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[2016] VSC 691
General information, not legal advice.
Supreme Court of Victoria
2016-11-30
Daly AsJ
Original judgment source is linked above.
CONTRACT - Preliminary question to be tried - Question of the liability of the first defendant for outstanding debt in relation to a farming property owned by the plaintiff - Whether a variation of the parties' agreement to the effect of extending its term can be implied from the conduct of the first defendant or her late husband - Moratic Pty Ltd v Lawrence James Gordon & Anor [2007] NSWSC 5 applied - Whether the parties' agreement was akin to a lease or otherwise such that principles of 'overholding' apply - Whether the first defendant has a legal obligation for the debt or is liable for the debt as joint promisee with her late husband - Finding that the conduct of the first defendant did not amount to an assumption of liability for the debt beyond the period of the written agreement - No representation that she continued to be bound by the agreement after its expiry in accordance with its express terms.
QUANTUM - Credibility of evidence as to the quantum of claim - Accounting for missing cattle - Number of stock sold and basis of the plaintiff's authority to sell cattle and apply outstanding commissions payable to meet outstanding debts - Batrouney v Forster [2015] VSC 230 followed - Creditor entitled to apply proceeds of debt in the manner it sought fit in the absence of instructions to the contrary.
1 This judgment concerns the trial of a preliminary question in this proceeding: whether the first defendant ('Mrs Feldman') is liable to the plaintiff ('Frontlink') for a debt said to have been incurred by her and her late husband ('Derek Feldman') by reason of their alleged occupation and use of a property at 181 Grices Road, Berwick ('Grices Road property') between 2002 and 2010 or 2011. The Grices Road property, which until around 2011 was a sixty acre parcel of rural land with a single dwelling upon it, was owned at all material times by Frontlink. The remaining part of the proceeding, concerning the question of whether Mrs Feldman had taken steps to put her assets beyond the reach of her creditors, has been held over until determination of the question of whether Mrs Feldman is actually liable to Frontlink, and if so, in what sum. Frontlink claims to be owed the sum of $129,543.26, plus interest of $72,496.32 to the date of the conclusion of the trial. Mrs Feldman denies any liability to Frontlink whatsoever.
2 Frontlink is a family owned company with substantial commercial and rural property holdings. It owns and operates childcare centres, aged care centres, and shopping centres, largely in Melbourne's outer eastern suburbs. It owns substantial parcels of rural land, again, largely on Melbourne's eastern fringe, including the Grices Road property, which appears to have in recent years been developed in part for residential use.
3 While the sole director and shareholder of Frontlink is Natalie Mondous, she has played little or at least no visible part in the proceeding, or in the transaction giving rise to this proceeding, albeit that she executed the agreement relied upon by Frontlink to give rise to the debt said to be owed by Mrs Feldman, being the 'Joint Venture Farming Agreement' dated 20 October 2002 ('Grices Road Agreement'). Rather, the representative of Frontlink who has played the principal role in both the transactions culminating in this proceeding, and in giving instructions and evidence in this proceeding is her father, Mr Sohail ('Sam') Mondous. Her brother, Kameel Mondous, who works in the family business, also gave evidence during the course of the trial.
4 Mr Mondous senior ('Mr Mondous') had a longstanding business relationship with Derek Feldman, and, to a lesser extent, Mrs Feldman. Derek Feldman was a commercial real estate agent based in Glen Waverley, specialising in aged care and child care centres. According to Mr Mondous, he was 'the best in the area for aged care and child care'. Derek Feldman operated under the business name 'Derek Feldman & Co, Property Consultants'. Mrs Feldman was an employee in his business, and helped with bookkeeping and administration, although she did manage a shopping centre for Frontlink on her own. By all accounts, Derek Feldman was a fairly freewheeling businessman, often looking for new opportunities to earn income and pay his debts, with limited attention to details such as keeping records and filing tax returns. His affairs were in some disarray at the time of his sudden and unexpected death on 13 October 2010, when he drowned in a waterway while trying to rescue a dog. He died intestate, and his liabilities far exceeded his assets.
5 Derek Feldman conducted a cattle raising business on the Grices Road property and two other properties owned by Frontlink, an adjacent property at Pound Road, Berwick ('Pound Road') and a nearby property at Soldiers Road, Berwick ('Soldiers Road'). These properties were managed by Derek Feldman in accordance with agreements with Frontlink on similar terms to the Grices Road Agreement, save that only Derek Feldman was a party to these agreements, not Mrs Feldman. Derek Feldman's accountant, Mr David Mond, who was engaged by the estate's solicitors after Derek Feldman's death, could not locate any records relating to the cattle business operated from these properties ('three properties').
6 As noted above, Mrs Feldman assisted Derek Feldman in his business activities, and, while this is somewhat in contention, apart from a horse agistment business she conducted at the property next door to the Grices Road property, she was not a partner in or principal of any of his businesses. The past years have not been kind to Mrs Feldman. Not only has she lost her husband, and dealt with the ongoing stress of this litigation, which commenced in 2011, her health has been poor, and a scheduled trial earlier in 2016 was adjourned after she suffered a stroke, from which she still is recovering.
7 Mrs Feldman and Derek Feldman have two adult children, who have been bit players in this proceeding. Mark Feldman, who is apparently estranged from Mrs Feldman, gave evidence at trial about his dealings with his father's affairs after his death, and in particular his dealings with Mr Mondous. Laura Feldman did not give evidence at the trial, but at one stage was purportedly a party to the proceeding by reason of her alleged participation in a scheme to put Mrs Feldman's assets, in particular, the family home, beyond the reach of her creditors.
8 Shaun and Belinda Bilson also gave evidence. They lived in the house on the Grices Road property for approximately ten months prior to the death of Derek Feldman, and for a short time thereafter. They lived at the Grices Road property rent free in exchange for looking after the property and Derek Feldman's cattle.
9 Sharon Bunting lived for a number of years in a cottage at Pound Road, although she agisted horses on Pound Road for some time prior to that. She also kept a herd of cattle at Pound Road, and took custody of Derek Feldman's cattle at Mr Mondous' request after they were moved from the Grices Road property to Pound Road after Derek Feldman's death.
10 Each of Shaun and Belinda Bilson, and Sharon Bunting were subpoenaed to give evidence by Mrs Feldman. Each had previously sworn affidavits in support of an application by Mrs Feldman to adduce further evidence before the Court of Appeal[1] regarding the presence of Derek Feldman's cattle on the Grices Road property, their removal from the Grices Road property after Derek Feldman's death, and the number of cattle. Mr David Mond, the longstanding accountant of Derek Feldman and Mrs Feldman, also gave evidence on behalf of Mrs Feldman.
11 Frontlink called two witnesses apart from Mr Mondous and Kameel Mondous: Ms Rachel Ivic, a property manager employed by L J Hooker, and Glenn Wilmott, a handyman engaged on a casual but regular basis by Frontlink.
12 As noted above, Mr Mondous and Derek Feldman had an ongoing business relationship from about the mid-1990s. Mrs Feldman said she knew Mr Mondous socially. At some stage, Derek Feldman decided (against the probably wise advice of his accountant, Mr Mond) to start a business breeding and raising cattle. At that time, Frontlink was conducting farming operations on various properties, but wanted to scale these back because of Natalie Mondous' health problems. While it is unclear whether Derek Feldman sought the Grices Road property from Frontlink, or Frontlink (via Mr Mondous), offered the property to Derek Feldman (and Mrs Feldman), it appears that in or around October 2002, there was at least one meeting between Mr Mondous and Derek Feldman and Mrs Feldman to discuss the Grices Road property. Mrs Feldman hoped to use the Grices Road property to agist horses, and Mr Mondous, at least initially, agreed to this.
13 This discussion (or series of discussions) led to Derek Feldman preparing a document with the title 'Licence Agreement', with Frontlink described as 'the Licensor', and 'Cindy Feldman and Derek Feldman trading as Derek Feldman & Company Property Consultants' described as 'the Licensee'. However, there were a number of errors and anomalies in this document (for example, this document included a term giving the licensee the right to purchase the property), and ultimately, Mr Mondous decided to prepare (or have a staff member prepare) the document which was ultimately executed by the parties.[3]
14 Given the issues in this trial, it is helpful to reproduce the Grices Road Agreement in full. The document is headed 'Joint Venture Farming Agreement', and is dated 20 October 2002. Frontlink is described as 'the Owner', and 'Cindy Feldman and Derek Feldman trading as Derek Feldman & Company Property Consultants' are described as 'Farm Consultant'.
15 The recitals of the Grices Road Agreement include the following:
and whereas the parties hereto wish to enter into terms of agreement to enable the Farm Consultant to manage the land on behalf of the Owner upon the terms and conditions following:-
16 The terms of the Grices Road Agreement were as follows:
(a) This Agreement shall be for three (3) years with the Farm Consultant having the option to extend the arrangement for a further three (3) years.
(b) For the first year of the term of this agreement the sum of $22,000.00 per annum (plus GST if applicable) shall apply.
(c) In each subsequent year of the agreement or further term the amount of the share of the profits payable to the Owner shall increase in line with the C.P.I. (Melbourne All Groups).
(d) The Farm Consultant shall have the option of paying the Owner his agreed share of annual production ($22,000.00 plus GST if applicable) in farm produce.
17 The agreement was executed by Natalie Mondous on behalf of Frontlink, and was purportedly signed by both Derek Feldman and Mrs Feldman.
19 Only two payments were made to Frontlink in accordance with clause 6 of the Grices Road Agreement: a payment of $3,666.66 on 14 November 2002, and a payment of $88,000 on 30 March 2007. No invoices were rendered by Frontlink in respect of the 'rent'[6] payable for the Grices Road property, or for that matter, for the rent for Pound Road or Soldiers Road. Indeed, the first document which made any reference to rent for the Grices Road property was a handwritten document prepared by Mr Mondous sometime after October 2006 and before 18 March 2007. The document is headed 'History of Rent with Derek Feldman 181 Grices Road Berwick',[7] sets out the rent of $22,000 being payable for four years up to 20 October 2006, and a notation to the effect that the outstanding amount would be paid from the sale of cattle. A further notation referred to the outstanding amounts for Pound Road and Soldiers Road being payable from commissions.
20 No further payments were made in respect of the Grices Road property. On or about 17 October 2009, Kameel Mondous prepared a bundle of accounts in respect of each of the properties,[8] each page of which was headed 'Frontlink Pty Ltd - History of Rent with Derek Feldman', and the footer of each page stated 'Frontlink Pty Ltd - Derek Feldman record for Grices, Pound & Soldiers Road'. The statement referred to rent being payable for the Grices Road property at $22,000 per annum,[9] and the amount outstanding was said to be $63,082.34. The amounts outstanding in respect of Pound Road and Soldiers Road were said to be $94,338.31 and $47,297.96 respectively, with the total amount owing on the three properties said to be $204,718.61. These statements were initialled by Mrs Feldman, apparently during the course of a meeting between her, Derek Feldman, Mr Mondous and Kameel Mondous at around that time. In a fax from Derek Feldman & Co dated 22 October 2009,[10] an unknown person, but quite possibly Mrs Feldman, queried some aspects of the statements with respect to Pound Road and Soldiers Road, and asserted that the total amount owing in respect of the three properties was $113,832.88. In a fax from Kameel Mondous to Mrs Feldman dated 7 January 2010,[11] some adjustments were made, with the total owing said to be $164,025.75. No response to this letter was in evidence.
21 Kameel Mondous prepared updated accounts on or about 26 October 2010[12] for the three properties, some two weeks after Derek Feldman's death, which incorporated amounts payable in respect of insurance, such that the outstanding amount said to be owing in respect of the Grices Road property was said to be $86,397.34. Another version of this document, which was the version sent to Mr Mond's office on 3 November 2010,[13] included a sum of $8,805.28 in respect of rates, bringing the total to $95,202.62. Yet another version of this document (also dated 26 October 2010) calculated the annual rental payments incorporating CPI increases since 2002, and different sums for rates, bringing the total amount said to be owing to $142,426.93.
22 What occurred after Derek Feldman's death, including how the cattle which remained on the Grices Road property were dealt with by Frontlink, is a matter of some contention, so I shall not go any further here, save to say that Mr Mondous says that Frontlink took possession and sold 23 head of cattle, with Mark Feldman's permission, while Mrs Feldman says that there were up to 125 head of cattle on the Grices Road property at the time of Derek Feldman's death, and neither she or Mark Feldman authorised their removal or sale.
23 The history of this proceeding is quite protracted, involving a large number of court attendances, particularly in circumstances where the quantum of the claim ultimately able to be pursued by Frontlink is relatively modest in the context of contemporary Supreme Court litigation. No particular responsibility for the delays can be sheeted home to any party, but the intense and protracted nature of this proceeding must have been stressful and costly for all concerned.[14]
24 Key events during the course of the proceeding include:
(a) on 2 December 2010, Osborn J (as he then was) made orders granting Mrs Feldman Letters of Administration ad colligendum bona of the intestate estate of Derek Feldman;
(b) on 10 March 2011, Frontlink issued this proceeding against Mrs Feldman, both in her personal capacity (in respect to the amount said to be owing in respect of the Grices Road property), and in her alleged capacity as representing the estate of Derek Feldman in respect of Pound Road and Soldiers Road;
(c) on 5 April 2011, judgment in the sum of $637,162.89 was granted in default of appearance in favour of Frontlink;
(d) on 20 June 2011, an associate judge set aside the default judgment, and later heard Frontlink's summary judgment application in respect of the amounts said to be owing by Mrs Feldman in relation to the Grices Road property;
(e) on 2 November 2012, an associate judge gave judgment against Mrs Feldman in Frontlink's favour in the sum of $156,225.10;[15]
(f) on 10 December 2012, a Trial Division judge substantially upheld the decision to grant summary judgment, after allowing Frontlink to amend its statement of claim, and gave judgment in favour of Frontlink in the sum of $148,618.00 plus interest calculated at $29,285.89.[16] An appeal by Mrs Feldman to the Court of Appeal was heard on 5 February 2014, and determined on 3 March 2014. The appeal was allowed, and the proceeding was remitted to the Trial Division for hearing;
(g) in the meantime, between April 2013 and May 2014, Frontlink took steps to enforce its judgment and to restrain Mrs Feldman from dealing with the proceeds of sale of her Glen Waverley home. Eventually, after a number of attendances before the Practice Court between September 2013 and May 2014, an agreement was reached whereby Ramarim Pty Ltd (now the second defendant in this proceeding), the trustee of a superannuation fund of which Mrs Feldman and Laura Feldman are both members, and which was the beneficiary of a life insurance policy in the name of Derek Feldman, was, subject to certain undertakings, permitted to use the proceeds of sale of the property to retire a debt secured by Mrs Feldman's Glen Waverley home, and to enable her to purchase a property in Wheelers Hill;
(h) on 23 January 2014, Frontlink filed and served a second further amended statement of claim, which purported to join Laura Feldman and Ramarim Pty Ltd as defendants to the proceeding;
(i) on 16 June 2014, I made orders striking out the second further amended statement of claim insofar as it purported to make claims against Mrs Feldman in a representative capacity, Ramarim Pty Ltd, and Laura Feldman;
(j) on 27 November 2014, I made orders granting leave to file an amended statement of claim, adding Ramarim Pty Ltd as a party to the proceeding;
(k) the proceeding failed to settle at a judicial mediation held on 4 March 2015;
(l) on 17 September 2015, I made orders which, among other things, set out the preliminary questions which were the subject of this trial, being:
(i) is the first defendant liable to the plaintiff by reason of the matters pleaded in paragraphs 1 to 5 of the statement of claim dated 23 December 2014?[17]
(ii) if so, what is the amount of that liability?
(m) the trial of the preliminary questions was originally set down for 7 March 2016, then adjourned to 19 April 2016. The latter trial date was subsequently vacated owing to Mrs Feldman's illness; and
(n) on 9 June 2016, I allowed (in part) an application by Mrs Feldman to amend her defence, and made orders allowing her to advance a claim by way of set off and/or damages with respect to the alleged removal and sale of Derek Feldman's cattle from the Grices Road property.
25 Further, in addition to the above, there were a number of hearings concerning applications for costs and the enforcement of past costs orders, which are not necessary to detail further here. The legal costs incurred by the parties over the past five and a half years no doubt far exceed the quantum of Frontlink's claim.
26 In its fourth amended statement of claim dated 1 August 2016 ('statement of claim'), Frontlink pleaded, relevantly, as follows:
Particulars
A copy of the Grices Road Agreement may be inspected at the offices of the plaintiff's Solicitors by prior appointment.
4. The Grices Road Agreement provided, amongst other things, that:
4A. By its terms the Grices Road Agreement was stated to be for three years, with the Assignee having the option to extend the agreement for a further three years.
4B. The period of the Grices Road Agreement was extended from time to time by agreement between the parties for the following periods on the same terms and conditions as had before applied.
(a) 20/10/05 - 20/10/06
(b) 20/10/06 - 20/10/07
(c) 20/10/07 - 20/10/08
(d) 20/10/08 - 20/10/09
(e) 20/10/09 - 20/10/10
(f) 20/10/10 - 20/10/11
Particulars
The agreement by the parties to the extension of the Grices Road Agreement period was to be implied, arising from the Assignee continuing in occupation of the Grices Road Property after the completion of its initial three year term for the periods referred to, and conducting thereon farming activities as contemplated by the Grices Road Agreement, and from the plaintiff rendering accounts in respect of the occupation and from the Assignee paying monies in respect of that occupation and usage.
Particulars
Payments were made to the plaintiff by the Assignee as follows:
Further particulars may be provided after discovery.
4BA. Further and in the alternative to 4B, after the initial term of the Grices Road Agreement had expired on 20 October 2005:
(a) the Assignee continued in possession of the Grices Road property until on or about 1 February 2011, alternatively on or about 13 October 2010 (the continued possession period).
