Neyland v Reid

THE COURSE OF THESE PROCEEDINGS

1. On or about 30 March 2017 the plaintiff lodged a caveat against the title to the property. It claimed a "[beneficial] interest in the land by way of a constructive trust for [the plaintiff] in a share proportionate to the [plaintiff's contribution] to the improvement of the land". The caveat recited the following as the statement of facts giving rise to the claimed entitlement: "Pursuant to agreement between [the plaintiff and the defendant, the plaintiff] at his expense carried out capital improvements to the land for which he was promised a proportionate share in the equity of the land".
2. As the plaintiff's case was presented, it would be more accurate to describe his claim as a claim to a charge on the proceeds of sale of the land equal to the value of capital improvements he effected to the land or the (actual or imputed) cost to him of effecting those improvements.
3. These proceedings were commenced by a summons filed on 29 May 2017 seeking an order that the operation of the caveat be extended in response to the defendant's service on the plaintiff of a lapsing notice on or about 18 May 2017.
4. The proceedings were subsequently conducted on pleadings. The plaintiff filed a statement of claim on 19 July 2017. The defendant filed a statement of cross claim on 14 August 2017. Ancillary pleadings were also filed, joining issue on the parties' competing claims.
5. On 1 June 2017 the parties came to an interlocutory agreement according to which: 1. the plaintiff undertook to the defendant that he would allow the caveat to lapse; 2. the plaintiff undertook to the Court and to the defendant that he would vacate Kinross Station by 30 June 2017; and 3. the defendant undertook to the Court and to the plaintiff that, upon receipt of the whole or any part of the purchase price in respect of his sale of the property pursuant to the contract dated 12 April 2017, he would "direct the payment of the sum of $250,000 to a controlled moneys account jointly controlled by the solicitors for the plaintiff and the defendant pending determination of these proceedings or further order of the Court".
6. A controlled moneys account was subsequently established. It remains in place, I assume, pending the Court's determination of the proceedings.

CORE QUESTIONS FOR DETERMINATION

1. The core questions for determination in these proceedings are: 1. What were the terms of any agreement, or agreements, between the parties relating to the plaintiff's farming activities (including those relating to goats and those relating to capital works) on Kinross Station? 2. Does the plaintiff have any (and, if so, what) right to compensation under the Agricultural Tenancies Act 1990 NSW consequentially upon termination of the relationship between the parties? 3. Does the plaintiff have any liability to account to the defendant for a share of proceeds of his sale of goats?
2. These core questions are enveloped in disputation about whether the relationship between the parties was, in whole or part, a "partnership" within the meaning of the Partnership Act 1892 NSW.
3. The plaintiff contends that there was no such partnership (for convenience, described as a partnership "at law") and that, when he described the parties' relationship in his statement of claim as a "joint venture and partnership arrangement", he was not to be understood as embracing the concept of a partnership at law. His contention is that the parties' "arrangement" was in the character of a "joint venture", falling short of a partnership at law. Prompted by the defendant's use of the word "partnership" in an early affidavit, in his subsequent pleadings and affidavits he used the expression "partnership", he maintains, only in a colloquial sense.
4. At the hearing of the proceedings, both sides of the record from time to time used the labels "partnership" and (to a lesser extent) "joint venture" to describe the parties' relationship or goats jointly owned by them.
5. The plaintiff does not seek in these proceedings any relief which is dependent upon, or related to, the existence of a partnership at law. His claims for relief, as articulated in his statement of claim, are characterised as: 1. a claim for damages for breach of contract; 2. alternatively, in the absence of a finding of contract, a claim for equitable compensation based upon an allegation of estoppel; and 3. in the alternative, a claim for compensation under the Agricultural Tenancies Act 1990.
6. A question which arises for the Court's consideration on the plaintiff's ultimate claim for relief is whether the Court has jurisdiction to make an order for compensation under the Agricultural Tenancies Act or whether such an order is within the exclusive province of the NSW Civil and Administrative Tribunal ("NCAT"). The defendant's denial that the plaintiff has an entitlement to compensation under the Act stops short of a denial of the Court's jurisdiction to make an order for compensation.
7. By his statement of cross claim, the defendant seeks orders to the following effect: 1. a declaration that the partnership between the parties was dissolved on 6 April 2017 or, alternatively, an order that the partnership be dissolved forthwith; 2. an order that the partnership be wound up under the direction of the Court; 3. an order for the taking of accounts, including an inquiry as to the assets of the partnership and the respective interests of the partners, and an account of all dealings of the partners; and 4. an order that the plaintiff pay to the defendant amounts found to be due upon those inquiries and accounts.
8. In common with his statement of cross claim, the defendant's defence pleads the existence of a "partnership", coupled with a denial of the "joint venture and partnership arrangement" pleaded in the statement of claim.
9. In presentation of his case, the defendant disclaimed any allegation that the plaintiff had acted in breach of a fiduciary duty owed as a partner for his pursuit of business opportunities (in the acquisition and sale of goats on his own account) which should have inured for the benefit of the partnership. His case, in essence, was that the plaintiff is liable to account to him for half of the proceeds of sale of all goats taken off Kinross Station unless he (the plaintiff) can prove that they were not "partnership goats"
10. The nature of the defendant's cross claim is summarised in paragraphs 81-82 of his written submissions dated 16 October 2019: "[81] … The defendant's entitlement to account arises by reason of the partnership arrangement between them, or equally by reason of the fiduciary obligations owed by the plaintiff. The defendant's entitlement to an account also arises, by reason of the admitted agreement between the parties to share the proceeds of sale of goats, in respect of the admitted proceeds of sale of goats from the plaintiff's June 2017 muster. [82] The defendant does not seek an accounting in respect of the proceeds of sale of goats which the plaintiff can establish were 'paid for, yarded and transported by the plaintiff with no contribution by the defendant apart from the fact that they may have been transported from stock yards located on his property'. However the defendant submits that the plaintiff, having failed to produce sufficient records to enable those goats to be clearly identified, must account to the defendant for the goats he cannot show were 'paid for, yarded and transported by the plaintiff with no contribution by the defendant'. The documentary evidence suggests that there were 25,000 goats removed from the property [between 2013-2017] which were not 'paid for, yarded and transported by the plaintiff with no contribution by the defendant' and the plaintiff must account to the defendant for those goats [by payment of a sum representing 50% of the estimated value of those 25,000 goats]".
11. Although the defendant's case has been pleaded exclusively in terms of an allegation of "partnership", his presentation of that case has not been so limited. His primary case is that there was a partnership at law. His secondary case is that the plaintiff was bound by fiduciary obligations arising from either a "joint venture arrangement" or, more simply, the plaintiff's sale of goats jointly owned by the parties.

