KCPC Pty Ltd v Ivamar Pty Ltd

[1910] HCA 20 Hammoud Brothers P /L v. Insurance Australia Ltd [2004] NSWCA 366 Isles & Nelissen (2021) 65 Fam LR 1; [2021] FedCFamC1F 295 Jagatramka v Wollongong Coal Ltd [2021] NSWCA 61 K v The Queen (1997) 22 Fam LR 592 Kizbeau Pty Limited v WG & B Pty Ltd (1995) 184 CLR 281; [1995] HCA 4 Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11 M v M (1988) 166 CLR 69; [1988] HCA 68 Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184 McCormick v Riverwood International (Australia) Pty Ltd (1999) 167 ALR 689; [1999] FCA 1640 Morley v ASIC (2010) 247 flr 140; [2010] NSWCA 331 Neat Holdings Pty Limited v Karajan Holdings Pty Limited (1992) 67 ALJR 170; [1992] HCA 66 New South Wales Land and Housing Corporation v Australia and New Zealand Banking Group Limited [2015] NSWSC 176 New South Wales v Hathaway [2010] NSWCA 184 Nobile v National Australia Bank Ltd [1987] ATPR 40-787; [1987] SC 55-580 Qantas Airways Limited v Gama (2008) 167 FCR 537; [2008] FCAFC 69 Ryan v Wright [2004] NSWSC 749 Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) (2019) 99 NSWLR 317; [2019] NSWCA 11 Vieira v O'Shea [2012] NSWCA 21 Weissensteiner v The Queen (1993) 178 CLR 217; [1993] HCA 65 Wilson v Wilson (1854) 5 HL Cas 40; (1854) 10 ER 811 Texts Cited: Stephen Odgers, Uniform Evidence Law, 12th Ed, Thomson Reuters) Justice Dyson Heydon AC, Cross on Evidence (12th ed, 2019, LexisNexis) Category: Principal judgment Parties: KCPC Pty Ltd (First Plaintiff) Khatambuhl Somerset Pty Ltd (Second Plaintiff) Silknote Pty Ltd (Third Plaintiff) Patricia Anne Wallace (Fourth Plaintiff) Ivamar Pty Ltd (First Defendant) Mark Ivan Burke (Second Defendant) Ivan Burke (Third Defendant) Representation: Counsel: A Connolly (Plaintiff) P Bolster (Defendant)

Solicitors: Rockliff Snelgrove Lawyers (Plaintiff) Manning Valley Legal & Conveyancing (Defendant) File Number(s): 2020/207061

INTRODUCTION

1. These proceedings broadly concern two families: the Wallaces and the Burkes. The Wallace family acquired three properties ("the properties") near the Manning River and Khatambuhl creek in Northern New South Wales, two in Cundle Flat and one in Mount George, in their own right or through companies established by the Wallace family for the purposes of developing an agricultural business. In the course of developing that business, Harry Wallace employed Ivan Burke as a station hand at one of those properties. Ivan Burke and the Burke family had historically resided in Cundle Flat and undertook farming work in the surrounding Mount George (Manning River) region ("the region") [1] . Over time, a close professional and personal relationship developed between Harry and Patricia Wallace and Ivan and Colleen Burke. This culminated in shared overseas trips and the attendance of special familiar events such as weddings and funerals.
2. The employment relationship between the Wallaces [2] and Ivan Burke commenced with Ivan performing work as a station hand. However, in 2010 the professional relationship between the families transformed into yearly lease arrangements that delegated complete management of the properties to the Burkes [3] including Ivan's son, Mark, with the central activity being the rearing, maintenance and sale of cattle. Those yearly arrangements continued until 2014 when a four-year lease agreement ("2014 Lease Agreement") was established. In 2017, another four-year lease agreement (the "2017 Lease Agreement") was entered into.
3. At least from the beginning of 2019, the region experienced drought which reached its peak at the end of November 2019. In November and December of 2019 bushfires broke out which burnt boundary fences on one of the properties (the Burkes were involved in fighting the fires).
4. After a meeting between representatives of the Wallaces and the Burkes on 28 November 2019 ("the November 2019 meeting"), the 2017 Lease Agreement was terminated on and from 1 December 2019. [4] By the time of the termination of the 2017 Lease Agreement, the Burkes were 10 months in rent arrears.
5. Thereafter, the Burke family supplied feed for a short period until the Wallace's took over the purchasing of feed to maintain the cattle on the properties. [5]
6. The Burke family continued to work on the properties. The nature and terms of those arrangements for work were controversial.

PROCEDURAL HISTORY

1. By a Statement of Claim, filed on 14 July 2020 ("SOC"), KCPC Pty Ltd ("KCPC"), Khatambuhl Somerset Pty Limited ("KS"), Silknote Pty Limited ("SN"), and Patricia Anne Wallace ("Patricia"), herein after referred to collectively as "the plaintiffs" or "the Wallaces" (or "the Wallace family"), brought proceedings against Ivamar Pty Ltd ("Ivamar"), Mark Ivan Burke ("Mark") and Ivan Charles Burke ("Ivan"), herein after referred to collectively as the "the defendants" or "the Burkes" (or "the Burke family").
2. The defendants filed a Defence on 24 August 2020, which was thrice amended. The final amended Defence ("FAD") was filed on 18 October 2020. The defendants also filed a cross-claim on 24 August 2020, which was thrice amended. The final amended cross-claim ("CC1") was filed on 18 October 2022.
3. The plaintiffs filed a Defence to the cross-claim ("DCC") on 17 November 2020. The plaintiffs additionally filed a cross-claim ("CC2") on 5 December 2022. There has been no Defence to the second cross-cla Annexures (1509009, docx) im filed by the defendants.
4. These proceedings took place over a five-day hearing on 5, 6, 7, 8 December 2022 and 31 March 2023. In between 8 December 2022 and the resumption of the matter in 2023, a mediation between the parties took place under Court order which was ultimately unsuccessful.

DRAMATIS PERSONAE

1. At the outset of this factual background, it is useful to identify key persons (natural or legal) and properties central to this dispute.
2. Patricia, the fourth plaintiff, was married to Mr Harry Lachlan Wallace ("Harry") who died in January 2018. Patricia and Harry, as well as the Khatambuhl Creek Trust and its trustee, KS and KCPC were parties to the 2017 Lease Agreement, as were Ivan, Mark and Ivamar.
3. Mr John Wallace ("John") and Ms Kirstie Anne Wallace ("Kirstie") were the children of Patricia and Harry and took over management of some Wallace family companies, in the capacity of directors, as Harry and Patricia aged. [8]
4. The properties, that the Wallace family either owned or controlled through companies, can be described as follows: [9] 1. The first property, "Somerset", was 2,200 acres, on the south bank of the Manning River, and was owned by the second plaintiff, KS. 2. The second property, "Westwood Park", was 165 acres, on the north bank of the Manning River, and was owned by the fourth plaintiff, Patricia. 3. The third property, "Khatambuhl", was 8,500 acres, straddled Khatambuhl creek north of the Manning River, and was owned by the third plaintiff, SN.
5. Most of the Wallaces' cattle were on Somerset. [10] There was a much smaller number of cattle on Westwood. Combined, those two properties were nearly double the size of the cattle on Khatambuhl. [11]
6. Khatambuhl is one of the largest stations in the region. There are two valleys in Khatambuhl that are divided by a range which comes from the south end. There are escarpments of each side of the range. There is a creek which runs through the centre of the property.
7. Mark, the second defendant, is the son of the third defendant, Ivan. Mark and Ivan are the sole directors of the first defendant, Ivamar.
8. A description of the additional parties who provided evidence in this hearing are as follows: 1. Mr Hannaford swore an affidavit dated 22 February 2021 indicating that he was a stock and station agent of Hannaford Stock & Land Australia ("HSLA") who conducted the cattle count on the properties from February to March 2020. 2. Mr Mark Willock ("Mr Willock"), swore an affidavit dated 22 February 2021 indicating that he was the accountant of the plaintiffs and had been an accountant for members of the Wallace family and the companies run by the family for over 15 years. 3. Mr Lindsay Thomas McLoughlin ("Mr McLoughlin"), swore an affidavit dated 7 May 2021, indicating that he was the brother-in-law of Ivan and the uncle of Mark. Mr McLoughlin lived in a house on the Khatambuhl property. 4. Mr Peter Damian Fry, swore an affidavit dated June 2021, indicating that he was employed by the Burke family and undertook work at the properties between 2013 and 2020. 5. Mr Benjamin John Lockhart, swore an affidavit dated 18 May 2021, indicating that he transported cattle for the Burke family.

ISSUES AND CLAIMS

1. The parties prepared a joint memorandum of issues ("JMOI"). Whilst the parties did not delineate the issues by reference to causes of action, it is appropriate that issues be corralled in this way. The three broad causes of action were as follows: 1. Breach of contract (and cross-claims by the defendant in that respect); 2. Breach of Australian Consumer Law ("ACL"); and 3. Miscellaneous claims made by the defendants.

Breach of contract (and cross-claims)

1. Under the first of those causes of action, the plaintiffs prosecuted a claim on these alternative bases: 1. breaches of the 2017 Lease Agreement; 2. breaches of an agreement said to be reached in consequence of the termination of that lease in November 2019 (which included a contest as to whether such an agreement was reached); 3. breaches of the agreement on or about 23 January 2020 (the "January Agreement").
2. The particularisation of those claims only fully materialised during the course of the plaintiffs' submissions. The claims for damages in these respects were as follows: 1. Payment of $34,000 plus interest, equalling $37,400, for outstanding rent from the defendants due under the 2017 Lease Agreement; 2. Payment of $49,500, for the unpaid portion of the purchase price for the sale of "Plant & Equipment" under cl 3 and appendix I of the 2017 Lease Agreement; 3. Payment for the unpaid portion of sale proceeds, being 15% of the total sales over $700,000 (as per cl 11 of the 2017 Lease Agreement), for the financial year from 1 July 2017 to 30 June 2018; 4. Payment for the unpaid portion of sale proceeds, being 15% of the total sales over $700,000 (as per cl 11 of the 2017 Lease Agreement), for the financial year from 1 July 2018 to 30 June 2019; 5. Damages for the market value of the shortfall in the number of cattle counted, between February and March 2020, in comparison to the 'heard profile' set out in cl 1(d) of the 2017 Lease Agreement or in the Agreement that followed the termination of the 2017 Lease Agreement; 6. Damages for breach of the 2017 Lease Agreement that required regular maintenance of the fences on the properties.
3. The claims in 1 and 2 of the proceeding paragraph were admitted by the defendants (collectively "the admitted matters").
4. I also note at this juncture that the plaintiffs confirmed (in their written submissions) that they abandoned their pleaded claims for damages in four respects: for the return of missing property of the first plaintiffs; arising from a breach of the defendants' obligations under the 2017 Lease Agreement to manage the herd profile via ensuring each animal received a NLIS tag arising from diverted feed from the first plaintiffs' cattle to cattle not owed by the plaintiffs; arising from the agistment of cattle not owed by the plaintiffs on the plaintiffs property.

The Lease 1. The parties to the 2017 Lease Agreement and whether Ivan and Mark are parties to it; 2. Whether the number of cows required for the full complement of the KCPC herd was 1222 (as contended for by the plaintiffs) or 1122 (as contended for by the defendants); 3. Whether the numbers of cattle in the herd on 1 December 2019 were below the herd profile numbers (1222 or 1122 cows, 556 calves, 620 weaners, 29 bulls); 4. Whether the defendants breached their obligation under the 2017 Lease Agreement to maintain the Herd Profile; 5. How much the defendants are liable to pay the plaintiffs under cl 11 of the 2017 Lease Agreement in respect of sales of cattle in the year ended 30 June 2018; 6. How much the defendants are liable to pay the plaintiffs under cl 11 of the 2017 Lease Agreement in respect of sales of cattle in the year ended 30 June 2019; 7. Title to the plant and equipment on the properties other than the Sale P&E (listed in Appendix 1 to the 2017 Lease Agreement); 8. Whether the defendants wrongly removed the chattels listed in [41] of the SOC (excluding irrigation pipes) from the properties and are liable either to return those chattels to the plaintiffs or pay damages for their value; 9. Whether the defendants failed to carry out regular maintenance of fences on the properties in breach of the 2017 Lease Agreement; 10. Whether the defendants are liable to pay damages, and if so their quantum, for the cost of maintenance work to fences on the properties incurred by the plaintiffs.

The Agreements Reached subsequent to termination of the 2017 Lease Agreement 1. Whether the matters set out in sub-paragraphs 17(a) to (q) of the SOC were agreed upon by the plaintiffs and the defendants at the November 2019 meeting or at the January meeting, and whether the matters set out in subpars 17(b) (in part), 17(h) and 17(l) were agreed upon at all; I interpose to set out sub-pars 17(a)-(q) of the SOC: 17. On or about 28 November 2019, the plaintiffs and the defendants agreed as follows: a. The 2017 Agreement would be terminated with effect on and from 1 December 2019. b. On 1 December 2019, the defendants would hand the herd over to KCPC with cattle numbers in accordance with the Herd Profile and thereafter manage the herd for KCPC in accordance with the usual practices of the beef cattle industry and otherwise manage the Three Properties in accordance with good rural land management practices. c. On and from 1 December 2019, the defendants would not be permitted to sell any animals in the herd without the consent of the plaintiffs. d. The defendants would be permitted to sell up to 400 head from the herd (being cattle surplus to the Herd Profile) during December 2019 and retain the proceeds from the sales after paying arrears of rent and the outstanding balance of the purchase price for the Sale P&E. e. The defendants would not be required to pay rent for any month later than November 2019. f. The plaintiffs would be responsible for all outgoings for Khatambuhl Creek, Westwood Park and Somerset after November 2019. g. The plaintiffs would be responsible for paying for ongoing feed for the herd after mid-December 2019. h. Until the earlier of 30 April 2020 and the date when all the cattle in the herd had been sold, the plaintiffs would pay the defendants a total of $2,400 per week to cover the labour of the second and third defendants and fuel for each of them. i. The defendants would invoice the plaintiffs on a monthly basis for the cost of any casual labour by other workers. j. In the period from 1 January 2020 to 30 June 2020 inclusive, the defendants would receive 10% of the proceeds of the sale of any cattle from the herd net of the costs of sale and the costs incurred by the plaintiffs in feeding the cattle. k. In respect of all sales of cattle from the herd: i. the sales had to be sales on behalf of KCPC; ii. documentation of the sales had to be sent to the plaintiffs; and iii. funds from the sales had to be deposited into the bank account of KCPC l. The defendants were to provide the plaintiffs with a plan for feeding the cattle in the herd (on the assumption that the herd would pe de-stocked by 30 April 2020). m. KCPC would pay for all stockfeed itself, rather than reimburse purchases made by lvamar. n. The second defendant would vacate and clean up Somerset house and the bunkhouse by 30 June 2020. o. The plaintiffs would pay for materials for any new fencing. p. Any bulldozer work, timber harvesting or other additional work was to be discussed and agreed between the plaintiffs-and the defendants. q. The agreement of 28 November 2019 was without prejudice to the plaintiffs' accrued rights under the 2017 Agreement. I continue with the issues under the heading 'Agreement reached subsequent to the termination of the 2017 Lease Agreement': 1. Whether the defendants were under an obligation under the alleged November 2019 Agreement to hand over the herd with cattle numbers in accordance with the Herd Profile, and whether that obligation was breached; 2. Whether the defendants were liable under an alleged agreement made in January 2020 to pay the plaintiffs the market value of the shortfall of cattle found on the 2020 cattle count;

Cross-claims by the defendants under the January Agreement

1. The issues associated with the defendants CC1 was as follows: 1. Whether the email from John to Mark on 23 January 2020 ("the January 2020 email") records the terms of an agreement made between the plaintiffs and the defendants at that time; 2. If the January 2020 email does record an agreement, whether the defendants are estopped from relying on the terms referred to in the particulars to par 14 of the CC1; 3. Whether the plaintiffs are liable by virtue of the January Agreement to pay three invoices issued to KCPC; 4. Whether in April 2020 the defendants were engaged by Mr Hannaford (as the agent of the plaintiffs); 5. Whether the plaintiffs are liable by virtue of the January Agreement to pay two invoices issued by the defendants to Mr Hannaford; 6. Whether the defendants are entitled to remuneration as pleaded in par 24 of the CC1.
2. The claims advanced by the defendants in this respect were not clearly articulated in the CC1. I will take a moment at this juncture to discuss them.
3. By the time of the final submissions, the claims made by the defendants, in this respect appear to be as follows: 1. Payment of $160,338.75 for unpaid invoices for works completed by the Burkes after the termination of the 2017 Lease Agreement; and 2. Payment of 10% of the net proceeds of cattle sold by the plaintiffs between 1 January 2020 and 30 June 2020; and 3. Payment of $20,000 to cover "all old issues of expenditure" on the properties by the defendants; and 4. Return of the defendant's property, listed in a table that appears in the CC1.
4. I will now break down, one by one, each claim. Prayer 1 is extracted from CC1 and affirmed in the closing written submissions. Prayer 1 comes from both the CC1 and closing written submissions.
5. Prayer 3 appears in the closing written submissions as "[t]he agreement [sic] regarding the $20,000 should be enforced". I have made the assumption that the "agreement" being referred to appears in the January 2020 email that alleges to sum up the January meeting between the Wallace's and the Burke's where it was allegedly agreed there will be a one-off payment by the Wallace family to the Burke family of "$20,000 to cover all old issues i.e./equipment, hay sheds etc this will be paid prior to 30th June".
6. Prayer 4 appears in the CC1 as "[a]n order permitting the Cross-Claimants to access the Cross-Defendants' properties for the purpose of retrieving the Cross-Claimants 'plant & Equipment located on the properties". The same claim appears in the defendant's closing written submissions as "[t]he plaintiffs should also be required to deliver up the Burkes personal property". The personal property being referred to appears in the table in CC1 at [41].

