Wandel v Halloran - [2015] SASCFC 155

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
WANDEL v HALLORAN & ANOR
[2015] SASCFC 155
Judgment of The Full Court
(The Honourable Justice Nicholson, The Honourable Justice Bampton and The Honourable Justice Parker)
27 October 2015
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - FORMATION OF CONTRACTUAL RELATIONS
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH JUDGE'S FINDINGS OF FACT - FUNCTIONS OF APPELLATE COURT - WHERE FINDINGS BASED ON CREDIBILITY OF WITNESSES - GENERALLY
Appeal against a District Court Judge’s finding that the respondents are entitled to amounts due pursuant to contracts made orally between the parties. The appellant and the respondents owned nearby properties on Kangaroo Island. In 2009, the appellant, Mr Wandel, engaged the first respondent, Mr Halloran, to provide earthmoving services to repair a river crossing that had been washed away as a result of Mr Wandel’s dam overflowing and flooding the Harriet River. Having lost his own water, Mr Wandel also made an arrangement with Mr Halloran to pump water from a dam on the respondents’ property for the purposes of irrigating Mr Wandel's seed potato farm. The respondents rendered invoices to Mr Wandel for both the works concerning the river crossing and for the water supplied to Mr Wandel from the respondents’ dam.
The respondents sued Mr Wandel in the District Court of South Australia, for the invoiced amounts. Mr Wandel denied any contractual liability and contended that the respondents had agreed to conduct the works and supply the water free of charge. The Judge found in favour of the respondents. On appeal, the appellant contended, in essence, that the contractual claims, as found by the Judge, had not been pleaded and that the evidence before the Court was insufficient to establish them.
Held per Nicholson J (Bampton and Parker JJ agreeing):
1. The Judge’s findings with respect to the terms of the contracts for the works to the river crossing conducted by the respondents and the supply of water by the respondents were supported by the evidence and should not be disturbed.
2. Ordinarily, a party will not be permitted to pursue a claim that has not been pleaded in a way that provides proper notice of the case to be met by the opponent.
3. However, in this case, the disconformity between the respondents’ pleaded cases and the evidence led and accepted by the trial Judge did not give rise to any procedural unfairness or miscarriage of justice.
4. Appeal dismissed.
Fox v Percy (2003) 214 CLR 118, [2003] HCA 22; Fitzgerald v Brock Real Estate & Ors [2009] SASC 183; Sands v Channel Seven Adelaide Pty Ltd & Anor [2010] SASC 202; Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279; Dare v Pulham (1982) 148 CLR 658; Gould & Birbeck &Bacon v Mount Oxide Mines (1916) 22 CLR 490; Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; Haynes v McNeil (1906) 8 WALR 186; Glass v Pioneer Rubber Works of Australia Ltd [1906] VLR 754, considered.

WANDEL v HALLORAN & ANOR
[2015] SASCFC 155
Full Court: Nicholson, Bampton and Parker JJ
NICHOLSON J.
Introduction

At all material times, the appellant, Mr Wandel (defendant at trial) and the respondents, Mr Halloran and Mrs Halloran (now deceased) (plaintiffs at trial) were the owners of neighbouring farms on Kangaroo Island. As part of his business, Mr Wandel grew seed potatoes and in so doing required access to water for irrigation. Mr and Mrs Halloran, in addition to their farming activities, conducted an earthmoving business using heavy machinery and other equipment. Throughout these reasons I will refer, from time to time, to Mr Wandel as either Mr Wandel or the appellant and to Mr and Mrs Halloran as either the Hallorans or the respondents. However, it was Mr Halloran, acting on behalf of both, who conducted the relevant negotiations, and otherwise interacted, with Mr Wandel.
Unfortunately, Mrs Halloran died on 19 February 2015, that is, between the date of the filing of the Notice of Appeal and the hearing of the appeal. However, this only came to the Court’s attention after it had reserved judgment. By then, Mr Halloran had departed for an extended period overseas. The Court therefore deferred giving judgment until the proper respondents to the appeal could be regularised. This was not possible until Mr Halloran returned from overseas and provided his solicitors with appropriate instructions. On 21 October 2015 and following an application by Mr Halloran consented to by the appellant, an order was made in chambers substituting, as second respondent, Mr Halloran representing the estate of Mrs Halloran for the purpose of the appeal.
In the second half of 2009, the Hallorans provided earthmoving services to Mr Wandel in connection with the repair of a river crossing called Larcombe’s Crossing and, on 22 February 2010, rendered an invoice in the amount of $26,391.75 (including GST) (“the Larcombe’s Crossing invoice”) which Mr Wandel has refused to meet.
During the period February to March 2010, the Hallorans permitted Mr Wandel to pump water from a dam on the Hallorans’ property, via a dam on the property of another neighbour (Mr Trethewey) to Mr Wandel’s property. On 29 May 2010, the Hallorans rendered an invoice to Mr Wandel, in the sum of $62,700 (including GST) (“the water invoice”) which Mr Wandel has refused to meet.
The Hallorans sued Mr Wandel in the District Court of South Australia on what they described in their pleading as six contracts. The “third contract”, as pleaded, asserted a claim to be paid the agreed price for the supply of the goods and services referrable to the Larcombe’s Crossing invoice. The “fifth contract”, as pleaded, asserted a claim to be paid the agreed price for the water supplied by the Hallorans referrable to the water invoice.
The Hallorans included in their statement of claim other amounts said to be owed by Mr Wandel, pursuant to contract, including amounts for interest, for his use, from time to time during 2009, 2010 and 2011, of the Hallorans’ blade plough and for the supply of certain goods and services in October 2009. The Judge found that any contractual entitlement to be paid these additional amounts had not been established on the evidence and, to this extent, the Hallorans’ claim was dismissed.
However, the Judge did find that the evidence supported a contractual entitlement to be paid for the earthmoving works described and charged for in the Larcombe’s Crossing invoice and for the water supplied, but in an amount slightly less than that claimed in the water invoice.
In a judgment delivered on 17 November 2014,[1] the Judge held that the Hallorans were entitled to judgment for the following amounts:[2]
114 megalitres of water including GST $61,160.00
Larcombe’s Crossing including GST $26,391.75
Lump sum prejudgment interest $25,000
TOTAL $112,551.75
[1] Halloran & Anor v Wandel [2014] SADC 190 (“reasons for judgment”).
[2] Reasons for judgment at [164].
Mr Wandel has appealed against the whole of the judgment. He initially raised eight grounds of appeal (A) - (H) inclusive, with respect to the Larcombe’s Crossing invoice findings. However, ground (F) was abandoned at the commencement of the appeal. In addition, Mr Wandel has raised a complete alphabet of grounds, (A) - (Z) inclusive, with respect to the water invoice claim. Alas, none of these has been abandoned.
It will be necessary to deal, albeit in some cases briefly, with each of the grounds of appeal. However, the two fundamental complaints by Mr Wandel are: first, that the contractual claim, as found by the Judge in each case, had not been pleaded and the Judge erred in entering judgment on a basis that had not been pleaded; and second, that, in any event, the evidence was not sufficient to establish, on a balance of probabilities, the agreement as to the price, in each case, found by the Judge. As to this latter complaint, Mr Wandel maintains that the Hallorans failed to prove an essential aspect of a contractual claim; they failed to prove that the parties had agreed upon a price for the Larcombe’s Crossing works and they failed to prove that the parties had agreed upon a price or a formula for a price with respect to the supply of the water.
At the trial, Mr Wandel’s defence was not simply that, in each case, the parties had not reached agreement as to price but that the Hallorans had agreed to do the Larcombe’s Crossing works free of charge and to supply the water free of charge. On the appellant’s case, the respondents were just being neighbourly.
It is common ground, and the Judge does not appear to have departed from this common ground,[3] that the Hallorans’ case was to succeed or fail according to the law of contract. No claim of quantum meruit or resting on any other equitable or restitutionary basis was pleaded or otherwise relied upon.
[3] Reasons for judgment at [11].
Background to the dispute
In July 2009, a dam on Mr Wandel’s property which, if full and operational, would have contained sufficient water to meet his needs for the 2009/2010 potato growing season, started to overflow. Mr Wandel was in Mount Gambier at the time. He telephoned Mr Halloran and requested that he undertake some excavation works to create a passage to allow water to escape the dam with a view to saving the dam. However, by the time Mr Halloran arrived, the problem had progressed to such an extent that it was not possible to save the dam. The dam gave way and a large quantity of water rushed down the Harriet River, causing damage on the way. In particular, the river crossing constructed to allow motor vehicles to cross the Harriet River and permit access to and from the property of Mr Larcombe and the river crossing constructed at the East-West Highway were both washed away.