PLEADING DISPUTES

1. The defendant contends that the plaintiff is bound by his pleadings to accept that there was a partnership at law between them. On my reading of the pleadings, that is not so: 1. The cause of controversy is the plaintiff's use of the expression "partnership" in paragraph 3 of his statement of claim, where can be found an allegation that "the plaintiff and the defendant entered into a joint venture and partnership arrangement" on particularised terms. That allegation is coupled with attachment to the alleged arrangement of a label ("the Goat Breeding Partnership") which may focus undue attention on the word "partnership". 2. The expression "Goat Breeding Partnership" is used at various points in the statement of claim (in paragraphs 4, 5, 9 and 10) in a way that imports the more general expression "a joint venture and partnership arrangement" found in paragraph 3 but does nothing of substance in advancement of the plaintiff's case except to provide context for the plaintiff's central allegations. 3. The plaintiff's central allegations (in paragraphs 6-8) are to the effect that "… the defendant agreed with and, or alternatively represented to, the plaintiff that, in consideration for the plaintiff carrying out certain improvements to the property [of the defendant], if and when the property was sold, an amount of money equivalent to the value of the improvements undertaken by the plaintiff would be paid by the defendant to the plaintiff out of the sale proceeds for the property…". That allegation is pleaded in terms of the law of contract and estoppel, without reference to any concept of partnership law. 4. The relief claimed in the statement of claim bears no relationship to a claim based on an allegation of partnership at law. Leaving aside the Agricultural Tenancies Act, the plaintiff's claims for relief reflect allegations of contract and estoppel. 5. Paragraph 3 of the defendant's defence expressly denies paragraph 3 of the statement of claim (that is, the plaintiff's allegation of "a joint venture and partnership arrangement") and alleges, instead, that "the plaintiff and the defendant formed a partnership the object of which was to engage in the breeding and selling of goats for profit" on particularised terms. The defendant's allegation of a "partnership" was an express joinder of issue with the plaintiff's less formal allegation of "a joint venture and partnership arrangement".
2. The defendant's contention that the plaintiff is bound by his pleadings to accept that there was a partnership at law between them is an aspirational, forensic construct, not a fair reading of the plaintiff's pleadings or a fair assessment of how the final hearing of the proceedings was conducted. Against resistance by the plaintiff, the defendant sought (in my view, unsuccessfully) to impose upon the plaintiff his own preferred terms of engagement.
3. The defendant has his own difficulties with the nature and scope of his pleadings. On the face of his defence and cross claim, his claim to an accounting for goat sales is tied to a finding that the parties' relationship was that of a partnership at law. His pleadings are confined to his primary case and do not, in terms, accommodate his secondary case. The secondary case finds a foothold, not in the defendant's cross claim, but in a combination of paragraph 3 of the plaintiff's statement of claim (which alleges a "joint venture and partnership arrangement" involving a sharing of proceeds of sale of goats) and paragraph 3 of the defendant's defence (which pleads the defendant's terms of the parties' agreement to share sale proceeds). If and to the extent that that case is made out, it depends upon effect being given to the Court's statutory imperative (embodied in section 90 of the Civil Procedure Act 2005 NSW and the Uniform Civil Procedure Rules 2005 NSW, rule 36.1) that judgment is to be given, and orders are to be made, as the nature of the case requires.
4. Each party endeavoured to take a pleading point against the other, about the operation of the law of partnership, without greatly affecting the nature of the real questions in dispute. The defendant contends that, because the statement of claim and the plaintiff's case presentation deploy the word "partnership", the Court must find that there was a partnership at law. The plaintiff contends that, if the Court determines that there was no partnership at law, the cross claim must be dismissed without more.
5. These pleading points obscure, but do not displace, the core questions for determination by the Court. Those questions focus upon the terms of the parties' agreement(s) and such, if any, enforceable rights the plaintiff has under the Agricultural Tenancies Act.

WAS THERE A PARTNERSHIP?

