| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : THE STATE HOUSING COMMISSION -v- LANG [2003] WADC 159 CORAM : MULLER DCJ HEARD : 28-31 OCTOBER & 1 NOVEMBER 2002 & 2-4 JUNE 2003 DELIVERED : 24 JULY 2003 FILE NO/S : CIV 346 of 1994 BETWEEN : THE STATE HOUSING COMMISSION Plaintiff
AND
MAXWELL BRUCE LANG
Defendant
Catchwords: Contract - Alleged breach of agistment agreement by defendant - Claim by plaintiff for balance of unpaid agistment fees and damages arising from alleged breach by defendant in failing to repair fencing - Counterclaim and set-off - Whether antecedent oral agreement or written agreement binding on parties - Alleged breach by plaintiff in terminating agistment agreement prematurely - Whether defendant entitled to damages for costs of transporting livestock onto the property - Whether written agreement subject to implied term giving defendant peaceful and uninterrupted possession of the property - Application of s 45 of the Property Law Act to written agreement - Whether written agreement was a conveyance within the meaning of the Property Law Act and subject to an implied covenant giving the defendant quiet enjoyment of property - Whether
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defendant entitled to damages for death of poisoned livestock - Alleged breach by plaintiff of implied term not to apply herbicide to land so as to endanger livestock - Whether plaintiff in breach of implied term in refusing to permit defendant to bring straying livestock back onto property after notice to quit given
Legislation: Property Law Act 1969
Transfer of Land Act1893
Result: Plaintiff's claim allowed in the sum of $15,000
Defendant's set-off and counterclaim dismissed Representation:
Counsel:
Plaintiff : Mr R A Cullen
Defendant : Mr K C Staffa
Solicitors:
Plaintiff : Dwyer Durack
Defendant : Kevin Staffa
Case(s) referred to in judgment(s):
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 286
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
Howe v Teefy (1927) 27 SR (NSW) 301
Streatfield v Winchcombe Carson Trustee [1981] 1 NSWLR 519
Case(s) also cited:
Hamilton Island Enterprises Ltd v Croycom Pty Ltd [1998] Q ConvR 54-509
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Helton v Sullivan [1968] Qd R 562
Homebush Abattoir Corporation v Bermira Pty Ltd (1991) ANZ ConvR 482
JC Berndt Pty Ltd v Walsh [1969] SASR 34
Kenny v Preen [1963] 1 QB 499
Lamiri v Aidan Nominees Pty Ltd [1987] ANZ ConvR 497
Lewis v Bell (1985) 1 NSWLR 731
Owen v Gadd [1956] 2 QB 99
Pearce v Watts (1875) LR 20 Eq 492
Radaich v Smith (1959) 101 CLR 209
Savill Brothers Ltd v Bethell [1902] 2 Ch 523
Sinclair v Judge [1930] St R Qd 220
Street v Mountford [1985] 1 AC 809; [1985] 2 All ER 289
Thomas v Sorrell (1674) 124 ER 1098
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1 MULLER DCJ: In this action the plaintiff, which owns a property in the Baldivis area called Amarillo Farm, permitted the defendant to agist his stock on the land and has claimed from the defendant an amount of $30,000 in unpaid rent and a further sum of $17,219.84 for expenses incurred in repairing fencing on the property. The defendant, while denying liability for the major portion of the alleged debt, has raised a set-off and counterclaim for losses he allegedly incurred as a consequence of the plaintiff's alleged breach of the agreement entered into between the parties.
2 The property in question, which was purchased by the plaintiff in late 1991 for $9.4 million, comprised 4,000 hectares of low lying land divided by the Serpentine River. Prior to the plaintiff purchasing the land the defendant had agisted cattle on the property under an agreement with the previous land owner. When the plaintiff acquired the property in 1992 it agreed to allow the defendant to continue agisting his cattle on the land. The terms of this agreement are in dispute and it is this dispute which has led to the claim made by the plaintiff and the counterclaim and set-off raised by the defendant. It was the plaintiff's case that pursuant to a written agistment agreement signed by the parties on 2 July 1992 the defendant was allowed to graze livestock on certain areas of Amarillo for a period of six months commencing on 1 April 1992 at a monthly agistment fee of $10,000. The agreement required the defendant to repair and maintain the fences on the property. Upon the expiration of the six month period the agreement provided that the agistment could be continued on a monthly basis subject to the same terms and conditions. The plaintiff contended that the defendant continued to agist livestock on Amarillo until the agreement was terminated on 30 April 1993. In breach of the agreement it was alleged that the defendant had failed to pay the total amount of rent due or repair and maintain the fences on the property. It was these breaches that are said to have given rise to the plaintiff's claim against the defendant. 3 The defendant, while admitting that he was a party to the agreement of 2 July 1992, alleged that prior to the agreement being signed he had entered into an oral contract with the plaintiff's representative to continue agisting his cattle on the property at a monthly rental of $10,000 for an initial period of six months with an option of continuing the agreement for a further three years. The defendant also asserted that the plaintiff undertook to repair the fencing on the property and denied he was under any obligation to do so. He also claimed that to the extent the written agreement dated 2 July 1992 did not reflect or was inconsistent with the terms of the antecedent oral agreement it was not binding on him. By way
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of counterclaim the defendant alleged that the plaintiff was in breach of the agreement by terminating the contract prematurely and by entering onto the property and interfering with the defendant's rights of agistment. This interference, it was claimed, included spraying herbicides on pasture leading to the death of the defendant's cattle and allowing access by others onto the property which also interfered with the defendant's rights of agistment. By its breach the defendant claimed the plaintiff was liable to pay the costs the defendant incurred in transporting livestock onto the property and indemnify him for the losses he incurred as a consequence of livestock perishing as a result of eating poisoned vegetation and the loss of 100 head of escaped cattle which, it was claimed, the plaintiff refused to allow the defendant to retrieve. 4 The defendant also alleged in the alternative that if he were bound by the written agreement dated 2 July 1992 he had reached an oral agreement with the plaintiff on the expiration of the six month period that he could continue to agist cattle for a further period of three years subject to the same terms guaranteeing him uninterrupted possession and use of the whole of the property and the right to agist livestock without interference by the plaintiff. In breach of that agreement the defendant asserted that the plaintiff allegedly terminated the agreement prematurely and that he incurred expenses and losses in bringing cattle onto the property at the plaintiff's invitation and losing livestock through death as a consequence of the plaintiff's spraying activities or its refusal to permit him to retrieve cattle that had strayed.
Events preceding the formation of written agreement 5 The first issue that has to be resolved is which of the two alleged agreements, the one oral and the other in writing, was binding on the parties. In order to resolve this issue it is necessary to trace the background against which the negotiations occurred and the alleged agreements were entered into. 6 Amarillo had previously been owned by JIMWA Pty Ltd and in late 1990 or early 1991 the defendant, who had been in the cattle industry his entire life, agreed to lease the whole of the property on which to agist his cattle. At this time the fences in cattle yards on the property were in a state of disrepair and remained so until the property was acquired by the plaintiff. The defendant had about 2,000 head of cattle on Amarillo and had ample pasture feed for the cattle.