The East-West Highway was a public road under the control of the local council which, after calling for tenders, awarded a contract for the repair of the crossing to the Hallorans at a cost of $35,000. Mr Wandel had expected to be approached to pay for the cost of the East-West Crossing repair but, to his surprise, was not. However, Mr Wandel did assume responsibility for the repair of the Larcombe’s Crossing with respect to which he sought the assistance of Mr Halloran.
The failure of the Harriet River dam on Mr Wandel’s property meant that his capacity to irrigate his seed potato crop for the 2009/2010 season was badly compromised unless he was able, immediately, to source an alternative supply of water.
There were several dams in the area. In particular, to the east of Mr Wandel’s farm, there was a dam on the adjacent property of Mr Nathan Trethewey and to the south of Mr Trethewey’s property there was a dam on the Hallorans’ property. Mr Trethewey and Mr Wandel shared a boundary and Mr Halloran and Mr Trethewey shared a boundary.
After negotiating with Mr Trethewey, Mr Wandel acquired access to the water in Mr Trethewey’s dam and when that was exhausted, and as a result of negotiations with Mr Halloran, he acquired access to the water in the Hallorans’ dam (which water became the subject of the water invoice).
The Judge’s findings with respect to credibility and reliability of witnesses
Mr Wandel, in his evidence, maintained that the arrangement with Mr Halloran was to the effect that the Larcombe’s Crossing works were to be performed free of charge and that the Hallorans’ water would be provided free of charge. The Judge rejected Mr Wandel’s evidence on this critical issue and more generally. His Honour observed as follows.[4]
The differences between the evidence of [Mr Halloran] and the evidence of [Mr Wandel] are fundamental and irreconcilable. There is no scope for one or other of them to be mistaken. This is a case where one or both of the principal witnesses must have given deliberately false evidence. It is a credibility case.
[4] Reasons for judgment at [12].
The Judge found that neither Mr Halloran nor Mr Wandel was a good witness. However, he found that Mr Halloran was basically an honest witness, notwithstanding that his evidence on a particular topic was wrong. On the critical issues, the Judge found that the evidence of Mr Halloran was “consistent with and corroborated by surrounding events and generally it was supported by logic”.[5] However, his Honour found that, in many respects, the evidence of Mr Wandel on critical issues “was illogical and contrary to objective facts and common sense”.[6] He found that Mr Wandel’s evidence was vague on critical issues and that, on many occasions, he claimed to have a poor memory and was unable to provide detail of critical conversations. Mr Wandel was reluctant to give straight answers and appeared to the Judge to be constructing his answers as he went along rather than recalling facts from his memory. The Judge indicated that he was not prepared to rely upon the uncorroborated evidence of Mr Wandel on any disputed issue.[7]
[5] Reasons for judgment at [16].
[6] Reasons for judgment at [18].
[7] Reasons for judgment at [19].
In addition to his Honour’s general rejection of Mr Wandel’s evidence on critical issues, his Honour, throughout the reasons, indicated a number of specific topics with respect to which Mr Wandel’s evidence was rejected. His Honour’s implied finding that it was Mr Wandel who, of the two, gave deliberately false evidence, whilst not conceded was not challenged on the appeal.
The evidence of Mr Halloran is also to be assessed in a wider context. I base the following on what Mr Halloran said in his evidence and how he expressed himself. I, of course, did not see or hear him give his evidence. However, his evidence suggests him to be a no nonsense man on the land. He clearly had little understanding of and, I dare say, little time for, the niceties of the law of contract at the time the arrangements with Mr Wandel were arrived at. I expect that he never contemplated at the time that his neighbour would not pay for the Larcombe’s Crossing work or the water, that he would have to sue his neighbour and that he would have to delve into an oral history of some years earlier in order to prove the arrangements arrived at as a result of their words and conduct.
The nature of the appeal
To the extent that the issues raised by Mr Wandel on the appeal involve issues of law or inferences to be drawn from uncontested or established facts, this Court is in as good a position as was the Judge to determine such issues. However, a number of Mr Wandel’s complaints involve a challenge to the Judge’s findings of fact. The principles applicable to the approach to be taken by an appellate court by way of rehearing, such as in the present case, when reviewing findings of fact is settled. In Fox v Percy,[8] Gleeson CJ, Gummow and Kirby JJ explained the position thus.
[8] [2003] HCA 22; (2003) 214 CLR 118 at [23], [25]-[29] and [41] (citations omitted).
[O]n the one hand, the appellate court is obliged to "give the judgment which in its opinion ought to have been given in the first instance". On the other, it must, of necessity, observe the "natural limitations" that exist in the case of any appellate court proceeding wholly or substantially on the record. These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the "feeling" of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole.
. . . .
Within the constraints marked out by the nature of the appellate process, the appellate court is obliged to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge's reasons. Appellate courts are not excused from the task of "weighing conflicting evidence and drawing [their] own inferences and conclusions, though [they] should always bear in mind that [they have] neither seen nor heard the witnesses, and should make due allowance in this respect". In Warren v Coombes, the majority of this Court reiterated the rule that:
"[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it."
As this Court there said, that approach was "not only sound in law, but beneficial in ... operation".
After Warren v Coombes, a series of cases was decided in which this Court reiterated its earlier statements concerning the need for appellate respect for the advantages of trial judges, and especially where their decisions might be affected by their impression about the credibility of witnesses whom the trial judge sees but the appellate court does not. Three important decisions in this regard were Jones v Hyde, Abalos v Australian Postal Commission and Devries v Australian National Railways Commission. This trilogy of cases did not constitute a departure from established doctrine. The decisions were simply a reminder of the limits under which appellate judges typically operate when compared with trial judges.
The continuing application of the corrective expressed in the trilogy of cases was not questioned in this appeal. The cases mentioned remain the instruction of this Court to appellate decision-making throughout Australia. However, that instruction did not, and could not, derogate from the obligation of courts of appeal, in accordance with legislation such as the Supreme Court Act applicable in this case, to perform the appellate function as established by Parliament. Such courts must conduct the appeal by way of rehearing. If, making proper allowance for the advantages of the trial judge, they conclude that an error has been shown, they are authorised, and obliged, to discharge their appellate duties in accordance with the statute.
Over more than a century, this Court, and courts like it, have given instruction on how to resolve the dichotomy between the foregoing appellate obligations and appellate restraint. From time to time, by reference to considerations particular to each case, different emphasis appears in such reasons. However, the mere fact that a trial judge necessarily reached a conclusion favouring the witnesses of one party over those of another does not, and cannot, prevent the performance by a court of appeal of the functions imposed on it by statute. In particular cases incontrovertible facts or uncontested testimony will demonstrate that the trial judge's conclusions are erroneous, even when they appear to be, or are stated to be, based on credibility findings.
That this is so is demonstrated in several recent decisions of this Court. In some, quite rare, cases, although the facts fall short of being "incontrovertible", an appellate conclusion may be reached that the decision at trial is "glaringly improbable" or "contrary to compelling inferences" in the case. In such circumstances, the appellate court is not relieved of its statutory functions by the fact that the trial judge has, expressly or implicitly, reached a conclusion influenced by an opinion concerning the credibility of witnesses. In such a case, making all due allowances for the advantages available to the trial judge, the appellate court must "not shrink from giving effect to" its own conclusion. Finality in litigation is highly desirable. Litigation beyond a trial is costly and usually upsetting. But in every appeal by way of rehearing, a judgment of the appellate court is required both on the facts and the law. It is not forbidden (nor in the face of the statutory requirement could it be) by ritual incantation about witness credibility, nor by judicial reference to the desirability of finality in litigation or reminders of the general advantages of the trial over the appellate process.
. . . .
Therefore, the appellant had to rely before this Court on the advantages that the primary judge enjoyed in seeing the parties, and Mr Murdoch, give their evidence and in preferring the evidence of the appellant and Mr Murdoch to that of the respondent. The Court of Appeal was bound to make due allowance (as it did) for such advantages. The trial judge sat through four days of trial before giving his decision. He did so at a time when the impression made by the witnesses was still clearly in his mind. The Court of Appeal was bound to afford respect to the endeavour of the judge to give the correct and lawful conclusion to the puzzle presented to him. Clearly, the Court of Appeal was right to reject the respondent's belated suggestion of bias, which should not, in our view, have been made. No doubt, the Court of Appeal also took into account the unexpressed considerations that went into the judge's conclusion. No judicial reasons can ever state all of the pertinent factors; nor can they express every feature of the evidence that causes a decision-maker to prefer one factual conclusion over another.