1. Nevertheless, as an incident of determining those questions, attention must be given to whether there was, or was not, a partnership between the parties within the meaning of the Partnership Act. That question must be determined objectively, by reference to the parties' intention, inferred from what they said, and did, in the context of their dealings generally.
2. In my assessment, there never was between these parties a "partnership" within the meaning of the Partnership Act. That is because: 1. during the currency of their business relationship, the parties themselves appear not to have regarded themselves as members of such a partnership. 2. there was never any written partnership agreement. 3. although the parties (separately) used the same accountant, they never filed a partnership tax return, they never gave joint instructions to their accountant, and it never occurred to the accountant (who gave evidence in these proceedings) that they were, or may have been, conducting business as members of a partnership. 4. neither party at any stage authorised the other to incur debts in the name of a partnership or the other. 5. the parties did not deposit funds into a partnership or joint bank account, or maintain such an account. They may have opened a joint account; but, if they did, they did not use it. 6. their relationship was not exclusive in the sense that, throughout the relationship, to the knowledge of the defendant the plaintiff mustered, bought and sold feral goats on his own account and, with the defendant's consent, used the stockyards on Kinross Station for the movement of his stock. 7. each party on his own account paid expenses relating to goats without reference to the other.
3. The parties generally accounted to each other for the proceeds of jointly owned goats contemporaneously with any sale of those goats and without formality. Between 2008 (or 2009) - 2013 or thereabouts, when a particular officer of the Meatworks dealt with them, he routinely sent each of them, separately and directly, 50% of the proceeds of sale of jointly owned goats sold to the Meatworks.
4. Not all goats held on Kinross Station were regarded by the parties as jointly owned. Leaving aside goats brought on to the property by the plaintiff for the limited purpose of using stockyards on the property (which the defendant permitted him to do from the time of commencement of their business relationship), the parties' arrangements included an agreement that, if and to the extent that the plaintiff (without assistance from the defendant) mustered feral goats on that part of the property known as "the sheep country", he alone was entitled to the goats.
5. The parties' arrangements were as dynamic as they were informal. They were not static. They varied over time according to what the parties regarded as expedient. Although their business relationship endured for about two decades, it depended upon their agreement "transaction by transaction", with neither of them surrendering independence of action to the other.
6. To the defendant's knowledge, throughout their business relationship (approximately 1998-2017) the plaintiff mustered, bought and sold goats on his own account, without any involvement of the defendant. The unchallenged evidence is that, between 2012-2017 or thereabouts, the plaintiff bought more than 40,000 goats from local graziers, for a total sum in excess of $1.5 million. Two of his customers described his business as "the closest goat depot".
7. During the course of their business relationship each of the parties established a trust through which he might (as the defendant did) trade. Neither sought consent of the other for a change in his business model.
8. Section 1 of the Partnership Act defines a partnership as "the relation which exists between persons carrying on a business in common with a view to profit".
9. Section 2 of the Act enumerates "rules" to which regard must be had in determining whether a partnership does or does not exist. Each of those rules is in the nature of a guideline, qualified by a statement to the effect that a particular feature of a relationship (which may be indicative of a partnership) is not "of itself" determinative of the question whether a partnership exists.
10. Of the "rules" set out in section 2, those identified in sections 2(1)(2) and 2(1)(3) are the most relevant to the present case.
11. Section 2(1)(2) is to the effect that "[the] sharing of gross returns does not of itself create a partnership, whether the persons sharing such returns have or have not a joint or common right or interest in any property from which or from the use of which the returns are derived."
12. Section 2(1)(3) is to the effect that "[the] receipt by a person of a share of the profits of a business is prima facie evidence that the person is a partner in the business, but the receipt of such a share, or of a payment contingent on, or varying with the profits of a business does not of itself make the person a partner in the business ...".
13. Any business relationship between the parties fails to fit comfortably within the definition of a partnership because, although they co-operated with one another in joint activities, they did so with a degree of independence not comprehended by the expression "a business in common with a view to profit". Any relationship between them was essentially transactional in character. Although they regularly did business together, over a lengthy period, that business was transacted on an ad hoc basis, preserving independence of action to each of them.
14. They did not, in conventional terms, share "profits" as distinct from a sharing of "gross receipts" transaction by transaction. Their financial resources were never pooled. Any financial contributions they respectively made to a joint endeavour were generally borne by them individually, not brought to account in a common fund. Distributions of proceeds of goat sales were not routinely set off against common expenditure. They each separately pocketed what they believed was due to them consequent upon a sale, not waiting for a formal accounting process.
15. If the parties' relationship is to attract any descriptive legal label then, in my assessment, the language of the defendant's solicitor in early correspondence is closer to the mark than the expression "partnership". In pre-litigation correspondence with the plaintiff's solicitor he characterised the parties' dealings, first, as "a goat breeding venture" and, then, as an arrangement "ultimately akin to a share farming agreement" - not "a share-farming agreement", but akin to one. The defendant's allegation of a partnership at law appears to have emerged contemporaneously with involvement of counsel in presentation of his case.
16. In a letter dated 13 April 2017 (written in response to a letter of demand dated 31 March 2017 written by the plaintiff's solicitor) the defendant's solicitor refuted the plaintiff's claim of an entitlement to compensation for improvements effected to the defendant's land by the plaintiff, allegedly upon representations to him by the defendant that he would receive a share of proceeds of any sale of the land by the defendant.
17. That refutation was grounded on an allegation that "although it is true that [the plaintiff] carried out various capital improvements … he did so pursuant to the terms of a goat breeding venture with [the defendant]. The agreement was never reduced to writing, but provided that, in consideration of [the plaintiff] carrying out the improvements, he would receive 50% of the goat sale proceeds".
18. The defendant's refutation of the plaintiff's claim for compensation was accompanied by a demand that the plaintiff vacate the defendant's land or face eviction proceedings.
19. In correspondence accompanying service on the plaintiff of the defendant's lapsing notice (a letter dated 17 May 2017), the defendant's solicitor wrote the following to the plaintiff's solicitor (with emphasis added in bold): "… Our client [the defendant] does not accept that your client [the plaintiff] has a caveatable interest in the properties. We note that his caveatable interest is alleged to arise out of a representation that, in consideration of him carrying out capital improvements, he would be provided with '… an equitable interest out of any sale of the properties'. With respect, the proposition appears to be contrived, vague and implausible. To accept your client's version of events would require the Court to accept that he carried out costly improvements in exchange for an undefined and uncertain return at an uncertain date in the future. On the other hand, our client's version is commercially plausible, as it is ultimately akin to a share farming agreement …".
20. Leaving aside contentious advocacy (matched in hyperbole on the other side of the record), the seminal point is deployment of the expressions "venture" and "akin to a share farming agreement" rather than "partnership".
21. According to an entry in Halsbury's Laws of Australia (last updated 25 May 2017), at paragraph [330-100], with footnote citations incorporated in the extracted text: "A 'sharefarming agreement' is an agreement under which a landholder allows another person to utilise land for a rural purpose and to share in the profits of the produce from that land [: Hindmarsh v Quinn (1914) 17 CLR 622]. Sharefarming agreements usually take the form of a licence but they can also take the form of a lease [...]. A sharefarming agreement is a contract and can be void for uncertainty where the terms are not clear [: Bishop v Taylor (118 CLR 518] but the court can imply terms into a sharefarming agreement where the agreement is silent [: Newland v Cooper [1940] SASR 40; Cf, Barnewall v Wood (1921) 21 SR (NSW) 291]. In NSW, sharefarming agreements are regulated by legislation as if they were tenancies, even if the agreement is properly characterised as a mere licence [: Agricultural Tenancies Act 1990 NSW, section 4(1) (definition of 'tenant'); Cf, Beveridge v Dontan Pty Ltd (1990) BC 9001648, Keeves v Taylor's Pastoral Co. Pty Ltd (No. 2) (1994) BC 9402583] ..."
22. There is no necessary inconsistency between characterisation of an agreement as a "sharefarming agreement" and as a "partnership". All depends upon the terms of the agreement.
23. This point is illustrated by another reference to Halsbury's Laws of Australia, paragraph [330-105], entitled "Construction", which includes the following: "Ordinarily, a sharefarming agreement takes the form of a licence [: Hindmarsh v Quinn (1914) 17 CLR 622; Dudgen v Chie (1955) 92 CLR 342; Carter v Smith (1952) 52 SR (NSW) 290, 69 WN (NSW) 326; Kulamma v Manadan [1968] AC 1062; James Estate Wines Pty Ltd v Rabobank Australia Ltd [2015] NSWSC 712, 17 BPR 34, 037]. Such a licence can be irrevocable in circumstances [: Bellinger v Hughes (1911) 11 SR (NSW) 419]. However, the agreement may, on a proper construction by the Court, take the form of an agistment [:Newland v Cooper [1940] SASR 40; Ex parte Duggan (1902) 19 WN (NSW) 260], employment contract […], partnership […] or lease [: Ex parte Duggan (1902) 19 WN (NSW) 260; Vagg v Holmes (1926) 53 WN (NSW) 150; Bellinger v Hughes (1911) 11 SR (NSW) 419; Ex parte Foster (1903) 3 SR (NSW) 645, 20 WN (NSW) 228; Hindmarsh v Quinn (1914) 17 CLR 622; Cribb v Korn (1911) 12 CLR 205...]".
24. In Landwel (Vic) Pty Ltd v Neessen Investments Pty Ltd (unrep, 16 September 1996) BC9604304 at 6, Young J observed that, to his mind, "… where there is a partnership agreement covering the parties' rights and duties vis a vis the working of land, there is such a fundamental inconsistency with a sharefarming agreement that the former must be taken as having been terminated and superseded by the partnership".
25. Those observations were made in the context of an oral sharefarming agreement and a subsequent partnership agreement. Whether a contract is discharged or merely varied by a subsequent contract depends upon the proper construction of the second contract (as his Honour duly observed): Federal Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd (2000) 201 CLR 520 at [22]. In the current proceedings, the focus is not upon whether one form of agreement should be held to have been superseded by another, but upon identification of the terms of any agreement, or agreements, between the parties governing their business relationship.
26. In the absence of a partnership, the defendant's cross claim must be, according to its terms, dismissed.
27. However, the substance of the case for which the defendant contends can be addressed in the context of the plaintiff's statement of claim and the defendant's Defence, focussing attention on the primary core question: What were the terms of any agreement, or agreements, between the parties relating to the parties' farming activities on Kinross Station? Dismissal of the defendant's cross claim is not determinative of the plaintiff's statement of claim.

THE TRANSACTIONAL NATURE OF THE PARTIES' DEALINGS

1. In my assessment, there was no single, overarching agreement between the parties that can account for all of their competing claims. Over a period of 20 years or thereabouts, their engagement with one another evolved on a transactional basis.
2. At a high level of abstraction, viewed objectively by reference to the parties' conduct, the core features of their dealings throughout that period of engagement were as follows: 1. The defendant granted to the plaintiff a non-exclusive licence to enter, and to remain upon, Kinross Station. 2. That licence, and any agreement incidental to it, was for an indefinite duration, coupled with an implied term that it was determinable on reasonable notice. 3. The purpose of the licence was to facilitate the capture, maintenance and sale of feral goats (including any progeny), and for incidental purposes, including use by the plaintiff of stockyards on Kinross Station for goat business wholly unrelated to the defendant. 4. The quid pro quo for the defendant's grant of a licence to the plaintiff was an agreement on the part of the plaintiff that he would share with the defendant (on terms the subject of dispute) proceeds of sale of goats. 5. There was no requirement for the plaintiff to pay to the defendant a licence fee in the nature of "rent" or to pay or bear rates and taxes referable to Kinross Station.
3. There is a dispute between the parties as to whether their arrangement for sharing proceeds of goat sales included, or was separate from, an agreement, or agreements, on the part of the plaintiff that he would assist the defendant in the construction and maintenance of (internal and boundary) fences necessary or expedient for the keeping of goats.
4. Work done by the plaintiff on Kinross Station which does not neatly fit within the framework of a relationship between goats and fencing is work done by him in connection with the construction of a shed/house, stockyards and (with an associated tank) two dams.

