Leason Pty Ltd v Dalgety Farmers Ltd & Ors [1986] FCA 94

_ BETWEEN : LEASON Pry. LTD. : Applicant AND: DALGETY FARMERS LIMITED (formerly

Respondents AND BETWEEN: DALGETY FARMERS LIMITED (formerly

Leason Pty. Ltd. ("Leason"), a Victorian company, claims damages and other relief against Dalgety Farmers Limited

("Dalgety") and one of its former employees, Mr. Graham Campbell.

The claim 1s based on the alleged acquisition in January 1982 by

Leagon of the stallion "Irish Playboy". The horse was then

purchased in the United States for the price of $US550,000.00. There 1s a dispute between the parties as to the identity of the buyer: Leason claims that it was the -purchaser whilst Dalgety

contends that Mr. J.B. Sanders, a director of Leason and its

controller, was the party to the agreement to purchase.

Shortly stated, Leason's claim 1s that it was induced to acquire the horse by certain misleading statements alleged to have been made by Mr. Campbell, the general manager of Daligety's Bloodstock Division at the time. The statements principally relied on are alleqed to be to the effect that, by way of "syndication" of the horse. Mr. campbell nad already sold 12 shares inthe syndicate and that Dalgety's staff would sell another eight shares expeditiously. Leason claims that Dalgety represented to it that prices in the range of $18,000.00 to $25,000.00 per share would be achieved. The making of any of such representations 1s denied by the respondents although 1t 15 common ground that Dalgety was appointed to act as agent on the sale of shares in the horse. It is also common aground that Mr. Campbell and Dalgety's staff were unable to sell any such shares, although they say there were good reasons for this, including the serious downturn in the Australian economy 1n 1982 and the fact that "Trish Playboy" became seriously ill whilst in quarantine in

North America and did not arrive in Australia until Audqust 1982.

Misleading or deceptive conduct or conduct likely to mislead or

deceive within the meaning of 5.52 of the Trade Practices Act

1974. Similar claims are made under s.53 of the Trade Practices

Act. Leason also alleges that the circumstances of the case give rise to claims by it against Dalgety and Mr. Campbell under the general law for negligent misstatement. Related claims under the

general law are made including claims in deceit and for breach of

Por ats part, Dalgety has cross-claimed against Mr. Sanders or, alternatively, Leason, for monies advanced by it in connection with the acquisition of "Irish Playboy". It 15 not disputed by the cross-respondents that Dalgety advanced to some party the sum of $399,368.95 on that account: Nor is it disputed that. thereafter, Dalgety advanced further funds in connection with the costs of importation of the stallion. Again, there is a dispute _as to the party liable: on behalf of the cross-respondents., 1t 1s submitted that Leason rather than Mr. Sanders is liable. A separate issue has arisen on the cross-claim as to the method of calculation of interest payable on the debt owed to Dalgety. Specifically, the question arises whether Dalgety is... entitled to compound interest on its

debt or whether. as the cross-respondents araque, Daigety is

By its amended statement of claim. lLeason alleges that

Dalgety conducted the business of a bloodstock agency; that by its servants and agents including Mr. Campbell, it held itself out and Mr. Campbell held himself out, as having particular expertise in the selection, valuation and acquisition of stallions, the financing of the acquisition of stallions and the sale of shares in stallions by way of "syndication" (para.2B); that Mr. Campbell held himself and Dalgety out to Leason as "having surficient influence in the bloodstock industry to be able to facilitate the sale of shares in stallions selected,

acquired and financed in accordance with the advice and approval

of Campbell and Dalgety (para. 3A); that in about June 1980, Mr.

