Riverman Orchards Pty Ltd v Hayden [2017] VSC 379

1 On 4 October 2013, in a clear and crisp spring dawn Tony Caccaviello went to spray his vineyard known as Mallee Block. He immediately noticed that the vines looked different. Initially he thought there had been an overnight frost, but as the day warmed up, the shoots did not turn black and burn, but were drooping down with yellow spotting and an increasing translucent appearance.

2 Over the following days, the condition of the vines did not improve and Mr Caccaviello began to suspect that a chemical spray drift, not a frost, had affected his vineyard. Apart from the block immediately to the north west, on which a crop of vetch was growing, the adjacent blocks would not be considered appropriate to spray. The vetch was a different matter. That block was into the direction of the winds that had been prevailing during the previous week.

3 Mr Caccaviello has lived and farmed in Piangil for his entire life. He began farming in partnership with his parents and two brothers at the family property in Piangil before starting his own farming operation, Riverman. Riverman farms on three separate blocks owned by Mr and Mrs Caccaviello. The property includes 171 hectares of cereal, stone fruit, olives and vacant land. Relevantly, it farms established vineyards (area under vine) on three blocks: Main Block (33.25 ha), Lisa's Block (29.24 ha) and Mallee Block (61.14 ha). The vineyards on Main Block and Lisa's Block are approximately 40 years old. The spray drift incident did not affect these blocks.

4 The defendant in this proceeding, Mr Rodney Hayden, is the owner and occupier of a property neighbouring Mallee Block, located at the corner of Sandy Lane and Mallee Highway, Piangil. Part of the defendant's property at the time of the alleged drift events, but since sold, a paddock known as 'Perrononies', lay to the northwest of Mallee Block and its closest point, the southeast corner of it was approximately 90 metres from the northwest corner of Mallee Block.

5 Before contacting Rodney Hayden, Mr Caccaviello wanted to be sure in his suspicion. He first contacted Rod Smith, a viticulturist and a representative of Landmark, a local agricultural supply company, who inspected the vines. Mr Smith considered that the vineyard had received a chemical overspray and recommended that Mr Caccaviello take expert advice from one Alison MacGregor. Mr Caccaviello also contacted the Department of Primary Industries to claim that he was the victim of an overspray but it would be a month or so before representatives of the Department could attend his property.

6 With Mr Smith's confirmation of his own suspicions, Mr Caccaviello confronted Mr Hayden who confirmed that vetch in Perrononies was sprayed by his brother Maxwell Hayden on 30 September 2013 with a mixture containing 2,4-D, glyphosate and metsulfuron-methyl. These chemicals are toxic to grapevines and are not used within a vineyard. The mixture also included a wetting agent based on ammonium sulphate.

7 In August 2015, the plaintiff (who I will also refer to as Riverman) issued this proceeding seeking damages for nuisance and negligence against the defendant. It asserted that subjecting its vines to overspray with a knockout strength broadleaf herbicide mixture was an unreasonable and substantial interference with its use and enjoyment of the Mallee Block vineyard. It also asserted that the vetch spraying on Perrononies was negligently carried out, principally in the manner in which it was done in the prevailing conditions on 30 September 2013 and in the mixture of chemicals chosen, which were applied neither in accordance with the label recommendations nor the recommendations of Mr Hayden's advisor, Mr Gavin Spinks, an agronomist with Swan Hill Stockfeeds.

8 At the time of the overspray, Andrew Peace Wines (APW), a local winemaker, was purchasing all of the produce from 54.25 hectares (ha) of the Mallee Block under an evergreen or rolling supply agreement at annual prices to be agreed each year prior to harvest, subject to a guaranteed base minimum price of $200 per tonne. That contract remained on foot, but was under threat. The plaintiff claimed that its vineyard does not yield the same quantity of fruit and the quality of the fruit produced is poor and that after three seasons it was clear that the vineyard would not recover.

9 The plaintiff claims that 8000 vines need to be removed and replanted to re-establish the vineyard to the standard that it was prior to October 2013. The site must be returned to a greenfield and properly prepared for successful replanting requiring that the entire trellis and irrigation infrastructures be removed and replaced and the young vines trained onto cordons. Once remediated, it will be some years before the vineyard would return to full productivity.

10 In summary, the heads of damage claimed by the plaintiff were:

(b) Losses of the grape sales for 2014, 2015 and 2016 vintages;

(c) Cost of re-establishing the vineyard over a 12 year period; and

(d) Future losses of grape sales during re-establishment.

11 The defendant contended that the plaintiff had failed to establish that the chemicals sprayed on to Perrononies on 30 September 2013 drifted on to the Mallee Block. Alternatively, any chemical drift established did not damage the vines on the Mallee Block or did not do so in a way that continued now or would in the future affect those vines. Accordingly, there was no unreasonable interference by the defendant with the use and enjoyment of the plaintiff's land.

12 Although the defendant denied the existence of a duty of care, the conduct of its defence at trial was principally that there was no breach of any duty of care. The defendant contended that the spraying of Perrononies did not cause damage to the plaintiff's vineyard and that either replanting the vines or retraining the vines would result in a greater loss to the plaintiff than simply doing nothing. If the defendant was held responsible in either nuisance or negligence, the quantum of its exposure to damages was the loss that arises because of taking no further action in respect of the vines. For this reason, the quantum claimed by the plaintiff was vastly in excess of any true loss or damage that it suffered.

13 The parties agreed that to resolve the dispute between them, the Court needed to determine the following issues:

A. Spray drift event in September/October 2013

1. Did the spraying of herbicides on the defendant's property in or around late September/early October 2013 cause damage to the plaintiff's vineyard on the Mallee Block?
2. If yes to question 1 above, what is the nature and extent of the damage?
3. If yes to question 1 above, having regard to all of the relevant circumstances, did the spraying of herbicides on the defendant's property in or around late September / early October 2013 constitute a substantial and unreasonable interference with the plaintiff's use and enjoyment of its land?
4. When spraying his property with herbicides in or around late September/early October 2013, did the defendant owe a duty of care to the plaintiff to exercise the care and skill of a farmer in the same or similar circumstances?
5. If yes to question 4, what was the content of the defendant's duty to exercise the care and skill of a farmer in the same or similar circumstances?
6. Did the defendant fail to take precautions against the risk of damage to the plaintiff's vineyard on the Mallee Block that, in the circumstances, a reasonable person in the same or similar position would have taken?
7. Did the spraying of the defendant's property in or around late September/early October 2013 materially contribute to any loss and damage suffered by the plaintiff?

8. Does the plaintiff's vineyard on the Mallee Block need to be replaced?

1. If yes to question 8, how long will it take for the vines to reach maturity?
2. If no to question 8, how long until the yield of the vines on the Mallee Block resumes to a satisfactory level?

11. Does the plaintiff's vineyard on the Mallee Block need to be retrained?

1. If yes to question 11, how long until the yields of the Mallee Block resume to a satisfactory level?
2. What is the quantum of any loss and damage suffered by the plaintiff as a result of the spraying of herbicides on the defendant's property in or around late September/early October 2013?

14 Resolution of these issues involved evidence, principally from the plaintiff's directors, Mr and Mrs Caccaviello and the defendant Mr Hayden and his brother, Maxwell Hayden. Mr Caccaviello is responsible for day to day farm management. Mrs Caccaviello is responsible for the financial and administrative side of the business. The plaintiff called a number of other witnesses. This evidence is discussed in due course.

15 The parties also relied to a significant degree on expert opinion evidence.

16 Dr Bell, a horticultural and agricultural consultant and director of David J Bell & Associates Pty Ltd, prepared a number of reports for the plaintiff based on his inspections of the Mallee Block vineyard on 13 January 2014, 16 October 2014, 18 February 2015 and 29 January 2016.

17 Ms Alison MacGregor, Senior Agronomist at SunRISE Mapping and Research, inspected the Mallee Block on 15 October 2013, 11 December 2013, 14 April 2014, January 2016 and May 2016 and prepared various reports for the plaintiff.

18 Mr John Whiting, Principal Consultant at John Whiting Viticulture, who first inspected the Mallee Block on 30 March 2015, prepared several reports for the defendant.

19 Dr Bell, Ms MacGregor and Mr Whiting also considered a list of common questions developed by the parties out of the issues raised by the pleadings and each prepared a report in response to the questions. They then met in a conclave and determined their points of agreement and disagreement arising on consideration of those questions. The joint report from the conclave was in evidence and the experts gave evidence concurrently after their reports and the joint report were tendered as their respective evidence in chief.

20 Mr Tony Natoli gave expert accounting evidence for Riverman and Messrs Ivey and Tremain prepared joint expert accounting reports, with Mr Ivey participating in a joint conclave and giving evidence concurrently with Mr Natoli.

21 It is convenient to now briefly summarise parties' principal liability submissions before stating my evidentiary findings bearing in mind that a more detailed exposition of the contentions advanced will be provided where appropriate.

22 First, the plaintiff submitted that there was a 'vast body of circumstantial evidence' that the spray drift event occurred and caused substantial and unreasonable interference with the plaintiff's farming activities on Mallee Block. The plaintiff relied on the following matters as evidence the interference was substantial:

(a) The vineyard remains in a poor condition and the vines are still clearly affected by herbicide damage;

(b) The vascular and/or root systems of the vines have been severely damaged by exposure principally to metsulfuron and/or a mixture of metsulfuron and glyphosate;

(c) Mallee Block will most likely not return to its pre-spray drift event condition, and will deteriorate further, failing to recover commercial viability;

(d) Since the spray drift event, Mallee Block has produced poor quality fruit, which has, at various times, either been:

(b) partially accepted by APW at a reduced price.

23 The plaintiff contended the result of this damage was interference by the defendant that necessitated that the vineyard be replanted to return it to its pre-spray event condition. Such interference could only be characterised as substantial.

24 The plaintiff submitted that the interference was also unreasonable. Because there was a clear and foreseeable risk of damage to Mallee Block vines from a spray drift in the conditions prevailing on 30 September 2013, and consequently a risk that the plaintiff's economic interests in the use of Mallee Block could be seriously compromised by the defendant's spraying activities, it was unreasonable for the defendant to have sprayed Perrononies that day. The block could have been safely sprayed on 4 October 2013 without any compromise of the defendant's farming activities.

25 The defendant was aware that the combination of herbicides used could be harmful to the vines on the Mallee Block, and that spraying Perrononies posed a risk. Both Rodney and Max Hayden said as much and in that respect I accept their evidence. Accordingly it was incumbent on the defendant to take a number of precautions to mitigate this risk when spraying, including by:

(a) applying an appropriate mix of chemicals by adhering to the applicable label rates and thus using a mixture that was less concentrated with metsulfuron;

(b) spraying in appropriate weather conditions and, equally, refraining from spraying in inappropriate weather conditions;

(c) using appropriate equipment in accordance with good farming practices; and

(d) realistically assessing the weather conditions on 30 September 2013, particularly the forecast for how the weather would develop that day.

26 The plaintiff contended that the defendant had failed to take appropriate precautions on 30 September 2013 by:

(a) failing to adhere to the label rate of metsulfuron of 7 g/ha, by using a mixture including metsulfuron at 10 g/ha;

(b) failing to follow the recommendation of Mr Spinks and using different concentrations of herbicides;

(c) spraying when the weather conditions were unsuitable and carried risk of spray drift occurring; and

(d) spraying with inappropriate boom height and nozzle size.

27 The plaintiff alleged it had taken reasonable steps to identify and mitigate the damage by contacting DPI and engaging and accepting the advice of appropriate consultants including Ms MacGregor, Mr Duffy, and Mr Stephen Lorimer, both immediately following the spray event and into the months and years following.

28 Thus, the plaintiff contended that the defendant breached a duty of care owed to it that caused it to suffer loss.

29 The defendant's principal submission throughout the proceeding was that there was in fact no interference by him through spraying activities on Perrononies with the plaintiff's farming activities on Mallee Block, but if there was a spray drift event, the plaintiff's damage was not caused by exposure to the herbicides used by the defendant.

30 First, the defendant asserted, relying on the evidence of Mr Whiting, that no damage was caused by any spray drift that allegedly occurred on 30 September 2013. There were no symptoms evident in the vines caused by the chemical damage alleged by the plaintiffs. Rather, the damage to Mallee Block vines was caused by:

(a) water stress arising from inadequate irrigation;

(c) general inadequate management, including inappropriate fertilisation.

31 Without resiling from this position, the defendant submitted that in any event the alleged interference was neither substantial nor unreasonable. This was for the following reasons:

(a) interference will not be substantial where it is no more than that which the average person in the locality can reasonably expect in the circumstances and the defendant is using his land for its common and ordinary uses;[1]

(b) there will be no long term effect from any herbicide damage from any spray drift in September 2013. There was no substantial interference; and

(c) the exercise of reasonable care can discharge liability for nuisance, and the defendant took such reasonable care when spraying on 30 September 2013, including by:

(a) having appropriate regard to wind conditions;

(b) stopping spraying at about 11:30 am on the day in question when the wind freshened and the weather conditions ceased to be conducive to spraying; and

(c) stopping spraying at a position in the middle of Perrononies at what the defendant estimates was 470m from the Mallee Block at its closest point.

32 The defendant contended that the question of 'reasonableness' was to be assessed by answering 'whether a farmer in the same or similar circumstances to Max Hayden would have decided not to spray in the wind conditions on the morning of 30 September 2013 or ceased to spray if the wind conditions changed'.

33 In putting this contention the defendant cited N M Rural Enterprises Pty Ltd v Rimanui Farms Ltd[2] in which Harrison J observed[3] of section 5B(1)(c) of the Civil Liability Act 2002 (NSW), the equivalent of section 48(1)(c) of the Wrongs Act 1958 (Vic):

In terms of s 5B(1)(c) of the Act, the only precaution that is relevant is the general precaution of deciding not to spray, either at all or to cease if conditions changed. The question can be posed as whether a reasonable person in the pilot's position would have decided not to spray. I am not satisfied that N M Rural has established that the reasonable pilot would have. Nor am I satisfied that he or she should have. It seems to me to be instructive in this respect to observe that none of the pilots was cross-examined to the point of accepting that any of their nominated spray runs were clearly or arguably contraindicated. I do not consider that I am in a better position to decide that they were. It does not seem to me that the evidence permits me to make a finding, that is not mere supposition or speculation, about the probability that harm would occur if care were not taken for the purposes of s 5B(2)(a) of the Act.

34 The defendant continued that the Court could not be satisfied that the plaintiff had established:

(a) that a farmer in the same or similar circumstances to Max Hayden would have decided not to spray or would have ceased spraying the area of Perrononies that he was spraying on 30 September 2013; or

(b) that a farmer in the same or similar circumstances to Max Hayden should have decided not to spray or should have ceased spraying the area of Perrononies that he was spraying in the wind conditions at Perrononies on the morning of 30 September 2013.

35 The defendant further submitted, again citing the judgment of Harrison J in N M Rural,[4] that the plaintiff had not established a necessary fault element on the part of the defendant. The defendant submitted that the plaintiff must establish on the balance of probabilities that the defendant knew or ought to have known that the herbicide spray was likely to drift onto the Mallee Block and cause damage to the vines. The defendant submitted that the weather conditions on 30 September 2013 were not such that the defendant knew or ought to have known that the alleged drift would occur, nor is there evidence that the defendant was aware or ought to have been aware that such a drift was actually occurring, and causing damage.

36 The defendant also asserted that the following facts should be accepted by the Court:

(a) the weather conditions on 30 September 2013 were appropriate for spraying;

(b) had the conditions been inappropriate for spraying, it does not stand to reason that Max and Rodney Hayden would have decided to spray, or that Max Hayden would have continued to spray the paddock; and

(c) the defendant was alive to and had considered the sensitivities surrounding Perrononies.

38 Mr and Mrs Caccaviello purchased the Mallee Block in about 1999 and the plaintiff soon established an irrigated 62 ha vineyard. When Riverman first planned and established the vineyard a significant portion of it was planted with chardonnay grapes, which then commanded up to $1,000 per tonne from wineries. The first crop was harvested in 2006 and from 2007 until 2011 Riverman supplied grapes to Orlando Wines under a capped supply contract that was below the yields that it was obtaining from its vineyards, with some small volume sales to Trentham Estate Wines. From 2011, Riverman sold its produce to Andrew Peace Wines (APW) apart from some table grapes and the box trade. The expression 'box trade' refers to sales by the box at the Sydney Wholesale Market to individual home winemakers.

39 The plaintiff set out to create Mallee Block as a high yielding premium quality block and it differed from his other blocks in several respects:

• It is twice the size;
• It is laid out north to south so as to capture the morning and afternoon sun;
• It contains only one type of soil as opposed to Main Block and Lisa's Block which contain a number of different types of soil. The variation in soil type affects the way that different varieties of grapes are laid out in those vineyards;
• The vines produce on two wires, cordons, and are trained to full lateral cordons for each vine;
• The cordons are wider spaced, 650mm, permitting a canopy that enhances even fruit quality and ripening;
• The chardonnay was more closely planted at 3 metres between rows rather than the standard 3.7 metres; and
• Finally, each row is 1 kilometre long enhancing efficiencies in the use of equipment.

40 There was some inconsistency in the precise areas of cultivation of different grape varieties on the plaintiff's blocks as follows:

41 As separate records were not kept of the box trade, it was excluded from the claim in the proceeding for past and future losses although the area of vine under cultivation is included in the claim for the rehabilitation, and reconstruction/replacement of Mallee Block. As a result, the claim was based on sales to a single buyer, APW under the rolling supply agreement. Accordingly it is the area of vine under contract to APW that is relevant and I am satisfied that the appropriate area of each variety under cultivation for the purposes of calculating past and future losses is that set out in the 'Area contracted to APW' column in the above table. It is not necessary to reconcile any discrepancy, which is likely to be an error or areas allocated to the box trade or table grapes.

42 The Department of Primary Industries, now the Department of Economic Development, Jobs, Transport and Resources (DEDJTR) investigated the spray event. Samples were analysed (to which I will later return) and Mr Hayden was interviewed. Ultimately, he received a warning letter. This investigation was conducted pursuant to the Agricultural and Veterinary Chemicals (Control of Use) Act 1992 (Vic).

43 What now follows are my findings on matters that were controversial. Unless the context suggests otherwise, I will refer to each season, which commences in spring and ends with senescence in the vines the following autumn by the harvest year. So, for example, the spray drift in October 2013 affected the 2014 season.

44 The first matter of some controversy was the precise nature and terms of contractual arrangements between APW and the plaintiff.

45 In August 2011, APW and the plaintiff agreed to a one year (annual) agreement for the purchase of the grower estimated harvest of various grape varieties in the 2012 season, delivered to the winery. The estimated tonnage of harvested fruit for each variety was nominated on the face of the agreement as the maximum purchase commitment made by APW under that agreement. APW agreed to a base minimum price per tonne of $200 and agreed to clarify in January 2012 the actual price per tonne that it would pay. The agreement referred to, and incorporated, a document entitled 'Wine Grape Quality Control Standards' and set out various conditions in respect of the quality of the fruit, APW's right to reject fruit that did not meet certain standards and the terms of payment. This agreement did not distinguish between fruit from different blocks on the plaintiff's vineyard.

46 On 23 August 2012, APW agreed with the plaintiff on a 12 month rolling supply agreement. This was an ongoing supply agreement that was not limited to a particular season, which had not, by the trial, been terminated. APW agreed to purchase the plaintiff's grapes grown in each season on the contracted area of the nominated vineyard blocks as set out above at a price to be agreed prior to delivery to the winery. That agreed price was subject to a guaranteed base minimum price per tonne of $200. Mataro grapes from the 2013 harvest were not sold to APW by this agreement.

47 The rolling supply agreement was similar to the annual agreement in many respects. The Wine Grape Quality Control Standards were incorporated in appendix 1 of the agreement and APW's right to reject fruit that did not meet quality control conditions remained governed by the terms and conditions of the rolling agreement.

48 The rolling supply agreement differed from the annual agreement by operating as an ongoing obligation on APW to take the fruit harvested from the nominated blocks and as an ongoing obligation on the plaintiff to supply it to APW. Each party achieved a degree of commercial certainty. There were provisions for renegotiation and termination, usually to occur in the off-season that were not engaged and are not relevant in this dispute. The agreement provided in respect of fruit prices that:

(i) Seasonal pricing will follow yearly market conditions to ensure that Andrew Peace Wines is in step with the rest of the industry. The seasonal price will not go below a guaranteed minimum base price as outlined in appendix 2. Actual prices will be sent to Growers in writing prior to vintage and crop estimates can be updated throughout the season.

(ii) Prices are 'per tonne delivered to winery', i.e. transport costs are to be met by the Grower.

(iii) If the grower can show with a statutory declaration (or evidentiary proof i.e. written offer), that another reputable winery has offered a higher price for his fruit across the whole agreement or for any particular variety then Andrew Peace Wines may either,

a) match that price, or

1. release all the fruit covered by this agreement for that season, or,

1. reach an alternative agreement with the grower by mutual agreement.

1. If any variety is not delivered for two separate vintages Andrew Peace Wines may terminate this grape supply purchase agreement.

In practice, the actual prices to be paid were determined by APW shortly prior to harvest, on the assumption of acceptable fruit quality on delivery. APW liaised closely with growers to schedule fruit for delivery to it as close as possible to its nominated Baume targets.

49 Each year, immediately prior to harvest, Mr Andrew Peace set prices that were communicated to growers in different ways. The evidence revealed that in some cases APW sent out an appendix 2 that stated the price and the expected tonnage. In other cases, the appendix 2 merely stated a price per tonne for the different grape varieties. There was also evidence of other communications, either by letter or through personal contact between APW's grower liaison officer Mr Rod Duffy and Riverman about the prices to be paid for a particular harvest. Variations in this procedure from one season to the next were of no consequence.

50 In these circumstances, I conclude that the rolling supply agreement was not embodied in a single document and its terms were partly implied from the conduct of the parties. The record keeping of each party was not ideal and the need to answer requests for the agreement for a particular year for instructions to experts and for the purposes of this litigation resulted in some compilation documents that purported to represent the agreement for a particular season, which piqued the interest of cross-examiners. I will refer more specifically to some of these issues in context.

51 From the 2012 season to the time of trial, and continuing, the grape supply agreement between APW and the plaintiff was, and remains, the rolling supply agreement.

Issue 1 - Did the 2013 spray drift event occur?

52 This issue became a matter of inference. There was no direct evidence of a spray drift. Careful examination of a number of circumstances persuades me on the balance of probabilities that the 2013 spray drift event did occur. The principal circumstances that I will now analyse are:

(a) The evidence called by the defendant about the spraying event;

(b) Observations of the symptoms that appeared in the vineyard;

(a) There was no direct evidence of any observation of a spray drift emanating from Perrononies and spreading to the Mallee Block on 30 September 2013.

(b) The analysis of the vines failed to detect the presence of metsulfuron, a chemical also used in the spraying of Perrononies on 30 September 2013. In its absence, a finding that there was a spray drift from Perrononies to the Mallee Block could not be substantiated or proved simply on the basis that traces of glyphosate and 2,4-D were detected on vine samples taken from the Mallee Block.

(c) The prevailing weather conditions were appropriate to conduct spraying on Perrononies on that day. Mr Max Hayden gave evidence that if he considered it unreasonable to spray he would cease spraying, which he did on this occasion once weather conditions deteriorated. There is no evidence to suggest that the weather conditions were unsuitable for spraying between 9.30am and 11.30am, when he decided to stop spraying.

(d) The chemical mix used in the spraying was an industry standard recommendation to control vetch. Mr Spinks gave evidence confirming this and that it is a commonly used formulation in the Mallee area.

(e) There is no evidence of vascular damage to the vines.

(f) Any damage caused to the Mallee Block was sustained by reason of the plaintiff's management practices, including under-watering.

(g) In the alternative, if any spray drift was to have spread from Perrononies to the Mallee Block, it would not have drifted in sufficient quantities to cause damage. Ms MacGregor gave evidence that 2,4-D is toxic to vines at 1% of the label rate, glyphosate causes symptoms at 4% of the field rate and metsulfuron would cause damage at 1% of the applied rate. At a distance of 470 metres, Ms MacGregor agreed that the amounts drifting would approach zero, or at least be significantly lower than 1%.

54 The defendant argued that the spraying of 30 September 2013 did not cause damage to the Mallee Block, but that in the alternative, even if the Court finds a spray drift event occurred, the proportion of chemicals that would have drifted would have been insufficient to cause the damage sustained.

55 The defendant (Rodney) made executive decisions in the management of the Hayden farm and Maxwell Hayden's (Max)[5] duties included doing all the spraying that was required using a tractor and boom spray unit that they owned. Rodney explained that up to the 2011 season, Perrononies had been used for a succession of cereal crops (wheat and barley). In Autumn 2012, a crop of vetch, an animal feed, was planted as a 'disease break', with the intention to follow it with a wheat crop in 2013. Because a volunteer crop had sprouted from self-sewn seed out of the 2012 vetch crop in the eastern half of the paddock, the wheat crop sewn in Autumn 2013 was confined to the western half of the paddock. In about August or September 2013, Rodney decided that the vetch needed to be removed by spraying in the eastern half of Perrononies before the vetch again set seed in order to return to a wheat crop in 2014.

56 Rodney was uncertain as to the best mix of herbicides to use to eliminate the vetch and contacted Mr Gavin Spinks, an agronomist with Swan Hill Stockfeeds, for advice. Mr Spinks drove past and inspected the paddock and then sent his recommendation by a text message to Rodney that read:

Vetch control -gly 450 1.8L +surpass 450 1L+ally 7-10 grams+lontrel 100mls +wetter 0.25%. 60L/ha. Gav.

57 The recommended mix was glyphosate 450 (being the concentration in grams per litre), Surpass 450 (a brand name for 2,4-D), Ally (a brand-name for metsulfuron, which is present at 600g per kg), Lontrel (a clopyralid), and a wetting agent to aid the application process, the mixture to be applied at the rate of 60 litres per ha. Mr Spinks noted that other farmers were spraying out their vetch at that time intending to control it before it set seed. He agreed that the recommended mix was 'a very, very strong mix that will do a very good job on controlling vetch'. His expectation was that one application of this mixture would terminate the vetch and other weeds in the paddock, provided that the vetch was not sprayed too late in its growth cycle. As will shortly become apparent, Rodney did not strictly follow this recommendation when purchasing necessary chemicals which he left in the paddock by a water tower for Max's use.

58 I do not accept the version of events proffered by the Hayden brothers as a probable explanation of what occurred on the morning of 30 September 2013. Rodney and Max stated that at approximately 7.45 am, Rodney discussed with Max whether he should spray Perrononies on that day. The fact of the conversation was all that was positively asserted and neither had any recall of the content of the conversation. The brothers both stated that they would have discussed the prevailing and forecasted weather conditions for the day, but had no recall of the forecast or their discussion of it. Each assumed that because Max did spray at Perrononies that morning, the information available to them had confirmed that conditions were favourable for spraying at that time, in particular with respect to wind speed, wind direction, humidity and temperature and that they agreed that Max should go to Perrononies and spray it.

59 These early morning conversations between the brothers about spraying were said to be regular but not invariable. Max would usually be observing the weather at his home, but Rodney, who had internet access, would check the forecast on the Bureau of Meteorology website. Use of that access to obtain the Bureau of Meteorology forecast was probably the point of the conversations. There was no evidence of the forecast, as at 7:45 am, for 30 September 2013.

60 The habitual, but not invariable, nature of the activity and the absence of any recall at all brings into question whether there was in fact such a conversation on the day in question.

61 Assuming that there was a conversation as the brothers asserted, although it is unsurprising that a witness cannot recall a weather forecast for a day three years earlier, the suitability of the day for spraying became an issue at a very early stage when Rodney and Max may well have had some recollection of both their conversation and information gathered in the course of it such as the internet forecast. Tony Caccaviello complained directly to Rodney within about a week of the spraying event. That was followed by an investigation by the Department of Primary Industries and this litigation. Ordinarily, memories would be refreshed or reconstructed by such events, but that did not occur.