(b) the use of the Grices Road Agreement by the Assignee continued as it had since the Grices Road Agreement commenced.
(c) There was no discussion or agreement between the Owner and the Assignee as to the fact that the initial term had expired, or as to any change in who was liable for payment for use of the land, or any changed terms as to amounts due for use of the land.
(d) Amounts that would have been due had the Grices Road Agreement been formally extended or renewed by agreement (which it was not) were agreed by the Assignee as owing.
Particulars
Acknowledgments of monies owing in relation to the Grices Road [Agreement] including for part of the continued possession period were made by the Assignee to Frontlink on or about 30 March 2007 and 17 October 2009.
4BB. In the premises:
(a) the terms of the Grices Road Agreement continued to apply during the continued possession period (save for the terms as to the length of term of the agreement and of any option to renew);
(b) the Assignee continued to be liable to the Owner for the profits fee and reimbursement payments for the continued possession period.
Particulars
The Grices Road Agreement was either a lease or analogous in material respects to a lease. The continued possession period was either a holding over after the lease expired such that the Assignee became a tenant at will, or analogous to a holding over such that the Assignee continued to be subject to the same rights and obligations as it had under the Grices Road Agreement (save for the terms as to length of term of the agreement and any option to renew) in the same way as a tenant at will continues to be subject to the same rights and obligations as it had under a lease which has expires (sic) whilst the tenant continues in occupation of the leased premises after expiry of the term.
4C. Alternatively, for the period set forth in Paragraph 4B after the initial three year term of the Grices Road Agreement, the Assignee represented to the plaintiff that the period of the Grices Road Agreement was to be extended on the same terms and conditions as before had applied (the representation).
Particulars
With the concurrence of the plaintiff, the Assignee remained in occupation of the Grices Road property after the initial period of the Grices Road Agreement carrying on farming activities as contemplated by the Grices Road Agreement and from time to time paid moneys in respect of that occupation and usage.
4D. On the basis of the representation the plaintiff assumed that the Grices Road Agreement was continuing and that the Assignee agreed to a continuation of its terms and acted or abstained from acting in reliance on that assumption or expectation.
PARTICULARS
The plaintiff continued charging in respect thereof and refrained from obtaining possession of the Grices Road property from the defendant and Derek Joseph Feldman and leasing the Grices Road property for profit to others.
4E. At all material times the Assignee knew or intended that the plaintiff would act or abstain from acting in reliance on the assumption or expectation.
4F. In the circumstances the plaintiff's actions or inaction will occasion detriment to it if the assumption or expectation referred to is not fulfilled.
27 Mrs Feldman's final defence and counterclaim dated 2 August 2016 ('defence') is summarised in the following paragraphs.
28 In paragraph 3 of the defence, Mrs Feldman does not admit to signing the Grices Road Agreement, but if she did, she did so:
(a) not knowing that she was signing a document by which she may assume legal obligations to the Plaintiff;
(b) without having intended to enter into legal relations with the Plaintiff;
(c) not understanding the purport or legal effect of the said document;
(d) at the direction of her husband Derek Feldman ('the deceased') who did not explain to her the nature, content or effect of the document she was to sign or that she may assume legal obligations to the Plaintiff upon signing the document;
(e) where the Plaintiff had (unbeknown to her) appointed her husband as its agent for the purpose of securing her signature to the document;
(f) in her capacity as a volunteer, not having any material interest in the cattle business conducted by the deceased at the Grices Road property and accordingly not obtaining any benefit or advantage under the said Grices Road Agreement but only obligations and disadvantage;
(g) not having obtained independent or other legal advice concerning any possible consequences to her of signing the said document and not having been advised and/or required by the Plaintiff to do so;
In the premises of sub-paragraphs (a) to (g) hereof, the Grices Road Agreement is unenforceable by the Plaintiff against her.
29 While Frontlink did not allege that Mrs Feldman and Derek Feldman exercised the option contained in clause 6(a) of the Grices Road Agreement, in paragraph 4B of the defence, Mrs Feldman alleged that:
(a) according to its terms, the valid exercise of any option to end the Grices Road Agreement beyond its initial term (that is, after 19 October 2005) was contingent upon the First Defendant participating in the exercise of any such option;
(b) she did not at any time participate in the exercise of any such option;
(c) she does not know, and cannot plead to, the allegations that the deceased exercised any such option; but if he did, he did so without any authority or permission to do so from her;
(d) she otherwise denies that the period of the Grices Road Agreement was extended from time to time or at all by agreement between the parties.
30 Mrs Feldman stated further that, in response to the allegations in paragraph 4BA of the statement of claim:
(a) the deceased remained in possession of the Grices Road Property until his death on 13 October 2010;
(b) the First Defendant was not in possession of Grices Road Property at any time on or after 20 October 2005;
(c) the First Defendant did not use the Grices Road Property on or after 20 October 2005; and
(d) the First Defendant did not agree to manage the Grices Road Property, or otherwise to perform any obligation in relation thereto, at any time on or after 20 October 2005.
31 In response to Frontlink's assertion that the continued occupation of the Grices Road Property was akin to an overholding under a lease, Mrs Feldman alleged in paragraph 4BB of the defence:
(a) the Grices Road Agreement was not, by its form or in its terms a lease, nor analogous to a lease; and
(b) in the premises, the obligations which apply to a tenant holding over under a lease have no application to the deceased's (alternatively the deceased's and the First Defendant's) continued occupation of the Grices Road Property after 20 October 2005.
32 In the particulars under paragraph 4BB of the defence, Mrs Feldman relied upon the full terms and effect of the Grices Road Agreement, and also upon a res judicata and/or issue estoppel arising out of the statements of the Court of Appeal to the effect that the Grices Road Agreement was an agreement to appoint a farm management consultant, and was not a lease.[18]
33 Mrs Feldman denied any liability to pay the sum claimed by Frontlink in paragraph 5 of the statement of claim, and further alleged that, if she was liable to Frontlink under the Grices Road Agreement, Frontlink was required to credit in her favour the value of, or the proceeds of sale from, the cattle which remained on the Grices Road property at the time of Derek Feldman's death, and had been removed from the Grices Road property at the direction of Mr Mondous. At paragraphs 45A to 45E of the defence, Mrs Feldman alleges as follows:
45A. Further or alternatively to all of the foregoing, at the time of the deceased's death there was a herd of not less than 120 cattle, alternatively not less than 60 cattle, owned by the deceased and/or the First Defendant, located on the Grices Road Property (Remaining Cattle).
45B. Since shortly after the deceased's death, the Plaintiff has exercised dominion and control over the Remaining Cattle to the exclusion of the First Defendant in that:
(a) in or about October and November 2010, and unbeknown to the First Defendant at that time, the Plaintiff directed the removal from the Grices Road Property of the Remaining Cattle to a neighbouring property owned by the plaintiff and occupied by one Sharon Bunting, and subsequently:
(i) directed that the ear tags which identified those cattle as the property of the deceased be removed; and
(ii) directed that those cattle then be removed from the property and sold - which steps were then taken;
(b) the Plaintiff did not seek or obtain the consent of the First Defendant before taking the steps alleged in sub-paragraph (a) above;
(c) the Plaintiff has not accounted to the First Defendant in relation to any proceeds of sale of Remaining Cattle, whether by deducting the same from any sum claimed by the Plaintiff against the First Defendant in this proceeding or otherwise.
45C. In the premises, the Plaintiff converted the Remaining Cattle to its own use.
45D. Further or alternatively, the Plaintiff has had and received the money constituting the sale proceeds of the Remaining Cattle to its own use and benefit.
45E. If (which is denied) the First Defendant is otherwise liable to the Plaintiff pursuant to the Grices Road Agreement, the First Defendant is entitled to have accounted for as a credit in her favour against such liability, further or alternatively is entitled to and hereby does set off against such liability:
(a) damages, representing the market value of the Remaining Cattle; further or alternatively
(b) the sum or sums had and received by the Plaintiff from the sale of the Remaining Cattle.
Particulars
The Remaining Cattle included 25 head of cattle that were taken into the possession of the Plaintiff and sold on 17 and 18 January 2011, for the gross sum of $14,917.64 (including GST). The First Defendant refers to invoices issued by Alex Scott and Staff to the Plaintiff on 17 and 18 January 2011.
As to the balance of the Remaining Cattle, the First Defendant is unable to give further particulars because details of the Plaintiff's subsequent dealings with and/or disposal of those cattle are not known to her. Further particulars may be provided following further discovery and the return of any further subpoenas.
34 In her counterclaim, Mrs Feldman seeks a declaration that the Grices Road agreement was not enforceable by Frontlink against her on the basis that, by reason of the trust and confidence she reposed in her husband, which was known by Frontlink, it would be unconscionable for Frontlink to enforce the terms of the Grices Road Agreement.
35 In its reply and defence to the counterclaim filed on 23 June 2016, Frontlink, in summary:
(a) joins issue with the bulk of the allegations in the defence;
(b) in relation to the allegations made by Mrs Feldman concerning the cattle, it denies that there was a herd of the size alleged by Mrs Feldman, but rather, it alleges that there was an agreement between Mr Mondous and Mark Feldman that Frontlink would take possession of and sell cattle belonging to Derek Feldman and credit the proceeds against the debts owed by Derek Feldman, and that the number of cattle taken and sold was 23;
(c) denies that the Grices Road agreement was voidable at the instance of Mrs Feldman, and that her avoiding of the Grices Road Agreement amounted to an acknowledgement on her part that she signed the Grices Road Agreement, and that it was effective and binding upon her; and
(d) denied that any extension or exercise of any option was invalid by reason of any contravention of the Instruments Act 1926 (Vic), and said, at paragraph 15 of the Reply and Defence to Counterclaim:
It denies each and every allegation made in paragraph 54 thereof and says:
(a) that the deceased and the first defendant continued in occupation of the Grices Road property until after the death of the deceased, utilising the same to run stock thereon, paying rent from time to time, and occupying the house thereon and from time to time confirming the tenancy in writing:
Particulars
Derek Feldman on her behalf and on his own behalf sent letters dated 14 November 2009 and 14 April 2010 to the plaintiff in which the tenancy was confirmed. The plaintiff may provide other correspondence in this regard when discovery is complete.
(b) the plaintiff permitted the deceased and the first defendant to do so on the basis that the Grices Road Agreement was still in operation, rendering accounts to the deceased and the first defendant in respect of such occupation;
(c) that by reason thereof the first defendant is now estopped from saying that it did not so continue in occupation of the Grices Road property under the Grices Road Agreement and is required to pay rent in respect thereof.
36 The trial of the preliminary question concerned questions of both liability and quantum. The 'liability' issues are as follows:
(a) did Mrs Feldman sign the Grices Road Agreement?
(b) if yes to (a), is there some other reason why she should not be bound by its terms?
(c) if yes to (b), is Mrs Feldman estopped from avoiding the agreement by reason of her continued occupation of the Grices Road property?
(d) did the terms of the Grices Road Agreement bind Mrs Feldman after its expiry in October 2005 by reason of:
(i) an implied extension on a year by year basis?;
(ii) the continued occupation of the Grices Road property by Derek Feldman and Mrs Feldman amounting to an overholding akin to an overholding of a lease agreement; and/or
(iii) by continuing to occupy the Grices Road property, paying rent, and acknowledging outstanding rent due, Derek Feldman and Mrs Feldman represented to Frontlink that they continued to be bound by the terms of the Grices Road Agreement?
37 In relation to the question of the quantum of any liability of Mrs Feldman, the issues are as follows:
(a) has Frontlink proved the amount owing to it by Mrs Feldman under the Grices Road Agreement?
(b) was Frontlink entitled to allocate any payments received or offset any commissions owed by Frontlink to Derek Feldman to the amounts owing in respect of the three properties in any manner it saw fit?
(c) how many cattle were on the Grices Road property at the time of Derek Feldman's death, and what became of them?
(d) what was the value of the cattle on the Grices Road property at the time of Derek Feldman's death?
(e) is Frontlink required to credit in Mrs Feldman's favour any amount representing the value of any cattle sold or retained by it?
38 Before turning to the parties' submissions and my analysis of the issues arising out of this trial, I will summarise the evidence relied upon by the parties. While it is possible to disaggregate the evidence according to the issues, I have not done so, as the evidence given by some witnesses on some issues goes to the credibility of the evidence of the witnesses on other issues. I refer in particular to the evidence of Mr Mondous in that regard.
39 The main witness called by Frontlink was Mr Mondous. During the course of his examination-in-chief, Mr Mondous gave evidence that he assisted his daughter in running the business of Frontlink. He first met Derek Feldman in the mid to late 1990s. They had business dealings for many years. He met Mrs Feldman a number of times in his home based office. He observed that Derek Feldman was the person who negotiated real estate transactions, while Mrs Feldman handled the documentation of those transactions.
40 Mr Mondous gave evidence that he first discussed the Grices Road property with Derek Feldman in August 2012. During a conversation about a range of business matters, Derek Feldman expressed interest in entering the farming business. Frontlink had a farming property it wanted to lease out, and Derek Feldman expressed interest in taking over the Grices Road property.
41 Sometime after that first discussion, Derek Feldman and Mrs Feldman came to his office. Mrs Feldman said that she wanted the Grices Road property for herself, as she had a few horses, a few cattle, and she wanted her daughter Laura to live in the house on the property. Derek Feldman had no objections, and it was no concern to Frontlink as to whose name the property was in. At the meeting they discussed what rent would be payable, and agreed on the sum of $22,000 per annum.
42 Derek Feldman said that he would prepare an agreement, which he did,[19] but it was full of errors. Mr Mondous requested Frontlink's accountant to prepare an agreement based upon a precedent Frontlink had in its office. He gave the agreement to Derek Feldman, who read and approved it, and Natalie Mondous signed and sealed it. A few days or a week later, Derek Feldman returned with a copy of the signed agreement, and gave it to Mr Mondous. They did not discuss the agreement any further on that occasion. He did not recognise the signatures on the document.
43 Mr Mondous did not really understand why the Grices Road Agreement referred to a share of profits rather than rent. He was more concerned about the amount of money to be paid than how it was described. He had no subsequent discussion with anyone about the Grices Road Agreement, and never entered the Grices Road property to find out who the occupier was.
44 Mr Mondous gave evidence that, after he entered into the Grices Road Agreement, he drove past the Grices Road property from time to time, perhaps a few times per year, as he lived only four kilometres away. He saw a couple of horses at the Grices Road property, he saw some cattle, and on a couple of occasions he saw a light on in the house. He first passed the Grices Road property about a month or two after the agreement was signed.
45 Mr Mondous never had any discussions with Derek Feldman about whether the house at the Grices Road property was occupied. However, he recalled a short discussion he had with Laura Feldman three or four years after the Grices Road Agreement commenced. He met her, for the first time, with Derek Feldman at the Endeavour Hills shopping centre, and asked her whether she was happy living in the house. She replied, 'Yeah, everything's all right.' He never met or spoke to her again.
46 Mr Mondous did not recall who made the payment of $3,666.66 in November 2002. He did recall Derek Feldman bringing the cheque for $88,000 to his office in March 2007.[20] He had many discussions with Derek Feldman regarding the payment of rent, Derek Feldman was always telling him to be patient, the money will be coming.
47 Mr Mondous gave evidence that Frontlink entered into two other farm management agreements, the first for Soldiers Road in 2003. Frontlink had been managing the farming business at Soldiers Road, and Mr Mondous asked Derek Feldman if he wanted to take over the property, and Derek Feldman agreed. Mr Mondous did not discuss this property with Mrs Feldman. He asked Derek Feldman whether he was happy with the same form of agreement, and Derek Feldman replied, 'Yeah, but just put Derek Feldman'.
48 As for Pound Road, Frontlink had decided to stop farming on that property because of Mr Mondous' daughter's health problems. He asked Derek Feldman if he could lease it out for him, and Derek Feldman agreed to take it over himself. Again, the agreement was with Derek Feldman alone. At that time, he was owed a lot of money by Derek Feldman, but he had confidence that he would get paid, or that the money could be deducted from commissions Frontlink owed to Derek Feldman on various property transactions, as they did business together regularly. When asked whether he discussed the outstanding arrears with Mrs Feldman, he said 'She was aware of all of that', but he then gave evidence that he did not speak to her directly about these matters.
49 Mr Mondous gave evidence that Derek Feldman told him that he had raised the sum of $88,000 by selling some cattle. He gave evidence that Derek Feldman said 'We sold some cattle and that's part of payment for the cattle we sold'. He personally wrote the document headed 'History of Rent with Derek Feldman 181 Grices Rd Berwick',[21] with the reference to 'sale of cattle by 18/3/07'. After that time, his son Kameel managed the account.
50 Mr Mondous gave evidence that he lent Derek Feldman money on two occasions in 2010 to enable Derek Feldman to pay outstanding rates he owed to the City of Casey, but he did not know to which property those outstanding rates related. These loans were documented in writing.[22] He could not recall any discussions with Derek Feldman about the repayment of these loans.
51 The last time Mr Mondous spoke to Derek Feldman was in August 2010. Derek Feldman said he had enough stock, about 200 to 300 head of cattle, to sell to cover his debts to Frontlink. Mr Mondous did not observe any cattle on the Grices Road property, but it was not easy to see cattle from the road. He took Derek Feldman's word for it.
52 Mr Mondous gave evidence that he heard of Derek Feldman's death on the day he died, or perhaps the day after. He telephoned the office to offer Mrs Feldman his condolences, and they did not discuss any business matters at that time. About a week later, he telephoned Mrs Feldman and asked her what she was going to do, and whether she going to continue with the business. Mrs Feldman told him that he should deal with Mark about business matters concerning Derek Feldman. He did not know at that time who Mark Feldman was.
