of Mr Speed's then state of mind that the defendant's projection was reasonable and did not constitute a representation with respect to a future matter. Further, even if it could be said that Mr Speed's assent to the proposition that the harvester would harvest at the rate of 20 tonnes per hour was a representation with respect to a future matter, the defendant was not mislead by it as it was the rate he nominated to Mr Speed who had suggested a faster rate.
There was no evidence that the plaintiff made any statement to the effect that "the plaintiff's total cost to the defendant would be $21.33 per tonne for 600 tonnes". Mr Speed did make statements with respect to future matters when he stated the approximate areas that the mower and the rake would cover. In accordance with the Fair Trading Act, s11 such representations are taken to be misleading unless Mr Speed had reasonable grounds for making them. If these statements had been put in issue by the pleadings, the burden of proof that there were reasonable grounds for making those statements falls on the plaintiff. See Ting v Blanche (1993) ATPR 41-102. Although it can be said that the plaintiff's statements with respect to the area that the mower would mow in an hour and the area that the rake would rake in an hour were made in breach of the Fair Trading Act, s14(1), these statements or representations are not those pleaded in the defence and counterclaim. In this context, it is important to bear in mind that the pleaded representation of $21.33 per tonne is the product of four factors, only two of which, viz, the rate of mowing and raking, were misleading within the meaning of the Act. The other two factors were the rate at which the harvester would work and the likely yield from the paddocks and the calculations which produced the figure of $21.33 per tonne were made by the defendant and announced by him to Mr Speed. In addition, to the knowledge of the defendant, $21.33 per tonne was not going to be the final cost of producing a tonne of silage. I find that from his experience, the defendant knew that in addition to the mowing, raking and harvesting, he would have to pay for the trucks to get the silage from the paddocks to the loader at the silo. I find also that the defendant knew that he would have to pay for transport to the site and commission. However, even if the pleading had alleged that the plaintiff represented, not that the all up cost of a tonne of silage would be $21.33, but that the cost of mowing, raking and harvesting alone would be the "all up rate of $21.33 per tonne", there is no evidence that Mr Speed made any such representation. The figure of $21.33 was a product of the defendant's calculations and the probabilities are that he announced it to Mr Speed. The following extract from the transcript of the defendant's evidence-in-chief puts his case in this respect at its highest:
"Yes, and so the figure of $21.33 is arrived at by adding which figures? ... By adding 7.33 per tonne for mowing, $8 for raking and $6 for chopping.
Each per tonne? ... Each per tonne. Per thousand kgs.
Now was that figure advised by you to Mr Speed or vice versa? ... The actual mathematical calculation was advised by me to Mr Speed who had been totally involved in literally each of those lines and numbers as they were done. I mean, I had literally looked up before I had written and said, 'Okay' and then we would keep doing the lines.
Was there any particular discussion between you and Mr Speed of the figure of $21.33 per tonne? ... Ah, yes. Well, not a discussion. I said that this was the sort of number that I was expecting him to come in at, to come in at, to charge me for my 600 tonnes. And then obviously there was then cartage as the extra. But this was the ball-park I was led to believe I would be charged.
What was his response to you saying that to him, if anything? ... He - I cannot recall his exact comment. But, I mean, he did not disagree. He accepted what I was saying."
That evidence is not sufficient to establish that it is more probable than not that Mr Speed made either the representation as pleaded, "that the plaintiff would charge the defendant the all up rate of $21.33 per tonne" or a representation that the plaintiff would charge the defendant $21.33 per tonne to mow, rake and harvest the silage.
For the reasons already given, the defendant has not made out that Mr Speed stated that "the plaintiff would spend approximately 30 hours in doing the work the subject of the agreement".
Even if the defendant had established the existence of one or more of the pleaded representations and that it or they had been made in breach of the Fair Trading Act, s14, he would not be entitled to relief as provided by the Act, s41. A condition precedent to the grant of any relief provided by s41 is proof that the defendant "has suffered or is likely to suffer loss or damage by [the misleading conduct of the plaintiff]". Identical conditions precedent appear in the Trade Practices Act, ss82 and 87. In Marks v GIO Holdings Pty Ltd (1998) 73 ALJR 12, the majority judgment of McHugh, Hayne and Callinan JJ held at 20, that the first step is to identify a causal connection between the misleading conduct and actual or likely loss or damage. Their Honours said at 21:
"…it is enough to say that s82 requires the identification of a causal link between the loss or damage and conduct done in contravention of the Act."
Reference is there made to Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 525. The joint judgment held that once loss or likely loss, causally related to the relevant conduct has been established, there is no reason to restrict the measure of damages to that used to measure damage for tort based loss. As in Marks, the pleaded misleading conduct is alleged to have caused the defendant to enter into a contract. In this case, a contract for the harvesting of silage to be paid for at a figure calculated by reference to hourly rates and the time taken by each piece of machinery to do the work. The defendant is not entitled to recover expectation damages, being the difference between any represented cost and the actual cost, unless he first establishes that that the making of the contract caused him, or was likely to cause him, to suffer loss or damage. In this respect the joint judgment said at 22:
"The bare fact that a contract has been made which confers rights or imposes obligations that are different from what one party represented to be the case does not demonstrate that the party that was misled has suffered loss or damage. The contrary view (which had been adopted by the Full Court of the Federal Court in Jobbins v Capel Court Corp Ltd (1989) 25 FCR 226) was rejected by the majority in Wardley (1992) 175 CLR 514 at 528-532.