62 I am satisfied on the probabilities that the weather forecast for spraying Perrononies on 30 September 2013 was not favourable. It would be convenient to have forgotten it. I could not detect a reason that compelled spraying on that day, unless the expensive spray mix had been earlier prepared and needed to be used or disposed of. That possibility was not explored and I say no more about it. What is more probable is that there was no conversation as deposed to by the brothers. It is likely they did not discuss the weather forecast as there was no need to do so because Rodney regarded Max as experienced and capable of making his own assessment. Max intended, in giving his evidence, that I concur with this assessment of his abilities. He said he had sprayed 27,000 acres annually for the preceding eight years and had sprayed Perrononies many times.

63 Max used a Goldacres boom spray drawn behind a tractor. The alignment of the tractor on the spray runs is GPS controlled to permit accurate coverage without overspray. The boom spray had a 6000 lt. tank and its operation was computer controlled. For example, the application rate of 60lt/ha is set by the computer control. The boom had a span of 36 m and was fitted with 76 medium-coarse nozzles. The same boom settings were used for all spray jobs on the Hayden's farm. Max had neither a record nor a recollection of the settings for the boom spray. He said his usual practice was to set the boom one metre above the top of the weeds. He 'hazarded a guess' that the vetch in Perrononies was 12 - 18 inches high at the time. He did not suggest that this height setting was ever varied for different weeds, spray mixes, or ambient conditions.

64 Max said he arrived at Perrononies between 9 and 9:30am on 30 September 2013, took at least 45 minutes to set up the sprayer and then sprayed until 11:30 am. He gave two reasons for stopping then. First, he had finished the area he decided to spray. Secondly, he was concerned that the freshening wind might place a neighbour's garden at risk.

65 There were no contemporaneous records of the weather at Perrononies and Mallee Block on that day and my findings must be a matter of inference from all of the available evidence, to which the BoM data from the nearest weather station at the Swan Hill airport is clearly relevant.

66 The defendant pointed to spray diary records that were required by law to be kept and I will pause for a moment to consider the diary that was produced. Max claimed responsibility for completing the entries that appear in it and he said that the entries accurately recorded what had occurred. Later, he described the entries as approximate, for example, the wind speed would have been 'around' 20kph. Just how approximate was not clear. He said that the diary, comprising loose A4 sheets in a folder, was completed by him on the day when he finished spraying and the folder was kept in the tractor. Max could not confirm under oath that the entries were accurate as he had no memory of the day. He retreated to describing what would have been 'ordinary practice'. This want of memory was both surprising and convenient. It was also inconsistent because, under cross-examination, Max either recalled or reconstructed part of the events of the day to assist the defendant's case.

67 For example, he recovered a recollection that he had not sprayed the whole paddock on 30 September. If that was so he did not record that fact at all in his spray diary on the day when presumably it was fresh in his memory. Other entries in the diary mostly, but not always, identify the area sprayed, which is a fact that is required to be recorded. Max was specific that he stopped spraying 470 m north of Mallee Block, which implied that on the day he would know that he had sprayed a lesser area. Later, Max described a function on the on-board computer that maps the paddock as it is sprayed. I do not accept his assurance that the spray diaries accurately recorded what occurred. Obviously, it was now beneficial to the defendant's case to suggest that spraying stopped 470 m north of Mallee Block.

68 Turning to the relevant entries, first, there was an entry in respect of the subject spraying that showed the herbicide mixture, which I will precisely identify shortly, was applied to Perrononies on 30 September 2013 at the rate of 60lt/ha when the wind was blowing from the north at 20kph. Neither the plant matter being sprayed nor the area of application was completed although it is clear that only the eastern part of the paddock could have been sprayed. The diary suggests that the spray was finished on 4 October 2013. Next, there is an entry that immediately precedes the subject entry, which shows the same mixture was applied over 100 ha at the same application rate at Langleys (another of the Hayden's paddocks) on 24 September 2013 and also finished on 4 October 2013 when the wind was blowing from the north west at 25kph. There is a third entry that stated that on 1 January 2014, 80 ha of 'stubble' on the west side of Perrononies was sprayed with a different mixture. Finally, on 10 January 2014, 80 ha of 'vetch' in east Perrononies was sprayed with a different mixture.

69 Max stated that although he was unable to independently recollect the weather conditions on 30 September 2013, the diary record would be his best estimate of the wind speed at the commencement and completion of spraying. He was suggesting that the wind was a constant speed and not gusting. He also stated that it was his practice to monitor conditions whilst spraying, through observing the spray mist, the dust cloud, tree lines and the plants being sprayed. He did not suggest that such monitoring informed the entry that he made in the spray diary. He said consulting his phone could provide him with the weather readings in Swan Hill. He suggested, based on his previous experience, that there could be significant variation between the weather conditions, the wind speed and direction, in Swan Hill and Piangil although this assertion was not developed. Plainly given their proximity, there could also be significant similarities between the weather conditions in Swan Hill and Piangil. Max did not state that he consulted the readings in Swan Hill on his phone or that there was any significant variation that day between the weather conditions in Swan Hill and Piangil. Max did say that the BoM forecast can be surprisingly accurate as to whether the wind will increase or decrease during the course of the day.

70 Having carefully considered Max's evidence and examined the spray diaries, I consider that the diary entries are neither reliable nor complete. Further, I do not accept that they were made contemporaneously, that is, on the day. It is probable that the entries were made at some time after Mr Caccaviello complained of the spray drift and before the first visit from the DPI inspector. I cannot assess the reliability of Max's recall when the entries were actually made.

71 The closest Bureau of Meteorology weather station is Swan Hill aerodrome. The weather records from the Swan Hill aerodrome on the day in question that were available to the court did not include what had been forecast, but now only provide the data actually recorded about the weather that day. The weather station, which is situated approximately 40kms south-east of Piangil, recorded that on 30 September 2013 between 7am and 9:30am the wind speed was in excess of 20kph, blowing from the north, and gusting above 30kph. At 9am the wind speed was 26kph, with wind gusts reaching 37kph. The wind eased a little between 9:30am and 10:30am and was blowing from the north west or north, north west. It was gusting slightly during this hour at speeds around 20kph. By 11am, the wind had picked up to 28kph, with wind gusts reaching 39kph blowing from the north. By 12 noon, the wind was blowing from the north, north west and continued to blow from that direction or to swing more to the west during the afternoon. The wind strengthened from noon initially to speeds in the mid-30s, and was gusting to speeds at or above 50kph. In the late afternoon, from 4:30pm to about 6:00pm, the wind speed was above 60kph, gusting to over 100kph. The temperature was 20ºC at 9:00am climbing to 28ºC in the early afternoon and 29ºC in the strong winds of the late afternoon. The relative humidity fluctuated from 28% at 7am to 1% at 1pm and 15% at 5pm.

72 A forecast reasonably reconstructed from this data would have indicated that the weather was not suitable for crop spraying, at least at Swan Hill. It would also have indicated that the wind speed would increase over the day and that gusty north winds should be expected by at least mid-morning.

73 I am not persuaded on the probabilities that on 30 September 2013 weather conditions varied significantly, or at all, between Piangil and Swan Hill. There was no evidence of actual variation. Max suggested that at times there could be variation in wind direction, but did not identify the circumstances in which variation might be expected. At its highest, I am invited to infer from the fact that Max said he sprayed Perrononies in acceptable conditions and that the conditions at Swan Hill were definitely not suitable for spraying that the weather was significantly different at Piangil. That inference cannot be drawn unless I accept, which I do not, that Max was a credible and reliable witness with a full and accurate recollection of the circumstances of the day.

74 Dr Bell checked the weather data from the only other BoM weather stations in the region, at Mildura and Hopetoun, on 30 September 2013. The weather was windy and gusting, consistent with the data from Swan Hill. I am satisfied that it is probable that on 30 September 2013 the weather data collected at the BoM weather station at Swan Hill sufficiently closely represented the conditions at Piangil for that data to be used to understand the probable actual conditions at Perrononies and Mallee Block on that day.

75 Max stated that he considered it appropriate to spray with a wind speed of between 15 to 20km/hr, but conceded that this is the upper range. However, his spray diary recorded spraying in a wind of 25kph on 24 September 2013 and numerous occasions when the wind speed is noted at the upper limit of 20kph. That said, not all paddocks on the Hayden farm were adjacent to more sensitive land uses.

76 Max believed he got to Perrononies at around 9 - 9:30am and observed that the weather conditions were appropriate for spraying. The BoM data shows that the wind eased between 9:30 and 10:30am and it is feasible that Max then may have reasonably believed that the weather conditions were conducive to spraying. Plainly he decided to spray, and did so. The first thing he did was fill the tank with water to which he then added the chemicals. I am satisfied that he mixed a full tank and did so because he intended to spray the whole paddock. He said filling the tank took around 30 minutes. Accordingly, he may have started spraying around 9:40 - 10:10am.

77 Rodney advised him about the mixture of herbicides that should be used on this occasion and Max added the following quantities of the herbicides to a full 6,000 litre spray tank. This provided a spray mix for approximately 100 ha. I am satisfied that he did not mix a lesser amount.

Amine (NUFA Amicide Advance 700) or Dow Statesman 720

78 Rodney's purpose was to eliminate the vetch on Perrononies once and for all in one application. Rodney stated that he had two reasons to add 1kg of metsulfuron, at the upper limit of Mr Spinks' recommendation. First, he did not wish to use Lontrel, as Mr Spinks suggested, because it persists in the soil. Secondly, Rodney was concerned that vetch was often difficult to eliminate and the worst result would be that the paddock might need to be re-sprayed if the mixture was not strong enough. I am satisfied that metsulfuron was applied at this concentration. I am also satisfied that as at 30 September 2013 neither Rodney nor Max had recently read the labels of the products that were applied.

79 Although an effective result first time was one reason to use a full strength mixture, another is that spraying is a costly exercise. The chemicals cost tens of thousands of dollars. The Haydens were motivated to avoid wastage of expensive chemicals. Max suggested that spraying was not chanced when the prevailing weather conditions were inappropriate because the application of the chemicals was less efficient creating a greater risk of the need to respray. Once the mixture was made up it must be used within 24 hours. If the weather conditions deteriorate it may become necessary to dump expensive chemicals unless the mixture can be refreshed. In this case, there is no suggestion that a mixture was refreshed.

80 I am satisfied that Max was conscious of the cost of the chemicals and actively sought not to waste them. Max did not suggest that any chemicals were dumped but if he only sprayed the smaller area that he described and finished by 11:30am, he would not have used the tank that he had filled. It is likely that at least a third of a tank would have remained unused. A full tank will spray approximately 100 ha and travelling at 14 kph that would take 2½ to 3 hours. The west side of Perrononies was approximately 80 ha. If the full area was sprayed, the spraying could have occurred between 10 am and 1pm.

81 Max claimed that he would have driven the tractor at 14km/hr whilst spraying, slowing to 8km/hr when turning. The sprayer switched off automatically when the tractor was turning. His technique was to spray a 'headland' at the north and south, by driving in an east-west direction, and then spray between the headlands, driving in a north-south direction. This technique used the benefit of the GPS spray control system.

82 Max also stated, demonstrating selective recall of the events of a day about which he had no memory, that he located the southern headland approximately 470 metres from the Mallee Block, going as far as a clump of trees situated on Perrononies. He did not consider the weather conditions to be favourable for completing the south and eastern corners of the paddock. The only aspect of the weather conditions that could have been of concern to Max would have been the strength and/or variability of the wind. By this evidence he purported to recall the events of a day of which he had no memory. Given the technique that he adopted for spraying, Max must have made that assessment soon after he started spraying when the time came to set out the southern headland. That would have been at around 10 or 10:30am. The BoM data suggested a mid-morning easing of the wind. It was unlikely that Max made that assessment at the paddock by observation of the conditions, which would have favoured a conclusion that the conditions were good to complete the whole spray job with the tank he had prepared.

83 However, there was no independent evidence supporting Max's claim that he set out the southern headland 470 m north of Mallee Block. It is equally open that Max arrived at Perrononies when the wind had eased from its early morning speed and he concluded that the trend in the wind favoured spraying. He admitted that a decreasing wind provided good spraying conditions. The BoM data recorded a wind speed of 13kph at 10am. Intending to spray the whole of the west side, he mixed a full tank and for about the first hour of spraying the conditions were suitable. Then, Max either failed to appreciate that he had misjudged the changing conditions or he pressed on regardless in order not to waste the cost of the chemicals.

84 Alternatively, if Max did set out the southern headland 470 m north of Mallee Block, the assessment he made was consistent with knowledge of the probable forecast of wind gusting and freshening over the day rather than the conditions observable at Perrononies at the time. If that be the case, Max must have deliberately calculated that a buffer zone of 470 m to the south would be sufficient to protect the vulnerable properties. The damage sustained by Mallee Block implies that a buffer zone, if actually adopted was, in reality, a miscalculation and an error of judgment.

85 Max suggested that he sprayed until approximately 11.30am and he stated that he stopped because he was concerned that spray would drift over to a neighbouring property, situated directly to the south of Perrononies and to the west of Mallee Block, on which was a newly established garden with trees. Again, this selective recall is curious. First, Max completed the area he said he decided could be safely sprayed, i.e. the area north of the 470 m buffer. Secondly, the BoM data shows that the wind had freshened to 28kph by 11am. Max was slow to appreciate the changing conditions. Thirdly, he never satisfactorily answered the question of why at 11:30am he perceived a threat that he had specifically allowed for by setting the southern headland back 470m, and then stopped spraying. That was precisely the concern that a sprayer would have if he realised that he had misjudged the wind forecast when he had not allowed a buffer zone. Fourthly, Max stated that a spray drift would not have threatened the vineyard as the wind was blowing from the north and not towards Mallee Block, but by 9:30am, according to the BoM data the wind direction had moved a little to the west, towards Mallee Block. Finally, if Max had only been spraying for that time he would have about one third of the tank remaining unused. He did not suggest that any chemicals were wasted that day, initially believing, not recalling, that he emptied the tank by spraying. Had chemicals in fact been wasted this would have been an expensive mistake that was likely to have been remembered. When challenged, he suggested, for the first time, that he may have mixed less than a full tank, without any specific recollection that he did, or any explanation for the quantities of chemicals entered in the spray diary that were for a full tank.

86 I do not accept this explanation. It is likely that, once the chemicals were mixed, even if conditions were not ideal as the day developed, Max decided to proceed to finish spraying Perrononies to minimise the loss of expensive chemicals. I expect that he hoped not to create a spray drift and I accept that he intended to avoid doing so. In other words, Max made an error of judgment and ran the risk, that he did not fully appreciate at the time, of spray drift occurring. That risk eventuated.

87 Max said he returned to spray the south-east corner of Perrononies on 4 October 2013 when the weather conditions were favourable. Again, there was no independent corroboration of this assertion. I am not persuaded that he did so. That was the day when Mr Caccaviello first observed that his vineyard had been affected and it is curious that, despite the activity at Mallee Block and the suspicion of the spray drift, nobody observed that Perrononies was sprayed on that day. The spray diary records that another paddock was also sprayed on that day, although Max believed that entry, rather than the entry for Perrononies, was mistakenly made. He said he had done a good job and that the vetch 'all died'.

88 As I have noted, Perrononies was resprayed for vetch on 10 January 2014. That may have been necessary because, as Max suggested, seed from the 2012 self-sewn crop was dormant in the soil and sprouted with rain. Max's suggestion seems inconsistent with his earlier evidence about both the intention and the success of the spraying as well as with the evidence of both Rodney and Gavin Spinks. Rodney's intention was to spray the area once, with a highly concentrated mix of herbicides that both Mr Spinks and Dr Bell stated ought to have killed the vetch, which had not set seed, with one application. There was no suggestion that eliminating the vetch would require spraying on two occasions until the record of the second spray was drawn to Max's attention in evidence.

89 Max had no recollection of the re-spray and speculated about what might have occurred on 10 January 2014 from the ingredients in the mix used. Alternatively, it may indicate that the spraying was not completely successful in September/October, because of the windy conditions resulting in a loss of a portion of the chemicals in a spray drift, reducing the application of chemicals to the vetch and failing to prevent some of it from setting seed. Bearing in mind that vetch is a very hardy plant that is difficult to eliminate, it is likely that an insufficient quantity of chemicals was applied to the vetch. Although Mr Spinks opined that spray timing can affect whether vetch grows the following season - if the vetch is sprayed late, when it has already self-sowed before being sprayed, then the vetch may not be eliminated in its entirety, Rodney was aware of this risk and intended to spray Perrononies before the vetch set seed. He did not suggest that he mistimed the spray application.

90 Unless independently corroborated or inherently probable, I have not accepted the evidence of Max Hayden. As I have said, the weather conditions recorded at Swan Hill by the BoM probably represented the weather conditions at Piangil. The topography of the region is not likely, over a 40km span, to cause any significant variation in wind direction, speed or turbulence.

91 I cannot draw from the evidence an affirmative conclusion that on the balance of probabilities the defendant did not create spray drifts that affected Mallee Block, an observation that I make only to identify what the evidence cannot support. I cannot be satisfied on the evidence of events from the defendant's perspective alone that there were no spray drifts. The case is a circumstantial one and the plaintiff bears the onus of proof that there were spray drifts. The plaintiff discharged its burden of proof in this regard.

92 The plaintiff submitted, and I agree, that in the totality of the circumstances that played out on Perrononies on 30 September 2013, the defendant's evidence carried considerable weight in determining whether spray drifts were created. When the defendant's description of the spray event is analysed and considered with other circumstances that I will now consider, it was clearly probable that the defendant created spray drifts that affected Mallee Block.

93 Mr Caccaviello stated that an overspray from Perrononies was the obvious source for a spray drift on Mallee Block, having regard to the prevailing weather and the use of neighbouring paddocks. There was no challenge to this proposition and no suggestion that a spray drift could have emanated from a different property or activity.

94 There was no alternative explanation for the presence of symptoms of herbicidal spray drift in the Mallee Block vineyard five days after Max sprayed Perrononies. There would be no suggestion of an alternative explanation for the observed symptoms until Mr Whiting was engaged by the defendant as his expert some 20 months later. However, Mr Whiting could only explain what he saw and failed to properly grapple with the observations and data documented by professional colleagues.

95 Neither APW nor other local vineyards reported being affected by spray drift in October 2013. The absence of damage to other properties supports a conclusion that Mallee Block was damaged by a wind driven direct drift from an immediately neighbouring property rather than by an inversion. Further, the weather data and observations about frosts support that conclusion.

96 When Mr Caccaviello first approached the defendant in the week following 30 September 2013, Rodney admitted that the paddock had been sprayed with a combination of Roundup (glyphosate), Ally (metsulfuron) and 2,4-D. The plaintiff did not use those chemicals in the vineyard. Rodney made the same admission to officers of the DPI. Samples later taken from the vineyard for analysis would reveal the presence of glyphosate and 2,4-D.

97 The absence of any trace of metsulfuron in the analysed samples from Mallee Block vines and Perrononies weeds does not prevent the finding that the spraying of Perrononies affected the Mallee Block as there is a ready explanation of its absence from the test results. The experts concurred that metsulfuron is difficult to detect in plants given it degrades within a few days. Mr Fern, a senior scientist with AsureQuality, confirmed that metsulfuron metabolises rapidly in plants. Testing to a much greater degree of sensitivity than was provided commercially by AsureQuality or testing within hours or days of the application would have been needed.

98 There is no doubt that metsulfuron was included in the spray mix. What is particularly significant is that it was used at a rate that exceeded the label recommendation. This was admitted by the defendant. As I noted at the outset, Mr Caccaviello reported the damage to the DPI. Investigators inspected Mallee Block on 23 October 2013 and took samples as did Ms MacGregor, including from Perrononies. Subsequent analysis of vine samples collected by the DPI from the Mallee Block and weed samples collected by Ms MacGregor from Perrononies in a laboratory in New Zealand were reported on 23 December 2013 and 19 February 2014 to show the presence of glyphosate and 2,4-D. The DPI issued a formal warning letter to Mr Maxwell Hayden. The letter detailed that the DPI concluded that a spray drift event had occurred from Perrononies to Mallee Block on 30 September 2013 and that the spray drift damaged the Mallee Block vineyard. The DPI concluded that Mr Hayden had contravened ss 5, 19(1)(a) and 40(1)(a) of the Agricultural and Veterinary Chemicals (Control of Use) Act 1992. His activities in spraying Perrononies had injuriously affected plants outside the target spray area. He had failed to keep adequate records of chemical use.

99 Max had, on Rodney's instruction, applied metsulfuron above the maximum label rate which is 7 g/ha, potentially in breach of s 19(1)(a) of the Act. Mr Spinks, who had not checked the label specifications, had recommended up to 10 g/ha. At 10 g/ha, metsulfuron was applied at 143% of the maximum recommended rate. Although there was obviously no analysis of the strength of the spray drift that affected Mallee Block, it is probable that metsulfuron was present in it in a high and significant concentration.

100 The DPI's warning letter also records, without subsequent objection, that Max Hayden, in an interview during the investigation, thought that a spray drift may have been created when he turned the sprayer boom around on the top of a slight rise at the southern end of the paddock. Given the pattern that he adopted for the spray job, he would have executed that manoeuvre numerous times.

101 Because of extensive damage to the fruit, APW rejected the plaintiff's Mallee Block fruit in total in January 2014.

102 Dr Bell, Ms MacGregor and Mr Whiting in their joint report dated 10 August 2016 agreed that the spray records suggested that there was a risk of damage caused by a spray drift but did not agree on the degree of risk. Mr Whiting described it as no more than a risk, while both Dr Bell and Ms MacGregor considered the risk to be extreme. I prefer the opinions of Dr Bell and Ms MacGregor, each of whom made a careful and documented study of the state of the vineyard following engagement by Riverman. They concluded that it was highly probable that the vineyard received multiple applications of spray drift, if not a continuous application, when the defendant was spraying on 30 September 2013.

103 Dr Bell and Ms MacGregor noted three factors as significant. In early October, the canopy was small, with young, short shoots, that would not have intercepted the majority of the spray drifts. The balance of the drift would have landed on the soil that was moist following good rains in mid-September. Further, approximately 6 - 9 mm of rain fell the following day that would have moved the metsulfuron into the soil. Secondly, the above label use of metsulfuron would have contributed to the probability that the vines would take it up through the soil. Thirdly, the weather data demonstrated that the day was very unsuitable for spraying.

104 The experts all agreed that the initial pattern of damage intensity was consistent with herbicide drift emanating from the north west and from the use of glyphosate, 2,4-D and metsulfuron. Just 12 months after the spray drift event Dr Bell suggested that the vines may not recover at all. He concluded from the severe and extensive damage that he observed that the vines had received a high dose of chemicals from the spray drift. Dr Bell described the damage as the worst he had seen in 35 years of working with agricultural chemicals. Mr Whiting relied on the observations of Dr Bell and Ms MacGregor as he did not directly observe the damage in 2013, 2014 or prior to the harvest in 2015. The experts agreed that the chemicals used, in isolation or in combination and even in low concentrations, were harmful to vines.

105 Dr Bell described the spray mix that was used as extremely potent, containing a greater concentration of the chemicals than would be required to kill woody weeds including blackberries. It would provide total control over the weeds over time.

106 The prospect of damage from chemical overspray is well recognised by both the Parliament, by the provisions of the Agricultural and Veterinary Chemicals (Control of Use) Act 1992, and by vendors of chemical products through product label information. Much of the information provided on labels for the relevant chemicals is provided to mitigate the risks associated with spray drift. All products containing 2,4-D should be applied by a coarse to very coarse droplet size. The Hayden's spray boom was fitted with medium-coarse nozzles. While operating pressures can be used to control droplet size, there was no evidence that Max was controlling droplet size in this way. The probability that the droplets were finer than coarse to very coarse would be conducive to a spray drift. Labels also cautioned against spraying in winds less than 3kmh or greater than 15kmh in some cases and 20kmh in other cases. I am satisfied that these warnings were not heeded.

107 The defendant was critical of the plaintiff's experts failure to conduct or commission sophisticated computer based modelling of the spray drifts they alleged. I accept Ms MacGregor's evidence that there were too many variables that were unknown to the experts at the relevant time to permit useful modelling to be undertaken. In the absence of a specific informed study, a minimum of 0.5% of the concentration sprayed could be expected in the drift, but that concentration could be much higher in conditions conducive to spray drift. Dr Bell agreed, noting that there were no details of nozzle size and type, spraying pressure, boom height, speed of spraying and time of the spray operation. He would have expected the boom to have been set relatively high to spray off a vetch crop in order to achieve double overlap in application, but at the risk of increasing the level of drift. Dr Bell considered that the defendant set the spray boom too high at one metre in the conditions. On his analysis of the weather data from Swan Hill, wind direction between NNW and NW, which applied on the day, would have a spray drift depositing directly onto the Mallee Block vineyard. Max Hayden provided some of this information when giving evidence as I have already noted, but there was no objective or contemporaneous data (from the on-board computer or the spray diary).

108 Two other relevant factors identified by Ms MacGregor were the unpredictability of wind and the ground conditions. Wind unpredictability, especially turbulence and gusting, can exacerbate the conditions that favour a spray drift. I am satisfied that the wind was gusting on the day. Uneven ground conditions could cause boom height off the ground at one end of a 36 m boom to vary significantly, resulting in discharge of herbicide droplets at a much higher point than planned or expected. These two effects can combine. Max Hayden identified this very problem when interviewed by the DPI.

109 On the basis of the foregoing analysis, I am satisfied to the requisite standard in all of the circumstances that when the defendant sprayed Perrononies on 30 September 2013, multiple spray drifts were created during the time that the defendant sprayed that caused a sufficient and damaging quantity of herbicide to settle on the plaintiff's vineyard affecting both the foliage and the soil. The spray drifts contained, relevantly, the herbicides, 2,4-D, glyphosate and metsulfuron in sufficient concentrations to cause very serious damage to the vines. However, the concentrations of herbicides to which the vineyard was exposed cannot be more precisely determined.

110 Mr Caccaviello initially noticed that the vines were different on the morning of 4 October 2013, observing translucent shoots, drooping canes, and yellow speckling on foliage. Since then, he has observed that the vines have become anaemic, some show no signs of growth, there was a distinct unevenness in berry ripening, and the fruit produced was of poor quality. He has tried various methods to mitigate the effects of the spray drift, including pruning the vines (cutting them back to single cordons to encourage regeneration), pulse watering and using different varieties of nutrients. He gave evidence that these efforts to present have been to no avail. I will return to his farming practices in due course.

111 Mrs Caccaviello also described the progressive damage to the vines. She described the shoots growing longer, in a more distorted fashion, with deformed foliage. She witnessed a dark redness develop in the shoots and the tips turned brown, were crunchy and fell off as they died. She also observed different stages of growth in the vines, such that there could be a flowered bunch and a little bunch that had not even flowered yet on the same vine.

112 2,4-D is a chemical which is absorbed through the leaves of the plant. The symptoms of 2,4-D exposure are fan-shaped leaves with sharp points at the leaf margins, downward bending of leaves, leaf strapping with deep sinuses and puckered leave surfaces with constricted veins that might be slightly chlorotic.

113 Grapevines are very sensitive to 2,4-D damage and are most vulnerable from the early growing season through to the bloom period. The incidence and severity of damage will depend on a number of factors, according to published research, that include the concentration of the drift, exposure time, weather conditions, grape variety, the age of the vines and the growth stage of the vines. The research established that exposure to the chemical may have an effect at rates as low as 1 part per billion, particularly when exposure occurs in the early growth stage, and severely injured vines may not recover for two years or more (The period of the study was two years). The literature suggested that vines may not recover, and may exhibit delayed fruit ripening, absent or delayed and indifferent fruit maturity, poor grape quality and decreased fruit yield and quality.