53 Mr Mondous gave evidence that Mark Feldman visited him one or two days later. They had a general discussion about Derek Feldman, and then Mr Mondous said: 'Look, your dad owe me a lot of money, your dad and mum owe me a lot of money. How would you like to deal with it and what your intention to do.'
54 Mr Mondous gave evidence that Mark Feldman replied as follows: 'Look, you know, it's too early, I'll discuss the matter with my mother, I'll come back to you'. They did not discuss how much they owed, or why it was owed. They discussed two things: the plan about payment, and whether they wanted to stay at the three properties.
55 Mr Mondous gave evidence that he thinks Mark Feldman returned to him after 5 November 2010, being the day he visited the Grices Road property with Rachel Ivic ('5 November meeting'). Mark Feldman told him that it was too hard for his mother, and he personally 'wasn't in this business'. Mr Mondous then said words to the effect that there is some stock on the property, and what was he (being Mark Feldman) intending to do with it. Mr Mondous then said, 'I'll sell it and deduct it from the rent'. Mark Feldman did not object or say, 'I'll come back to you'.
56 Mr Mondous gave evidence that at the time of the 5 November meeting, he knew that there were cattle on the Grices Road property. He did not see any cattle, but Mrs Bilson (whom he had not previously met, and of whom he did not know prior to that meeting) told him there was cattle on the property. She did not say how many.
57 Mr Mondous gave evidence that Soldiers Road was empty when he visited there a few days after the 5 November meeting. Sharon Bunting, a tenant of part of Pound Road, (she leased the property from Derek Feldman) told him there was cattle on Pound Road. She did not tell him how many. He asked Sharon Bunting to sell Derek Feldman's cattle for him, probably a couple of weeks before they were sold, and that those sales took place on or about 16 or 17 January 2011 ('January 2011 sales'). He had not heard from either Mark Feldman or David Mond about the cattle, and he had signed a lease for Pound Road to commence on 1 February 2011, so the cattle had to be moved from the Grices Road property. According to what Sharon Bunting signed for and what he received, there were 25 head of cattle.[23] Sharon Bunting organised everything, including providing ear tags for untagged cattle.
58 Mr Mondous confirmed that he had no further discussions with either Mark Feldman or Mrs Feldman concerning the cattle. Frontlink had no other cattle belonging to Derek Feldman in its possession apart from the cattle sold by Sharon Bunting. He has no knowledge of whether there were any other cattle owned by Derek Feldman at the time of his death. Frontlink did not receive any money from the sale of Derek Feldman's cattle apart from the proceeds of the January 2011 sales.
59 Mr Mondous gave evidence that he knew that David Mond was Derek Feldman's accountant, as Derek Feldman had previously introduced Mr Mond to him. He called Mr Mond on one occasion about the money owed to Frontlink on account of the three properties. Mr Mond asked him to send an account, which Mr Mondous believes Kameel Mondous sent on about 3 November 2010.[24] This account, which was dated 26 October 2010, stated that the amount owing with respect to the Grices Road property was $95,202.62, the amount owing on Pound Road was $143,537.72 (approximately $120,000 in commissions owing to Derek Feldman had been applied against the amount outstanding for Pound Road), and $135,185.87 for Soldiers Road, which included the amounts said to have been 'rates given to Derek' on four occasions in 2010. The total amount said to be owing in respect of the three properties was $373,295.20. The fax cover sheet for the accounts referred to 'our discussion this afternoon regarding money owed by Derek Feldman on farmland'.
60 Mr Mondous gave evidence that the commissions owed to Derek Feldman were deducted from the amount owing, because 'Pound Road was just him'. He identified the documents provided to Frontlink regarding the January 2011 sales. When asked about how Frontlink accounted for the proceeds of sale of the cattle, he identified a reference in a statement dated 5 June 2014[25] in relation to the amounts outstanding for Pound Road to the effect that the proceeds of sale of 23 cattle (approximately $12,000-$14,000) were to be deducted from council rates, water rates, and insurance paid by Frontlink.
61 Finally, Mr Mondous identified the share farming agreement he entered into with Mr Geoff Murray with respect to part of the Grices Road property and Pound Road,[26] which referred to the properties only being used for cattle raising.
62 After some questions about the order in which the Grices Road Agreement was signed, senior counsel for Mrs Feldman commenced his crossexamination of Mr Mondous by pointing out the occasions when Mr Mondous, during the course of his examinationinchief, had shifted from referring to Derek Feldman in the singular, to referring to Derek Feldman and Mrs Feldman in the plural. It was suggested that he was being careful to make sure that he referred to Mrs Feldman in his evidence because he knew Frontlink could only recover from Mrs Feldman. Mr Mondous rejected this contention.
63 Mr Mondous could not explain why there were no documents in existence concerning the Grices Road Agreement for the first few years. He said that any typed documents in existence would have either been created by Frontlink's bookkeeper, Christine, or his son Kameel. His explanation for why these documents only referred to 'Derek Feldman' was that Derek Feldman was the 'contact point' for the couple.
64 Mr Mondous confirmed his evidence that Mrs Feldman was involved in the Grices Road property, it was the first property, she wanted it for keeping horses, as it was small and it suited her. She had a few cattle, one named 'Elizabeth',[27] horses, and her daughter wanted to live at the house on the Grices Road property.
65 Mr Mondous denied the proposition that he told Mrs Feldman that she could not agist horses on the Grices Road property for land tax reasons. He knew that farming land was exempt from land tax, and that the agistment of horses did not fall within the definition of farming, but Mr Mondous said that he did not have any further conversations with Mrs Feldman about keeping horses at the Grices Road property. At the first meeting, Mrs Feldman referred to having three horses. The Grices Road property was not suitable for agistment of horses. It would have cost approximately $100,000 to provide facilities for the agistment of horses. Mr Mondous wanted it to be used for cattle. Mr Mondous was not aware that Mrs Feldman had leased the property next door to keep horses.
66 Mr Mondous denied the proposition that Laura Feldman only stayed one night at the house on the Grices Road property because it was in poor repair: the house was in excellent condition, at least at the time of the commencement of the Grices Road Agreement. He did not know when the Bilsons moved in, or what work they had to do to the house to make it habitable. He accepted that he could have seen a light on in the house when the Bilsons were there.
67 Mr Mondous rejected the contention that he treated all three properties as a single enterprise operated by Derek Feldman. He considered that Derek Feldman was acting for Mrs Feldman. He stated on two occasions that he had never been notified that the Grices Road property had become the sole responsibility of Derek Feldman. When he made a loan to Derek Feldman to cover the payment of rates, he did not know to which property the unpaid rates related. He agreed that a reference to the loan being repaid following certain real estate transactions being completed was a reference to the loans being repaid from commissions owing to Derek Feldman.
68 Mr Mondous rejected the proposition that he had not called Mrs Feldman after Derek Feldman's death. He denied telling Mark Feldman there were approximately 120 to 150 head of cattle on the Grices Road property, and maintained he had two conversations with Mark Feldman. He noted that a few months lapsed between Derek Feldman's death and the sale of the cattle. No-one claimed the cattle in the meantime.
69 Mr Mondous emphatically denied that there was any discussion about cattle at the 5 November meeting. He went there with Rachel Ivic as he was considering letting out the house on the Grices Road property. He referred to the evidence Rachel Ivic was expected to give as support for his contention that there was no discussion about cattle at this meeting: rather the tenants begged to stay there, then they moved out after a month. They moved to the house on Soldiers Road, but left on bad terms because they did not pay the rent.
70 Mr Mondous gave evidence that Frontlink has its own cattle, on properties at Cranbourne and Inverloch.
71 Mr Mondous rejected the contention that the Bilsons' evidence was consistent with Sharon Bunting's evidence, and his own evidence with what he did with the cattle. He stated once again that there was no discussion about cattle, or numbers of cattle, at the 5 November meeting, rather, he and Rachel Ivic were at the Grices Road property to look at the house. He said that 'there is a big difference between 60 and 120'. At the time of the 5 November meeting, he did not know that Mrs Feldman did not want to continue with the property.
72 Mr Mondous agreed that he was on good terms with Sharon Bunting. He denied asking the Bilsons to remove Derek Feldman's ear tags from the cattle, but did ask Ms Bunting to put Frontlink's ear tags on untagged cattle, because they had to have ear tags before they could be sold.
73 Mr Mondous was taken at some length to the documents subpoenaed by Mrs Feldman's solicitors from Meat and Livestock Australia ('MLA records').[28] The MLA records are somewhat difficult to understand in the absence of a full explanation as to how they should be interpreted, and Mr Mondous clearly found them difficult to follow. He did not accept that Frontlink only purchased 24 cattle between 2008 and 2015, in 2004 and 2005. He could not recall these purchases. He could not explain why the MLA records showed cattle associated with Derek Feldman's PIC number being sold on 3 May 2011, or as late as February 2014.[29] He denied that any of Derek Feldman's cattle were moved to other properties owned by Frontlink. He was not aware of any calves being born while the cattle were in the care of Sharon Bunting, and he gave evidence that he gave no instructions to anyone to sell Derek Feldman's cattle apart from the January 2011 sales.
74 When the inconsistency between his evidence and Sharon Bunting's evidence in her 2014 affidavit regarding the number of cattle was pointed out to him, Mr Mondous suggested that if Ms Bunting was correct in saying there were sixty of Derek Feldman's cattle, the likely explanation is that 25 were sold in his name, 26 were sold in her (Sharon Bunting's) name, four belonged to the Bilsons, and one belonged to Mrs Feldman. He took no action regarding Sharon Bunting selling these cattle in her own name, as he accepted her explanation that they were her cattle, and denied that Frontlink received any benefit from the 26 cattle that Ms Bunting sold.
75 Mr Mondous emphatically rejected the suggestion that, in relation to any of Derek Feldman's cattle which remained after January 2011 sales, he had done precisely what he had said he would do at the 5 November meeting: that is, sell the cattle to reduce the debt owed to him by Derek Feldman. He protested that he was not a cattle thief. When taken to records produced upon subpoena by Alex Scott & Staff Pty Ltd ('Alex Scott'), a stock and station agent, which recorded sales of thirty head of cattle on 3 May 2011, he denied that they were Derek Feldman's cattle, and that Sharon Bunting was solely responsible for the sale of Derek Feldman's cattle. Once again, he was emphatic that he gave no instructions to anyone to take any cattle, and he had no interest in Derek Feldman's cattle.
76 Mr Mondous gave evidence that the proceeds of the January 2011 sales were applied to the amounts outstanding for rates and insurance and the like. When asked to identify a document which showed how these proceeds were accounted for by Frontlink, he was referred to the statement of account dated 5 June 2014, which was prepared after Sharon Bunting prepared her affidavit. His response was that it did not matter if the funds were applied in 2012 or 2014.
77 Finally, Mr Mondous was taken to the following statement made by him in an affidavit sworn in support of an application by Frontlink to amend its statement of claim shortly prior to the hearing of Mrs Feldman's appeal against the grant of summary judgment:[30]
Shortly before his death I spoke to Mr Feldman about the amounts outstanding, which were then considerable. I knew that at the time Mr Feldman owned 300 to 400 head of cattle on the various properties of the plaintiff on which he and/or his wife were operating. Mr Feldman told me that he intended selling the herd and he was going to give me the proceeds in order to settle the debt he and his wife owed to me. In the event, shortly after this conversation, Mr Feldman died, whilst, I am told and believe verily, rescuing a dog from a waterway. Following his death the herd was sold but Mrs Feldman did not pass the monies on to me in payment of the debt owed to me, but has apparently kept the monies herself.
78 Mr Mondous became quite agitated when confronted with this evidence, which is clearly at odds with what is now common ground between the parties: that Mr Mondous arranged for Sharon Bunting to take custody of Derek Feldman's cattle and arrange for their sale. At trial, the only real factual dispute between the parties regarding the cattle was how many head of cattle were on the Grices Road property at the time of Derek Feldman's death, what became of them, and whether Frontlink was authorised to take and sell the cattle. Mr Mondous eventually conceded that the statement in his affidavit must have been a mistake.
79 Mr Mondous was later recalled to give evidence after Mark Feldman gave evidence regarding an email he sent to David Mond on 9 November 2010 regarding his meeting with Mr Mondous ('Mark Feldman email').[31] This email, which was located by Mr Mond and discovered by Mrs Feldman during the course of the trial, stated, among other things, as follows:
Meeting with Sam Mondous was ok, asked what was going on and how would he get his money? asked to be briefed by Wednesday on whats [sic] happening. Picked up some info which I have given to Sasha. He told me that he is holding the following cattle stock 44 cows, 5 heifers and 2 bulls (told me only 1 bull but saw 2 clearly written on his list). He did mention legal action to recover his monies but as he and Derek had a good long term relationship it was the last thing he would want to do but would.
80 Mr Mondous was also clearly agitated by the emergence of Mark Feldman's email. He described it as a 'fabrication', and that he would not alter his evidence. He denied having a list of the cattle, he denied having any discussions about cattle at the meeting at the Grices Road property, and he denied that he spoke about cattle in the manner suggested in the Mark Feldman email (that is, disaggregating them into bulls, heifers et cetera).
81 When taken to a document in the court book which had been discovered by Frontlink and was headed 'Copy List of Stock - From 1 January 2008 to 31 December 2010', Mr Mondous said he had no knowledge of this document, he was only assisting his daughter with cattle, and did not know much about cattle. He would use the terminology 'head of cattle', as was used in this document.
82 Mr Mondous' son, Mr Kameel Mondous, was also called to give evidence, largely to verify account statements and other correspondence created by him, or to which he was a party.
83 Kameel Mondous gave evidence that he first started working for Frontlink in 2006, aged twenty, predominantly doing accounting and bookkeeping work for Frontlink's farming businesses, of which there were six to eight in 2006. He shared the work with another bookkeeper, Christine. He did not prepare the original versions of the account statements which were in evidence, but he updated them. He first met Derek Feldman in 2006, and Mrs Feldman, he believes, in 2008.
84 Kameel Mondous gave evidence that he believes he held two meetings with both Derek Feldman and Mrs Feldman where accounts in relation to the three properties were discussed. Mr Mondous was also in attendance at these meetings. He believes the first meeting was in 2008, at Frontlink's office, which was a general catchup, but he did recall discussing some accounts, because they were really behind in the payments. He gave the following evidence about what he recalled from the first meeting:[32]
I'm asking do you remember anything specifically said by Derek? Did he say, 'We're both aware?' I'm not putting words into your mouth. I'm asking what did Derek say?---I cannot be specific.
Do you remember anything specific said by Cynthia at that meeting?---Not particularly very specific, but we did - something along the lines of we discussed the accounts and we discussed Derek's - we discussed 490 Soldiers Road and 1275 Pound Road, more so with Derek, and something along the lines of, 'Okay, now we'll discuss Grices Road with Cynthia', that was her baby, she'd call it. Along those lines, words to that effect.
When you say she would call Grices Road her baby, when did she use those words to you?---That would be in the - possibly both meetings, words to that effect.
Is that a phrase you recall her using or was that the effect you thought of what she was saying?---More so the effect of what she was saying.
Was anything said at that first meeting as to why that was effectively Cynthia's baby, that property?---No, not really, not at the first meeting.
85 Kameel Mondous was responsible for preparing the statements of account which were annotated 'received from Sam on 17 October 2009'.[33] He gave evidence that these statements were prepared by him and annotated and signed by Mrs Feldman at a meeting attended by him, Mr Mondous, and Derek and Mrs Feldman on 17 October 2009, the second meeting held regarding the accounts which Mrs Feldman attended.
86 Kameel Mondous gave the following evidence regarding what occurred at the second meeting:[34]
What do you actually recall was discussed at that meeting?---I recall discussing 1275 Pound Road and 490 Soldiers Road specifically with Derek.
What did you say to him; what did he say to you?---So we - the accounts were in arrears quite a bit and it was concerning that the outstanding amount was building up and he would say yes, he understood there were outstanding accounts and he had been working on it for some time, he had a few deals coming in through his business, so he would be able to catch upon the outstanding amounts.
If you look at p.47, there are figures of $47,297.96 owing for Soldiers Road; $94,338.31 owing for Pound Road?---Yes.
Were they figures that you had calculated by updating the records?---Correct.
What discussion did you have in relation to Grices Road?---Grices Road, I specifically remember discussing the matter with Cynthia because she was the one that was dealing with that property. I understood since day one that Grices Road was her property and she was using it for her use.
What gave you that understanding?---She told me at the previous meeting earlier, and any prior meetings I had with Derek alone discussing any of the accounts, he would always say, 'Cynthia would have to discuss Grices Road with you because that's her one.' There was one stage where the accounts were so far in arrears we were saying, 'You may have to leave the three properties,' and Derek, at that meeting, actually put his hands together and said, 'Please, please, please. These two are for me and Cynthia needs it'. That was 'her outlet', I recall him saying.
Was that at this meeting of 17 October 2009 or was that - - - ?---No, it was much prior to that meeting.
That was before that meeting?---Yes.
So where this was said by Derek, that he said, 'Please, these two for me. That is Cynthia's property', that was before this meeting on 17 October 2009?---Yes.
And who was present when that was said?---Myself, Derek and Sam.
87 Kameel Mondous confirmed that he saw Mrs Feldman apply her signature to the statements of account provided to her at the meeting on 17 October 2009. She signed the documents to confirm receipt because Mr Mondous wanted to make sure she had her statement. That is why he called for her to be at the meeting.
88 Kameel Mondous confirmed that he faxed to Mrs Feldman some updated account statements on 7 January 2010.[35] He recalled discussing with Derek Feldman the outstanding accounts on about a dozen occasions, and Derek Feldman's proposal that commissions be applied to outstanding accounts. On many occasions Derek Feldman said he would discuss the matter with Mrs Feldman and return to him.