In this case, the Judge heard the matter over five days at the end of October 2014 and delivered his reserved decision on 17 November 2014, less than three weeks after the trial had concluded. Of the nearly 850 pages of trial transcript, more than 230 pages were devoted to the recording of Mr Halloran’s evidence and more than 300 pages were devoted to the recording of Mr Wandel’s evidence. The Judge heard and observed each give their evidence over long periods of time. As the trial Judge, his Honour had distinct and obvious advantages, as compared with this Court, when forming his view about the truthfulness and reliability of their respective accounts. The Judge delivered reasons for judgment at a time when the impressions made by these two witnesses must have been still clearly in his mind.
The Larcombe’s Crossing claim
The Hallorans sued for a debt due under a contract. The Judge found that a contract had been entered into and that the debt, as sued for, was due and payable in accordance with the terms of the parties’ contract.[9] However, in finding the contractual claim to be made out, his Honour did so by identifying a contractual term as to payment that had not been pleaded. This is the basis for a number of appeal grounds which are, in general, to the effect that this aspect of the claim was decided contrary to the pleaded case and that the judgment in respect of the Larcombe’s Crossing invoice should be set aside for this reason alone.
[9] The appellant has seized on a particular observation by the Judge that the amount in the invoice was “a proper amount for the work” and argued that the use of the word “proper” is an indication that the Judge had determined this aspect of the dispute on the basis of a reasonable price or quantum meruit. This is a misreading of the judgment. I will return to this issue.
The Hallorans’ pleading of this aspect of their claim was in obscure terms and did not entirely accord with Mr Halloran’s evidence. The claim is pleaded in paragraphs 10 to 12 of the second statement of claim, filed on 20 October 2014, which are in the following terms.
10.By oral agreement made in or about September 2009 between Mr David Halloran acting for and on behalf of the Plaintiff and the Defendant (“the Third Contract”), it was agreed that:
10.1 The Plaintiff would supply goods and services to the Defendant at the Defendant’s request in order to make good damage caused to a neighbouring property of the Defendant;
10.2 The costs associated with the supply of goods and services referred to in the immediately preceding paragraph would be less than a similar job performed by the Plaintiff approximately 5 years earlier of which the Defendant was aware and for which the Plaintiff was paid approximately $35,000 (excluding GST);
10.3 The Plaintiff would render an invoice to the Defendant for goods and services so supplied;
10.4 The Defendant would pay the invoiced amount to the Plaintiff within 14 days of date of the invoice; and
10.5 In the event that the Defendant failed to make payment of the invoiced amount to Plaintiff within 14 days of the date of the invoice, interest at the Prescribed Rate would be applied to any outstanding sum and would be payable by the Defendant.
11.Pursuant to the Third Contract:
11.1 The Plaintiff supplied goods and services to the Defendant and the Defendant’s request between September 2009 and October 2009; and
PARTICULARS
The Defendant has full details of the goods and services supplied by the Plaintiff.
11.2 On 22 February 2010, the Plaintiff rendered an invoice to the Defendant in the sum of $26,391.75 (including GST) (“the Third Invoice”), which invoice required the Defendant to make payment of the invoiced amount to the Plaintiff within 14 days, namely on or before 8 March 2010.
PARTICULARS
12.In breach of the Third Contract, the Defendant has failed to make payment of the Third Invoice and the Plaintiff has suffered loss and damage as a result.
PARTICULARS
The sum of the Third Invoice ($26,391.75) along with interest payable on the sum of the Third Invoice at the Prescribed Rate from 8 March 2010 and ongoing until payment is made.
On one reading of the pleading, it asserts a contract for the supply of goods and services to make good the damage caused, that the cost thereof would be less than $35,000 (excluding GST), that the cost thereof would be the amount as rendered in an invoice and that Mr Wandel had agreed to pay the amount as rendered in an invoice. It is further pleaded that an invoice in the amount of $26,391.75 (including GST) was rendered to Mr Wandel, on 22 February 2010, and that he has failed to make payment.
It would appear that, during the interlocutory stages of the matter, there was no attack on this pleading on the basis, for example, that a contract pleaded in these terms lacked certainty and was amenable to a strike out[10] or on the basis that further and better particulars should be supplied. Rather, Mr Wandel pleaded to the claim according to its terms. By his third defence, he denied the existence of any such contract, admitted that the Hallorans were to perform some mutually agreed repair work but of a nature less than or different from that pleaded by Mr Halloran and denied liability to pay any amount with respect to work performed on the Larcombe’s Crossing. As earlier indicated, it has always been Mr Wandel’s case that whatever work was done was performed by his neighbour, free of charge.
[10] I express no view on such a matter.
As a matter of principle, there is nothing to prevent parties from agreeing to a contract for the supply of goods and services on the basis that the recipient promises to pay the invoiced amount. It is not uncommon for a tradesperson to be engaged to perform work which involves the supply of goods and services on the basis that it will be paid in accordance with the terms of a rendered invoice setting out the work actually done and the contractor’s usual charges. There may or may not be a quote in advance. Any such quote may be a “fixed” quote or merely an estimate. Often, the circumstances will be construed as involving an implied term that the price, ultimately charged, will be a reasonable price. However, this is not necessary to a binding contract. There is nothing, in principle, to prevent the parties from agreeing to an arrangement pursuant to which the invoiced price to be paid is to be calculated according to the contractor’s usual rates for such work, whether or not reasonable.
Mr Wandel never challenged the amount charged in the Larcombe’s Crossing invoice, on account of reasonableness or otherwise, prior to the commencement of the litigation. He only ever disputed the extent of the work said to be performed and that he was to pay anything at all. And this, only quite some time after receiving the invoice.[11]
[11] Reasons for judgment at [75], [78].
As it happens, it is unnecessary to form a concluded view about the nature of the contract as pleaded and, in particular, whether the pleaded contract should be construed as invoking a reasonable price or simply a promise to pay the actual price as invoiced. This is because, on the basis of Mr Halloran’s evidence, the Judge found that the parties’ had orally agreed a price at the time the contract was formed.
I turn then to the Judge’s critical findings concerning the Larcombe’s Crossing works. His Honour found that Mr Wandel had assumed responsibility for repairing the damage to the Larcombe’s Crossing over the Harriet River.[12] The crossing consisted of two lines of pipes in the river bed which permitted the flow of water along the course of the river with these pipes being covered with rocks, gravel, soil and concrete so that the crossing then acted as a bridge over the river. The work required for the repair of Larcombe’s Crossing, that is, to restore a crossing of the nature just described, was the type of work normally carried out by the Hallorans.
[12] Reasons for judgment at [55].
Since 2008, the Hallorans had, on occasions, carried out earthworks for Mr Wandel. According to Mr Halloran, on this occasion, he was asked to do earthmoving works to restore the crossing but only so as to bring it to the concreting stage. The concreting of the sides and on the top of the crossing would be carried out by Mr Wandel’s workmen.
The Judge accepted “unreservedly”[13] the evidence of Mr Halloran with respect to Larcombe’s Crossing. His Honour found that it was supported by common sense. His Honour rejected[14] the evidence of Mr Wandel as to his assertions concerning the arrangement with respect to Larcombe’s Crossing and the extent of the work done. The evidence of Mr Halloran, accepted unreservedly by the Judge, included the following.[15]
(i)Following the damage to Larcombe’s Crossing, Mr Halloran was asked by Mr Wandel to put the crossing back in order so as to take a B-double semi-trailer and Mr Wandel asked for a price to get to that stage.
(ii)Mr Halloran said to Mr Wandel that he could do the work.
(iii)When asked for an approximate price, Mr Halloran said that Mr Wandel knew that Mr Halloran had done a large crossing in the Cygnet River five years earlier for $35,000 and that he had just submitted a quote to the Kingscote Council for the East-West Highway Crossing for a price of $35,000 which the Council had agreed to.[16]
(iv)Mr Halloran said to Mr Wandel “this one will be $22,500 approximately plus GST to be solid”.
(v)According to Mr Halloran, Mr Wandel told him to “go ahead immediately”.
[13] Reasons for judgment at [82].
[14] Reasons for judgment at [78].
[15] Reasons for judgment at [68] and see trial transcript at T33-34. The whole of the relevant exchange during Mr Halloran’s examination in chief is extracted below.
[16] It is not entirely clear from the transcript, but this evidence may have been of a hearsay nature. However, it was not challenged at the trial and the fact that this was Mr Wandel’s state of knowledge was not disputed on appeal.
The Judge, after reciting these matters, observed “if the evidence of Mr Halloran is correct it establishes the plaintiffs’ case”.[17] With respect, the Judge was correct in making this observation. The exchange between the parties, as identified in Mr Halloran’s evidence, discloses a simple oral contract to restore the Larcombe’s Crossing to a certain stage[18] for an identified price. The price agreed to, according to Mr Halloran, was $22,500 plus GST ($24,750) “approximately”. The “approximately” is important. Mr Halloran had made it clear that this was not a fixed quote but a good estimate and that, by implication, the job might, ultimately, cost a little more or a little less according to the nature of the work that actually needed to be done.