114 Glyphosate is a broad-spectrum systemic herbicide and crop desiccant used to kill weeds. It is absorbed through the foliage and minimally through roots, and then transported to growth points. It inhibits plant enzymes involved in the synthesis of aromatic amino-acids. The symptoms of glyphosate include browning and death of foliage, leaf chlorosis, fan-shaped leaves with veins crowded together and rough and upward curled leaves (sometimes with yellowing between the veins). New shoots are pale and stunted, with shortened internodes and clustered side shoots. Death by glyphosate with perennial plants can be a slow process over a number of years. An academic study showed that some treated trees and vines recovered normal foliage 1 to 2 years after a sub lethal dose. Other research showed that recovery from severe injury may be slow with symptoms declining over two or more years. Glyphosate may be synergistic in combination with 2,4-D or metsulfuron.

115 It is possible for damage sustained by grapevines to be worse from the combination of glyphosate, 2,4-D and metsulfuron. Monsanto markets a combination of glyphosate and metsulfuron for the control of woody weeds including blackberry with which maximum results are often not observed for 1 to 2 years after application. In the context of a spray drift scenario, a grapevine could be likened to a woody weed such as blackberries.

116 Metsulfuron is a highly systemic, sulfonyl-urea herbicide, which is absorbed through both the foliage and the roots of the plant. It is an ALS inhibitor herbicide that, once absorbed, moves rapidly through the plant inhibiting cell division in the roots and shoots stopping growth. It metabolises rapidly in plants, but can remain in soil for months after spraying. Highly active at low rates, it inhibits the uptake of water by causing a blockage in the root system of the plant. Because of the thin canopy on the Mallee Block vines at the time of the spray drift and subsequent rain, uptake of metsulfuron through the roots may have occurred. The symptoms of metsulfuron are wilted shoot tips and leaves, stunted growth, chlorosis and puckering of foliage. Necrosis may be evident in the phloem (the plant's vascular system). It can kill perennial plants. It is commonly sold as Brush Off. The long term impact of metsulfuron on grapevines has been neither studied nor reported.

117 Synergism in agricultural chemicals is widely accepted. Generally chemicals, when used in combination, act faster and more effectively than they otherwise would when used in isolation. Although there is documented evidence of the combined use of 2,4-D, and glyphosate on vines, and of the synergistic effect of metsulfuron with glyphosate, the synergistic effects of the three specific chemicals, 2,4-D, glyphosate and metsulfuron used in combination on grape vines, or for that matter on any like vegetation, has been neither studied nor reported.

118 Dr Bell described the damage to the vines as 'very severe and extensive', stating that it was 'the worst damage that [he had] seen from spray drift on to a horticultural crop in over 35 years of working in the agricultural chemical and horticultural industries'. On his initial inspection on 13 January 2014, he observed stunting of the canes, small and stunted bunches of grapes, zig zag shape in the stems, crinkled and fan shaped leaves, yellow spotting, parallel veins and leaf chlorosis. He describes these symptoms as caused by the combination of chemicals found in the spray drift. He opined that the extent of the damage was such that the vines may not recover at all or at least will be an ongoing concern for a number of years resulting in yield and quality losses and death of vines throughout the vineyard.

119 Dr Bell again inspected the vineyard on 16 October 2014, 18 February 2015 and 29 January 2016. In his report of October 2014, he noted the appearance of further symptoms (in addition to those observed in January 2014) including dead vines and canes, shoots dying and black on margin edges, twisting, distortion and reddening of shoots, severe suckering of vines and shortening of internodes. He observed no vines resembling a heathy vine. New growth was severely stunted and chlorotic. He noted severe suckering of the vines that indicated damage to the vascular system of the plant. The vines, as a result, were very weak and anaemic, the bunches of grapes were small, chlorotic and yellow or brown at the tips and the shoots were yellowing and dying. His remained ambivalent about recovery of the vineyard in the future. He said there would not be a commercial yield from the vineyard in the 2015 season, as the grapes were undeveloped and of poor quality, with delayed and varying rates of maturity. Likewise, the 2016 season would not be commercial as poor growth, or death, of shoots and dead canes would not provide any good quality bud wood meaning bud formation would be poor in future years. Dr Bell's predictions were accurate.

120 In his report of 6 March 2015, Dr Bell observed further deterioration in vine health, noting very uneven ripening of the grapes, differences in the maturity of the grapes, sunburnt bunches of grapes, high levels of leaf drop and very poor quality bud wood to prune to. He observed large areas of severe damage across the vineyard. He recorded that the application of additional foliar nutrients and fertiliser had not assisted the vines to recover their vitality. The extensive damage would significantly affect grape quality. Any yield from the 2015 harvest would have to be sold at reduced prices and the returns might not cover costs. He remained of the view that the 2016 season would be similarly affected. His recommendation was to replant the vineyard.

121 In his report of 22 July 2016, Dr Bell reported his observations of continuing damage to the vineyard. Symptoms noted in previous reports remained and, in addition, he reported noting very unhealthy and unthrifty vines, poor canopy cover, poor quality bunches of grapes with very mixed maturity between the top and bottom cordons, berry shrivel of green berries as the plants were taking moisture back from the berries to survive, dormant buds shooting and producing small and thin growth with small bunches and low levels of blister mite damage. Dr Bell also reported that metsulfuron damage evident through necrosis in the phloem was observed by cutting vines throughout the vineyard. He noted that the defendant's application rate of metsulfuron and glyphosate, when spraying the vetch, was considerably higher than that required to kill woody weeds including blackberries.

122 Dr Bell concluded this continuing damage was consistent with exposure to metsulfuron, 2,4-D or glyphosate or a combination of these herbicides. Vineyard management had not contributed to the damage he observed and he regarded the plaintiff's management practices as normal, with the exception of the use of additional fertiliser, which he considered was an understandable, if ultimately unsuccessful, attempt to mitigate loss and revive the health of the vines. Dr Bell concluded that the spray drift event had caused irreparable damage to the vines.

123 Ms Alison MacGregor inspected the Mallee Block in October 2013, December 2013, April 2014, January 2016 and May 2016. Initially, in October 2013, Ms MacGregor noticed symptoms of foliage and shoot distortion, deep sinuses in the foliage, leaf spotting, cupping, fingering and lamina buckling along the veins, and mottled and interveinal chlorosis.

124 In December 2013, the chlorotic spots were no longer evident, but there was severe and extensive distortion of distal leaves. She also noted that symptoms associated with glyphosate and metsulfuron were evident on the older leaves, symptoms which were not common on the new growth. Shoot tips, whether visibly damaged or not, were growing vigorously but were rubbery. Die back of the shoot tips was also evident. There was a high proportion of berries that had not set, and the berries that were set were very variable in size. Within healthy-looking sections of the canopy there were random shoots with chlorosis, cupping, blistering, failure of the shoot tip, distorted petiole sinus and strapping of veins. She observed that every assessed panel in the Chardonnay had some damage, with shoot damage ranging between 85% of foliage having symptoms in the north-west corner, that being closest to Perrononies, to 5% having symptoms in the north-east corner. Shoot damage in respect of the Mataro, Shiraz and Black Muscat varied between zero and 18%. She carefully mapped her findings using 53 sampling points across the vineyard, spaced every 20 or 30 panels along pairs of rows, where she assessed 20 shoots and 20 bunches.

125 When Ms MacGregor inspected in April 2014 the vines were starting to senesce. She did not quantify foliar damage on this visit. She did observe however that there were stunted shoots, a large proportion of die back of shoot tips and malformed inflorescences. The vines had been trimmed, removing many of the shoot tips with 2,4-D symptoms. She was therefore unable to observe how those had survived the season. The vines had not been harvested, and many of the berries were over-ripe and drying. The canopy was sparse exposing berry bunches to sun-damage. Shoots on the Chardonnay vines were still producing leaves with fanning, elongated tips and clustered veins. New shoot tips with long internodes were dying. Vines also had a low level of erinose blister mite and rust mite, which is typical of a late season canopy. Ms MacGregor opined that the damage was very extreme and that a substantial proportion of vines may not fully recover, causing a significant and ongoing financial loss.

126 In January 2016, Ms MacGregor observed distinct herbicide leaf symptoms in stunted shoots from buds in old wood usually on the lower cordon, which she opined was likely due to the spray drift event in late September of 2013. In contrast, she explained that if there was any recent herbicide exposure it would appear at the tips of the most vigorous shoots and there would be more chlorosis. There was a wide range in maturity of the berries and the canopy and berries were showing signs of stress, such that the berries were losing turgor, the leaves were cupping, curling and distorting and the shoots were failing at the tips, buds were reshooting along the canes and multiple basal shoots had burst. The symptoms of stress were not however consistent through every variety.

127 In May 2016, Ms MacGregor observed that shoots from later-bursting buds were particularly short and thin and had not lignified, the fruit bunches had not ripened properly by harvest, and there were too many shoots growing from each spur. She noted that vines in different areas of the vineyard were not developing normally - some sections of vines were senescing as expected, but other sections of vines continued to shoot new foliage. The vines appeared non-responsive to fertiliser despite the plaintiff applying boron, suggesting damage to the vascular system of the plants. A deficiency of boron can cause shoot tip death and leaf cupping. She also noted that more vines had died since her last visit and other vines were in extreme decline.

128 Ms MacGregor discounted the notion that the damage observed in the Mallee Block could be due to paraquat (used by the plaintiff to control weeds under vines) on the basis that, as a contact spray, any damage would be limited to the area sprayed and paraquat did not produce symptoms in new growth after the exposure to spray. She rejected the notion that the damage would be due to nutrient deficiencies, as even when the plaintiffs applied boron, the vines did not respond. There was no positive result in tests for viruses, while mites would have been present prior to the spray drift event, and could be discounted as causal of any loss. Ms MacGregor also rejected inadequate management, relating to irrigation, fertiliser or weed control as a cause of the observed damage.

129 Ms MacGregor considered that the cropping levels may have stressed the vines and delayed recovery and that the canopy trimming had not been completely successful as was evident from the emergence of damaged tissue in the following season. She had found no precedent for nursing vines back to health after exposure to this particular mix of herbicides.

130 Ms MacGregor initially opined that the vines would recover if there was no vascular or root damage. She conservatively postulated that the concentration of metsulfuron in the spray drifts would be too low to cause any ongoing damage to established grapevines. She recognised, however, that her optimism was challenged as the vines had failed to recover as she expected. Vines continued to die and the foliage continued to show symptoms of exposure to the chemicals sprayed.

131 Ms MacGregor described the progression of deterioration in evidence:

In spring, in the first year that I went, I saw young vines and I saw symptoms, a lot of yellow spotting, a lot of leaf distortion, and these were symptoms of leaves that were very young, were growing very rapidly and had exposure to something that had changed the way they were growing. There was obviously some hormone in there because it was causing a whole lot of distortion to the growth. There was obviously some toxicity that was a more direct toxicity because it was causing a chlorotic effect rather than a hormonal effect. So there was a range of symptoms that were what you would expect to see as a kind of immediate response in young foliage. Then when I went back out, and I delayed going back out until there would be a reasonable amount of growth, I went back out and the vines had, you know, a metre or 60 centimetres of growth on them and then you - and then we saw the - or I saw this - the hormone growing right through the - the distorted growth right through to the shoot tips.

Then when I went back out again, the shoot tips were all dying, so the vine was trying to grow out and then they were just collapsing. It was trying to grow out and they were collapsing. So this was another growth stage and another manifestation of the vine having been damaged by something. By late in the season, a lot of the damaged shoot tips had died. The distorted foliage, those shoots had often - you know, they'd start to kind of collapse and the vine aborts them.

When I went out late after harvest, then what you look at is just a whole lot of defoliation. Vines look horrible after a machine harvest has been past. It really thrashes them to bits. So you've got just foliage that has been beaten off. It's late season anyway so they're starting to senescence so they're looking autumnal, you know, they're getting colour in them. Things like there was a bit of yellow speckle virus started to appear and this just happens in vines that are a bit stressed. So there'd just be leaves here and there or vines here and there that had a bit of yellow speckle. So things that are just - the vines are tired. They're old, they're tired, it's late season. So they look - they're a very different beast to look at than early in the season ...

132 The reports of both Dr Bell and Ms MacGregor included many photographs documenting their observations.

133 Challenged in cross-examination whether she could definitely opine that it was more probable than not that ongoing damage (in the 2015 and 2016 seasons) could be attributed to any spray drift event, Ms MacGregor would not definitely conclude that the damage was the result of the spray drift event, but definitely stated that the observed symptoms were due to herbicide exposure:

They're classic herbicide symptoms and there's nothing else really that produces those symptoms. I can't say that the decline of the vines - I can't pin that down to anything in particular. I do agree that there is decline of the vines that surprised me, but it's happening ... Vines are dying. Patches that are ok, patches that are not. Never seen the three way mix of herbicide before. Symptoms have persisted longer than I have previously seen them do ... it was something that they did this season and what seemed to happen was that the vines had - they'd obviously shot their initial buds and the initial cane growth early in the season was good and the cane diameter was okay and the canes have grown and there was good internode length. Internode length is, in some respects, a measure of the vigour of growth because a rapidly growing shoot has quite a distance between each length and that might be, you know, 10 or 15 centimetres is good. If you have really short internode lengths, it indicates that the vine is struggling as it grows. So those first initial canes were good diameter and good internode length and it suggests good during their early growth. However, the tips of those shoots had then collapsed and then what the vine has done in response is send out a brush of, you know, 10 or 20 sometimes new little thin, spindly shoots. Interestingly, those threw bunches, but they didn't - judging by the diameter of them, they've not emerged early in the season. You know, the vines now basically should have the canes that they are going to have for this year, they are already flowering bunches, they are flowering and they are turning those into bunches right now as we speak. Those new little shoots that came out were thin and spindly and didn't really grow longer than about this long and they tried to throw a bunch. Now, the difficulty with that, you could say, "Oh, extra bunches, that's good", but two things happen: one of them, those bunches never mature, they start too late and the vine can't mature then, but, secondly, they're on such a short little cane that even if they do mature, when the harvester beaters come through, the beater can't contact those canes, so it never shakes that bunch off. So not only is it not mature enough to harvest anyway, even if it was, the harvester can't beat it off. So, effectively, that's useless effort the vine has put into the little shoots. A vineyard manager does not want that to happen. It's wasted energy and it achieves nothing and it saps the vine of a lot of other sugar and effort to try and mature them and it doesn't go into your final fruit bin. So you don't want that. Now the vines tried to do this. It is an unusual and kind of counterproductive thing that they tried to do. I haven't seen that as a response to drought and I haven't seen that as a response to nutrition.

134 Mr John Whiting did not inspect Mallee Block until 30 March 2015, late in the season, after harvest by mechanical harvesters when the vines were entering senescence. He classified 'damage' as being anything that was atypical or unusual growth due to any cause. He observed a wide range of symptoms, and described some as associated with herbicide damage. Mr Whiting concluded that most of the Mallee Block vines had grown well in the 2015 season, with well lignified canes providing suitable spurs for the 2016 season, that where crop was present the bunches were well-set and coloured, that the remainder of the crop was accepted by the winery with no concerns about herbicide residues. The absence of classic symptoms of the three alleged herbicides, metsulfuron, 2,4-D and glyphosate supported his view that the vines had mostly grown out of the initial damage reported by others and that no areas of vines required replacing.

135 Mr Whiting considered that none of the damage that he observed was caused by residual effects from exposure to the three chemicals. He ascribed responsibility for the damage generally to nutrient imbalance or phytoplasma, physical damage when harvesting, trimming or spraying, use of paraquat, insufficient watering, rust mites and leaf blister mites, and unknown causes that were not exposure to the three chemicals. Specifically, he allocated cause to symptoms as follows:

(a) Necrotic spots on leaves and blackening on shoots - typical of paraquat drift with no carry-over effects between seasons;

(b) Extensive leaf drop - withholding of water and inadequate irrigation;

(c) Green, immature canes - a pruning level of 20 buds per vine, rather than 180 to 360 buds per vine;

(d) Cordon dieback - not unusual on grapevine cordons of the age ascribed to the vines, but given no observations made of the extent of initial shoot damage it remained a possibility that that alleged spray drift contributed to cordon dieback;

(e) Distil growth of short internodes, small leaves, cupping of leaves - nutrient imbalance or phytoplasma;

(f) Chlorosis on older leaves - nutrient imbalance, pre-emergence herbicide or part of the leaf senescence process;

(g) Reddening or yellowing of leaves - mechanical harvesting process;

(h) Broken and bent canes - mechanical harvesting process;

(i) Scuffing on upper leaf surface - typical of rust mite damage;

(j) Broken and bent canes - mechanical harvesting process;

(k) Puckering of leaf surface - typical of erinose mite;

(l) Black speckle on upper surface of leaf - water stressed vines under high solar radiation;

(m) Yellow blotching on leaves - typical of Muscat vines and of unknown cause; and

(n) Uneven berry colouring within a bunch - heavily cropped vines but cause unknown.

136 Mr Whiting concluded that at the time of his observations the only clear symptom of spray drift damage was paraquat damage to leaves and stems of mainly low hanging shoots. He considered that some of the symptoms described by Dr Bell and Ms MacGregor in their reports were caused, not by exposure to the three herbicides, but rather by the causes that he reported, asserting that these alternative causes were not considered by his colleagues. Given that he did not observe the damage initially, Mr Whiting's method was to reinterpret the observations of Dr Bell and Ms MacGregor that spray drift damage occurred and persisted.

137 Mr Whiting stated that grapevines generally 'grow out' of the effects of damage of metsulfuron, 2,4-D and glyphosate within one to three years. His general view appeared to be based on US research that was limited to investigating the effects of 2,4-D and glyphosate. He conceded that there was no research about the effect of metsulfuron in combination with the other two chemicals. His view was that mitigating treatment, while the chemicals metabolised within the vine, would be to keep the vines adequately supplied with water and nutrients and avoid any undue stress from biological pests and the environment.

138 Mr Whiting inspected the Mallee Block again on 10 March 2016. He reported that most of the damage symptoms previously observed remained present, but to a greater degree. He concluded that there were no symptoms of metsulfuron, 2,4-D or glyphosate damage, rather the poor condition of many of the vines was the result of inadequate management. An inadequate irrigation schedule had led to water stress, severely reducing the foliage in some areas, producing desiccated leaves in all blocks and causing berry shrivel and sunburn. The pest and disease control program was inadequate, due to inappropriate spray application rates, and possibly the nutrient program was also inadequate, potentially because insufficient nitrogen was being applied (Mr Whiting noted that he had insufficient evidence from the plaintiff in this respect). He concluded that the vineyard did not require replacing, and that the compromised yields were explained by poor management practices that have adversely affected growth and development. He suggested that if pruning levels were sustained at those of a typical vineyard with the same varieties and trellis systems and management was improved, the vines would go on to produce commercially viable crops.

139 Mr Stephen Lorimer, a local agronomist, inspected the Mallee Block in the 2016 season. He observed symptoms that he considered were consistent with chemical damage, including cupped and misshapen leaves and inconsistent shoots. He stated that some plants 'are distinctly behind where they should be at this stage', there was a 'large variation in bud burst' and the shoots 'are weaker, thinner than they should be at this stage'. He believed that the cause of the observed damage was 'lingering herbicide damage'.

140 Mr Rodney Duffy, the Grower Liaison Officer at APW, has regularly inspected the Mallee Block both before and since October 2013. He stated that the 'wood quality is very poor, there are still certainly signs of sick vines in varying states and still poor fruit quality and certainly there is problems with the fruit ripening'. He also described observing leaves and shoots that were distorted and spotting on the leaves. He attributed these symptoms to a physical drift, not an inversion event. He observed that the vines were 'severely handicapped', with the leaf structure and canopy size being only a fraction of what existed previously and with the fruit being 'totally unusable' by APW. He regarded the damage as probably the worst affected area that he had seen. He observed that the vineyard deteriorated further over time as grapes were exposed to sun due to reduced leaf cover. Parts of the bunches had dropped of the vines, bunched stems were decaying and fruit was ripening at uneven rates. He stated that it was 'virtually impossible to get a consistent product'. From the 2015 harvest, Mr Duffy considered that the quality of fruit produced was very poor, such that the small amount that was collected by APW was segregated and was not mixed with the larger quantities of good quality fruit.

141 The experts agreed that there was ongoing damage in the vineyard but disagreed about cause. Each expert had first observed the state of the vineyard in a different stage of the season when the condition of growing tips, the canopy, and the fruit varied. The experts were not necessarily comparing like observations. The experts acknowledged that different definitions of damage had been adopted. Dr Bell and Ms MacGregor focused on herbicide damage and Mr Whiting looked at any atypical or abnormal symptoms as damage.

142 The experts disagreed on whether spray drifts in 2013 were the cause of ongoing damage to the condition of the vineyard in the 2016 season. Mr Whiting acknowledged that he could not directly say whether herbicides caused damage that was evident to Dr Bell and Ms MacGregor before he first visited the vineyard. He attributed the poor condition of the vineyard to poor management and principally to water stress. Dr Bell considered that symptoms of each herbicide were readily observable in the vineyard in the 2014 season and in later seasons foliage symptoms of 2,4-D and glyphosate continued to be evident in shoots emerging from buds damaged in the 2014 season. Metsulfuron caused root damage that affected foliage and shoots and caused observable stress symptoms. Ms MacGregor stated that the location within the canopy of symptoms of 2,4-D and glyphosate indicated exposure in a previous season. Herbicide damage put the vines under extreme stress resulting in an inability to sustain the canopy and mature a crop.

143 Following analysis of the spray records and details of the chemicals applied, the experts agreed that there was a risk of spray drift damage but disagreed about the extent of that risk. There was no difference of opinion about the initial pattern of damage intensity being consistent with herbicide drift coming from the north-west, but the pattern of stress damage interacted with differences between varietal and rootstock tolerance of stress. Ms MacGregor concluded the differences in the extent of damage was consistent with varying exposure to herbicide and varying tolerances by varieties. Dr Bell explained differences in the condition of vines within varieties and rootstocks as caused by varying concentrations of herbicide being deposited through a sequence or series of differing spray drifts on 30 September 2013. As a result root damage varied through the vineyard. Mr Whiting attributed the differences to varietal and rootstock differences in drought tolerance and to changes in the topography of the vineyard.

144 Ms MacGregor considered both intermittent damage among undamaged crop and varying degrees of damage in different varieties to be consistent with herbicide drift. She concluded that the initial damage was most likely caused by glyphosate with 2,4-D damage emerging as the shoots grew, which was evident from her analysis of the Chardonnay and Mataro. The pattern in initial symptoms was consistent with herbicide deposited on foliage and most evident in the early developing Chardonnay. Other varieties with less developed foliage at that time were more exposed to herbicide deposited on the ground. Different patterns of symptoms emerged in vines with greater foliage absorption compared with vines exposed to a greater potential for soil absorbed metsulfuron.

145 Another area of significant disagreement between the experts was the effect of metsulfuron. Although Mr Whiting agreed in the joint conclaves that many of the initial symptoms reported in the 2014 season were consistent with damage by 2,4-D, glyphosate and possibly metsulfuron, his opinion was that by the 2016 season the extreme stress evident in the vines was due to significant water stress, caused by poor irrigation management. Both Dr Bell and Ms MacGregor rejected this conclusion. Although they accepted the observation of extreme stress due to significant water stress, they opined that the cause of that stress was root damage to the vines as a result of the exposure to glyphosate, metsulfuron or a combination of the two. Later in these reasons, I will explain why I accept Dr Bell's explanation that the symptoms of water stress visible during the 2016 season were caused by the spray drift event.

146 In relation to the evidence of the effect of the herbicide mixture on the vines, I accept Dr Bell's evidence and I will say a little more about metsulfuron. Mr Whiting suggested the reports of symptoms ascribed to metsulfuron by Dr Bell and Ms MacGregor were less clear than the symptoms of damage from 2,4-D and glyphosate. He approached his analysis by a review of the research, which mostly did not include research concerning the use of metsulfuron. Then, working from figures prepared by Ms MacGregor, Mr Whiting challenged the assumptions in her calculation of the predicted deposition rate on the vineyard from the spray drift and compared the likely consequences with research that modelled simulated spray drifts of glyphosate and 2,4-D. Mr Whiting postulated that applying this research to the conditions at Mallee Block at the relevant time permitted the conclusions that:

(a) the symptoms that he observed were not consequent on continuing effects of any herbicide over spray;

(b) synergistic responses were unlikely at spray drift concentrations; and

(c) recovery from exposure back to full production could be expected after three years in vines that had survived after 18 months.

147 Mr Whiting also relied on research into the effects of several ASL inhibitor chemicals, but not metsulfuron, applied by simulated spray drift and into the effects of metsulfuron applied to the soil, suggesting in each case the concentrations used in the research were significantly higher than what would be expected on Mallee Block. This research underpinned Mr Whiting's key conclusion that glyphosate damage symptoms at the concentrations likely to be in a spray drift would not carry over into following seasons. Symptoms of 2,4-D damage may carry over into following seasons when a spray drift contains high concentrations, but ASL inhibitors disappear relatively quickly and certainly by the following season. Mr Whiting argued that his observations of no damage symptoms in the Mallee Block in the second and third seasons after the spray drift event were supported by the published research. He also argued that the absence of soil testing for metsulfuron permitted overstatement of the toxicity of the concentration of metsulfuron in the spray drifts.

148 Dr Bell described from his experience with the use of that herbicide in controlling other plants, particularly blackberry, how metsulfuron leads to the rapid cessation of cell division and subsequent growth processes in plants. It is absorbed both through the roots and foliage and moves rapidly through plants, which store it in the roots or stems. Dr Bell considered that root uptake may have occurred. Dr Bell described metsulfuron damage to the Mallee Block vines to be similar to what he had observed in blackberries. In each case growth of plants was stunted with reduced root growth, vine dieback, yellowing of leaves, failure of vines to 'leaf out', and delayed or stunted leaf appearance. When challenged by his cross-examiner that he didn't know the dose that the vineyard had received, Dr Bell responded that he didn't need that information because it was plain on observations of the vineyard at the time that the vines were 'in extremely poor condition, very very weak, anaemic, extremely sick.' The damage was very extensive.

149 Dr Bell was challenged in cross-examination to justify his claim that the vineyard had received toxic concentrations of the herbicides, particularly metsulfuron. The essence of this challenge was that Dr Bell's observations of symptoms of damage could not reliably be treated as caused by exposure to the chemical mix because those observations were not consistent with such published research as there was. This proposition failed to address the extent of corroboration of Dr Bell's observations of damage and cause by Ms MacGregor, although she conceded a want of expertise in relation to metsulfuron.

150 As metsulfuron cannot be detected at normal laboratory sensitivities in vegetation samples after a short period and the soil was not tested, the defendant contended that its presence in the vineyard at harmful levels had not been established, unlike the situation with 2,4-D and glyphosate. When pressed, Dr Bell consistently returned to his personal observations. His assessment of the extent of metsulfuron damage was based on a comparison of personal observations of the vineyard with extensive prior experience involving a range of crops.

151 Dr Bell rejected several of Mr Whiting's conclusions. The asserted lack of synergism between metsulfuron and glyphosate based on US research was contradicted by extensive trials carried out by Monsanto on blackberries in which Dr Bell personally participated. Although Dr Bell said this research was in the public domain, it was not identified in the concurrent evidence session[6] but I accept Dr Bell's evidence that the marketing of the product 'Trounce Brush-Pack' is based on the significant synergistic effect of metsulfuron and glyphosate.

152 Dr Bell stated that the conclusion about cause between the observed symptoms and the accepted use of the three herbicides on Perrononies could not be founded on academic research papers and that he was extrapolating from his 40 years' experience involving all three herbicides that included spray trials of 2,4-D, hundreds of glyphosate spray trials and spray trials with metsulfuron on blackberries. He rejected the cross-examiner's suggestion that he was just guessing when giving evidence of the causal relationship. However, he accepted that he had not tested the particular mixture applied because he had not sprayed a mixture of the three herbicides in issue onto grapevines.