89 Under crossexamination by senior counsel for Frontlink, Kameel Mondous gave the following evidence, in summary:
(a) he asked Mrs Feldman to acknowledge receipt of the account statements on 17 October 2009 because in the past he had given documents to Derek Feldman and he had not attended to them;
(b) when it was put to him that none of the account statements referred to Mrs Feldman, he referred to Derek Feldman as being the 'point of contact' for the couple. He rejected the suggestion that his father had suggested to him that he refer in his evidence to Derek Feldman being the 'point of contact': rather, he had suggested to Mr Mondous that it was a good expression to use;
(c) he recalled that he had specifically requested that Mrs Feldman be at the meeting on 17 October 2009 and rejected the suggestion that Mrs Feldman just happened to be accompanying her husband on that occasion;
(d) while he had first seen the Grices Road agreement in 2008 or 2009, he did not update the amount owing to take into account CPI increases, he just continued with what Christine was doing. The reference to 'Derek Feldman' alone on the account statements was something he overlooked;
(e) he first stated that he discussed the Grices Road property specifically with Mrs Feldman, but then conceded it was a discussion between the four of them regarding all of the accounts;
(f) he cannot recall why CPI increases were only added to the accounts after Derek's death, or why the outstanding commissions owed to Derek Feldman were offset against the debt owing on Pound Road. He agreed that it may have been upon instructions from his father; and
(g) Frontlink allowed Derek Feldman to stay at the three properties because Mr Mondous had a good relationship with Derek Feldman. He does not believe he ever discussed 'kicking them off' with Mr Mondous or Natalie Mondous.
90 Ms Rachel Ivic was also called by Frontlink to give evidence. She has worked for LJ Hooker for seventeen years, where she is a property manager, and has been dealing with Frontlink for eleven years. Mr Mondous called her and asked her to attend the Grices Road property so she could look at the house on the property with a view to renting it out. She recalls meeting Shaun and Belinda Bilson. She had not previously met them. When asked whether anyone else was present at the 5 November meeting, she replied 'not that I remember'. She discussed the house on the Grices Road property with the Bilsons. They had been living there for about ten months, and they told her about what they had done to get the property to a liveable standard. She also attended on 10 November 2010 to inspect the house, on that occasion only Belinda Bilson was there. The Bilsons wanted to stay on, which they did, but no lease was ever signed.
91 Under crossexamination, Ms Ivic agreed that at the 5 November meeting, she was only concerned with the house on the Grices Road property, not the farm. She stated that the contents of her notes[36] reflected what was told to her by the Bilsons. She did not recall Sharon Bunting being at the meeting. She knows who she is, but just does not recall whether she was there. She agreed that if there had been a discussion about farming matters at the meeting, she could well have 'tuned out'. She could not say that it was not possible that such a conversation occurred.
92 Finally, Mr Glen Wilmott gave evidence, briefly, on behalf of Frontlink. He works on a casual but regular basis for Frontlink. He first became familiar with the three properties in 2010. He did some tree work, house demolition, and fencing. He never saw any cattle at the Grices Road and Pound Road properties. He was engaged by Frontlink to remove trees and demolish the house at the Grices Road property in 2010.[37] He saw some cattle at Soldiers Road, when he went to fix some fences there. He does not know how many. He never shifted cattle from one property to another.
93 Mr Wilmott gave evidence that he knows how to yard a cow. He has done a lot of work for Mr Mondous over the past five years, which is ongoing. He met Sharon Bunting about eight to nine years ago. He knew her exhusband. There was noone living at the Grices Road property when he went to demolish it. He agreed with Sharon Bunting's evidence about taking some cattle from Soldiers Road to be sold, some months after he did some tree work at the Grices Road property, when Carlos and Frank Sofra were present. He thought there were about thirty cattle there, perhaps under thirty.
94 Six witnesses gave evidence on behalf of Mrs Feldman: herself, Mark Feldman, David Mond, Sharon Bunting, and Shaun and Belinda Bilson. The latter three witnesses had sworn affidavits when this matter was before the Court of Appeal, but on this occasion attended court pursuant to subpoenas issued on behalf of Mrs Feldman.
95 Mrs Feldman gave evidence that she is retired. She was married to Derek Feldman from 1975 until his death in 2010, and assisted him in his real estate business by carrying out office duties. Derek Feldman also bought and bred cattle. He owned all of the cattle on the three properties, apart from her pet, Jezebel. Jezebel had been rescued from the abattoir when she was a day old and raised in the backyard of her Glen Waverley home until she grew too large, following which she was agisted with her horse. Although she helped Derek Feldman from time to time, she had no role in the cattle business.
96 Mrs Feldman gave evidence that she first heard of the Grices Road property when Derek Feldman was looking at properties with Mr Mondous. She and Derek Feldman thought that they might lease the Grices Road property, as they were behind on the mortgage payments on their home, and thought they might have to move there. This did not eventuate. Their daughter, Laura Feldman, stayed at the house on the Grices Road property for one night: she left after she saw a rat in the house. That was quite some time after they had the property, as by then the house was in disrepair.
97 Mrs Feldman gave evidence that she was now aware of the Grices Road Agreement, but did not recall signing it. She would have signed thousands of documents at Derek Feldman's request. She had never refused to sign a document he had asked her to sign. She did not read the contents of any documents she signed, because she trusted her husband.
98 Mrs Feldman gave evidence that it was Richard Stamford, a previous tenant of the Grices Road property,[38] who first got Derek Feldman interested in cattle. After taking over the Grices Road property, he gradually acquired more cattle, and took over more properties. Mrs Feldman gave evidence that she was furious with her husband when he took on Soldiers Road and then Pound Road, because she did not think it was a good idea to take on more properties belonging to Mr Mondous, and because he also assumed responsibility for the debts of a previous tenant. She had known Mr Mondous for a long time. She managed a shopping centre for him, so there were regular faxes, letters and phone calls between them.
99 At first, she had no intended use for the Grices Road property herself. However, after Derek Feldman took it over, she thought about agisting horses on the Grices Road property. Mr Mondous initially agreed to this during the course of a meeting, but a few weeks later he told her she could not, because of land tax issues. Later, the property next door became available, and she approached the owner, and took it over. She arranged for two young men, one of whom was Clint Bilson, to take care of that property, and she had about thirty horses there, which paid the rent. She did not agist horses on the Grices Road property.
100 Mrs Feldman gave evidence that she made the first payment of rent for the Grices Road property, then Derek Feldman told her that Mr Mondous had told him not to bother paying rent, as he would take what Derek Feldman owed him out of commissions payable to Derek Feldman. No demand had been made upon her for payment in respect of the Grices Road property until the writ in this proceeding was served upon her.
101 Under crossexamination, Mrs Feldman agreed that she was familiar with commercial documents. She confirmed that she knew Mr Mondous socially, and had met him on a number of occasions concerning the real estate business. She confirmed that she first heard of the Grices Road property when Derek Feldman told her there was a property they may be able to utilise, because they might lose their family home. The property was in disrepair, but they did not do any work upon it to make it habitable, as they never moved in. She does not recall discussing with Mr Mondous whether she wanted Laura to live at the Grices Road property. She only ever had one horse and one cow, but a couple of horses belonging to Richard Stamford might have been located at the Grices Road property. She agreed that she told Mr Mondous that she wanted to keep horses at the Grices Road property. She agreed that while she used the property at 161 Grices Road, and Derek Feldman had the Grices Road property, they generally treated things as belonging to both of them. She no longer has a copy of the lease agreement for 161 Grices Road.
102 Mrs Feldman agreed that she was or had been a director of a company or companies operated by Derek Feldman, but she was never interested in their affairs, she just went along with whatever her husband did. A statement in a letter from her solicitors to Meat and Livestock Australia to the effect that she had traded in the cattle business with her husband was put to her: her response was that she had no idea why that statement was made. She occasionally visited Jezebel at the Grices Road property.
103 Mrs Feldman could not remember whether Mr Bilson called her after Derek Feldman died, to tell her that Mr Mondous was taking the cattle. She was on medication during that period, and said that, 'it was just a blur'. She remembers meeting Kameel Mondous, but does not recall discussing finances with him. She had no recollection of signing the statements of account said to have been provided to her at a meeting on 17 October 2009, but said she probably took them for her husband. She believed it was a summary of what they owed so Derek Feldman could keep track of what he had to allow Frontlink to take from his commissions. She does not know why Kameel Mondous sent a fax on 7 January 2010 with the adjusted statements of account to her, rather than to Derek Feldman.
104 Mrs Feldman agreed that she, not Derek Feldman, spoke to Shaun Bilson regarding the Bilsons' proposed occupation of the Grices Road property. She would often speak to people on behalf of Derek Feldman, but would not have agreed to the Bilsons coming to live at the Grices Road property without discussing it with her husband.
105 Finally, she agreed that she had made some money from her horse agistment business, but left it to her husband to deal with Mr Mond about filing tax returns and the like, and she only had the business for a short period of time before Derek Feldman died.
106 Mr Mark Feldman, Mrs Feldman's son, also gave evidence. He lives in Perth, and is an airline pilot. He worked with Derek Feldman's accountant, David Mond, in the weeks after Derek Feldman's death to try and sort out his affairs, particularly concerning the real estate business. He knew Derek Feldman had some cattle on some properties, but he personally had nothing to do with that business. He saw no paperwork concerning the cattle farming business.
107 Mark Feldman made the initial contact with Mr Mondous after Derek Feldman's death. Mr Mondous informed him that there was money owed and that he was holding on to the cattle. He confirmed that the contents of the Mark Feldman email referred to were correct, insofar as the email records the substance of the conversation between him and Mr Mondous. He gave evidence that he saw the list referred to in the email in a notepad Mr Mondous had in front of him, and he believes the list was handwritten. He did not say anything to Mr Mondous about his reference to one bull rather than two bulls. He did not authorise Mr Mondous to sell the cattle, as he had no authority to do so.
108 Under crossexamination, Mark Feldman gave the following evidence:
(a) he did not see his parents very often, but he did know that they had some cattle. He vaguely recalls a reference to the cow called Jezebel;
(b) he did not recall whether there was a second discussion with Mr Mondous, but there certainly was not a second meeting;
(c) he did recall being asked by Mr Mondous whether he would take over the family business, and he replied 'definitely not'. He cannot recall if he was asked about what his mother wanted to do with the properties;
(d) he informed Mr Mondous that David Mond would be working through his father's affairs and that David Mond would get back to him. He ceased having any involvement in this process by late December 2010 or early January 2011;
(e) he did not discuss his conversations with Mr Mondous with Mrs Feldman, either at around the time of his conversations, or since then, as they have been estranged for many years;
(f) he did speak with his mother in general terms after his father died, about what was to happen to his father's businesses and properties, but she was quite ill and grief stricken, and in no state to deal with anything; and
(g) he did not know whether Mrs Feldman had a horse agistment business.
109 Ms Sharon Bunting also gave evidence. She lived at Pound Road for some years. Prior to living there, she had leased a fifty acre parcel of Pound Road from 'Feldman cum Mondous'. She moved there to live when the little cottage on the property became available. She had met Derek Feldman a couple of times.
110 Ms Bunting had met Shaun and Belinda Bilson prior to the 5 November meeting. They had chatted through the fence that separated the Grices Road property from Pound Road. She attended a meeting in the front yard of the Grices Road property with Mr Mondous and the Bilsons. Mr Mondous told them Derek Feldman owed him a lot of money and that he would be taking over the cattle. He said the cattle on the property would not cover all of the debt. She thinks that there may have been two meetings, at one of which a real estate agent was present, but she could not recall. Mr Mondous directed that the cattle were to be moved from the Grices Road property to Pound Road. Shaun Bilson was to move the cattle through the gateway, with Ms Bunting to help if she was around. Nothing was discussed about what was to occur after the cattle were moved to Pound Road.
111 Ms Bunting gave evidence that the cattle came across to Pound Road a few days later. They were definitely Derek Feldman's cattle. Most had ear tags, except for the young stock. The cattle stayed for a few months. One or two died, and a few calved. They were moved to Soldiers Road after Mr Mondous asked her to move them there to clean up the property, as there had been no grazing on that property for a while. Some cattle were sold before the move to Soldiers Road, in two loads. Ron Girling, of Alex Scott, rounded up the cattle, and yarded and ear tagged them. There still would have been sixty plus cattle when the herd was moved to Soldiers Road, compared with eighty to a hundred at the start. There were definitely a lot more than twenty five cattle.
112 Ms Bunting gave evidence that the cattle which remained at Soldiers Road were yarded and taken away by Glen Wilmott, Carlos from Alex Scott, and Frank Sofra, some months after the first two sales. She was present when they were removed, to make sure her own cattle were not taken at the same time. She did not attend the sales, and did not receive any money from the sales.
113 Ms Bunting gave evidence that she saw horses on the Grices Road property, some belonged to Mrs Feldman, and others agisted. There were also horses at the property at 161 Grices Road, at Soldiers Road, and at Pound Road until she took over. When asked about why she was prepared to allow Pound Road to be used to accommodate the cattle, she said that Mr Mondous was a very strong willed character, she had a lease on the property, and that it was 'Do as I say, or move on'.
114 Finally, Ms Bunting gave evidence that there were horses at the Grices Road property when she first moved to Pound Road. She believed that there were horses that belonged to Mrs Feldman, and others that were agisted. There were also horses on Pound Road, Soldiers Road, and the property at 161 Grices Road. The horses on Pound Road left after she took over. She believes there were still horses at the Grices Road property when the Bilsons moved in, but she believed they were from the property at 161 Grices Road. Soldiers Road still had some horses on it when she took over the lease on that property: there was a young woman who lived in the house who had horses there, and other horses were agisted at Pound Road.
115 Under crossexamination, Ms Bunting gave evidence that she first leased part of Pound Road from Richard Stamford.[39] At one point, Mr Mondous turned up and wanted to eject her, then she leased the land directly from Frontlink. Sometime after 2005, she leased the cottage from Derek Feldman and Mrs Feldman. She kept a couple of calves at Pound Road, and looked after Jezebel. Mrs Feldman paid for Jezebel's feed and vet bills.
116 Ms Bunting gave evidence that she did not count the cattle removed from the Grices Road property as there was no reason to do so, but she has a general idea about the size of a herd. She has twentyodd head of cattle herself. She was involved in the yarding of the cattle at Soldiers Road before the cattle were removed. She believes they were sold to market.
117 Ms Bunting said that she did not do any ear tagging of cattle herself. She had Mr Mondous' ear tags and his National Vendor Declaration ('NVD') book. She signed the NVD documents for the January 2011 sales, but was not aware of signing any others on behalf of Frontlink, and did not see them being signed by anyone else. Mr Girling ear tagged the first lot prior to the January 2011 sales, and Carlos and Glen Wilmott the second lot of cattle sold from Soldiers Road. She believed twenty to thirty cattle had to be ear tagged.
118 Ms Bunting gave evidence that there was a 'decent sized' set of yards at Soldiers Road and they were full of cattle when they were yarded. She believes there were twenty to thirty calves in the herd, and the herd was big enough to stop traffic when they moved the cattle to Soldiers Road.
119 Ms Bunting agreed that she omitted to refer to the movement of cattle from Pound Road to Soldiers Road when she swore her affidavit in 2014.[40] When questioned about the difference between the numbers of cattle referred to in her 2014 affidavit (more than sixty) and her estimate at trial of more than eighty, she said that she did at some stage have a diary which recorded details of cattle stock, but had not located it to prepare her affidavit in 2014, or bring it to Court. She kept a diary because there was a lot going on in her life, and she needed to write things down to remember them. She also had a herd of her own and would have kept records to ensure they were not mixed up with Derek Feldman's cattle. This diary would have shown how many calves were born while the cattle were at Pound Road. She knows she had a record of what went to market. She was unable to comment upon the contents of the Mark Feldman email, insofar as it referred to the number of Derek Feldman's cattle.
120 Ms Bunting confirmed that she saw Glen Wilmott yard the cattle at Soldiers Road. Her partner at the time was present as well. She sold some of her own cattle that day, save for one of her bulls which could not be yarded, and she identified her PIC. She left Pound Road about four years ago, having been there about six to eight years.
121 Ms Bunting confirmed her belief that the cattle at the Grices Road property were Derek Feldman's cattle, and the horses were Mrs Feldman's. She believed Mrs Feldman's daughter kept horses at the Grices Road property, but at one stage they were at Pound Road. She believed that a politician lived in the house on the Grices Road property before the Bilsons lived there. She believed Shaun Bilson had some cattle. She cannot recall speaking to Mr Mondous about selling cattle from Pound Road, but she would have. She did not speak to him about selling cattle from Soldiers Road.
122 Ms Bunting gave evidence that she did not purchase seventy ear tags under Mr Mondous' PIC, rather, she purchased ear tags which cost $70.00. She does not recall how many ear tags were used by Mr Mondous. She returned the surplus ear tags and the NVD book to Mr Mondous.
123 Mr Shaun Bilson also gave evidence. He lived at the Grices Road property for about twelve months prior to Derek Feldman's death. He had come to live there because his brother was living next door at the property at 161 Grices Road, and his brother recommended Shaun and Belinda Bilson to Mrs Feldman. They lived there rent free in exchange for looking after the property and some cattle. He had some horses of his own.
124 Mr Bilson gave evidence that as at 2010, there were 110 to 120 cattle on the Grices Road property, perhaps 125 with some young calves. Four of them were his. He believed that Derek Feldman and Mrs Feldman owned them.