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7 In late 1991 JIMWA Pty Ltd went into liquidation. The official receiver sold Amarillo to the plaintiff. In February 1992 the plaintiff's leasing manager, Douglas Waghorn, advised the defendant he would have to remove his herd from Amarillo. At that time the defendant had approximately 2,000 head of cattle on the property. Waghorn claimed he told the defendant the plaintiff might let him continue with his agistment or invite applications by public tender. Given this situation the defendant said he began moving his cattle off Amarillo. About 1000 head had been removed when the defendant was invited by the plaintiff to keep his livestock on the property. This invitation was allegedly given by the plaintiff to the defendant at a meeting on 31 March 1992 at the plaintiff's premises at 99 Plain Street in East Perth. The defendant was present at the meeting and the plaintiff was represented by Douglas Waghorn, the plaintiff's leasing manager, and Andrew Baillieu, the recently appointed manager of Amarillo. What was discussed and agreed upon at this meeting is the subject of dispute. According to the plaintiff's witnesses the defendant was told of their concern at the state of deterioration in the pastures, fences and yards of the property. In the discussion that followed both Baillieu and Waghorn said that the defendant was invited to keep his livestock at Amarillo for a period of six months at a monthly fee of $10,000 subject to much stricter controls being exercised over grazing methods and the management of the property. Baillieu said he told Lang the plaintiff would repair the fencing and bring it up to an acceptable standard but that the defendant would be responsible for the maintenance of the fencing during the six months agistment period. Both Baillieu and Waghorn said the defendant agreed to upgrade the cattle yards at the north and south ends of the property and accept directions from Baillieu as to which paddocks were to be used.
8 It is significant that during this meeting both Waghorn and Baillieu said they told the defendant of the plaintiff's intentions to introduce a tree planting and pasture renovation programme on the property during the agistment period. This programme, it was claimed, was explained in some detail to the defendant. Baillieu claimed the defendant was told that the plaintiff intended spraying vegetation and carrying out other preparatory works before the planting of trees actually commenced in 1993. The defendant, according to Waghorn and Baillieu, agreed to this. 9 It is also significant that at this initial meeting the defendant apparently indicated he wanted a long term agistment agreement with the plaintiff. Baillieu said he responded to this request by pointing out that the plaintiff wanted to maintain its options in relation to the land and that
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for reasons of flexibility did not want to commit itself to any agreement longer than six months. 10 Baillieu also claimed he told the defendant at this meeting that a wide range of contractors and consultants would necessarily have to access the land during the agistment period. He said he told the defendant that after the six month period had expired the entire situation would be reviewed. Both Waghorn and Baillieu said the plaintiff agreed that a written agreement would be prepared at some stage in the future. 11 Following this meeting the plaintiff arranged for a draft agreement to be prepared by its solicitors. A draft copy was sent to Baillieu who claims that at about this time he met the defendant on the property when the latter expressed the view that he would like to enter into a long term arrangement with the plaintiff. Baillieu said he told the defendant that he would discuss a possible long term arrangement with the plaintiff but doubted whether it would agree to commit itself to anything of that nature. 12 On 2 July 1992 the agistment agreement prepared by the plaintiff's solicitors was signed by the defendant at Baillieu's office. The document had not been signed on behalf of the plaintiff at that stage. Baillieu said the defendant was in his office for approximately 10-15 minutes but could not recall discussing the contents of the agreement with him. He said he thought the defendant read the contract while he was in the office. The defendant signed the contract which was deemed to have commenced on 1 April 1992 and was to terminate on 30 September 1992. 13 The defendant's account of the circumstances preceding the agistment agreement, and the terms of the agreement itself, are markedly different from that of the plaintiff's witnesses. At the meeting in the plaintiff's premises on 31 March 1992 the defendant said all he was told by Waghorn and Baillieu was that there was a possibility he could continue to agist livestock on Amarillo. At this point in time he said he still had approximately 900 head of cattle on the property. Following this meeting the defendant claimed that Baillieu telephoned him and invited him to continue agisting his livestock at Amarillo. During this conversation the defendant asserted he told Baillieu he would be prepared to keep his livestock there but wanted an agreement in place that would guarantee him the long term use of the property. 14 In the meeting that followed on 14 April 1992 at Baillieu's office the defendant said that he and Baillieu discussed and agreed upon the terms upon which the defendant would continue to keep his cattle at Amarillo.
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Included in these terms was an undertaking by the plaintiff that the defendant, after an initial six month period of agistment, would have the option to extend the agreement for a period of three years. The defendant said he agreed to bring back the cattle he had sent to other areas in the State and build up his stock level to 2,000 head. It was further agreed that the defendant would pay the plaintiff a monthly rental of $10,000. The parties agreed that a contract would be drawn up reflecting the terms that had been discussed and agreed upon. 15 It is significant that during this meeting on 14 April 1992 the defendant claimed that Baillieu never suggested that his occupation of Amarillo would be subject to any restrictions. He claims he was never told that his rights of agistment would be restricted to only parts of the property. He also asserted he was never told of the plaintiff's intention to spray and plough the paddocks, burn off vegetation or allow a wide range of invitees onto the property. Had he been told that he would be restricted to only parts of the property, or that the plaintiff intended to carry out these activities or allow access by others to the property, the defendant said he would never have agreed to agist his livestock at Amarillo.
Whether parties bound by oral or written agreement during period 1 April 1992-30 September 1992 16 The agistment agreement was signed by the defendant on 2 July 1992. By this time the defendant had already arranged for livestock earlier removed from Amarillo to be brought back. He had continued paying his agistment fees to the plaintiff. By the time he signed the agistment agreement more than 3 months had elapsed since he had been invited by the plaintiff to keep his livestock on the property. 17 The written agreement signed by the parties differed from what the defendant claimed to have been an antecedent oral contract in several material particulars. In the first place the agreement was limited to a period of six months from 1 April 1992. If, after the expiration of this term, the defendant continued to agist livestock on the property the agreement provided that he would continue to do so on a monthly basis subject to the terms and conditions contained in the written contract. Significantly the agreement did not give the defendant an option to extend the duration of the contract for a further period of three years. 18 There were other significant differences between the written agreement and what the defendant claimed to have been the earlier oral contract. The written agreement limited the defendant's grazing facilities
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to certain parts of Amarillo Farm as depicted on a plan annexed to the agreement and reserved for the plaintiff the full and exclusive right to possession and occupation of the land subject only to the right of agistment and "attendant rights" provided to the defendant as grazier. Whereas the defendant claimed that the antecedent oral agreement required the plaintiff to maintain and repair fencing on the property during the period of agistment the written agreement cast this obligation on the defendant. All the plaintiff agreed to do – although this was not a term of the written agreement – was to repair and ensure the fencing was of an acceptable standard as at the commencement of the period of agistment. 19 The written agreement gave the plaintiff extensive rights in relation to the property. Not only was the defendant required to follow all reasonable directions given by the farm manager in relation to paddocks that could be used for grazing and other areas that could not be used for that purpose but also to comply with the plaintiff's plans to improve the property. The defendant's rights were limited to the right of agistment and the right to enter upon the property at any time for the purpose of maintaining his livestock or carrying out his other obligations under the deed. The differences between the written agreement (Exhibit 2) and the alleged antecedent oral agreement were, as I have already said, significant. The main points of difference appear to be these: first, the absence of any option to renew the period of agistment for three years in the written lease; second, the plaintiff's right to exclusive possession in the written agreement; third, the defendant's restricted right to use areas of the property; and fourth, the defendant's obligation to maintain and repair fencing during the period of the agistment. 20 The defendant alleged he had not read the written agreement when he signed it on 2 July 1992. He said he simply assumed it recorded the terms he had agreed upon with Baillieu at the meeting in Baillieu's office on 14 April 1992. Baillieu said he had no recollection of any such meeting. When cross-examined it was pointed out that he had written the words "Bruce Lang" in his diary on 14 April 1992. This entry, it was argued, supported the plaintiff's contention that such a meeting had taken place. But in re-examination Baillieu was able to recall by reference to another entry in his diary that he had been at Amarillo on that day with a person named Davis. 21 I believe the defendant must be mistaken on this issue. I am not satisfied he has proved the existence of an antecedent oral agreement containing the terms he asserted were agreed upon. There is a presumption that a written document, signed by the parties, is a true