153 Dr Bell rejected the contention that he had 'reverse-engineered' his conclusions from the antecedent information provided to him that the vines had been affected by herbicides. Considering his reports and the evidence as a whole, I accept that rejection. When the same contention is considered in relation to Mr Whiting's evidence there might be some merit in the assertion but as it was not explored in evidence, I say no more about it.

154 Dr Bell's description of the likely performance of the spray drifts was also challenged, essentially against the proposition that sophisticated computer modelling could be, but was not, used to reconstruct an estimate of the likely dose of herbicides received by Mallee Block and some analysis by Mr Whiting of academic studies of spray drift in the US. I consider that computer modelling was no more than a theoretical possibility in this case and its absence was of no moment. I have elsewhere dealt with Mr Whiting's analysis of academic studies of spray drift. In the present context I would add that both Dr Bell and Ms MacGregor, unlike Mr Whiting, started with the circumstances of the day in question at Perrononies/Mallee Block and were alive to the inferences open from the combination of analysis of what was known or observed at each block.

155 The defendant challenged Dr Bell's findings of vascular damage. Dr Bell expected vascular, root and stem damage caused principally by metsulfuron exposure. Although he would not discount that glyphosate exposure may also have contributed, it is well established that metsulfuron alone damages root and vascular systems in plants. As I will later explain, this finding is critical to the assessment of the prognosis for the vineyard.

156 Dr Bell explained that metsulfuron prunes the roots of affected plants. The effect can be slow to become catastrophic as in good seasons a compromised root system may continue to support the plant. Although Dr Bell accepted that tests could be done to identify vascular damage in plants, he did not undertake testing of that type. Rather, he cut and inspected stems and cordons in the Mallee Block vineyard. He told his cross-examiner that vascular damage can be observed visually and that he observed precisely that when he cut the cordons and the trunks of vines. As Mr Whiting had neither conducted tests of the type suggested by the cross-examiner nor inspected the vascular system of affected vines, the challenge was insipid and reduced to debate about whether the 'arrow' placed in a photograph in Dr Bell's report pointed to the xylem or the phloem. Mr Whiting was not expecting metsulfuron damage because his assessment was that the level of metsulfuron that drifted onto the property would be insufficient to have caused vascular damage, another instance of Mr Whiting's unwillingness to countenance the documented observations of other experts. While Mr Whiting may not have had access to Dr Bell's particular photograph when he inspected Mallee Block, it is unlikely that it would have influenced his investigations.

157 Mr Whiting was unable to draw conclusions from a photograph of limited quality and suggested that a longitudinal section down the trunk of a vine, rather than a transverse cut, would reveal a broader section of phloem. Irrespective of the level of specificity that might be expected from an indicative arrow on a photograph, I was not persuaded that Mr Whiting was confused between the xylem and the phloem. I accept Dr Bell's evidence that he knew what he was looking for and that numerous cuts and inspections revealed vascular damage in vines. I am satisfied that vines suffered vascular damage, and probably root damage from exposure to metsulfuron.

158 Mr Whiting's evidence lacked a satisfactory base in several respects. First, his initial inspection for approximately three hours was not thorough and did not compare with the significantly more thorough inspections of the vineyard undertaken and documented severally by Dr Bell and Ms MacGregor. Second, Mr Whiting accepted that he did not inspect at an ideal time, first attending too late in the 2015 season after mechanical harvesting when the vines were entering senescence. When Mr Whiting attended a second time he again inspected late in the season. His explanation for doing so lacked conviction and could not be tested. For these reasons, Mr Whiting's reports tended to reason from what he observed on his limited inspections at an inopportune time.

159 Significantly, Mr Whiting did not accept the documented studies produced by Dr Bell and Ms MacGregor of their observations of conditions in the vineyard in his reports, including those observations made on occasions much earlier than his first inspection. He did not explain why such careful and well documented observations should be dismissed or simply reinterpreted in order to minimise the exposure of the defendant to the plaintiff's claimed loss. He did not grapple with the conclusion that the symptoms observed by each of Dr Bell and Ms MacGregor before his first inspection were patently consequent on herbicide exposure and Riverman's consistency of management practices was evident from inspection of Home Block and Lisa's Block, which he did not undertake. During the expert's conclave, Mr Whiting did accept that there was no other cause for many of the initial symptoms reported by Dr Bell and Ms MacGregor as consistent with herbicide damage.

160 Dr Bell reported inconsistencies in Mr Whiting's reasoning, failure to take into consideration the results of the testing of the samples, and that some of the damage observed by Mr Whiting, such as any virus or nutrient damage, was secondary damage in comparison to the extensive herbicide damage to the vines, which had weakened the vines, thereby making them more susceptible to secondary damage. Dr Bell also disagreed with Mr Whiting's contention that grapevines grow out of the effects of chemical damage within one to three years as it is not known at what rates the chemicals were applied or what was the action of the three chemicals operating in combination. I am satisfied that these criticisms of Mr Whiting's evidence were well founded.

161 The foundations for reliance on academic and scientific reporting were limited because there was not in the literature any analysis and report on the implications for grapevines, or any other like plant, of exposure to a mixture of these three chemicals. The implications of the spray drift of a mixture of 2,4-D and glyphosate onto grapevines was the subject of one study and Mr Whiting placed considerable reliance on that study. Ms MacGregor was more cautious, accepting that her conclusions were limited by a lack of personal experience with, and academic reporting about, exposure to metsulfuron. On the other hand, Dr Bell had practical experience with exposure to metsulfuron. The presence of metsulfuron in the herbicide mixture was a factor requiring particular evaluation.

162 There are two important reasons why the defendant's use of metsulfuron has particular significance. First, the herbicide produces symptoms similar to the symptoms of deprivation of nutrition and/or water and I will shortly return to this issue. Secondly, I have already found that metsulfuron was applied at 143% of the maximum recommended or label rate and I find that metsulfuron was not just present in the spray drifts that affected the vines on Mallee Block but was present in a relatively high concentration, albeit significantly and substantially lower concentrations than was sprayed on the vetch. The consequence was that it was probable, and I so find, that the vineyard was exposed to both foliar and root uptake of what was, for a grapevine, a dangerous or toxic dose of metsulfuron.

163 Because Mr Whiting did not, prior to the expert's conclave, accept the conclusions reached by Dr Bell and Ms MacGregor that the vineyard had been affected by a spray drift comprised of the three herbicides, his investigations and reports focussed on finding alternative explanations for the readily apparent damage, according to his broad definition of that concept. He gave insufficient consideration in his investigations to the question of whether interaction of the herbicide damage to the vines impeded nutritional and water uptake. Mr Whiting's analysis was critical of Mr Caccaviello's record keeping and his farm management practices as justification for his conclusions that there was no continuing herbicidal damage and if properly nurtured and watered, the vines would return to full productivity.

164 Criticism of Riverman's record keeping was a furphy. More significantly, Mr Whiting's failure to consider the implications of the observations of herbicide damage made by the other experts in the 2014 and 2015 seasons, which I have accepted, renders improbable his theory that the damage was attributable to farming practice. It was in this sense that a hint of reverse engineering seemed present.

165 The better explanation was put against Mr Whiting by Ms MacGregor when she stated that if the vascular system of a vine is damaged in any way, then it interrupts the flow of all water and nutrients to the plant as a whole, producing symptoms that are secondary to vascular system damage, whatever be the cause, and in this case herbicide damage explained the symptoms that Mr Whiting attributed to other causes.

The vines were very anaemic and very, very yellow. So the vines weren't fully functioning and fully photosynthesising and therefore weren't drawing nutrition, the elements up out of the soil. So not only could you have a damaged vascular system, a damaged root system, you've also got vines that aren't functioning properly and therefore they're not going to draw a full nutritional program up out of the soil, so you may well then get some secondary symptoms following herbicide damage.

167 Ms MacGregor added that the stress on the vines was particularly obvious when they were attempting to mature the fruit and bore the maximum burden of energy, nutrition and water requirements. At that point, symptoms that Mr Whiting had defined as damage to the vines became more noticeable. Ms MacGregor accepted Mr Whiting's conclusion that the vines appeared very stressed when he observed them. She stated:

COUNSEL: This may seem like a very obvious question to you, but is sunburnt fruit and shrivelled fruit a result of inadequate nutrition?

MS MacGREGOR: They are more - they are secondary to the vine being stressed, extremely stressed by whatever cause. There could be a whole myriad of causes there, but basically the flow within the vine is not operating properly, it's not able to feed the - get out to the extremities of the vine and so the vine starts to lose foliage and it can't ripen the fruit. It's hard to pin down desiccation of leaves and failure to mature fruit, it's hard to pin it down and say that is due to one thing because there's a whole lot of things that could contribute to that.

COUNSEL: What are some of those things?

MS MacGREGOR: Well, primarily Mr Whiting suggests water stress and I agree, the vines are very stressed. The question is maybe why, but I think that they also were - do you want me to describe some of my other observations?

I have set those observations out elsewhere in these reasons.

168 Mr Whiting's thesis fails to correspond with the observed random distribution of the damage that it ought to explain. This inconsistency was deflected into debate about the adequacy of records of irrigation watering, rainfall, application of fertilisers and special additives like boron and like matters. It is unsurprising that a farmer did not have a detailed and accurate record keeping system. What is surprising is that the patterns of stressed vines did not correlate with the irrigation system. Water stress in vines was not identified with an area where the flow of irrigation water was controlled by a particular valve. There was no shortage of water because Mallee Block had an extensive system of irrigation with water sourced directly from the nearby Murray River. The regular practices in respect of irrigation were interrupted to some extent when Mr Caccaviello adopted different practices on agronomist's advice, such as pulse watering, in an attempt to resuscitate Mallee Block. Likewise, variation in nutritional practice was recommended to the plaintiff in a genuine attempt to resuscitate the vineyard. Application of boron was an example.

169 I accept that Mr Caccaviello was a competent farmer. There was no suggestion that Riverman experienced any difficulty in relation to water or nutrition prior to the spray drift event or that the continuing farming practices on Main Block and Lisa's Block demonstrated inappropriate practices in relation to irrigation or vine nutrition. Poor farming practice, as alleged by Mr Whiting, would not and did not produce inconsistent damage across Mallee Block but, as Ms MacGregor documented, the spray drifts did precisely that.

170 For the above reasons, I find that the nature and extent of the damage caused to the vineyard on Mallee Block was as mapped, photographed, and described by Ms MacGregor and Dr Bell and was severe. The nature and extent of the damage resulted in:

(b) Severe compromise of the 2015 and 2016 harvests, about which I will say more later in these reasons;

(c) Death of vines randomly throughout the vineyard; and

(d) Ongoing compromise of the health and vitality of vines.

171 The damage destroyed the commercial viability of the vineyard in the 2014, 2015 and 2016 seasons. The trial of the proceeding was during the early part of the 2017 season, and it appeared unlikely that the vineyard would recover to the extent necessary for commercial viability in the 2017 season. For reasons to be set out in due course, I am satisfied that the vineyard will not recover commercial viability and will continue to decline as vines remain compromised and increasingly die off. That prospect will increase in adverse environmental conditions.

Issue 3 - Substantial and unreasonable interference with use and enjoyment of land

172 There was little dispute between the parties regarding the elements of the tort of nuisance. In brief, the plaintiff must establish interference by the defendant that was both substantial and unreasonable with the plaintiff's use or enjoyment of the land (Mallee Block).

173 I accept Riverman's submission that the defendant's interference with its use of Mallee Block was both substantial and unreasonable in the circumstances.

174 The defendant was aware that the combination of herbicides used could be harmful to the vines on the Mallee Block, and that spraying Perrononies posed a risk to the neighbouring property. Both Rodney and Max Hayden said as much and in that respect I accept their evidence.

175 Mere interference that causes damage will not constitute a nuisance.[7] A balance must be struck between the competing rights of neighbours. In Sedleigh-Denfield v O'Callaghan,[8] Wright LJ gave the classic explanation of this position:

An occupier may make in many ways a use of his land which causes damage to the neighbouring land-owners and yet be free from liability ... A balance has to be maintained between the right of the occupier to do what he likes with his own, and the right of his neighbour not to be interfered with. It is impossible to give any precise or universal formula, but it may broadly be said that a useful test is perhaps what is reasonable according to the ordinary usages of mankind living in society, or more correctly in a particular society.

...

But the gist of the present action is the unreasonable and unjustified interference by the Defendant in the user of his land with the Plaintiff's right to enjoy his property. Negligence, moreover, is not a necessary condition of a claim for nuisance. What is done may be done deliberately, and in good faith and in a genuine belief that it is justified.

176 As already observed, it was not in dispute that the interference with a plaintiff's use and enjoyment of their land must be both substantial and unreasonable.

177 The interests that may be protected by an action in nuisance are broad, and undoubtedly include 'an occupier's actual use of the land for agricultural purposes',[9] in this case the plaintiff's interest in the Mallee Block vineyard. Damages may also be awarded for pure economic loss arising from the interference with such interests. Whether or not such interference occurred is a question of fact.

178 In Walter v Selfe,[10] Knight-Bruce VC described the need for alleged interference to be substantial as follows, a position later affirmed in the Victorian case Haddon v Lynch:

The inconvenience which the Court will protect against must not be one of mere delicacy and fastidiousness, but must be an inconvenience materially interfering with the ordinary comfort physically of human existence, not merely according to elegant or dainty modes and habits of living, but according to plain, sober, and simple notions among English people.

179 This will be a question of fact, however, it should be noted that even transitory activities may constitute a substantial interference.[11]

180 Whether interference is unreasonable is an objective question, requiring consideration of a number of factors, including:

(a) the 'nature and extent of harm or interference'; [12]

(b) 'the hypersensitivity (if any) of the user or use of the plaintiff's land 'although abnormal sensitivity may not entitle additional protection';[13]

(c) 'the nature of established uses in the locality';[14]

(d) 'whether all reasonable precautions were taken to minimise any interference';[15] and

(e) 'the type of damage suffered'.[16]

181 In Southern Properties (WA) Pty Ltd v Executive Director of the Department of Conservation and Land Management,[17] the 'fault' of a defendant was considered:

This exercise involves weighing the respective rights of the parties in the use of their land to make a value judgment as to whether the interference is unreasonable. Although the "fault" of the defendant may be a relevant consideration in an assessment of whether the interference with the claimant's enjoyment of land is unreasonable, the duty not to expose one's neighbours to nuisance is not necessarily discharged by the exercise of reasonable care. Liability in nuisance is strict. Once a prima facie case has been established, it is for the defendant to prove its defence.

182 The defendant's broader contention that nuisance may be answered by taking reasonable care must be rejected. Although this may be the case in particular instances, in other cases a defendant may be taking perfectly reasonable care in their activity, but the activity may of itself still constitute a nuisance.[18] The position is explained by Balkin and Davies:[19]

When it is said that it is not a defence for one to claim "that he is merely making a reasonable use of his own property", all that is intended to be conveyed by this proposition is that the reasonableness (or otherwise) of the defendant's conduct is one factor to be taken into account in determining liability.

183 As I have already found, I am satisfied that on 30 September 2013, the herbicide spraying undertaken by Max Hayden on Perrononies resulted in multiple wind-driven spray drifts which settled on the Mallee Block vineyard.[20]

184 Accordingly I am satisfied to the requisite standard that as a matter of fact, the defendant, by causing the spray drift, interfered with Riverman's interests, namely the use of the Mallee Block as a vineyard.[21]

185 The defendant argued that, should I accept that the spray drift occurred, I should nonetheless conclude that the proportion of chemicals used in the spray mixture could not have caused the damage sustained. Again, my findings now exclude this contention.[22] Although it is impossible to determine the precise concentrations which in fact settled on the Mallee Block, the evidence has clearly established that:

(a) the concentration of metsulfuron in the spray mix was 143% of the maximum recommended label rate;[23]

(b) It was not disputed that metsulfuron was in the spray mix used on Perrononies on 30 September 2013;

(c) although metsulfuron was not in fact detected in the samples taken from the Mallee Block, this is unsurprising given the chemical's degradation rate;[24] and

(d) accordingly, it can be inferred, and I have found, that metsulfuron was absorbed, at dangerous levels by the Mallee Block vines, at the levels of both foliage and soil.

186 Additionally, although the combined effect of 2,4-D, glyphosate, and metsulfuron on grape vines or comparable vegetation have not been studied, I am satisfied that:

(a) both combinations of 2,4-D and glyphosate, and glyphosate and metsulfuron, have been shown to be capable of inflicting severe damage on vines and like vegetation;[25] and

(b) the evidence suggests that the toxicity of such a combination would be likely to increase on the addition of a third chemical.[26]

187 The immediate commercial effect of the spray event was the rejection, that is, total loss, of the 2014 harvest. But the physical and commercial effects of the interference were not isolated to a single season. Cumulative and ongoing problems for the vineyard have resulted as a consequence of vascular and root damage caused by the herbicides.[27] The resulting poor growth, and unpredictable vine and stem death, have prejudiced bud formation.[28]

188 The results of this have been the small, and generally poor quality harvests of the 2015 and 2016 seasons that were not commercially viable. Vines in the Mallee Block have also died at random, and are of overall poor health. Thus far, many of the predictions of Dr Bell and Ms MacGregor as to the vineyards prospects have come to fruition, and there has been no persuasive evidence that the vineyard is likely to substantially recover. As I have mentioned, to the extent Mr Whiting said otherwise, I reject his evidence.[29] The future prospects of the vineyard are poor, and the vineyard will not recover commercial viability unless the entire block is re-established.

189 I am satisfied that the 2013 spray drift event materially, in fact catastrophically, interfered with Riverman's use of the Mallee Block. Given my findings that the entire block needs to be reinstated it is difficult to imagine a greater interference with the land. The small amount of fruit produced by the vines and accepted by APW at reduced prices in the 2015 and 2016 seasons does not ameliorate this interference.

190 I consider that the interference with the plaintiff's interest occasioned by the defendant's conduct was patently and objectively unreasonable. This is for a number of reasons, in light of the factors outlined at [180] above, including:

(a) the nature and extent of the harm and damage caused has been significant and, in my view, irreversible;[30]

(b) the plaintiff's use of the land was sensitive, and susceptible to the particular harm occasioned by spray drift;

(c) nonetheless, the plaintiff's use of the land was not abnormally sensitive, and was consistent with the established uses of land in the area; and

(d) I do not consider the defendant took all reasonable precautions to minimise the risk of interference.

191 On the contrary, I consider the defendant's conduct in regard to spraying on 30 September 2013 was unreasonable for the following reasons.

192 First, the weather was entirely unsuitable for spraying. Although it is possible that the brief easing wind at approximately 9:30-10:00am may have fortified Max Hayden's decision to spray that day, the conditions both before and after those times as recorded by the BoM should have alerted him to the fact that a spray drift event was possible. The wind was, for the majority of that time, not only in excess of recommended spraying speeds (20km), but was also gusting.[31]

193 Secondly, the concentration of herbicides used was inappropriate, in excess of the recommended label rate, and contrary to the advice received from Mr Spinks, in the manner I have set out earlier in detail.[32]

194 Finally, the defendant was well aware of the potential risks of a spray event.[33] I have found that it is likely that despite the worsening of conditions on the morning in question, Max Hayden continued to spray in the hope of avoiding wasting expensive chemicals.[34]

195 I am satisfied that the interference caused by the defendant was both substantial and unreasonable and Riverman's claim in negligence arising from the 2013 spray event is made out.

196 Courts have considered claims in negligence for pure economic loss caused by spray drift damage in a number of cases including Bootle v Barclay,[35] Meandarra Aerial Spraying Pty Ltd v GEJ Geldard Pty Ltd,[36] and Bonic v Fieldair (Deniliquin) Pty Ltd.[37] The usual principles of a negligence cause of action apply. It is not necessary to analyse these cases as the defendant conceded that there is an established duty of care owed between occupiers of adjoining properties to take reasonable care to avoid damage occurring as a result of spray drift from one property to another.

197 The defendant did not dispute that he owed Riverman a duty to take reasonable care when spraying Perrononies with herbicides. He accepted that he owed a duty to exercise the reasonable care and skill of a farmer in the same or similar circumstances. What was in dispute was the degree of diligence required of the defendant to satisfy the obligation to take reasonable care when spraying Perrononies.

198 Riverman submitted that the defendant was aware that spraying Perrononies with the particular herbicides used posed a significant risk to the vines on the Mallee Block. The plaintiff argued that the danger posed by the defendant's activity was such that the defendant was obliged to fulfil a high standard of care when spraying Perrononies on 30 September 2013.

199 In support of this submission, Riverman cited Burnie Port Authority v General Jones,[38] in which Mason CJ, Deane, Dawson, Toohey and Gaudron JJ stated:

Where a duty of care arises under the ordinary law of negligence, the standard of care exacted is that which is reasonable in the circumstances. It has been emphasized in many cases that the degree of care under that standard necessarily varies with the risk involved and that the risk involved includes both the magnitude of the risk of an accident happening and the seriousness of the potential damage if an accident should occur. Even where a dangerous substance or a dangerous activity of a kind which might attract the rule in Rylands v Fletcher is involved, the standard of care remains "that which is reasonable in the circumstances, that which a reasonably prudent man would exercise in the circumstances". In the case of such substances or activities, however, a reasonably prudent person would exercise a higher degree of care. Indeed, depending upon the magnitude of the danger, the standard of "reasonable care" may involve "a degree of diligence so stringent as to amount practically to a guarantee of safety".

200 The plaintiff also cited Meandarra Aerial Spraying Pty Ltd v GEJ Geldard Pty Ltd,[39] in which Fraser JA, after referring to the above extract from Burnie, said:

Having regard to the potentially catastrophic and widespread consequences of careless aerial spraying of potent herbicides the appellants were obliged to fulfil a very high standard of care, but their duty remained a duty to take reasonable care.

201 Riverman further submitted that this higher standard was reflected in the provisions and purposes of the Agricultural and Veterinary Chemicals Act, namely s 40(1):

A person must not carry out agricultural spraying which injuriously affects -

(a) any plants or stock outside the target area; or

(b) any land outside the target area so that growing plants or keeping stock on that land can be reasonably expected to result in the contamination of the stock or of agricultural produce derived from the plants or stock.

202 The defendant disputed the imposition of a higher standard on two grounds. First, the principle from Burnie was inapplicable in the present case because harm to the plaintiff was not inherently likely due to the following factors:

(a) the act of spraying by tractor and boom spray, of itself, was not dangerous;

(b) it did not follow simply from proximity between Perrononies and the Mallee Block that harm to the plaintiff would be inherently likely; and

(c) it also did not necessarily follow that the harm to the plaintiff would be inherently likely because the herbicide may damage vines. The defendant submitted that '[t]he fact that a particular herbicide mix can be lethal to plants in general and vines in particular is no more and no less than a recognition of the characteristics that define its usefulness to destroy the target plant.'

203 The defendant submitted that the following facts and circumstances supported these propositions:

(a) Max Hayden used the same herbicide mix to spray Perrononies on 30 September 2013 and 4 October 2013;

(b) Max Hayden estimated that his tractor was spraying approximately 470 metres away from the Mallee Block at its closest point on 30 September 2013;

(c) On 4 October 2013, he sprayed much closer to the Mallee Block than on 30 September 2013; and

(d) The plaintiffs' experts agreed there would not have been any spray drift risk to the Mallee Block in the wind conditions on 4 October 2013.

I was not persuaded, for reasons already stated, to find these facts and circumstances to have occurred, or if they did, to have been relevant.

204 Secondly, the defendant argued that the cases in which such a higher standard has been found were distinguishable from the present case on three bases.

(a) In each of those cases, the issue of a non-delegable duty and the corresponding principles in Burnie Port Authority v General Jones squarely arose between a landowner and a third party engaged to conduct aerial spraying. The factual matrix therefore necessitated a consideration of a higher standard of care, namely a non-delegable duty. Here, there is no dispute that the defendant was responsible for the acts of Max Hayden.

(b) Those cases concerned aerial spraying rather than ground spraying, the former being more dangerous because there is a greater risk in aerial applications of 'off target' application and 'off target' drift. In GEJ & MA Geldard Pty Ltd v DN Mobbs & Ors,[40] the manner in which the spray operation was undertaken was important. A fixed wing aircraft applied the chemicals when the label required them to be applied by helicopter only. There was no corresponding restriction on using a tractor and boom when applying the chemical mix used on Perrononies.

(c) Furthermore, the defendant proposed that for policy reasons, a high standard should not be placed on farmers ground spraying their properties with a common herbicide mix to destroy a common crop. This was said to be because the particular herbicide mix was a prevalent and accepted method of controlling vetch crops in the area, and the herbicides used were permitted at that time of year.

205 I conclude that the defendant owed the plaintiff a duty of care when spraying Perrononies to exercise reasonable care when doing so to avoid a foreseeable risk of injury to his neighbour, Riverman.

206 What is required in all circumstances is a 'reasonable' standard of care. However, as explained in Burnie, in particular circumstances a reasonable standard of care may involve a higher degree of diligence, such that a failure by a defendant to accord this higher degree of diligence may amount to a breach of duty.

207 I am satisfied that the defendant's acknowledgement that there is risk associated with spraying vegetation with 2,4-D, metsulfuron, and glyphosate was properly made.[41] There is inherently significant risk in conducting spray activities with chemicals. The magnitude of the risk of an accident happening and the seriousness of the potential damage if an accident should occur has been recognised as significant in the cases and by Parliament.

208 The principles in Burnie are not dependent on the presence of a non-delegable duty and a third party as the defendant contended. This precise issue arose in Meandarra,[42] where, after quoting the above passage in Burnie in the context of critiquing the language adopted by the trial judge, Fraser JA stated:

The second sentence of [131] of the reasons refers to a "non-delegable duty". No question arose whether any duty owed by either appellant could be delegated to an independent contractor because Hill himself conducted the spraying operation, it was admitted that Meandarra was vicariously liable for the alleged negligence of Hill and Baker, and it was admitted that both appellants sprayed the herbicides. The references to the duty being "non-delegable" were inapt. In the same paragraph, the trial judge described the duty as a "duty to ensure" that the respondent's cotton crops were not damaged by the spraying, an expression adopted from the quoted passage of Davies AJ's reasons in Bonic v Fieldair (Deniliquin) Pty Ltd & Ors. That too was inapt. The respondent did not contest the appellants' contention that the relevant duty was instead a duty to take reasonable care to avoid a foreseeable risk of injury to the respondent.

209 Moreover, assuming (without accepting this is necessarily the case) that aerial spraying may be a more inherently risky activity than ground spraying, it does not follow that the absence of the particular features of aerial spraying that warrant that assumption renders the present circumstance insufficiently dangerous to attract the Burnie reasoning. That one activity may be more dangerous than another does not mean the other is not inherently dangerous.

210 However, it is not necessary for me to find that spraying at Perrononies on 30 September 2013 required a higher standard of care to be met because it involved a dangerous substance or a dangerous activity for two reasons. I have found that the plaintiff has established its claim in nuisance; and as considered below, I am satisfied that, assessed against a standard that does not consider the implications of the use of dangerous substances or of engaging in dangerous activities when assessing the magnitude of the risk of an accident happening and the seriousness of the potential damage if an accident should occur, the defendant did not take reasonable care in its conduct of spraying on 30 September 2013.

211 Riverman submitted the defendant failed to exercise the standard of care required when spraying Perrononies on 30 September 2013 by:

(a) applying metsulfuron in excess of the label rate;

(b) failing to follow Mr Spinks' advice, including by applying the herbicides in excess of the recommended concentrations;

(c) spraying herbicides in weather conditions that were wholly unsuitable for spraying;

(d) failing to apply the herbicides with the boom at an appropriate height; and

(e) failing to apply the herbicides with an appropriate nozzle size.

The defendant denied that he had failed to discharge an appropriate standard of care.

212 The test to be applied is what would a reasonable person (the reasonable farmer) in the circumstances of the defendant on 30 September 2013 have done by way of response to the foreseeable, and not insignificant, risk of damage to crops on neighbouring farms from a potential spray drift from Perrononies.[43] This test requires a contextual and balanced assessment of the reasonable response to a foreseeable risk.[44] As Mason J held in Wyong Shire Council v Shirt,[45] a court needs to consider:

The magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities the defendant may have.