125 Mr Bilson gave evidence that he had a meeting in the front yard of the Grices Road property with Mr Mondous after Derek Feldman's death (being the 5 November meeting). Sharon Bunting was there, along with Steve Sekic, the owner of the property at 161 Grices Road, Rachel Ivic, and his wife Belinda. Mr Mondous wanted to know why they were living there, and made arrangements for Rachel Ivic to deal with him and his wife. Mr Mondous said that the cattle were all his, not the Feldmans', because he was owed money by them. He was instructed to push the cattle onto Pound Road, and he did so the next day, helped by his young son. There were twenty to twenty five calves in the herd, about half a dozen of them without ear tags. After the cattle were moved to Pound Road, he could still see them for a couple of months, and then they were moved to the other side of the property.
126 Under crossexamination, Mr Bilson agreed that the 5 November meeting was not a pleasant meeting. He did not dislike Mr Mondous, but found him a bit intimidating. He agreed that he and his family later moved to another property owned by Frontlink. They left that property as well, not because they were behind in the rent, but because of the behaviour of another tenant living in a bungalow adjacent to the house on that property. He believed they may have owed a couple of hundred dollars in rent, which was paid.
127 When asked about how he came to live in the house at the Grices Road property, Mr Bilson gave evidence that he and his brother spoke about it with Mrs Feldman.
128 When asked about the number of cattle at the Grices Road property, Mr Bilson gave evidence that their first count was about 75 head of cattle, but when they moved the cattle to Pound Road after the 5 November meeting, there were 110 to 125 cattle, with the size of the herd having increased through breeding. Within six months of them being there, the Feldmans' stock and station agent came through and took away some rogue bulls. Some of the cattle were on Pound Road and Soldiers Road. The cattle had only been at the Grices Road property for a short time prior to Derek Feldman's death.
129 Mr Bilson gave evidence that while at the Grices Road property he had a book in his possession, which he now cannot find, which recorded the numbers of Belted Galloways, Wagyu cattle, and Angus cattle in Derek Feldman's herd. This book was lost in the rush to move from Grices Road to Soldiers Road. He remembers seeing it after Derek Feldman's death and wondering whether anyone would ever need it, but when he came to prepare his affidavit in 2014 he could not find it.
130 Mr Bilson gave evidence that a few weeks before Derek Feldman died, a stock and station agent from Pakenham named 'Laurie' visited, and together they counted the cattle as they were moved up to the Grices Road property.
131 Mr Bilson was taken to the Mark Feldman email, and said that the figure of 44 cows was wrong. There would have been about 44 Belted Galloways. He said there were about seventy cows, and the rest were heifers.
132 After the 5 November meeting, which was quite distressing for his wife, because Mr Mondous was 'laying down the rules', and he was worried that his family would be evicted from the property, he tried to contact Mrs Feldman. He spoke to her the following morning, and he thinks he would have told her how many cattle were on the Grices Road property. She was quite upset, and asked 'what can I do?' He told her he would keep her old pet, and she told him to make sure they got their own cattle out.
133 Mr Bilson gave evidence that Steve Sekic was present for the whole of the 5 November meeting. That was the first time they met him, and Mr Mondous introduced him to them. Steve Sekic and Rachel Ivic then went to the property next door, which Mr Sekic told him was leased from him by Derek Feldman and Mrs Feldman.
134 In reexamination, Mr Bilson gave evidence that his brother, Clint, agisted horses on the place next door, and that Mrs Feldman had an old horse there too. It was the only horse the Feldmans had of which he was aware.
135 Ms Belinda Bilson, Shaun Bilson's wife, also gave evidence. She gave evidence that her family lived at the Grices Road property for about ten months. The house was in poor condition when they arrived. They had to clean up after possums and mice, and fix some doors. There were roughly 120 cattle when they arrived, mostly on Pound Road. She believes it was her and Mr Bilson's decision to move the cattle to Grices Road for fresh grass, which was probably sometime during winter.
136 Ms Bilson clearly remembers who was at the 5 November meeting in addition to herself and her husband: Mr Mondous, Steve Sekic, Sharon Bunting and Rachel Ivic. Mr Mondous stated that Cindy and Derek owed him a lot of money, so the cattle were his. There was some discussion about leasing the house from Mr Mondous, or through the agent.
137 Ms Bilson said that Mr Bilson told Mr Mondous that there were roughly 110 cattle. There was no further discussion. They had to move the cattle for him to Pound Road. She never saw them again after they had moved. The majority of the cattle had ear tags.
138 Under crossexamination, Ms Bilson gave the following evidence:
(a) she had spoken with her husband about what had happened, but not what they were going to say in Court. She had not reread the affidavit she swore in 2014 prior to coming to Court;
(b) she confirmed that she believed the cattle were brought up to the Grices Road property in the winter of 2010;
(c) she believed that there were approximately 120 cattle when they moved in to the Grices Road property. They did a rough head count at the time, and she remembers writing it in a notepad. Later, she said the figure of 126 stuck in her mind;
(d) they moved to Soldiers Road in August 2011, which was when the book in which she and her husband kept a record of the cattle went missing;
(e) the number of Derek Feldman's cattle dropped at some stage, some were sold by his stock and station agent, being some rogue bulls. She actually attended the market on the day of that sale because she was curious about the process. She said her husband's evidence that there were cattle on both Pound Road and the Grices Road property at the same time was wrong;
(f) she learned from Sharon Bunting that Mr Mondous owned the Grices Road property, and she obtained his telephone number shortly before the 5 November meeting. Mr Mondous told her that they had to leave the Grices Road property, but brought a real estate agent along with him to the 5 November meeting to negotiate with them;
(g) in the following year, they had no choice but to leave the Grices Road property and to move to Soldiers Road. They were given two weeks' notice, and there was heavy machinery turning up at the Grices Road property and pulling down fences;
(h) they left Soldiers Road the following Easter, and she did not believe that they owed Mr Mondous any money for rent. She took care of the family's financial dealings with Mr Mondous;
(i) when questioned about her dealings with Mrs Feldman, Ms Bilson gave evidence that their moving into the Grices Road property was arranged between her brotherinlaw and Mrs Feldman. She met Mrs Feldman once when she came to the Grices Road property to visit Jezebel, and she telephoned a few times to enquire after Jezebel. She knew Mrs Feldman visited the property at 161 Grices Road occasionally. She had met Derek Feldman; and
(j) when taken to the Mark Feldman email, Ms Bilson disagreed with its contents insofar as it referred to the number of cattle Derek Feldman owned. She said 'a lot more than 44'.
139 Under re-examination, she confirmed that Steve Sekic was at the 5 November meeting, she had not met him before, and she recalled that he handed her husband a business card. Apparently he knew Rachel Ivic well. Ms Bilson also gave evidence that she came to Court to give evidence because she was subpoenaed, not because she holds a grudge against Mr Mondous. When asked as to whether there was any 'bad blood' between her and Mr Mondous, she replied 'I would be happy not to see him again.'
140 Finally, Mr David Mond, the longstanding accountant of Derek Feldman and Mrs Feldman, gave evidence. Mr Mond gave evidence that this was a limited role, because Derek Feldman did not lodge any personal tax returns in the ten years prior to his death. Further, while he may have assisted Derek Feldman from time to time, he did not finalise any accounts for his business, as those accounts were prepared by an internal bookkeeper.
141 He became more involved in Derek Feldman's affairs after he was engaged by the solicitors for Derek Feldman's estate to prepare a statement of the assets and liabilities of the estate. He and three of his staff went into the real estate business to go through all of the papers. The records of the business were in a mess.
142 Mr Mond gave evidence that he found no invoices issued by Frontlink amongst Derek Feldman's records. He only found out about any debt owing to Frontlink when Mr Mondous called him and told him that he was owed money by Derek Feldman and wanted to be paid. Mr Mondous then faxed through some further information regarding the debt said to be owing to his office.[41] Mr Mondous did not tell him that Mrs Feldman owed him any money.
143 Mr Mond did not find any information in Derek Feldman's records about the cattle business. He did recall Derek Feldman telling him that he was going into the cattle business. Mr Mond counselled against it at the time.
144 Mr Mond gave evidence that the statement of assets and liabilities he prepared for the estate[42] included information provided to him about cattle at the time by Mark Feldman, who in turn obtained it from Mr Mondous, as recorded in the Mark Feldman email. He explained how he found the email earlier in the week, and confirmed that it was a genuine email.
(a) confirmed that he started acting for Derek Feldman in 1995. He did the tax returns for the business, and Mrs Feldman's tax returns. She was an employee of the business;
(b) said that Derek Feldman would always be talking about 'deals' he was involved with. Derek Feldman was a very positive person, he was not concerned with incurring debts, but rather, how he was to earn the income to pay them;
(c) said that the main focus of his investigations after Derek Feldman's death was the real estate business. He was getting instructions from the solicitors for the estate, who he believed were engaged by Mrs Feldman, as Mrs Feldman was not capable of giving instructions. He agreed that Mrs Feldman's paramount concern was remaining in the family home, and gave evidence that the proceeds of Derek Feldman's life insurance policy were directed towards paying off the loan to Bendigo Bank so that she could remain in her home.;
(d) gave evidence that he believed that he and his staff went through every document in Derek Feldman's office, which took many weeks. He did not see any documents of the nature which were in evidence in this proceeding, such as the account statements tendered by Frontlink. Mark Feldman helped him to go through the records, and sold the rent roll of the real estate business. He did not discuss the cattle business with either Mrs Feldman or Mark Feldman;
(e) gave evidence that he did not speak to Mr Mondous about the cattle business, and he does not recall having more than one conversation with Mr Mondous at that time. He said there was little point in talking to Derek Feldman's creditors as there were so many of them; and
(f) Mr Mond was taken to an email from Mark Feldman to him dated 15 November 2010,[43] in which Mark Feldman told him that Mr Mondous had called him. Mark Feldman wrote 'he did not sound happy and I think we may have some problems from him'. Mr Mond repeated his evidence that he did not want to have any discussions with Derek Feldman's creditors, as there was no real point in doing so.
146 For completeness, Mrs Feldman also relied upon the MLA records, which were produced by Meat and Livestock Australia pursuant to a subpoena dated 25 November 2015.[44] In order to understand these records, it is necessary to have some understanding of the system of identifying livestock, livestock producing properties, and transfers of livestock between owners and properties. The parties helpfully prepared an agreed aide memoire which explains how the system works. The key features of this system are as follows:
(a) if someone owns cattle, the owner requires a livestock PIC, being an eight digit alphanumeric sequence. PIC numbers associated with Derek Feldman were 3CSW131 and 3CSCA098; while Frontlink's PIC was 3CSEA065. A PIC number is used to identify a livestock producing property;
(b) all cattle which leave their property of origin is required to be tagged with a device recording their unique code ('NLISID') (analogous with a car registration number). The first eight digits of the NLISID are the first owner's PIC number; and
(c) when a cattle is sold or otherwise transferred, its destination property is updated through the National Livestock Information Service database. Individual cattle are transferred from the seller's PIC to the owner's PIC. However, the cattle's NLISID will not change, such that the cattle's NLISID will always refer to the PIC of its first owner, not its current owner, even if it has been sold. Very few devices are lost, and livestock owners are instructed not to remove the devices, and to never attach a second tag if one is already on the cattle. Apparently, attaching ear tags to cattle is not an easy task.
147 The subpoena to Meat and Livestock Australia sought the following records:
(a) cattle transfers off the PIC 3CSCW131 (D Feldman);
(b) cattle transfers on to the PIC 3CSCA098 (D Feldman & Co);
(c) cattle transfers off the PIC 3CSCA098 (D Feldman & Co);
(d) cattle transfers on to the PIC 3CSEA065 (Frontlink); and
148 In respect of (a) above, the MLA records show that on 11 April 2013, there was one head of cattle transferred off D Feldman's PIC. In respect of (b) above, the MLA shows that 408 cattle were transferred on to the PIC of D Feldman & Co between September 2004 and August 2006. In respect of (c) above, the MLA records show that 528 cattle were transferred off the PIC of D Feldman & Co between April 2005 and 5 October 2010. Of these, only a modest subset of cattle were cattle with an NLISID which incorporated the PIC of D Feldman & Co, which would only apply to cattle born on the three properties. Most (26) of these cattle were sold on 4 and 5 October 2010. There were no transfers off this PIC after that date.
149 In relation to (d) above, between December 2004 and October 2015, 141 cattle were transferred on to Frontlink's PIC, or at least Frontlink's PIC referable to the Berwick/Cranbourne district. In relation to (e) above, between February 2005 and February 2014, there were 464 cattle transferred off Frontlink's PIC. Of these, most, but not all, of the cattle were cattle with NLISIDs which incorporated Frontlink's PIC.
150 On 17 and 18 January 2011, there were 25 cattle transferred off Frontlink's PIC, which were sold from the Pakenham saleyards, of which eighteen had an NLISID which incorporated a reference to Frontlink's PIC, with the ear tags having been manufactured in 2010. That is consistent with the evidence of Ms Bunting that some of Derek Feldman's cattle were ear tagged using Frontlink's ear tags. Three of the cattle transferred had an NLISID which incorporated a reference to the PIC of D Feldman & Co, and four incorporated a reference to an unknown PIC. As it is common ground that the cattle sold in the January 2011 sales were Derek Feldman's cattle, this demonstrates that some of the cattle sold that day must have been purchased by Derek Feldman at an earlier date, or had been ear tagged with Frontlink's ear tags after they had been moved to Pound Road. This analysis also demonstrates that the MLA records do not enable one to precisely determine the ownership of cattle sold on any particular occasion. Further, it is a mystery, at least to me, as to how Derek Feldman's cattle came to have been identified as being transferred off Frontlink's PIC without there having been a prior transfer on to Frontlink's PIC. It may be that the MLA records are derived from the NVD documents submitted by the sellers of livestock at the time of sale.
151 The MLA records also show that, on 3 May 2011, thirty cattle were transferred from Frontlink's PIC, with the sale taking place at the Pakenham saleyards. Most, but not all of the cattle had an NLISID which incorporated a reference to Frontlink's PIC, with the ear tags having been manufactured in 2010. Eight of the cattle had an NLISID which incorporated a reference to the PIC of D Feldman & Co, and one with an NLISID which referred to an unknown PIC. Further transfers of cattle from Frontlink's PIC from the Pakenham saleyards took place on 17 January 2012, 10 July 2012, 23 September 2013, and 17 and 18 February 2014, most of which were cattle with an NLISID incorporating a reference to Frontlink's PIC. However, one of the cattle sold on 18 February 2014 had an NLISID which incorporated a reference to the PIC of D Feldman & Co.
152 Mrs Feldman also relied upon documents produced upon subpoena by Alex Scott.[45] Alex Scott was asked to produce all records relating to the sale and purchase of livestock from properties associated with PICs associated with Sharon Bunting, Derek Feldman, and Frontlink. Relevantly, these records showed:
(b) a client ledger for 'N. Mondous T/AS Frontlink P/L' showing sales of ten cattle on 17 January 2011, fifteen cattle on 18 January 2011, and thirty cattle on 3 May 2011, with a reference to cheques being addressed to 'Sam Mondous' in relation to each of these sales; and
(c) NVD documents with respect to the sale of cattle by Frontlink apparently signed by Sharon Bunting on 7 November 2010, 16 January 2011, 17 January 2011, and 3 May 2011. Only the signature on the NVD signed on 17 January 2011 looks different from Ms Bunting's usual signature.
153 While this was not ultimately a trial where credit loomed exceptionally large, at least on the question of liability, the credibility of witnesses is a matter I have to evaluate, given the different version of events put forward by the parties and their witnesses. This issue emerged in particular in relation to the question of how many of Derek Feldman's cattle were on the Grices Road property at the time of Derek Feldman's death, and what became of them. In making my factual findings about this matter, as distinct from my legal conclusions regarding the consequences of those findings, I have preferred the evidence of Sharon Bunting, Shaun Bilson and Belinda Bilson over that of Mr Mondous. As to the issue of whether Mark Feldman and Mr Mondous discussed the question of how many cattle Derek Feldman owned, and whether Mark Feldman authorised Mr Mondous to take the cattle and sell them to reduce the amount owing to Frontlink, I prefer the evidence of Mark Feldman over that of Mr Mondous. There were not many factual disputes between Mr Mondous and Mrs Feldman, largely because of Mrs Feldman's poor recollection of events. While I have some concerns about the accuracy of some of Mrs Feldman's evidence, the exposure of the falsity of Mr Mondous' evidence concerning the cattle issue does lead me to treat Mr Mondous' evidence concerning other issues with some degree of scepticism when it conflicts with the evidence of other witnesses, or when it appears to be somewhat self-serving.
154 To elaborate further regarding the credibility of the respective witnesses regarding the cattle issue, in order to accept Mr Mondous' version of events regarding what was discussed at the 5 November meeting, and what number of cattle were on the Grices Road property at the time of Derek Feldman's death, I would have to form the view that the evidence given by Sharon Bunting, Shaun Bilson, and Belinda Bilson, both at trial and in the affidavits they swore in 2014, was totally fabricated. I cannot form that view. First, while demeanour is not determinative of the matter, each of these witnesses gave evidence directly and confidently, without seeking to embellish their evidence. If they did not know the answer to a question, they said so, and conceded that their recollection of events may have faded with the passage of time. Sharon Bunting was perhaps less cooperative with counsel than the Bilsons, but that appeared to me to be as a result of her irritation with being called to give evidence and then kept at Court, noting that her crossexamination was interrupted and she was forced to wait while Mr Mondous was recalled. However, I accept her evidence was incorrect in some respects, as she appears to have signed NVD documents on behalf of Frontlink on at least two other occasions in addition to the January 2011 sales. However, that would not cause me to reject the main thrust of her evidence.