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reflection of the terms of the agreement they reached although this presumption can be displaced by clear evidence of common mistake. See Cheshire and Fifoot's"Law of Contracts" 7th Aust ed par 12.29. The defendant has not alleged common mistake. He has not sought rectification of the written agreement concluded on 2 July 1992. By his pleading the defendant has relied upon an antecedent oral contract subject to an implied term that the written agreement to be prepared by the plaintiff would reflect the terms agreed upon by the defendant and Baillieu at the alleged meeting on 14 April 1992. I have already said that, given the conflict that exists, I am not satisfied such a meeting took place, or, even if it did, that an oral agreement along the lines suggested by the defendant was reached. It is common cause that earlier discussions between the plaintiff, Baillieu and Waghorn occurred on 31 March 1992 at Plain Street. I accept the evidence of Waghorn and Baillieu that the general issues discussed and agreed upon by the parties at that meeting were subsequently incorporated in the written agistment agreement signed by the defendant on 2 July 1992. I have no reason to doubt their evidence in that regard and I emphasise that the written agreement is consistent with what both Baillieu and Waghorn said was discussed and agreed upon. While I did not find Baillieu to be an altogether convincing witness, I am not prepared to accept that he is either untruthful or mistaken on an issue as significant as this. I find it inconceivable that, had he given the undertakings he is alleged to have given at a meeting on 14 April 1992, he would subsequently have asked the defendant to sign a written agreement which clearly contained terms materially inconsistent with what he and the defendant had earlier agreed to. Had he done that he could have expected an outright rejection by the defendant. I believe it is far more probable that the written agreement simply reflected, and in some respects added to, the major points of agreement reached between Baillieu, Waghorn and the defendant at the meeting on 31 March 1992. In making this finding I have relied substantially on the evidence of Waghorn, whom, I believe, was a reliable witness. I was impressed by the balanced and thoughtful way in which he gave his evidence. He was consistently responsive and fair in his answers. I would have acted on his evidence alone without the support of Baillieu. In his position as leasing manager he could be expected to remember the details of what was clearly a meeting of some significance. He was adamant that the essential terms later included in the written agreement were discussed and agreed upon on 31 March 1992. 22 The defendant's recollection of the details of this meeting was shown to be less than accurate. In his evidence in chief he said all that was
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discussed was the possibility of his remaining on the property after March 1992. When questioned in cross-examination he agreed other issues may have been raised as well including the better management of the property and the manager's discretionary powers. While he denied in evidence that the plaintiff's tree planting programme was raised he agreed that in an earlier affidavit he had conceded he had been told at the meeting that the plaintiff intended to plant trees and had development plans in place for the property. 23 I was left with the overall impression that the defendant, while honestly trying to recall the details of this meeting, was uncertain as to what actually was discussed or agreed upon. 24 I prefer the evidence of Waghorn and Baillieu and accept their account of what was spoken of and agreed to on 31 March 1992. 25 The next relevant event was the defendant's act of signing the written agistment agreement on 2 July 1992. I accept the defendant might not have read the agreement on that occasion. I also accept he probably believed from earlier discussions, including, quite possibly, a conversation with Baillieu on 14 April 1992, that the plaintiff would be willing to extend the term of agistment for another three years. I am unable to find, however, that there had been any positive representation to that effect by either Baillieu or Waghorn. It is clear from the evidence of both Baillieu and Waghorn that the defendant was anxious to extend the period of agistment. While there may have been discussions on this issue I am satisfied that no representation or undertaking was either made or given by either Baillieu or Waghorn. I believe the defendant was mistaken in his obviously genuinely held belief that the contract was as he described it to be. 26 I have reached the conclusion that the defendant has failed to prove any antecedent oral agreement as pleaded and that his rights and obligations as a grazier were governed by the written agreement he signed on 2 July 1992.
Plaintiff's claim for outstanding rent 27 The plaintiff has claimed $30,000 for outstanding rent as at the end of April 1993. 28 I have already referred to the fact that the defendant had grazed livestock at Amarillo under an agreement with the previous land owner.
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He paid the previous land owner $10,833 per month. The rent was paid monthly in advance on the 15th of each month. When the plaintiff acquired the property the defendant was given until 15 March 1992 to leave Amarillo. There is a dispute as to whether the defendant's payments were up to date at this time. Graham Findlay, a leasing officer employed by the State Housing Commission, was assigned the task of informing the defendant that he had one month to remove his livestock from Amarillo. In a letter dated 13 February 1992 Findlay wrote to the defendant giving him one month's notice of termination of his grazing rights. Following this letter a meeting between the defendant, Graham Findlay and Douglas Waghorn – whose evidence I shall refer to later – took place on 24 February 1992. At that meeting the defendant was apparently given notice that his cattle had to be removed from Amarillo by 15 March 1992 but was told the plaintiff would give him a two week extension if additional time were needed. 29 Not long after this the situation changed. Negotiations between the plaintiff and the defendant began in relation to the defendant's continued use of Amarillo. Graham Findlay, who was responsible for monitoring the payments made by the defendant, said in evidence that an agreement between the plaintiff's representative, Andrew Baillieu, and the defendant under which the defendant was allowed to continue using the land for grazing purposes was reached on 14 April 1992. 30 The pattern of payments made by the defendant has to be examined against this background. According to Graham Findlay the last payment of $10,800 made by the defendant prior to the oral agreement to renew his grazing rights at Amarillo had been made on 15 February 1992. This payment, according to Findlay, was for the period 15 February 1992 – 15 March 1992. Following this there was a hiatus in the payment of grazing fees. This gap occurred between 15 March 1992 – 31 March 1992. Findlay said the defendant was not required to pay rent for this period because of the uncertainty surrounding the renewal of his grazing rights at Amarillo. 31 Following this two week gap in March the next payment made by the defendant was on 2 April 1992. This was a payment of $10,800. This payment, according to Findlay, related to the month of April even though the agreed fee or rental of $10,000 was only fixed on the 14th of April 1992 some 12 days after the payment of $10,800 had been made. 32 It was in this climate of some confusion that Findlay wrote to the defendant on 8 May 1992 asserting that the defendant was in arrears in the
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amount of $10,833 for the month of March 1992. No satisfactory explanation was ever given by the plaintiff as to how it arrived at this conclusion. Given Findlay's evidence that the defendant made a payment of $10,800 for the period 15 February-15 March 1992, and that the payment due in respect of the second half of March 1992 was waived because of the uncertainty surrounding the grazing arrangement, I am unable to find, as the plaintiff has urged me to do, that the payment of $10,833 made by the defendant in early April related to the month of February or March 1992. 33 The defendant asserted that he was up to date with his payment of grazing fees when the new arrangement was reached with the plaintiff on 14 April 1992. He asserted he made a payment of $10,833 for the period 15 February-15 March 1992. As from 1 April 1992, which was the effective date of the renewed agreement, the defendant said he paid the plaintiff $10,833 and thereafter $10,000 monthly as required by the renewed agreement. 34 Given the conflicting evidence on this issue I am unable to find that the defendant was in arrears as at 1 April 1992. The payment he made immediately preceding 1 April covered the period 15 February 1992-15 March 1992. I am satisfied that the plaintiff waived payment of any grazing fees for the remainder of March 1992. The next payment made by the defendant was on 2 April 1992. This payment was for $10,833. I am satisfied this payment related to the month of April 1992. The amount paid actually exceeded the figure of $10,000 which the parties agreed upon on 14 April 1992. But the payment of $10,833 was at the old rate and was made before this agreement was reached. The defendant, in fact, overpaid the plaintiff by $833 for the month of April 1992. 35 Having found that the defendant was not in arrears on 1 April 1992 when the renewed agreement came into being the next question is whether he fell into arrears with the payment of grazing fees between 1 April 1992-30 April 1993. What is certain is that in January 1993 the defendant paid only $5,000. In February 1993 he again only paid $5,000. He made no payments at all in March 1993 or April 1993. It is these shortfalls and non-payments that make up the plaintiff's claim for $30,000. 36 The defendant agreed he had paid only $5,000 in January 1993 and again in February 1993. He also agreed he made no payments at all in either March or April 1993 because he received a notice to quit the