Sanders, on behalf of Leason. informea Mr. Campbell that a further stallion was required for Leason's stud (known as "Napier Park Stud") (para. 3Bla)); that between June 1980 and December 1981 Mr. Campbell advised Mr. Sanders in respect of "what transpired to be unsuccessful proposals or opportunities to

It 1s alleged that in each such instance, Mr. Campbell Imew that Leason could not acquire any such stallion unless assured by Mr. Campbell and Dalgety that "syndication" of the stallion could be effected expeditiously by them (para. 2B(c)(i)); and consequently, that Leason relied upon the advice and assurances of Dalgety and Mr. Campbell that they could and would expeditiously "syndicate" any stallion purchased by Leason

The amended Statement of claim then alleges that in the last week of December 1982 (sc.1981), Mr. Sanders, on behalf of Leason, arranged and attended a meeting at Dalaety's premises with, inter alia, Mr. Campbell, and that prior to the meeting, Mr. Campbell was unformed by Mr. Sanders that the purpose of the meeting was "to advise CLeasonJ on the future operations of its stud" (para. 3B(d)(i) and (ii)). At the meeting, Dalgety and Campbell allegedly advised Leason first, to "syndicate" two stallions "Galway Bay" and "Royal Biscay" with a view to selling 20 shares in each, secondly, that Dalgety could sell such shares and thirdly, that "Dalgety could syndicate and sell shares in what was described as a Group 1 winner from England being a brother to a successful sire for a sum of $18,000~-$25,000" fpara.3B(d)(21ii): at a late stage of the trial, Leason amended this allegation by deleting the reference to "Group 1 winner" to "Group winner" - the significance of this amendment to a central

_Geason claims that Mr. Campbell and Dalgety knew that Leason relied on their expertise in this connection (para. 3B(d) (iv). As aresult, it 1s alleged that in January 1982, Leason entered into negotations with Mr. Campbell and Dalgety for the purchase of "Irish Playboy", the financing of its purchase price by Dalgety and its "syndication" by Dalgety (para. 4). Leason claims that in January 1982, during the course of the

negotiations, Mr. Campbell represented to an agent of Leason, Mr.

John Harrington, that the horse would be "easy to syndicate" and

that "he CCampbellJ could seil 10 shares of the proposed 42

shares in the horse straight away"; and that Mr. Campbell subsequently represented to Mr. Sanders that '"he CCampbellid had sold 12 shares in the horse and that his CCampbell'sJ staff would sell eight shares in the horse"and "that the purchase syndication and sale of shares 1n the horse could and would be expeditiously effected by Dalgety." (para.5).

Leason then alleges that, relying on this holding out, these advices, assurances, representations and statements, Leason, by its servants and agents, travelled to the United States and inspected the horse, paid the sum of $100,000.00 to Dalgety and on 20 January 1982 entered into an agreement (herein called "the agreement") to sell and purchase with Dalgety (para. 6). Further, at is claimed that it was then agreed between

GLeason and Dalgety that the price of a share in the syndicate was

Leason next says that these representations. statements and assurances were false and misleading and deceptive in that neither Mr. Campbell nor Dalgety had any reasonable grounds for the assertion that 10 shares could be sold straight away; in that Mr. Campbell had not sold 12 shares: in that neither Mr. Campbell nor Dalgety had any reasonable grounds for the assertion that the staff of Dalgety would sell eight shares in the horse; and in that neither Mr. Campbell nor Dalgety had any reasonable

grounds for assuring Leason that the syndication and sale of

las toa ee 2 [tate taats ttn nendin NA he alnn t ' ,

shares in the horse could and would be expeditiously effected by

Then Leason claims that, as at 20 January 1982, Mr.

Campbell and Dalgety knew that the belief of Leason as to the

ease of "syndication" of "Irish Playboy", a belief induced by Mr.

Campbell and Dalgety, was wrong. Specifically, Leason claims

that, as at 20 January 1982 Dalgety and Mr. Campbell were not

able to effect a successful "syndication" and sale of shares in iy

the horse by reason of the competing claims of other stallions then being syndicated and sold by Dalgety and the priority given '

to such other stallions by Mr. Campbell and other employees of

Dalgety; and that Dalgety could not apply such expertise,

facilities and staff as 1t had to the sale of shares in the horse by reason of the amount of its resources then applied to the sale of other syndicated stallions it was selling at the time, and further by reason of the amount of its resources being applied to the opening of 1ts premises at Oaklands Junction, near Melbourne,

and the impending sale to be conducted at those premises by ait

Leason further alleges that the conduct of Mr. Campbell

| ! j and Dalgety in failing to inform Leason of these matters and of

; permatting Mr. Sanders and Leason's stud manager, Mr. Todd, to

travel to the United States to inspect the horse, to pay the sum

of $100,000.00 to Dalgety and to enter into the agreement already re

mentioned, misled and deceived Leason (para.93). A contravention

of 33.52 and 53(c), (d), (e) and (f) of the Trade Practices Act by Dalgety 1s claimed and Mr. Campbell is said to be a person