Australian Consumer law

1. The plaintiffs claimed damages under ss 236 and 237 of the ACL (which appear in Schedule 2 of the Competition and Consumer Act 2010 (Cth)), for misleading and deceptive conduct pursuant to s 18 of the ACL, in relation to the representation that there were enough cattle for the defendants to sell 400 animals in December 2019 and the 'herd profile' would still remain intact. The issues identified in that respect of the JMOI were as follows: 1. Whether the defendants at the November 2019 meeting represented to the plaintiffs that there were enough animals in KCPC's herd on the properties that the defendants could sell 400 animals from the herd in December 2019 and the herd profile would remain intact; 2. Whether the defendants represented to the plaintiffs on or about 20 January 2020 that the herd profile of 1222 cows, 556 calves, 620 weaners and 29 bulls was then intact; 3. Whether the plaintiffs relied on that herd number representation in the manner pleaded at [36] of the SOC, or on the January herd profile representation in the manner pleaded in [6] of the CC2. Paragraph 36 of the SOC was as follows: 36. The plaintiffs relied on the Herd Number Representation: a. by agreeing with the defendants on or about 28 November 2019 that the defendants would be permitted to sell up to 400 animals from the herd in December 2019; b. by not requiring on or about 28 November 2019 and later that a count of the cattle on the Three Properties be undertaken in late November or early December 2019; c. by agreeing with the defendants on or about 28 November 2019 that the defendants would manage the herd after 30 November 2019 and would be remunerated for doing so; d . by agreeing with the defendants on or about 28 November 2019 that the defendants would receive 10% of the proceeds of the sale of any cattle from the herd net of the costs of sale and the costs incurred by the plaintiffs in feeding the cattle. Paragraph 6 of the CC2 was as follows: 6. The Plaintiffs relied on the 2020 Herd Profile Representation: a. by agreeing with the Defendants on or about 20 January 2020 that the Defendants could retain the proceeds of the sale in December 2019 of up to 400 head of cattle from the herd; b. by agreeing with the Defendants on or about 20 January 2020 that, as an incentive, from 1 January 2020 to 30 June 2020 only and inclusive, from all sales of KCPC cattle the Defendants would receive 10% of the sale price less the costs of sales (being commission, fees and transport costs) and the cattle feeding costs (including freight and feeding equipment); c. by agreeing with the Defendants on or about 20 January 2020 that, from 1 December 2019, subject to the provision of invoices containing correct information and weekly activity reports, the Plaintiffs would pay the Defendants $6,000 plus GST per week to cover all labour of both management and casuals to run the Three Properties seven days a week, all workers' on-costs (including workers' compensation, superannuation and overtime), all equipment (whether the Defendants' own or from an external source) and running costs (being fuel, repair and maintenance, registration and insurance), and further subject to review of the arrangement in April and June 2020 based on cattle numbers and general workload; d. by agreeing with the Defendants on or about 20 January 2020 that the Plaintiffs would pay to the defendants a one-off payment of $20,000 prior to 30 June 2020 in relation to all claims by the Defendants for compensation in relation to past improvements made by the Defendants to the Three Properties, to equipment and to the use of the Defendants' own hayshed. The particulars of issue 3 concerning the ACL were as follows: 1. by agreeing with the defendants that the defendants would be permitted to sell up to 400 animals from the herd in December 2019 and retain the proceeds; 2. by not requiring at the November 2019 meeting and later that a count of the cattle on the properties be undertaken in late November or early December 2019; 3. by agreeing with the defendants that the defendants would manage the herd after 30 November 2019 and would be remunerated for doing so; 4. by agreeing with the defendants that the defendants would receive 10% of the proceeds of the sale of any cattle from the herd net of the costs of sale and the costs incurred by the plaintiffs in feeding the cattle; 5. by agreeing with the defendants at the January Agreement that the plaintiffs would pay the defendants a one-off payment of $20,000. 1. Whether the herd representations in November 2019 or January 2020 constitute conduct engaged in in trade or commerce; 2. Whether the herd number representation or the January herd profile Representation was correct; 3. Whether the making of the representations in November 2019 or January 2020 constituted conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL; 4. Whether the plaintiffs have suffered loss or damage by reason of the making of those representations; 5. Whether the defendants used feed that had been purchased by KCPC as feed for KCPC cattle between mid-December 2019 and the end of April 2020 to feed other cattle; 6. Whether the defendants wrongly caused or permitted cattle other than KCPC's cattle to be agisted on Somerset between 1 December 2019 and 31 March 2020 and, if so, the quantum of damages to be paid by the defendants; 7. If the January 2020 email does record an agreement, whether the representation in January 2020 was conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL and the plaintiffs should be relieved of their obligations under the agreement.

Miscellaneous Other Issues

1. The JMOI identified three miscellaneous claims brought by the defendants as follows: 1. Whether the defendants have suffered any loss in relation to silage from a sorghum crop and, if so, in what quantum; (The claim relating to the silage by the defendants was not pressed in the defendants' closing written or oral submissions. I will treat the claim as not pressed). 2. Whether the defendants are entitled by virtue of the January Agreement to payment of 10% of all net cattle sales between 1 January 2020 and 30 June 2020; (This issue is already addressed under the breach of contract heading). 3. Whether the defendants have been unable to retrieve equipment left by them on the properties because they have been locked out of the properties and, if so, whether they have suffered any loss or damage. (This issue is mentioned in relation to the defendants' cross-claim).

FINDINGS OF FACT (INCORPORATING THE CONSTRUCTION OF THE 2017 LEASE AGREEMENT AND ANY SUBSEQUENT AGREEMENT AFTER TERMINATION OF THAT AGREEMENT)

1. The relationship between the Wallace and Burke families, as briefly outlined in the introduction, begun in the 1970's between Harry and Patricia Wallace and Ivan and Colleen Burke and over the decades developed into a significant professional and personal relationship.
2. In 1974, Ivan was appointed as a station hand at the Khatambuhl property which was purchased by Harry some years prior to that date. During Ivan's employment at the property, he undertook work to renew and upgrade fences, construct new steel cattle yards, clear areas of regrowth and slash and fertilize open areas of the property to assist in the development of the agricultural business of the Wallace family overall.
3. The close relationship between the Burke and Wallace families was demonstrated by occasions attended by both families outlined in Ivan's affidavit sworn on 9 June 2021: "(b) Along with my late wife Colleen we went as Harry 's guests to Zimbabwe, along with Wallace family members and other friends, to celebrate Pat Wallace' 60th Birthday. (c) Colleen and I also went to Vanuatu as guests of Harry and Pat Wallace and family. (d) When Colleen died suddenly in December 2002, Pat Wallace delivered a moving eulogy which outlined the connected association and closeness which our families enjoyed, along with her personal friendship with Colleen. (e) Along with members of my family, I went to India for Andrew Wallace's wedding. (f) I and members of my family enjoyed a time with the Wallace Family in the Cook Islands. (g) When my daughter, Kate and her husband Clem Ayres were married at Woolgoolga, in July 2017, Harry and Pat Wallace were our guests. (h) I had gone to Scotland and Thailand with Harry and Pat Wallace, during which Harry Wallace would introduce me to extended family and acquaintances as "my other son". (i) In 2006 Craig Burke and Mark Burke and myself and my brother-in-Law, Hilly Dunn went on a Kokoda Track walk with John Wallace, Andrew Wallace and other Wallace Family members, Hunter Johnson and Jake and Dan Knight."
4. Ivan described the relationship as familial, stating the following in his affidavit of 9 June 2021: "over the years from the 1970's me and my family had many associations with Harry Wallace, Pat[ricia] Wallace and their family. We had developed such a close relationship to the extent that from my observation it was as though Harry and Pat Wallace thought of, or at least treated, me and my family as an extended part of their family."

2014 Lease Agreement

1. The next lease in sequence was titled "LEASE AGREEMENT v5" but for the purposes of this judgment will be referred to as the "2014 Lease Agreement".
2. The 2014 Lease Agreement was entered into between Harry, Patricia, SN as the trustee of Khatambuhl Creek Trust, KS, KCPC and Ivan, Mark and Ivamar. [12] The 2014 Lease Agreement was signed on 5 May 2014 and the term of the agreement was from 1 April 2014 to 30 June 2017. [13] Each page of the agreement is initialled by five signatories to the 2014 Lease Agreement: Harry and Patricia, Mark and Ivan, and Kirstie on behalf of the SN as trustee of the Khatambuhl Creek Trust and KCPC.
3. The assets stated under cl 1 of the lease were: [14] "a) the property known as Khatambuhl Creek Pastoral but excluding the Top and Bottom houses and Hardes house but including Tommy's Hut b) the property known as Westwood Park but excluding Westwood house c) the property known as Somerset including the Somerset house and Bunkhouse d) the cattle herd profile that existed at 1 July 2010 being 1222 cows (being 941 cows, 194 replacement heifers and 87 culls), 556 calves, 620 weaners and 29 bulls, being a total of 2377 head (See Appendix II) e) the P&E list as attached to the 2010/11 Lease Agreement less the Toyota Ute driven by Ivan Burke plus the Excavator plus the Kubota Tractor (part-time) plus a Post Hole driller but excluding Item A(14) being the ride-on mower, Item A(18) being 3 Hiilux Utes and Item B(2) being the FIAT tractor with attachments, but with the third Hilux Ute and the FIAT tractor ownership being subject to the April and May 2014 Lease payments being made before 8 May 2014."
4. Clause 1(a) to (c) concerns property, cl 1(e) concerns motor vehicles but of most significance is cl 1(d), which deals with the number of cattle.
5. The 2014 Lease Agreement spans five pages with the first three pages making up the primary agreement. An appendix begins halfway down page three that lists the "main plant & equipment items" at the Khatambuhl and Somerset properties. Page five contains a handwritten tally ("the tally") which deals with the total cattle asset under the lease with a delineation of the cattle on each property as of 1 July 2010. The tally records 1065 cows counted at the Khatambuhl property, 70 cows counted at the Westwood Park property and 87 cows counted at the Somerset property. The sum of those numbers is 1222 cows, which is recorded correctly as the total number of cows in the tally and in cl 1(d) of the 2014 Lease Agreement. The tally further showed a total of 556 calves, 29 bulls and 620 weaners being the total cattle counted across the three properties.

2017 Lease Agreement

1. The 2017 Lease Agreement substantially replicated the 2014 Lease Agreement. It was entered into between the same parties. These parties are specified in the preamble to the 2017 Lease Agreement, the signature provision of the 2017 Lease Agreement and John's affidavit of 22 February 2021 at [12]. [15] It was signed by the Burke parties on 3 April 2017 and the Wallace parties on 24 April 2017. The anticipated term [16] of the agreement was from 1 July 2017 to 30 June 2021. [17]
2. The assets stated under the 2017 Lease Agreement in cl 1 were very similar to those under the 2014 Lease Agreement. In relation to the real property and motor vehicle assets, cll 1(a)-(c) were the same except the "Jane Russell blocks" were included in cl 1(a) rather than "Tommy's Hut", and cl 1(e) does not appear. Most significantly, cl 1(d) in the 2017 Lease Agreement is identical to cl 1(d) in the 2014 Lease Agreement but does not contain the parenthetical words "(being 941 cows, 194 replacement heifers and 87 culls)" to describe the make-up of the herd of cows­. Clause 1 is extracted below: "1. Assets The assets included in this agreement are: a) the property known as Khatambuhl Creek Pastoral Co but excluding the Top and Bottom houses and Hardes house but including the Jane Russel blocks. b) the property known as Westwood Park but excluding Westwood house c) the property known as somerset including the somerset house and bunkhouse, d) the cattle herd profile that existed at 1 July 2010 being 1222 cows, 556 calves, 620 weaners and 29 bulls, being a total of 2377 head (See Appendix II)"
3. The 2017 Lease Agreement spans five pages with the first four pages making up the primary agreement. Appendixes I and II appear on page five and are both typed. Appendix I of the 2017 Lease Agreement provides a "Valuation of equipment for Mark Burke". Appendix II is titled "Cattle numbers" for 30 June 2010 and consists of a table with columns bearing the titles, "year", "cows", "calves", "weaners", "bulls" and "total". The entries for each column are as follows: the cows are recorded as "1122", the calves are recorded as "556", the weaners are recorded as "620", the bulls are recorded as "29" and the total is recorded as "2377". I note that Appendix II provides less details of the breakdown of the herd profile compared with the tally that appears in the 2014 Lease Agreement. As earlier mentioned, both parties accept that 2377 is an incorrect sum of the total cattle.

Construction of the 2017 Lease Agreement: Issue of cattle numbers specified in the 2017 Lease Agreement

1. Counsel for the plaintiffs submitted that ascertaining the correct "definition of the herd profile" in the 2017 Lease Agreement is to be resolved as a matter of construction. Counsel for the defendants did not identify the means of resolving the issue or, in substance, address this issue other than making reference to 1122 cows in his closing written submissions. In my view, the plaintiffs are correct.
2. As mentioned, there is an inconsistency between the figure of cows stated in cl 1(d) of the 2017 Lease Agreement, being "1222", and the figure of cows stated in Appendix II of the 2017 Lease Agreement, being "1122". The resolution of this discrepancy is a matter of construction as it requires the Court to construe the 2017 Lease Agreement.
3. A related issue, is what is the correct total number of cattle under the herd profile having regard to the 2017 Lease Agreement. It was common ground that the number of cattle was incorrectly recorded in both the 2014 and 2017 Lease Agreements as 2377. The plaintiffs submitted a finding of cow numbers at 1222 would yield a total of 2427 cattle, whereas the defendants contended the herd profile was a total of 2327 cattle corresponding to its contention as to the proper construction of the 2017 Lease Agreement as to the number of cows.
4. As to the first proposition, counsel for the plaintiffs submitted that the figure for cow numbers under the 2017 Lease Agreement and corresponding sum of cattle under the herd profile "can be corrected as a matter of construction of the 2017 Agreement either by applying the principle of falsa demonstratio non nocet or by recourse to the surrounding circumstances in which the 2017 Agreement was made".
5. Counsel sought to rely on the authority of Ryan v Wright [2004] NSWSC 749 ("Ryan v Wright") stating that "Gzell J found that a restraint provision in a contract was not unenforceable due to inaccuracy in the contract's definition of "business" and that the inaccurate description should be struck out as a falsa demonstratio".
6. Ryan v Wright was a case where Mr Ryan and DeMorgan Pty Ltd ("DeMorgan") brought proceedings against Mr and Mrs Wright for contempt of Court for breaching an undertaking given to the Court to refrain from, in broad terms, directly or indirectly carrying on a business in competition with DeMorgan and directly or indirectly approaching a customer of DeMorgan (at [3]). Mr Ryan was a shareholder of DeMorgan and Mr and Mrs Wright were former shareholders of DeMorgan. Mr and Mrs Wright were sole shareholders of Ridges Estate Pty Ltd ("Ridge"). The undertakings given to the Court resembled cl 13.1(a) in the shareholder agreement of DeMorgan, which counsel for the plaintiffs referred to as the 'restraint clause', which read as follows: "Notwithstanding any other provisions of this Agreement, the Shareholders must not do any of the following things during the period commencing on the date of this Agreement and ending three (3) years after a Shareholder ceases to be a Shareholder or a Director ceases to be a Director of the Company without the prior written approval of the holders of at least 90% of the Shares: - (i) directly or indirectly carry on a business in competition with the business of the Company or its Associates; (ii) directly or indirectly approach an agency who is a customer of the Company or its Associates."