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property at the beginning of March and believed, rightly or wrongly, that the various obstacles put in his way by the plaintiff relieved him of the obligation to make any further payments. 37 In considering the defendant's alleged liability to pay the fees claimed by the plaintiff I must take into account an incident that occurred in either late September or early October 1992. At that time the plaintiff claimed that five head of stock had died on the northern end of the property at a time when the contractor was spraying herbicide on Cape Tulip weed in the North River Road paddock. At the time he said he told the plaintiff's representative, Andrew Baillieu, that, while his cattle had not eaten the weed before it was sprayed, they began eating it after the chemicals had been applied to it. 38 I am satisfied the plaintiff did complain to Baillieu. As a consequence of this complaint I find that Baillieu later agreed to allow the plaintiff a 50 per cent reduction in the agistment fee for the month of February 1993 to compensate him for the loss of the five head of cattle. In a letter to the defendant dated 2 February 1993 Baillieu wrote in the following terms: "Having spent in the vicinity of $10,000 attending to the eradication of Cape Tulip at the northern end of the property and allowing you a rebate of $5,000 for agistment fees in compensation for losses (for which you were not technically entitled within the agreement) I find your attitude to be less than appreciative." 39 There is further evidence of this rebate having been promised. In a letter to the defendant's solicitors dated 22 March 1993 the plaintiff's solicitors said: "Secondly, you stated HomesWest has refused to negotiate with your client. In this regard we should state that HomesWest has had various discussions with your client. It has already granted your client a rebate of $5,000 in agistment fees in compensation for losses without any admission of liability." 40 This rebate of $5,000, though promised, was never allowed by the plaintiff. It was not taken into account by the plaintiff in its assessment of the amount owed by the defendant. In my view it is clearly a deduction that will have to be made.
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41 The other issue is whether the defendant was liable to pay grazing fees up to the end of April 1993 as the plaintiff has claimed. The defendant asserted that a notice to quit was issued on 2 March 1993 giving him one month to remove his livestock from Amarillo. This meant that he had to vacate the property by approximately mid-April 1993. Whether the requirement that he quit the property in early or mid April 1993 had the effect of reducing the grazing fee he had to pay for that month was not the subject of any evidence. What does seem clear, however, is that he did underpay the grazing fees for the months of January and February 1993 by a total of $10,000. I am also satisfied that he ought to have paid the full grazing fee for the month of March 1993 in the sum of $10,000. What is not so clear, however, is whether he was obliged to pay the grazing fee, or a proportion of that fee, for the month of April 1993 when he was required to vacate the property. The notice of one month he had been given expired on or about 3 April 1993. I am unable to see why the defendant should be obliged to pay grazing fees for the month of April unless he had failed to remove his livestock from the property after 3 April 1993. The evidence on this point is equivocal. No admissible evidence was led by the plaintiff to show that cattle belonging to the defendant were still on Amarillo after this date. Baillieu's evidence was silent on this point. The only reference to the defendant's continued use of the property is to be found in a letter from the plaintiff's solicitors, Messrs Dwyer Durack, dated 22 April 1993. In that letter the solicitors expressed concern on behalf of their clients that there were still significant numbers of livestock on the property and that the defendant did not appear to be acting with any degree of urgency in removing the remaining livestock. The only other evidence on this issue came from the defendant himself. He said that at the time the notice to quit was served he encountered difficulty in mustering his cattle and loading them onto trucks because of various works being done by the plaintiff's contractors both in the paddocks and in the lanes. These obstructions led to approximately 100 cattle being left on Amarillo from mid-March onwards. The defendant acknowledged receipt of the letter dated 22 April 1993 from the plaintiff's solicitors which referred, not only to stock belonging to the defendant still on Amarillo, but also to 100 head of cattle that had escaped into an adjoining pine plantation. The defendant, in commenting on this letter, said the 100 head of cattle that strayed from Amarillo were the same beasts he had been forced to leave on the property because of the difficulty in mustering them.
42 I am satisfied that the 100 head of cattle that strayed from Amarillo into the adjoining pine plantation were the only livestock left on Amarillo
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in March 1993. While there was no evidence as to when the 100 head of cattle strayed from the property the probabilities favour the end of March or early April 1993. From that point on the defendant had no cattle on Amarillo. He may have believed the 100 head was still there but he was mistaken. 43 Once the cattle had strayed from Amarillo into the adjoining property the defendant was no longer under any obligation to pay a grazing fee under the contract. His livestock had left the property. He had complied with the notice to quit and his contractual obligations had come to an end. There is no evidence as to precisely when the 100 head strayed from Amarillo into the adjoining pine plantation but, as I have already said, it probably occurred at the end of March 1993. Having made this finding I believe the defendant was not obliged to pay the plaintiff a grazing fee for the month of April 1993. 44 I find that the defendant is obliged to pay the plaintiff the sum of $15,000 calculated as follows:
January 1993 $ 5,000 February 1993 $ 5,000 March 1993 $10,000 Total $20,000 Less $ 5,000 (rebate for five dead cattle) Total outstanding $15,000
Plaintiff's claim for the cost of fencing materials and repairs 45 Clause 5.2 of the agistment agreement signed by the defendant on 2 July 1992 provided that the defendant would during the term of the contract or any continuation thereof repair and maintain the fences on Amarillo in the same condition and state they were in at the commencement of the term. Given the size of Amarillo it is not surprising that the fencing, both around the perimeter and internally, was extensive. It is common cause that after the plaintiff acquired the property at the end of 1991 the fencing was in poor condition. It is also common cause that when the terms of the proposed agistment were discussed between Baillieu, Waghorn and the defendant it was agreed that the plaintiff would repair any damaged fencing on the property. In pursuance
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of this undertaking the plaintiff engaged two contractors to repair the fencing. The first contractor, Raymond Elliot, found that the fences were neglected and overgrown with vegetation. Baillieu directed which fences he had to repair. In his evidence Elliot described the sections of fencing he had repaired and said he charged the plaintiff $4,734.15 for the work he did. The other contractor who was engaged to work on the fencing in 1992 was David Harwood. He did a limited number of repairs to certain sections of the existing fence lines and charged the plaintiff $11,500 for the work he did. 46 I have no hesitation in accepting the evidence of the two contractors that this work was done. What I do have difficulty in accepting, however, is the plaintiff's assertion that the fencing on the property was in a reasonable condition and state of repair after the two contractors had completed their work. Neither contractor gave evidence as to having examined all the fences on the property, both boundary fencing and internal fencing. Each said he was only directed by Baillieu to repair certain sections of the fencing. Both agreed that in 1992 the sections of fencing they examined had the appearance of having been neglected and in need of repair. There was no evidence as to the condition of the remainder of the fencing either on the boundary or within the paddocks. 47 What is significant is that one of the contractors, Raymond Elliot, was asked in May 1993 to return to the property and repair certain sections of fencing. By this time the defendant's agistment agreement had been terminated. Once again the contractor did not examine all the fencing on the property. He was directed to repair certain sections by Baillieu. These sections were in a different area to the sections he had repaired in the preceding year. What he did notice, however, was that the state of the fencing he was asked to repair in 1993 was very similar to the condition of the other fencing he had been asked to repair in 1992. He expressed the view that in 1992 the sections of fencing he was asked to repair had deteriorated through age and natural wear and tear and had also been damaged by kangaroos and emus which, at the time, were prevalent on the property. When asked to describe the condition of the sections of fence he was required to repair in 1993 he said they appeared to be in much the same condition as the fencing he had repaired in 1992. He expressed the view that the fencing he was required to attend to in 1993 was, like the fencing he repaired in 1992, suffering from age, wear and tear and damage caused by wild animals. He added that in 1993 he had to replace timber posts that were broken. These posts, in his view, had aged to the point where they had nearly reached the end of their usefulness.