The amended statement of claim also seeks to raise a number of causes of action at common law. Furst, it pleads that that in order to induce Leason to enter into the agreement and to pay Dalgety the sum of $3100.,000.00, Mr. Campbell warranted, or alternatively represented, to Leason each of the matters alleaed an para. 5 of the amended statement of claim (para.13); that the Warranties were breached and the "representations Pleaded were false ain that Dalgety and Mr. Campbell "did not intend to be bound by the Agreement" (para.14); that Dalgety by its servant and agent, Mr. Campbell, or alternatively, Mr. Campbell personally made the said representations knowing them to be false and untrue or made them recklessly, not caring whether they were true or false (para.15); that acting on the faith of the said warranties and the said representations, Leason committed itself

to the agreement and paid to Daigety the sum of 53100-000.00

Secondly, Leason alleges that in consideration of Leason entering into the agreement. the parties made an agreement collateral to the agreement "to the intent that CLeasonJ should rely thereon as to each of the matters enumerated in paragraph 5 herein." {para.17). Then it is claimed that, contrary to the

representations pleaded in para. 5S and in breach of the

collateral agreement and warranty referred to in para.17, Dalgety

and Mr. Campbell did not "honour" the terms and conditions of the

Thirdly, Leason alleges that Dalgety and Mr. Campbell well knew that Leason "was minded" to acquire the horse and syndicate it into 42 equal shares of $19,500.00 (para.20); that Dalgety by its servant and agent, Mr. Campbell, or alternatively Mr. Campbell pesonally, made the representations to Leason alleged in para. 5 (para. 21) intending to induce GLeason to enter unto the agreement and to pay Dalgety the sum of $100,000.00 (para.22); that in the premises Dalgety and Mr. Campbell were under a duty to take care in the making of the said representations to Geason (para.23); that, acting on the faith of the representations and induced thereby, Leason entered into

the agreement and paid to Dalgety the sum of $100,000.00

(para.24); and that in breach of this duty, Dalgety and Mr.

Campbell were guilty of negligence in making the said representations tpara. 25). Particulars of negligence include failing to make any or any reasonable or proper assessment or inquiry to determine whether 20, or any other number, of prospective purchasers were willing and able to acquire a share

It is then alleged that the representations were "false, untrue, inaccurate and misleading" (para. 26). The particulars

given in para. 8 are relied upon. Alternatively, 1t 15 alleged

that by an agreement made in January 1982, Dalgety agreed that if Leason paid to it the sum of $100,000 and entered into the agreement, Dalgety would effect the sale of 20 shares in the "syndication" of the horse (para.27); and that in breach of that

collateral agreement, Dalgety neglected to sell any shares in the

A question arises at the outset as to the nature of the case thus pleaded by Leason. The matter was debated at some length during the course of the trial but the parties remained at issue as to the case sought to be made. The several causes of action alleged in the. amended statement' of Claim may he summarised as follows: Firstly, claims under ss.52 and 53 cf the Trade Practices Act that Mr. Campbell and Dalgety engaged in conduct likely to mislead Leason by representing to it in the course of the negotiations for the acquisition of "Irish

(a) that they had the influence, expertise and facilities to achieve an expeditious sale

(b) that the horse would be "easy to syndicate" and that Mr. Campbell could sell 10 shares "straight away" (alleged to be made to Mr.

(c) that Mr. Campbell had sold 12 shares, that his staff would sell eight shares and that the sale of shares could and would be expeditiously effected by Dalgety (alleged

Practices Act that Mr. Campbell and Dalgety engaged in conduct

likely to mislead Leason by failing to inform it that, because of

other commitments. Mr. Campbell and Dalgety were, to their

knowledge, unable to achieve a successful "syndication" of the

Thirdly, a claim for breach of collateral warranty in

terms of the representations alleged in para.5 of the amended

statement of claim (i.e. the claims firstly summarised above)

Fifthly, a claim for negligent Misstatement based upon

these representations (paras. 19, 20, 21, 22, 23, 24 and 25).