The November 2019 Meeting

1. The meeting proceeded between John, Kirstie, Mark and Ivan on 28 November 2019. The meeting was also attended by Mr Willock who, as outlined by the dramatis personae, was the accountant of the plaintiffs. By this stage, the Burke family were 10 months in rent arrears. Kirstie gave evidence that she took notes during the meeting. These are extracted below: "Been in drought effectively 2013. Insignificant damage. Fencing problems, KC OK for ground-cover, estimate fencing - difficult. Wieners: 800, cows - 1200, Calves - 500, Bulls - 27 (40 deaths) No cows over 7 years. Age 2-4 cows:325, 4-6 cows (1300 at Somerset, 115 Westwood, balance at KCPC) Drought for 2 years. Exit Strategy: $10,000 a day feed. Strategy: selling down the young cattle. Have to feed calves until they are at age. Terminate Lease decision made. Burkes requested time to think about it. MB says he can feed for $60,000 a month so 3 months $180,000. What are the next stages: 6 month clause. 2,200 cattle returned + rent. $40,000 P&E owed. MB said he would sell and repay. 2 weeks left for feed. $240,000 to grain-feed 1200 cows. $350,000 Send 400 off to export in next 2 weeks: $750-$1000 sale price Discussed the strategy of keeping KCPC and selling Somerset. 3-4 month feed plan and sale plan. Management plan. $500,000 due in with cattle sales. Owes tractor. Only enough feed for 2 weeks. 6 months selling all the herd. $350,000 coming in will pay Burke debts. We chip in the $350,000 for the feed. Come up with a herd value. Fences - critical - Dalrae. Actions: priority boundary fences."
2. Following this meeting, an email was sent from Kirstie to John, Mark and Mr Willock on 29 November 2019 with the subject line "Memorandum of Understanding - Burke Family and Wallace Family". The email of 29 November 2019 ("MOU") [28] read as follows: "Dear Mark & Ivan, Further to our meeting yesterday conclusions and actions are as below: 1. As of 1st December Wallace Family (WF) and the Burke Family (BF) by mutual agreement agree to the termination of the Lease signed and dated 24/4/2017. 2. The number of the herd outlined in the Lease Clause 1 are: 1222 Cows + 556 calves + 620 weaners + 29 bulls. 3. As of 1st December, cattle cannot be sold without consent of the WF. 4. WF consents to the sale of up to 400 head in December with the proceeds being used firstly to repay outstanding rent, the balance of the equipment and then any remaining funds are retained by the BF. 5. No rent required in December or ongoing until the end of the period of Lease. The WF will assume payment of all outgoings as outlined in the Lease Clause 2.d (Rates, Electricity, Levies, Insurance, Irrigation charges). 6, The Wallace Family agree to pay for the ongoing feed of the cattle starting in mid-December. 7. WF agree to pay the Burke Cattle Co $2400 per week ($1000 per week for Ivan and Mark each, plus $200 each to cover fuel and incidentals) until 30th April 2020 or until all cattle are sold. Any other casual labour such as Kelvin or Peter should be invoiced separately on a monthly basis. 8. As an incentive, from 1st January - 30 June 2020 only and inclusive, all sales of the cattle will garner the Burkes 10% of the cattle sale prices, less costs of sale and the cattle feeding costs incurred by the WF. 9. All sales of cattle must be done through the KCPC Pty Ltd company and documentation of sales sent to the WF and funds deposited into that company's bank account. 10. The BF are to come back with a feed plan for the cattle, with an intention to de-stock the herd by 30th April. WF to pay for stockfeed directly from KCPC Pty Ltd rather than via the BF company. 11. Mark Burke to vacate and make good (ie clean up) Somerset House and the Bunkhouse by 30 June 2020. 12. WF to cover any of the material costs associated with new fencing. 13. Any bulldozer work or timber-harvesting or other additional work to be mutually discussed and agreed between the WF and BF. 14. If BF wishes to discuss a caretaker role for Khatambuhl Creek from 1 July 2020, the details and terms of the role will be decided at a future date. 15. This letter is done on a without prejudice basis. Could you please acknowledge receipt and acknowledgement of the points above via return email. Kind regards, Kirstie Director, KCPC"

Conclusion: Mutual Termination and November 2019 Agreement

1. The 2017 Lease Agreement was terminated effective from 1 December 2019 following the November 2019 meeting. By the date of the termination of the 2017 Lease Agreement, the defendants had been managing the properties for about 9 years. At the point of termination, the defendants were 10 months in rent arrears.
2. As mentioned, an issue arose in the proceedings as to whether or not the 2017 Lease Agreement was terminated by consent. [32] In that respect, I have come to the conclusion that the 2017 Lease Agreement was ultimately terminated by consent of the defendants.
3. The starting point for that assessment was the November 2019 meeting.
4. Before turning to the accounts of the November 2019 meeting, I would observe that my overall impression of John and Kirstie in cross-examination is a favourable one. Kirstie's evidence was measured, considered and frank. John's evidence may have exhibited some argumentative aspects but, generally speaking, his answers were responsive and considered. I consider they were honest and reliable witnesses, even though there is, as I have mentioned, some equivocation in Kirstie's evidence about the intention of the Wallaces' prior to the November meeting and some minor inconsistencies in their accounts at that meeting.
5. John was cross-examined as to whether he and Kirstie had determined, prior to the meeting, they would terminate the lease. His response was that, whilst both of them had in mind the prospect of termination in the circumstances, they would await the outcome of the meeting to reach a final position.
6. In certain aspects of cross-examination of Kirstie's evidence she seemed to have suggested (sometimes in combination with other propositions) that she had determined the 2017 Lease Agreement would be terminated prior to the November meeting. There is one passage of Kirstie's evidence where this issue was put squarely: "Q. had you and your brother agreed that the lease was going to be terminated. Is that right? Or was it just an option? A. It was an option. Yes, it was an option. Q. Be very clear about this? A. Okay. Q. Before the meeting began, from what I understand you're saying, termination was just an option? A. We they had already breached the terms of the lease Q. Yes. A. Okay, so, based on that, yes, we were going to terminate. Q. And you'd already decided that before you walked into the meeting? Or had you? A. Yes. Q. Two days earlier you sent an agenda for the meeting, at page 1241 of the Court book, which suggests that termination was only an option at that stage. Point 5 and with it, point 6? A. Yes. Q. Your evidence today would seem to suggest that you and your brother had discussed, and made a decision, that you were going to tell the Burkes it's all over, at the meeting? A. Unless there was some convincing information the Burkes gave us, as a result of the meeting, that was the intention, yes."

The November 2019 Agreement?

1. The plaintiffs pleaded the existence of an agreement emerging from the November 2019 meeting, the terms of which were contained in the MOU.
2. Whilst I have concluded that the parties mutually agreed to the termination of the 2017 Lease Agreement, as recorded in the MOU and elsewhere, I consider that the defendants were correct to submit that the Court should find no agreement was reached in November 2019 or thereafter in terms of the MOU, even though the MOU referred to remuneration that was to be paid to the Burkes for managing the properties and an incentive payment in respect of cattle sales both occurring from the date of termination.
3. The MOU was stated to be provided on a without prejudice basis. There were clearly terms within it that remained unresolved. No reply was provided to the email for quite some time. Kirstie followed up the email with a request for a response for 4 December 2019 and Mark responded in a manner consistent with their being remaining issues under the proposed agreement. Mark stated that things would be sorted out "this week". On 23 December 2019, Mr Snelgrove sent a communication asserting that an agreement had been made but nonetheless demanded a response by 31 December and that the arrangement was without prejudice to his clients' rights under the 2017 Lease Agreement.
4. John accepted that the MOU was merely a proposal and stated that the Burkes had accepted it when they responded in January 2020, even though variations were introduced to the terms of the purported November 2019 Agreement.
5. In classic terms of the requirement of offer and acceptance for the formation of a contract, I consider that an offer was made but no acceptance was communicated in clear and unequivocal terms: Goldsbrough Mort & Co Ltd v Quinn (1910) 10 CLR 674 at 678 (per Griffith CJ). Furthermore, if it were the case that the proposed agreement was in some way accepted, it is a real question whether acceptance was communicated.

The January Meeting

1. An email was sent by John to Mark on 16 January 2020 arranging the January meeting with the subject line "Re: Response to the MOU". The January meeting took place at Khatambuhl on the 20 January 2020 between John, Mark and Ivan. John provided a recollection of the meeting in his affidavit of 22 February 2021 which corresponds to the January 2020 email that provides a "summary of the points".
2. The January 2020 email from John to Mark is extracted below: "Hi Mark, Further to our meeting on Monday 20th Jan, please find a summary of the points: 1. All outstanding rents and equipment to be paid before 31st Jan 2020- this is $170,900 (including GST) as $56,100 was paid last week. 2. As at 30th November the following WF cattle were accounted for 1,222 cows+ 556 calves+ 620 weaners+ 29 bulls. There has been losses since the 1st Dec, with BF to provide a summary of when (dates) and where+ if possible photos of the deaths (possible inspection may be required). There needs to be a report at the end of every month. The stock count will be conducted on the proposed dates of 27th Feb .with any adjustments to be agreed and made as per Clause 10 of the Lease. 3. The herd sell down in general terms will be as follows, with copies of sales to be provided to WF; February 100 cows to Wingham abattoirs 100 weaners to Edwards for export March 200 cows to Wingham abattoirs 100 weaners to Edwards for export April 100 cows to Wingham abattoirs 100 weaners to Edwards for export Total 700 approx $550,000 * Mark to get the Wingham abattoir pricing/rate sheet 4. As an incentive, from the 1st January - 30 June 2020 only and inclusive, all sales of the cattle will garner the Burkes 10% of the cattle sale prices, less costs of sales. (commission/fees/transport) and the cattle feeding costs (including freight & feeding equipment) incurred by the WF. General estimate of herd Cows 1,222 @ $750 = $916,500 Weaners 620 @ $850 = $569,500 Calves 556 @ $400 = $222,400 Bulls 29 @ $8 00 = $ 23,200 $1, 723, 600 5. Feed costs , WF has paid $ 394,616 since December, with the following needed Required * Pellets 3 loads =$60,000 * Pasture hay 80t per week @ $300 X 6 weeks =$150, 000 $210,000 Currently at KCPC Grain - till Mid Feb Pellets - till mid Fe b Hay- 60 bales arriving this week Somerset Hay - end of Jan 6. Operations management from 1st Dec, WF will pay the BF $ 6,000 + GST per week to cover- (invoices to be supplied with correct info) a. All labour for both management and casuals to run all the properties across the 7 day week. b. All workers on -costs- (workers comp, superannuation, over-time etc.) c. All equipment (whether it be Burke's or external) and running costs (fuel/R&M/Rego/insurance) d. This will arrangement be reviewed in April & June based on cattle numbers and general work load. e. BF to provide a weekly activity report. f. WF will be appointing a selling agent- John Hannaford to assist with the cattle sales and managing the sale of Somerset, and leasing of KCPC and Westwood. BF to work with John Hannaford to organise the cattle, review feed reqs, prepare for the stock count on the 27th Feb and review the work program and have a more defined cattle sales program. 7. 1 off payment WF will pay BF $20,000 to cover all old issues ie/ equipment, hay sheds etc this will be paid prior to 30th June. 8. Somerset, BF to install new garden fence, fixed broken panels in awnings, de-clutter the house, repair the septic and re-establish the garden, remove the redundant spa and fill in, clean up the staff quarters. WF or its selling agent will have contractors come to the house to look at replacing the carpet, blinds and painting and other items needed to prepare the house. 9. KCPC priorities- BF to provide feedback on the following; a. Quotes for re -building the Baxter's boundary fence, with the Burke's labour and or using external contractors b. Negotiations with Rolf for a contribution c. Estimates for dozing the fence line d. Meeting with the Native Vegetation Manager to discuss the opportunity to clear off re-growth in Baxters and the Red-Cutting paddock, plus need to look at burned forest areas, such as House paddock, Amos, Mckays etc .. e. Fixing other boundary fences on the Paddock creek eastern side and other important internal fences, such as the Hut & Hardes 10. Caretaker role for Ivan will be discussed once cattle & Somerset have been sold. It is the intention to agist/lease out Westwood & KCPC As per Point 5 please liase with Kirstie on timing of ordering the next loads of feed. Regards John" (emphasis added)

The January Agreement

1. John did not receive a response to the above email from Mark or Ivan. In cross-examination, Ivan stated he could not recall this meeting. His evidence at [59] of his affidavit of 9 June 2021, where he discusses the January meeting, should therefore be rejected. In his affidavit of 10 June 2022 at [10], Mark describes this email from John as a "summary of our meeting on 20 January 2020". Mark's evidence in that respect is as follows: "Q. You had a meeting on 20 January, did you not? A. Yes. Q. You and your father and Mr Wallace. After that meeting Mr Wallace sent you an email on 23 January 2020. A. I believe so, yes. Q. You didn't respond to that email subsequently, did you? A. No, I think everything was decided in that meeting. Q. Your evidence is the email is a summary of the meeting? A. It's a direction from the meeting, yes."
2. I consider the email from John should be found to be an accurate record of the content of the January meeting. The email corresponds to John's affidavit and is contemporaneous to the meeting it records. In my view, the January 2020 email clearly represents an agreement reached between the parties in January 2020 in accordance with the content of that email (the "January 2020 Agreement"). I resolve the issues stated in the JMOI as to whether the email "records the terms of agreement" in these terms.
3. On 30 January 2020, KCPC paid the council rates due for each of the properties. In early February 2020, Mr Hannaford informed John that the defendants were intending to sell 200 head of cattle in mid-February. In response to this, John contacted Mr Snelgrove and on 5 February 2020, Mr Snelgrove sent a letter to Mark stating "it has come to the attention of our clients that you intend to shortly sell cattle from those properties through Wingham Abattoir." The letter also reinforced that no cattle were to be sold without authorisation from the Wallace family until a stocktake of the cattle was completed and requested a response from Mark by 10:00am on 10 February 2020, stating that he would act in accordance with those directions. No response or acknowledgement was ever received from Mark or Ivan.
4. Mr Snelgrove sent another letter to the livestock manager of the Wingham abattoir, Mr Stephen Moy, on 5 February 2020 which similarly stated, "It has come to the attention of our clients that cattle from these properties may shortly be offered for sale to you by or on behalf of Mark and/or the Burke Cattle Company." The letter stated that Mark and Ivan did not have authority to sell any cattle owed by KCPC and requested to be contacted if there was any attempt to sell KCPC cattle that could be recognised by "a registered large stock brand and earmark". A follow-up email was sent by Mr Snelgrove on 6 February 2020 to Mr Moy which also copied in Mark confirming that all the proceeds of the sale of KCPC cattle being sold are to be deposited into a bank account that John would elect and later provide those details.

General: The Plaintiff's Submissions on Breach Of Contract

1. The plaintiffs relied upon, in this respect, several causes of action. These were as follows: 1. A claim for damages based on a breach of a term of the 2017 Lease Agreement that the herd profile be maintained; or 2. A claim for damages based on breach of the agreement formed at the November 2019 meeting including the term that the defendants would hand over the herd with the herd profile intact; or 3. A claim for the market value of the missing cattle based on the agreement made in January 2020.
2. In oral submissions, counsel for the plaintiffs clarified that the above causes of actions were "alternatives".