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48 A third contractor named Danny Moss was called by the plaintiff. He described how in 1993 he had been requested to repair sections of fencing. While he said he checked most of the perimeter and internal fencing he agreed in cross-examination that he only focused upon the condition of the sections of fence he was asked by Baillieu to repair. He also agreed that some of the sections of fence were, in his view, badly run down. Most of the fencing he had to repair was old and in need of repair but he was unable to say whether the condition of that fencing might be expected to have been the same for a long period of time.
49 I am unable to find the plaintiff has proved that the general state of the fencing at the end of the agistment period in 1993 was materially different from its condition at the commencement of that period in 1992. The evidence falls short of what is required. In the absence of any evidence as to the general condition of all the fencing, both on the boundary and internally, at the commencement of the defendant's period of agistment and its condition at the end of that period, I am unable to find that there had been any material damage, deterioration or breakage between May 1992-April 1993. In my view what evidence there is lends itself to the more probable inference that the fencing was in a poor condition at the commencement of the defendant's period of agistment and remained in much the same condition at the end of that period. Some sections were repaired in 1992 and other sections left in the state they were in. In the absence of evidence showing a clear difference in the condition of the fencing, or parts of it, in May 1992 and the condition of the fencing, or parts of it, at the end of April 1993, I am unable to find that the defendant was in breach of his obligation to maintain the fences in the same condition as they were at the commencement of the contract. 50 In reaching this conclusion I have not overlooked the evidence of Baillieu. While he claimed to have inspected the fences regularly and directed the contractors to those sections which needed repair I am unable to accept his assertion that, after the 1992 repairs had been completed, the fencing as a whole had been brought to an acceptable condition. This evidence does not correspond with the observations of the fencing contractor, Raymond Elliot, that the fencing he was asked to attend to in 1993 was in much the same condition as the fencing he had been asked to repair in 1992. 51 I am not satisfied that the plaintiff has established there was any deterioration, damage or breakage for which the defendant could be held liable under the agistment agreement he signed on 2 July 1992. The evidence falls short of proving that the fencing in April 1993 was not in
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the order, condition and state of repair that it had been in at the commencement of the written agreement. 52 The plaintiff's claim for the costs of the materials and labour involved in repairing the fencing in 1993 must fail.
Counterclaim for costs of transporting cattle to Amarillo 53 If, as I have found, the parties were bound by the written agistment agreement dated 2 July 1992 the next question is whether the defendant has proved that the plaintiff agreed to allow the defendant to keep his livestock on Amarillo for a period of three years commencing upon the expiration of the six month term referred to in the written agreement. The relevance of this issue is the defendant's claim that, but for the promised three year extension of the agistment period by the plaintiff, he would not have incurred the expense of bringing 1,062 head of cattle onto Amarillo from outlying stations. That cost, according to the defendant, totalled $48,980 which he has claimed from the plaintiff. Paragraph 26A of the defendant's Further Re-amended and Substituted Defence, Set-off and Counterclaim, as amended at trial, states: "26A Further, and in the alternative, if the deed dated 2 July 1992 is of full force and effect, which is denied, then the defendant states that on or about 14 April 1992, it was agreed between the plaintiff and the defendant, inter alia, that the: PARTICULARS
The Further Agreement was oral and was made on or about 14 April 1992 between Baillieu on behalf of the plaintiff and the defendant.
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54 The agistment period of six months which the parties had agreed to in the written agistment agreement came to an end on 30 September 1992. The defendant continued to agist his cattle on the property after that date. His continued occupation of the property was, according to the plaintiff, deemed to be on a monthly basis pursuant to par 6.5 of the written agreement. From this time on, according to Baillieu, the defendant seemed less inclined to comply with his obligations under the agreement. Baillieu said that, contrary to the directions he had given and the specific terms of the written agreement, the defendant allowed his cattle to graze in laneways and was hesitant to comply with directions to graze his livestock in paddocks which had been sprayed in preparation for the tree planting programme that was scheduled to commence in 1993. Although difficulties in the parties' relationship had begun to surface Baillieu agreed
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that discussions did take place in 1992 about the possibility of extending the term of agistment for a longer period. These discussions, which according to Baillieu took place at Amarillo, had been authorised by Waghorn. Baillieu agreed that during the discussion he had with the defendant at Amarillo he might have mentioned the possibility of the term of agistment being fixed at three years. Following these discussions Baillieu, with Waghorn's authority, wrote to the defendant on 11 September 1992. The terms of that letter are significant and I set the text out in full: "Amarillo I have been trying to contact you by telephone for several days without success. I wish to advise that both Doug Waghorn and myself met with Len Lango of Dwyer Durack on Wednesday 9 September, to prepare a new Agistment Agreement to take effect 1 October 1992, for three years as discussed. A draft of the agreement will be forwarded to you late next week for your perusal. I will be away for the next couple of weeks, however I have made a tentative appointment with Dwyer Durack, for yourself and myself for Monday 28 September, to amend any areas of the draft that require attention. It is important that the agreement be finalised prior to expiry of the current agreement. I will contact you on my return to confirm the meeting." 55 The significant feature of this letter is that it seems to suggest an agreement had been reached between the plaintiff's representatives and the defendant for the agistment period to continue for another three years with effect from 1 October 1992. The letter also conveys the impression that the parties had agreed to prepare a written contract reflecting the terms they had agreed upon and that a draft would be made available to the defendant for his scrutiny. 56 The second paragraph of the letter, however, creates a contrary impression and seems to suggest that no final agreement had been concluded. Reference is made to an appointment having been arranged with the solicitors for the draft to be discussed and, if necessary, amended. The last sentence seems to suggest that no final agreement had, at that
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stage, been reached but that it was important to achieve finality before the expiry of the written agistment agreement on 30 September 1992. 57 While Waghorn and Baillieu stressed that no final agreement had been reached as to the extension of the agistment period, and that the letter dated 11 September 1992 was simply intended as a step in the negotiating phase, the defendant was adamant that the 3 year extension had been agreed upon at the meeting he had with Baillieu on 14 April 1992 and that the letter of 11 September 1992 simply confirmed what had already been agreed. 58 I am unable to draw any conclusion from the terms of the letter of 11 September 1992 as to whether an agreement to extend the agistment period was made. The letter is, in my view, equivocal. It could, on the one hand, convey the impression that a three year term had been agreed upon but, on the other, is equally consistent with discussions revolving around a three year term having begun without any final decision having been reached. 59 The fact that nothing was reduced to writing is another factor that adds to the uncertainty. In his own evidence the defendant seemed to agree he always knew that any extension of the term would have to be the subject of a written agreement. He said in evidence: "It was 'expressly agreed' between Baillieu and I at the '14 April meeting' that I would be entitled to a further 3 years term at Amarillo after the initial 6 months. I realise that the deed Baillieu got prepared and got me to sign provides only for a 6 months term but this was not what was agreed. By letter dated 11 September 1992 Baillieu wrote to me 'confirming' that I was entitled to a further 3 years agistment on Amarillo. A copy of this letter is document 20 in my affidavit and list of documents in these proceedings. TENDER THE LETTER Under the 14 April agreement the initial 6-month period ended at the end of September 1992. That is why Baillieu wrote to me in September regarding the extension for a further 3 years.