Sixthly, a claim in contract that, in consideration that Leason pay to Dalgety the sum of $100,000.00 and enter into the

agreement, Dalgety promised that it would effect the sale of 20

Before reference 15 made to the evidence of the conversations said to constitute the misleading statements and representations_now relied on, 1t 1s necessary to mention some backaYfound matters about which there can be no dispute. It is convenient to commence in 1981. Dalaety was then and now is in the business of selling and promoting bloodstock in Victoria. For this purpose, 1t held annual and other sales. It acted as the agent for the sale of ploodstock and shares in bloodstock. (It will be necessary later to analyse the legal character of such a share.) Dalgety then employed Mr. Campbell, an experienced and knowledgeable bloodstock consultant, as general manager of its Bloodstock Division. based in Melbourne. Mr. Sanders knew Mr. Campbell well, having been a client of Dalgety for some years. Mr. Sander's earlier background had been in the field of real estate but. some years previously, 'Mr. Sanders, through family interests (both corporate and trust), - had established a horse stud, Napier Park Stud. at Euroa, in

Victoria. Standing at Napier Park Stud were the two stallions i

already mentioned, "Galway Bay" and "Royal Biscay".

There is little else inthe whole dispute which is common ground. The parties are at issue on virtually every

aspect of the case, both in its general "or1entation and in

specific details, including the statements or representations now relied on. In order to understand the evidence of the many witnesses called, it is necessary to describe, in outline, the

different cases.cpened by the parties. LEASON'S CASE AS OPENED

Towards the middle of 1981, Mr. Campbell advised Mr. Sanders, acting on behalf of Leason. that he should "upgrade" Napier Park Stud by acquiring a good quality stallion from overseas. Mr. Sanders then made it clear to Dalaety that he could not command sufficient resources to finance such an acquisition. assuming a purchase price ranging upwards from $500,000.00. Thus it was made clear to Dalgety that Leason could only proceed with a transaction of that order 1f shares in the horse were taken up by other parties by way of a syndicate

At about this time a United Kingdom stallion, "Hard Green" was brought to Mr. Sander's attention by Mr. Campbell ata

price about $500,000.00. Mr. Sanders, having told Mr. Campbell that he could. only proceed 1f the horse were "syndicated", proceeded to England to inspect it. However, an inspection disclosed a genetic fault with the stallion's jaw and the matter

was dropped. Mr. Campbell next recommended to Mr. Sanders a

French stallion, "Adraan", ata price of $1,400,000.00. Mr.

Sanders informed Mr. Campbell that, although he was interested,

he could only afford three or four shares in such a horse.

In October or November 1981, Mr. Harrington, a director of one of Europe's largest bloodstock agencies, the Irish-based Curragh Bloodstock Agency, spoke to Mr. Sanders about another overseas stallion, "Centurius". (Mr. Harrington had previously

met Mr. Sanders in Australia.) The asking price was 275,000.00

pounds sterling. Mr. Sanders also discussed the proposal with

Mr. Campbell. According to Mr. Sanders. a significant discussion about ""Centurius" took place with Mr. Campbell and his staff between Christmas 1981 and the New Year. Mr. Sanders arranged for the meeting to be held at Mr. Campbell' s office. There were also present at the meeting Mr. Peter Cornell, manager of the Victorian branch 'of Dalgety's Bloodstock Division, Mr. Daryl Sherer. a bloodstock consultant, Mr. Frank Mitchell. chief auctioneer, Mr. Peter Heagney, auctioneer and Mr. Tan Baird,

At the meeting. Mr. Sanders raised the prospect of Leason's "syndicating" the two stallions then standing at Napier Park Stud. Having adverted to his own lack of experience at "syndication", he sought the advice of Mr. Campbell and his staff whether his proposal was feasible and, if so, what price per share should be sought. Mr. Sanders also raised the proposed purchase of a third stallion, and although he had "Centurius" in

mind, he did not mention him by name. He was designated "Mr. X".