The Plaintiffs' submissions

1. The plaintiffs made the following submissions in relation to the first claim, being the 2017 Lease Agreement: 1. The plaintiffs pleaded that cl 2(a) (that the defendants would maintain the herd profile), was a term of the 2017 Lease Agreement and that the definition of the herd profile was 1,222 cows, 556 calves, 620 weaners and 29 bulls. 2. In FAD at 15, the defendants admitted the whole paragraph 15 in the SOC but contended that the herd profile included only 1,122 cows. It is common ground, therefore, that the defendants had an obligation to maintain the herd profile, but there was an issue as to whether the correct number of cows was 1,222 or 1,122. 3. On the basis of the evidence of the cattle count and of the inadequacy of any other explanations for the shortfall found in 2020, there is strong and persuasive evidence to support the finding that the shortfall in the cattle numbers existed at the beginning of December 2019 and that the Burkes' failed at that time to hand over the herd in the requisite numbers. 4. The Court should therefore find that the defendants breached the 2017 Lease Agreement by failing to maintain the herd profile. The loss suffered by the first plaintiff is the value of the missing cattle and the offspring who would have been born to the missing cows if those cows had been present. 5. The numbers of the missing cattle are as follows: 1. 300 cows; 2. 87 calves; 3. 157 weaners; and 4. 4 bulls. 1. The lost offspring to the missing 300 cows have been estimated on the basis of a 80% birth rate to be 240, as identified in the defendants document titled "Cattle Numbers - March 2019". 2. The first plaintiff's damages have been calculated in the affidavit of Kirstie Wallace affirmed on 4 December 2021. 3. The calculations yield the following results: 1. 300 cows: $318,624.00; 2. 87 calves: $85,081.65; 3. 157 weaners: $153,538.15; 4. 4 bulls: $5,008.72; 5. 240 additional calves not born to the missing 300 cows: $234,708.00; Total: $796,960.52. 1. The first plaintiff claims damages in the amount of $796,960.52 plus interest. Interest should run from 1 December 2019, when the cattle should have been handed over, or alternatively from 1 April 2020, when the cattle could have been sold and their value realised.
2. The plaintiffs submitted that the existence of a shortfall in cattle was an important factual element to make out each of the cause of action. The plaintiffs submitted that to establish the shortfall in cattle requires consideration of the following: 1. The definition of the herd profile; 2. The reliability of the count carried out in 2020; 3. The likelihood that the shortfall was caused by events other than the failure of the defendants to provide sufficient animals in December 2019.

There was uncertainty about the herd numbers at the end of 2019

1. The plaintiffs contended that it is clear that the defendants did not keep reliable records of the stock on the properties and hence did not know how many cattle there were in November 2019 when they made a representation to the plaintiffs that there were cattle on the properties in excess of the herd profile.
2. The plaintiffs submitted that the defendants had no reasonable basis for their representation that the herd profile was intact in November 2019 and that there were strong reasons to conclude that a deficit of 548 animals on 1 December 2019 "was entirely possible and, in the absence of any plausible explanations for the shortfall found later, probable".

No lack of feed in late 2019 and early 2020

1. The plaintiffs submitted that the defendants provided feed for the cattle in the first two weeks of December 2019 and after that time the plaintiffs took over the supply of the feed for the herd. The plaintiffs bought a large amount of feed from early December 2019 onwards such that there was no reason why the cattle would die from lack of feed. Between December 2019 and March 2020, the first plaintiff spent a total of $471,393.05 on the provision of feed to the herd.
2. The plaintiffs submitted that on numerous occasions over the above-mentioned period, Mark communicated with Kirstie about the necessary feed for the herd and on 10 December 2019 Mark assured Kirstie that there was sufficient feed for the cattle. Further, it was submitted that John had visited the Khatambuhl property between 19 and 21 January 2020 "and did not see cattle that were severely emaciated" and that Mr Hannaford did not consider the cattle on the Somerset and Khatambuhl property to be distressed as such.
3. The plaintiffs submitted there was no reason why the cattle in the herd would die from lack of food.

No lack of water in late 2019 and early 2020

1. The plaintiffs submitted that the suggestion by the defendants the herd died from a lack of water was unfounded. They relied on John's statement in cross-examination that the properties had a large number of dams on them, some of which did not run out of water; Mr Hannaford's statement in cross-examination that in January of 2020 when he visited the properties, he saw water in dams and in the creek where the cattle could drink; and a statement by Mark on 23 December 2023 that there was enough water in the dams for the next few months.

The cattle did not wander away into the bush or onto other properties

1. The plaintiffs submitted that there is strong evidence against the proposition that the shortfall in cattle of the herd can be explained by cattle wandering away from the properties. The only property where wandering cattle was "potentially relevant" was Khatambuhl. The plaintiffs pointed to evidence which demonstrated that it was quite unlikely that cattle would wonder off Khatambuhl either into the bush or onto other properties.
2. The shortfall in cattle numbers cannot be explained by the theory that the cattle wandered away from the property and were not recovered.

There was a lack of evidence of the deaths of cattle.

1. The plaintiffs submitted that it can be safely inferred that the animals were not dying and the defendants' contention that the shortfall could be explained, at least in large part, by numerous deaths of animals in the herd, is mere speculation unsupported by any evidence. The evidence is rather to the contrary effect.
2. In the result, the plaintiffs submitted that a shortfall of cattle was made out which extended to each alternative subsidiary cause of action: the 2017 Lease Agreement, the agreement formed in November 2019 or the January 2020 Agreement. I will discuss the submissions on the existence of an agreement formed in November 2019 or in January 2020 under separate headings below.

The Defendants' Submissions

1. The defendants submitted that the plaintiffs' case does not establish "that there was a deficiency in the herd at the relevant time, i.e., 28 November 2019".
2. To support that contention, counsel for the defendants made submissions on the burden and standard of proof. The plaintiffs' claim was backed, in effect, on a proposition that the defendants "converted or stole the stock". From that starting point, the defendants made the following submissions: "C. Burden and standard of proof 13. The allegations that the plaintiffs make against the individual defendants, Mark and Ivan Burke, in respect of the herd leased to their company Ivamar are serious allegations and matters of high gravity to people who are experienced farmers and graziers. The implication of the allegation is that the Burkes, despite their long-standing positive relationship to the Wallace family extending back of many years, were responsible for removing from the Three Properties a significant number of stock in the period leading up to the termination of the lease on 28 November 2019. The claim is, in effect, that they converted or stole the stock. 14. Section 140 of the Evidence Act 1995 (NSW) provides as follows: 140 CIVIL PROCEEDINGS: STANDARD OF PROOF (1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities. (2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account - (a) the nature of the cause of action or defence, and (b) the nature of the subject-matter of the proceeding, and (c) the gravity of the matters alleged. 15. In Neat Holdings Pty Limited v Karajan Holdings Pty Limited [1992] HCA 66; (1992) 67 ALJR 170: 110 449 at [2], the plurality of Mason CJ, Brennan J, Dean J and Gaudron J "The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary 'where so serious a matter as fraud is to be found'. Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not likely make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct." As Dixon J. commented in Briginshaw v Briginshaw at p 711: "The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved "…". 16.Similarly, when serious allegations of sexual abuse of children are raised in Family Court parental matters, Odgers notes that the Court has held that, "the evidence must be 'very carefully evaluation' and '[i]nexact proofs, indefinite testimony, or indirect inferences are insufficient to ground a finding of abuse'" citing K v The Queen (1997) 22 Fam LR 592 at 599, 602-603. See also M v M (1988) 166 CLR 69; [1988] HCA 68; and more recently Isles & Nelissen [2021] FedCFamC1F 295. 17. The same reason applies in other similar contexts; e.g., Hammoud Brothers P/L v. Insurance Australia Ltd [2004] NSWCA 366 where at issue was whether a motor vehicle had been stolen for the purposes of a claim under an insurance policy. 18. In New South Wales v Hathaway [2010] NSWCA, at 263, the Court of Appeal observed that; "In the language of Briginshaw, the seriousness of that finding and the gravity of the consequences flowing from it are such that it requires "clear or cogent or strict proof" in order to be made out on the balance of probabilities." 19. In Morley v ASIC [2010] NSWCA 331 at [750]-[753] the Court also said: [751] As Dixon CJ put it on another occasion, what is required is "an affirmative conclusion … establish[ed] to the reasonable satisfaction of a judicial mind" (Jones v Dunkelat 305). His Honour went on to say (ibid at 308) that "[t]he facts proved must form a reasonable basis for an actual conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied." See also West v Government Insurance Office of NSW (1981) 148 CLR 62 at 66. [752] In Rejfek v McElroy the court spoke of "clear and cogent" proof. In the usual case it is, in our opinion, preferable to use the positive language of cogency to the negative language in Briginshaw v Briginshaw of "inexact proofs, indefinite testimony or indirect inferences". Both positive terminology - "adequate material to enable a court to reach a comfortable satisfaction"; and negative terminology - "uncertain inferences", was used in the relevant passage in Whitlam v Australian Securities and Investments Commission. [753] In order to be satisfied on the balance of probabilities, within the meaning of s 140, the tribunal of fact must reach an affirmative conclusion, or a definite conclusion, or an actual persuasion. This state of mind turns on the cogency of the evidence adduced before it. Relevant to the cogency of the evidence actually adduced is the absence of material evidence of a witness who could have been called and in fulfilment of the duty of fairness should have been called. In Whitlam v ASIC it was said that absent diligence in calling available evidence, a court is left to rely on uncertain inferences. The case of the party in default suffers in its cogency, and it is made more difficult for the tribunal of fact to reach an affirmative conclusion, a definite conclusion or an actual persuasion: the more so if the Briginshaw principles involving the gravity of the consequences apply. In our opinion, that is the consequence of the breach of the obligation of fairness. See generally Odgers, Uniform Evidence Law, 12th Edition at [EA.140.60-120] 20. It is to be noted that the inherent unlikelihood of an occurrence of a given description, which is referred to by Dixon J in Briginshaw, should be taken into account under s 140; Qantas Airways Limited v Gama (2008) 167 FCR 537 at [138]: "As identified above, in addition to taking into account the three matters specifically identified in s 140(2), it was open to his Honour to have regard to other relevant matters. Other relevant matters could include the inherent unlikelihood, or otherwise, of the occurrence of the matter of fact alleged (see the passage from Briginshaw v Briginshaw set out in [4] above) and the long standing common law rule that evidence is to be weighed according to the proof which it was in the power of one party to produce and the power of the other party to contradict (Medtel Pty Ltd v Courtney (2003) 130 FCR 182 per Branson J at [76])." 21 This is critical in the present case where, as will be developed in these submissions, the defendants and in particular Ivan Burke, had a long and close personal history of working closely with the Wallace, including a close relationship with the parents of the current Wallace dynasty, dating back to the 1970s; see [5] to [8] of Ivan Burke's affidavit, about which he was not challenged at CB Volume 1, p 297-298. 22. That relationship extended to Ivan and Mark taking action to protect Khatambuhl Creek and the herd that ran on it from bushfires from August 2019 onwards that led to Mrs Wallace, who was not called to give evidence, giving him a $3,000 Flight Centre gift card in November 2019, some weeks before her children made the decision to terminate the lease. 23. Against this background, the plaintiffs have elected not to call evidence or present a case that establishes where the missing cattle went if indeed the herd profile was deficient on 28 November 2019. 24. As Brennan and McHugh JJ said in G v H (1994)181 CLR 387 (a paternity case) at 391 [8]: "…when a court is deciding whether a party on whom rests the burden of proving an issue on the balance of probabilities has discharged that burden, regard must be had to that party's ability to adduce evidence relevant to the issue and any failure on the part of the other party to adduce available evidence in response. As Mason CJ, Deane and Dawson JJ explained in Weissensteiner v The Queen (1993) 178 CLR 217 at 227.": "it has never really been doubted that when a party to litigation fails to accept an opportunity to place before the court evidence of facts within his or her knowledge which, if they exist at all, would explain or contradict the evidence against that party, the court may more readily accept that evidence. It is not just because uncontradicted evidence is easier or safer to accept than contradicted evidence. That is almost a truism. It is because doubts about the reliability of witnesses or about the inferences to be drawn from the evidence may be more readily discounted in the absence of contradictory evidence from a party who might be expected to give or call "t." 25. In Director General of Department of Community Services; Re Sophie [2008] NSWCA 250 at [50], Sackville AJA, observed that: "More recent authorities have pointed out that s 140(2)(c) does not impose any hard and fast rules governing the proof of serious allegations from circumstantial evidence. The requirement stated in Briginshaw v Briginshaw, that there should be clear and cogent proof of serious allegations, does not change the standard of proof, but merely reflects the perception that members of the community do not ordinarily engage in serious misconduct." (citations omitted) 26. Similarly, in Bale v Mills [2011] NSWCA 226 at [73], the Court of Appeal comprising Allsop P, Giles JA and Tobias AJA, after referring to Re Sophie, made this observation: "[73]. The inference sought was one, but only one, possibility. The matters to which we have already referred… in discussing what was not put to Mr Schipp reveal that a recognition of error and conscious dishonesty are not the only possible explanations. The inference that Mr Schipp was aware of the error and intentionally deceived his client is a possibility. It is a possibility about which minds might differ as to whether it is sufficiently probable to be a proper inference, that is more probable than not... In our view that inference cannot be drawn as more probable than not, for the reasons set out below. Most importantly, however, could it be drawn with the requisite confidence in circumstances where that inference and its significance was never raised with Mr Schipp so that he was deprived of any opportunity to respond to it? The answer is plainly, no." 27. Lest there be any doubt about it, the plaintiffs' case is a case that the defendants engaged in serious misconduct; one that they effectively converted or stole cattle that they say were worth well in excess of $500,000. However, give the way that they have framed and prosecuted such a case, the plaintiffs have sidestepped this fundamental feature of it. 28. This can be seen in two critical ways. 29. Firstly, there is the failure of the plaintiffs to put forward a case about where the cattle went. They say they didn't die, they say they didn't wander away, they say that they were fed enough and watered enough despite the drought to survive, leaving the only possible reason to account for the deficit as active wrongdoing on the part of the Burkes. Despite this and leaving aside the evidence about the sale of the cattle by the Burkes that was agreed on 28 November 2019 they don't articulate where they went or how this is said to have occurred. 30. The plaintiffs have failed to engage with where the cattle went and offer no case theory or evidence whatsoever about how this could have happened. 31. There is not a shred of evidence that shows any movement of funds in a Burke bank account, a movement of cattle to or from a Bourke property, or a transfer of an animal under the NLIS that would support the contention that the herd was being stripped by the Burkes prior to 28 November. 32. No such case was put to either Ivan or Mark Bourke. It should have been.

The plaintiffs were in breach of the 2017 Lease Agreement in failing to carry out a herd count on or before 28 November

1. The defendants submitted that the first hurdle facing the plaintiffs was that they failed to comply with the 2017 Lease Agreement when it came to determining if there was a shortfall in the herd profile.
2. The 2017 Lease Agreement was terminated in November 2020, seven months short of its full five-year term that was to have expired on 30 June 2021.
3. Clause 10 of the 2017 Lease Agreement enabled the plaintiffs to terminate that agreement without notice, "in the event that BF has not made the lease payments in full for two consecutive months." "BF" appears in the 2017 Lease Agreement as an abbreviation for the Burke Family.
4. There is no issue that the plaintiffs were entitled to terminate the 2017 Lease Agreement at that time, given that the lessees were more than two months behind in the payment of rent, however, it was incumbent on them, having elected to terminate, to carry out the stock count that was mandated and expressed in urgent and imperative terms.
5. It was submitted this is clear from cl 10 of the 2017 Lease Agreement, which provided that: "a herd count will be made immediately prior to or on the date of termination and BF will pay WF market price for any cattle that are less that the cattle profile as set out in Appendix II."
6. The defendants submitted that the plaintiffs failed to comply with cl 10 when they terminated the 2017 Lease Agreement as no engagement was made with a qualified person to carry out the herd count for months until Mr Hannaford was engaged to do so in February 2020. Furthermore, this failure is made worst by the fact that John agreed that he, Kirstie and Mr Willock had discussed the fact that they needed to do a stock take if they did terminate the lease.
7. It was contended by the defendants that it was typical of John to blame the Burkes for the plaintiffs' failure to comply with the 2017 Lease Agreement, and that it was relevant that the plaintiffs could have, but did not, initiate a stock count at the termination of that agreement. A contemporaneous stock count was crucial as it would have established, one way or another, the size of the herd at that time and the failure to take that action is a material matter in evaluating whether the plaintiffs have established a deficiency for the purposes of s 140(2) of the Evidence Act 1995 (NSW).