A party that is misled suffers no prejudice or disadvantage unless it is shown that that party could have acted in some other way (or refrained from acting in some way) which would have been of greater benefit or less detriment to it than the course in fact adopted. Thus, the party that is misled will have suffered loss if a chose in action which was acquired was worth less than the amount paid for it. There may well be other ways in which it might suffer loss or damage. For example, consequential loss may be suffered. But no loss of that kind was alleged in this case and, putting that kind of loss to one side, we focus only on loss said to be suffered by the making of the contract."
For a useful short discussion of this case, see Marks v GIO Holdings Pty Ltd: Not just Marking Time (1999) 18 Aust Bar Rev 79. The principle expressed by the joint judgment in the passage just set out has since been applied on a number of occasions. See Fennell v Australian National University [1999] FCA 989; Australian Competition & Consumer Commission v Top Holdings Pty Ltd & Ors [1998] FCA 1689. In the present case, there is no evidence that the defendant "could have acted in some other way (or refrained from acting in some way) which would have been of greater benefit or less detriment to [him] than the course in fact adopted." The defendant gave evidence that there was an alternative winter feed namely grain, but he was unsure of the cost. He thought that it was about $120 - $180 per tonne, but accepted that a direct comparison with the cost of producing a tonne of silage was not valid for the stock do not need as much grain as they do silage because the former provides more megajoules of energy than the latter. That evidence is insufficient to establish on the balance of probabilities, that the condition precedent to relief prescribed by the Act, s41 has been fulfilled. There was no evidence that the silage could have been harvested at any lesser cost than that agreed to by the plaintiff and the defendant.
In the alternative, the statement of claim pleads that the following were terms of the contract:
"(i) The plaintiff would produce for the defendant 600 tonnes of silage;
(ii) The plaintiff's total cost to the defendant would be $21.33 per tonne for 600 tonnes, or $12,798.00 in total."
Contractual terms are created when statements made constitute the assumption of an obligation. See Australian Woollen Mills v The Commonwealth (1954) 92 CLR 424 at 457; Placer Development Ltd v The Commonwealth (1969) 121 CLR 353 at 367. In his evidence, the defendant accepted that there were a number of factors which prevented the plaintiff from assuming an obligation to mow, rake and harvest the number of hectares per hour that Mr Speed told him could be achieved. He said that he was only after a "ball park figure." There was no promissory expression made during the conversation at the defendant's house on 8 August 1996 other than with respect to hourly hire rates. This is confirmed by the evidence that subsequent thereto and prior to the work commencing, the plaintiff sent the letter to the defendant confirming "the arrangements and prices", which letter referred only to hourly hire rates for the various pieces of machinery. However, quite apart from all that, the alternative claim based on breach of contract fails in accordance with the findings I have made that Mr Speed did not make statements pleaded as terms of the contract.
Conclusion
Insofar as the defendant's counterclaim is based on the provisions of the Fair Trading Act, it fails because it has not established that the plaintiff made the representations relied upon, and in any event, because it has not established that the defendant has suffered, or is likely to suffer, loss or damage by reason of the pleaded representations. Insofar as the defendant's counterclaim is based upon breach of contract, it fails because the defendant has not established that the pleaded terms were terms of the contract.
With respect to the claim, as has already been mentioned, the defendant formally admitted that the various pieces of equipment were used for the hours it was alleged they were used, that the waiting time claimed for the trucks is correct, that the transportation time for the harvester was, as claimed, 6 hours, and that the cost of transport of the trucks was $200, also as claimed. The defendant also agreed that he was obliged to pay commission on the amount found to be due at 2 per centAlthough there was no evidence of the reasonable cost of transporting the harvester, the figure claimed in the particulars of $50 per hour was not disputed and, on the face of it, appears reasonable. With respect to the harvester, the particulars claim a hire rate of $130 per hour, not $120 per hour as discussed. For the reasons set out earlier this should be allowed at the rate claimed. Accordingly, the plaintiff's claim is allowed in the sum of $24,430.53.
By the statement of claim the plaintiff claims interest on this sum. A letter of demand dated 10 March 1997 was tendered in evidence. It demanded payment by 14 March 1997. The writ was issued on that day as payment was not made. The letter of demand states that interest would be claimed from the date thereof and accordingly, the plaintiff is entitled to interest at the rate of 10 per cent per annum from 10 March 1997 until the date of judgment in accordance with the provisions of the Supreme Court Civil Procedure Act 1932, s34(1)(b) and the Rules of Court, O46, r16; a period of 2 years and 257 days. Calculated on the basis of simple interest, this amounts to $6,606.27. There will be judgment for the plaintiff against the defendant for $31,036.80.
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