155 It is significant that each of these witnesses is largely disinterested. While they were prepared to swear affidavits in 2014 in support of Mrs Feldman's application to adduce fresh evidence before the Court of Appeal, they were subpoenaed to give evidence at trial. It appears that none of them knew either Mrs Feldman or Derek Feldman well, having met or spoken with Mrs Feldman on only a handful of occasions. I reject the evidence of Mr Mondous that the Bilsons left Soldiers Road because they owed him money for rent, if that was intended to cast doubt upon their credibility, or the insinuation made by Mr Mondous during the course of him giving his evidence that Sharon Bunting sold the rest of Derek Feldman's cattle and kept the proceeds herself. I accept that none of these witnesses appeared to hold Mr Mondous in high regard, but I doubt their negative view of the way Mr Mondous conducts business would be so strong as to motivate each of them, years after their dealings with him, to give false evidence under oath. In any event, their evidence to the effect that there were many more cattle at the Grices Road property at the time of Derek Feldman's death than contended for by Frontlink is consistent with the MLA records and the records produced upon subpoena by Alex Scott.
156 In any event, there are other matters which cast doubt upon the accuracy of Mr Mondous' evidence. I interpreted his agitation when giving evidence about the Mark Feldman email, and his declaration of it as a fabrication (which it patently was not), not, as suggested by senior counsel for Frontlink, as anger that the Mark Feldman email had emerged so late, but anger at having been caught out. Further, the statement he made in his affidavit of 27 November 2012 in support of Frontlink's application to amend its statement of claim[46] that:
Following his death the herd was sold but Mrs Feldman did not pass the monies onto me in payment of the debt owed to me, but has apparently kept the monies herself.
is completely at odds with what Mr Mondous must have known at that time was the true position, and cannot be passed off as clumsy language.
157 There are other inconsistencies of note in this affidavit. In paragraph 5(e) he states:
In one of the houses Cynthia Feldman's daughter became the resident and lived there for several years.
158 It may well be that Laura Feldman lived on the property at Grices Road for longer than one day. But it is clear from Mr Mondous' evidence that while he believed she lived there, he did not actually know that she lived there, or that she lived there for 'years'. In any event, Laura Feldman was Derek Feldman's daughter as well. Further, the evidence in this affidavit that it was Mrs Feldman who brought the cheque for $88,000 to his office, and asked him to apply it against the amount owing with respect to the Grices Road property is clearly untrue, as is the statement to the effect that he regularly sent the Feldmans reminders for the amounts outstanding to Frontlink. It is noteworthy that when confronted with documents which contradict his version of events to the cattle (such as the MLA records or the Mark Feldman email), Mr Mondous would get very angry and agitated. I do not accept that this could be attributed to his poor command of English. While Mr Mondous speaks with a heavy accent, he himself said he has a good command of English, and he had no difficulty in understanding the majority of questions put to him, or putting forward his version of events.
159 Accordingly, I approach with some degree of caution any of the evidence Mr Mondous gave with respect to the conversations he held with Derek Feldman, Mrs Feldman, Mark Feldman, or others, insofar as it seeks to give evidence about conduct of Mrs Feldman which is said to amount to a representation concerning the Grices Road Agreement, or any acknowledgement of indebtedness on her part.
160 As for Kameel Mondous, while I would not make a finding that he has deliberately given false evidence, he did have a tendency to at first advance a position that supported Frontlink's case with respect to the liability of Mrs Feldman in respect of the Grices Road property, but then resile from it when pressed by either senior counsel for Frontlink, or senior counsel for Mrs Feldman. In other words, when pressed on matters of detail, he appeared to tell the truth. However, the reference by him in his evidence to suggesting to Mr Mondous that they refer to Mr Feldman as the 'point of contact' for the couple suggests that both Mr Mondous and Kameel Mondous were alert to the need to give evidence which appeared to associate Mrs Feldman with Derek Feldman's conduct, and to emphasise her participation in the dealings between Frontlink and the Feldmans.
161 As for Rachel Ivic, I had no reason to doubt her evidence, and she freely admitted that if the others present at the 5 November meeting had discussed cattle, she may well have tuned out. As for Mr Wilmott, while his evidence was to some extent inconsistent with that of the Bilsons and Ms Bunting regarding the number of cattle at Soldiers Road, his evidence that he did take away some cattle from Soldiers Road was also inconsistent with Mr Mondous' evidence, and the outline of his evidence filed and served on behalf of Frontlink. Given these inconsistencies, and Mr Wilmott's limited involvement in dealing with the cattle, his evidence was not of great assistance.
162 As for the other witnesses called on behalf of Mrs Feldman, Mark Feldman and David Mond, I unreservedly accept Mark Feldman's evidence, and David Mond gave evidence of a largely uncontroversial nature in a candid manner.
163 As for Mrs Feldman herself, her inability to recall many matters and her frail presentation made it difficult to assess her credibility on key issues. Further, her inability to recollect conversations and documents is consistent with her case that she really did not know many details of Derek Feldman's dealings. There was some evidence given which was odd: for example, her evidence that she only ran the horse agistment business for a few months before Derek Feldman died, when earlier she had given evidence that it was a well-established business that made money. However, her credibility was not impugned in any serious way: rather, her lack of recollection meant that her evidence did not add much to the information before the Court.
164 I was invited to draw an adverse inference from the failure of Laura Feldman to give evidence, and I would do so, save that it is difficult to identify what inference I was asked to draw. For instance, I could infer that Laura Feldman's absence means that she lived at the house on the Grices Road property for longer than one night. That would detract from Mrs Feldman's credibility, but given that Laura Feldman was Derek Feldman's daughter too, such a finding would not add much to the determination of the question of whether Mrs Feldman was liable to Frontlink. I doubt, in the circumstances of the case, that I could draw an inference that she would have given other evidence which would not assist Mrs Feldman.
165 Further, while I was not specifically asked to draw an adverse inference by reason of Frontlink's failure to call Mr Steve Sekic, in my view, it would be open for me to do so. Mr Sekic's presence at the 5 November meeting only emerged during the course of the evidence given by the Bilsons. Both of them were quite certain that Mr Sekic was there. Mr Bilson referred to him seeming to be well acquainted with Rachel Ivic, and being told by him that Derek Feldman and Mrs Feldman leased the property at 161 Grices Road from him, while Ms Bilson recalls him giving a business card to her husband, and leaving with Ms Ivic to visit the property at 161 Grices Road at the conclusion of the 5 November meeting. Given the failure of Frontlink to call Mr Sekic, and the absence of evidence as to why he was not called, I suspect that his evidence as to what was discussed at the 5 November meeting might accord more closely with the evidence of Ms Bunting and the Bilsons, rather than that of Mr Mondous.
166 Finally, although while strictly speaking this is not so much a matter going to the credit of witnesses, I note that the relatively meagre number of documents tendered at the trial does not add a great deal to the probative evidence concerning the question of whether Mrs Feldman was liable under the Grices Road Agreement after October 2005. The reference in the account statements prepared and/or updated by Kameel Mondous to Derek Feldman alone is consistent with the position of each of the parties. The fact that Mrs Feldman initialled each page of the account statements provided to her at the meeting in October 2009 does not add much either: she merely acknowledged receipt of the account statements referable to each of the three properties. Similarly, addressing the updated account statements to her in January 2010 does not either confirm or disclaim any liability on Mrs Feldman's part: it was common ground that she assisted Derek Feldman with paperwork concerning his business. Finally, the documents referred to in the particulars to paragraph 15(a) of Frontlink's Reply and Defence to Counterclaim do not, as contended by Frontlink, 'confirm the tenancy in writing'. The first of these letters was a letter dated 14 November 2009 and signed by Derek Feldman on behalf of Derek Feldman & Co which confirmed that 'we have agreed to pay the sum of $20,000 each three months', and the second was a letter from Derek Feldman to Mr Mondous in April 2010 which requested an advance from Mr Mondous to enable him to meet his payment plan with the City of Casey, expressed Derek Feldman's expectation that he would be able to make payments in reduction of the outstanding rent by June 2010, and acknowledged receipt of $6,000.00 from Mr Mondous. While these documents may confirm that Derek Feldman occupied the three properties, they made no reference to Mrs Feldman.
Was Mrs Feldman bound by the terms of the Grices Road Agreement, and if so, for what period of time?
167 The first two issues referred to in paragraph 36 above can be dealt with fairly promptly. Mrs Feldman does not deny signing the Grices Road Agreement, rather, she does not recall signing the Grices Road Agreement. She agrees that the signature on the copy of the Grices Road Agreement looks like her usual signature, and that she was present during a meeting with Derek Feldman and Mr Mondous regarding taking over the Grices Road property. She wanted to agist horses on the Grices Road property, and she thought that she and Derek Feldman might have to move there to live because they were behind on the mortgage payments on their home. She would regularly, if not frequently, sign business related documents that her husband would ask her to sign, and she would sign all documents presented to her by him unquestioningly. In all of the circumstances, I consider that it is more probable than not that Mrs Feldman signed the Grices Road Agreement.
168 In relation to the question of whether Mrs Feldman's lack of knowledge of the terms of the Grices Road Agreement and the trust she reposed in her husband means that she should not be bound by the terms of the Grices Road Agreement, I do not consider that any of the matters pleaded by Mrs Feldman in that regard assist her in defending Frontlink's claim. Her lack of knowledge of the terms of the Grices Road Agreement is answered by the statement of the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Limited and others:[47]
No one suggests that the fact that a document has been signed is for all purposes conclusive as to its legal effect. At the same time, where a person has signed a document, which is intended to affect legal relations, and there is no question of misrepresentation, duress, mistake, or any other vitiating element, the fact that the person has signed the document without reading it does not put the other party in the position of having to show that due notice was given of its terms. Furthermore, it may be asked, where would this leave a third party into whose hands the document might come?
169 While Mrs Feldman does not remember reading or signing the Grices Road Agreement, and I have no reason to disbelieve her in that regard, an examination of the document itself is sufficient to conclude that a person such as Mrs Feldman, who is reasonably experienced in business affairs and familiar with commercial documents, particularly documents recording transactions concerning real estate, would have realised at the time she signed the Grices Road Agreement that she was signing a document which is intended to create legal relations.
170 The question remains whether there was 'any other vitiating factor'. Senior counsel for Mrs Feldman sensibly conceded that some of the usual indicia of undue influence or unconscionable bargaining are not present in the current case, except for Mrs Feldman's evidence that she trusted her husband, and followed his lead on commercial matters. While there is no evidence of her professional qualifications or lack thereof, she is a native English speaker, and is experienced in business affairs by reason of her work in assisting her husband in his real estate business. Indeed, her evidence was that she personally managed a shopping centre on behalf of Frontlink. She was not a volunteer, indeed, she wanted to operate a horse agistment business from the Grices Road property. She gave evidence that she was very cross with Derek Feldman for taking on Pound Road and Soldiers Road, which sits uncomfortably with the notion that she went along with all of his ventures unquestioningly. In short, I cannot find that there is any reason why Mrs Feldman ought not be bound by the Grices Road Agreement, at least until its expiry in October 2005. The real question is how the nature of the relationship between the parties after October 2005 is to be characterised, in the absence of any express extension of the agreement via the exercise of the option referred to in clause 6(a) of the agreement, but also in the context of the ongoing occupation of the Grices Road property after October 2005.
171 As noted above, the central issue in this trial is whether the terms of the Grices Road Agreement continued to bind Mrs Feldman after October 2005, such that Mrs Feldman is liable to pay Frontlink the amounts owing under that agreement by reason of:
(i) an implied extension on a year by year basis?;
(ii) the continued occupation of the Grices Road property by Derek Feldman and Mrs Feldman amounting to an overholding akin to an overholding of a lease agreement; and/or
(iii) by continuing to occupy the Grices Road property, paying rent, and acknowledging outstanding rent due, Derek Feldman and Mrs Feldman represented to Frontlink that they continued to be bound by the terms of the Grices Road Agreement?
172 Frontlink submitted that, in the period between the date of the expiry of the Grices Road Agreement in October 2005, and Derek Feldman's death, nothing changed. The Grices Road property continued to be managed in the same way as it had before, the Feldmans continued to provide the stock and feed for the stock and use the property as they wished. Noone told Mr Mondous of any change in the arrangements between the parties. Mrs Feldman continued to leave (and visit) her pet cow Jezebel there, and arranged for the Bilsons to occupy and manage the property. She initialled her receipt of an account in October 2009 acknowledging the debt, and she was involved in at least two discussions about the amounts owing on the three properties. Accordingly, it is open to the Court to find that the Grices Road Agreement was extended from time to time, probably on an annual basis, given the references in the accounts to rent being payable on an annual basis. Alternatively, the agreement became, or became akin to, a tenancy at will. As such, the Feldmans' ongoing occupation of the land was in accordance with the same terms as the Grices Road Agreement. Finally, it was submitted, by reason of Frontlink's reliance upon matters continuing as before, Mrs Feldman is estopped from asserting that she is no longer bound by the terms of the Grices Road Agreement.
173 In her closing submissions at trial, senior counsel for Frontlink submitted that the following matters were consistent with Mrs Feldman continuing to be bound by the Grices Road Agreement after October 2005:
(a) the first version of the agreement, which was prepared by Derek Feldman, referred to Mrs Feldman as being a party to the agreement;
(b) Mrs Feldman did not actually deny signing the Grices Road Agreement;
(c) Mrs Feldman admitted that she had one horse, had planned to run horses on the Grices Road property, and witnesses gave evidence that there were horses on the Grices Road property;
(d) Mrs Feldman's evidence is that the agistment business at 161 Grices Road was run for only a few months before Derek Feldman's death, and there are no financial records concerning this business;
(e) Mr Mondous' clear recollection of Mrs Feldman being actively involved in discussions concerning the Grices Road Agreement was confirmed by Mrs Feldman's evidence that she and Derek Feldman thought they might have to move there;
(f) Laura Feldman lived at the Grices Road property for at least one night. It is open to me to draw an adverse inference from her failure to give evidence, given Mr Mondous' evidence that the house on the Grices Road property was in good condition in 2002, and his evidence concerning his conversation with Laura Feldman about living in the Grices Road property;
(g) Mrs Feldman's evidence that she was cross with her husband taking on Soldiers Road and Pound Road was consistent with her not being a signatory to those agreements;
(h) as the Grices Road Agreement was akin to a lease, principles of overholding should apply. Everyone involved used the term 'rent', and otherwise the terms of the agreement were very similar to what one might find in a lease. Everyone acted consistently with a continuation of the agreement. Mrs Feldman did not do anything because she had forgotten that she had signed the agreement;
(i) Mrs Feldman was aware of and acknowledged the amount owing with respect to the Grices Road property. The Grices Road property was being used, it was sub-leased, and there were cattle and horses on it;
(j) even if Mrs Feldman had not set foot on the Grices Road property after October 2005, as a joint promisee with Derek Feldman, she is still liable to Frontlink;
(k) Kameel Mondous gave evidence he had two discussions with Derek Feldman about the debts, and that Derek Feldman talked about the Grices Road property as Mrs Feldman's property;
(l) the suggestion that Mrs Feldman was just helping out her husband with his business has to be viewed in the context of her having signed the Grices Road Agreement;
(m) Mrs Feldman visited the Grices Road property on various occasions. She dealt with Clint and Shaun Bilson regarding the Bilsons' occupation of the property. Sharon Bunting gave evidence that there were horses there; and
(n) Frontlink's reliance is obvious. There were meetings, and promises to pay. It was not necessary for Mr Mondous to give evidence to the effect that, if he had been told that Mrs Feldman and Derek Feldman did not consider themselves to be bound by the Grices Road Agreement, he would have told them to leave.
174 Mrs Feldman submitted that she was no longer bound by the terms of the Grices Road Agreement, for the following reasons:
(a) there was no valid exercise of the option in Clause 6(a) of the Grices Road Agreement, so it could not be said it was extended in accordance with its terms (and this was not pleaded);
(b) as such, the Grices Road Agreement terminated on 21 October 2005, and anything which occurred thereafter was not pursuant to that agreement;
(c) that there was no implied agreement to extend, or equivalent representation, is established by the evidence. At most, Derek Feldman failed to remove his cattle on or after 21 October 2005. That might have been a breach of the Grices Road Agreement, but does not of itself constitute a renewal or extension of the agreement;
(d) Derek Feldman did not make, and was not pressed for payment of any sum in October 2005. At most, any payments of any accounts (which were addressed to him alone), taken together with the entry by Derek Feldman into agreements with respect to Soldiers Road and Pound Road, suggests some new and informal arrangement between Derek Feldman and Frontlink for the use of the three properties;
(e) the evidence does not throw up any conduct on the part of Mrs Feldman to support any ongoing liability by her to Frontlink. She never lived at the Grices Road property. She never put her horses on the property, and her evidence as to the reason why she did not do so is quite plausible. Jezebel's presence on the Grices Road property (and on Pound Road) can be explained by Mrs Feldman entrusting her care to Derek Feldman and in any event, that was only one cow. To keep a pet is not to conduct a farm; and
(f) the concept of 'overholding' has no application to a commercial agreement for farm management. The Grices Road Agreement was drafted by Frontlink, and is not a lease. If Frontlink wished to obtain the benefits of a lease or a licence, it could have entered into a lease or licence.
175 In his closing submissions at trial, senior counsel for Mrs Feldman identified what he described as the most important issue in the trial: did anything occur after 20 October 2005 which indicated that the terms of the Grices Road Agreement continued beyond that date? The starting point, he submitted, is that, by reason of the express terms of the Grices Road Agreement, the agreement had come to an end. The question is not whether there was any change on that date, rather, the question is whether there was conduct after that date from which it can be inferred that the parties continued to regard themselves as bound by the Grices Road Agreement and its terms. The conduct of the parties has to be that of both parties (or in this case, all parties), as contractual relations are necessarily mutual.
176 Senior counsel submitted that it is relevant that the Grices Road Agreement is not a lease. It did more than confer a right to occupy land: it imposed positive obligations upon Derek Feldman and Mrs Feldman to farm and manage the Grices Road property. He submitted that it is possible to conclude that the parties did not conduct themselves in accordance with the Grices Road Agreement from the start: no books of account were kept, and horses were not agisted on the Grices Road property.