[17] Reasons for judgment at [69].
[18] Their oral exchange in this respect is to be understood in the context of their respective knowledge and experience concerning the nature of the crossing and its construction and what needed to be done to get it to concreting stage. There has been no complaint about the nature of the work performed by Mr Halloran.
During argument, counsel for the appellant complained about the use of the phrase “to be solid”; that it was inconsistent with the notion of an “approximate” price and that a fixed price of $24,750 (inclusive of GST) neither conformed to the pleading nor to the invoice as rendered ($26,311.75). The complaint fails to take into account the precise evidence given by Mr Halloran in this respect and that the quote in the judgment, “$22,500 approximately plus GST to be solid”, was potentially misleading unless considered in its full context. The whole of the exchange with Mr Halloran concerning the agreement reached with Mr Wandel was as follows.[19]
[19] At T33-34.
QWhat was the work that needed to be done on Mr Larcombe's crossing.
AWhen this dam breached, and flooded the Heriot (sic) River, with the force it took that cement crossing out and pulverised it and took it downstream.
QIn summary, what was the work that you did there.
AFor me, was to - I was asked to put it back in order, to take a B-double semitrailer, which is two big semitrailers, and also asked for a price to get it to that stage.
QWho asked you to do that.
AJames Wandel.
QDo you remember what he said to you when he asked you.
AHe asked if I could possibly do it. This time of the year, your Honour, it's a very wet time of the year, the machine would be wet. I said I could, then he asked an approximate price. I explained, as we've got written, I'd done large crossings in the Cygnet River, which is a bigger river system than this one, prices were $35,000 five years prior. I had just submitted a pricing for the Kingscote council and also did the work on the council road, downstream from this one, which was easier work, for a price of 35,000 which council agreed to. So Mr Wandel knew what these prices were, I said this one will be 22 and a half thousand approximately, plus GST, to be solid. I'm a truck driver myself - strong enough to be take a truck across there and Mr Wandel wanted to do the concreting himself.
QYou just said this will cost $22,000 approximately.
A22 and a half thousand dollars, that's correct.
QDid you use the word 'approximately'.
AApproximately, plus GST.
QWhat did Mr Wandel say to that.
AYes, go ahead immediately.
It can be seen that the reference to “solid” was a reference to the crossing itself being put in a state that was “strong enough to be [sic] take a truck across there and Mr Wandel wanted to do the concreting himself”. The word “solid” when read in context had nothing to do with the nature of the price which, in his evidence, Mr Halloran stressed to be an approximate one.
The Judge went on to consider the nature of the work done as itemised in the Larcombe’s Crossing invoice and identified in the evidence of Mr Halloran.[20] His Honour found that the extent of the work shown in the tendered photographs “speaks for itself” and that the evidence of Mr Wandel’s workmen who did the concreting did not contradict the evidence of Mr Halloran as to the work that the respondents’ had carried out.[21] His Honour was satisfied that the Larcombe’s Crossing invoice properly reflected and described the work performed.
[20] Reasons for judgment at [70]-[73].
[21] Reasons for judgment at [78]-[79].
In reaching these conclusions, his Honour expressly rejected the evidence of Mr Wandel to the contrary. His Honour found that “given the size of the project and the cost associated with it [Mr Wandel’s] case is completely unbelievable”.[22] His Honour rejected the evidence of Mr Wandel as to the arrangement with respect to Larcombe’s Crossing and as to the extent of the work.[23] According to his Honour, it was “completely improbable that the [Hallorans] would incur expenditure for fuel and other items of overhead and incur wear and tear on [their] machinery without making any charge for work which involved many days of [Mr Halloran’s] time”.[24]
[22] Reasons for judgment at [73].
[23] Reasons for judgment at [78].
[24] Reasons for judgment at [81].
The Judge’s ultimate conclusion is in these terms.[25]
The evidence establishes work was carried out. I find that the parties entered into a contract in the terms stated by Mr Halloran and that Mr Halloran carried out all of the work which is itemised in [the Larcombe’s Crossing invoice]. I find that the amount which has been charged for that work was a proper amount for that work.
I find that the plaintiff has established an entitlement to $26,311.75, including GST, with respect to Larcombe’s Crossing. The invoice was delivered on 22 February 2010 and it was payable on or before 7 March 2010.
His Honour referred to a contract “in the terms stated by Mr Halloran”. On a reading of the judgment as a whole, this can only be a reference back to the terms earlier identified by the Judge[26] based on Mr Halloran’s evidence, as set out above in (i) to (v) at [33]. As his Honour had earlier observed,[27] if this evidence of Mr Halloran was found to be correct, “it establishes the plaintiffs’ case”.
[25] Reasons for judgment at [82]-[83].
[26] Reasons for judgment at [68].
[27] Reasons for judgment at [69].
It is true that his Honour also stated, in the passage just quoted, that the amount charged for the work was “a proper amount” for the work. Again, reading his Honour’s judgment as a whole, there is no suggestion here that his Honour, all of a sudden, has diverted his attention from identifying the terms of any contract to awarding a reasonable amount or a quantum meruit for the work done. His Honour very early in his reasons identified, in effect, that the Hallorans’ case would stand or fall according to whether or not they could establish a contract.[28] Indeed, in the passage just quoted his Honour found the establishment of “a contract in the terms stated by Mr Halloran...”.
[28] Reasons for judgment at [11].
The use of the word “proper” derives from the fact that the quoted price was “an approximate” price. Mr Wandel clearly accepted that there would be scope for an adjustment either up or down. The quoted price of $22,500 “approximately” plus GST ($24,750 inclusive of GST), given the nature of the work and the circumstances in which the parties conducted their negotiations was sufficiently close to the invoiced price of $26,311.75 for the latter to be regarded as “proper” and the contractually agreed charge for the work.
I have reviewed the evidence of Mr Halloran and Mr Wandel. The findings of the Judge with respect to the Larcombe’s Crossing invoice were open on the evidence and ordinarily would follow, unless his Honour’s findings with respect to credibility and reliability were to be set aside. Nothing has been put to the Court to cause me to do other than adopt the Judge’s credibility and reliability findings with respect to Mr Wandel. There are no incontrovertible facts or uncontested testimony that might suggest the Judge’s conclusions here to be erroneous, nor could his Honour’s findings be described as glaringly improbable (in fact, quite to the contrary) or contrary to compelling inferences available from other evidence in the case.
I turn to consider, briefly, the specific grounds of appeal raised with respect to the Larcombe’s Crossing invoice. Appeal grounds (A), (B), (C), (D) and (H) are all directed at Mr Wandel’s primary complaint that the Judge decided this part of the case in a way that departed from the Hallorans’ pleaded case. Appeal ground (H) also asserts that the price charged as found by the Judge was not open on the evidence. This aspect of appeal ground (H) has been dealt with already and I reject it.
It is true that, ordinarily, a party will not be permitted to pursue a claim that has not been pleaded in a way that provides proper notice of the case to be met by the opponent. A helpful summary of the law and the type of considerations that can become relevant when an issue such as this is raised was provided by Gray J in Fitzgerald v Brock Real Estate & Ors[29] which I gratefully adopt.
[29] [2009] SASC 183 at [24]-[27]. See also Sands v Channel Seven Adelaide Pty Ltd & Anor [2010] SASC 202 at [39]-[44] (Gray J, with whose reasons Nyland and Vanstone JJ agreed).
The consequences of a divergence from a pleaded case has been the subject of a number of authoritative discussions.
In Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd[30] the High Court of Australia considered the function of pleadings in the context of whether a bank’s failure to appear at trial estopped it from relying on its pleaded defence. In the course of their joint judgment, Mason CJ and Gaudron J stated:[31]
[30] Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279.
[31] Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 286-287.
The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v. Mount Oxide Mines Ltd. (In liq.) per Isaacs and Rich JJ. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party’s right to this basic requirement of procedural fairness. Accordingly, the circumstances in which a case may be decided on a basis different from that disclosed by the pleadings are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities. See, e.g., Browne v. Dunn; Mount Oxide Mines.
Brennan J summarised the object of pleadings in the following way:[32]
[32] Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 287-288.
In Thorp v Holdsworth, Jessel M.R. stated the object of pleadings:
“The whole object of pleadings is to bring the parties to an issue, and the meaning of the rules of Order XIX. was to prevent the issue being enlarged, which would prevent either party from knowing when the cause came on for trial, what the real point to be discussed and decided was. In fact, the whole meaning of the system is to narrow the parties to definite issues, and thereby to diminish expense and delay, especially as regards the amount of testimony required on either side at the hearing.”
When the pleadings bring the parties to the issue, the court’s function is to determine that issue and to grant relief founded on the pleadings unless the parties are allowed to alter the issues at the trial without amendment of the pleadings (as to which, see the observations in London Passenger Transport Board v. Moscrop.)