The plaintiffs failed to carry out any stock count until March 2020

1. The second hurdle the defendants submitted the plaintiffs faced was that, notwithstanding the fact that they knew they had to carry out a stock count, could have carried out a stock count and had already had some discussions with Mr Hannaford about doing so, they did nothing to effect a stock count until March 2020. The defendants submitted that, while the flooding in February 2020 limited access to parts of Khatambuhl, there was no reasonable explanation for the delay. The stock count was inadequate and inaccurate.
2. The third hurdle the defendants submitted the plaintiffs faced was how little time was spent carrying out the stock count, given the size of the properties, and in particular Khatambuhl. It was put by the plaintiffs in written submissions that Mr Hannaford carried out the count in a careful manner and the count yielded reliable results but the defendants submitted that he, in fact, did not.
3. It was contended that despite Mr Hannaford's experience working with cattle, he was completely unfamiliar with the properties in question and with Khatambuhl in particular.
4. The defendants submitted that Mr Hannaford was engaged by the Wallace family for work additional to the cattle count, which is demonstrated by the invoices he issued, including the following: [48] "Initially assess stock condition and propose sustainable feeding programme. - Purchase necessary fodder and mineral supplements. - Organise labour for continual feedings of stock 7 days a week. - Make sure adequate feeding and machinery available. - Produce a Budget as a guideline to ongoing costs on a weekly basis. - Provide all and to process all accounts due for this operation. - Provide difference scenarios in relation to sale of stock as costs and drought progress. - Keep owners informed weekly with all progress by e-mail."
5. Mr Hannaford's rate was $80/hour + GST including travel time from Gloucester and his station hands were at $45/hour plus GST.
6. Mr Hannaford's time at the properties, together with that of his staff, was recorded for posterity in the time sheets that he kept, and the invoices based upon them, all of which was in evidence. [49] Mr Hannaford's first substantive interaction with the Wallace's occurred on 21 and 22 January 2020 when he met John on 21 January. His invoices record a total of 6 hours in respect of a four hour meeting with Mr Wallace on 21 January 2020 and 2 hours in respect of further work on 22 January 2020. The second meeting is described as "Administration John Hannaford - Office - Formulate Selling and Stock Plan". That stock plan does not appear to be in evidence.

The plaintiffs have failed to provide the details of any subsequent counts of cattle.

1. The defendants submitted that there has been no transparency from the plaintiffs regarding the numbers of cattle on the properties following the count and that there is no subsequent evidence of the count.
2. In this respect, I interpose to note that the documentary evidence of the cattle found between May and October 2020 in the Court Books does provide evidence on subsequent checks for additional cattle by Mr Hannaford.
3. The defendants further submitted that there was evidence to clearly establish cattle sales of 2,045 animals between 1 December 2019 and 31 August 2021.

The plaintiffs do not proffer any explanation for what happened to the allegedly missing stock.

1. The defendants submitted that, on the question of the onus and standard of proof, the nature of the plaintiffs' case was that there was a substantial shortfall in the number of cattle worth, on their case, in excess of $500,000. The plaintiffs must, therefore, deal with or engage with what they say happened to the cattle. It is only in that context that the question of whether the Court can be satisfied to the requisite standard that their case is made out.
2. The defendant submitted that the plaintiffs' written submission "glosses over" the fact that, if there was a deficiency as of 28 November 2019, what became of the animals that were missing.
3. The defendant submitted that the plaintiff made a "faint attempt in cross-examination" to suggest that the Burkes may have moved cattle from the Wallace properties onto their own, but no submission is made that there was any conversation or otherwise unlawful sale of the cattle.
4. The defendant submitted that it was "inherently implausible that the Burkes would not have been interested in the count."

The herd was under threat at the time the lease was terminated and remained under threat until well after the drought broke in early February 2020

1. At the time the lease was terminated, there had been a long period of drought at Khatambuhl and Somerset not the "dry spell" that John sought to convey. That drought continued until early February when 153 mm fell on the 9ᵗʰ of February, following some showers in January.
2. Mr Hannaford described the cattle at Khatambuhl in these terms: "Q. When you went up to Khatambuhl Creek, you did see cattle that were distressed? A. Yes. Yeah, not distressed, but they'd had a hard, obviously hard time during the drought."
3. This is consistent with what Ivan told John on 18 December 2019 when he told her things were not looking good with heat stress that week. In her reply, Kirstie described the situation as being extremely grim. Mr Hannaford said that he gave advice to the Wallace's about the distressed cattle on Khatambuhl in these terms: "… on Khatambuhl Creek cattle, there were a lot of old cows up there, and the other thing about managing a large beef herd, that once a cow gets to a certain age, especially in the country, which can be eight to nine years old, you take them off on an age basis, especially if their mouth is starting to break, and then bring your young heifers in the bottom, so you maintain the status quo."
4. This was consistent with a theory that Mr Hannaford employed during a drought: "…anything that is weak or old, first you remove off the property, prior to them trying to feed them first. The old theory that a bad beast will eat as much as a good one, so you bring the drawbridge up and look after your best stock, and move the other ones off the property, um, to get rid of them."
5. Mr Hannaford recognised that weaker and older animals were under dire threat in those conditions.
6. Later in 2020, Mr Hannaford said that he sold off the weak and old cattle at Khatambuhl after he took over. [53] The Burkes, on the other hand, were prevented from doing this by the terms of the 2017 Lease Agreement and the requirement to maintain the herd profile. The defendants asserted that there was simply no evidence that they sold anything in this period unless it was specifically agreed upon and that, in February and March of 2020, in respect of the sales arranged, the Wallace's unfairly complained about the sales organised by the Burkes who only acted in accordance with the selling plan of the plaintiffs. The defendants submitted that the Burkes were directed to action the sales and Mr Hannaford was informed.

The plaintiffs failed to call Patricia

1. The defendants submitted that Patricia, despite being one of the plaintiffs, was not called to give evidence in these proceedings despite the fact she visited the properties prior to November 2020. The defendants contended that Patricia's evidence as to the state of the stock at that time would have been helpful. Additionally, her evidence as to the trustworthiness and reliability of the Burkes, and in particular Ivan, would also have been helpful. Kirstie admitted that her mother and Ivan had a strong relationship.
2. The Court should infer that the uncalled evidence would not have assisted the Burkes; Jagatramka v Wollongong Coal Ltd [2021] NSWCA 61 at [49]; Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 at [64]. See Justice Dyson Heydon AC, Cross on Evidence (12th ed, 2019, LexisNexis) at [1215].
3. Instead of calling Mrs Wallace, the plaintiffs chose to make further serious allegations against the Burkes in their affidavit evidence, suggesting that the Burkes made threats to contaminate dams, injure children and sell cattle without consent, none of which were pursued in cross-examination and do not seem to form part of the plaintiffs' case. These allegations should not have been made.

The consequences, under the contract, of a deficiency as November 2019 meeting

1. The defendants submitted that the 2017 Lease Agreement provides a clear method for determining the consequences for the Burke's in respect of any deficiency of cattle numbers upon termination of that agreement and as such it follows that the plaintiffs' claim is not a claim for damages, but a claim for an accrued entitlement under the contract. However, if the claim is assessed as damages, as a general rule, they are assessed at the date of breach.
2. The plaintiffs were at liberty to adduce evidence of the market for beef cattle in the location or vicinity of the properties and has elected not to do so.

Breach of contract: unpaid portion of sale proceeds under the 2017 Lease Agreement

The plaintiffs' submissions 1. The plaintiffs submitted that the defendants have admitted to claims for the unpaid portions of sale proceeds under cl 11 of the 2017 Lease Agreement owed for the 2017-2018 and 2018-2019 financial years. That admission arises from [47]-[53] of FAD, although I note that there appears to be a spelling mistake at paragraph [51] which should read 30 June 2019 not 30 June 2018, and [54] of the affidavit of Mark of 10 June 2021. The plaintiffs submitted that the quantum is not admitted. 2. The plaintiffs submitted, pursuant to cl 11 of the 2017 Lease Agreement, that the defendants were required to pay a profit share of 15% of each financial year's total sales above $700,000 plus GST. In the financial years 2017-2018 and 2018-2019 the plaintiffs submitted that the defendants have not paid the requisite 15% plus GST. 3. In the 2017-2018 financial year, the plaintiffs submitted the total profit of the defendants was $768,535.00 which is $68,535.00 in excess of $700,000. In the result, 15% of that total profit plus GST ($10,280.25 + $1,028.02) equates to a total of $11,308.27 owed to the plaintiffs by the defendants. 4. In the 2018-2019 financial year, the plaintiffs submitted the total profit of the defendants was $742,670.41 which is $42,670.41 in excess of $700,000 and in the result, 15% of that total plus GST ($6,400.56 + $640.05) equates to a total sum of $7,040.61 owed to the plaintiffs by the defendants.

The defendants' submissions

1. The defendants did not make any oral or written closing submissions on claims three and four, despite the fact counsel for the plaintiffs expressly raised that "additional payments under cl 11 of the 2017 agreement... [is] not mentioned in the defendant's written submissions… so I don't know if there's anything further that my friend wishes to say against it".

Breach of contract: failure by the defendants to maintain the fences on the properties

The plaintiffs' submissions

1. The plaintiffs made the following submissions in relation to fence maintenance: 1. The plaintiffs claim damages for the costs of carrying out maintenance to fencing on the properties that the plaintiffs alleged ought to have been carried out by the defendants under cl 2(b) of the 2017 Lease Agreement. 2. John inspected the fences on Khatambuhl and Westwood on 7 April 2020. The plaintiffs' solicitors subsequently wrote to the defendants on 9 April 2020 setting out the ordinary maintenance work that had to be carried out on the fences of Khatambuhl Creek identified by John. 3. The first plaintiff had fencing maintenance work carried out and the fencing contractor's invoices distinguished between regular maintenance that ought to have been carried out under the 2017 Lease Agreement and work not of that kind. 4. Ivan, in his affidavit of 9 June 2021 and cross-examination, conceded that a lot of regular maintenance of the fencing had not been done in 2018 and 2019. 5. The first plaintiff paid the invoices for the fencing work done. 6. The claim is for $13,809 (exclusive of GST), being the sum of the invoiced amounts marked as "Maintenance", plus interest.

The defendants' submissions

1. The defendants made the following closing written submission in relation to fence maintenance: "This will be addressed in detail in oral argument, however there is no evidence at all to establish the claims. The highest that the evidence rises is that there was a wish list of items that needed repair and that this amount to proof of a failure on the part of the Burkes to properly maintain the fences on Khatambuhl Creek."
2. In oral submissions the defendants outlined the evidence as the following: "Mr Wallace went up to the property. Then we see a letter from Mr Snelgrove complaining about the state of the property… So, Mr Snelgrove sends a letter indicating a list of complaints and the next step in the logical chain of the evidence is that there are all these invoices for this work that was carried out."
3. The defendants then submitted, in relation to that evidence, as follows: "There is nothing that your Honour can look at, in terms of a photograph, a report, a Scott schedule, that says that fence posts number 123, that's located next to this dam, has obviously not been maintained for A, B, C and D reasons; there is nothing there to suggest that. So, it is really a case of mere assertion that some fences had not been taken care of, and that is strapped up with some questioning of Ivan Burke when he was asked: Well, that some of the maintenance had perhaps not been carried out because he was trying to stop the cattle from dying and protecting them from the fires, the very matters about which Mrs Wallace Senior thanked him and rewarded him. So, it is a very odd claim the way it is put and, in my submission, when your Honour looks at the evidence that is relied on in my learned friend's submissions, it really does go nowhere."

The plaintiffs' submissions

1. The plaintiffs made the following submissions in relation to the second basis for the claim in contract: 1. At [17] of the SOC, the plaintiffs pleaded the formation of an agreement at the November 2019 meeting outlining its terms. At 17 of the SOC, the plaintiffs pleaded that it was a term of the agreement reached in November that on and from 1 December 2019 the defendants would hand the herd over to the first plaintiff with cattle numbers in accordance with the herd profile. 2. At par 17 of FAD, the defendants denied that this agreement was made on 28 November and say that "the agreement was reached on 23 January 2020". This is a reference to the date of the email from John to the Burkes setting out the outcome of the January meeting and to the January Agreement. 3. At [17] of FAD, subject to placing the conclusion of the agreement in January 2020, the defendants admitted all of the terms pleaded in SOC [17] except to the following extent: 1. The defendants did not admit the term pleaded at SOC 17 to the effect that the defendants were to provide the plaintiffs with a plan for feeding the cattle in the herd (on the assumption that the herd would be de-stocked by 30 April 2020). 2. At FAD par 17, the defendants admitted the plea in SOC at 17 that the 2017 Lease Agreement would be terminated with effect on and from 1 December 2019, but say that it was the plaintiffs who terminated the lease. 3. At FAD par 17, the defendants admitted SOC 17 "insofar as the defendants would 'hand over the herd' on a specified date, but otherwise do not admit the balance of the clause". No specified date other than 1 December 2019 was advanced by the defendants, and the defendants' admission that the 2017 Lease Agreement was terminated with effect on and from 1 December 2019 and their insistence that they would not be responsible for the herd after November 2019 point to 1 December 2019 as the agreed date. 4. At FAD par 17, the defendants declined to admit that it was agreed that the herd being handed over was "with cattle numbers in accordance with the herd profile". 1. The plaintiffs pleaded the shortfall in the cattle numbers, breach of the obligation of the agreement at the November 2019 meeting , and loss and damage from the breach. 2. The evidentiary bases for the allegations of the shortfall and the defendants' breach of their obligation are the same as those for the claim for breach of cl 2(a) of the 2017 Lease Agreement. The plaintiffs submitted that those allegations have been made out. The remaining issue is whether the herd that the defendants agreed that they would hand over was a herd with cattle numbers in accordance with the herd profile. 3. Numerous matters were agreed at the November 2019 meeting. The email of 29 November 2019 from Kirstie Wallace set out an outline of what the parties had agreed and there were a number of matters yet to be resolved. Among the matters that were settled were the following: 1. the lease was terminated with effect on and from 1 December 2019; 2. the herd numbers were 1,222 cows, 556 calves, 620 weaners and 4 bulls; 3. on and from 1 December 2019, cattle could not be sold without the consent of the Wallaces; 4. the Wallaces consented to the Burkes' selling up to 400 cattle that were excess to the herd quota; 5. the Wallace family would feed all the cattle; 6. all cattle sales were to go through the first plaintiff; 7. the money from sales of cattle was to be paid to the first plaintiff. 1. There was also discussion what the Burkes would be paid to look after the herd on the Three Properties. 2. From the facts that the lease was being terminated with effect on and from 1 December 2019, that the Wallaces were taking on responsibility for feeding the herd and that future sales of cattle were only to occur with the consent of the Wallaces and through the first plaintiff, it is clear that the parties were proceeding on the basis that the herd was being handed over to the Wallaces at the beginning of December 2019. 3. The Wallaces were keen to know whether the herd was intact in accordance with the numbers in the 2017 Lease Agreement. The Burkes assured them that they were. 4. It was agreed in November 2019 and ratified in January 2020 that the Burkes were handing over the herd with cattle numbers in accordance with the herd profile of 1,222 cows, 556 calves, 620 weaners and 29 bulls. 5. In the light of the evidence of the existence of the shortfall at 1 December 2019, the Court should find that the defendants breached the obligation to hand the herd over with cattle numbers in accordance with the herd profile. 6. The damages under this claim are calculated in the same manner as those claimed under the breach of cl 2(a) of the 2017 Lease Agreement.