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As the initial 6-month period drew to an end Baillieu said to me on several occasions in about August 1992 that the additional 3-year term needed to be tied up with a written agreement. At Baillieu's request, I visited him at his office in early September 1992. He had asked me to come in to sign the new agreement. However, when I got to his office Baillieu told me that he had read it and it was no good. He told me that the agreement 'tied me' up and that he had sent it back to Len Lango at Dwyer Durack to have it redone. This was the last I heard of the agreement." 60 What seems clear from this passage is that the defendant always knew an extension would have to be in writing. He knew Baillieu considered the written agreement he had allegedly arranged to have prepared to be unsatisfactory. He knew Baillieu had allegedly returned it to the solicitors to have redrafted. He must have known nothing had been finalised and that nothing would be finalised until he and Baillieu signed a written agreement. That, on his own admission, never happened. 61 In cross-examination Waghorn's attention was drawn to the minutes of a meeting in about September 1992 of the Amarillo Project Team of which he was a member. The minutes contain the following entry: "Update from Doug on farm and plantation. Current leasee (sic) extended for 3 years." 62 This entry, it was suggested, confirmed that the extension of the agistment period had been agreed to by the plaintiff. Waghorn disagreed with this suggestion. He agreed he had attended the meeting and conceded an extension might have been discussed. He added that such an extension might or might not have related to the defendant. He was certain, however, the minute entry was incorrect and misleading because, as he emphasised, no final decision on any possible extension had been made. I accept his evidence on this point. He was at the meeting and was the manager in charge of the Amarillo project. He was not the author of the minutes. I accept his assertion that the entry is misleading and incorrect. 63 I believe the matter can only be resolved by looking back at the earlier negotiations and discussions that took place. The pivotal meeting, according to the defendant, was the one he had with Baillieu on 14 April 1992. It was at that meeting, according to the defendant, that Baillieu committed the plaintiff to a three year extension. The problem with this
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evidence, however, is the fact that I have already found no such firm agreement was reached at that meeting. While there may well have been a meeting between Baillieu and the defendant on that occasion, and while there might have been some discussion about extending the agistment period for three years, I have already found that the terms of the defendant's agistment had been finalised between Waghorn, Baillieu and the defendant on the earlier date of 31 March 1992. It was essentially the terms agreed upon at that meeting which formed the basis of the written contract (Exhibit 2) which, as I have found, was binding on the parties. 64 All this leads me to the conclusion that the meeting of 14 April 1992, which the defendant recalls but which Baillieu says did not take place at all, is of no real significance. If, as the defendant claims, the meeting did take place I am unable to find that he was promised an extension of three years on that occasion. While the subject of an extension might have been discussed I am not satisfied it was agreed upon. Had it been agreed upon the probabilities are it would have been included in the later written agreement signed by the defendant on 2 July 2002. 65 Given these findings I must conclude that the defendant has failed to prove the further agreement pleaded in par 26A of the Further Re-amended Substituted Defence, Set-off and Counterclaim. His claim for $48,980, being the wasted expenditure of bringing 1062 head of cattle onto Amarillo, must fail.
Defendant's counterclaim - whether written agistment agreement was subject to implied terms 66 As I have already found it was the written agistment agreement (Exhibit 2) that bound the parties during the initial six months and in the period following and ending in April 1993. It is only that agreement I can look to in order to determine the rights and obligations of the parties. During the defence case counsel for the defendant sought leave to further amend the Re-amended Substituted Defence, Set-off and Counterclaim by adding the following pleading: "26F Further, and in the alternative, if, which is not admitted, the Agreement pleaded in paragraph 4 of the Amended Substituted Statement of Claim ("Deed") was binding on the parties then the defendant says that:
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(a) the implied terms pleaded in paragraph 26B hereof were implied terms of the Deed for the reasons pleaded therein; (b) the defendant agisted his cattle on Amarillo from 1 April 1992 pursuant to the Deed; and (c) The plaintiff breached the Deed in the manner pleaded in paragraph 26D hereof and these breaches resulted in the losses pleaded in paragraph 26E hereof for which the defendant counterclaims as pleaded in paragraph 28 hereof." 67 I earlier set out the implied terms to which the defendant says the agreement was subject and I now intend to examine the various claims made by the defendant against the plaintiff in the context of the written deed of agistment made on 2 July 1992 to determine whether there is any room for the implied terms which the agreement is said to be subject to.
Implied term as to defendant's right to peaceful and uninterrupted possession and use of the whole of Amarillo for the duration of the agreement 68 I have little hesitation in concluding that the plaintiff did curtail the areas of Amarillo in which the defendant could graze his livestock. This came about in several ways. In preparation for the tree planting programme that was due to commence in 1993 the plaintiff arranged for contractors to enter the property with the appropriate machinery and begin clearing areas of land where it was intended to plant trees. Apart from the defendant's own evidence on this issue reliance was also placed on a series of documents discovered by the plaintiff in which the extent of the development programme was revealed. I do not propose to detail everything the plaintiff did to prepare the land and I will confine myself to the main activities which, the defendant claims, limited the area of pasture available to him. These activities included the application of superphosphate to about 40 per cent of the land area, the top dressing of a 50 hectare area with what was described as red mud and the slashing, burning and ploughing of substantial areas of reeds and tea trees. In addition to these activities a number of paddocks were sprayed with herbicide to eradicate Cape Tulip weed. Other paddocks were ploughed and moundings undertaken in preparation for the planting of trees.
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69 With all these activities taking place there was, according to the defendant, an influx of contractors and other invitees. This entry of workers and others also seriously interfered with the area in which the defendant's cattle could be grazed.