INFORMALITY IN THE PARTIES' DEALINGS

1. The fact that the parties' arrangements were consistently informal does not, of itself, preclude a finding that those arrangements were contractual in character, that they gave rise to an estoppel operative against the defendant, that they may ground an entitlement in the plaintiff to relief under the Agricultural Tenancies Act or that they gave rise to a liability in the plaintiff to account for goat sales.
2. However, in the present proceedings, informality of dealings speaks, particularly, at two levels.
3. First, it points to the transactional character of the parties' dealings. They did business on a transaction-by-transaction basis. In his evidence, the defendant agreed that the parties' "partnership" was just him and the plaintiff "getting together and doing something" in circumstances in which neither party had authority to incur debts in the other's name, or in their joint names, but they each proceeded in an ad hoc way so that, if it was necessary to buy something, they discussed buying it and one of them bought it. In the defendant's words, their work plans were "fairly relaxed" and "pretty casual" because each of them had other things to do. And if work was to be done (for example, in the mustering of goats) whoever was around contributed to that work.
4. The plaintiff contributed labour and some materials to the construction or repair of fences on Kinross Station, but not to the exclusion of the defendant, who also paid for some materials and cleared a pathway for fencing. Although the defendant generally did not pay the plaintiff for his labour, or labour costs, in the construction of fences, the plaintiff obtained (without having to account to the defendant for) money contributions from neighbours and (in the vicinity of a road) the local council in the erection of boundary fences.
5. Secondly, the parties' informality of dealings affects an assessment of the evidence bearing upon their competing claims. Their record keeping was as informal as every other aspect of their operations. There is no file note or other contemporaneous record of their conversations. The plaintiff has kept no contemporaneous accounts of the amounts of money or time spent by him in construction work relating to capital improvements. Neither party has kept reliable records as to their joint, or several, dealings with goats. Both have endeavoured, long after the event, to reconstruct evidence to support a case. Neither case is free of inconsistency. Neither party is quite sure of the timing of events long preceding the termination of their relationship.
6. In presentation of their respective cases, both parties appealed to broad generalities. The plaintiff asked rhetorically, why would he have constructed many kilometres of fencing without remuneration or at least a promise by the defendant that he would, upon sale of Kinross Station, be remunerated for his work; he did not agree to perform substantial work for nothing. The defendant asked rhetorically, why would he bind himself to give the plaintiff a share of the proceeds of sale of Kinross Station at some indefinite long-distant future time, especially in circumstances in which, in retrospect, the plaintiff was: (a) well rewarded by the sale of goats; (b) allowed to live "rent free" on the property (between 2008-2017 or thereabouts) in a shed/house of his own construction; and (c) permitted, over many years, to use the defendant's equipment without charge?
7. The informality of the parties' dealings was such that uncertainty attaches to their evidence about when particular events occurred.

Boundary Fencing : 82 kilometres

1. The parties had a contested conversation about their keeping goats on Kinross Station in or about 1996-1998, an uncertain leeway of more than one year. At about the same time (perhaps before, perhaps after their conversation), they experimented with keeping some goats on two paddocks of the property, respectively known as "Muster" paddock and "Swamp" paddock, for which the plaintiff erected 10-15 kilometres of fencing. From that experiment they expanded to other parts of Kinross Station as goat-proof fences (a prerequisite for expansion) were constructed.
2. Over about 10 months in or about 1998 or 1999, the plaintiff erected about 72 kilometres of boundary fencing. He says that, before he undertook that work, the defendant said to him words to the effect that "I will pay you for the fencing, but I cannot not pay you now. You will get paid if the place is sold out of the sale proceeds". In cross examination the plaintiff explained himself thus: "… there was a fair conversation, it wasn't just cut and dried. We went over costs. He had no money. I had no money. And the fence would be paid for, if anything eventuated, we'd split or place [sic] was sold or something drastic happened, or something happened to him, I would be paid".
3. That conversation is said by the plaintiff to have been, in substance, repeated on a couple of other occasions. One of those occasions is said to have occurred in the early 2000s, following which the plaintiff completed another 15 kilometres of boundary fencing, bringing the total boundary fencing constructed by the plaintiff at that time to about 82 kilometres. In cross examination, the defendant agreed (albeit reluctantly) that the cost of materials for that fencing was, at the time it was constructed, of the order of about $2,000 per kilometre, a figure which accords with the plaintiff's estimate. The plaintiff's evidence, confirmed in cross examination, was that the cost of labour for the fencing was $1,000 per kilometre, bringing to $3,000 per kilometre ($246,000 overall) the total cost of the 82 kilometres of boundary fencing.
4. The fact that the defendant (to the extent of about $17,000) funded part of the works undertaken by buying wire netting, and paying for part of the cost of clearing a pathway for that fencing, does not detract from the plaintiff's claim for work done, and material supplied, by him.
5. Nevertheless, if (as I ultimately find) the plaintiff is entitled to a payment by the defendant for the 82 kilometres of boundary fencing he undertook, an allowance should be made in favour of the defendant for the plaintiff's receipt of an admitted, but unquantified, contribution to the plaintiff for the cost of the fencing by neighbouring land owners. In the absence of evidence to the contrary, I infer that the neighbours paid one half of the cost of the fencing, leaving the defendant to pay the other half ($123,000) if not tied to the plaintiff's use of the defendant's land for goats.
6. The defendant does not dispute that the plaintiff constructed 82 kilometres of fencing (or that the plaintiff arranged for all of the labour, and most of the materials, for that fencing); but he says that the critical conversation (disputed by the plaintiff) which occurred at or about the commencement of the parties' venture on Kinross Station their governed future dealings.
7. His version of that conversation (which he says he particularly remembers as significant because he was talking on a "partner") is to the effect that the plaintiff proposed that they start breeding and selling goats themselves as it would be more profitable than mustering goats for other people; he responded that he would supply the land at no charge, but he would retain a right to veto things concerning the land; the plaintiff volunteered that he would build fences for the goats and provide the materials, and they would each have a half share in the goats and goat sales; and to that the defendant agreed.
8. It is common ground that there was no discussion about the duration of any goat-related business in which the parties might engage. The defendant maintains that he always thought that his relationship with the plaintiff was for the long term, but he nevertheless reserved a right to terminate it without cause. In presentation of his case, his counsel conceded, correctly, that any ongoing arrangement between the parties was subject to an implied term that the arrangement was determinable on reasonable notice.

Construction of a Shed / House

1. In or about 2007 the plaintiff separated from his then wife. At about that time he proposed to the defendant, and the defendant agreed, that he be allowed to construct on Kinross Station a shed. There is some controversy about whether, in agreeing to this, the defendant from the outset knew of the plaintiff's intention that the "shed" be constructed in a manner consistent with its use as, or conversion into, a house. Nevertheless, shortly after its construction, with the defendant's acquiescence, the plaintiff commenced living there, and he remained resident there until required by the defendant to vacate Kinross Station in 2017.