The defendants' submissions

1. The defendants contended that there was no agreement formed at the November 2019 meeting. Their submissions in relation to that were as follows: 1. The plaintiffs contended that an agreement was reached at the November 2019 meeting about a range of matters that included, relevantly, the remuneration that was to be paid to the Burkes for managing the properties and an incentive payment in respect of cattle sales. The correspondence and conduct of the parties does not bear out that allegation. 2. The following day, Kirstie sent the MOU which set out 15 points, the last of which stated that the letter was on a without prejudice basis. It concluded with a request for receipt and acknowledgement, the letter having begun with a statement to the effect that it set out the conclusions and actions arising from the meeting the previous day. No such acknowledgement was forthcoming. The defendants submitted it is not hard to understand why, because, for example, the proposal included a provision for the payment to the Burke Family of $2,400 a week until 30 April 2020 or until all the cattle were sold. This was just over a third of what was actually agreed and well under what the Wallaces paid Mr Hannaford after the Burkes left. 3. The letter also included a reference to the Burke's having agreed to the mutual termination of the lease. Nothing in the evidence suggests that the termination of the lease was ever agreed to. The evidence makes it clear that the Wallaces had already agreed amongst themselves to terminate the lease, and this was one of the reasons why the meeting was called in the first place. 4. Although the plaintiffs had made the decision to terminate, they had not engaged anyone else to manage the property, meaning the Burkes could simply have departed the properties on and from the 28 November 2019. To their credit, they did not do so. To their further credit, they continued to feed the herd with feed they had bought until mid-December and co-operated with Kirstie in relation to the purchase of further feed. For example, on 2 December 2019 Kirstie and Mark had a text exchange in these terms: "Kirstie: Hi Mark we have got the funds to order feed for a month mid- December if you wanted to send me the details via e-mail? Kirstie Mark: I have pellets coming tomorrow which will last mid-month which I have paid for. You'll need to order hay as it will run out on Thursday. I'll attach Erin's contact card and you can organise here as well as Macdonald transport…" 1. On 17 December 2019 Kirstie sent John an email raising the sourcing of feed for the cattle and suggested John give mark a call to discuss that. John replied on 18 December 2019 stating "have left message for him & spoken to Ivan. Not looking good with heat stress this week." Kirstie responded in these terms; "Yes, it is going to be extremely grim but what options are there? Unless you truck the cattle all off somewhere and even Mark said that would put the cattle under more stress." John responded on 23 December to the effect that, inter alia, he had spoken to Mr Hannaford who could have a caretaker in place from the 3rd if Mark pulls the pin and walks off. They did not walk off. [I pause to note, that the email being referred to in the Court Book indicates that Mr Hannaford "could have a caretaker in place from w/c 30th" not the 3rd, as counsel for the defendants submitted. Continuing then with the summary of the defendants' submissions]: 1. There was no reply to the email of 29 November 2019. Kirstie followed up this email with a request for a response on 14 December 2019. Mark responded to the effect that it would be sorted out, "this week". On 23 December, Mr Snelgrove entered the fray with a letter asserting that an agreement had been reached at the November 2019 meeting and demanded a response by 31 December, yet stated that the arrangements were without prejudice to his clients' rights under the lease which were reserved. 2. That could not have been correct. The lease had been terminated, but no agreement had been reached in the interim. Despite all this, the Burkes continued to manage the properties and feed the KCPC herd. 3. On the same day, Mark was communicating with Kirstie about the steps he was taking to get feed. 4. Mark responded on 9 January, with a without prejudice "Memorandum of Understanding", in response to the 29 November e-mail. On 16 January 2020, John sent an e-mail with a list of outcomes that the Wallace family were looking for at a meeting to be held on the following Monday, i.e., 20 January 2020. 5. The parties met on 20 January, following which John sent an e-mail to Mark and Kirstie summarising the position reached from his perspective. The most relevant terms of that agreement were that: 1. As of 30 November 2019, 1,222 cows, 556 calves, 620 weaners and 29 bulls "had been accounted for", with losses having occurred since 1 December. 2. A stock count was to be conducted on 27 February, with any adjustments to be agreed and made as per cl 10 of the lease. 3. The herd would be sold down. 4. An incentive of 10% of the cattle sale price, less the cost of sales would be paid to the Burke for sales between 1 January and 30 June 2020. John set out a general estimate of the herd and its value; "Cows 1,222 @$750 = $916.500 Weaners 620 @850 = $569,500 Calves 556@ $400 = $22,400 Bulls 29 @800 = $23,200" 1. It should be observed how different these prices, given the context of the ongoing drought, differ from the prices the plaintiffs seek for the purposes of their damages claim; 2. On and from 1 December 2019, "WF will pay BF $6,000 + GST per cover (invoices to be supplied with correct information) a. All labour for both management and casuals to run all the properties across the 7-day week….etc" 1. A one-off payment of $20,000 to cover all old issues prior to 30 June 2020. 1. It is to be immediately observed that it was contemplated by John that there had been losses since 1 December 2019. He also contemplated that any deficiency in the number of cattle and any claim in that regard be dealt with in accordance with cl 10 of the 2017 Lease Agreement. 2. There was no indication that the obligation to pay the other entitlements of the Burkes under the agreement was tied to the number of cattle determined by the stock count. 3. Clearly, no agreement was reached about these matters until the January meeting.

The plaintiffs' submissions

1. The plaintiffs made the following submissions in relation to the third basis for the claim for breach of contract: 1. The plaintiffs pleaded in CC2 at par 1 that, if the plaintiffs and the defendants entered into the January Agreement, then that agreement contained a term to the following effect: 1. A stock count would be conducted commencing on 27 February 2020 and any adjustments to the cattle numbers would be agreed and made in accordance with cl 10 of the 2017 Lease Agreement, which relevantly provided that the defendants would pay the plaintiffs market price for any deficiency of cattle numbers below the herd profile (being 1222 cows, 556 calves, 620 weaners and 29 bulls). Any cattle that were surplus to the herd profile would become the property of the defendants. 1. The plaintiffs provided particulars of the January Agreement as follows: 1. The terms of the January Agreement were recorded in the January 2020 email, which recorded the outcome of the January meeting between John, Mark and Ivan . 1. The plaintiffs pleaded that the defendants were liable to pay the first plaintiff the market value of any shortfall from the herd profile in the cattle handed over on 1 December 2019, that the defendants have failed to pay the amount due, and that the defendants are indebted to the first plaintiff for that amount (CC2 [3] and [4)]. The plaintiffs sought judgment for the relevant amount in [1] of the relief claimed in CC2. 2. No defence to CC2 was served. 3. The January 2020 email was relied on by the defendants as a basis for part of their cross-claim. The relevant portion of the email is extracted below: "Further to our meeting on Monday 20th Jan, please find a summary of the points: … 2. As at 30th November the following WF cattle were accounted for 1,222 cows + 556 calves + 620 weaners + 29 bulls. There has been some losses since the 1st Dec, with BF to provide a summary of when (dates) and where + if possible photos of the deaths (possible inspection may be required). There needs to be a report at the end of every month. The stock count will be conducted on the proposed dates of 27th Feb. with any adjustments to be agreed and made as per Clause 10 of the Lease." 1. As earlier discussed in this judgment, John gave affidavit evidence of the relevant part of the January meeting. In cross-examination, Ivan could not recall the January meeting, however, Mark, described the January 2020 email as "a summary of our meeting of 20 January 2020" and stated he did not respond to the email because he thought everything had been decided in the meeting. 2. Mark subsequently sought to resile from his earlier evidence (and the defendants' pleaded position) about the content of the January 2020 email by suggesting that he disagreed with some parts of the email and that John recorded what suited him. However, Mark agreed that he had not raised any objection with John about the email. 3. At the January meeting, John proposed that there would be a stock count starting on 27 February 2020, and that the parties would make adjustments in accordance with cl 10 of the 2017 Lease Agreement. 4. The January 2020 email recorded the parties' agreement that adjustments would be made in accordance with cl 10 of the 2017 Lease Agreement. 5. The cattle count yielded a shortfall of 548 animals. In accordance with the January agreement, the defendants owed the first plaintiff the market price of the missing animals. The calculation of that amount is set out in Kirstie's affidavit of 3 December 2021 at [6].The market value of the 548 missing animals was $562,252.52 (this does not include the amount for lost offspring of the missing cows). Interest on that amount should run from the date on which the defendants were notified of the shortfall on 30 March 2020.

The defendants' submissions

1. The defendants submitted that the January agreement did not include a term to the effect of the term pleaded. Their submissions on that issue are as follows: 1. The plaintiffs contended at [118] of their written submissions that the January agreement contained a term to the following effect: "A stock count would be conducted commencing on 27 February 2020 and any adjustments to the cattle numbers would be agreed and made in accordance with clause 10 of the 2017 Agreement, which relevantly provided that the Defendants would pay the Plaintiffs market price for any deficiency of cattle numbers below the herd profile (being 1222 cows, 556 calves, 620 weaners and 29 bulls) ("the Herd Profile") but any cattle that were surplus to the Herd Profile would become the property of the Defendants." 1. They also relied upon the January 2020 email as particulars of that agreement. 2. The January 2020 email does not bear out the rather tortured construction for which the plaintiffs contended. 3. Firstly, it states that on 30 November that 1,222 cows, 556 calves, 620 weaners and 29 bulls had been accounted for. 4. Secondly, it contemplated that losses had occurred, with the extent of them to be identified. This should have come as no surprise to the Wallaces given the stress they knew the herd was under. This meeting occurred during the nadir of the drought and before it broke in early February. 5. Thirdly, it expressly provided that any adjustments were to be by agreement and pursuant to cl 10. Quite clearly, that agreement contemplated what was to happen if there was a deficiency. 6. The Court should not find that there was a term in the form contended by the plaintiffs.

Cross-claim by the defendants under the January agreement

1. The plaintiffs made common submissions in relation to claims one, being the payment for unpaid invoices after termination of the 2017 Lease Agreement and, two, being the payment of 10% of the net proceeds of cattle between January and June 2020, and three, being the payment $20,000 to cover all old issues, of the cross-claim.
2. In that respect, the plaintiffs submitted the following: 1. It is unclear which of the claims raised on the CC1 are pressed by the defendants. 2. The claim for renumeration at $6000 per week plus GST, the payment of $20,000 and the 10% incentive of the net proceeds of sale were dealt with by the submissions of the plaintiffs on misleading conduct. The plaintiffs sought to be relieved of the obligation to pay that remuneration in whole or in part: Nobile v National Australia Bank Ltd [1987] ATPR 40-787 ("Nobile").; Kizbeau Pty Limited v WG & B Pty Ltd (1995) 184 CLR 281 at [298] (Brennan, Deane, Dawson, Gaudron and McHugh JJ ("Kizbeau") 3. Two of the claims based on invoices issued by the defendants are for remuneration for work performed for HSLA, totalling $26,137.75 (inclusive of GST) in invoices issued to HSLA. The entitlement of the defendants to any payments from HSLA for work done for HSLA is a matter between the defendants and HSLA. The plaintiffs have no liability for any such amounts. Further, the terms of any engagements of the defendants by HSLA and the defendants' entitlements under such terms are not sufficiently supported by the evidence.
3. In the result, the plaintiffs submitted that if it is found that the plaintiffs and the defendants made an agreement in January 2020 providing for payment to the defendants of management fees, or an incentive payment (10%) or the $20,000 one-off payment, the plaintiffs sought orders under s 237 of the ACL relieving them of the burden of each of those obligations. Further, in relation to the payment of $20,000, that was a payment offered as part of an overall deal that depended on the defendants' representation that the herd numbers were intact. The defendants had no legal entitlement to the $20,000 or any other amount for compensation.

The defendants' submissions

1. The defendants provided very brief submissions on their cross-claim which are extracted below: "183. For reasons that have already been canvassed, the Burkes are entitled to the remuneration provided for under the January Agreement. There was no challenge to the work having been performed during the relevant period. 184. The tax invoices in respect of same are in evidence and clearly reflect the agreement are at CB Vol 4, p 1471, 1472, 1646 and 1645. 185. Curiously, the plaintiffs assert that in the case of the last two invoices that were addressed to Mr Hannaford, as the plaintiffs' agent, that no liability can arise, however the terms of the agreement are clear - the agreement was with the Wallaces and the fact that the invoices were sent to Mr Hannaford cannot detract from that. Seeking to hide behind the shield of Mr Hannaford's agency is not to the plaintiffs' credit. 186. The agreements regarding the $20,000 and the 10% of sales to 30 June 2020 stand and for the reasons already given, should be enforced. 187. The plaintiffs should also be required to deliver up the Burkes' personal property, a matter that will be developed in oral address."
2. In relation to claim 4, being the return of the defendants' property, the plaintiffs submitted the following in their closing written submissions: "The defendants make claims for the return of some items of plant and equipment or damages in respect of them (FASCC pars 39-42 (EX10-CB1.146-147). The allegations are denied or not admitted by the plaintiffs (DCC pars 39-42 at EX10-CB1.158). Those claims have not been made out. There is insufficient evidence to support the claims."
3. Despite the above extracted submission ([187] of the extract) being made, the issue was not expanded upon in oral submissions.

The plaintiffs' submissions

1. The plaintiffs submitted that the defendants have contravened s 18 of the ACL and that the shortfall in cattle, that they say is established per the submissions above, is an important factual element to make out the following causes of action: 1. A claim for damages under s 236 of the ACL for the sale of 309 head in December 2019 advanced in both the SOC and the CC2; 2. A claim for relief under s 237 of the ACL in the SOC and the CC2.
2. The plaintiffs made submissions under the following headings: 1. Claims based on misleading conduct; 2. The herd number representation in November 2019; 3. The claim for damages arising from the herd number representation in November 2019; 4. Other Relief arising from the herd number representation in November 2019; 5. The herd profile representation made in January 2020.
3. The content of those submissions appears below:

Claims based on misleading conduct

1. The plaintiffs pleaded contraventions of s 18 of the ACL, claims for damages under s 236 and claims for other relief under s 237 of the ACL. All of the claims depend on allegations that the defendants made misleading representations to the plaintiffs regarding the numbers of cattle in the herd either in late November 2019 or in January 2020.

The herd representation in November 2019

1. At the November 2019 meeting, the defendants represented to the plaintiffs that there were enough animals in the first plaintiff's herd on the properties that the defendants could sell 400 animals from the herd in December 2019 and the herd profile would remain intact.
2. The claims for damages and other relief arising from the herd representation in 2019 are pleaded at SOC [35]-[40]. These are extracted below: "35. On or about 28 November 2019, the defendants represented to the plaintiffs that there were enough animals in KCPC's herd on the Three Properties that the defendants could sell 400 animals from the herd in December 2019 and the Herd Profile would remain intact ("the Herd Number Representation"). 36. The plaintiffs relied on the Herd Number Representation: a. by agreeing with the defendants on or about 28 November 2019 that the defendants would be permitted to sell up to 400 animals from the herd in December 2019; b. by not requiring on or about 28 November 2019 and later that a count of the cattle on the Three Properties be undertaken in late November or early December 2019; c. by agreeing with the defendants on or about 28 November 2019 that the defendants would manage the herd after 30 November 2019 and would be remunerated for doing so ; d. by agreeing with the defendants on or about 28 November 2019 that the defendants would receive 10% of the proceeds of the sale of any cattle from the herd net of the costs of sale and the costs incurred by the plaintiffs in feeding the cattle; 37 The Herd Number Representation was conduct engaged in in trade or commerce. Particulars (1) The representation was made during negotiations about the terms on which the 2017 Agreement was to be terminated and the terms constituting the further commercial relationship between the plaintiffs and the defendants. 38 The Herd Number Representation was not correct. Particulars (1) The numbers of animals in the herd were materially below those required for maintenance of the Herd Profile and could not support sale of up to 400 animals in December 2019 on the defendants' account. (2) See the particulars of herd numbers handed over to the plaintiffs set out in the Particulars subjoined to paragraph 31 above. 37 The Herd Number Representation was conduct engaged in in trade or commerce. 39 In the premises, the defendants engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of section 18 of the Australian Consumer Law. 40 By reason of the defendants' contravention of section 18 of the Australian Consumer Law, the plaintiffs have suffered loss and damage. Particulars (1) Agreement to terms in the November 2019 Management Agreement that were disadvantageous to the plaintiffs, including: (a) that the defendants would be permitted to sell up to 400 animals from the herd in December 2019; (b) that the defendants would manage the herd and the Three Properties after 30 November 2019 and would be remunerated for doing so; (c) that the defendants would receive 10% of the proceeds of the sale of any cattle from the herd net of the costs of sale and the costs incurred by the plaintiffs in feeding the cattle. (2) Losses arising from forbearance by the plaintiffs to appoint managers other than the defendants and carry out a count of the cattle on the Three Properties immediately. (3) Loss of 311 animals from the herd sold by the defendants in December 2019 or their value. (4) Losses arising from mismanagement of the herd by the defendants after 30 November 2019 (for which refer to paragraphs 49 to 51 inclusive."

The claim for damages arising from the herd representation in November 2019

1. The defendants sold at least 309 head as part of the agreed 400 in December 2019. The plaintiffs claimed damages and interest with respect to the sale of those cattle.

Other Relief arising from the herd representation in November 2019

1. The plaintiffs submitted that they should be relieved of the obligation to pay that remuneration in whole or in part: Nobile; Kizbeau at 298.
2. That submission was predicated upon the premise (which was disputed) that the plaintiffs agreed to remunerate the defendants for the defendants' services in relation to the first plaintiff's herd on and from 1 December 2019 and the plaintiffs were otherwise liable to pay the defendants in accordance with that agreement. A similar submission was made with respect to the January agreement.
3. The plaintiffs fixed upon aspects of the purported November agreement wherein it was said that the plaintiffs proposed rates for payment of the defendants and coverage of casual labour and an incentive payment based on sales of cattle between 1 January 2020 and 30 June 2020. It was submitted that the last figures discussed by the plaintiffs and the defendants (in January 2020) were an all-inclusive figure of $6,000 per week plus GST as management fees and a 10% incentive payment.
4. The proposals purportedly arising at the November 2019 meeting and the January meeting were made on the basis that the herd profile would be intact even after the sale of 400 head in December 2019.

The representation in January 2020

1. The plaintiffs' submissions in this respect were predicated upon representations made in the January meeting. I will further discuss those submissions in my considerations below. The plaintiffs also made submissions as to the implications of the ACL with respect to certain entitlements said to arise for the defendants under the January agreement. Again, I will return to those matters below.