213 Sections 48 and 49 of the Wrongs Act 1958 (Vic) must also be borne in mind. Those sections state:

48 General principles

(1) A person is not negligent in failing to take precautions against a risk of harm unless -

(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known); and

(b) the risk was not insignificant; and

(c) in the circumstances, a reasonable person in the person's position would have taken those precautions

(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things) -

(a) the probability that the harm would occur if care were not taken;

(b) the likely seriousness of the harm;

(c) the burden of taking precautions to avoid the risk of harm; and

(d) the social utility of the activity that creates the risk of harm.

(3) For the purposes of subsection (1)(b) -

(a) insignificant risks include, but are not limited to, risks that are far-fetched or fanciful; and

(b) risks that are not insignificant are all risks other than insignificant risks and include, but are not limited to, significant risks.

49 Other principles

In a proceeding relating to liability for negligence -

(a) the burden of taking precautions to avoid a risk of harm includes the burden of taking precautions to avoid similar risks of harm for which the person may be responsible; and

(b) the fact that a risk of harm could have been avoided by doing something in a different way does not of itself give rise to or affect liability for the way in which the thing was done; and

(c) the subsequent taking of action that would (had the action been taken earlier) have avoided a risk of harm does not of itself give rise to or affect liability in respect of the risk and does not of itself constitute an admission of liability in connection with the risk.

214 The defendant did not dispute that there were significant risks should spraying be carelessly conducted and Riverman submitted the question was whether the reasonable farmer in the position of the defendant on 30 September 2013 would have done the following:

(b) not followed Mr Spinks' advice, including by applying the herbicides in the concentrations ultimately used;

(c) sprayed in the particular weather conditions present on 30 September 2013;

(d) applied the herbicide with the boom at the height used; and

(e) applied the herbicide with the nozzle size used.

215 In submissions, the plaintiff contended that the boom height of 1 metre was too high and that the spray pressure used was inappropriate. The plaintiff's pleadings made no allegations of this nature and the plaintiff challenged neither the defendant nor Max Hayden in evidence on these points. Dr Bell raised the issue in passing in one of his reports which went into evidence and presumably was the basis for the plaintiff's submission. I decline to make any findings in respect of those matters.

216 That said, I am satisfied, for the reasons already expressed in my analysis of the facts pertaining to issue 1, that the defendant fell short of the standard to be expected of the prudent farmer when Max Hayden undertook the task of spraying Perrononies in the weather conditions prevailing on 30 September 2013. That paddock could have readily been sprayed with significant amelioration of risk on 4 October 2013 when the weather conditions were ideal for spraying. The defendant acknowledged that spraying out a crop of vetch involved chemicals that could cause substantial damage to grape vines. He maintained, as did his brother Max, that they were at all times conscious that the consequences of a spray drift could be very serious. I am satisfied that both the defendant and his brother understood the susceptibility of grape vines to sustain serious damage from the chemicals being used.

217 Further, the defendant maintained that he acted responsibly by seeking the advice of Gavin Spinks, an agronomist, as to the appropriate chemical mixture. I have found that Rodney Hayden did not follow Mr Spinks' advice, particularly by applying the herbicides in the concentrations that differed from his recommendation. Metsulfuron was applied at a rate that exceeded the label rate that for reasons explained elsewhere was causative of the severity of the damage sustained by Riverman.

218 The principles regarding causation were not in dispute. As both parties noted, the question is governed by ss 51 and 52 of the Wrongs Act 1958 (Vic) ('Wrongs Act'):

51 General principles

(1) A determination that negligence caused particular harm comprises the following elements -

(a) that the negligence was a necessary condition of the occurrence of the harm (factual causation); and

(b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused (scope of liability).

(2) In determining in an appropriate case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be taken to establish factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.

(3) If it is relevant to the determination of factual causation to determine what the person who suffered harm (the injured person) would have done if the negligent person had not been negligent, the matter is to be determined subjectively in the light of all relevant circumstances.

(4) For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.

52 Burden of proof

In determining liability for negligence, the plaintiff always bears the burden of proving, on the balance of probabilities, any fact relevant to the issue of causation.

219 It was also not in dispute that the determination of factual causation required the application of the 'but for' test,[46] namely 'that the harm that in fact occurred would not have occurred absent the negligence.'[47] This question is entirely factual.

220 Riverman submitted, with reference to Meandarra[48] and Amaca Pty Ltd v Ellis,[49] that an absence of scientific proof of causation did not preclude a finding on the balance of probabilities that a spray event caused damage. Riverman also contended that there was an overwhelming body of evidence established that the 30 September spray drift event was causally connected to the damage suffered by it.

221 The defendant submitted that causation was not proved if a plaintiff's evidence gives rise to no more than 'conflicting inferences of equal degrees of probability so that the choice between them is a mere matter of conjecture.'[50] The defendant contended that it was at least as likely, if not more probable, that the damage caused to the plaintiff's vineyard was as a result of mismanagement of the Mallee Block by Riverman, rather than the alleged spray drift event.

222 The divergence in expert opinion as to the cause of the damage alleged by the plaintiff does not absolve the court's responsibility to decide the claim. In Meandarra,[51] Fraser JA observed:

It was not contentious that a certain minimum quantity of herbicide was necessary before it would damage cotton crops in the way that the respondent's cotton crops were damaged. It is also clear that the evidence did not justify a finding about the precise quantity of herbicides deposited upon the respondent's cotton crop. As was submitted for the respondent, however, it is not the law that the absence of scientific proof of a causal relationship precludes a finding that it was more probable than not that the appellants' spraying operation caused the damage.

223 In Amaca Pty Ltd v Ellis,[52] the High Court wrote:

The courts' response to uncertainty arising from the absence of knowledge must be different from that of the medical practitioner or scientist. The courts cannot respond to a claim that is made by saying that, because science and medicine are not now able to say what caused Mr Cotton's cancer, the claim is neither allowed nor rejected. The courts must decide the claim and either dismiss it or hold the defendant responsible in damages. As Dixon J rightly said, albeit in a context very different from this:

There are few, if any, questions of fact that courts cannot undertake to inquire into. In fact it may be said that under the maxim res iudicata pro veritate accipitur [a thing adjudicated is received as the truth] courts have an advantage over other seekers after truth. For by their judgment they can reduce to legal certainty questions to which no other conclusive answer can be given.

The plaintiff recognised that the courts were asked in this case to reduce to legal certainty a question of causation to which no other conclusive answer can be given.

...

The answer to the question can be expressed in several different ways. All depend upon the basic and unpalatable fact that no scientific or medical examination can now say, with certainty, what caused Mr Cotton's cancer or lung cancer in any other particular case. As explained at the outset of these reasons, despite this uncertainty, the courts must, and do, "reduce to legal certainty [a question] to which no other conclusive answer can be given". The courts do that by asking whether it is more probable than not that X was a cause of Y. Saying only that exposure to asbestos may have been a cause of Mr Cotton's cancer is not a sufficient basis for attributing legal responsibility.

224 The basis for the defendant's submission was that two or more possible causes were supported by the evidence and that the cause that he promoted placed fault at the plaintiff's door. I have rejected the defendant's contention that Riverman's management of the Mallee Block caused or exacerbated the damage to the vines.[53] The evidence identified only one possible cause. That one posited cause, the spray drift event, remains does not necessarily elevate it from a possible to a probable factual cause. In Amaca Pty Ltd v Booth,[54] the High Court distinguished the factual matrix of Amaca v Ellis. French CJ discussed this issue, stating:[55]

Causation in tort is not established merely because the allegedly tortious act or omission increased a risk of injury. The risk of an occurrence and the cause of the occurrence are quite different things. That proposition is obvious enough and not determinative of these appeals. The existence of an association or a positive statistical correlation between the occurrence of one event and the subsequent occurrence of another may be expressed as a possibility, which may be no greater than a "real chance" that, if the first event occurs, the second event will also occur. The mere existence of such an association or correlation does not justify a statement, relevant to factual causation in law, that the first event "creates" or "gives rise to" or "increases" the probability that the second event will occur. Such a statement contains an assumption that if the second event occurs it will have some causal connection to the first. However, if the association between two events is shown to have a causal explanation, then the conclusion may be open, if the second event should occur, that the first event has been at least a contributing cause of that occurrence. An after-the-event inference of causal connection may be reached on the civil standard of proof, namely, balance of probabilities, notwithstanding that the statistical correlation between the first event and the second event indicated, prospectively, no more than a "mere possibility" or "real chance" that the second event would occur given the first event. There may of course be cases in which the strength of the association, as measured by relative risk ratios, itself supports an inference of a causal connection.

...

In summary, a finding that a defendant's conduct has increased the risk of injury to the plaintiff must rest upon more than a mere statistical correlation between that kind of conduct and that kind of injury. It requires the existence of a causal connection between the conduct and the injury, albeit other causative factors may be in play... Where the existence of a causal connection is accepted it can support an inference, in the particular case, when injury has eventuated, that the defendant's conduct was a cause of the injury...In Betts v Whittingslowe, Dixon J employed apposite logic when he said:

"[T]he breach of duty coupled with an accident of the kind that might thereby be caused is enough to justify an inference, in the absence of any sufficient reason to the contrary, that in fact the accident did occur owing to the act or omission amounting to the breach of statutory duty."

That logic encompasses the case of an ex ante probability, of accident given breach, supported by a causal explanation linking breach and accident.

225 I find that the 30 September 2013 spray drift event was the cause of the damage to the Mallee Block. That conclusion is founded on my findings in respect of issue 1 leading to the conclusion expressed at paragraph [109]. I have found that the defendant was aware of the risk created by spraying in inappropriate conditions, and in using excessive concentrations of herbicides. The defendant was also aware that the danger posed could be significant. I also found that in the circumstances, a reasonable person in the position of the defendant would not have sprayed in the conditions present on 30 September 2013, and would not have used the concentrations of herbicides in fact employed.

226 I conclude that the harm that in fact occurred, the damage to the Mallee Block elsewhere described, would not have occurred absent the defendant's negligence.

227 Contributory negligence refers to the plaintiff's failure to take reasonable care for its own safety that contributes, at least in part, to its loss. The defendant must prove that the plaintiff's loss resulted from a particular risk to which the plaintiff was exposed by a want of care and the plaintiff's breach of the standard of care reasonably expected of it to avoid suffering such an injury, contributed to that loss.

228 The defendant contended that if the court should find the defendant negligent, the plaintiff was also negligent in its management of the vineyard, primarily by:

229 Riverman contended that the evidence could not support the allegation of contributory negligence. To the contrary, Riverman contended it has acted reasonably in mitigation of its loss by expending significant time, effort and money in seeking to nurture the vines on the Mallee Block back to health.

230 As I have rejected the defendant's submission of mismanagement of the Mallee Block by Riverman and accepted that to the extent that any criticism can be directed at the plaintiff's response to the need to remediate the consequences of the defendant's wrongful conduct, Riverman acted carefully on the basis of professional advice, the defendant's claim in contributory negligence must be rejected. I am persuaded that a farmer of ordinary prudence, when faced with the crisis that was presented to Riverman, would act in a like fashion by taking and implementing the advice of experts.

231 Turning now to the issue of damages, the plaintiff seeks damages that, in summary, fall into the following four classes:

232 Subject to an important dispute in respect of the extent of the damage to Mallee Block, the quantum experts agreed that Riverman's loss could be assessed under those heads of damage, but before dealing with assessment there were differences between the parties on issues of principle that I must resolve. In addition there were factual disputes on matters about which the experts made (different) assumptions that influenced the outcome of their deliberations.

233 Speaking generally, the appropriate measure of damages will be 'that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation'.[56]

234 A critical issue that emerged during trial was whether remediation of the vineyard was the proper measure of the plaintiff's damage.

235 In cases of torts affecting land, the two primary competing bases on which such compensation will be awarded are:

(a) the diminution of the value of the land; or

236 The choice is not always a simple binary choice, as '[s]uch rules and principles as the common law has developed to assess the damages of an injured party are not inflexible, and must always be applied with the overriding goal of compensation.'[57]

237 The compensatory principle requires that the actual nature of the plaintiff's loss be identified when considering the appropriate basis for damages. The first consideration is a plaintiff's true interest in the land.[58] An interest in affected land may have a 'special value' to a plaintiff, such as a home.[59] Some examples from the cases illustrate the significance of the particular circumstances of a case to the identification of a plaintiff's actual loss.

238 In Harbutt's Plasticine Ltd v Wayne Tank and Pump Co Ltd[60] a factory's building, plant and machinery were destroyed by fire. Cross LJ concluded that:[61]

In my judgment the value of the building and of the plant and machinery before the fire throws no light on the true measure of damage in a case like this where it was obviously right for the plaintiffs to rebuild and re-equip their factory and start business again as soon as possible.

239 Lonie v Perugini,[62] was a case with an agricultural context that bears similarities to the present case. The appellant had lit a fire on his property that escaped to the respondent's land, damaging a significant number of fruit trees forming part of a commercial orchard. On appeal, the defendant challenged the plaintiff's award of damages. King J concluded:[63]

The respondents' claim as pleaded was for the cost of clearing the land and planting new trees and the loss of profit from the sales of fruit until the new trees would become economically fruit bearing. No evidence was presented at the trial as to the cost of clearing or planting new trees and nothing was allowed under these heads. The assessment was based upon the net loss of income from sale of fruit. [Counsel] for the appellant, contended that the damages had been assessed on a wrong principle. He contended that the proper measure of damages was the difference between the value of the land prior to the fire and the value of the land after the fire. In many cases this is the appropriate method of assessing the damages (see, for example, Genders v South Australian Railways Commissioner). But it is not the only method. In some cases the cost of reinstating the property might be more appropriate (see, for example, Hollebone v Midhurst & Fernhurst Builders). In addition to compensation for the actual damage to the land, consequential losses may be recovered. I think that it is quite clear that where the land produces income, the loss of income must be reflected in the damages in one way or another: Rust v Victoria Graving Dock. Where the difference in the value of land before and after is the basis of assessment, loss of income may be reflected in whole or in part in the diminution of value. It seems to me that in a case such as this, the respondents' loss resulting from the damage to their land by fire is properly assessed upon the basis of loss of net income. On this basis of assessment, the respondents would also be entitled to the cost of reinstating the land including the cost of procuring and planting new trees, but they were unable to recover under those heads due to lack of proof.

240 In Hobbs v Oildrive Pty Ltd,[64] the plaintiff's claim for reinstatement was rejected. A fire that spread from the defendant's property to the plaintiff's land had destroyed a number of mango trees and damaged equipment. The plaintiff claimed loss of income from the orchard and for the removal and replacement of the damaged trees but made no claim for diminution in the value of the property resulting from the fire. Daubney J distinguished Lonie thus:[65]

An obvious distinction between Lonie v Perugini and the present case, of course, is that Lonie concerned damage which was done to a functioning, operational, and profitable cherry orchard. What the plaintiffs had purchased in the present case was an abandoned mango farm, which had not been tended, and in fact was neglected in large part for several years, with no equipment and little infrastructure. It was obviously not an extant horticultural operation at the time they purchased the property. At best for them, it held potential for the future.

241 In this proceeding, as I will show, I am concerned with an established, profitable agricultural operation, and the principle identified in Lonie is on point and not defeated by a want of proof.

242 The plaintiff, who is not the owner of Mallee Block, makes no claim based on a diminution in the value of the land. Mallee Block is owned by Mr and Mrs Caccaviello who make exclusive possession of it available to the plaintiff to conduct its farming enterprise business as trustee for the A&C Caccaviello Family Trust. Mr and Mrs Caccaviello are both the directors and key employees of the plaintiff and are principal beneficiaries of the trust. However, Riverman did not pay rent to Mr and Mrs Caccaviello for the use and occupation of their land. The financial statements of Riverman included balance sheet entries that were not explained in evidence but which appear to substantiate that Riverman bore the cost of the improvements to Mallee Block and owns the grape vines planted on the block. That conclusion was not put in contention.

243 Neither party has adduced any evidence of the value of the land, either before or after the spray drift event. It may be inferred that the market value of Mallee Block is less that it would be if the vines were fully healthy, but the extent of any diminution in value is not known. In any event, the owners of the block make no claim. The plaintiff's claim is that the value of the block to it as an income producing asset has been diminished and it pressed strongly for remediation of the block to restore its income earning potential.

244 The plaintiff submitted that the evidence established that, on the balance of probabilities, if the vineyard on the Mallee Block is not replaced, it will not return to the condition it was in prior to the 2013 Spray Drift Event and will deteriorate further from its current condition. Only removal of the existing vineyard, including the trellis and irrigation infrastructure, and re-establishing the infrastructure and vineyard anew could restore the Mallee Block to its pre-spray event condition.

245 An estimate of the costs of this work was prepared by Mr Caccaviello and, while conceding that Mr Caccaviello's estimate was not immune to criticism, the plaintiff contended this was the appropriate measure of damage because:

(a) Riverman is entitled to be returned to the position it was in prior to the spray drift event;[66] and

(b) Mr Caccaviello is the only witness who prepared such an estimate, and he was uniquely placed and qualified to do so.

The estimate was hotly contested, but for the moment I will stay with the questions of principle.

246 The defendant submitted that the Mallee Block was unprofitable and it was unreasonable to seek reinstatement of the vineyard because the cost would be out of all proportion to the benefit to be obtained. He submitted that the block could not, and had not, produced an economic return and that no rational farmer would invest in its reinstatement. He further submitted that replanting the vines on the Mallee Block would result in a disproportionately greater loss to the plaintiff than simply doing nothing, and that the plaintiff's damages should not be disproportionate to the true loss suffered. This submission mischaracterised the relevant considerations in certain respects.

247 The defendant emphasised that a plaintiff does not have 'an untrammelled election between alternative bases of assessment.'[67] Rather, as Santow JA stated, in dissent, in Port Stephens Shire Council v Tellamist Pty Ltd:[68]

As shown in Minter v Eacott, a plaintiff will be denied the cost of re-instatement if it is disproportionate either to the injury suffered or to the diminution in value. It seems that in such cases, the Court will refuse to overcompensate the plaintiff, and will reject re-instatement costs if it is not in accordance with the compensatory principle. This does not mean that re-instatement will be refused merely because it exceeds diminution in value. The plaintiff may recover reinstatement cost in excess of diminution in value where there is evidence of special value, such as the need of the plaintiff and his family to occupy their home: Hollebone v Midhurst and Fernhurst Builders Ltd. In such cases, there is clearly no over-compensation. But it is true that if re-instatement is disproportionate, it will not be awarded even despite the plaintiff's desire for it.

248 What I took the defendant to be submitting was that it was unreasonable for the plaintiff to claim that its loss can only be adequately compensated if the defendant is required to pay damages by way of reinstatement costs that significantly and unreasonably exceed the quantum of damages assessed by reference to diminution in value. The plaintiff submitted that its loss was complete and the defendant's contention that its basis for assessing the loss was not reasonable because it may result in a higher damages award than an alternative basis for assessment was no answer, and in that respect the defendant's submission twisted the relevant concepts.

249 The plaintiff contended that the principle that the defendant found in the dissenting judgment in Tellamist was not engaged in the trial for several reasons. First, there being no evidence of diminution in value, that alternative basis was simply not open. Neither party led evidence of the value of Mallee Block, but that would not in any event have been the relevant valuation question.

250 The plaintiff is the occupier, not the owner, of the Mallee Block. While this gives the plaintiff the necessary standing to sue in nuisance,[69] the plaintiff pointed to this fact as the reason it did not claim for diminution of value of the property. This submission was also misconceived. The land was not the relevant asset, rather it is Riverman's right to exclusive possession of Mallee Block that was the asset, the value of which may have been diminished by the defendant's conduct in the same sense as a leasehold interest in land is an asset for a lessee. That asset was capable of valuation, an exercise usually undertaken by accountants and one which was, according to the evidence, within the expertise of each of Mr Natoli and Mr Ivey.

251 Mr Natoli and Mr Ivey can be excused from not giving evidence of the value of the plaintiff's asset affected by the wrongful conduct alleged. The pleadings do not identify the issue as relevant. By the statement of claim, the plaintiff claimed that the vineyard plantings would require total replacement, referring to Mr Natoli's report of 15 December 2014 for particulars of the quantum sought and the basis for its calculation. The defence did not raise an issue that the method of assessment of the quantum of loss was inappropriate when compared with diminution in value. Then, when the parties agreed on the common questions to be put to the loss and damage experts, no question was put to the experts seeking a valuation of the asset of the plaintiff to be reinstated. The issue was not explored in evidence, because it was not pleaded and was irrelevant.

252 The defendant's contention that the usual measure of damages is the value of the diminution of the value of the land, raised for the first time in final submissions, is rejected. Ultimately, the only issue raised in the proceeding, either by the pleadings, or the evidence at trial was whether the plaintiff's claim for the costs of remediation of the vineyard was reasonable.

253 Returning to the issue of principle, compensation where a nuisance has affected land can be achieved in a number of ways, however the circumstances of the case and the overriding requirements of what is reasonable in those particular circumstances will determine what the proper assessment will be.

254 This was made clear in Evans v Balog[70] by Samuels JA, who said:

In a case such as the present, involving tortious damage to a building, it cannot be said that the normal measure of damages is the amount of diminution in the value of the land and improvements. I agree with the analysis of the cases contained in the 13th edition of McGregor on Damages, pp. G 711-713, pars. 1059-1062, and see Minter v. Eacott. The view that an equally admissible measure is the cost of reinstatement and restoration is supported by Hollebone v. Midhurst and Fernhurst Builders Ltd., and Harbutt's "Plasticine" Ltd v. Wayne Tank and Pump Co. Ltd. Mr. A Toomey endeavoured to distinguish Harbutt's case, on the ground that there the building destroyed was a factory vital to the maintenance of the plaintiff's business. But it is in truth the controlling importance attributed to that fact in that case which establishes the validity of the reinstatement principle where the necessity of the case requires its application ... As the learned author of McGregor on Damages says at p 713, the case sustains what I take to be the true criterion of the selection between diminution of value and the cost of reinstatement. What he says is this: "The test which appears to be the appropriate one is the reasonableness of the plaintiffs' desire to reinstate the property; this will be judged in part by the advantages to him of reinstatement in relation to the extra cost to the defendant in having to pay damages for reinstatement rather than damages calculated by the diminution in value of the land."

Hence, it is sometimes said that a plaintiff may have the cost of restoration provided that it is not disproportionate to the diminution in value: Cf. Public Trustee v. Hermann. This is merely an alternative way of stating the principle expressed in MacGregor on Damages.

255 In Bellgrove v Eldridge,[71] the High Court was concerned with an action for damages for breach of contract where the damage was inflicted on a building, stating:

Subject to a qualification to which we shall refer presently the rule is, we think, correctly stated in Hudson on Building Contracts, 7th ed (1946), p 343. "The measure of the damages recoverable by the building owner for the breach of a building contract is, it is submitted, the difference between the contract price of the work or building contracted for and the cost of making the work or building conform to the contract, with the addition, in most cases, of the amount of profits or earnings lost by the breach". Ample support for this proposition is to be found in Thornton v Place; Chapel v Hickes and H Dakin & Co Ltd v Lee. (See also Pearson-Burleigh Ltd v Pioneer Grain Co and cf Forrest v Scottish County Investment Co Ltd and Hardwick v Lincoln). But the work necessary to remedy defects in a building and so produce conformity with the plans and specifications may, and frequently will, require the removal or demolition of some part of the structure. And it is obvious that the necessary remedial work may call for the removal or demolition of a more or less substantial part of the building. Indeed - and such was held to be the position in the present case - there may well be cases where the only practicable method of producing conformity with plans and specifications is by demolishing the whole of the building and erecting another in its place. In none of these cases is anything more done than that work which is required to achieve conformity and the cost of the work, whether it be necessary to replace only a small part, or a substantial part, or, indeed, the whole of the building is, subject to the qualification which we have already mentioned and to which we shall refer, together with any appropriate consequential damages, the extent of the building owner's loss.

The qualification, however, to which this rule is subject is that, not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt.

The approach taken in Bellgrove was later endorsed by the High Court in Tabcorp Holdings Ltd v Bowen Investments Pty Ltd.[72]

256 In Bellgrove, when considering what would be unreasonable, the Court said:[73]

No one would doubt that where pursuant to a building contract calling for the erection of a house with cement rendered external walls of second-hand bricks, the builder has constructed the walls of new bricks of first quality the owner would not be entitled to the cost of demolishing the walls and re-erecting them in second-hand bricks. In such circumstances the work of demolition and re-erection would be quite unreasonable or it would, to use a term current in the United States, constitute "economic waste". We prefer, however, to think that the building owner's right to undertake remedial works at the expense of a builder is not subject to any limit other than is to be found in the expressions "necessary" and "reasonable", for the expression "economic waste" appears to us to go too far and would deny to a building owner the right to demolish a structure which, though satisfactory as a structure of a particular type, is quite different in character from that called for by the contract.

257 Referring to this example, the High Court in Tabcorp concluded that this would 'indicate that the test of "unreasonableness" is only to be satisfied in fairly exceptional circumstances'.[74] In the present case the comparison is not with a contractual standard but with the vineyard that Riverman had before the defendant's tortious conduct. As I have elsewhere explained, I am satisfied that the vineyard is now quite different in character from what it was.

258 The defendant's contention that it is not reasonable for Riverman to choose a course that will result in a higher loss to it that another available course must be rejected. A difference in quantum may be relevant in certain circumstances, but it is not, of itself, determinative. In Evans v Balog,[75] the difference between remediation costs and diminution in value supported the opposite conclusion. Although the remediation costs were significant, because the house in question was worthless the land had not diminished in value at all as a result of the defendants conduct. In that case, Samuels JA observed:[76]

[T]he consequences that unless the plaintiffs get the costs of reinstatement they may get nothing, is enough to suggest that any rule which produces such a result in the present case cannot be soundly based.

259 Samuels JA cautioned against over-reliance on the difference between the costs of alternative measures as a basis for assessing 'reasonableness':[77]

The question is whether it was reasonable for the plaintiffs to desire to reinstate their property. In my opinion, there is only one answer. It undoubtedly was. They had, in effect, lost their family home. That is the nature of their damage, and not some diminution in the value of their land. Fair compensation requires that they be given back what they had before; and the only way in which that purpose can be achieved is to award them the sum reasonably necessary to restore their property to the condition in which it was before the defendants effectively destroyed it. This the learned judge did; and, in my opinion, he was right. It is not to the point that the diminution in value basis might on one view produce no damages, while the reinstatement basis produces a substantial sum. The disproportion in question in cases of this kind are not always to be revealed by arithmetical comparison. The cost to a defendant of competing measures is a significant factor. But it is but one ingredient in the calculation of whether the plaintiffs' claim is reasonable or not. There are cases, and this, in my opinion, is one, where the nature of the plaintiffs' loss is such that there is only one mode of fairly repairing it. If that turns out to be more expensive than another, the wrongdoer has no one but himself to blame.

260 In Tabcorp,[78] the Court relevantly observed:

The example given by the Court [in Bellgrove] aligns closely with what Oliver J said in Radford v De Froberville, that is, that the diminution in value measure of damages will only apply where the innocent party is "merely using a technical breach to secure an uncovenanted profit". It is also important to note that the "reasonableness" exception was not found to exist in Bellgrove v Eldridge. Nothing in the reasoning in that case suggested that where the reasoning is applied to the present circumstances, the course which the Landlord proposed is unnecessary or unreasonable.