Additional Fencing : 40 kilometres or more

1. In about 2007 the plaintiff did some additional fencing, which he estimated to have extended over about 90 kilometres, but which the defendant estimated extended over about 40 kilometres. It is common ground that that fencing included the subdivision of paddocks; fencing around the defendant's house, shearing shed and driveway; and boundary fencing to keep the defendant's sheep in his property. The defendant paid about 90% of the cost of materials for that fencing, the plaintiff the other 10%.
2. The plaintiff was paid for 50% of the labour costs of the boundary fencing he did by the owners of neighbouring properties. He also received a contribution from a council incentive scheme for roadside fencing.
3. The plaintiff supplied approximately 2,500 second hand pine posts and about $5,000 worth of steel posts for the fencing, and all the labour. There is no direct evidence of the cost of the pine posts. Nor of the cost of labour for this fencing. On the plaintiff's case, an estimate of both categories of costs is left to inferences to be drawn from the cost of metal posts, the cost of labour for boundary fencing and a later date quotation for the additional fencing. Amounts received by the plaintiff from neighbours and the local council remain unquantified.
4. The evidence is not sufficiently clear to allow the plaintiff more than a nominal allowance for the cost of pine posts and labour in addition to the $5,000 for steel posts conceded by the defendant in cross examination. On this basis, $10,250 may be allowed to the plaintiff for this fencing: $5,000 for steel posts; $1,250 for pine posts (at 50 cents each); and $4,000 for labour (at $100 per kilometre).

Construction of New Stockyards

1. In about 2008 (according to oral evidence of the defendant) or 2013 (according to affidavit evidence of the plaintiff), but quite probably in or about 2010 (according to Depreciation Schedules prepared by the plaintiff's accountant for tax purposes), the plaintiff installed on Kinross Station new stockyards for goats. They replaced old, worn yards. Materials for the new stockyards were mostly funded by the plaintiff. Labour in their construction was either supplied by the plaintiff personally or at his expense. The defendant made no contribution by way of payment towards erecting the stockyards, but some of the materials used by the plaintiff were recycled from another yard.
2. In cross examination, the defendant initially maintained that construction of the stockyards was part of the parties' joint venture agreement and thus, on his case, an expense to be borne by the plaintiff. In later cross examination he characterised construction of the stockyards as "outside the agreement" but part of the give and take of the parties' working together, the cost of which should be borne by the plaintiff.
3. At the time of construction of the stockyards, there was no discussion about who would pay for them. Simply, the plaintiff said he wanted to build new stockyards, and the defendant agreed.
4. The plaintiff's estimate was that the cost to him of installing the stockyards was about $50,000. Nevertheless, his ultimate claim was limited to $7,237, recorded in his Depreciation Schedules. His evidence of quantum was not contradicted by the defendant's evidence.
5. In retrospect, the plaintiff's use of the stockyards (with the defendant's consent) gave rise to controversy in these proceedings. In about mid 2013 the plaintiff acquired a lease over Ringwood Station (which he regarded as "holding paddocks") of about 1000 acres (the defendant's estimate is 2000 acres), of which he used about 500 acres. His acquisition of that property permitted him to use its "Property Identification Code (PIC)" for the "National Vendor Declarations (NVDs)" required, for regulatory purposes, for freight movements of stock, including goats. Before that time he had to use the PIC for Kinross Station. After that time (as disclosed to the defendant) he used the Ringwood Station PIC. Neither regarded the NVDs as a primary record of stock ownership until, having fallen out with the plaintiff in mid 2017, the defendant conducted a retrospective review of them with a view to constructing a case of "failure to account" against the plaintiff.

Construction of Two Dams

1. In about January 2014 the plaintiff was involved in the construction of two dams (with an associated tank) on Kinross Station. He paid $21,879 for machine hire for the construction work.

PARTICULAR DISPUTES

1. A resolution of the parties' disputation about the plaintiff's capital improvement works must ultimately be viewed in the context of the defendant's complaints about distribution of proceeds of sale of goats and, in particular, disposition of goats upon termination of the parties' relationship in June 2017.
2. However, in the meantime, as a preliminary to consideration of the parties' dealings as a whole, topics that require separate consideration are: (a) the relationship, if any, between goats and fencing on Kinross Station; (b) the plaintiff's construction, and use, of a shed/house on the property; (c) his construction of new stockyards on the property; and (d) his construction of two dams (including a tank) on the property.

The Relationship between Goats and Fencing on Kinross Station

1. The nature of the business venture in contemplation of the parties at the time they brought goats onto Kinross Station with a view to husbandry carried with it a necessary connection between jointly owned goats, the property and a need for fencing work for any expansion of goat holdings on the property. Goats could not be held on the property without fences suitable for their containment.
2. Objectively, it is reasonable to suppose that the plaintiff's contribution to any joint endeavour related to the construction of additional goat-proof fencing required, and the defendant's contribution related to the provision of the land to be fenced and stocked with goats.
3. At the time when the parties had their primary, contested conversation about fencing work there was, objectively, a balance to be struck between the interests of the parties without foresight as to whether or not their joint venture would be successful or long lasting. The plaintiff was called upon to do substantial work which, if the venture was terminated within a short period, would enure to the benefit of the defendant at the plaintiff's cost. The defendant was called upon to provide land over which it was in his interests to retain ownership and control, unconstrained by any obligation to the plaintiff.
4. In my assessment, it is more likely than not that the plaintiff's version of the parties' conversation is correct. In effect, the parties agreed that the plaintiff would do fencing work (yet to be agreed) without immediate remuneration but against an assurance that he would be compensated should the parties' venture come to an end otherwise than consensually. The plaintiff did not agree to an open ended commitment on his part to provide fencing for what was a large property, apparently under utilised. The plaintiff recalls, and I accept, that the defendant was at that time under financial pressure which militated against him erecting fences without the plaintiff's assistance. The plaintiff's preparedness to construct fences on the basis of an indefinite deferral of an entitlement to remuneration, coupled with a share of the proceeds of sale of goats, was an attractive proposition for the defendant, and one which offered the plaintiff an opportunity to develop his goat business without a significant landholding of his own.
5. Although, in cross examination, the defendant volunteered that his contested conversation with the plaintiff, pursuant to which he took on "a goat partner", was "a pivotal point of direction on the property" and "a colossal gamble in taking on a partner" (so as to justify his recollection of his version of the conversation), he took no contemporaneous note of the conversation or treated it with any degree of formality. In my assessment, his anxiety to establish a case against the plaintiff has coloured his recollection of events, including the disputed conversation.
6. The defendant adduced corroborative evidence from the plaintiff's former wife. I do not regard her evidence of a casual conversation she swore she had with the plaintiff in about 1996 as a reliable indicator of the nature of the relationship between the plaintiff and the defendant, or the terms of any conversation between the plaintiff and the defendant. Her affidavit was prepared about 21 years after the time of the conversation to which she deposed. The words she attributes to the plaintiff, in their casual conversation, are not inconsistent with the plaintiff's case. The fact (if it be the fact) that the plaintiff did not report all the details of his business arrangement with the defendant (in particular, a promise on the part of the defendant to pay him, a fencer, for fencing) is not surprising.
7. The terms of the parties' agreement about fencing are to be determined as at the time of the agreement. The plaintiff's version of their primary, contested conversation accommodates that. The defendant's version implicitly invites the Court to locate the conversation in the context of subsequent events.
8. Of significance, however, is the absence from the parties' agreement of express discussion about: (a) the duration of the agreement; (b) the precise lines to be fenced; and (c) the rate of any remuneration to be allowed to the plaintiff in the event he was to be compensated for work done.
9. It is common ground that the property was, and would remain, in the ownership of the defendant unless and until he sold it, even if (implicitly) any sale proceeds were to be charged with an obligation to provide payment for fencing in favour of the plaintiff.
10. The duration of the parties' arrangement was indefinite, but it is common ground that there was an implied term that the arrangement was determinable on reasonable notice: Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd (1988) 14 NSWLR 438; JD Heydon, Heydon on Contract (Law Book Co, Sydney, 2019), paragraphs [24.119]-[24.120].
11. Although the plaintiff complained, during the course of his cross examination, that he had not been given sufficient notice at the time of his eviction from Kinross Station in 2017 to decide whether he could, or (perhaps more accurately) should, remove the shed/house of his construction from the property, he has not in these proceedings made a claim for relief predicated upon an allegation that the defendant was not entitled to evict him without further notice.
12. Any fencing work undertaken by the plaintiff on Kinross Station was undertaken in consultation with, and with the agreement of, the defendant after they had, near the time of commencement of their business arrangement, agreed upon the terms upon which fencing work beyond the "Muster" and "Swamp" paddocks would be done.
13. In the absence of any express agreement about the rate at which the plaintiff was to be remunerated for fencing work, but in circumstances in which it was agreed that such work was not to be gratuitous, the plaintiff was entitled, upon an implied term of the parties' agreement, to reasonable remuneration: Heydon on Contract (2019), paragraph [3.80].
14. According to the parties' agreement, any such remuneration was implicitly to be assessed at rates prevailing in the local area at the time work was done, but the plaintiff's entitlement to remuneration was deferred until such time as the parties' venture might be terminated (as happened) upon sale of Kinross Station.
15. Evidence adduced by the plaintiff about the cost of replacement fencing in 2018 is of little, if any, relevance to an assessment of his entitlement.
16. In my opinion, for reasons earlier stated, the plaintiff should be allowed $123,000 for the boundary fencing constructed by him and $10,250 for the additional fencing he undertook.