The defendants' submissions

1. The defendants rebutted the plaintiffs claim in respect of misleading and deception conduct. Their submissions as to the making of the representations was as follows:

The herd representation at the November 2019 meeting

1. In the case of the herd representation at the November 2019 meeting, it was said that the defendants represented there were enough animals on the properties on 28 November 2019 to make up the herd profile and that the defendants could sell 400 animals from the herd in December 2019 and the herd would remain intact. It was alleged that this representation was made at the November 2019 meeting. There is no issue that during the course of the discussions at the November 2019 meeting the conversation extended to the herd profile being in terms that corresponded with the herd representation. That is what the Burke's believed. The evidence does not establish that they were wrong about that.

The herd representation in January 2020

1. In the case of the herd representation in January 2020, it is said that at the January meeting the defendants represented to John that the herd profile was then intact.
2. The plaintiffs relied upon the January 2020 email referred to above as proof on this representation being made.
3. As previously indicated, the January 2020 email does not bear out that submission. There is nothing in that email to suggest that such a representation was made at that time.
4. The evidence does not support the claim that the plaintiffs relied upon the representation in respect of any of these matters.
5. The MOU does not suggest that a representation that the herd profile was intact was a condition of the agreement that Kirstie was proposing or that any of the other terms she was proposing were conditional upon it. If a conditional agreement was what was intended, it would have been easy to express the offer in those terms.
6. For similar reasons, which apply to the herd representation allegedly made at the November 2019 meeting, the defendants denied, in the event that it is determined that such a representation was made, that it was relied upon.
7. In this respect it is to be noted that the plaintiffs submitted that they relied upon the herd representation in January 2020 in the following ways: 1. Not taking steps to reverse the previous agreement about the sale of up to 400 head of cattle; 2. Offering to pay 10%; 3. Offering to pay $6,000 plus GST for labour; 4. Offering to make a $20,000 payment to resolve various outstanding disputes.
8. Precisely how they would have reversed the agreement about the sale of 400 head is far from clear.
9. The plaintiffs' case is that it suffered a loss by reason of permitting the sale of 309 head as part of the agreed 400 in November 2019. The measure of damages claimed are the prices for comparable stock that were achieved by the plaintiffs after the drought broke. This does not represent the actual loss, as the animals were sold in December 2019 before the drought broke. Relying on post drought prices to fix a loss that accrued during the drought is impermissible as it does not reflect loss.
10. The plaintiffs relied upon s 237 of the ACL.
11. It is fundamental requirement to the grant of relief that the orders sought either compensate for loss or damage of prevent or reduce the loss or damage suffered. The relief is also discretionary.

Breach of Contract

1. The question of whether there was a shortfall in the herd numbers at the time of the November 2019 meeting by comparison to the herd profile specified, (as required to be maintained) in the 2017 Lease Agreement, was a central issue in the trial and I will, therefore, commence my considerations in that respect. The related question is the state of the herd numbers as at the January meeting.
2. Logically, it is appropriate to commence those considerations by evaluating the parties' submissions as to the reliability of the cattle count conducted by Mr Hannaford in February-March 2020. The plaintiffs contentions were premised upon the reliability of the count in itself, or as adjusted, by 69 head of cattle found in between April and October 2020.
3. In my view, Mr Hannaford was well qualified to conduct the cattle count based upon his qualification and experience. He was a stock and station agent of 20 years' experience and had a lifetime of experience of cattle farms and mustering. This was not gainsaid by the defendants.
4. The defendants' submission that Mr Hannaford "was completely unfamiliar with the properties in question and with [Khatambuhl]" must be rejected. Mr Hannaford had been raised in the same country as Khatambuhl and he had worked on a large property, Giro Station, that was "very similar" to the Khatambuhl property. He was familiar with the layout of Khatambuhl. He was not initially familiar with Somerset but came to know the property well. Mr Hannaford described the property as a high-quality property with some timber up the back.
5. Mr Hannaford conducted the cattle count in a careful manner. He conducted the muster according to an orderly method, creating secure yards and moving out progressively to the boundaries. The counting system involved constant double checking of numbers and was recorded both on paper and electronically. If the cattle were found not to have NLIS tags, the tags were placed upon them. Any unbranded calves were branded.
6. In his affidavit of 7 June 2021, Mr McLoughlin complained of an apparent irregularity in Mr Hannaford not recording previous NLIS tags during the cattle count. However, he does not state that there was other than a consistent process of entering NLIS tags in the computer system.
7. Mr McLoughlin also complained that Mr Hannaford was wrong to state (in [11] of his affidavit of 22 February 2021) that the scanning of cattle took place in the presence of either of the Burkes or himself. However, Mr Hannaford simply indicated that the Burkes were frequently present on the properties when work was being carried out and provided some assistance in the stock count process such as pushing up cattle and mustering. What Mr Hannaford emphasised was that the Burkes did not provide him any useful or detailed information about the number of cattle that could be found in the various locations on the properties.

2017 Lease Agreement: claim for shortfall of cattle

1. Clause 2(a) was a term of the 2017 Lease Agreement which required the defendants to maintain the herd profile which was defined as 1222 cows, 556 calves, 620 weaners and 29 bulls.
2. The evidence before the Court established that it is more probable than not that a shortfall in cattle numbers, by reference to the herd profile in the 2017 Lease Agreement, existed on and from 1 December 2019 and that the defendants failed at that time to hand over the herd in the requisite numbers. As mentioned, I consider that this inference is available upon the basis of strong and persuasive evidence.
3. The shortfall in cattle was as follows: 1. 300 cows; 2. 87 calves; 3. 157 weaners; 4. 4 bulls, making a total shortfall of 548 head.
4. Before I come to the central issues raised by the defendants as to the proper assessment of the plaintiffs claim in this respect, it is necessary to return to the cattle sold in December 2019. According to the NILS's documentation, cattle were sold on 4, 11 and 12 December 2019, the total number being 309. As properly conceded by counsel for the plaintiffs, those cattle must be treated as being available on and from 1 December 2019 and not calculated as part of the shortfall, even though they will become relevant in considering the claims under ACL.
5. The 309 cattle sent to Edwards Livestock in December 2019 were not, in fact, surplus to the herd profile and their removal caused loss to the first plaintiff. The 309 head comprised 131 heifers and 178 steers. The 131 heifers would have reduced the shortfall of cows to 169. The 178 steers would have reduced the shortfall of weaners to nil and, applying the additional 21 weaners to the shortfall of calves, would have reduced the shortfall of calves to 66.
6. Adjusted in this manner the shortfall in cattle was as follows: 1. 169 Cows; 2. 66 Calves; 3. Nil Weaners; 4. 4 Bulls.
7. This makes the total shortfall of 239 head.

Assessment of loss for shortfall of cattle

1. I find, therefore, that the defendants breached the 2017 Lease agreement by failing to maintain the herd profile. The loss suffered, in that respect, is the value of the missing cattle. There is also an issue as to the loss occasioned by offspring who would have been born to the missing cows if those cows had been present.
2. The claim advanced by the plaintiffs, based on calculations by Kirstie in her affidavit of 4 December 2021, is represented in a table as follows:
3. The amounts appearing under the column "Average Values" are calculated upon the basis of Annexure D to the affidavit of Kirstie of 4 December 2021. In those tables, Kirstie refers to the proceeds of sale excluding GST for cows, weaners (steers and heifers) and bulls between 1 May 2020 and 27 May 2020. Upon this basis, Kirstie worked out the average sales yields of cows, weaners, and bulls (the net cost of sale) which were then applied to the abovementioned table. Kirstie estimated that calves would be sold when weaned.
4. Putting aside issues associated with the method of assessing value, what is clear from the table is that the plaintiffs' claim for loss of cattle is predicated upon sales in April and May 2020 and not at the date of the termination of the 2017 Lease Agreement on and from 1 December 2019.
5. The calculation of lost offspring is based upon the 300 missing cows having an estimated birth rate of 80% being 240. This is based upon the document produced by Mark marked as Annexure A.
6. The plaintiffs' claim is for damages arising from the breach of contract. It was submitted that the appropriate date for the assessment of damages was not the date of the breach on and from 1 December 2019 but in 2020 when the count was conducted, and cattle were sold. It was accepted that the starting position is that the date for the assessment of damages is normally the date of the breach of contract when the defendants failed to hand over the requisite number of cattle.
7. It was submitted by the plaintiffs that the date of breach for the assessment of damages was not an absolute rule and the ultimate purpose for damages was compensation. The bases for this submission were as follows: 1. It was understood from November 2019 meeting that the cattle were being handed back to the plaintiffs who would pay for the costs of maintaining the cattle and then sell them in 2020. 2. There were practical reasons for this approach. The cattle were in poor condition, and it was not appropriate to transport them at the time. There was also a problem in booking the cattle in for sale. There had been an earlier arrangement to sell the cattle in November, but the date was moved to December. 3. The plaintiffs expended a significant amount of their resources on the maintenance of the cattle until their sale in April and May 2020.

2017 Lease Agreement: claim for failure to maintain fencing

1. As to the issue of fencing maintenance, cl 2(b) of the 2017 Lease Agreement deals with paddock maintenance. That provision not only required the maintenance of paddocks but regular maintenance of constructed features of the properties including fences.
2. I have earlier summarised the submissions of the parties in that respect and will not repeat them here. It is sufficient to observe that the plaintiffs made a claim for the costs of carrying out maintenance to fencing on the properties that ought to have been carried out by the defendants under the 2017 Lease Agreement.
3. In my view, the evidence does establish that there was a failure to carry out maintenance on the fences by the Burkes and that the plaintiffs bore the cost of rectification of the same. It is true, as submitted by the defendants, that maintenance was affected by the climatic conditions which affected the work of the Burkes in the sense that they were taking measures to protect the cattle. However, Ivan's evidence was that the regular maintenance had not been done in both 2018 and 2019.
4. Based on the evidence in the form of invoices for fencing work, in my view, the plaintiffs have made good the claim for $13,809 (exclusive of GST). This amount can be brought to account in Short Minutes of Order prepared by the parties in accordance with directions given later in this judgment.

2017 Lease Agreement: claims under cl 11

1. As to unpaid claims under cl 11 of the 2017 Lease Agreement, the plaintiffs pleaded the following (in the SOC): "48. In the year from 1 July 2017 to 30 June 2018, sales of cattle from the herd exceeded $700,000. Particulars (1) On the basis of information presently available, the defendants sold 604 head of cattle from the herd in the year from 1 July 2017 to 30 June 2018, and the value of those sales was greater than $720,000. … 51. In the year from 1 July 2018 to 30 June 2019, sales of cattle from the herd exceeded $700,000. Particulars (1) On the basis of information presently available, the defendants sold 770 head of cattle from the herd in the year from 1 July 2018 to 30 June 2019, and the value of those sales was greater than $924,000."
2. In the defendants penultimate Amended Defence, the defendants admitted they had made over $700,000 in those respective financial years but corrected the quantum. These are extracted below: "(kkk) (bb) The cattle sales referred to in Clause 48: Corrected: The cattle sales for the financial year ending 30 June 2018 was approximately $768 ,535 (excl. GST). The 15% of the profit over $700,000 would in such case be $10,28 0.25. … The First Defendant will pay this amount subject to its Cross-Claim in these proceedings. … (nnn) (cc) The cattle sales referred to in Clause 51: Corrected: The cattle sales for the financial year ending 30 June 2019 was approximately $714,670 (excl. GST). The 15% of the profit over $700,000 would in such case be $2,200.50. … The First Defendant will pay this amount subject to its Cross-Claim in these proceedings."
3. However, the defendants, in their FAD, only admitted the plaintiffs made profits exceeding $700,000 in those financial years but "Otherwise do not admit the balance of the paragraph", namely, the quantum.
4. In my view, the plaintiffs have established these claims as stipulated in their submissions set out on the basis of the respective financial statements of Ivamar. In the result, the plaintiffs were entitled to judgment for: 1. $11,308.27 (from 15 August 2018) 2. $7,040.61 (From 15 August 2019)
5. The plaintiffs sought interest from 15 August 2018 for the first amount and from 15 August 2019 for the second amount. The quantum of interest shall be determined under the procedures in the Orders and Directions section of this judgment.

The claim under the purported November 2019 Agreement

1. This claim by the plaintiffs was in substance for losses occasioned from the shortfall of cattle and was an alternative to the claim made under the 2017 Lease Agreement.
2. It is therefore unnecessary to consider the matter further in that light but in any event, I have found that a contract was not formed out of the MOU.

The claim under the January agreement

1. The plaintiffs pleaded under CC2 at par 1 that the plaintiffs and the defendants had entered into the January agreement and that the agreement included a term that a stock count would be conducted commencing on 27 February 2020 and any adjustment to cattle numbers would be agreed and made in accordance with cl 10 of the 2017 Lease Agreement.
2. The Court has earlier found that an agreement was made in January 2020 and that the terms of the agreement were those contained in the January 2020 email including the term pleaded in the CC2.
3. However, the claim by the plaintiffs, in this respect, rises no higher than the claim made for the shortfall of cattle under the 2017 Lease Agreement and is a true alternative to the claim under that agreement. The conclusions reached as to loss for the shortfall of cattle under the 2017 Lease Agreement are equally applicable to this claim, but there shall be no double counting.
4. However, more will need to be said about the existence of the shortfall of cattle against the herd profile in the context of representations made by the defendants and the operation of the ACL. I will deal with those matters below.

CLAIMS BASED ON MISLEADING AND DECEPTIVE CONDUCT BASED ON ACL

1. Section 18 of the ACL is in Chapter 2 of the ACL and provides: A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive.
2. The expression "trade or commerce" is defined in s 4 of the ACL and covers "trade or commerce within Australia" including "any business or professional activity (whether or not carried on for profit)".
3. By virtue of s 2(2)(a) of the ACL, the expression "engage in conduct" refers, among other things, to doing any act. That includes the making of a representation.
4. Section 236(1) of the ACL provides: If: (a) a person (the claimant) suffers loss of damage because of the conduct of another person; and (b) the conduct contravened a provision of Chapter 2 or 3; the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.
5. Section 237(1) of the ACL provides that a court may, on application of a person (the injured person) who has suffered, or is likely to suffer, loss or damage because of the conduct of another person that was engaged in a contravention of a provision of Chapter 2, make such order or orders as the court thinks appropriate against the person who engaged in the conduct or a person involved in the conduct. Subsection 237(2) further provides that the order must be an order that the court considers will either compensate the injured person in whole or in part for the loss or damage, or prevent or reduce the loss or damage suffered, or likely to be suffered, by the injured person. The kinds of orders that may be made under s 237 are described non-exhaustively in s 243 of the ACL.
6. Section 243 of the ACL provides as follows: 243 Kinds of orders that may be made Without limiting section 237(1), 238(1) or 239(1), the orders that a court may make under any of those sections against a person (the respondent) include all or any of the following: (a) an order declaring the whole or any part of a contract made between the respondent and a person (the injured person) who suffered, or is likely to suffer, the loss or damage referred to in that section, or of a collateral arrangement relating to such a contract: (i) to be void; and (ii) if the court thinks fit - to have been void ab initio or void at all times on and after such date as is specified in the order (which may be a date that is before the date on which the order is made); (b) an order: (i) varying such a contract or arrangement in such manner as is specified in the order; and (ii) if the court thinks fit - declaring the contract or arrangement to have had effect as so varied on and after such date as is specified in the order (which may be a date that is before the date on which the order is made); (c) an order refusing to enforce any or all of the provisions of such a contract or arrangement; (d) an order directing the respondent to refund money or return property to the injured person; (e) except if the order is to be made under section 239(1) - an order directing the respondent to pay the injured person the amount of the loss or damage; (f) an order directing the respondent, at his or her own expense, to repair, or provide parts for, goods that had been supplied by the respondent to the injured person; (g) an order directing the respondent, at his or her own expense, to supply specified services to the injured person; (h) an order, in relation to an instrument creating or transferring an interest in land, directing the respondent to execute an instrument that: (i) varies, or has the effect of varying, the first mentioned instrument; or (ii) terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the first mentioned instrument.

Was there a representation made in the November 2019 meeting?