Brennan J reiterated the rule as laid down by the High Court in Dare v Pulham:[33]
[33] Dare v Pulham (1982) 148 CLR 658 at 664.
Apart from cases where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings (Gould and Birbeck and Bacon v. [Mount Oxide Mines Ltd. (In liq.)]; Sri Mahant Govind Rao v. Sita Ram Kesho.
The rationale for confining parties to their pleaded case was explained by Isaacs and Rich JJ in Gould & Birbeck &Bacon v Mount Oxide Mines:[34]
Undoubtedly, as a general rule of fair play, and one resting on the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him, pleadings should state with sufficient clearness the case of the party whose averments they are. That is their function. Their function is discharged when the case is presented with reasonable clearness. Any want of clearness can be cured by amendment or particulars. But pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest.
These authorities indicate that the purpose of pleadings has its genesis in procedural fairness and the public interest in the finality of litigation.
Although these authorities demonstrate that the pleaded case forms the foundation for argument and the consequent findings, disparity between the evidence and the particulars will not prevent a verdict based on the evidence. As stated by the unanimous High Court in Dare v Pulham:[35]
But where there is no departure during the trial from the pleaded cause of action, a disconformity between the evidence and particulars earlier furnished will not disentitle a party to a verdict based upon the evidence. Particulars may be amended after the evidence in a trial has closed (Mummery v. Irvings Pty. Ltd., though a failure to amend particulars to accord precisely with the facts which have emerged in the course of evidence does not necessarily preclude a plaintiff from seeking a verdict on the cause of action alleged in reliance upon the facts actually established by the evidence (Leotta v. Public Transport Commission (N.S.W.)).
[34] Gould & Birbeck &Bacon v Mount Oxide Mines (1916) 22 CLR 490 at 517.
[35] Dare v Pulham (1982) 148 CLR 658 at 664.

The evidence given by Mr Halloran, as to the price he quoted for the Larcombe’s Crossing work and Mr Wandel’s acceptance of Mr Halloran’s offer to do the work on that basis, was not objected to at the trial. Mr Wandel had ample opportunity to meet that evidence both by way of cross-examination of Mr Halloran and by the giving of his own evidence to contrary effect. It, ultimately, can only have been an oath on oath credit issue with each party’s account to be assessed in the context of the whole of the circumstances.
Where Mr Wandel’s case was, to the effect, that there was no contract at all, it is difficult to see how, in the circumstances of this case, he could have been prejudiced by the adducing of evidence as to the terms of a conversation that he says did not take place and with respect to which he was not believed.
The disconformity with the respondent’s pleaded case did, of course, provide Mr Wandel with a forensic opportunity to cross-examine Mr Halloran and to challenge his credibility with respect to the conversation concerning price about which he gave evidence. Nevertheless, the Judge believed Mr Halloran and disbelieved Mr Wandel.
During submissions on the appeal, counsel for Mr Wandel was unable to identify any prejudice caused as a result of finding a contract to have been established on the basis of this evidence of Mr Halloran. It may have been different had his Honour decided the matter on the basis of a quantum meruit or an implied term as to a reasonable price; if so, Mr Wandel may have been deprived of the opportunity of adducing evidence material to that type of issue. However, that was not the basis of the Judge’s finding. There has been no procedural unfairness and no miscarriage of justice.
By appeal ground (E) Mr Wandel complains, in effect, that the Judge failed to have adequate regard to paragraph 10.2 of the statement of claim, that is, that the cost of the works would be less than $35,000. I fail to understand how this could have a material bearing on the outcome of the trial or of the appeal given the Judge’s findings as made on the evidence before him. Mr Halloran, in his evidence, said that he had told Mr Wandel that the costs would be less than $35,000 and this is consistent with the pleading in paragraph 10.2. The fact that, in his pleading, Mr Halloran claimed that the cost was to be less than $35,000 but did not identify the oral term as to price subsequently established by his evidence, is an aspect of the inconsistencies between the pleaded case and the case presented in the evidence. As already indicated, it was a forensic opportunity to be exploited by Mr Wandel. Nevertheless, the Judge had regard to both the pleading and the evidence of Mr Halloran on this issue and accepted Mr Halloran’s evidence as to the oral term.
As earlier indicated, appeal ground (F) has been abandoned but appeal ground (G) is to the effect that the Judge failed to have regard to the quantity of rocks taken by the Hallorans.
This ground refers to evidence of Mr Wandel that, in exchange for performing the works at the Larcombe’s Crossing, Mr Wandel would supply rocks from his property to the respondents which they could use with respect to the Larcombe’s Crossing repairs and with respect to other earthmoving works being performed by the respondents. The Judge rejected Mr Wandel’s evidence in this respect and found that the Larcombe’s Crossing works were to be paid for with money. Further, whilst his Honour found that Mr Halloran did take rocks from Mr Wandel’s property, he also found that this was done by Mr Halloran as a favour to Mr Wandel.[36]
[36] Reasons for judgment at [80].
Following my review of the evidence, the findings made by the Judge on this topic were not contrary to incontrovertible facts or uncontested testimony and could not be said to be glaringly improbable or contrary to compelling inferences available from other evidence in the case.
I would dismiss the appeal with respect to the Larcombe’s Crossing invoice.
The claim for water taken from the Hallorans’ dam
Initially, Mr Wandel arranged to purchase water from Mr Trethewey. In order for this to be effected, Mr Wandel laid piping from Mr Trethewey’s dam to a pivot on Mr Wandel’s land from which Mr Wandel could water his crop. Mr Wandel met the cost of that piping. In return for the water, Mr Wandel agreed to lay, at his cost, additional piping from Mr Trethewey’s dam to a location on Mr Trethewey’s land where Mr Threthewey intended to install his own pivot for future use.
According to the Judge, the transaction with Mr Trethewey was “evidenced by an invoice ... which Mr Trethewey handed to Mr Wandel sometime after the event”.[37] In fact, the invoice was provided by Mr Trethewey to Mr Wandel sometime in 2014, some four years after the water had been taken (in early 2010). The invoice purported to record the nature of the transaction between Mr Trethewey and Mr Wandel. It was typed, apart from an annotation “Paid in full March 2010 NT” which had been hand written by Mr Trethewey. The typed portion of the invoice recorded the following matters.
(i)Against the date March 2010 there are the words “Complete use of all water contained in the ‘Lindhurst’ Dam. Approx total volume of dam 120ML. Used 87ML (by flowmetre)”. Adjacent to that is recorded: under the heading “amount”, $39,150; under the heading “GST”, $3,915; and, a total figure (apparently inclusive of GST) of $42,345.
(ii)Beneath the entry in (i) and adjacent to the word “included” the following is recorded: “Access and agreement to reroute temporary line across 4 separate pdks. Final site cleanup and remediation of temporary line. ability to refill and use dam as required.”
(iii)Underneath the entry in (ii) is recorded the words “PAID IN FULL through negotiation of installation of 2.48km of 8” pipe”. This entry has a circle around it in blue biro being the same colour biro as used for the handwritten annotation “Paid in full March 2010 NT”.
[37] Reasons for judgment at [85].
The Judge held that the effect of the transaction between Mr Trethewey and Mr Wandel was that Mr Wandel provided piping valued at $39,150 plus GST of $3,915 (total inclusive of GST of $42,345) in return for 87 megalitres of water.[38] As a consequence, the Judge found that the cost to Mr Wandel of Mr Trethewey’s water was $450, excluding GST, and $487, inclusive of GST, per megalitre.[39]
[38] Reasons for judgment at [89].
[39] Reasons for judgment at [89] and [118], [153] respectively.
Of course, the arithmetic is wrong. Mr Trethewey’s invoice incorrectly records the addition of $39,150 and $3,915 to be $42,345 rather than $43,065. The correct GST inclusive cost to Mr Wandel for the provision of 87 megalitres was therefore $495 per megalitre.
Mr Trethewey’s dam was not sufficient to meet Mr Wandel’s needs. He thereupon reached an arrangement in about December 2009 with the Hallorans that they would make the water in one of their dams available. Mr Wandel laid piping from the Hallorans’ dam to their boundary with Mr Trethewey and across Mr Trethewey’s property to a stream[40] that fed the dam belonging to Mr Trethewey from which water could be piped to Mr Wandel’s pivot. Mr Wandel also installed a brand new flow meter somewhere on the pipeline between the Hallorans’ dam and the stream that fed the Trethewey dam. The purpose was, not surprisingly, to measure the flow of water along that piping.
[40] According to Mr Trethewey this pipe discharged the water into the “headwaters” of his dam, trial transcript at T182.