The Plaintiff's construction, and use, of a shed/house on Kinross Station

1. The initiative for construction of a shed/house on Kinross Station by the plaintiff came from the plaintiff, for his own benefit, without any connection with the parties' goat business (however defined) beyond the plaintiff's proposal that equipment could be stored there.
2. At the outset, the plaintiff requested the defendant's permission to construct the structure. With the defendant's acquiescence, and without any substantial active participation by the defendant, he built the shed/house and lived in it (without payment of rent or the like) for about a decade.
3. The plaintiff bore the cost of construction, without any contribution by the defendant beyond allowing equipment of the defendant in situ to be used.
4. The plaintiff did not seek, or obtain, from the defendant a promise (express or implied) that the defendant would compensate him for the shed/house if or when their business relationship came to an end. The defendant did not (expressly or impliedly) represent to the plaintiff that he would, at any time, compensate the plaintiff for the structure.
5. Constructed on stump piers, the building was amenable to being moved to another location.
6. When given notice to leave Kinross Station in 2017, the plaintiff took no steps to move the structure off the property beyond, perhaps, removal of the generator which provided electrical power for it. Nor did he seek from the defendant an opportunity to remove it. An available inference is that he simply took from it what he wanted before abandoning it.
7. In my opinion, there is no basis upon which the plaintiff can reasonably claim an entitlement to be paid compensation for the structure he left behind when he vacated Kinross Station.
8. If I am wrong about that, there is nevertheless no reasonable basis upon which any entitlement of the plaintiff can (as the plaintiff contends) be quantified by reference to an estimate of the likely cost, in 2018, of construction of a replacement structure. Evidence adduced by the plaintiff about the cost of a replacement ($220,000, including materials costed at $150,000) is of little, if any, relevance. There is no foundation for the plaintiff to claim, or to be allowed, "new" for "old".

The Plaintiff's construction, and use, of new stock yards

1. Despite widely differing recollections of the parties as to when the plaintiff constructed new stockyards on Kinross Station the plaintiff maintains a claim for $7,237 recorded in Depreciation Schedules prepared by his accountant as the cost to him of constructing the stockyards in the tax year ended 30 June 2011.
2. Whenever they were built, the initiative for their construction came from the plaintiff, not the defendant. The old yards (some materials from which were recycled in the new stockyards) were inadequate for the plaintiff's purposes in moving stock. It was for his convenience, in particular, that the new yards were constructed.
3. When, in time, the plaintiff needed to move goats off the adjoining Ringwood Station he did so from those new stockyards on Kinross Station.
4. The plaintiff did not seek, or obtain, from the defendant a promise (express or implied) that the defendant would compensate him for the cost of the new stockyards if or when their business relationship came to an end. The defendant did not (expressly or impliedly) represent to the plaintiff that he would, at any time, compensate the plaintiff for the yards. In a manner consistent with his claim of an allowance for depreciation for his expenditure on the yards in his taxation returns, the plaintiff treated the yards as his own during the currency of his licence to enter upon Kinross Station.
5. In my assessment, the plaintiff's construction of the stockyards was part of the give and take of his transactional working relationship with the defendant. It was work done and expenditure incurred without any expectation of recoupment otherwise than in the course of the plaintiff's business (with the defendant and on his own account) in dealing with goats. There is no basis upon which the plaintiff can reasonably claim an entitlement to be paid compensation for the yards.

The Plaintiff's construction of dams on Kinross Station

1. In much the same light must be viewed the plaintiff's claim for $21,879 (attributable to equipment hire) for the construction of two dams and an associated tank, in or about January 2014, expenditure apparently matched by the defendant.
2. In my assessment, the plaintiff's expenditure was, again, part of the give and take in the parties' ongoing, transactional working relationship. When he participated in construction of the dams the plaintiff did not seek, obtain or expect to receive reimbursement for his expenditure or any remuneration. There is no basis upon which the plaintiff can reasonably claim an entitlement to be paid compensation for the dams.