70 Heavy machinery was brought onto the property at one stage to grade the laneways used to access various parts of the property. The grading activities took place in January 1993. 71 As a consequence of all these activities the defendant said he was precluded from using the paddocks and areas of land shown in the annexure to his witness statement. At least three of those paddocks had been sprayed with herbicide, two had been burnt, another three had been removed for use by the plaintiff, one had been the subject of what was described as a red mud experiment and four were unsuitable for use because of the intrusion of contractors. Notwithstanding these intrusions I did not understand the defendant to say that he was left with an inadequate area in which to pasture his cattle. His complaint was more directed at a combination of factors, including the restriction in the areas of land he was allowed to use, which affected his grazing activities as a whole. I certainly accept the defendant's assertion that the defendant's use and possession of Amarillo, or parts of it, were disturbed by the directions and activities of the plaintiff and its contractors. 72 The defendant submitted that the grazing agreement (Exhibit 2) gave him the right to graze cattle in those areas of Amarillo delineated on the plan annexed to the agreement in consideration of the defendant paying a monthly calendar fee of $10,000. It was submitted by the defendant that the agreement (Exhibit 2) contained an implied term that the defendant would have the right to quiet enjoyment of Amarillo without interruption or disturbance by the plaintiff. The defendant submitted that this term was to be implied in fact to give effect to the presumed intention of the parties as well as by law pursuant to the provisions of the Property Law Act 1969. 73 In examining this submission I will necessarily have to refer to the terms of the written agreement (Exhibit 2). The relevant terms appear to be as follows:
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B. The Grazier wishes to arrange for the agistment and grazing facilities in respect of a number of livestock for the period of six (6) months from 1st April 1992 over part of Amarillo Farm. C. The parties have agreed for provision of such agistment and grazing facilities for the consideration and on the terms and conditions set out in this deed. THE PARTIES AGREE AS FOLLOWS: 1.1 Grant of Rights and Term: The Owner grants to the Grazier the right to graze livestock on all that part of Amarillo Farm as is delineated and edged in blue on the annexed plan ("the Property") and which is usually set aside for grazing purposes, for a period of six months commencing on 1 April 1992 and expiring on 30 September1992. 1.2 Early Termination: Notwithstanding the term of this deed, this deed may be determined by either party at any time by giving sixty (60) days notice of termination in writing to the other party." The plan annexed to the agreement seems to indicate that the whole of the property was set aside for grazing purposes. 74 The plaintiff's rights as owner of Amarillo were clearly defined in clause 3 of the agreement:
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(b) renovate and improve any fencing on the Property and rehabilitate or revegetate any grazing lands forming part of the Property." 75 The grazier's rights were limited and are set out in cl 4 of the agreement: "4.0 Grazier's Additional Rights: The Grazier shall have the right to agistment as provided in this deed and in addition the following rights - 76 The limitations to the grazier's rights are brought into sharp focus by cl 5.5 which conferred on the owner the power to give the grazier directions in relation to the use of the property or sections of the property. "5.5 Observe Directions:: The Grazier shall follow all reasonable directions of any farm manager or consultant appointed by the Owner over the Property, and in particular any directions with respect to: (i) the rate or number of livestock permitted to be grazed in specific paddock areas; (ii) ensuring that livestock remain in specified paddocked areas and are not allowed to roam "free range" over the Property as has been the past practice. (iii) prohibiting livestock from grazing on any laneways or pathways; and (iv) any plans by the Owner to improve the general appearance of the existing vegetation and improvements on the Property."
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77 The agreement (Exhibit 2) made specific provision for what was termed "holding over" after the six month term had expired.
"6.5 Holding Over: In the event of the Grazier continuing to agist livestock on the Property after the expiration of the term contained in this deed, the right to such continuation shall be deemed to be a right on the terms and conditions contained in this deed on a month to month basis only. 78 The first question I have to decide is whether the right to quiet enjoyment is a term implied in fact to give effect to the presumed intention of the parties. The test to be applied was set out by the Privy Council in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 286: "…For a term to be implied, the following conditions (which may overlap) must be satisfied: (i) It must be reasonable and equitable; (ii) It must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (iii) It must be so obvious that it 'goes without saying'; (iv) It must be capable of clear expression; (v) It must not contradict any express term of the contract." 79 The High Court has recognised that courts must be slow to imply a term. Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 346. In this case I am unable to see how any of the conditions referred to in the BPRefinery case can be said to apply. The agreement reached between the parties was not strictly a contract of agistment of the bailment type.. "A contract of agistment is a type of bailment contract under which the agistor feeds or grazes another's stock for payment, on the implied term that the stock will be redelivered to the owner on demand. Keeping a horse within a stable and yard will not amount to agistment within the ordinary meaning of the word. A contract of agistment is not required to be evidenced in
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writing as it confers no interest in land." Halsbury's Laws of Australia (20-145). 80 The agreement (Exhibit 2) is not a type of bailment contract. Although the owner of Amarillo was expressed to have a general lien over the whole of the livestock for any sum owing under the deed the owner was not required to feed or graze the grazier's livestock for payment. An essential element of the contract of agistment was not present. The grazier simply had the right to enter upon the property with animals and use the land to feed his livestock. I am unable to see how a term must necessarily be implied to give effect to the grazier's rights as expressed in the written agreement (Exhibit 2). On the contrary what can be said with certainty is that any implied term of quiet and undisturbed possession would be inconsistent with the express terms of the written agreement (Exhibit 2). This conclusion is, in my view, inevitable. The agreement expressly excludes the right of the grazier to peaceful and uninterrupted possession. Clause 3.1 of the agreement expressly reserves the full and exclusive right to possession and occupation of the property in the owner subject only to the grazier's right of agistment and attendant rights as provided by the agreement. The right of agistment must refer to the defendant's right to bring his cattle onto Amarillo and allow the livestock to feed on the property. His "attendant rights" must necessarily be a reference to the additional rights conferred by cl 4.0 of the agreement to enter the property at any time without notice and do whatever was reasonably incidental to maintain his livestock on the property. That is where the grazier's rights begin and end. 81 The owner's rights are far reaching. Clause 3.2 gives the owner the right to apply fertiliser and renovate and improve fencing and rehabilitate or revegetate any grazing lands. Clause 5.5 empowers the owner to give the grazier reasonable directions, which the grazier must follow, including directions as to the number of livestock permitted to be grazed in specific paddocks. I agree with the submission made by the plaintiff that these provisions make it absolutely clear that it was never intended that the defendant would have peaceful and uninterrupted occupation. It was manifestly clear from the agreement that the owner retained the right to manage the entire property, and to allow third parties to enter Amarillo, subject only to the defendant's right to graze his cattle on the land and to use the facilities that were provided. If there were any doubt as to this it is removed by cl 4 of the agreement (Exhibit 2) in which the grazier is expressly given the right to enter the property to maintain the livestock. By expressly conferring this right the parties must have intended to exclude any greater right such as that of peaceful and uninterrupted