As already indicated, Mr Wandel maintained at trial that Mr Halloran agreed to supply the water free of charge. This was rejected by the Judge. The Judge found that it had been agreed between the parties that the water was to be paid for. Mr Wandel further maintained that no agreement had been reached as to the price of the water or as to a sufficiently certain means of calculating the price of the water. Mr Wandel also disputed the amount of water claimed to have been provided by the Hallorans.
The Judge reviewed at some length the evidence of Mr Halloran and Mr Wandel as to the nature of their negotiations with respect to the supply of the water.[41] His Honour described the evidence of Mr Halloran as jumbled and internally inconsistent.[42] He observed that the evidence of Mr Halloran on this topic was, again, not consistent with his pleading. In paragraph 16.2 of the statement of claim the Hallorans had alleged:
[Mr Wandel] would make payment to [the Hallorans] for each mL of water pumped from [the Hallorans’] property to [Mr Wandel’s] property at a price calculated by reference to the amount paid by [Mr Wandel] to Nathan Trethewey for water in his dam as calculated by the value of construction of Nathan Trethewey’s dam divided by 87mL of water pumped by [Mr Wandel] from Nathan Trethewey’s dam and in any event rate [sic] at least equal to the amount prescribed in the [Stock Journal] at any given time.
Nevertheless, after reviewing the evidence of Mr Halloran and Mr Wandel, and bearing in mind the credibility and reliability findings earlier made, the Judge arrived at the following conclusion.[43]
Notwithstanding the confusion I am satisfied that it was clear to the parties that Mr Halloran wanted the same price for his water that Mr Wandel was paying for the water of Mr Trethewey. I am satisfied that the evidence as a whole establishes on the balance of probabilities that Mr Wandel agreed to pay Mr Halloran the same price that he had agreed to pay Mr Trethewey.
[41] Reasons for judgment at [93]-[107].
[42] Reasons for judgment at [112].
[43] Reasons for judgment at [114].
In reaching this conclusion, the Judge, in addition to his preference for Mr Halloran’s evidence over that of Mr Wandel, took account of a number of matters including the following.
(i)When Mr Halloran delivered the invoice to Mr Wandel, Mr Wandel “opened it, looked at it, didn’t query it”.[44] It was not until a later date that Mr Wandel queried the invoice and then only on the basis that according to Mr Wandel the respondents’ dam did not have a capacity of 114 megalitres.[45]
(ii)The Judge pointed out, correctly with respect, that a challenge to the volume of water supplied is different from a denial of liability to make any payment at all, or payment at the rate claimed by Mr Halloran in the invoice.[46]
(iii)The Judge asked, rhetorically, if the Hallorans had offered the water free of charge why would Mr Wandel, in the first instance, have agreed to pay a significant sum to Mr Trethewey for water. The Judge also asked, rhetorically, why did Mr Wandel install a meter on the line from the plaintiff’s dam to Mr Trethewey’s dam. The Judge found the answers given by Mr Wandel to these questions to be “not convincing”.[47]
(iv)Mr Wandel maintained in his evidence that the reason the respondents were prepared to give him the water was that they wanted their dam to be emptied so that it could be enlarged and its bottom resealed. Mr Halloran denied that he had ever said he wanted to enlarge his dam or that it needed resealing. As it happens, after the dam had been drained the respondents did not enlarge the dam. The Judge accepted Mr Halloran’s account and rejected Mr Wandel’s.
[44] Trial transcript at T48; reasons for judgment at [116].
[45] Trial transcript at T145; reasons for judgment at [116].
[46] Reasons for judgment at [116].
[47] Reasons for judgment at [117].
The Judge specifically rejected the evidence of Mr Wandel on this topic of the arrangements concerning the supply of the water. He rejected the evidence in part because it was inconsistent with other objective facts and because it was improbable.[48]
[48] Reasons for judgment at, for example, [140], [141], [142], [147] and [151].
The Judge was faced with this difficult position. He was unable to accept virtually anything Mr Wandel had told him and was in the position of having to put Mr Wandel’s evidence to one side and to have no regard to it. However, he found that Mr Wandel agreed to pay for the water but was faced with jumbled and internally inconsistent evidence from Mr Halloran concerning the terms of payment. Ultimately, his Honour was satisfied that the parties agreed that the respondents would be paid for their water at the same price that Mr Wandel was paying or had paid to Mr Trethewey.[49] Three main issues arise.
(i)Was there evidence sufficient to support this finding?
(ii)What was the price that Mr Wandel paid Mr Trethewey and, as a consequence, what was the price per megalitre that Mr Wandel agreed to pay the respondents in the event that the finding to which (i) above refers was correctly arrived at?
(iii) How much water did the respondents supply to Mr Wandel?
Does the evidence support the Judge’s finding that the parties agreed that Mr Wandel would pay the same price that he had paid for Mr Trethewey’s water
[49] Reasons for judgment at [114], [118].
I have reviewed the evidence of Mr Halloran that bears on the nature of any agreement reached with Mr Wandel for the supply of the water.[50] This evidence supports the Judge’s findings as to the nature and terms of the agreement reached. The critical features of Mr Halloran’s evidence, in this respect, are as follows.
[50] Trial transcript of examination in chief at T43.5-43.28, 44.15-44.34, 45.10-45.31, 47.11-47.15, 47.31-48.4 and 48.7-48.28 and trial transcript of the cross-examination at T75.6-75.10, 77.34-78.7, 78.16-78.21, 78.27-79.2, 79.26-80.32, 85.8-85.37 and 89.6-90.11.
(i)Mr Wandel told Mr Halloran that Mr Trethewey was doing very well “he’s getting his dam paid for” and “he’s doing very well, he’s getting piping in the ground to the cost of $45,000”.
(ii)Mr Halloran was of the belief, at the time, that the cost of installing Mr Trethewey’s dam might have been $55,000 but he indicated to Mr Wandel that he was happy to proceed on the assumption that the cost had been $45,000 which had been the approximate cost of Mr Halloran’s dam.
(iii)Mr Halloran indicated to Mr Wandel that he would be happy to receive the same and, in effect, to have his dam paid for.
(iv)Mr Halloran said “I’m happy as long as I get the same as Nathan” and that “I’m happy with the price, the same price as Nathan”.
(v)Mr Halloran summarised the position in cross-examination as follows.
Discussion on price of water was discussed and it was put to me by Mr Wandel the price of the neighbour’s dam at 45,000 or 55, and he said he’s getting the equivalent money’s [sic] worth of piping in the ground and I agreed that I’d be happy with a similar price.
Earlier in his examination in chief Mr Halloran said that when he told Mr Wandel “I’m happy with the price, the same price as Nathan. You discussed $45,000 for the dam that’s the end of that”, Mr Wandel was “in agreeance, he’s usually looking down on the ground and shuffling his feet and walks off”.
Mr Halloran clearly informed Mr Wandel that he would be happy with the same price that Mr Wandel paid Mr Trethewey for his water and that this “price” was to be calculated by reference to the cost of piping provided by Mr Wandel to Mr Trethewey. Mr Wandel accepted this proposition by not refusing or debating it – by way of response on one occasion, at least, he looked down, shuffled his feet and walked away – and, importantly, by laying the piping from the Hallorans’ dam to Mr Trethewey’s dam and taking the Hallorans’ water via Mr Trethewey’s dam.
One possible construction of the interactions between Mr Halloran and Mr Wandel, as described in Mr Halloran’s evidence, is that they agreed on a flat figure of $45,000 for all of the water available from the Hallorans’ dam, however much that may have turned out to be. Neither party contends that this was the agreement reached and this was not the construction adopted by the Judge.
The verbal and non-verbal interactions said to give rise to a contract must be construed objectively. The relevant interpretation is that which a reasonable person would place on the parties’ words and actions not that which conforms to one or other party’s subjective intentions.[51]
[51] See, eg, Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 61.
The general observations by the author of Contract Law in Australia[52] are apposite to the present case.
The formation of agreement will in many cases be inferred from the conduct of the parties. Sometimes there may be no identifiable offer and acceptance because the parties have not expressly discussed the formation of contract but have indicated by their conduct that they did in fact intend to contract.[53] In many cases a more realistic explanation is that by the time a dispute arises, perhaps many years after the alleged contract was entered into, no direct evidence is available of what was said by the parties and yet their conduct is consistent only with the hypothesis that an agreement was in fact made by them.[54] In other cases an express offer has been made which was never expressly accepted or rejected, but the subsequent conduct of the offeree in performing the acts contemplated in the offer indicate an intention to accept.
[52] John W Carter, Contract Law in Australia (LexisNexis Butterworths, 6th ed, 2013) [3-05].
[53] See, eg, Haynes v McNeil (1906) 8 WALR 186; Glass v Pioneer Rubber Works of Australia Ltd [1906] VLR 754.