177 Senior counsel for Mrs Feldman submitted that as it was not said anywhere that Derek Feldman was the agent of Mrs Feldman, it is the conduct of Mrs Feldman that must be scrutinised. She never lived there, she did not have horses on the property, and she was not a partner in Derek Feldman's cattle business. Her explanation as to why she did not agist horses on the Grices Road property was quite plausible. The fact that the cattle remained on the property after 20 October 2005 says nothing about whether or not Mrs Feldman was in some way affirming or representing or engaging in conduct giving rise to an implication that the original agreement subsisted and that she continued to be bound by it. Her signing of the statements of account on 17 October 2009 is a long way from acknowledging an obligation to pay.
178 Senior counsel for Mrs Feldman submitted there was no conduct on the part of Frontlink consistent with the Grices Road Agreement extending beyond 2005. No invoices were issued. The only statements of account in existence refer only to Derek Feldman. Frontlink conducted itself on the basis that Derek Feldman was liable to it on account of the amounts owing in respect of the three properties: its focus only shifted to Mrs Feldman when it became concerned about the solvency of Derek Feldman's estate.
179 Senior counsel for Mrs Feldman submitted that even if Mrs Feldman's conduct could amount to a representation on her part to the effect that she continued to be bound by the Grices Road Agreement, there was no evidence of any reliance on the part of Frontlink so as to ground a claim in estoppel.
180 As for the allegation that there has been an 'overholding' of the Grices Road property, senior counsel for Mrs Feldman submitted that the Grices Road Agreement is not a lease and its terms are not particularly similar to a lease. There is no authority to suggest that the concept of overholding exists outside tenancy agreements.
181 Prior to turning to the specific issues in this trial, it is helpful to identify the relevant legal principles against which the conduct of the parties must be evaluated. While Frontlink in its pleadings has alleged that there has been an implied extension of the Grices Road Agreement, it is really contending that there has been a variation of the Grices Road Agreement to extend the term of the agreement, and the fact of the variation and its terms can be implied from the conduct of Derek Feldman and Mrs Feldman in failing to vacate the property, in continuing to pay the rent and outgoings for the Grices Road property, and in acknowledging the debts owing in respect of the Grices Road property.
182 The principles governing whether parties to an existing agreement can be found to have varied the terms of their agreement are conveniently summarised in the following extract of Cheshire and Fifoot's Law of Contract,[48] (omitting citations):
A contract cannot be varied unilaterally, but only by a further contract. Ex hypothesi, variation by contract involves two contracts, the existing one (which may or may not continue to exist: see 22.5) and the new one (the contract of variation). The existence of a contract of variation must be clearly demonstrated by reference to the usual rules of formation. A definite agreement, going beyond discussion or negotiation, must be established, but as with any contract such an agreement may be inferred from conduct. Consideration must also be established. Where a variation is made in favour of one party ostensibly without advantage to the other (for example, a reduction in price), the element of consideration may be missing. However, the modern doctrine of consideration recognises a 'practical' as well as a legal benefit in such situations.
183 Further, in Moratic Pty Ltd v Lawrence James Gordon & anor ('Moratic'),[49] Brereton J considered whether the conduct of the parties in failing to observe a term of a lease amounted to a variation of a lease to excise that term, and summarised the position as follows (authorities and citations omitted):
The terms of a contract may be varied by implied agreement arising from a course of dealing between the parties, and a party that seeks to rely on a term incorporated as a result of a course of dealing need not show that the other had actual knowledge of the term, because the issue depends not on the actual subjective intentions of each party, but on what each was reasonably entitled to conclude from the attitude of the other. Nonetheless, more is required to produce this result than mere failure to insist upon performance of a contractual obligation, even if protracted: a party to a contract does not lose its contractual rights by omitting immediately, or even promptly, to demand strict performance - unless there has been some event which amounts to a repudiation or waiver or founds an estoppel. Moreover, contractual variation requires a mutual intention to vary the existing contractual terms, and consideration.
184 Relevantly, Brereton J noted the following in respect of what is required to establish a variation of the terms of a written agreement:[50]
It is one thing to find that, in the absence of a written contract, the parties have by a course of dealing objectively adopted certain terms (as occurred in Proprietors Strata Plan 30102 v Energy Australia), but where the parties have recorded their agreement in writing and in detail, a mutual intention to vary the contract by omitting one of its express written terms is not lightly to be inferred from a course of conduct when the parties do not advert to the relevant term.
185 While the parties in Moratic were in a different situation as in the current case, in that there was no issue as to whether the parties were in a contractual relationship, but rather whether they had varied the contract to exclude a term of a written contract, the reasoning in the statement above is relevant to the current case. Essentially, where the terms of an agreement are in writing, a court must be cautious to find that, in the absence of express reference by the parties to that term (in the current case, the duration of the Grices Road Agreement), there has been a mutual agreement to vary the terms of the contract.
186 In Moratic, his Honour found that there had been no variation of the terms of the lease, or any representation sufficient to found a promissory estoppel, but that the parties had adopted a common assumption as to the conventional basis of their relationship, such that both parties were estopped from denying the truth of the assumption. His Honour summarised the elements of equitable promissory estoppel and common law conventional estoppel in the following passages (citations omitted):[51]
In Waterman v Gerling Australia Insurance Company Pty Ltd, I compared the elements of these two related estoppels - both are included in the rubric of estoppel in pais - so as to reveal their analogies and distinctions in the following terms. In equitable promissory estoppel, it is necessary for a plaintiff to establish (1) that it has adopted an assumption as to the terms of a legal relationship with the defendant; (2) that the defendant has induced or acquiesced in the plaintiff's adoption of that assumption; (3) that the plaintiff has acted in reliance on its assumption; (4) that each party knew or intended that the other act on that basis; and (5) that the departure from the assumption will occasion detriment to the plaintiff.
The similarities between the two doctrines should not be allowed to mask their differences, which reflect the disparate origins of promissory estoppel and conventional estoppel. Promissory estoppel, a creature of equity, is, typically, focussed on the conscience of the defendant: it operates when the defendant has induced or acquiesced in the adoption by the plaintiff of an assumption that the defendant will not assert its strict legal rights, so to prevent unconscionable (or unconscientious) insistence by the defendant on its strict legal rights. On the other hand, conventional estoppel, a creature of the common law, is focussed on the consensual basis of the parties' relationship: it operates when both parties have adopted the same assumption as the basis of their relationship, often without appreciating that any departure from the strict legal position is involved, so as to hold both parties to their common understanding.
187 In the current case, Frontlink makes no distinction between promissory estoppel or conventional estoppel. However, I have assessed the evidence in order to establish whether either species of estoppel is made out.
188 There is substantial overlap between the principles associated with establishing whether there has been a variation of an agreement, or whether there has been conduct which estops a party from denying there has been such a variation. As noted by the learned authors in Cheshire and Fifoots Law of Contract:[52]
Estoppel undoubtedly has a role in dealing with the problem of contract variations, as do the related concepts of waiver and election. Broadly, if the elements of estoppel are satisfied, a change to the contract will be binding, even though the rules of the doctrine of consideration have not been met, and, in any appropriate case, even where the change has not been made in accordance with the formal procedure for change included in the contract.
189 In a footnote to the passage extracted above, the learned authors refer to Hodgins v Duke Nominees Pty Ltd[53] in support of their statement that 'the statement relied on to vary the contract must be clear and unequivocal'.
190 In my view, Mrs Feldman had no liability under the Grices Road Agreement after October 2005, at least not on the basis contended for by Frontlink in the statement of claim. The evidence might, at least arguably, support a finding that, at the conclusion of the three year period of the Grices Road Agreement, Mr and Mrs Feldman impliedly exercised their option to extend the Grices Road Agreement by failing to vacate the Grices Road property, but that allegation is not pleaded in the statement of claim. If it had been, and I had found that allegation to have been made out, the Grices Road Agreement would have come to an end in October 2008, there being no provision in the agreement for a further extension. That would mean that Mrs Feldman would have been liable for an amount equivalent to approximately two years' rent, and perhaps an amount in respect of rates and insurance, totalling approximately half the quantum of Frontlink's claim in this proceeding. However, the evidence is insufficient to establish that there was an agreement, to which Mrs Feldman was a party, to vary the terms of the Grices Road Agreement in the manner contended for by Frontlink.
191 In reaching this view, I have, notwithstanding my reservations concerning the credibility of the evidence relied upon by Frontlink, largely taken Frontlink's case at its 'highest and best', with some qualifications. In particular, I accept Mrs Feldman's evidence that she had spoken to Mr Mondous regarding the agistment of horses on the Grices Road property, and that Mr Mondous originally agreed, but returned to her later and told her that she could not agist horses on the property, because it would jeopardise the land tax exempt status of the Grices Road property. Not only is that evidence inherently plausible, it is consistent with Mrs Feldman leasing the property at 161 Grices Road, which she presumably would not have needed to do had she had access to the Grices Road property. I also have some reservations regarding the accuracy of the somewhat selfserving evidence concerning what Derek Feldman told Mr Mondous and Kameel Mondous about Mrs Feldman's particular attachment to the Grices Road property, but in the end, this evidence does not really go anywhere towards establishing any liability on the part of Mrs Feldman.
192 So, taking Frontlink's case almost at its best, the Court is being asked to find that the following conduct of Mrs Feldman either amounted to an implied agreement to extend the term of the Grices Road Agreement on an annual basis after its expiry in October 2005, or amount to a representation that she continued to be bound by the Grices Road Agreement after the expiry of the agreement, or the expiry of any agreed extension:
(a) Mrs Feldman's entry into the Grices Road Agreement;
(b) Mrs Feldman's expressed desire to have horses on the Grices Road property, and that her daughter live there, notwithstanding her evidence that in fact she and Derek Feldman discussed moving there, and the fact that Laura Feldman is the daughter of both Mrs Feldman and Derek Feldman;
(c) the (scant and disputed) evidence that there were some of Mrs Feldman's horses on the Grices Road property at an unspecified time, and that Laura Feldman lived there for a period of time before the Bilsons lived there, and before an unidentified politician lived there;
(d) Derek Feldman's acknowledgement of the amount owing by his initialling of the handwritten document prepared by Mr Mondous sometime prior to March 2007, and his payment of $88,000 in March 2007 (equivalent to four years' rent) by delivery of a cheque to Mr Mondous;
(e) Derek Feldman's use of the Grices Road property, in conjunction with Pound Road and Soldiers Road, for his cattle business;
(f) Mrs Feldman's occasional, albeit apparently reasonably rare, visits to the Grices Road property to visit her pet cow Jezebel;
(g) Mrs Feldman's attendance at two meetings in 2008 and 2009, where she, along with Derek Feldman, Mr Mondous, and Kameel Mondous, discussed the outstanding debts with respect to each of the three properties, and her acknowledgement of receipt of statements of account in relation to each of the three properties by initialling each page of the statements of account at the meeting in October 2009;
(h) her conduct in organising the Bilsons, being close relatives of one of the caretakers of 161 Grices Road, to take on the responsibility of being caretakers at the Grices Road property;
(i) her failure to tell Mr Mondous or any other representative of Frontlink that she was no longer liable for any obligations under the Grices Road Agreement; and
(j) two letters from Derek Feldman to Frontlink, dated 14 November 2009 and 14 April 2010, in which Derek Feldman is said to have acknowledged the tenancy on Mrs Feldman's behalf, referred to in the particulars under paragraph 15(a) of Frontlink's Reply and Defence to counterclaim, which are said to 'confirm the tenancy in writing'.
193 Turning first to the question of whether there was an implied, year to year extension of the Grices Road Agreement, the evidence simply does not go that far. It is common ground that the agreement was not extended in accordance with its express terms. Even if there was conduct on the part of Derek Feldman which supports a conclusion that he agreed to the extension of the Grices Road Agreement, which there was, it is trite law that a party to an agreement cannot bind a third party, in the absence of an agency relationship between the promisor and the third party. It was not pleaded that Derek Feldman acted as the agent of Mrs Feldman. It was Derek Feldman who kept his cattle on the Grices Road property, made the payment in March 2007 from the proceeds of the sale of his cattle, borrowed money from Mr Mondous and/or Frontlink to pay the outstanding rates owing on the three properties, and made promises to pay the outstanding arrears on the three properties.
194 The only conduct on the part of Mrs Feldman after October 2005 which was relied upon by Frontlink was her presence at two meetings at which the outstanding accounts were discussed, her initialling the account statements for the three properties to acknowledge their receipt, her organising the Bilsons to move into the Grices Road property, and her failure to tell Frontlink that she was no longer bound by the Grices Road Agreement. In my view, the evidence is equally consistent with Derek Feldman alone being, in effect, a party to an agreement or being a tenant at will at the Grices Road property. Mrs Feldman assisted Mr Feldman with his business, and attended some business meetings with him, which explains why she was in attendance at some meetings, and handled commercial documents concerning Derek Feldman. Kameel Mondous' evidence as to why he wanted Mrs Feldman to acknowledge receipt of account statements for each of the three properties is consistent with the evidence concerning Derek Feldman's management of his affairs: it is possible that Kameel Mondous wanted to ensure the account statements were in the hands of someone who might be more responsible and attentive than Derek Feldman.
195 As for Mrs Feldman's 'silence' concerning the Grices Road Agreement, even ignoring her own evidence that she had not read the Grices Road Agreement, what Frontlink (an experienced commercial operator) is effectively contending is that a person in the position of Mrs Feldman, in order to avoid liability, is obliged to tell Frontlink that she is no longer bound to the terms of an agreement which was prepared by it and, in accordance with its express terms, had lapsed. While the courts are generally amenable to facilitate commercial activity by not being unduly pedantic concerning informal arrangements between commercial people,[54] one can go too far in seeking to protect parties from the consequences of failing to properly document their commercial relationships.
196 Accordingly, the evidence does not support a conclusion that Frontlink on the one hand, and Derek Feldman and Mrs Feldman on the other hand, entered into a further agreement to extend the term of the Grices Road agreement, on an annual basis, or otherwise. At or after the end of the term of the Grices Road Agreement, Frontlink may have assumed the agreement was still on foot, but the situation lacked the necessary element of mutuality. There was certainly no positive statement or conduct on Mrs Feldman's part which signified any intention on her part to establish or maintain a legal relationship with Frontlink in relation to the Grices Road property. The reference in the pleadings to the parties agreeing as to a year by year extension is mere speculation: there is no evidence of such a term apart from the references in the Grices Road Agreement to an annual profit share fee, and the references in the statements of account prepared by Frontlink in 2009 and 2010 to rent being calculated on an annual basis.
197 Further, turning to the question of whether Mrs Feldman is estopped from denying she was bound by the Grices Road Agreement after October 2005, in my view largely for the reasons set out above, there has been no conduct on the part of Mrs Feldman which would amount to a representation on her part that she continued to be bound by the terms of the Grices Road Agreement after its expiry in October 2005. There are a limited number of circumstances where mere silence can amount to a representation.[55] None of these apply in the current case. Some of the conduct said to amount to Mrs Feldman's alleged ongoing 'involvement' with the Grices Road property, such as her keeping Jezebel there, and her arranging for the Bilsons to take care of the property and the cattle, was not known to Frontlink until, at the very earliest, on the occasion of the 5 November meeting, but more likely, not until Sharon Bunting and the Bilsons gave their evidence at trial. As such, that conduct could not amount to a representation Mrs Feldman made to Frontlink which was or could be relied upon by Frontlink.
198 In any event, even if the conduct of Mrs Feldman amounted to an actionable representation on her part, there are, on Frontlink's own evidence, real question marks around the issues of reliance and detriment. The evidence of Mr Mondous was to the effect that he relied upon Derek Feldman's assurances that Frontlink would be paid the amounts outstanding with respect to the three properties, either from the proceeds of sale of cattle, and/or by foregoing commissions, and that he expected he would ultimately be paid. Indeed, in his evidence, Mr Mondous said words to the effect that Frontlink would not be in this position (that is, in litigation with Mrs Feldman) if Derek Feldman was still alive. While there is some evidence from Kameel Mondous to the effect that he and his father told Derek Feldman that he would have to leave the three properties if he failed to get up to date with the rent, no such evidence was given by Mr Mondous, and Kameel Mondous gave evidence that he had no discussions with his father about ejecting Derek Feldman from the Grices Road property or any of the other properties. As late as 2010, Mr Mondous was prepared to lend Derek Feldman money to pay outstanding rates on the three properties, when he knew hundreds of thousands of dollars was owing in respect of the three properties.
199 Indeed, I can infer from the evidence that there was some benefit to Frontlink from its arrangements with Derek Feldman in respect of the three properties, notwithstanding the arrears. Mr Mondous' evidence is that Frontlink no longer wanted to farm the properties itself. He conceded that there had to be farming businesses operating from the properties for land tax exemption purposes. I can infer from Mr Mondous' evidence that Derek Feldman was 'the best in the business', in the context of giving evidence as to why Frontlink allowed the arrangement to continue despite the arrears, that it was in Frontlink's broader commercial interest to maintain a good relationship with Derek Feldman. Accordingly, I am far from satisfied, even if it could be established that the absence of any change amounted to a representation on the part of Mrs Feldman, and leaving aside the question of whether it was unconscionable for Mrs Feldman to resile from any representation, that the remaining necessary elements of a promissory estoppel have been established.
200 Similarly, the evidence does not support a finding that a common law conventional estoppel operates to bind Mrs Feldman to the terms of the Grices Road Agreement after its expiry in October 2005. Frontlink may well have assumed that Mrs Feldman continued to be so bound (although I suspect that Mr Mondous and/or Kameel Mondous did not even turn their minds to the question of whether Mrs Feldman herself was liable under the Grices Road Agreement until after Derek Feldman's death), but the evidence does not support a finding that Mrs Feldman assumed she was so bound, or knew that Frontlink assumed that she was so bound. I also refer to my comments regarding my reservations as to whether Frontlink suffered any real detriment as a result of any departure by Mrs Feldman from any assumed state of affairs.