261 The Court was asserting the primacy of the compensatory principle, that is, compensation for the plaintiff's actual loss. So much had been made clear in Bellgrove, and what the High Court stated in the following passage in the context of contractual damages is apposite when considering the loss of what the plaintiff enjoyed prior to the defendant's tortious conduct:[79]

It is true that a difference in the values indicated may, in one sense, represent the respondent's financial loss. But it is not in any real sense so represented. In assessing damages in cases which are concerned with the sale of goods the measure, prima facie, to be applied where defective goods have been tendered and accepted, is the difference between the value of the goods at the time of delivery and the value they would have had if they had conformed to the contract. But in such cases the plaintiff sues for damages for a breach of warranty with respect to marketable commodities and this is in no real sense the position in cases such as the present. In the present case, the respondent was entitled to have a building erected upon her land in accordance with the contract and the plans and specifications which formed part of it, and her damage is the loss which she has sustained by the failure of the appellant to perform his obligation to her. This loss cannot be measured by comparing the value of the building which has been erected with the value it would have borne if erected in accordance with the contract; her loss can, prima facie, be measured only by ascertaining the amount required to rectify the defects complained of and so give to her the equivalent of a building of her land which is substantially in accordance with the contract.

262 What the authorities make clear as the correct understanding of unreasonableness in this context is that remediation costs might be unreasonable in appropriate circumstances if disproportionate to diminution in value, but will be unreasonable if disproportionate to the plaintiff's injury.[80] It is settled on the authorities that in order for the plaintiffs to obtain the costs that they seek of replanting the vineyard, that basis of quantification of damages must be both necessary to effect compensation for the loss and a reasonable course to adopt.

263 I now turn to this essentially factual question, noting the distinction between the issues of, firstly, the basis for quantification and, secondly, whether the sums actually claimed in quantification of loss calculated on that basis were both necessary and reasonable in the circumstances. I will come to the quantification issue in due course.

264 There was neither allegation nor evidence about an alternative basis for assessment, as the parties addressed only the loss of use of the income producing asset. The defendant argued that reinstatement was unreasonable as the expense involved 'would be out of all proportion to the benefit to be obtained'. Mr Ivey's opinion was that 'to replace the vineyards as it was, with the potential yields and costs incurred associated with that type of vineyard, then a rational producer would not do that, because it doesn't produce an economic return'.

265 The defendant further submitted that replanting the vines would result in a disproportionately greater loss than 'simply doing nothing'. Accordingly, the plaintiff would be fairly compensated by confining damages to the net present value of its lost income from the block without reinstatement. Underpinning this submission was the conclusion urged by the defendant that the vineyard does not need to be replaced as there 'will be no long term effect from any herbicide damage from any spray drift in September 2013'.

Issue 8 - Is remediation necessary and reasonable

266 A number of factors support my conclusion that remediation of the vineyard is both necessary and reasonable. I will discuss each factor in turn but in summary they are -

(a) because the parties conducted the trial without reference to any assessment of the diminution in value of the asset, the plaintiff cannot be fairly compensated by any other method;

(b) Mallee Block was purchased and set up as a high yielding vineyard taking advantage of irrigation and seeking to exploit the opportunity to sell bulk grape quantities to wineries producing low end wine;

(c) Mallee Block was economically viable, generating a not insignificant income for the plaintiff prior to the spray drift event;

(d) the plaintiff had, and still retains, an evergreen or rolling contract with APW that guarantees a minimum price of $200 per tonne;

(e) the vineyard has been damaged to the extent that it will not return to its full productive capacity. Rather, vines within it will probably continue to die off in a random pattern that will further compromise its economic viability; and,

(f) the quantum of the remediation claimed by the plaintiff can be assessed by the court to ensure that the costs of remediation are reasonable, on the basis of the court doing the best that it can with the evidence. The defendant's challenge to the reasonableness of the items claimed under the remediation head of damage is a separate inquiry. It is the cost of remediation, as assessed by the court, that is relevant to the determination whether remediation is, in principle, necessary and reasonable.

267 A court should be reluctant to reject the plaintiff's basis for a claim for remediation and accept the defendant's alternative where that alternative may 'constitute but a doubtful remedy',[81] meaning there is a risk the alternative measure being proposed (the 'do nothing alternative') may not properly compensate the plaintiff's loss.

268 In Bellgrove, the Court was not satisfied that an alternative means of remedying the structure proposed by the defendant would be effective.[82]

To give to the respondent the cost of a doubtful remedy would by no means adequately compensate her, for the employment of such a remedy could not in any sense be regarded as ensuring to her the equivalent of a substantial performance by the appellant of his contractual obligations.

By analogy, it can be said that giving the plaintiff the cost of a doubtful remedy cannot in any sense be regarded as putting Riverman in the position that it would have been in but for the defendant's wrongful conduct.

269 In Kirkby v Coote,[83] the Queensland Court of Appeal said:

In speaking of the reluctance of the law to confine a plaintiff to a "doubtful remedy", the High Court was contrasting the case before it with a case where it is clear that the expenditure imposed on the defendant is disproportionate to any benefit to the plaintiff in terms of the vindication of the plaintiff's right to recover its actual loss from the defendant. In this case, the damages recovered by the respondents are not disproportionate to the benefit to the respondents in terms of respondents' entitlement to have a house structure which will be, as it should have been, free from risk to its stability so far as its foundations are concerned. It is only by this level of expenditure that the respondents can now achieve a structure which is as stable as it would have been had it not been for the negligence of the first appellant. It is only by this expenditure that the respondents can be freed of a real risk of catastrophic failure with serious consequences for life, limb and property.

270 The law directs inquiry to an assessment of risk. In this case, the plaintiff seeks vindication of its right to recover from the defendant its actual loss, being a healthy vineyard on Mallee Block that will enable it to produce and sell grapes, particularly to APW. The defendant contended that the capacity to generate an income stream from farming Mallee Block was all that was affected, and that the impact of the spray drift event on the capacity of the block to do so already has, or will, resolve. Accordingly all that the defendant must pay is the value of the lost income stream, which was valued by the accounting experts. This submission allocates a number of risks from the defendant to the plaintiff.

271 The way in which such allocation of risk may be managed was considered in Kirkby v Coote:[84]

The appellants' complaint as to "the reversal of the onus of proof" in this regard is without substance. The task before the learned primary judge was not to determine whether it was more probable than not that a landslip would occur in the future. His Honour did not cast the burden of disproof in that regard on the appellants. Equally, the respondents' case was not that it was more probable than not that their house would fall in the future. The respondents' case was that the negligence of the appellants had left their house affected by a degree of instability which, though not likely to be disastrous, was real. If the risk did "come home", its consequences would be disastrous. The task for his Honour was to assess an amount of money reflecting what was necessary to enable the respondents to have the stable house, free of risk of collapse, which they would have owned had the appellants not failed in their duty to them. In this regard, even if one accepts at face value Mr Murdoch's quantitative assessment of a 1:20 chance of future failure, the respondents are entitled to be compensated by an award that obviates that risk.

272 The principal risk was that, contrary to the defendant's contention, the vines on Mallee Block would not recover their vitality and the capacity to generate income as before. Were that to occur, the plaintiff would be substantially under-compensated by the loss assessment proposed by the defendant.

273 The factual issue was whether there is a real risk that the vineyard will not recover to appropriate yields. If so, to adopt the language of Keane JA in Kirkby v Coote, this is a risk that the plaintiffs, 'who were not responsible for its creation, should not be required to bear'.[85] In Bellgrove, the possibility that a plaintiff may ultimately be overcompensated by the necessity to assess damages once and for all was considered:[86]

It was suggested during the course of argument that if the respondent retains her present judgment and it is satisfied, she may or may not demolish the existing house and re-erect another. If she does not, it is said, she will still have a house together with the cost of erecting another one. To our mind this circumstance is quite immaterial and is but one variation of a feature which so often presents itself in the assessment of damages in cases where they must be assessed once and for all.

274 In the present case, the defendant submitted that the plaintiff might retain the Mallee Block in its present condition and retain the damages. The plaintiff, despite Mr Caccaviello's evidence that he would replant the same varieties in the same quantities, could plant, for example, much less chardonnay because that variety no longer commands the price per tonne that it did when Mallee Block was first planned. Rather, it would take the opportunity to plant other grape varieties that could maximise its return under the APW contract.

275 Another variant was the suggestion of a betterment through renewed trellis and irrigation infrastructure on the block. The issue of betterment was not raised on the pleadings as an issue in the proceeding and was not addressed in the evidence.

276 I reject these submissions, primarily for the reasons explained in Bellgrove. The circumstance that the plaintiff might ultimately not undertake remediation is immaterial.

277 I am satisfied that there is a substantial risk that the vineyard will not recover to appropriate yields. As I will shortly explain, I am satisfied that it is probable that the vineyard will continue to experience the effects of the spray drift and that those effects will not be ameliorated either by the passage of time or by more active intervention because of the damage sustained by the vines. Further, the seasons since 2013-2014 have been benign and it is probable that in poor seasons adverse conditions will exacerbate the stress experienced by the vines, consequent on the spray drift, resulting in more vine deaths that will accelerate the decline of the vineyard in terms of yield, efficiency of farming operations, and financial viability.

278 Further, this is not a case where, as in Kirkby v Coote, the quantitative assessment of the risk is modest and apt to be reflected in an appropriately discounted assessment. The probabilities are that this slow death of the vineyard will occur and consequently assessment of damages on the basis that it will not, or that the eventuality is only a modest risk, will result in the imposition on the plaintiff of a risk that he is not at law obliged to carry. It is a risk for which the defendant bears responsibility because he created it. That is not to say that this particular risk is irrelevant in assessing whether there ought to be some discount for contingencies of the plaintiff's loss because of the possibility of a better outcome.

279 I am satisfied by the expert evidence to which I now turn that the probability that the vineyard will continue to deteriorate is a powerful justification for the plaintiff's claim that it is necessary and reasonable that it replant the vineyard.

280 The experts who participated in the horticultural conclave relevantly answered three questions pertaining to this issue. One question was 'What is the likely trajectory of health of the vineyard?' The experts were unable to agree on the potential for the vineyard to recover. In the absence of relevant irrigation records, the experts could not opine on whether irrigation deficit was an issue. The principal area of dispute was whether the plaintiff's management of the vineyard or the continuing effect of the herbicides was the cause of the present symptoms of poor health.

281 In summary, Mr Whiting considered that severe pruning in 2014-15 by the plaintiff had compromised yield while during the following season the vineyard exhibited signs of severe water stress that would explain a compromised yield in 2015-16. Poor management, primarily with respect to irrigation, resulted in slow recovery of the vines but based on previous published research and likely deposition rate, recovery in the health of the vines could be expected.

282 Dr Bell and Ms MacGregor considered that both yield and quality had been compromised. Ms MacGregor stated that the vines had not recovered as she had originally expected, causing her to now anticipate a very slow recovery. Vines were continuing to die, and more generally the vines were not progressing well into dormancy suggesting that yields in the next season are unlikely to exceed the 2016 yields. An imbalance was evident in the vines in the 2016 season that evidenced a continuing need for careful management in future seasons. Ms MacGregor considered it unlikely that yields would recover within the next few seasons and, subject to an important proviso, it will be necessary to cut the vines back to the trunk and re-train them. That proviso was that the vascular system of the vines had not been damaged.

283 Dr Bell concluded that the vines showed signs that the vascular system was compromised and he concluded that the vines were unlikely to recover.

284 Another relevant question asked of the experts concerned the likely recovery of the vines to the point of a commercially viable yield. The experts could not agree on a target yield that would be commercially viable. Mr Whiting considered that the vineyard will regain yields that align with actual average yields. Ms MacGregor considered the vineyard may need to be cut back and retrained to regain balance, but that procedure would not be successful if there is an underlying issue with the trunk and roots. Dr Bell stated that the vineyard will never again be commercially viable.

285 A third relevant question was 'If the damage (if any) was caused by any or any combination of the three herbicides, what will be the long-term effects to the health of the vines and the quality of produce in the future?' Again, the experts did not agree on the answer to this question.

286 Mr Whiting based his conclusion that there will be no long-term effects on the vineyard from herbicide damage on three matters. First, the absence of symptoms of herbicide damage arising from the spray drift event on the occasions when he inspected the vineyard, secondly, published research and thirdly, the likely deposition rates of the spray drift onto the vineyard as calculated by Ms MacGregor.

287 Ms MacGregor noted that published, peer reviewed research included reports of vine deaths after exposure to stimulated drift and, mostly, reviewed papers reported recovery of vines following that exposure. However, published trials of simulated drifts were limited to assessments of damage over only the following two years.

288 Ms MacGregor noted two important qualifications. First, the concentrations of the individual herbicides in the drift that settled on the vines was unknown, which restricted the utility in comparison between the present circumstances and the published research. Further, there is no published data showing the effects of a mix of glyphosate, 2,4-D and metsulfuron.

289 Although prognostication was dependent on the dose applied, the long term effects of the drift may include continued death of vines, reduced yield continuing for several seasons, the prospect that the vines may never recover to the pre-2013 cropping levels and poor quality fruit in the short term that may result in cancellation of the APW contract. Ms MacGregor considered that the vines would not recover without drastic measures to avoid damage to the vines from trying to carry a heavy crop. Ms MacGregor concluded that in the 2016 season the vines were in a stressed condition. She considered that the stressed condition of the vines suggested that the vascular system may be damaged. Her prognosis of a recovery in the productivity of the vines was dependent on the observed stress being merely due to irrigation management which could be rectified, the vascular system of the vines not being damaged by prior exposure to metsulfuron and that there is no residual metsulfuron remaining in the soil.

290 Dr Bell stated that metsulfuron and glyphosate cause slow death in grapevines. Metsulfuron in soil causes gradual root pruning of perennial plants creating a root system that cannot support the plants. That effect causes vines to go into gradual decline resulting in death. Such damage to the root system will create the appearance of water stress symptoms in the vine and the long term effects will be ongoing loss of yield and quality.

291 On each of these questions, I prefer the evidence of Dr Bell and I adopt his conclusions as my findings. I am satisfied that the vineyard on Mallee Block will never recover to produce commercially viable yields because a sufficient number of the vines within the vineyard have suffered damage to their vascular system from which they are unlikely to recover. The vines suffered that damage principally by exposure to metsulfuron but particularly in the circumstances by the exposure to the combination of metsulfuron and glyphosate.

292 I prefer Dr Bell's evidence for the following reasons. First, Dr Bell has particular specialist qualifications and experience within the agricultural chemical industry that includes practical experience with commercial, technical and research aspects of the use of chemicals in a wide range of horticultural and agricultural crops. He has had extensive experience in managing product performance inquiries with a range of companies including Aventis, Bayer, Cropcare, Syngenta, BASF, Monsanto, Dupont, Dow and Nufarm amongst others. Dr Bell has research and development experience in assessing crop damage, growth reduction and crop injury symptoms with extensive experience in relation to the use of glyphosate during a six year period working with Monsanto. In addition, he has experience in providing expert forensic opinion in the areas of agriculture and horticulture across all levels of the industry from growers, insurance companies, agribusinesses and the agricultural chemical industry.

293 I do not suggest that Mr Whiting was not sufficiently qualified to express his opinion on the questions put to the horticulture experts. He came to court with the benefit of a long career in the Department of Primary Industry and with professional experience in a variety of research and industry development roles, particularly in the wine grape industry. When employed by the Department of Primary Industry, his particular expertise was in biosecurity and since practising as a horticultural consultant he has been involved in providing advice primarily to grape producers, as a loss assessor for insurance assessors and in teaching, preparing reviews and reports and conducting industry funded research trials.

294 In expressing my preference for Dr Bell's opinions over those of Mr Whiting, I note that Ms MacGregor qualified her opinions on these particular questions by deferring to her lack of expertise in assessing the particular impact of metsulfuron on the vascular system of vines, which was outside her personal experience and not reported on in scientific literature.

295 Dr Bell enjoyed significant advantages over Mr Whiting in the opportunities afforded to him for direct personal assessment of the condition of the vineyard. He first inspected Mallee Block on 13 January 2014, conducting follow-up inspections on 16 October 2014, 18 February 2015 and 29 January 2016. Ms MacGregor inspected Mallee Block on five occasions being October and December 2013, April 2014, January 2016 and May 2016. Dr Bell had the benefit of her reports that included a detailed mapping and recording of the damage to the vineyard that required explanation. Although Mr Whiting made three visits to Mallee Block, his second visit on 14 May 2015 did not involve making any general observation and was for the purpose of collecting samples. He inspected the vineyard in late March 2015 and in March 2016. His first visit was after the harvest of most grapes and his last visit was after the harvest of Chardonnay and Gordo and some of the Shiraz and Mataro.

296 I lacked confidence in Mr Whiting's evidence based on these visits for several reasons. First, his inspections were carried out after the vineyard had been mechanically harvested. Dr Bell's visits, in every case earlier in the season prior to harvest, afforded a much better opportunity to properly assess observable symptoms. Mr Whiting effectively conceded as much when he agreed that it would have been better to have inspected the vineyard at an earlier stage of each season. I accept that Mr Whiting would have preferred to have done so but the fact that he did not raises further questions.

297 First, Mr Whiting was dismissive of the documented findings made by each of Dr Bell and Ms MacGregor of the damage that they observed when they inspected the vineyard that included, between them, four inspections during the 2014 season and one inspection during the 2015 season. Until the expert conclave, Mr Whiting gave little credence to the observations that had been made and documented by his professional colleagues and could not provide me with a satisfactory explanation as to why the court, as he had done, should simply dismiss those observations in preference to his observation made late in each season and after harvest at a time when observations about the health of the vineyard were more difficult as the vines were entering senescence.

298 Mr Whiting's failure to reconcile the observations of other experts necessarily means that his observations, commencing some 20 months after the event, provide no more than a snapshot which cannot be reasonably compared with the detailed analysis undertaken over an extended period of time by Dr Bell.

299 That Mr Whiting lacked specialist expertise in agricultural chemicals also appeared from his failure to bring to account the chemical testing reported on by Ms MacGregor. As I have elsewhere observed, chemical testing clearly demonstrates the presence of glyphosate and 2,4-D residues in the analysed samples, evidence which clearly supports the proposition that the vines suffered from a spray drift containing those chemicals. The fact that metsulfuron was not detected in testing is of no consequence. Mr Whiting agreed that metsulfuron is hard to detect, except in samples collected a very short time after the spray event. In any event, that the defendant (his instructing party) included metsulfuron in the spray mix with the detected chemicals was not contentious.

300 Mr Whiting asserted that Dr Bell and Ms MacGregor gave no consideration to other possible causes of the observed symptoms. In failing to engage with the possibility that the vineyard had been affected by a spray drift comprised of those three herbicides, Mr Whiting's evidence appeared to march towards a pre-determined destination, that the damage observed in the grapevine was not the result of any actionable conduct on the part of the defendant. Occasionally he made unsubstantiated statements such as 'missing vines occasionally observed in the vineyard had died prior to the alleged spray drift', a comment for which no foundation was proffered.

301 On the other hand, because of the nature and timing of the observations made by Dr Bell and Ms MacGregor, they both concluded that the observed damage was distinctive and its cause clearly and evidently an overspray of herbicides. Dr Bell described it as the worst damage that he had seen from a spray drift on to a horticultural crop in over 35 years of working in the agricultural, chemical and horticultural industries. Further, there were occasions on which Mr Whiting, despite stating that further information was necessary and had been sought but not provided, nevertheless expressed a theory that the observed symptoms were possibly caused by circumstances other than the spray drift. The court faced a difficulty that Mr Whiting's evidence contained hypotheses that could not be readily separated from conclusions that were based on assumptions not established by evidence.

302 Precisely what further information was required by Mr Whiting was difficult to determine. It was suggested that the plaintiff's watering and fertiliser records were inadequate. Mr Whiting also suggested that virus, nutrient deficiency, insects and pesticides might have caused the observed symptoms. However, a factual basis for such conclusions was not established either by Mr Whiting or by the defendant. As Dr Bell observed, the increased stress on vines resulting from herbicide damage causes poor plant health which increases secondary symptoms including virus damage and nutrient deficiency symptomology. One example of the pursuit of such a theory at trial raised an issue as to whether there was a boron deficiency in the soil.

303 I am satisfied that the symptoms of herbicide damage were plain and clear. Those symptoms were observed by both Dr Bell and Ms MacGregor when they inspected the vineyard soon after the spray drift which was confirmed by chemical testing. The only reason to look for causes other than herbicide damage for observed symptoms was to identify an explanation for the observed damage that was not actionable. This conclusion was also supported by Mr Whiting's failure to confront the proposition that the observable effects of nutrient imbalance or water stress was explicable as a secondary effect following on from herbicide damage.

304 I was not persuaded that Mr Whiting had adequately considered the synergistic effect on the operation of any particular herbicide by the presence in the mix of the other herbicides. This prospect is particularly important when considering the research literature on the effect of these herbicides on vineyards. It was not disputed that there is no research or academic references available that provides any insight as to the combined effect of all three herbicides in question. Conclusions from published research about recovery time following a spray event involving different mixtures were generally insufficiently relevant. Subsequent developments with the Mallee Block vineyard since the spray drift event demonstrated that such research conclusions were inappropriate. The vines had not recovered after three seasons. The inference is not open that the vines will recover during the 2017 season. The timeframe envisaged by Mr Whiting for recovery in the yield and quality of produce from the vineyard has now passed.

305 A number of other factors supported the conclusion that remediation by replanting the vineyard was reasonable, being the set-up of the block, the terms of the ongoing APW supply agreement, and, ultimately, the economic viability of Mallee Block.

306 I set out my findings about the manner and purpose of the setup of Mallee Block by the plaintiff above at [38] - [39]. Although the capital expenditure for the original set-up of Mallee Block was not explicitly quantified, I am satisfied from Riverman's financial statements and the evidence of Mr Caccaviello that it invested significant capital and the unpaid labour of its principals in establishing the vineyard and that it did so to take advantage of the opportunity presented by an irrigated block to produce grapes for the bulk wine market.

307 I set out my findings about the APW supply agreement above at [44] and following.

308 I am persuaded to accept Mr Natoli's conclusion that the financial statements for the five years prior to the spray drift event supported Riverman's assertion that Mallee Block was not just profitable but was a driver of its profitability. In doing so, I have adopted a different approach to Mr Natoli's calculation in order to concentrate solely on the viability of Mallee Block. Nonetheless, the calculation is substantially based on his analysis of the financial statements.

309 It is necessary to first deal with a number of factual issues that explain my approach in extracting a basis to assess the financial viability of Mallee Block.

310 Riverman asserted that the Mallee Block was the driver of its profitability, but its accounting and taxation system did not permit a discrete assessment of the profitability of the Mallee Block alone. That assessment became a matter for inference from such records as were in evidence. The historical financial records recorded the plaintiff's income from 'fruit, grapes & produce', and expenses were collated on a 'whole of enterprise' basis. To extract from the financial records realistic historical data about the performance of the Mallee Block required some manipulation of the data. For that purpose, estimates based on probabilities must be used. Mr Ivey suggested that uncertainty about the base information underlying these calculations may cause any analysis to be so inaccurate as to not be useful. However, guarding as much as I can against inaccuracy introduced from the base information, I must do the best that I can to assess the plaintiff's loss on the available evidence. That said, the purpose of the following exercise is not to calculate the plaintiff's damages but, rather, to rule on the submission that the block could not, and had not, produced an economic return and that no rational farmer would invest in reinstatement of it.

311 First, of the total area of the plaintiff's property, 303 ha, approximately 135 ha are dedicated to cereal, stone fruit, olives and vacant land. Of the remaining 168 ha planted with grapevines, the Mallee Block comprises 61 ha. In terms of area, the Mallee Block comprises 36% of the area devoted to grape vines and 20% of the total area of the farm. However, it would be misleading to analyse the financial statements by simply adopting one or other of these percentages. Mr Caccaviello's evidence was that grapes generated 80% of the farm's income. Although this statement was not directly challenged,[87] I am satisfied that Mr Caccaviello was prone to generosity in Riverman's favour in making interpretative assessments of this sort. I am satisfied that the appropriate percentage of farm income generated by grape growing was approximately 70%.

312 Secondly, the Mallee Block was more intensively cropped than other vineyard blocks, and for that reason made a greater contribution to farm income earned by grape production than Main Block and Lisa's Block. However, yield from individual blocks was not recorded prior to the spray drift event. I will deal separately with the records of deliveries to APW. There are a number of features of the Mallee Block, discussed earlier, that support an inference that its yield was likely to have been significantly greater than that of Main Block and Lisa's Block. Further, income and expenses on a per hectare basis will vary between grapes and other farm produce and between blocks. Mallee Block was designed to be more efficiently farmed, a proposition that Ms MacGregor accepted. In my assessment, half of the farm income generated by grape production came from Mallee Block.

313 Thirdly, addbacks of expenses that are not particular to the block, or are particular to the owner, adjust the financials to produce figures that are comparable from year to year and properly reflective of the financial performance of the Mallee Block. This adjustment was controversial between the accounting experts. I prefer Mr Natoli's approach of using adjusted earnings before interest, tax, depreciation and amortisation to best reflect operating performance. After such adjustments are made, I will apply 70% of the expenses against grape production income and 36% of that figure against Mallee Block income.

314 Doing so results in the following assessment of the financial performance of Mallee Block drawn from the financial statements for the financial years 2009-2013. Figures are in thousands, rounded.

In good seasons, Mallee Block could contribute more than $300,000 to the plaintiff's adjusted earnings before interest, tax, depreciation and amortisation. In poor seasons, when the yield was affected by weather and/or disease, the block remained a positive contributor.

315 I am satisfied that the Mallee Block vineyard must be replanted. It was and can be economically viable. Once it is accepted, as I have, that the long term effect of the herbicide spray on the vineyard was permanent vascular damage to a sufficient number of vines such that Mallee Block will never recover to produce commercially viable yields and that the vineyard will increasingly fail, the defendant's submission that the proper compensation for the plaintiff is the cost of doing nothing must be rejected. I am satisfied that the vineyard was commercially viable before the spray drift event and that it is reasonable for the plaintiff to reinstate the vineyard by replanting. The reasonable costs of doing so are not disproportionate to the true loss suffered, which is the loss of a vineyard planted to maximise grape yield in an irrigated agricultural area and supported by an evergreen, or rolling supply agreement at a guaranteed base price. It becomes necessary to identify the reasonable costs of reinstatement of the vineyard, there being no proper alternative measure of damages. This identification forms part of issue 13, as does issue 10, but it is no longer necessary to consider issues 11 and 12.

316 The assumed date for the calculation of loss was 1 July 2016 (the assessment date), effectively the end of the 2016 season. Losses prior to that date are past losses and losses since that date are future losses. It was assumed that remedial works could commence in the 2016 - 2017 financial year, particularly during the winter of 2017. Having regard to the timing of the trial and of judgment, this assumption is not fair to the plaintiff. I will come to this issue later.

317 Before turning to the expert evidence in respect of quantum, there were a number of areas where there was disagreement between the experts that were based on the assumptions they were asked to make and which must be resolved by my findings of fact. These matters were:

(a) What were Mallee Block's actual yields prior to the spray drift event?

(b) What were Mallee Block's actual yields from the spray drift event in the 2014, 2015, and 2016 seasons?

(c) What annual average yields should be assumed, as reasonable, but for the damage from the spray drift?

(d) What average price per tonne would the yield from Mallee Block have earned, but for the spray drift event?

(e) How long will it take the replanted vines to reach maturity?

318 A major focus of the trial was the contest on the issue of grape yields from Mallee Block. Yields were a critical input in the quantum calculations but were the subject of considerable controversy between the parties. It is necessary to make a finding as to the reasonable yield for the 2014, 2015 and 2016 seasons but for the spray drift event and deduct from that amount the actual yield achieved in order to assess the loss claimed by the plaintiff for each of those seasons. It is also necessary to make a finding as to the average future yield of the vineyard in different loss scenarios.

319 Each party's experts based his or their calculations on an average drawn from the grape yields for the 2012 and 2013 seasons, doing so because in prior seasons the plaintiff sold its grapes to both APW and Orlando under arrangements by which the purchaser only accepted a capped tonnage. The sales figures from the earlier seasons did not reflect yield from the vineyard as grapes above the capped tonnage were not measured. Mr Caccaviello's evidence, which I accept, was that the rolling supply agreement with AWP that commenced in the 2012 season provided an incentive to the plaintiff to maximise yield on the Mallee Block and that it did so. Significantly, that incentive remains relevant.