In his opening, senior counsel for Leason said that Mr. Sanders then believed that "Centurlus" was a "Group 1" winner. (As has been noted, this point was the subject of an application, made during the trial, further to amend the amended statement of claim). A price per share in the range of $18,000.00 to $25,000.00 was estimated to be capable of achievement" and the staff members advised Mr. Sanders that the acquisition and "syndication" of "Centurius" would be a feasible proposition. But the advice could not be put into effect because difficulties arose in the neqotiations with the owner of "Centurius" and, in the result, Leason was unable to buy the stallion.

However, 1n early January 1982, Mr. Harrington spoke by telephone to Mr. Sanders about the availability of "Irish Playboy". Mr. Sanders had previously heard that "Irish Playboy" was on the market at $2,000,000.00 but Mr. Harrington said that the asking price was then in the order of 30US500,000.00 plus commission. Mr. Sanders telephoned Mr. Campbell, sought and obtained, his advice as to the horse's prospects and as to the possibility of ""syndication". Having decided that the proposition appeared viable, Mr. Sanders then flew to California to inspect the stallion, arriving in Los Angeles on 14 January. He inspected "Irish Playboy" on that day in the company of Mr.

Todd, who is now deceased and Mr. Harrington who had come from

Having sought the advice of Messrs. Todd and Harrington,

Mr. Sanders formed the view that "Irish Playboy" "looked a pretty good proposition at that price". Mr. Sanders then telephoned Mr.

Campbell. "Syndication" was discussed. According to Mr. Sanders,

Mr. Campbell then said words to the effect that Mr. Sanders

should not worry about "syndication", "Irish Playboy" would be another "Lord Seymour". (This was a reference to another stallion imported into Australia as a consequence of the joint

efforts of Mr. Harrington and Dalgety which had been quickly and

telephone. Mr. Campbell told him that he was then able to sell 10 shares. Mr. Harrinaton told Mr. Campbell that he would be

able to sell five shares to European interests. This information was later relayed by Mr. Harrington to Mr. Sanders who then

Mr. Sanders returned to Melbourne on 18 Januarv. on that day, he met with Mr. Campbell and discussed "syndication". Mr. Campbell said that he had sold 12 shares and that the other sales staff would be able to sell eiaht shares. Mr. Sanders said that he or his family interests would subscribe for 12 shares. Two shares were to be qiven to Mr. Campbell as a reward for his efforts in the transaction. The cost of acquisition of "Irish Playboy" and other incidental expenses including import duties and insurance were discussed. An asking figure of $19,500.00 per

share was proposed, together with a fee of $6,500.00

as the price for a nomination of a mare to the stallion.

The discussion ended with Mr. Campbell's informing Mr. Sanders that the transaction would have to be placed before Dalgety's board of directors for approval. Mr. Sanders was invited to return the next day to be told the outcome. On 19 January, Mr. Sanders was told that the purchase could proceed provided that he paid a deposit of $100,000.00. Mr. Sanders protested at being asked to provide a deposit at such a late stage, but on 20 January, he executed a document evidencing the purchase of "Trish Playboy". Some days later, the deposit of $100,000.00 was paid. The horse was acquired but, as has been

said, Dalgety was unable to achieve the sale of any shares and

Leason claims to have suffered financial loss accordingly.

Dalgety puts an entirely different complexion upon the

It says that in the years 1979, 1980 and 1981. the bloodstock industry in Victoria had enjoyed buoyant conditions. In that period, Dalgety had participated in many successful syndications. As well as "Lord Seymour", Dalgety succeeded in negotiating the sale of shares in the stallions "Voodoo Rhythm", "Sovereign Red" and "Full On Aces". Unfortunately for Leason, in

early 1982 the condition of the general economy declined sharply,

interest rates were raised to record levels and the Australian market for bloodstock, aincludina shares offered by way of

Although Mr. Campbell did discuss both "Hard Green" and "Adraan" with Mr. Sanders in 1981, neither transaction was able to proceed. Mr. Sherer sought to obtain an option on "Adraan" for Mr. Sanders but soon found himself in competition with Mr. Brian Maher for the stallion. Mr. Campbell arranged for the preparation by Dalgety of a cash flow chart dealing with a proposed "syndication" of "Adraan", providing, inter alia, for payment by Mr. Sanders of a deposit of $120,000.00. A point was reached where Mr. Maher intended to purchase within 24 hours. Mr. Campbell then informed Mr. Sanders that 1t would not be possible to obtain the approval of finance from his superiors

Late in 1981, Mr. Sanders, through Dalgety, sought to negotiate for the purchase of "Centurius". The horse was inspected by Mr. Mitchell in Europe in about October 1981 and was quoted by Mr. Harrington to Mr. Sanders. Dalgety supplied Mr. Sanders with a pedigree of "Centurius". Again, the proposition did not proceed as the stallion was purchased by an Irish

breeder, Captain Tim Rogers, at the beginning of December 1981.