The Plaintiff's claim for compensation under the Agricultural Tenancies Act

1. The licence the plaintiff enjoyed to "occupy or use" Kinross Station until mid-2017 is capable of falling within the definition of "tenancy" in section 4 of the Agricultural Tenancies Act, a prerequisite for an award of compensation under section 6 (read with sections 15 and 17) of the Act in favour of a "tenant" who carries out an "improvement" on a "farm" with the consent of the "owner".
2. Kinross Station falls within the definition of "farm" in section 4 of the Act, being land of the requisite size used for "agricultural purposes" (as defined in section 4); namely, grazing.
3. At least some of the capital works undertaken by the plaintiff on Kinross Station can reasonably be described as falling within the definition of "improvement" in section 4 of the Act, another prerequisite for an award of compensation under section 6.
4. Such an award, if made, is made against an "owner" as defined by section 4 of the Act: "Any person for the time being entitled to the rents and profits of a farm". There is no dispute that the defendant is and was at all material times the "owner" of Kinross Station. It has not been suggested that he ceased to be "the owner" because of some form of "partnership" with the plaintiff in relation to goats.
5. Whether the Court has jurisdiction under the Act to entertain the plaintiff's claim for compensation is not free of difficulty. Relevantly, section 6(3) ostensibly speaks at large of a tenant (such as the plaintiff) having an entitlement to compensation: "If compensation is not fixed by agreement at a fair amount or is not fixed at all, the owner must pay fair compensation to the tenant". One one view, section 6(3) has to be read with section 6(4) as confining jurisdiction to entertain a claim for compensation to NCAT. Section 6(4) reads as follows: "Compensation payable under this section is payable at the end of the tenancy or such earlier time as may be agreed or determined by the Tribunal".
6. Sections 15 and 17 of the Act (which define criteria for the determination of compensation payable for tenants' compensation) are silent as to whether a claim for compensation can be entertained by the Court.
7. Section 20 of the Act provides that an owner or a tenant may apply to the Tribunal for determination, inter alia, of a dispute relating to a right or obligation conferred by the Act. Section 21 confirms that on an application to it the Tribunal can, inter alia, make an order as to compensation.
8. Section 3(c) of the Act describes one of the objects of the Act as being "to provide a mechanism for settling disputes between parties to agricultural tenancies through applications to [the Tribunal]." It stops short of specifying that the Tribunal is the sole mechanism for settling such disputes.
9. Nor does the Act, as presently enacted, include a provision expressly denying jurisdiction to the Court to enforce "a right or obligation conferred" by the Act. Section 22 of the Act, as enacted and twice amended, was to that effect. It was repealed with establishment of NCAT at the beginning of 2014.
10. Neither party to these proceedings contends that the Act does not apply to their dispute because any "tenancy" came into existence before the Act's repeal of its predecessor, the Agricultural Holdings Act 1941 NSW. The saving and transitional provisions in section 30 and clause 3 of Schedule 2 of the Act provide, in essence, that the Act "extends to a tenancy in existence immediately before the repeal of" the 1941 Act.
11. The plaintiff contends that the Court has jurisdiction to make an order for compensation under the Act. The defendant does not deny that, but contends that the plaintiff's claim for compensation must fail "on the facts" of the case.
12. Upon an assumption (without deciding) that the Court has jurisdiction to make an award of compensation under section 6 of the Act, the primary difficulty for the plaintiff is that his evidence does not address the criteria for an award of compensation. Nor do his submissions.
13. Sections 15 and 17 of the Act are in the following terms (with emphasis added): "15 Determination of compensation payable for tenants' improvements (1) For the purposes of determining the compensation payable under Part 2 for an improvement carried out by a tenant, the amount of compensation is the value of the improvement to an incoming tenant, taking into account the value of any consideration or benefit given by the owner to the tenant for carrying out the improvement. (2) The value of an improvement to an incoming tenant is to be calculated by taking into account the financial returns that might be expected to accrue to a (hypothetical) incoming tenant on account of the improvement or product, if the farm were to be subject to a further tenancy (not being a sharefarming arrangement). … 17 Fair compensation In determining what constitutes fair compensation for the purposes of determining the compensation payable under Part 2 for an improvement carried out by a tenant or an owner, regard may be had to the financial resources of the parties, the financial returns that might be expected from the improvement and other factors."
14. Insofar as the plaintiff claimed compensation under the Act he did so by reference to evidence confined to either the current replacement value of improvements or the historical cost to him (including an allowance for his own labour) of effecting the improvements. He did not address any question as to: (a) "the value of the improvement to an incoming tenant"; (b) "the value of any consideration or benefit given by the owner to the tenant for carrying out the improvement"; or (c) "the financial returns that might be expected to accrue to a (hypothetical) incoming tenant on account of the improvement".
15. For this reason alone the plaintiff's claim for an award of compensation under the Act must be dismissed. There is no evidence upon which the Court can properly ground a finding as to the value of an improvement to a (hypothetical) incoming tenant.
16. Dismissal of that claim does not operate to the prejudice of the plaintiff's claims for relief under the general law. Nothing in the Act takes away such other rights as the plaintiff may have against the defendant, or such rights as the defendant may have against the plaintiff.