[54] See W A Dewhurst & Co Pty Ltd v Cawrse [1960] VR 278 at 282.
Common sense suggests that the agreement reached was in terms of the Hallorans receiving the same price as was paid to Mr Trethewey per megalitre. The dams were different, with different capacities. As Mr Halloran said,[55] “that’s why Mr Wandel put the meter in there so we could work it out. I didn’t have any money to spend on meters, I’m afraid”. Mr Halloran’s evidence was consistently to the effect that the agreement reached related to a price per megalitre.
[55] Trial transcript at T80.
The respondents’ case, in this respect, was not documented at the time and the conversations and conduct by which the agreement between Mr Halloran and Mr Wandel was reached were poorly articulated by Mr Halloran in his evidence. Nevertheless, the essence of their contract was really quite simple. Mr Trethewey was being paid in kind (piping) for the water he provided. As it happens, the value of the payment in kind was understood to be broadly equivalent to, and therefore had the effect of reimbursing, the cost of the installation of Mr Trethewey’s dam. This notion of having his own dam effectively paid for was attractive to Mr Halloran. He, therefore, wanted the same terms as to price as applied with respect to the Trethewey arrangement but in money not in kind.
An agreement in the terms articulated by the Judge was open on the evidence. I agree with the Judge that the “formula by which the price was to be calculated is so esoteric that it had the ring of truth”.[56] There are no incontrovertible facts or uncontested testimony that might suggest the Judge’s conclusions here to be erroneous, nor could his Honour’s finding be described as glaringly improbable or contrary to compelling inferences available from other evidence in the case.
[56] Reasons for judgment at [152].
The agreement, as found, was in terms that differed slightly from the pleaded case. The Hallorans’ pleading, in this respect, was amended during the trial in an effort to conform to Mr Halloran’s evidence. The amendment could have been more precisely articulated. Nevertheless, for reasons similar to those already set out with respect to the pleading disconformity concerning the Larcombe’s Crossing invoice, I am satisfied that, to the extent that the Judge has determined this issue in a manner differently from that as pleaded, there has been no procedural unfairness and no miscarriage of justice.
What was the price per megalitre that Mr Wandel agreed to pay Mr Trethewey?

The Judge made a finding based on the invoice provided by Mr Trethewey to Mr Wandel, albeit some years after the relevant events. That finding was to the effect that Mr Wandel had paid Mr Trethewey, for water supplied, at a rate of $487 per megalitre inclusive of GST.[57] His Honour adopted this as the price per megalitre that Mr Wandel had, in effect, agreed to pay the respondents.[58] Subject to the arithmetical error referred to earlier, an analysis of the Trethewey invoice, taken at its face value, supports this calculation.
[57] Reasons for judgment at [89], [118], [153].
[58] Reasons for judgment at [153].
However, Mr Wandel maintains that the respondents have not proved, and the evidence before the Court is not sufficient to permit a finding, that Mr Wandel took 87 megalitres of water from Mr Trethewey’s dam. Accordingly, even if the Hallorans were entitled to be paid the same price per megalitre as Mr Trethewey was paid, they have not proved that price.
The Hallorans invoiced Mr Wandel on 29 May 2010 for the water supplied from their dam.[59] The invoiced amount can only be seen as an estimate, given that, on the Judge’s findings, it was necessary to ascertain the price in fact paid to Mr Trethewey for his water.
[59] The invoice is exhibit P6, see the appeal book at p55.
The Hallorans’ invoice records “114 Megalitres on FLOW METER @ $500/Ml + 10% GST” and records a charge of $57,000 plus $5,700 GST making a total of $62,700 inclusive of GST.[60] However, as at May 2010, the invoice provided by Mr Trethewey to Mr Wandel, setting out the costs of the piping and the provision of 87 megalitres, the details of which have been set out earlier, was not available to Mr Halloran. His evidence was to the effect that he was aware that 87 megalitres had been recorded on the Trethewey flow meter and that, on the basis that $45,000 was the amount that had been or was to be paid to Mr Trethewey, he calculated the per megalitre price at $500 (in effect, rounded down from $517) and to this he added GST.
[60] Mr Halloran’s arithmetic is better than Mr Trethewey’s.
The appellant contends that there was no basis in the evidence for finding that Mr Trethewey supplied 87 megalitres of water to the appellant and that the Judge should have concluded that it was not possible to make a finding as to the quantity of water supplied by Mr Trethewey.[61] In addition, the appellant complains that, on the evidence, the Judge should have found that the readings on the two flow meters were unreliable and should have given effect to the lack of any expert evidence before the court sufficient to prove the reliability and accuracy of the flow meters.
[61] Appeal grounds (M) and (N).
This misconceives what was required to be established under the contract. As it happens, Mr Wandel agreed during cross-examination[62] that the flow meter reading, after all of Mr Trethewey’s water had been exhausted, was 87 megalitres. Furthermore, the invoice provided by Mr Trethewey to Mr Wandel which records 87 megalitres having been taken has never been challenged in this respect. Mr Wandel, in his evidence, did refuse to accept that the value of the pipework was in the region of that set out in the invoice. However, given the Judge’s credibility finding, his evidence cannot be accepted. On the other hand, Mr Trethewey gave a detailed explanation as to how he calculated the value to him of the pipework, as recorded in the invoice. It can be inferred, as the Judge did, that the completed transaction between Mr Trethewey and Mr Wandel was as recorded in the invoice and was one whereby Mr Trethewey had provided piping at the identified value and Mr Wandel had received, in exchange, 87 megalitres of water.
[62] Trial transcript at T567.
It is put against the Hallorans that whilst this might be an available finding as between Mr Wandel and Mr Trethewey, it is not binding as between Mr Wandel and the Hallorans. The Hallorans are still obliged to prove how much water Mr Wandel, in fact, took. Counsel for Mr Wandel told the Judge during his cross-examination of Mr Halloran:[63]
[Mr Trethewey has] just said what came out of his dam and we’re not challenging against him, that 87 megalitres came out of his dam.
[63] Trial transcript at T229.
Under the contract between the Hallorans and Mr Wandel, Mr Wandel agreed to pay the same price for water as he, in fact, paid to Mr Trethewey for water. This does not require the Hallorans to prove from scratch the amount of water supplied by Mr Trethewey and the cost to Mr Wandel to provide and lay the piping in exchange, where, in truth, the fact of the price paid is not in dispute. It is necessary to take a practical and common sense construction of the contract binding on the Hallorans and Mr Wandel. According to the evidence of Mr Wandel and the concession by his counsel, 87 megalitres were charged for by Mr Trethewey at a total cost of $42,345 (or $43,065 once the arithmetic is corrected) inclusive of GST. The Judge was right to rely on the invoice as setting the relevant price per megalitre.
In any event, a flow meter had been installed on the Trethewey pipeline by Mr Wandel for the purpose of recording the amount of water taken. Mr Halloran was aware of the Trethewey flow meter. Given that the water supplied by Mr Halloran was to be paid for and that it was to be paid for at a rate equivalent to the rate of payment for Mr Trethewey’s water, it was implicit in the arrangement between the Hallorans and Mr Wandel that the water coming out of the Hallorans’ dam and the water coming out of the Trethewey dam, in each case, would need to be measured. Mr Wandel had installed flow meters for this purpose. It is not open to Mr Wandel to turn around at the end of the exercise and demand that the Hallorans provide evidence from an expert that the flow meters, that Mr Wandel installed, accurately recorded the quantity of water. Having induced Mr Halloran to understand that the volume of water was to be measured by way of the flow meters, it is too late after the event and opportunistic for Mr Wandel to argue otherwise.
Finally, Mr Trethewey also gave evidence that he observed the flow meter to read 87 megalitres after his dam had been drained. He also said that he had no reason to doubt that reading.[64] Mr Trethewey demonstrated a detailed familiarity with his dam and its capacity to supply water over time. His dam had a capacity of 120 megalitres and was capable of being replenished from a spring that serviced the bottom of the dam. However, evaporation through the summer months was significant. It could lower the level by a number of feet which, over a two and a half hectare surface area, was a substantial loss of water. His dam was not full at the time Mr Wandel started to take water. Mr Trethewey was not at all surprised that Mr Wandel obtained only 87 megalitres. In other words, this meter reading was not unexpected given Mr Trethewey’s knowledge and experience with his dam.
[64] Trial transcript at T166, 182.
On the basis that the Hallorans’ did have to prove that Mr Trethewey supplied 87 megalitres (which basis I have rejected), the Judge only had to be satisfied on a balance of probabilities to this effect. Notwithstanding the absence of expert evidence as to the reliability of the Trethewey flow meter, there was ample evidence from Mr Wandel and Mr Trethewey to support such a finding.
How many megalitres of water did the Hallorans supply to Mr Wandel?