In early 1982, Mr. Sanders telephoned Mr. Campbell and

informed him that Mr. Harrinaton had referred a horse to Mr.

Nr ren age eee ree et) LA 7 . ae - . tour emet rd t

Sanders in which he was very interested. Mr. Sanders would not mention the name of the horse on the telephone but arranged an immediate meeting with Mr. Campbell. At the meeting, Mr. Sanders told Mr. Campbell that Mr. Harrington had quoted him a Group 1 winner, "Irish Playboy", which Mr. Harrington said was a very good horse. Mr. Sanders asked Mr. Campbell to obtain a pedigree for -him and to cali a meeting with Dalgety's sales staff to discuss the "syndication" of "Galway Bay" and "Royal Biscay". He asked Mr. Campbell not to mention to the staff his interest in "Irish Playboy". To achieve confidentiality, he proposed that the stallion be referred to at the meeting as "Mr. X".

The meeting took place on 7 or 8 January. Mr. Sherer had prepared a pedigree for "Irish Playboy" and Mr. Campbell had given the pedigree to Mr. Sanders before the meeting. The sale of 20 shares in each of "Galway Bay" and "Royal Biscay" was discussed. Dalgety's staff accepted Dalgety's appointment as agent for sale. Mr. Campbell then introduced the subject of "Mr. statement of clain,

Leason's case, contrary to the finding of fact already made, as that this meeting was concerned with I "Centurius" and not "Irish Playboy". It follows that

'b) The representations alleqed to have been made on the

telephone from California (amended statement of claim,

representation was made on this occasion by Mr. Campbell 2

{c) The representation alleqed to have been made by Mr.

Campbell on 18 January 1982 to the effect that he had

already sold 12 shares (amended statement of claim para.5(b)}

In accordance with the finding that lLeason has not

established that Mr. Campbell made a statement to the

effect that he had already sold 12 shares, this part of

The alleged representation by Mr. Campbell on 18 January 1982 that the staff would sell e1rght shares (amended

Mr. Campbell's evidence is that at the "Mr. X" meeting, he said that it was believed that the staff could sell eight shares. As has been said, the statement was neither misleading nor deceptive at the time 1t was made. As a prediction, it was not fulfilled. but the settled course of authority in this Court demonstrates that the mere non-fulfillment of a prophecy aces not establish a contravention of 5.52 of the Trade Practices Act. A contravention will only occur if the maker of the statement does not ain fact hold 'the opinion

expressed or if there is no reasonable basis for holding

It is common ground that, as at January 1982, market conditions in the Victorian bloodstock industry were good, Dalgety led evadence that the market did not deteriorate until the 1982 Easter sales in Sydney. This evidence was not challenged, although Leason did attempt to attribute Dalgety's failure to achieve a successful "syndication" of "Irish Playboy" to other commitments of

Dalgety. First, Leason pointed to the fact that, at

this time, Dalgety was undertaking the construction of a

large complex at Oaklands Junction. It may be assumed

" that this project absorbed much executive time. But 1t

undertaking would distract Mr. Campbell or other members

of Dalgety's sales staff to the point where they were unable to devote proper time and attention to the

Leason also complained that Dalgety's sales staff were preoccupied in the sales of shares in other stallions. The complaint 1s rejected. Many of the sales in other horses were erfected earlier in more promising market conditions: the timing of the marketing of the shares in "Irish Playboy" was unfortunate to coincide with the serious downturn in the Australian economy which began to be felt in March 1982. Moreover, the known 1llness of "Irish Playboy" which occurred in March 1982 and delayed his arrival at Naprer Park Stud until August 1982, must have had a disastrous effect on the attempts

It follows that Mr. Campbeli's statement in January 1982 that the staff could sell eight shares was not

The representation alleged to have been made by Mr.