Accounting for goats and goat sales

1. The transactional character of the parties' business dealings is on display upon an analysis of the defendant's claim that the plaintiff is obliged to account to him for goats and the proceeds of sale of goats.
2. That claim falls into two categories. The first, major claim invites the Court to re-open the parties' informal process for accounting for sale proceeds contemporaneously with the sale of goats between 2013-2017. The second, minor claim invites the Court to find that, when the plaintiff conducted a final muster of goats in or about June 2017, before he vacated Kinross Station, he did not properly account to the defendant for the value of one half of the goats jointly owned by the parties.
3. Whatever findings might be made responsive to these claims, an order (of the character of that sought in the defendant's cross claim upon an assumption of a finding of "partnership") for the taking of accounts or the conduct of an inquiry would serve no useful purpose. There is no reason to believe that the evidence about the parties' goat transactions (imperfect as it is) would be likely to improve in ancillary proceedings. If the defendant has an entitlement to an accounting for goats or the proceeds of sale of goats, it has realistically to be determined in the current proceedings, on the current evidence, with no reference out. In substance, the defendant invites the Court to award, or allow, him a specific sum rather than to make an order for accounts to be taken. Procedurally, the plaintiff does not demur.
4. Accounting for Goats, 2013-2017. The defendant's major claim for an accounting for goats relates to the period between 2013-2017, during which the plaintiff leased Ringwood Station and used the Ringwood Station NVD/Weighbill book when he moved goats (from Ringwood Station or Kinross Station) via the stockyards on Kinross Station.
5. The parties continued their transactional relationship throughout that time. However their relationship may be characterised in terms of "partnership", "joint venture" or otherwise, their modus operandi in accounting for sales of goats was transactional.
6. On the defendant's own evidence, their practice from October 2013 was that the plaintiff would muster goats off Kinross Station and then, telling the defendant how many goats he had consigned, give to the defendant his half share of the money received for that consignment. When, in about October 2013, the defendant's wife warned him that the plaintiff might not tell him the real number of goats being sold off Kinross Station, he dismissed her concerns. It was not until after the parties fell out in mid 2017 that he, at his wife's urging, reviewed all available NVD Weighbills (incomplete though they were) as a foundation for what became his cross claim. By that time, in the absence of any earlier complaint by the defendant, the plaintiff had not retained all his weighbill records.
7. NVD records were not, in any event, an accurate record of goat ownership. That was not their function. They were directed towards a regulatory purpose of keeping track of goat movements. In the work-a-day world, as a matter of industry practice, they were not universally maintained or maintained with scrupulous care for identification of an "owner" of goats. The fact that goats were loaded from Kinross Station did not mean that they were goats in which the defendant had an ownership interest. The plaintiff used the stockyards on Kinross Station because Ringwood Station lacked yards of equivalent standard.
8. That is not the only problem encountered in any attempt, at a distance, to quantify stock numbers. It is common ground between the parties that there was an element of guesswork involved in estimation of natural increases in the goat population. In cross examination, the defendant described calculations for a natural increase as "a guestimate figure". When asked, "… you weren't able to actually count with any precision the number of goats which you - which were present on your property without mustering them, were you?", the defendant responded, "We might have had a bit of a rough idea, but it's a bit like certainly asking how many ants there are".
9. A further difficulty in quantification of goat movements is that the agreement between the parties was that the plaintiff was entitled to sole ownership of feral goats mustered by him on that part of Kinross Station called "the Sheep Country". This serves as a now unquantifiable qualification on any agreement between the parties for a 50-50 sharing of goats, an underlying assumption of the defendant's calculations in his allegation that the plaintiff failed to account for "jointly owned" goats.
10. Yet another difficulty in accounting for the proceeds of goat sales is that, where sales were made to private buyers (that is, buyers other than a meatworks) sale proceeds were sometimes received, and divided, in cash.
11. The plaintiff swears that, throughout his business relationship with the defendant, he acted honestly in accounting to the defendant for the defendant's share of the proceeds of sale of goats at the time goats were sold. I accept that evidence. In the context of a continuing business relationship, in which the plaintiff enjoyed use of the defendant's property (including a residence) and had expended his own resources in capital improvements, it was not in the plaintiff's interests to short change the defendant. This is quite apart from the fact that the defendant was actively involved in management of Kinross Station and the weighbill records of both parties were accessible by the defendant, as well as by the plaintiff, should either party wish to examine them. Nothing was done in a dark corner.
12. The defendant seeks to circumvent problems of proof associated with the unavailability of contemporaneous business records by a contention that the plaintiff owed him the obligations of a fiduciary. He submitted that, insofar as more of the goats taken off Kinross Station were attributed in presently available documentation to the plaintiff than to him, the plaintiff (as a fiduciary) bore an onus to prove that the extra goats attributed to the plaintiff were not, in his terminology, "partnership goats" (that is, jointly owned goats).
13. That the parties' relationship was a commercial one is not, of itself, an impediment to its characterisation as a fiduciary relationship; but, equally, the fact that they did engage in business together is not, of itself, indicative of a fiduciary relationship: Meagher, Gummow and Lehane, Equity: Doctrines and Remedies (Lexis Nexis Butterworths, Australia, 5th ed, 2015), paragraph [5-035]. The facts of the particular case require examination to ascertain whether a relationship manifests the characteristics of a fiduciary relationship.
14. The language used by parties to describe a relationship (as, for example, a "partnership" or a "joint venture") does not necessarily carry with it characterisation of the relationship as a fiduciary one: United Dominions Corporation Ltd v Brian Proprietary Ltd (1985) 157 CLR 1 at 10-11. One must look to the incidents of the relationship, only one of which may be the descriptive label(s) parties attach to it.
15. As explained by Mason J (as his Honour then was) in Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 96-97, the critical feature of a fiduciary relationship is that: 1. a person (a "fiduciary") undertakes or agrees to act for or on behalf of or in the interests of another person (a "principal" or beneficiary") in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense; and 2. by virtue of their relationship, the fiduciary has a special opportunity to exercise that power or discretion to the detriment of the principal/beneficiary, who is accordingly vulnerable to abuse by the fiduciary of the fiduciary's position.
16. Upon consideration of the facts of the present case, a dominant feature of the parties' relationship is the freedom of independent action that they each retained to conduct business on their own account, coupled with the transactional nature of their commercial dealings and their established practice of contemporaneous accounting for goats at the time of sale of goats.
17. Given the transactional nature of the parties' commercial dealings, their established practice of contemporaneous accounting for goats at the time of a sale, their agreement that the plaintiff was entitled to sole ownership of goats he mustered in the Sheep Country, and the defendant's agreement that the plaintiff could use the stockyards on Kinross Station for the movement of his own goats, there is, in my opinion, no room for imposition of the obligations of a fiduciary on the parties' dealings. On his own evidence, the defendant was actively involved in the day-to-day supervision of goats kept on, and moved off, Kinross Station. He was not in any sense vulnerable to an exercise of power, or discretion, on the part of the plaintiff (with whom, as an independent businessman, he interacted at arm's length) in the sale of goats.
18. In my opinion, the relationship between the parties was not fiduciary in character.
19. Subject to consideration of the "final muster", I am satisfied that there was no failure on the part of the plaintiff to account to the defendant for goats or the proceeds of sale of goats throughout their relationship.
20. What, then, about the final muster? As a preliminary to vacating Kinross Station by 30 June 2017 (in accordance with the interlocutory agreement recorded by the Court on 1 June 2017), the plaintiff (with the assistance of eight persons employed by him for the purpose) conducted a final muster. It was not a full muster; on any view, goats remained on the property. The plaintiff removed, and subsequently sold to a meatworks, 2,142 goats, for which (after deduction of duties and levies) he received $182,651.41. He also removed approximately 800 kids which were in poor condition and unable to be sold, as a consequence of which he gifted them to a relative. He estimated that another 2,000 - 2,500 goats were left by him on the property. He invites the Court to proceed on the basis that, as a result of the final muster, he took (and left for the defendant) approximately an equal number of goats.
21. The defendant disputes the plaintiff's estimation of the number of goats left on Kinross Station. His evidence is that, shortly after the plaintiff's final muster, he conducted a muster of his own, corralling only 267 goats and leaving (he estimated) less than 200 other goats on Kinross Station.
22. The problem in dealing with these figures is that, as is common ground, Kinross Station occupied so vast an area that it was practically impossible to do a head count of goats on the property without a full muster.
23. Nevertheless, an attempt at accounting for goats removed from the property, and left on the property, must be made. Neither party can avoid engagement with the accounting process by imposing responsibility on the other and disclaiming any for himself.
24. I leave to one side the approximately 800 kids removed from the property in a poor condition and unsaleable; the plaintiff was not challenged on the lack of commercial value attributed by him to those animals.
25. I focus attention instead on the other goats, accepting for this purpose each party's bona fides in accounting for goats and discounting each party's estimate of goats left on the property unmustered.
26. Neither party has fully accounted for the goats the subject of division between them at the time of termination of their relationship although (because he conducted his final muster, with the assistance of employees not called to give evidence, and without active co-operation with the defendant) it is more likely than not that the plaintiff left behind for the defendant fewer goats than he estimated. The defendant, for his part, cannot complain over loudly about inadequacies in the plaintiff's estimates in circumstances in which he did not, himself, do a full muster of the goats left behind by the plaintiff. It is more likely than not that the defendant underestimated the goats left behind by the plaintiff.
27. Precision in accounting for goats taken, and left, on the final muster is unattainable. In the circumstances, I propose to require the plaintiff to allow in favour of the defendant the sum of $40,000 as an allowance for the possibility that he removed from the property more than his equal share of the goats.

CONCLUSION

1. On the findings I have made, the plaintiff is entitled to a judgment (exclusive of interest) in the sum totalling $93,250, representing: 1. $123,000 payable to the plaintiff for 82 kilometres of boundary fencing; plus 2. $10,250.00 payable to the plaintiff for 40 kilometres of additional fencing; less 3. $40,000.00 to be allowed by the plaintiff in favour of the defendant for goats on the final muster.
2. Subject to allowing the parties an opportunity to be heard as to the form of the orders to be made, and costs, I propose to make orders to the following effect: 1. Judgment for the plaintiff in the sum of $93,250 plus interest, yet to be calculated (at the rates prescribed by section 100 of the Civil Procedure Act 2005 NSW from 1 July 2017 to date). 2. ORDER that the plaintiff's statement of claim and the defendant's statement of cross claim otherwise be dismissed.
3. An order might also be required for disposition of the sum held in the controlled moneys account established pursuant to the parties' interlocutory agreement of 1 June 2017. I look to the parties to clarify this.

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: 21 July 2020