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possession because, if that implied right did exist, the right of the defendant to enter the property with his animals would not have needed to be expressed. 82 I find that on a proper interpretation of the written agreement (Exhibit 2) there was no implied term conferring on the defendant the right to quiet and uninterrupted occupation of the property. 83 The next question is whether such a term can be implied by law or, more accurately, by statute. In this regard the defendant has relied on the provisions of the Property Law Act 1969. Reference was made by counsel for the defendant to s 45 of the Act which provides as follows: "45. Covenants for title implied (1) In a conveyance there shall, in the several cases mentioned in this section, by virtue of this Act, be implied, a covenant to the effect stated in this section by the person or by each person who conveys, as far as regards the subject matter… (a) in a conveyance for valuable consideration, other than a mortgage,…Part I of the Third Schedule;" The term "conveyance" is defined in s 7 as follows: "'Conveyance' includes a mortgage, charge, lease, assignment, appointment, transfer, assent, vesting declaration, disclaimer, release, surrender, extinguishment and every other assurance of property or of an interest therein by any instrument, except a will; and 'convey' has a corresponding meaning." 84 If the agreement (Exhibit 2) is deemed to be a conveyance within the meaning of the definition in the Act the Third Schedule to the Act stipulates that the subject matter conveyed shall be quietly enjoyed by the person to whom the conveyance is expressed to be made without any lawful interruption or disturbance in the exercise of that right. 85 I do not believe this implied covenant can be inferred to be part of the written agreement (Exhibit 2). The agreement, though expressed to be a "deed", is not a "conveyance" within the meaning of s 7 of the Act. It does not purport to convey an interest in property. Whether the agreement (Exhibit 2) is described as a contract of agistment, or a grazing contract, does not really matter. In Streatfield v Winchcombe Carson Trustee [1981] 1 NSWLR 519 the Supreme Court of New South Wales had to
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consider the true nature of what was described as a verbal agistment agreement. The verbal agreement was exceptionally brief. The only terms apparently agreed upon were the rental and the period of notice required to be given for termination. Wootten J reviewed the authorities relating to contracts of agistment and concluded that the arrangement under consideration was consistent with bailment, licence or lease. He emphasised, however, that there was a clear distinction between traditional agistment bailment, a mere licence to run cattle on land and a lease. He concluded that a lease contemplated the exclusive occupation of the land by the lessee. 86 That was clearly not the case here. If the agreement (Exhibit 2) cannot be categorised as a lease or other transfer of a proprietary interest it cannot fall within the definition of "conveyance" in s 7 of the Act. I do not know what description ought to be given to the agreement. It is not a true bailment agistment but, as I said earlier, is more accurately described as a grazing contract giving the defendant the right to keep and graze his cattle on the property subject to the payment of a fee to the plaintiff. The agreement may, as counsel for the plaintiff has submitted, be characterised as one between licensor and licensee permitting the licensee as the owner of the cattle to maintain responsibility for the livestock and to use the land to keep and feed the cattle. However the agreement is described one thing is clear. It does not purport to convey an interest in property. The implied covenant in the Property Law Act has no application to it. 87 The defendant, in written submissions made after the close of the evidence, referred to the Transfer of Land Act 1893 in support of the argument that the plaintiff had, by cl 3.1 of the written agreement (Exhibit 2), subordinated its rights as the registered proprietor of the land to that of the plaintiff to enjoy his right of agistment and attendant rights without interruption or interference. I am unable to see the relevance of this argument. The Transfer of Land Act 1893 has no application to this situation. The only question is whether the written agreement (Exhibit 2) was subject to the implied covenant I have referred to earlier. That question does not, in my view, depend in any way on the provisions of the Transfer of Land Act 1893. That Act simply has no application. 88 It follows from the finding I have made that the defendant has failed to prove the existence of an implied term as alleged in the amended counterclaim. This means the defendant's claim for damages arising out of the alleged breach of such a term must fail. Before leaving this aspect of the defendant's counterclaim, however, there is another alleged incident
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relating to it that ought to be mentioned. The incident in question, while not pleaded by the defendant as a basis for any claim made, was the focus of considerable attention during the trial and led to some confusion as to what the defendant was actually claiming. 89 The defendant alleged that the level of interference reached the point where he complained to both Baillieu and Waghorn. Dissatisfied with Baillieu's response to the problem he arranged to meet Waghorn in early January 1993. His son went with him to this meeting. At this meeting he told Waghorn he was not prepared to continue paying a monthly agistment fee of $10,000 when he could not use large areas of the land. He claimed that Waghorn acknowledged the problem and agreed to compensate the defendant for the limited grazing area available to him by reducing the agistment fee from $10,000 to $5,000 a month for several months between January and May 1993. Satisfied with this arrangement the defendant said he sent the plaintiff a $5,000 cheque on 12 January 1993 in payment of that month's agistment fee. 90 Waghorn, however, denied having given the defendant any such undertaking. While he acknowledged this meeting took place with the defendant and his son he said he told the defendant he would have to discuss the issue of a reduced agistment fee with Baillieu and advise the defendant of his decision. Having considered the matter and discussed it with Baillieu he said he decided against it. At his direction Baillieu wrote to the defendant on 19 January 1993 in the following terms: "Recently, you made a request to Mr Doug Waghorn of HomesWest, for a reduction in the monthly agistment fee. He advised you that he would discuss the issue with both myself and the HomeWest Executive. At no time did he agree to the reduction. Your payment for January was received in the amount of $5,000 with a note attached explaining a reduction due to an agreement with Mr Waghorn. To date you have not received any advice with regard to a reduction in the agreed agistment fee of $10,000 per month in advance. You are requested to make payment immediately of a further $5,000 being the balance due for January 1993." 91 The defendant's response to this letter was significant. Instead of taking issue with what Baillieu said in his letter the defendant replied by
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letter dated 21 January 1993 addressed to Waghorn saying, among other things: "With regards to the $5,000 IMMEDIATELY – we will pay it next week. This is a misunderstanding caused through my lack of business acumen – I felt to have paddocks ploughed and taken from us was reasonable cause for a peaceful, reasonable discussion with our landlord. I am now confused on that point." 92 This response seems to contradict an alleged undertaking by Waghorn to reduce the fee by 50 per cent. It is inconsistent with the assertion by both the defendant and his son that Waghorn expressly agreed to such a reduction as compensation for the intrusion into the defendant's activities at Amarillo. It is more consistent with an assumption by the defendant that the plaintiff would agree to a $5,000 reduction in the monthly fee. That assumption proved to be unjustified. 93 Given the conflict in the evidence I am unable to find that the plaintiff agreed to compensate the defendant for any reduction in the grazing area as a consequence of the plaintiff's own activities. In making this finding I realise that, in the end, no claim was made by the plaintiff under this head. 94 Given the contractual rights it had under the written agreement (Exhibit 2) I believe the plaintiff was entitled to do what it did. While the defendant might have been inconvenienced, and perhaps substantially so, by the various activities of the plaintiff I am unable to find that what the plaintiff did was unreasonable or in breach of an implied term as pleaded. The very existence of the implied term pleaded by the defendant conflicts with cl 3.1, cl 3.2 and cl 5.5of the agreement. I am satisfied the agreement was not subject to an implied term that the defendant would have peaceful and uninterrupted possession and use of the whole of Amarillo for the term of the agistment. Even if I am wrong in this finding, and there was an implied term as pleaded which the plaintiff was in breach of, I am unable to find evidence of any loss suffered by the defendant as a consequence of the alleged breach. There is no evidence that, as a result of the reduction of any area in which he could graze his cattle, the plaintiff has been deprived of something which has a monetary value. Howe v Teefy (1927) 27 SR (NSW) 301 at 306. The plaintiff's claim that the loss of area and cattle feed for the period between October 1992-April 1993 amounted to $35,000 is, my view, unsustainable. This calculation is based upon the quite arbitrary notion that the loss of grazing area should be reflected by a 50 per cent reduction of the monthly |