Campbell that the sale of shares in "Irish Playboy"

could and would be expeditiously effected by Dalgety (amended statement of claim, para.5(c))

This allegation raises a consideration of the same matters as are raised by the allegation made in -para.S(b) of the amended statement of claim. In short, Mr. Campbell acknowledges that, at the "Mr. X" meeting, he expressed the belief that Dalgety could achieve the sale of a total of 20 shares. No doubt 1t would be proper to anfer from such lanquage an implication that it was Mr. Campbell's belief that the sales would be effected within a reasonable time. Leason has not shown

likely to be so in the sense aiready discussed. This part of Leason's claim is rejected.

_ The principal claims made by Leason have already been dealt with. It follows from what has been said that the consequential claim under the Trade Practices Act made in para.8A of the amended statement of claim must also

fe pe gD Sonne pen op THe cen ore "ae ~ . e 2 rome aan + . gy _ mee a soe tk so

It follows from the findings made adverse to Leason that the general law claims must fail also. [It should be noted that, in the course of addresses, senior counsel for Leason indicated that the claims for breach of contract made in paras.27 and 728 of the amended

First, there is a dispute as to whether the party liable to Dalgety is Leason or Mr. Sanders personally. As has been noted, Mr. Sanders personally executed the agreement for purchase and related documents. Although the adreement described the purchaser as "Napier Park Stud Syndicate". no attempt was made by Mr. Sanders in the drawing or execution of the documentation to suggest that his signature was intended to be placed there asa representative of Leason. On the contrary, his signature appeared above the word "purchaser" in each case. Prima facie, Mr. Sanders 1s liable

Senior counsel for Mr. Sanders invited a consideration of the

surrounding circumstances as negating any intention on his part to assume a personal liability. He pointed to the fact that in the statement of his affairs previously furnished to Dalgety, Leason was shown as the repository of his horse stud interests. He also relied onan admission made by Mr. Crookshanks in the course of his evidence that he believed that Leason was intended to be the party. This admission was reflected in Dalgety's initial accounting treatment of the transaction - the account was raised in the name of Leason,

although later changed upon receipt of legal advice that Mr.

~Mr. Crookshanks' views of the legal question which has arisén are not. of course, decisive of the point. The surrounding circumstances and the subsequent conduct of the parties, including the solicitors' letter of demand, written on behalf of Mr. Sanders and not Leason., are equivocal on the issue.

They are not sufficient to displace the prima facie liability

of Mr. Sanders indicated by his execution of the transaction

The second question on the cross-claim is whether Dalgety is

The letter of understanding provided that it was agreed that

the advances made "will bear interest at that rate charged

No dispute arises as to the percentage at which interest was charged by Dalgety. Evidence was given that in the period now in question, it was the practice of Dalgety to compound its interest charges. Dalgety puts its case on this aspect of the cross-claim in a number of ways but itis only necessary to consider its primary contention that the reference in the letter of understanding, to the "rate

charged from time to time by CDalgetyJ" picks up not only the

As a matter of construction of the letter, to divorce the compound nature of the interest charged from 1ts percentage is an artificial process and unlikely to have been intended by the parties. The preferable interpretation is to hold that the letter intended to pick up Dalgety's practice with respect to the rate of interest in all its aspects, including

2 compound as distinct from simple rate of interest.

In the result, the application should be dismissed. On the cross-claim, judgment should be entered in favour of Dalgety against Mr. Sanders for the amount claimed, including interest at the compound rate claimed. The representatives of Mr. Sanders

should have an opportunity to consider Dalgety's calculation of

compound interest up to the date of judgment. This can be

publication of the confidential appendix to these reasons he

restricted to the parties and their representatives.

I certify that thas ond the preceding pases are a true copy or the

DALGETY FARMERS LIMITED (formerly DALGETY AUSTRALIA LIMITED) and GRAHAM CAMPBELL

Amendment to the judgment of his Honour Mr. Justice Beaumont

First line of "Minute of Order" should read "respondents"

Page 48 of Judgment - first line "Daglety" should read

Page 48 of Judgment - line 9 "respondent" should read