201 Finally, for completeness, while I accept that Mrs Feldman may have reaped some modest benefit from Derek Feldman's continued occupation of the Grices Road property, such as being able to keep her pet cow there, or possibly even a horse or two, her acceptance of such benefits does not give rise to any legal liability on her part to Frontlink. In Lumbers v W Cook Builders Pty Ltd (in liq),[56] the High Court emphatically rejected a restitutionary claim made by a subcontractor against the building owner in circumstances where the building owner did not know that the work was being done, not by the head contractor, but the subcontractor. Accordingly, Frontlink could not (and did not) rely upon any claim that Mrs Feldman received an incontrovertible benefit from any use she made of the Grices Road property. Indeed, in that case the High Court emphasised the primacy of contractual rights and obligations over those arising under inconsistent informal arrangements.
202 Frontlink also submitted that it was open to the Court to find that, in the absence of any finding that the Grices Road Agreement was extended from time to time by agreement between the parties, the agreement became, or became akin to, a tenancy at will. As such, the parties continue to be bound by the terms of the original agreement.
203 Senior counsel for Mrs Feldman did not take issue with the proposition that there could be a tenancy at will, or the principles governing the obligations of the parties to such an arrangement. However, he submitted that the concept of 'overholding' has no application to a commercial agreement for the management of a farm. He relied upon the statement of the Court of Appeal to the effect that the Grices Road Agreement was not a lease, noting that it was Frontlink that prepared the Grices Road Agreement. Senior counsel noted that there were many aspects of the Grices Road Agreement which distinguished the agreement from the usual landlordtenant relationship, in particular, the obligation imposed upon the farm consultant to actively farm the land, and to keep accounts, unlike a tenancy arrangement, which merely confers a right of occupancy upon the tenant.
204 In the current case, I agree that the principles governing an 'overholding' under a lease do not assist Frontlink in the current case. Senior counsel for Frontlink could not direct me to any authority that establishes that the principles of overholding could extend beyond the orthodox relationship of landlord and tenant. Given the Grices Road Agreement had come to an end, and I have found that there was no conduct on the part of Mrs Feldman which could support a finding that she had consented to an extension of the Grices Road Agreement, similarly, there was no conduct on her part which could be pointed to as establishing she had assumed the obligations of a tenant at will. If there was a tenant at will at the Grices Road property, it was Derek Feldman.
205 Having found that there is no liability on the part of Mrs Feldman to Frontlink, strictly speaking, it is not necessary for me to deal with the question of quantum. However, I shall do so given the time and attention given to these issues at trial, and if I am later found to be wrong on the question of liability.
(a) has Frontlink proved the amount owing to it by Mrs Feldman under the Grices Road Agreement?
(b) was Frontlink entitled to allocate any payments received or offset any commissions owed by Frontlink to Derek Feldman to the amounts owing in respect of the three properties in any manner it saw fit?
(c) how many cattle were on the Grices Road property at the time of Derek Feldman's death, and what became of them?
(d) what was the value of the cattle on the Grices Road property at the time of Derek Feldman's death?
(e) is Frontlink required to credit in Mrs Feldman's favour any amount representing the value of any cattle sold or retained by it?
207 In relation to (a) above, subject to a modest adjustment to the amount of outstanding rent and rates to take into account my finding (explained further below) that Frontlink resumed possession of the Grices Road property on 5 November 2010, Frontlink has proved the quantum of its claim. The quantum of the claim was verified by the documents tendered in evidence through Kameel Mondous, who prepared and updated the account statements, and identified the documents concerning the rates and insurance payable in respect of the Grices Road property. The calculations of these amounts were agreed between counsel at the conclusion of the trial.
208 As for the relevant date, Frontlink contended that the relevant date ought to be 1 February 2011, being the date that Frontlink entered into a Share Farming Agreement for Pound Road and part of the Grices Road property with Mr Murray. However, it is clear from the evidence of Mr and Mrs Bilson, and Ms Ivic, that Mr Mondous, on behalf of Frontlink, resumed control of the Grices Road property at the 5 November meeting. Ms Ivic gave evidence that Mr Mondous took her to the 5 November meeting because Frontlink wanted to lease out the house on the Grices Road property, and she returned a few days later to prepare a condition report, presumably on Mr Mondous' instructions. Mrs Bilson gave evidence that at the 5 November meeting Mr Mondous said they would be leasing the house at the Grices Road property through either him or his real estate agent. On 18 November 2010, Ms Ivic wrote to the Bilsons enclosing a condition report for the house on the Grices Road property, and stating that once she had received the farm lease from Mr Mondous she would send it through for them to sign. Thereafter, the Bilsons paid rent to Frontlink (or Mr Mondous). Mr Mondous directed the Bilsons to move the cattle to Pound Road. This evidence is entirely consistent with Frontlink resuming control of the Grices Road property on 5 November 2010.
209 By my calculations, by applying an end date of 5 November 2010 rather than 1 February 2011, the quantum of any debt owing by Mrs Feldman to Frontlink is reduced from $129,543.26 to $126,564.19. I will seek input from counsel as to whether there needs to be a corresponding adjustment to the interest component of Frontlink's claim.
210 As for (b) above, while senior counsel for Mrs Feldman submitted that Frontlink's accounting for the commissions owing to Derek Feldman at the time of his death was unsatisfactory, and queried why they were applied to the amount outstanding with respect to Pound Road only, in the absence of any express instructions on the part of Derek Feldman as to how any payments should be allocated, Frontlink was entitled to allocate any payments received or offset any commissions owed by Frontlink to Derek Feldman in any manner it saw fit, on the basis of the wellestablished principles referred to by Robson J in Batrouney v Forster:[57]
There are several well established principles relating to the allocation of payments to satisfy debts due between a debtor and creditor. If a debtor owes several debts to a creditor, the debtor may inform the creditor to which debt a payment by the debtor should be applied. If a debtor fails to inform the creditor of an allocation, the creditor may make the allocation. If the allocation is made by the creditor in his or her books of account, the creditor may alter the allocation at any stage before the debtor is informed of an allocation.
211 In the absence of any evidence that Derek Feldman instructed Frontlink to give priority to reducing the debt in respect of the Grices Road property (and there could have been none, given the circumstances of his death) it was open to Frontlink to apply the proceeds of the sale of cattle, or commissions, to the debt owing on the Pound Road property. The fact that proceeds of the sale of cattle were used to pay rent on the Grices Road property in 2007 does not assist Mrs Feldman on this question. Further, the evidence of the Bilsons and Ms Bunting to the effect that Mr Mondous said he was going to apply the proceeds of the sale of the cattle to the debt of both Derek Feldman and Mrs Feldman (which he denies) does not bind Frontlink either.
212 Turning now to questions (c), (d) and (e) above, being Mrs Feldman's contentions concerning the size and value of Derek Feldman's herd of cattle, and her contentions regarding how the proceeds of sale of any cattle should be applied, senior counsel for Mrs Feldman submitted that it was plain from the evidence that not only has Frontlink appropriated all of Derek Feldman's cattle, but has refused to acknowledge that the number of cattle present upon Grices Road at the time of Derek Feldman's death far exceeded the 25 cattle sold in the January 2011 sales.
213 Senior counsel for Mrs Feldman submitted that Mr Mondous' evidence stands alone amongst all of the relevant witnesses. He noted Ms Ivic's evidence that if there was a discussion about cattle at the 5 November meeting, she may well have tuned out. Mr Wilmott agreed that there was a later yarding of cattle at Soldiers Road. As for the other witnesses, it is inconceivable that the evidence of the Bilsons is wrong. Sharon Bunting's evidence was broadly consistent with the evidence given by Mr and Mrs Bilson. As for the evidence of Mark Feldman, it entirely contradicted the evidence given by Mr Mondous. Senior counsel for Mrs Feldman submitted that I should not treat the number of cattle referred to in the Mark Feldman email as a cap on the size of the herd, because it may well be that what Mr Mondous told Mark Feldman in the meeting referred to in the email was wrong, given what Mark Feldman said about being told there was only one bull, when Mr Mondous' list referred to two bulls. The cattle which remained after the January 2011 sales and the sales on 3 May 2011 may well have been integrated into herds at Frontlink's other properties.
214 Senior counsel submitted that the value of the remaining cattle could only be valued in their absence based upon the average value of the cattle being sold, being approximately $600 per head. He submitted that it was only fair that the total value of the herd ought to be offset against any amount said to be owing by Mrs Feldman in respect of the Grices Road property. The cattle were on the Grices Road property at the time of Derek Feldman's death, and there had been a discussion between Mr Mondous and Derek Feldman about selling the cattle to reduce debt in the months prior to Derek Feldman's death.
215 Senior counsel for Frontlink submitted that 'the cattle are a red herring'. She submitted that there was no legal obligation imposed upon Frontlink to apply any proceeds of sale of any cattle to the debt owing with respect to the Grices Road property. In any event, Mr Mondous' evidence is that he told Mark Feldman that he would sell cattle to reduce the debt, and noone came back to him in the two month period between this conversation and the January 2011 sales. Further, if, contrary to Mr Mondous' evidence, it is found that there was a list of cattle held by Mr Mondous, this information can only have been provided by the Bilsons. Glen Wilmott's evidence is consistent with the number of cattle referred to in the Mark Feldman email. Much of Sharon Bunting's evidence seemed to have been reconstructed, and the Bilsons could not even agree with each other. Accordingly, I should not place too much weight upon the figures given by them.
216 Further, senior counsel for Frontlink submitted the MLA records show that only one of the cattle sold on 17 January 2011 belonged to Derek Feldman, as none of the other cattle sold on that day show up as having been purchased by Derek Feldman in the previous years. Of the cattle sold on 18 January 2011, only nine of them were Derek Feldman's cattle.
217 I accept the evidence of Shaun and Belinda Bilson that there were in the range of 110 to 125 head of cattle. In the absence of any compelling reason to disbelieve them, their eyewitness evidence is difficult to impeach. They were resident on the Grices Road property, part of their role was to care for the cattle, and Mr Bilson gave evidence that he and another person actually counted the cattle a few weeks before Derek Feldman's death. Any inconsistencies between each other's evidence, and their evidence and Sharon Bunting's evidence is relatively minor, and explicable by the passage of time. They were emphatic in their rejection of the contention that there were only 44 head of cattle on the Grices Road property, as reported by Mr Mondous to Mark Feldman, and passed on to Mr Mond. Their evidence is also consistent with Mr Mondous' evidence that in August 2010 Derek Feldman told him he had 200 to 300 cattle. While this was clearly an exaggeration, it would be odd if Derek Feldman told Mr Mondous that if he only had 25 head of cattle, and the MLA records do not disclose any significant sales by Derek Feldman in 2010.
218 It is difficult to understand, in the light of the evidence of the Bilsons, and Ms Bunting, how the figure of 44 head of cattle came to be included in the Mark Feldman email. This figure was what was included in the statement of assets and liabilities of Derek Feldman's estate: Mr Mond's evidence is that he had no other information upon which to rely when putting this figure in the accounts. The evidence of Mr Mondous is of course unenlightening: he rejects knowing anything about the number of Derek Feldman's cattle at the time of his death, and says that the Mark Feldman email is a fabrication. I reject this evidence, but am no wiser as to how the figure referred to in Mark Feldman's email was arrived at. This figure is consistent with Mr Wilmott's evidence, but it seems that he only saw the herd of cattle once, while the Bilsons and Ms Bunting had the responsibility of caring for the herd at different times. Also, it appears that while the MLA records are helpful in tracing cattle from one owner to another, they do not provide a complete picture of changes in the custody of cattle, given that there is no doubt that all of the cattle sold in the January 2011 sales were Derek Feldman's cattle.
219 As for (d) above, I agree with senior counsel for Mrs Feldman that the best evidence of the value of the cattle is based upon the average sale price of the cattle which Frontlink admitted it sold and applied to the amounts outstanding in relation to one or more of the three properties, being approximately $600 per head. That would value the herd of cattle removed from the Grices Road property and unaccounted for at $66,000.
220 However, despite the time and attention this matter received at trial, in the end, I would echo the words of senior counsel for Frontlink to the effect that 'the whole thing is a red herring'. I agree that there is no factual or legal basis for the contention that Frontlink was required to account to Mrs Feldman for the value of the cattle, or was obliged to set off the value of the cattle, whatever that value, against the amounts owing to Frontlink with respect to the Grices Road property. Given the size of the amounts outstanding on both Pound Road and Soldiers Road, the value of the cattle, if applied against those debts, would not have extinguished those debts.
221 While I do not condone Frontlink's 'selfhelp' with respect to the taking of Derek Feldman's cattle, or Mr Mondous' denial of having taken and sold any more than 25 cattle, the reality is that the only party which would have a claim in respect of the cattle is the (bankrupt) estate of Derek Feldman. All of the evidence points to the cattle belonging to Derek Feldman alone. Mrs Feldman herself asserts no proprietary interest in the cattle. Simply because the cattle were located on the Grices Road property at the time of Derek Feldman's death does not of itself give rise to an entitlement of Mrs Feldman to insist that their value be set off any amount owing by Mrs Feldman to Frontlink in respect of the Grices Road Agreement. As noted in paragraph 210 above, in the absence of any express instructions by Derek Feldman himself as to how any payments or other credits were to be applied, Frontlink is entitled to allocate any such payments or credits in any manner it sees fit, at any time up to trial.
222 Accordingly, the answer to the preliminary questions is as follows:
(a) Is the first defendant liable to the plaintiff by reason of the matters pleaded in paragraphs 1 to 5 of the statement of claim: No.
(b) If so, what is the amount of that liability: not applicable, but if the answer to (a) above was yes, $126,564.19, subject to any adjustment to the interest component of $1,339.98 referred to in the particulars to paragraph 5 of the statement of claim.
223 Applying these answers and my findings generally to the parties' pleadings, my conclusions are as follows:
(a) Frontlink has proven the allegation made in paragraphs 3, 4 and 4A of the statement of claim, and Mrs Feldman's defences to those allegations are not made out (noting that Mrs Feldman's contention in paragraph 4 of the defence to the effect that the Grices Road Agreement was void for uncertainty was not pressed at trial). Further, Mrs Feldman's counterclaim fails;
(b) Frontlink has failed to prove the allegations in paragraphs 4B, 4BA, 4BB, 4C, 4E, and 4F of the statement of claim;
(c) if I am wrong with respect to (b) above, Frontlink has established that it suffered loss and damage in the sum calculated according to the revised particulars produced at trial. Accordingly, paragraphs 5 and 45A to 45E of the defence are not made out, at least insofar as to reduce any liability of Mrs Feldman to Frontlink.
224 Finally, having regard to my findings regarding the absence of any liability on Mrs Feldman's part, the claims by Frontlink against Mrs Feldman and Ramarim fall away, as Frontlink has suffered no loss as a result of this conduct. Accordingly, I will make orders dismissing the proceeding, and will hear further on the form of any further order, and the question of costs.
[1] See paragraph 24 of these reasons for more details concerning the procedural history of this proceeding.
[2] The following narrative is derived from what are, unless stated otherwise, undisputed or uncontroversial facts.
[6] Of course, it is questionable whether the amounts payable under clause 6 of the Grices Road Agreement are properly characterised as 'rent'. However, this term is used throughout these reasons for ease of reading.
[9] Notwithstanding the terms of clause 6(c) of the Grices Road Agreement, which provides for annual CPI increases.
[14] To give a flavour of the disputation between the parties, there have been three published judgments in the proceeding, at least eight Practice Court listings and approximately fifteen attendances before me. I have delivered at least four written but unpublished rulings upon various interlocutory matters since mid-2014.
[17] The amendments to the statement of claim which post-date the making of these orders do not materially affect this question.
[18] Feldman v Frontlink [2014] VSCA 27 [2], [40].
[23] There is some confusion between the pleadings and the evidence as to whether 23 of Derek Feldman's cattle were sold in January 2011, or whether 25 was the correct number. In the end, little turns on this discrepancy.
[27] I assume this to be a reference to Jezebel, Mrs Feldman's pet Jersey cow.
[37] On the basis of other evidence given at trial, that must have occurred in 2011, not 2010.
[38] Other evidence suggests that Mr Stamford was previously a tenant at Pound Road, not the Grices Road property.
[39] Accordingly, Ms Bunting must have first leased part of Pound Road prior to April 2005, which was when Derek Feldman entered into the agreement with Frontlink for Pound Road.
[48] NC Seddon and MP Ellinghaus, _Cheshire and Fifoot's Law of Contract (_Lexis Nexis, 9th ed, 2008) [223] ('Cheshire & Fifoot').
[49] [2007] NSWSC 5, [21].
[54] See, for example, those authorities where it has been determined that a binding contract exists, notwithstanding that the conduct of the parties does not fall within the usual 'offer/acceptance' paradigm: Integrated Computer Services Pty Ltd v Digital Equipment Corporation (Australia) Ltd (1988) 5 BPR 97,326; Vroon BV v Fosters Brewing Group Ltd [1994] VicRp 53; [1994] 2 VR 32; and Husain v O&S Holdings (Vic) Pty Ltd [2005] VSCA 269.
[55] See the discussion at Cheshire & Fifoot [11.17] and [6.18], where the learned authors refer to 'at least' three sets of circumstances where silence may give rise to relief: where silence distorts a positive representation, where the contract requires the parties act in the utmost good faith, and where a fiduciary relationship exists between the parties.
[57] [2015] VSC 230 [204].
Frontlink
Feldman [2016] VSC 691
(2004) 219 CLR 165
(2000) 77 SASR 74
(2008) 232 CLR 635