320 The plaintiff submitted that the 2013 yield was the most reliable indicator of the future performance of the Mallee Block. That may be so, although it is necessary to exercise caution in relying on a single season's yield, particularly with farmed produce. Farming output is notoriously variable due to a variety of unpredictable factors that produce either good or bad seasons. Further, the plaintiff had harvested seven vintages following the initial crop in 2006 and it is probable that over that period the productive capacity of the vineyard had been optimised. I am not persuaded that it is appropriate to identify yields in a counterfactual scenario on the basis solely of the 2013 season.

321 Murray Valley Winegrowers, an industry association, produced reports about the 2013, 2014, and 2015 vintages for the industry from surveys of participating wineries. These reports provide some evidence of averages applicable across the wine grape industry in the region. It is evident that the 2012 season was below average and that the 2013 season was above average, and relevantly that the average wine grape crush for those two seasons reasonably approximates the average wine grape crush over nine seasons from 2007 to 2015. On this basis, I am satisfied that the average yield of Mallee Block calculated by averaging the yield of the 2012 and 2013 seasons most fairly represents a reasonable annual future yield to be applied in the calculation of the plaintiff's loss. Adopting this average is most likely to avoid over or under compensation due to seasonal variations and other vicissitudes.

322 There was a second aspect of this dispute. For the 2012 and 2013 seasons, Mr Natoli relied on Mrs Caccaviello's estimates of yield and Mr Ivey relied on APW grape delivery records. These two sources did not reconcile but varied substantially and there were questions about the reliability of each source.

323 Mr Natoli assumed total production of 2,412 tonnes for the 2012 season and 3,306 tonnes in the 2013 season. Riverman instructed Mr Natoli that in the 2012 season total production was made up of 1,504 tonnes of Chardonnay, 251 tonnes of dry reds, 82 tonnes of Shiraz and 72 tonnes of Gordo. The yield in that season also included 472 tonnes of dry reds and 30 tonnes of Gordo that were not harvested. Total production from Mallee Block for the 2013 year came from a harvest schedule provided to Mr Natoli by Mrs Caccaviello. Mr Natoli proceeded on an average of 2860 tonnes per year. I calculate the average per hectare having regard to my findings as to the area under contract to APW to be 48.96 tonnes per ha.

324 The defendant submitted that the APW grape delivery records demonstrated that total production from Mallee Block was 1,029 tonnes for the 2012 season and 2,006 tonnes in the 2013 season. In making this submission, the defendant interpreted the delivery records by totalling the yield from blocks that are part of Mallee Block and including all yield from blocks described as 'unknown'. The defendant's experts proceeded on the average of 1,518 tonnes or 25 tonnes per hectare. I calculate the average to be 26 tonnes per ha.

325 Pausing to note the discrepancy, plainly the delivery records in the 2012 season would not include unharvested grapes. Leaving unharvested grapes to one side, the plaintiff submitted that the delivery records understated the yield by 46%. With the unharvested grapes, the understatement of yield (but not delivery) would be 57%. In the 2013 season, the delivery records understated the yield by 39%. The effect on the average is an understatement of 47%. The discrepancy to be explained is substantial. The unharvested grapes in the 2012 season were left on the ground because in a wet season they were botrytis affected and unsuitable for APW. Such grapes should not be included in the yield.

326 The plaintiff submitted that the APW delivery records did not accurately record the variety that was sold or the block from which grapes were sourced. Mrs Caccaviello contended that those records overstated grape deliveries from Main Block and Lisa's Block and understated grape deliveries from Mallee Block because bins on the trucks that were not full when they left Main or Lisa's Blocks were topped up with grapes harvested from Mallee Block. Such records as existed did not permit an easy resolution of this contention, particularly having regard to the magnitude of the discrepancy. Further, there was no evidence, other than that from Mrs Caccaviello, of the asserted 'topping-up' practice.

327 APW was primarily focused on tonnage and obtaining sufficient produce to maximise the efficient use of the winery. APW in the 2012 and 2013 seasons was not particularly concerned about the source of grapes, that is, whether grapes came from one or other of the blocks farmed by the plaintiff. Its primary concern was prompt supply of quality grapes, which did not require identification of specific bins or the source block.

328 The plaintiff submitted that APW's attitude to grape type and source data was evidenced by examining the records concerning delivery of Mataro grapes. The APW records did not record receipt of any Mataro grapes in those seasons. Each of Mr and Mrs Caccaviello was adamant when giving evidence that the yield from 14.18 ha of Mataro on the Mallee Block was delivered to APW in each of the 2012 and 2013 seasons. The supply agreement for the 2012 season does not indicate that APW purchased Mataro as such, although appendix 2 to the supply agreement for the 2013 season stated a price for the purchase of Mataro. The supply agreement during the 2014 season clearly provided that APW, but for the spray drift event, would have purchased the yield of Mataro from the Mallee Block. Mr Gilbee and Mr Duffy of APW both accepted that Mataro may have been delivered to APW and received as 'dry red' in the 2012 and 2013 seasons.

329 The plaintiff submitted that these matters demonstrated that APW's delivery records were not reliable. Mrs Caccaviello provided estimates of the yield from the Mallee Block in the 2012 and 2013 seasons that were calculated by reference to APW delivery records, her contemporaneous notes, and her knowledge and experience of the process and documentation of grape delivery from the plaintiff's farm to APW. Mrs Caccaviello's 'contemporaneous notes' were handwritten notes made on the manila folders into which she placed APW delivery dockets. These notes were not discovered and were ultimately produced in response to a call made by the defendant's counsel during cross-examination, Mrs Caccaviello having referred to their existence when seeking to justify her instructions to Mr Natoli.

330 Given the unsatisfactory circumstances in which these notes were produced, in particular the absence of any credible explanation for their omission from Riverman's affidavit of documents sworn by Mrs Caccaviello, and the defendant's vigorous challenge of Mrs Caccaviello's reconstruction of the delivery records, I was not persuaded to accept the authenticity of these notes, particularly as an apparently contemporaneous source of Mrs Caccaviello's recollection. That said, I am satisfied that the APW delivery records contain errors and cannot be described as an accurate record of the yield from the Mallee Block in those seasons. APW at that time had no compelling need to accurately record the source of grapes. Records were required to support payment but the price to be paid in each relevant season did not vary between the blocks or between Mataro and dry red.

331 The defendant correctly characterised Mrs Caccaviello's evidence when he submitted that the delivery dockets prepared by the plaintiff and submitted with the fruit to APW were, to her knowledge, inaccurate, which is why she made notes on the manila folders. It is improbable that inaccuracies of this magnitude occurred over two seasons in the delivery dockets while Mrs Caccaviello maintained accurate records in scribbled notes. Mrs Caccaviello claimed in evidence that she was not aware of the magnitude of the understatement, which the cross-examiner suggested was about 30%.

332 Prior to the 2014 season, the plaintiff had no need to distinguish between harvests from the different blocks. That need only arose when for the purposes of claiming the loss from the spray drift event it became necessary to separate the records relating to Mallee Block from the other blocks. That fact calls into question whether the manila folder notes were contemporaneous. When first cross-examined, Mrs Caccaviello explained the misallocation error of approximately 30% as being record keeping errors by APW. After the notes were produced, Mrs Caccaviello suggested that delivery documents were filled out on the basis of orders from APW rather than deliveries to it. She accepted that she knew that the delivery documents were incorrect and that she later recorded the correct harvest in the notes on the manila folders. Earlier in her evidence, Mrs Caccaviello insisted that her paperwork was in complete disarray, but by the conclusion of her evidence she was suggesting that her record-keeping was accurate and the disarray lay in what she provided to APW.

333 Because Mrs Caccaviello produced these further documents late in the trial and was recalled to give further evidence, the defendant did not have the opportunity to test these further propositions with Mr Duffy and Mr Gilbee of APW. However more general propositions were put to Mr Gilbee. He considered APW's records to be accurate in recording tonnage, because a weighbridge was used, and generally accurate in respect of variety and source. He accepted that information about source and variety generally came from the delivery documents prepared by the grower though variety was checked by visual inspection.

334 Mr Duffy's evidence was more specific. He described a fairly rigorous sampling procedure involving laboratory testing prior to harvest with recorded results. On delivery samples were taken and tested from some bins on each truck on the weighbridge. On any particular day, staff at the winery would be expecting grapes from particular blocks and that random testing at the weighbridge was designed to ensure that the whole load from the blocks complied with earlier laboratory testing. APW staff at the weighbridge were trained to identify discrepancies in the fruit and were expected to do so.

335 Mrs Caccaviello suggested that her husband would have informed Mr Duffy of this practice although neither gave evidence of a conversation about it. It is probable given APW's practices on receiving fruit that it would have identified discrepancies of the magnitude asserted by Mrs Caccaviello. However, that never occurred.

336 There was no evidence of similar mistakes in the assessment of quantities delivered for the 2015 and 2016 seasons and for those seasons the record-keeping system was varied. The accuracy of the information derived from delivery dockets in those seasons was not challenged.

337 Further, the evidence in respect of the purchase of Mataro remained consistently enigmatic. The plaintiff could not point to a single record sourced from APW documenting the purchase of Mataro or dry red. Mr Duffy did not consider it likely that Mataro was purchased and recorded as a different variety. That said, the greatest opportunity for error in documenting deliveries would seem to have been in the visual identification of varieties at the weighbridge. Be that as it may, I am satisfied that 14.2 ha of Mataro was included in the rolling supply contract from the 2014 season and I find that the Mataro yield, absent from the APW records on which the defendant's experts proceeded, needs to be included when assessing the average future yield for the counterfactual calculations.

338 The converse of Mrs Caccaviello's proposition was that to the extent that the yield of Mallee Block was understated, the yield from Main Block and Lisa's Block had been overstated. Mr Caccaviello changed his farming practices in order to maximise yield from Main Block and Lisa's Block after it became apparent that the plaintiff would lose income as a result of the spray drift event. However, he did not quantify the improvement in yield that he achieved from those blocks.

339 The following table compares Mrs Caccaviello's estimates of yield (in tonnes) for Main Block and Lisa's Block in the 2012 and 2013 seasons with the APW's delivery records for the 2015 and 2016 seasons. The '% variation' is the increase in the average of 2015/2016 as a percentage of the average of 2012/2013.

340 Mr Caccaviello did not directly suggest, and I would not infer, that yield improvements of this magnitude were achieved by changes in farming practices. Rather, as the defendant submitted, the comparison supports the inference available on consideration of the totality of the evidence that there was error in the yield figures for 2012 and 2013 that Mr Natoli was asked to assume because grapes from Main Block and Lisa's Block had been included in the figures for the 2012 and 2013 season yields from Mallee Block.

341 The defendant submitted that the evidence otherwise supported rejecting the figures that Mr Natoli was asked to assume. I agree. I was not persuaded that the figures developed by Mrs Caccaviello probably represent the yield from Mallee Block in the 2012 and 2013 seasons. On the other hand, I accept Riverman's submission that the evidence does not support a finding that APW's delivery records were accurate, the assumption made by the defendant's experts. Accordingly, I must make a finding as to the actual yield of Mallee Block for each of the 2012 and 2013 seasons.

342 Bearing these competing considerations in mind and doing the best that I can on the evidence, I find that the average annual yield for Mallee Block after the 2014 season would have been in the range of 2000 - 2200 tonnes per annum, which equates to 34.24 - 37.66 tonnes per ha.

343 This assessment can, by way of cross check, be compared with an answer to a question put to the experts about the yields that are likely to be attained in Mallee Block from year to year once the vineyard returns to full production. Both Mr Whiting and Ms MacGregor suggested that a realistic average production level would be 35 tonnes per hectare.[89] This production level was adopted by Mr Natoli in his assessment of economic loss and I am persuaded that it was a proper and appropriate assumption, established by the evidence.

344 A further issue that arose in respect of yield was the yield for different grape types, given that different prices were paid. This was neither the subject of direct record keeping nor the subject of direct evidence. Mr Ivey avoided the issue by applying an average price per tonne across the block. Mr Natoli accepted instructions from Riverman that the yield was comprised of 59.16% chardonnay, 33.5% dry reds, 3.92% Gordo and 3.43% Shiraz. These figures were based on Riverman's records and, as such, required checking. There was a rough approximation between these percentages and the areas under different types of vine with chardonnay occupying a slightly higher percentage of the area under vine and the reds a lesser area, suggesting that the reds were higher yielding, which is consistent with Ms MacGregor's analysis. I am satisfied that for the purposes of the assumed average annual yield but for the spray drift event, the yield of individual grape varieties is to be calculated by applying these percentages to the assumed total yield of 35 tonnes/ha.

345 The next issue I must determine is what price should be assumed, as a reasonable average future price per tonne for grapes from Mallee Block, but for the damage from the spray drift. Mr Natoli in his estimate of future losses used the grape prices for the 2014 season as set by APW. Those prices were Chardonnay - $275 per tonne, Shiraz and Mataro - $395 per tonne, and Gordo - $350 per tonne. Mr Ivey and Mr Tremain, on the other hand, calculated the average price paid for grapes from Mallee Block in the 2016 season to be $227.12 per tonne and adopted $227 per tonne as the future average price of grapes.

346 The defendant challenged the authenticity of the 2014 season pricing on the basis that by the time it was purportedly set in about January 2014, it was 'virtually certain' that no grapes would be accepted from Mallee Block that year because of chemical contamination. Until that pricing was announced, APW had paid the same price for grapes from the plaintiff irrespective of the originating block. The defendant emphatically contended that pricing information was sent to the plaintiff for the sole purpose of assisting it with any insurance claim that might follow on the spray drift event. The defendant invited a finding that APW intentionally produced documents to assist the plaintiff 'for other purposes' and that it never had a genuine intention to pay higher prices for Mallee Block grapes than for grapes from the other blocks.

347 Expanding on my findings expressed earlier in these reasons about the APW rolling supply contract, I am satisfied that the 2014 season prices were recorded by APW in three separate documents. First, there was the Appendix 2 sent by APW to the plaintiff for the 2014 season that I find accompanied APW's letter to the plaintiff dated 18 January 2014. That letter and a second letter dated 6 February 2014 from APW to the plaintiff also set out the prices for the 2014 season. The Appendix 2 for the 2014 season was a document that formed part of the rolling supply agreement.

348 The defendant contended that the plaintiff's case about the documentation of the rolling supply agreement was confused. That may have been so, but that confusion does not support the defendant's contention. Relevantly, I accept that APW has always paid the same price for the same variety of grapes, irrespective of source. However, I am satisfied that APW would have paid the plaintiff a better price for Mallee Block fruit commencing in the 2014 year but for the spray drift event.

349 APW's practice, accepted by Riverman, was that pricing was resolved at the last moment shortly before harvest when variable factors such as size of harvest and quality of fruit etc. were mostly known. The grower had rights under the rolling supply agreement if able to obtain a better price and APW was acting commercially in notifying prices shortly prior to commencement of delivery. Mr Duffy stated that the plaintiff's fruit from Mallee Block was rejected on 20 January 2013 and the plaintiff was immediately notified. APW treated the plaintiff's fruit as contracted fruit until the decision to reject it was made. It was not rejected at the time APW learned of the spray drift event or at any intervening time. Although the Appendix 2 for the 2014 season was given to the plaintiff only two days earlier, it was delivered in the ordinary course of assessing prices that APW would offer for the 2014 season to all its contracted growers. At the same time, samples were being tested, a process that undoubtedly was informing the decision to reject the fruit on 20 January. As Mr Duffy stated, 'we treat it as being contracted fruit until the time of rejection. That's the way we treat it... So it's not rejected until such time as the fruit is formally rejected.'

350 I do not accept that a general expectation that the fruit would be rejected because of chemical contamination arising at an earlier time altered contractual consequences requiring the conclusion that the fruit actually was rejected much earlier. It is unsurprising that Mr Duffy was seeking alternate sources of supply in December 2013. He was the grower liaison officer and had responsibilities for sourcing sufficient quality fruit for the winery. I accept that he regarded the spray drift event as the worst he had seen and that there was a chardonnay glut that year. Mr Duffy was not responsible for setting prices or for rejecting fruit. Mr Gilbee agreed with his evidence.

351 I am satisfied that APW had not finally determined to reject the plaintiff's fruit when the pricing decision was made by Andrew Peace. The defendant was critical of the plaintiff's failure to call evidence from Mr Peace personally and I was invited to draw from his absence some non-specified inference adverse to the plaintiff, presumably that the Schedule A was a concocted document. I do not regard Mr Peace as being in the plaintiff's camp. It was suggested that he was overseas but either party could have required his attendance at the trial to give evidence. Further, each of Mr Gilbee and Mr Duffy, on behalf of APW was cross-examined by the defendant about the pricing process and the communications with the plaintiff about prices and the rejection of the fruit for the 2014 season and responded from direct knowledge of such matters.

352 I find that the pricing differential for the 2014 season between Mallee Block and the plaintiff's other blocks was consequent on APW's assessment of the quality of fruit from Mallee Block in earlier seasons. I am satisfied that it is reasonable to accept these differential prices as relevant in assessing the average price per tonne of different varieties for the purpose of assessing the return to Riverman but for the spray drift event.

353 Further, I am not persuaded that the defendant demonstrated that adopting an average price across the total yield irrespective of variety, based on the price paid in 2016, as assumed by Mr Ivey and Mr Tremain was reasonable. First, the produce purchased by APW in the 2016 season was affected by the spray drift event and was not comparable in quality to the yield in the 2013 season. So much was confirmed by the APW witnesses as well as Ms MacGregor. Secondly, that assumption does not take account of different grape varieties. Thirdly, it is unrealistic to adopt the price paid in a single year as representative for agricultural produce that is subject to seasonal variation.

354 Some evidence of the impact of seasonal variation was evident in the Murray Valley Winegrowers reports about the 2013, 2014, and 2015 vintages that I referred to earlier. These reports also provide average prices per tonne applicable across the region for many different varieties including those farmed by Riverman. Applying a weighted average for Chardonnay, dry reds, Gordo and Shiraz,[90] the average price per tonne, in 2013 was $316. In 2014, it was $417 and in 2015 it was $304. The average over those three seasons was $345. The weighted average of the 2014 season prices offered but not paid by APW was $315. Mr Natoli noted, as these statistics bore out, that the 2014 APW pricing offer was relatively low compared with historical market levels. Mr Natoli also factored the risk associated with potential movement in grape prices into the discount rate.

355 Against these averages, the pricing adopted by Mr Natoli was reasonable while the pricing adopted by Messrs Ivey and Tremain was not. The weighted average price adopted by reference to the APW 2014 season offer was a little over 90% of the regional average price which was an acceptable variation. However the price adopted by Messrs Ivey and Tremain, at two thirds of the regional average price, was not justified as reasonable. Taking all of these matters into consideration I find that the reasonable pricing to adopt for sales to APW in future years were the prices adopted by Mr Natoli.

(a) The rolling, or evergreen, supply agreement with APW had not been terminated as at the trial and but for the spray drift event, Riverman would have continued to supply its produce from Mallee Block to APW in the assumed quantities and at the assumed prices that I have already discussed.

(b) Although the supply of Gordo grapes was not guaranteed, the assumption made by Mr Natoli that Gordo grapes would have, or be, sold under alternative arrangements at the same assumed price and in the same assumed quantity was not challenged.

357 The defendant disputed the need for replanting of the vineyard, but as I have ruled against that contention, I turn to the defendant's alternative submission that the vineyard could be established over a seven year period. Riverman contended for a 12 year period.

358 This question was the subject of expert deliberation and I prefer Ms MacGregor's opinion. Ms MacGregor suggested that the vineyard could be replaced with two-year-old vines that would permit a return to full production in 10 years. Dr Bell did not disagree, suggesting that the vineyard would return to its original condition and yields in 10 - 12 years. Significantly, Mr Whiting accepted that Ms MacGregor's timetable was reasonable.

359 Mr Whiting qualified his opinion with the observation that the timetable could be shortened. He suggested that vines could be ordered and produced in a nursery within 15 months during which period trellis and irrigation could be installed, permitting planning in season two, followed by training the vines to the cordons in seasons three and four. Mr Whiting considered the cropping yields would increase by a third during each of seasons five, six, and seven, resulting in a return to full production in season seven.

360 I consider that two aspects of this timetable are unrealistic. First, other than Mr Whiting's suggestion, there was no evidence that the very substantial number of young grapevines required to replant Mallee Block could be produced within 15 months. That vines could be ordered and grown over a 24 month period was not in dispute. Secondly, I was not persuaded that the rate of increase in yield from 11.66 t/ha in season five to 35 t/ha in season seven is likely to be achieved.

361 I accept Ms MacGregor's conclusion that one-year-old vines are likely to be slower to reach the wire and at least a year behind in bearing fruit with a higher risk of loss and that these factors would be significantly mitigated if two-year-old vines are planted. Further, pushing young vines to produce high yields too soon by aggressive farm management practices, as opposed to allowing the vines to develop more slowly, would threaten the prospect of achieving the target yield of an average of 35 t/ha. Ms MacGregor's proposal was that the vines be planted in season three and trained to the cordons over the following two seasons. Riverman could expect a yield of 7 t/ha in season six increasing at an annual rate of 20% to the intended target yield in season 10. Ms MacGregor reasoned that the metabolic burden placed on maturing grapevines by the stress of carrying a large crop would slow the overall growth of vines, impacting on the placement of spurs along the cordon, which determines the eventual canopy architecture and yield potential.

362 As damages are being assessed to an assumed loss date of 1 July 2016, it is necessary to assess the future loss for the 2017 season as it will not be practicable for replanting to commence until the 2018 season. The actual figures are not available as evidence in the trial was taken early in the 2017 season. It is clear that the revenue increased from the 2015 season to the 2016 season. I accept the evidence given by Dr Bell and Mr Caccaviello that the vineyard would not return to full production in the 2017 season, and it is plain that Mr Whiting's prognosis to the contrary was based on assumptions that I do not accept. None of the experts, or Mr Caccaviello, suggested what the yield might be for the 2017 season. In all the circumstances, I find that the yield for the 2017 season and the expenses incurred in farming it approximated the results in the 2016 season.

363 I am satisfied that it is reasonable to assess Riverman's future loss of income on the following basis.

364 Another question on which the experts could not agree was the appropriate discount rate. Mr Natoli concluded that a discount rate of 16.5% was appropriate while Messrs Ivey and Tremain argued that higher discount rate of 27.9% was appropriate.

365 The purpose of applying the discount rate to any compensation awarded to Riverman in respect of future cash flows is to reflect the risk profile associated with the prospective receipt of such cash flows. The assessment is substantially subjective, involving balancing a number of competing considerations. Some of these considerations have, at least in part, been relevant in assessing the average future yield or price to be used in assessing future loss.

366 Riverman invited me to note a number of positive factors that supported a lower discount rate including the ongoing rolling supply agreement with a guaranteed minimum price, the set-up of Mallee Block including that it is irrigated, security of tenure, the experience of the Caccaviellos, and the cyclical nature of demand in the wine industry. The major risk factors that supported a higher discount rate included climate variability, disease risk, market oversupply, and variable demand for wine.

367 The defendant submitted that Riverman's financial performance was highly variable and at best could be described as 'breakeven'. It was appropriate that the future cash flows of a high-risk business be discounted by 30%, not 15%. The defendants also submitted that Mr Ivey's considerable agricultural experience added gravitas to his assessment.

368 In assessing a discount rate to be applied to future cash flows, it is accounting/valuation experience, not agricultural experience, that is likely to inform the proper discount rate. Mr Natoli's assessment was based on his research to establish what, in 2013, was a reasonable EBIT multiplier. He concluded that the appropriate multiplier was in the range of 4 to 8. The midpoint of that range is six times earnings and that equates to a capitalisation rate of 16.67%. Further, Mr Natoli's approach was consistent with the terms of trade between APW and Riverman by which income is received progressively throughout the year rather than at year-end.

369 I prefer the discount rate adopted by Mr Natoli as I have not accepted the assumption that Mallee Block performs at breakeven, at best. I am satisfied that the Mallee Block was profitable, and significantly so in good seasons. Mr Natoli conceded that the profitability of the vineyard was fundamental to his thinking and I am satisfied that he was entitled to that view. The experts agreed that if a business was losing money a higher discount rate would be appropriate, but that was not the case with Mallee Block.

370 The assumed loss date of 1 July 2016 defined past and future losses. Mr Natoli discounted both past losses and future losses, where Messrs Ivey and Tremain would have only discounted future losses. The economic impact of the spray drift was immediate although cash flows were adversely affected for a number of years from that event. Reflecting the normal business risks in deriving and incurring future income flows, loss is assessed as at the assumed date and predicted, or hypothetical, cash flows must be used when assessing past losses as well as future losses.

371 The experts agreed a discounted cash flow analysis was applicable and they acknowledged that its application carried consequences relevant to consideration of a discount rate. The risk profile of cash flows varies with the nature and timing of the estimated cash flows and in theory differential discount rates can be applied to particular cash flows. Estimated net earnings were based on accounting results prepared on an accruals basis and the loss was based on net earnings and capital expenditure estimates, not cash flows. Costs may be incurred throughout each financial period. Assessments of past loss can include some actual income and actual costs warranting a lower discount rate.

372 Mr Natoli applied a blended rate of 16.5% (mid-period) to all estimated net earnings and capital expenditure in the calculation of both past and future loss. Mr Ivey did not discount his estimate of past loss and applied a discount rate of 27.9%, mid-period for expenses and year-end for income. Mr Ivey's approach treats estimates of past loss as risk-free, but such estimates are based on hypothetical earnings. As has been demonstrated, the calculation of both past and future loss depends on assessments of grape yield and grape prices and these assessments cannot be regarded as risk-free.

373 The assessment and application of a discount factor can become unnecessarily complex and I am persuaded that Mr Natoli's application of a blended rate to all estimated earnings and expenditure is reasonable in all the circumstances.

374 I will apply discount rate of 16.5% to compensation for loss of both past and future cash flows. Mitigation/rehabilitation costs and the costs of replacing the vineyard will not be subject to discounting.

375 All accountants calculated figures on a GST exclusive basis and I have adopted the same approach.

376 As Riverman is entitled to be put back in the position it was in had the spray drift event not occurred, the proper approach is to consider whether the costs incurred by Riverman were properly and reasonably incurred in response to that event. The quantum experts agreed, as do I, that the mitigation/rehabilitation costs properly incurred should not be discounted.

377 The defendant submitted that Riverman's claim under this head was, in large measure, misconceived, exaggerated, or not properly shown to be expenses incurred as a result of the alleged spray drift. The defendants made the following specific submissions:

(a) The costs claimed for additional nutrients, fertiliser, and chemicals were overstated. Riverman claimed to have spent $89,172 for additional nutrients and chemicals in the 2014 year when its 2014 trading statements showed that the expenditure on 'orchard requisites and chemicals' was $182,370.92, which was a modest increase from 2013 at $166,800.13. Mr Caccaviello tried to explain this as a timing difference, but was unable to explain why the expenditure on orchard requisites and chemicals in the 2012 year was as high as $228,062. Riverman kept no fertiliser records for the 2014 and 2015 years. Mr Caccaviello accepted that he was spraying the Mallee Block pretty much the same way as he was spraying the Main Block and Lisa's Block. Mr Caccaviello admitted that he did not approach the exercise by saying that he applied an extra amount to the Mallee Block over and above what he usually did, he simply produced invoices and questionably claimed that they were all for the Mallee Block.

(b) In the 2014 year, Riverman claimed $15,000 for tractor hire for summer pruning and $3,000 for fuel. In the 2015 year a similar claim was made for $45,000 for tractor hire for winter pruning, $9,000 for fuel and a further $71,700 for hand pruning. The defendant submitted that Mr Caccaviello performed this work at no charge to Riverman and accordingly no loss was suffered by Riverman. No receipts were produced for tractor hire or fuel.