1. I have found that, at the November 2019 meeting the defendants represented to the plaintiffs there were enough cattle in the first plaintiff's herd on the properties that the defendants could sell 400 cattle from the herd in December 2019 and the herd profile would remain intact.
2. I have earlier set out the evidence upon which that conclusion was reached but would mention at this juncture in particular the following: 1. At the November 2019 meeting, Mark confirmed that the first plaintiff's herd was intact and that the 400 head of cattle proposed to be sold in December 2019 were excess to the herd profile numbers in the 2017 Lease Agreement. 2. The Wallace's agreed to the sale of up to 400 head on the basis that they were excess. 3. The representation was reflected in the terms set out in the MOU, particularly at numbered paragraphs 2 and 4.
3. In November 2019, Mark and Ivan were both parties to the 2017 Lease Agreement and were directors of Ivamar.
4. As the earlier mentioned, the herd profile under the 2017 Lease Agreement was 1222 cows, 556 calves, 620 weaners and 29 bulls.
5. The representation was incorrect, as the herd numbers were in deficit and could not sustain the removal of any animals, still less 400 animals, and preserve the herd profile.
6. The herd numbers had been a matter about which the Wallaces had shown close interest throughout 2019. The responses given by the Burkes (as earlier discussed), involved speculation, were without proper foundation and were most likely directed to mitigating the concerns of the Wallace's regarding growing arrears of rent under the 2017 Lease Agreement.
7. The defendants submitted that the MOU did not suggest that a representation that the herd profile was intact was a condition of the agreement that Kirstie was proposing or that any other terms that she was proposing were conditional upon it. This submission is unsustainable.
8. Central to the issues discussed in the November 2019 meeting was the state of the herd profile which was an extension of inquiries of that kind that had been made by the Wallaces throughout 2019.
9. The MOU specifically set out the herd profile in the 2017 Lease Agreement and coextensively, in my view, referred to the consent to the sale of up to 400 head of cattle. The Burkes understood this in the MOU response. They referred to a stocktake having been completed at 29 November and that "it is agreed that the livestock numbers at that time were in excess of the lease values".

Loss occasioned from the November 2019 representation

1. The plaintiffs made the following submissions with respect to damages arising from the sale of the 309 cattle as follows: "148. These 309 animals were moved pursuant to the agreement for the sale of up to 400 head in December 2019 (Mark Burke XXN, T236.40-42, T237.40-42, T238.40-T239.5). 149. The 309 cattle sent to Edwards Livestock in December 2019 were not in fact surplus to the herd profile and their removal caused substantial loss to the first plaintiff. The 309 head comprised 131 heifers and 178 steers. The 131 heifers would have reduced the shortfall of cows to 169. The 178 steers would have reduced the shortfall of weaners to nil and, applying the additional 21 weaners to the shortfall of calves, would have reduced the shortfall of calves to 66. Applying the figures in Kirstie Wallace's affidavit of 4 December 2021 (at EX10-CB1.224) the damages for the loss of the cattle sold in December 2019 are as follows (not including interest): a. Cows: $139,132.48 (131 at $1,062.08); b. Weaners: $153,538.15 (157 at $977.95); c. Calves: $20,536.95 (21 at $977.95); d. Calves that would have been born to the missing cows: $101,706.80 (104 (being 131 x 80/100) at $977.95); 3. Total: $414,914.38. 150. Interest should run from the dates of the removal of the animals, 4 and 11 December 2019."
2. The defendant's alternative case in reply was that if the plaintiffs did suffer any loss, in respect of permitting the sale of 400 head in December 2019, the damages were limited to the value of the stock sold.
3. The defendants submitted that the plaintiffs' case is that it suffered a loss by reason of permitting the sale of 309 head as part of the agreed 400 sale in November 2019. The measure of damages claimed are the prices for comparable stock that were achieved by the plaintiffs after the drought broke. It was submitted that relying on this does not represent that actual loss, as the animals were sold in December 2019 before the drought broke. Relying on post drought prices to fix a loss that accrued during the drought is impermissible as it does not reflect loss.
4. I accept the defendants' submissions in this respect. The calculation of the damages will be, therefore, based upon the assessment of loss in that respect.
5. The parties did not directly address the calculation of damages in that respect. I will provide an opportunity for them to deal with that question following the publication of this judgment.

The January Meeting: Representations

1. I will briefly repeat and elaborate upon earlier conclusions as to representations arising from the January meeting. These conclusions are coextensive with the conclusions reached as to misleading and deceptive conduct in the November 2019 meeting. They are mirrored in the January meeting. The relief available to the plaintiffs in that respect is equivalent to the assessment of loss under the ACL with respect to November 2019 meeting.
2. The claims for damages and other relief arising from representations made during the January meeting were pleaded at CC2 ([5]-[10]) and the relief claimed appeared at [2]-[4]. No defence to the CC2 was served by the defendants.
3. I accept the submissions of the plaintiffs in this respect which may be summarised as follows: 1. At the January meeting, the defendants represented to the plaintiffs that there were enough animals in the first plaintiff's herd on the properties that the herd profile (of 1,222 cows, 556 calves, 620 weaners and 29 bulls) was then intact. 2. Although Mark refused in cross-examination to concede that he had told John at the January meeting that the cattle were all present, his own evidence was that in early January 2020 he thought that most of the cattle were present so far as he could tell. In cross-examination Mark conceded that, in early January 2020, the cattle at Somerset were "close to the number" and that he was not at Khatambuhl to see what deaths had occurred there, but Ivan would have told him if there had been many deaths at Khatambuhl. The calculation of the value of the herd carried out by John at the meeting proceeded on the basis that cattle corresponded to the full herd profile in the 2017 Lease Agreement and that the cattle might be sold on that basis. I agree that it may, therefore, be concluded that Mark did make the representation at the January meeting. 3. Similar to the circumstances of the representation at the November 2019 meeting, the representation made at the January meeting was made in a context where the plaintiffs and the defendants engaged in further commercial negotiations about the terms on which the defendants would continue to work for the plaintiffs. It was, therefore, made in trade or commerce for the purposes of s 18 of the ACL. 4. Mark and Ivan continued to be the directors of Ivamar at that time. 5. For the reasons earlier given with respect to the state of the herd in November 2019, the representation was incorrect as the herd numbers were substantially below the herd profile numbers as specified in the 2017 Lease Agreement. 6. The representation as to the herd profile in the January meeting constituted, therefore, misleading or deceptive conduct or conduct likely to mislead or deceive under s 18 of the ACL. 7. The plaintiffs relied upon the representation of the aforementioned representations, at least to the extent that they took no steps to reverse the previous agreement that the defendants could retain the proceeds of the sale in December 2019 of up to 400 head of cattle from the herd. Nor did the plaintiffs claim for restitution of the cattle sold in conformity with the representations. 8. The plaintiffs also contended that there was reliance indicated by certain parts of the January agreement which correlate to claims made under the cross-claim and also relate to the proposition by the plaintiffs that any claims arising with respect to those entitlements under the January agreement may be defeated under the ACL.

Reliance and the operation of ACL regarding claims under the January agreement

1. The plaintiffs submitted that they would not have agreed to the January agreement provisions if the defendants had not made the aforementioned representations in the January meeting.
2. It was further submitted that the first plaintiff lost the 309 cattle sold by the defendants in December 2019 and the proceeds of those sales. The plaintiffs sought damages being equal to the value of the 309 animals plus interest in the same terms I have discussed with respect to the loss arising from the misleading and deceptive conduct in the November 2019 meeting.
3. Upon the basis that the Court had found, as it has, the existence of the January agreement containing the January agreement provisions, then the plaintiffs' sought orders under s 237 of the ACL relieving them of the burden of each of those obligations.
4. The plaintiffs' submission in this respect derived from written submissions of the plaintiffs which focused upon the November 2019 meeting and the purported November 2019 agreement.
5. I will focus upon those submissions presently so far as they concern the January agreement and the January agreement provisions.
6. The plaintiffs' submission in support of them being relieved of the obligation to make payment in accordance with to the January agreement provisions in whole or in part was based upon the following submissions: 1. The shortfall of the cattle numbers from the herd profile was 22.57% of the herd, a substantial difference that undermines the basis of any agreement on remuneration. The plaintiffs thought that they were paying remuneration underpinned by an asset pool containing a further 548 head of cattle. 2. If the defendants are to be paid any remuneration in relation to management fees, the rate should be adjusted to reflect the substantial reduction in the herd. 3. If it is found that the plaintiffs agreed to pay the defendants the incentive payment, the incentive payment was underpinned by the larger asset pool of the intact herd. The value to the Wallaces of the 548 missing animals would have covered the whole of any incentive payment that would have been payable to the defendants if the herd had been intact. It is unconscionable on the part of the defendants to demand a 10% share that had been negotiated on a false basis, requiring the plaintiffs both to give up that 10% and also to bear the losses resulting from the shortfall in the herd numbers. 4. Other factors that weigh in favour of the elimination or reduction of management fee and 10% incentive are: 1. The defendants ought to have provided invoices containing correct information weekly activity reports but did not do so (par 6 and par 6(e) of the January 2020 email). 2. The defendants had their own and Craig Burke's cattle running on Khatambuhl Creek and Somerset after November 2019. On 20 February 2020, Mark told John that the defendants had 18 heifers and 8 cows on Somerset and 60 cows on Khatambuhl, and that Craig Burke had cattle on Somerset. The defendants were doing work on the Wallace properties for their own benefit also.

THE DEFENDANTS' CROSS-CLAIM

1. The defendants claimed 10% of the net proceeds of sale of cattle between 1 January 2020 and 30 June 2020.
2. In that respect, I accept that the representations made by the Burkes were made in trade and commerce and were misleading and deceptive or likely to mislead and deceive in contravention of s 18 of the ACL. The plaintiffs relied upon the representations in entering into the January agreement and suffered loss by reason of the defendant's contravention. Nevertheless, for the reasons I have given above, the plaintiffs should be relieved of any liability under the January agreement by orders under s 237 of the ACL.
3. The plaintiffs also claimed that it would be unconscionable for the defendants to rely upon the onerous and adverse terms produced by the 10% incentive and, in the result, the defendants were therefore estopped from doing so. It is unnecessary to decide that matter in view of the conclusion I have reached under the ACL.
4. Different considerations arise in relation to the management fee. By the cross-claim, the defendants submitted that they had agreed to supply labour to run the properties across a seven-day period without the responsibilities of management, which had ended with the termination of the 2017 Lease Agreement ([15] of the CC1).
5. It was also pleaded that, at the January meeting, the plaintiffs appointed Mr Hannaford to act as a Regional Manager in relation to properties and that on 1 April 2020, the defendants received an email from Mr Hannaford as agent for the plaintiffs requesting the defendants to provide work on a casual contractor basis. That offer was accepted and they undertook work. On 5 and 13 May 2020, the defendants issued invoices to Mr Hannaford for payment of work undertaken at his request. No payment has been made for those invoices.
6. At [22] of the CC1, the defendants made the following claim:
7. The plaintiffs pleaded that the defendants had agreed to provide labour to run the three properties, denied that the supply of labour was without management and responsibility and otherwise did not admit the claim.
8. In relation to the management agreement, in addition to the earlier arguments to which were referred the plaintiffs responded to the cross-claim as follows: 1. The representations made in the January meeting found an estoppel against the defendants for reliance on the terms of the January agreement in relation to the claims. 2. Two of the claims were based on invoices issued by the defendants for remuneration for work performed for HSLA totalling $26,137.75 (inclusive of GST) in invoices issued to HSLA. It was contended that the entitlement of the defendants to any payments from HSLA for work done for HSLA is a matter between the defendants and HSLA. No liability arises in that respect.

CONCLUSION

1. In the circumstances, the plaintiffs have established that the defendants breached their obligations under the 2017 Lease Agreement in the following respects: 1. A failure to make payments with respect to the admitted matters. 2. A failure to make payment for the unpaid proportion of sale proceeds for the financial years 1 July 2017 to 30 June 2018 and 1 July 2018 to 30 June 2019 in accordance with cl 11 of the 2017 Lease Agreement. 3. A failure to maintain the herd profile and return to the plaintiffs the cattle in the herd profile in accordance with cl 2(a) and Appendix II (as properly construed) of the 2017 Lease Agreement as at the date of mutual termination of that agreement on 1 December 2019. 4. A failure to maintain fences in accordance with cl 2(b) of the 2017 Lease Agreement.
2. The plaintiffs shall have judgment under the SOC in those respects in accordance with the findings of the Court in this judgment for damages or compensation with respect to claims arising from those breaches. The loss will be assessed by reference to the sales of cattle by the Burkes in December 2019. It should be noted that the calculation of the shortfall of the herd on the termination of the 2017 Lease Agreement was adjusted for the sale of 309 cattle in December 2019 (those losses will be reflected in rectification of loss or damage under the ACL).
3. There is a counterpart breach to the January agreement with respect to the shortfall in the herd profile as at 1 December 2019. In that respect, the plaintiffs may have judgment under the CC2 corresponding to the findings as to the shortfall of cattle in this judgment but it must be noted that the claim under CC2 in this respect is a true alternative to the claim for the shortfall in cattle under the SOC. The loss will be assessed by reference to the sales of cattle by the Burkes in December 2019.
4. The Court has found that, at the November 2019 meeting, the defendants represented to the plaintiffs that there were enough animals in the herd on the properties that the defendants could sell 400 animals from that herd in December 2019 and the herd profile would remain intact. The plaintiffs relied upon that representation which was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL and, in that respect, suffered loss and damage upon the sale of 309 cattle from the herd in December 2019. The plaintiffs should have relief under s 18 of the ACL in that respect and judgment under the SOC.

ORDERS AND DIRECTIONS

1. The Court makes the following orders and directions: 1. The plaintiffs shall file and serve Short Minutes of Order reflecting this judgment within 14 days of the date of publication of this judgment including the calculation of damages or compensation but excluding interest and costs. 2. In the event that the defendants dispute the draft Orders filed and served pursuant to Order (1) they shall file and serve Short Minutes of Order specifying the variation to those orders sought within 7 days of the receipt of the plaintiffs' Short Minutes of Order. 3. The plaintiffs shall file and serve draft orders as to interest and costs, separate and additional to the Short Minutes of Order pursuant to Orders (1) and (2) above, submissions in support of the same (not exceeding 5 pages in length, unless by leave of the Court) and any evidence with respect to interest or costs within 7 days of the receipt of draft orders pursuant to Order (2). 4. The defendants shall file and serve draft orders as to interest and costs together with submissions (not exceeding 5 pages in length, unless by leave of the Court) and any evidence in response to the plaintiffs' draft orders, submissions and evidence filed and served pursuant to order (3) within 7 days of the receipt of the draft orders pursuant to Order (3). 5. The Court shall resolve any disputes arising as to the form of orders, interests or costs on the papers, unless any party seeks an oral hearing with respect to the same.

Endnotes

1. Mount George (Manning River): Ex 6.
2. A term defined below in the procedural history.
3. Ibid.
4. Plaintiffs' Chronology, page 2 [note: this chronology was agreed to by both parties per Transcript, 5 December 2022, page 8].
5. The Burkes had supplied feed to the cattle.
6. Notwithstanding the figure of 311 cattle sold in the joint chronology, the parties adopted a common position in their written and oral submissions of the sale number being 309. The difference appears to derive from an inconsistency between the National Livestock Identification System ("NLIS") documentation showing 311 and the 'European Union Vendor Declaration (Cattle and Waybill)' showing 309. I shall adopt the common position stated by the parties in their submissions.
7. CB, p 17, [65].
8. An ASIC company search of 19 February 2021 found that John was a director of the first plaintiff, KCPC, and the third plaintiff, Silknot. As per an ASIC company search of 19 February 2021, Kirstie was a director of the first plaintiff, KCPC, the second plaintiff, KS and the third plaintiff, Silknot. I note, that the agreed Dramatis Personae, provided by the parties during the hearing, identified John and Kirstie as 'officers' of those companies rather than directors.
9. As per the agreed Dramatis Personae.
10. The cattle on the properties were, in fact, owed by KCPC: SOC, [9].
11. Those ratios as at March/April 2020: see email from Hannaford to Mark of 3 April 2020 (J/W-2, p 75-76).
12. Ivan and Mark were the sole directors of Ivamar: FAD at [12] and [14].
13. Lease Agreement v5, Cl 7.
14. Lease Agreement v5, Cl 1.
15. I note that the pleadings in the SOC do not refer specifically to SN as the trustee of Khatambuhl Creek Trust.
16. Anticipated term is referred to as the term of the contract was not fulfilled.
17. 2017 Lease Agreement, cl 9
18. "Cattle Numbers - March 2019", CB p 1210.
19. Transcript 7 December 2022, p 168-169.
20. Also referred to as 'Martin's'.
21. Also known as Stanton's'.
22. Transcript 7 December 2022, p 168 - 169

Amendments 17 May 2024 - Paragraph [587], second sentence - changed "plaintiffs" to "defendants". DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 May 2024