The appellant contends that there is no reliable evidence to support the Judge’s finding that the water supplied by the respondents to the appellant totalled 114 megalitres. The Judge accepted Mr Halloran’s evidence to the effect that the flow meter installed by Mr Wandel on the line running from Mr Halloran’s dam to the stream where it fed the Trethewey dam was a new meter which, according to Mr Halloran’s observation, showed all zeros at the time it was installed. The Judge also accepted Mr Halloran’s evidence, and made findings to the effect, that Mr Halloran checked the meter readings periodically and that, when Mr Wandel had finished pumping the water, the meter read 114 megalitres.[65] It was for this reason and on this basis that Mr Halloran presented his invoice to Mr Wandel claiming the supply of 114 megalitres.
[65] Reasons for judgment at [108].
Mr Wandel has challenged the accuracy of this figure of 114 megalitres on two broad bases. First, there is no or insufficient evidence that the flow meter reliably recorded the amount of water supplied by Mr Halloran and second, that the amount of 114 megalitres, recorded as leaving the Halloran dam, was inconsistent with various readings taken from the flow meter on the Wandel side of the Trethewey dam. In short, there was evidence from Mr Wandel to the effect that the total amount of water that passed through the Trethewey flow meter had been less than the combined amounts of 114 megalitres said to have passed through the meter on the Hallorans’ side and the 87 megalitres recorded, in the first instance, when the Trethewey dam was drained and before the dam was supplemented by the Halloran water. The appellant contends that this alone suggests that the reading of 114 megalitres on the flow meter on the Halloran side may be unreliable.
There is also an issue arising from, what appears to be common ground, that the Halloran dam when full has a maximum volume of appreciably less than 114 megalitres. However, this potential issue evaporates when regard is had to the Judge’s finding, based on the evidence of Mr Halloran,[66] that the respondents’ dam was fed by a spring. As such, the volume of the water in the dam did increase over time, as and when supplemented by the spring, and it was possible for the volume of water taken from the Hallorans’ dam to exceed the capacity of the dam.[67]
[66] Trial transcript at T227.
[67] Reasons for judgment at [124].
The Judge found that the best evidence on this topic was the reading on the new flow meter installed on the line leading from the Hallorans’ dam to Mr Trethewey’s dam. There was no evidence to contradict Mr Halloran’s evidence that the flow meter started at zero and finished at 114 megalitres.[68] The appellant complains that the Judge relied on calculations, made by Mr Halloran, of the volume that his dam would hold. The Judge did refer to this evidence and appeared to be comforted by it, although I put it no higher than this. Given that the dam was spring fed, as just now discussed, the actual volume of water that the dam could hold is not of particular assistance. On my reading of the judgment, I am satisfied that the Judge, essentially, relied upon the meter reading.
[68] Reasons for judgment at [127]-[128]. Mr Wandel confirmed in his evidence that the flow meter showed 114 megalitres, trial transcript at T584.
That an inconsistency between the meter reading on the Hallorans’ side as compared with the final meter reading on the Wandel’s side might be inferred is of no assistance to Mr Wandel. The agreement with Mr Halloran was to acquire and pay for all of the water that left his dam. The arrangement put in place by Mr Wandel was that a pipe from the Hallorans’ dam was to terminate in the headwater of a spring that fed Mr Trethewey’s dam from where it was piped to Mr Wandel’s pivot. There was scope for water leaving the Hallorans’ dam to be lost by way of evaporation, spillage or other unknown but conceivable means.
Precisely what happened to all of the water once it left the Hallorans’ dam and passed through the flow meter until some or all of it arrived at the Wandel pivot is of no concern. As I have said, the agreement between the parties was that Mr Wandel would acquire water from the Hallorans’ dam and pay for it. How he achieved this, what he did with the water and what happened to the water once released was entirely the concern of Mr Wandel. In these circumstances, the Judge was right to rely solely on the evidence that served to demonstrate the amount of water that left the Hallorans’ dam.
After agreeing with the Hallorans to pay for the water, Mr Wandel supplied a new flow meter for the purpose of measuring the amount of water that was to leave the Halloran dam. By implication, this was the means by which the volume of water would be measured in order to be paid for. Mr Wandel should not be permitted, after the event, to insist on the respondents proving the reliability of the flow meter which Mr Wandel installed for the very purpose now relied on by the respondents. The evidence, before the Judge, when accepted, was capable of establishing, on a balance of probabilities, that 114 megalitres left the Halloran dam.
The Judge was correct to find that Mr Wandel had acquired from the Hallorans 114 megalitres of water to be paid for at the same price Mr Trethewey as a matter of fact, paid for his water, that is, $487 per megalitre inclusive of GST. The arithmetical error, earlier identified, should be ignored. The Trethewey invoice recorded the total payable, inclusive of GST, (albeit, incorrectly) as $42,345. This was the final or total invoiced charge, as recorded, and it was open to the Judge to adopt it. On this approach, Mr Trethewey would not have “recovered” the full amount of the GST noted on the invoice.
The Judge was correct to calculate the respondents’ entitlement in this way so as to total $61,160 inclusive of GST, albeit, that this is slightly less than the amount of $62,700 claimed in the statement of claim.[69]
[69] In drawing the statement of claim, the solicitors for the respondents apparently relied on the figure of $550 per megalitre inclusive of GST relied on by Mr Halloran in the invoice of 29 May 2010.
I turn to consider briefly the various grounds of appeal that relate to the water supply arrangement.
Appeal grounds (A), (B), (C), (K), (L) and (Z) all assert that the Judge erred in deciding the matter on the basis of evidence that fell outside the respondents’ pleaded case. I have already dealt with and rejected this contention.
Appeal grounds (E), (F), (K) and (L) combine to assert that the Judge should have found on the evidence there was no contract proved or, in the alternative, there was no agreed term as to price proved. Again, this contention has been dealt with. It depends, essentially, on the evidentiary contest between Mr Halloran and Mr Wandel and upon the application of the principles identified in Fox v Percy.[70]
[70] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118.
The appellant contends in appeal grounds (G), (H) and (I), to the effect, that the Judge should have found that the arrangement between Mr Wandel and Mr Trethewey did not include agreed terms as to price per megalitre. This has been dealt with in the earlier analysis. In a sense, the nature of the agreement between Mr Trethewey and Mr Wandel, in its executory state, is of no relevance. What is important is that, as a matter of fact, the rate charged and paid for the Trethewey water was the equivalent of $487 per megalitre (GST inclusive).
It is contended in appeal ground (J) that the Judge failed to make findings as to the terms of the contract. This ground must also fail. In paragraph [92] of the reasons for judgment, the Judge found that the respondents agreed to supply water. In paragraph [114] of the reasons for judgment, the Judge found that it was clear to the parties that the respondents wanted the same price that the defendant was paying to Mr Trethewey and that the appellant agreed to pay the same price as he was paying to Mr Trethewey. In paragraph [118] of the reasons for judgment, the Judge found, on the balance of probabilities, that there was a contract between the parties under which the appellant agreed to purchase from the respondents water at the same price as he paid for water from Mr Trethewey. Mr Wandel’s acceptance of the Hallorans’ terms was inferred from his actions in taking the water without objecting to the terms.
The appellant contends in appeal grounds (M), (N), (P), (Q) and (V) to the effect that the Judge erred in finding that 87 megalitres of water had been supplied by Mr Trethewey. For the reasons already given, whether or not Mr Trethewey supplied more or less than 87 megalitres as a matter of fact is not an issue in contention, bearing in mind the terms of the contract between the Hallorans and Mr Wandel. As explained in more detail earlier, the Judge was correct to adopt the invoice provided by Mr Trethewey, at face value, as establishing the facts of the amount of water provided and the rate at which it had been paid for.
Appeal grounds (O), (P), (R), (S), (T), (V), (W), (X) and (Y) all appear to attack the Judge’s finding that the Hallorans supplied 114 megalitres of water. This contention has been dealt with.
By appeal ground (U) the appellant contends that the Judge erred in having regard to the evidence of stock journal prices for water. Whilst there was some evidence given along these lines the Judge, ultimately, did not rely on it nor make use of it in arriving at his decision.
Conclusion
The appellant’s attack on the judgment, ordering payment of $26,391.75 with respect to the Larcombe’s Crossing works and $61,160 with respect to the supply of water, should fail. In these circumstances, there is no reason to adjust his Honour’s order for lump sum pre-judgment interest nor his Honour’s orders with respect to the costs of the trial. The appellant does not challenge either of these matters, independently of the appeal on the substantive issues. I would dismiss the appeal.
BAMPTON J.
I would dismiss the appeal for the reasons given by Nicholson J.
PARKER J.
I agree with Nicholson J that the appeal should be dismissed for the reasons he has stated.