(c) In the 2014 year, Riverman claimed 250 hours of additional watering, at a cost of $70 per hour for electricity, totalling $17,500. Mr Caccaviello agreed this was an estimate rather than a calculation, made on the basis that his power use went up. When cross-examined, he was unable to explain why the 2014 trading statements showed a decrease in the 'light and power' expense from 2013 to 2014.

(d) Riverman bought urea for the Mallee Block both before and after receiving expert advice following the alleged spray drift and, ultimately, made no claim in respect of an invoice dated 23 September 2013, which was clearly before the spray drift acknowledging that it was claimed in error. Although it was not pressed, the defendant submitted that the claim cast doubt generally over Mr Caccaviello's evidence of expenditure only incurred as a result of the alleged spray drift.

(e) Mr Caccaviello's explanations for many items of expenditure under this head were implausible. For example, when asked about urea purchased on 24 October 2013, he said: 'These products are bought for the season, so with the experts and everything else, well, these are products that have been bought for the exercise'. Mr Caccaviello agreed that he was not saying that before October 2013 he had never used urea on his vineyards. He said that urea was nitrogen, but in Riverman's other vineyards nitrogen was used as well as calcium, magnesium, potassium, MAP and products with trace elements. Mr Caccaviello also said he used fertiliser on the Mallee Block with all the 'little trace elements' but that was different from what was being used on the other blocks.

(f) Riverman claimed the expenses of Dr Bell and Ms MacGregor under this head of damages, when it is plain from their invoices that their work was for services as an expert for this proceeding and not for advice to remediate the Mallee Block. In respect of one example invoice of Mr Bell, Mr Caccaviello accepted that the work was all for the preparation of an expert report. It is similarly clear that the costs of testing by AsureQuality was for this proceeding.

(g) Finally, various invoices from contractors relied on by Mr Caccaviello never made it clear that the work was done on the Mallee Block.

378 More generally, the defendant submitted that what Riverman had failed to do was to produce records for all of its expenses for chemicals and nutrients for the farm for the 2014 and 2015 year and divide them between the Mallee Block and the other blocks and then divide them between ordinary usage and usage as a result of the alleged spray drift. In view of the specific inaccuracies identified in Mr Caccaviello's evidence and his 'general unreliability', the court ought not to accept Riverman's claims that all such expenses were all incurred as a result of the spray drift.

379 The plaintiff sought $429,070 on the basis of Mr Natoli's assessment in respect of rehabilitation and mitigation costs by reference to specific invoices and estimates of costs incurred by Riverman in the 2014, 2015 and 2016 financial years. Mr Caccaviello's evidence was that he had followed advice received from EE Muir & Sons, Landmark and Alison MacGregor when purchasing additional fertiliser and nutrients which were applied to Mallee Block following the spray event. In closing submissions, Riverman relied on a summary table of costs claimed, that in part identified where supporting documentation was located in the evidence. It claimed these costs were incurred directly as a result of the 2013 spray drift and would not have otherwise been incurred in an ordinary season.

380 The foundation for the summary table of costs comprised both invoices and the plaintiff's evidence of an estimate of other expenses, such as the costs of electricity to drive pumps for watering, tractor hire, fuel for pruning and labour for hand pruning. Some of the claim was based on the plaintiff's estimate of the value of his own labour, and in support of that entitlement the plaintiff cited Thomas v Powercor Australia Ltd,[91] where J Forrest J had permitted recovery of the cost of reinstating or replacing fences damaged by fire where that work had been undertaken by the plaintiff and by volunteers. His Honour stated:[92]

A member of the group (perhaps a neighbour) may have been fortunate enough to be in a position to afford to engage and pay for a fencing contractor to repair the fences. He or she would be able to recover the costs of reinstating the damaged property; as would an insurer in bringing a subrogated claim though an insured. But Mr Thomas who expends his own labour and that of friends to reinstate his fences is precluded from claiming damages unless, on Powercor's submission, he can show the use of his labour has produced a direct financial loss in the sense of a demonstrable loss of earnings. I do not think that the law can be so inflexible or unfair.

381 Riverman submitted that the defendant did not review each invoice or estimate and assess whether it was reasonably incurred in response to the 2013 spray drift event. The defendant submitted, based on the opinion of its experts Messrs Ivey and Tremain that the proper approach was to calculate mitigation/rehabilitation costs in the 2014 and 2015 financial years, based on the difference between the 'orchard requisites and chemicals' incurred in the 2013 and 2014 financial years. That difference was $15,591.

382 Riverman submitted that Messrs Ivey and Tremain's approach was guess work, not justified by reference to accounting or legal principle. When cross-examined, Mr Ivy accepted that the amount spent on 'orchard requisites and chemicals' by a business like Riverman, which was the accounting entry in the trading statements that was adopted for this exercise, would fluctuate each year according to a wide range of factors. No attempt was made to identify or adjust for such of these factors as may have been relevant in the periods under consideration. Further, the difference between the amount spent by Riverman in the 2013 financial year on 'orchard requisites and chemicals' was approximately $61,000 when compared with the 2012 financial year and $79,000 when compared with the 2015 financial year.

383 There was some force to certain of the defendant's submissions. The proper approach is to consider whether each cost incurred by Riverman was properly and reasonably incurred in response to the incident.

384 I accepted Mr Caccaviello's evidence that he followed advice received from EE Muir & Sons, Landmark and Alison MacGregor when purchasing additional fertiliser and nutrients that were applied to Mallee Block following the spray drift. EE Muir & Sons and Landmark were Riverman's regular agricultural suppliers and advisers and I accept that on realising his problem with the Mallee Block Mr Caccaviello acted quickly and appropriately. Riverman also took advice from Alison MacGregor to try and mitigate, as best he could, the damaged caused. Mr Caccaviello was not to know at the time that he was incurring these expenses and attempting to mitigate his loss by recuperating the vineyard that this ultimately would not prove effective.

385 I am persuaded in the circumstances that Riverman's claim for rehabilitation/mediation costs as set out in the summary table will only be allowed in a sum that excludes the following amounts:

(a) the additional amounts for the 2014 and 2015 financial years in respect of watering, pruning, tractor hire and fuel. While this assessment involved some degree of flexibility, the plaintiff's reliance on Thomas v Powercor Australia Ltd was misplaced in circumstances where the costs incurred in subsequent financial years were, in effect, costs Riverman would have otherwise borne irrespective of the spray drift. These expenses were based on Mr Caccaviello's estimates and were not verified by invoice. I cannot be satisfied that they were additional expenses incurred as a result of the spray drift event that would not ordinarily have been incurred in those financial years. I was not persuaded to allow recovery of these sums.

(b) it is clear that Riverman's expenditure on professional services from Dr Bell, Ms MacGregor and AsureQuality initially was an expense incurred in investigating the cause of the decline in the health of the vineyard. When Riverman focussed on the need to litigate its claim, the experts drew on their earlier work for that purpose. I am satisfied that the careful approach of each of Dr Bell and Ms MacGregor in their early investigations anticipated the prospect of litigation. That being so, I will not allow their expenses as rehabilitation or mitigation expenses. Such amounts were however reasonably incurred in anticipation of litigation and may be properly recovered as expert disbursements pursuant to any costs order.

386 Having accepted Mr Caccaviello's evidence about his attempts to recuperate the vineyard and mitigate his losses, I will only allow the amounts claimed for chemicals and nutrients, urea, fertiliser and contract work for which invoices were produced. I accept Mr Caccaviello's characterisation of the various invoices as expenses properly referable to Riverman's attempt to remediate the damage.

387 Accordingly, the amounts that follow will be allowed in respect of rehabilitation and mitigation.[93] For the 2014 financial year:

390 The total amount allowed for rehabilitation and mitigation expenses is $212,447. I also award damages in the nature of interest of $32,787.02, calculated at the rate applicable under the Penalty Interest Rates Act, 1983 on the sums awarded for the 2014 and 2015 years from the date of issue of the writ, being 28 August 2015,[95] and on the sum awarded for the 2016 year, from 30 June 2016.[96]

391 Mr Natoli calculated that Riverman's discounted past losses for the 2014, 2015 and 2016 seasons were $1,563,885. Messrs Ivey and Tremain calculated those losses at $473,714. The different conclusions are explained by reference to the assumptions made, particularly in respect of the 'but for' grape yield and grape price. Based on my earlier findings, Mr Natoli has overstated that yield, and Messrs Ivey and Tremain have understated both yield and price.

392 Messrs Ivey and Tremain have also relied on a weighbridge docket to conclude that 21 tonnes of grapes were purchased in the 2014 season. I do not accept the reliability of this docket and I am satisfied that APW rejected the whole of the 2014 crop from Mallee Block. Because of the prospect of a claim, accurate records were maintained after the 2014 season and Mr Natoli's calculations of the grapes purchased from Mallee Block by APW in the subsequent seasons was based on those records. Messrs Ivey and Tremain undertook a more complex analysis of delivery records that required assumptions and judgments. On this issue, I prefer Mr Natoli's methodology.

393 Adjusting Mr Natoli's calculations, principally by reference to my finding as to the appropriate 'but for' yield and including an appropriate discount for contingencies inherent in the 'but for' assessments, I find that Riverman's past income loss, before tax, is $1,100,000. I also award damages in the nature of interest in the sum of $167,640.52, on 70% of that sum from the date of issue of the writ, being 28 August 2015[97] and from 1 July 2016 on the remaining 30%,[98] to be calculated at the rate applicable under the Penalty Interest Rates Act 1983.

Cost of remediation - the cost of replacing the vineyard

394 Being satisfied that the plaintiff is entitled to remediation damages in the sum required to remove the vineyard impacted by the spray drift and re-establish a new vineyard on the Mallee Block, I now turn to the assessment of the quantum of that claim. The parties maintained a conflicting position on the reasonable cost of replacing and retraining the vines.

395 The plaintiff's claim to the reasonable costs of removing and replacing the vineyard on the Mallee Block was based on a scheme of required works and costings put together by Mr Caccaviello. That scheme was a two page spreadsheet summary setting out the series of steps that would be involved in re-establishing the vineyard and other supporting documents, predominantly quotes obtained from third parties about the provision of certain services, materials and labour that would be required to complete particular tasks. It was, in effect, a rough and ready scope of works. Mr Caccaviello claimed that he had relevant experience in establishing vineyards and, in particular, he had established the Mallee Block vineyard in around 2005. He claimed that this scope of works was both necessary and reasonable, which claim was strongly challenged by his cross-examiner.

396 In some cases, costs in Mr Caccaviello's summary table were based on a quotation that was tendered and in other cases he had estimated the labour required, the time to be allowed and the unit rate and verified his estimate during his evidence.

397 Mr Caccaviello also claimed additional costs as set out in the following table that the plaintiff claimed would be incurred in the first four years once the vineyard had been replanted in order to bring it back to an acceptable crop yield:

398 The defendant submitted that I should reject Mr Caccaviello's methodology and calculation of the claimed remediation cost, and he submitted more generally that Mr Caccaviello was not a reliable witness in this respect. It was not in issue that the plaintiff's experience in this area was limited to planting the Mallee Block vines approximately 15 years ago. While I accepted that, in the circumstances of this case, Mr Caccaviello demonstrated sufficient knowledge and experience to render admissible his opinion about the processes and costs of re-establishing the vineyard infrastructure; its probative value was another matter.

399 The defendant contended that Mr Caccaviello 'undertook the wrong exercise' and had included both significant double counting and questionable costs in his estimates. The defendant also pointed to what it described as 'Mr Caccaviello's lack of experience in the removal and replacement of vineyards and his interest in this case' and consequent lack of expertise as reasons to give his evidence and estimate little weight. There was force in this submission, but much of that force fell away when I considered the defendant's opposing evidence.

400 Mr Tony Muller, who gave evidence for the defendant, has worked in vineyard establishment and removal in NSW for over 25 years. He provided a partial estimate, as a potential contractor, that the defendant adopted as an alternate analysis to demonstrate the appropriate steps and costings involved, but Mr Muller did not posit an alternate scheme of works and costings. He did not inspect the site or require an agreed scope of work as the basis for a quotation. Rather, he provided comment on Mr Caccaviello's estimates in two single page emails to the defendant's solicitor that was not a response to the work that needed to be done but a critique of Mr Caccaviello's spreadsheet. He explained his critique when giving evidence. There was also force in the criticisms of Mr Muller's approach.

401 Mr Caccaviello and Mr Muller differed significantly about the ultimate replacement cost of the vineyard for two reasons. First, there was no agreement of the scope of works involved and, secondly, there were different assessments about the construction approach and the reasonable costs for its component tasks. In closing submissions, the plaintiff conceded that there was a degree of repetition in Mr Caccaviello's calculations. I accept the defendant's contention that, having established the vineyard in question some years prior, Mr Caccaviello lacked the expertise of an independent contractor specialising in the removal and establishment of vineyards over many years. That limitation, as well as his interest in and proximity to the matters in question, were matters affecting the probative value to be accorded to his evidence in respect of this claim.

402 That said, despite having established and removed multiple vineyards in his career, Mr Muller's evidence was presented at a level of generality that in many cases took issue with, but failed to provide a sound basis for departing from Mr Caccaviello's estimates. His evidence provided a basis to test some aspects of Mr Caccaviello's scheme. Mr Muller did not posit a clear viable alternative to Mr Caccaviello's adopted scope of works. The use that could be made of Mr Muller's evidence was limited. It was not a quotation that could be evaluated on the basis that if it was accepted and the work performed in accordance with it, the manner in which, and the standard to which, the vineyard was remediated and replanted was identifiable.

403 The fundamental source of the difficulty with the evidence pertaining to this head of damage was the failure of the parties to identify a proper scope of works, which meant that the evidence was not susceptible to comparative analysis. It resembled competing quotations to construct a house that were not based on an agreed set of documents.

404 Thus it was necessary for me to identify the appropriate scope of works to constitute a basis for my findings as to the proper quantum of re-establishing the vineyard, doing the best I can having regard to the way in which the parties have chosen to put their cases to the court. What follows is drawn as a starting point from Mr Caccaviello's spreadsheet and his evidence about it and is informed by Ms MacGregor's evidence, Mr Muller's opinions and counsel's submissions.

405 I do not accept the defendant's submission, based on Mr Muller's evidence, that steps 1, 6, 7, 8, 9, 10 and 12 were rendered entirely otiose because retention of the current infrastructure was reasonable. I was not persuaded that the complete removal of the existing vines with an excavator and turning over of the field in preparation for planting new vines (steps 4 and 5) is achievable while retaining the existing infrastructure in its present form. I was satisfied, principally by Ms MacGregor, that complete removal of vines, proper soil preparation and an inviolate infrastructure are necessary to achieve proper compensation for Riverman's loss. I accept Mr Caccaviello's assessment that the risk of compromise to the existing infrastructure and irrigation system by employing the process suggested by Mr Muller would be significant. Although Mr Muller asserted that he had access to appropriate equipment for the task, there was no evidence of a contractor with access to such, or similar, equipment being available to undertake the Mallee Block job on the basis of accepting the risk that the infrastructure and irrigation system would not be compromised. I accept Riverman's submission that Mr Muller's alternative was a doubtful remedy, carrying a risk that it may not properly compensate Riverman for its loss and was advanced to save the defendant expense in paying compensation for its wrongdoing.

406 I find the following steps are required in order to remove and re-establish the vineyard on the Mallee Block. These steps constitute the scope of the works required, the reasonable cost of which represents part of the sum required to return Riverman to the position that it would have been in but for the defendant's wrongful conduct.

(a) Step 1: Preparatory work/Miscellaneous labour. Before the vineyard can be cleared two tasks must be completed by hand: cutting wire from the posts (end and middle rows) and removing dripper hoses from the rows of vines.

(b) Step 2: Removal of current vines. Using an excavator the vines are pulled out and the posts and heaping them into piles along the rows. Mr Muller posited a different procedure which would cut the wires and vines which would then be pushed out in small sections so as not to disturb any of the existing structure. I accept Mr Caccaviello's assessment that this stage of the process will involve substantial damage to, and the need for removal of, the key infrastructure - that is, the posts, trellis system and irrigation - of the block which will subsequently require replacement.

(c) Step 3: Clean field. The purpose of this step is to clear all debris and damage done in the removal process such that the block is in a condition suitable for preparation for re-planting of new vines.

(d) Step 4: Site preparation. This process involves a number of steps at different points in time, deep ripping, discing, landplane, rotary hoe and tine cultivation, to ready the field once the old vines have been removed. These preparations were undertaken when Mallee Block was first set up and are now required for its re-establishment in order to ensure replanting is successful and to enable the vines to reach the projected cropping yields within the time frames that have been allowed.

Deep ripping (conditioning) of the soil is performed to help the vines establish a strong, deep root system and I allow 14 days for that task. That is followed by discing that turns the soil with a disc to leave a uniform and relatively smooth finish, requiring 7 days. The rotary hoe assists in incorporating soil amendments (step 5) and will take 16 days, while tine cultivation involves planting a cover crop to protect the young vines from the elements and is undertaken just after the block is re-planted. I allow 7 days, and it is done twice. Landplaning to level the soil is performed twice - first before the irrigation is set up and again before the vineyard layout is marked out (steps 6 and 7), due to the impact of equipment on the land following those two steps. I allow 16 days on each occasion.

(e) Step 5: Soil amendments. Both gypsum and manure are applied evenly to the entire cleared area.

(f) Step 6: Irrigation. Once the machinery, excavators, equipment discs and rippers involved in steps 1-4 have traversed the vineyard completing those tasks, the existing irrigation system will be damaged and pipe damage from those works might not be immediately apparent. It will be uneconomic to repair that system and less costly to install a new system. The defendant challenged Mr Caccaviello's claim that the entire irrigation system would have to be removed and could not be re-used. Mr Muller suggested that all parts except the mainlines and submains could be removed and reused, but he did not provide any costing for that approach or information that would permit a cost to be assessed. Mr Muller did not persuade me to reject Mr Caccaviello's contention that damage that would not be immediately apparent would be caused to pipes and irrigation parts by site stripping and preparation activities.

On balance, I am satisfied that the costs of attempting selective recycling of discrete sections of the irrigation system while ensuring that the irrigation system functioned properly when completed was not economically viable. I will allow the costs of installing a new irrigation system.

(g) Step 7: Mark new vineyard layout. Surveyors are contracted to set out the grids along which the new vineyard is to be planted.

(h) Step 8: New posts. Both Mr Caccaviello and Mr Lorimer considered that the existing trellis (including the posts) would be broken or damaged during the vineyard removal process and that it would be impractical for the posts to be re-used. Internally fractured posts, which might appear unbroken to the naked eye, if re-used, would be unable to support the weight of the new vines.

Mr Muller challenged this conclusion, contending that if removed correctly substantially all posts could be salvaged. Neither party could quantify what percentage of posts might be salvageable post excavation. It could be supposed that a contractor engaged to complete the works for a fixed price that included supply of posts and other hardware might be motivated to work, and inspect the recycled materials for suitability, in a cost-effective way. There was no evidence that a contractor, prepared to assume and price those risks into the contract was available. I am not satisfied that, on balance, a system of post removal and analysis for suitability for recycling, while possible, would be economical or has been costed. I will allow the cost of new posts.

Mr Caccaviello claimed that, in addition to the specific allowances for labour made for each step, a further substantial allowance for miscellaneous labour costs would be necessary in relation to steps 8-12 for tasks including unloading trucks, getting material to the site, loading and unloading trailers, moving wires and filling the water cart. The defendant suggested that these costs had been invented, but I accept that there will be some additional miscellaneous labour required in each of these steps and although the plaintiff no longer sought a contingency sum, a contingency allowance is appropriate for expenses of this sort.

(i) Step 9: Distribute posts. The new posts must be distributed and laid out in the correct format, with two workers following a tractor and trailer dropping the posts and, given the number of posts involved, I allow 576 hours (72 days) for this task.

(j) Step 10: Post placement. A tractor operator, using a large knocker and assisted by two workers who pick up and hold each post, knocks it straight into the ground. For 34,601 posts, at 30 posts per hour, this is expected to take 1,153 hours (144 days) to complete. In addition, the end assemblies involve larger posts that require an auger attachment to the tractor to first drill a hole before the posts are knocked into the ground. This is expected to take 2 workers 344 hours to complete. This task requires 187 days.

(k) Step 12: End assemblies. Firstly the wire, steel rods, nuts and washers must be purchased that make up the end assembly. Two people are required to lay the wire along the rows, one holding a wire spinner and the other walking down the row running the wire out to the other end along the ground. Once the wire is tied at each end it is clipped into place along the vine structure. This is expected to take two workers a total of 480 hours to complete. The 688 end assemblies then have steel rods drilled in to ensure the right tension to support the weight of the vines, each of which is estimated to take one hour to complete by one experienced employee assisted by a farm hand.

(l) Step 11: Purchase and planting of new vines. New vines are planted and trimmed in the new vineyard structure. It is estimated to require approximately 158 days to trim or de-bud vines that are purchased as rootlings (78,741 vines, at 500 vines per day). Planting is estimated to require three workers and a tractor operator, planting 225 vines per hour for a total of 350 hours (44 days). Of the three workers, one is to throw the vines out, the second to put the vine into the ground and the third following to check that each vine is in line and properly sealed without air pockets. Mr Caccaviello's evidence was that this process was followed when establishing the original vineyard.

(m) Step 13: Vine training for first, second, third years. Using twine, vines are strung up with vine guards, necessary to protect the young vines from chemical and animal damage. Vine training is undertaken three times per season for the first three years, being the process used when the Mallee Block vineyard was first established. Training involves removing the vine guard and ensuring the vine is wrapping around the twine properly, removing unwanted shoots, so that the vine stem grows straight vertically to fill the space between the two wires of each cordon. Any supervision required in the first year to ensure a consistent standard across the vineyard can be provided by Mr Caccaviello.

Mr Muller did not include the costs of vine training or any allowance for maintenance costs during and after the re-establishment process. No reason was given as to why these steps should be excluded and, save for the issue of supervision, I am satisfied that they are reasonable steps which ought be factored into the costs of re-establishing the vineyard.

407 Before turning to costing of the scope of works, I will address the claim for overhead expenses associated with the works that were claimed on the basis and in the sums set out in the second table, at [397]. The defendant objected that many of these additional expenses were tasks that the plaintiff would have been required to undertake in any case if the spray drift had not occurred, or were exorbitant estimates or were simply unnecessary. There was force in some of these submissions and, in particular, Riverman, while seeking recompense for lost income when Mallee Block was no longer being farmed and was in the process of remediation and development back to productive yields, failed to make proper allowance for the reduction in the work involved in running the farm and the savings in management time that would be achieved.

408 I am satisfied that it is reasonable to allow Riverman's claims as follows:

(a) I do not allow the costs of a farm manager, technical/irrigation manager and assistant manager, at $150,000, $85,000 and $60,000 per annum respectively, for each of the first four years of the re-establishment of the Mallee Block. I am not satisfied that this claim is reasonable. Riverman presently has no full time employees and did not have such employees in the years immediately after Mallee Block was initially established. Mr Caccaviello himself has in the past, and continues to, farm the three blocks. Mallee Block is slightly over a third of the total farm by area. I do not accept Mr Caccaviello's suggestion that he would be fully employed on the remainder of the farm once remediation of Mallee Bock began and could only have limited involvement in overseeing the re-establishment of the Mallee Block. Once Riverman brings to account the savings in the time and expense of management when Mallee Block is not producing, either at all or to its full potential, it is not reasonable to allow for additional management expenses. The proper allowance for the savings in the time and expense incurred by Mr and Mrs Caccaviello is to allocate that cost against the claim for supervision overheads.

(b) An allowance for chemicals and fertiliser for the first four years post re-establishment is reasonable, and I will allow it on the basis of the figures provided in Ms MacGregor's report.

(c) I will not allow for the hire of a tractor and sprayer to distribute herbicide and fungicide through the vines for any of the first four years. This work would have been required in any case, and Mr Caccaviello stated that the younger vines would require roughly half the applications of older established vines.

(d) I allow for the costs of purchasing seed and fertiliser for a cover crop for the first four years post re-establishment to protect the new vines. I accept that this is a necessary step until the vines reach sufficient strength and maturity and one that was undertaken when the Mallee Block was first established. The labour for tine cultivation in the first year was allowed in step 4. In subsequent years, the labour cost becomes simply an incident of usual farming, in lieu of spraying with sprayseed to control weed, which is a reasonable off set.

(e) I would allow an amount for slashing of the organic matter underneath the vines by a tractor with a specialised attachment, twice a year for the first four years to assist the young vines to grow and I accept that this task would not be performed on a mature vineyard in an ordinary year.

(f) I will not allow any amount for flushing out the dripper lines as that is an expense that would ordinarily be incurred and is unrelated to the establishment of a new vineyard.

(g) I allow an amount for replanting dead vines, which Mr Caccaviello estimated at 2% of the newly planted vineyard. This process will involve 6 workers over 16 days locating and re-planting unsuccessful sections of the new vines. This is not done on mature vines, such as those at Lisa's or Main Blocks, because vines of different ages cannot be effectively farmed in a single vineyard. The opportunity to replace dead vines is unique to the young vines when they are first being established.

(h) With regard to sundry equipment hire, I will allow a contingency to cover such expenses, for each of the first four years. I accept that the labouring involved will necessarily require hired equipment including forklifts, generators, drills, water tanks, trailers and portable toilets, the scope of which cannot be precisely determined in advance.

(i) I allow a sum for hand pruning the buds in the second, third and fourth years after the new vineyard is established. This process is required to ensure the long term health of the future vineyard by filling the cordons with healthy vines and cutting back other parts as needed. The allowance will be for labour for workers under Mr Caccaviello's supervision.

(j) I allow an amount for restraining the end posts at the end of the first year once the new vines are in place and any movement can be detected. This involves re-aligning and tightening the strainer posts and wire, checking the steel stabiliser rod in each end assembly and tightening the bolts. Mr Caccaviello estimated that this would take 3 workers a total of 80 hours to complete.

(k) I allow an amount for the labour involved in mulching and sweeping the canes with a tractor in the second, third and fourth years after establishment. This is required to clean the debris from around the new vines, giving them the best chance of growing. It is a task exclusive the establishing a new vineyard.

409 In addition to the labour costs of many of the steps outlined above, Mr Caccaviello included amounts for tractor hire and fuel costs. This was on the basis that he would not be using his own tractors, of which he owns six, because they would be exclusively required in managing the other two vineyard blocks. I do not accept that contention. It is reasonable that where costs are saved in the management of Mallee Block, because the plaintiff is not employing or is under employing its existing farm equipment, that excess capacity should be employed in the re-establishment process whenever possible. Additional equipment hire will only be allowed when the plaintiff's resources are exhausted. I will allow a contingency amount to deal with overruns such as equipment hire as and when required. I also propose to allow an amount for fuel for each particular task, but taking into account the defendant's objection that Mr Caccaviello gave no account of the fuel tax credit of 39 cents per litre.

410 Mr Muller did not reveal how his estimates factored in labour costs, particularly the number of man hours to be worked, making a comparison with Mr Caccaviello's figures difficult. Mr Caccaviello produced a quote from Kandel Contracting Pty Ltd for labour at $36 per hour, per worker. The lower $27 per hour award rate suggested by the defendant was for casual labour, and I accept that for a project of this size contract labour is appropriate, which is more expensive including additional costs such as superannuation. Labour costs are allowed at $36 per hour, per worker.

411 Mr Caccaviello relied on a quote obtained from Belmonto Pty Ltd for $265 per hour for tractor hire, as follows:

DESCRIPTION

Hire JD 8310R Tractor

To bedform for orchards $256 per hr plus fuel

Contract Discing $50 per HT plus fuel

Contract sowing with disk seeder $52 per HT plus fuel

Mr Caccaviello stated that the hourly fee of $265 was for machine (tractor) hire and driver and included the use of specialised attachments. This figure is useful in assessing an appropriate contingency sum, but for reasons given, I will not allow for tractor hire as claimed by Riverman because it can employ much of its own equipment. I will allow for a driver by an additional labour cost of one worker charged at the rate of $36 per hour.

412 Based on the quote from Tasco, I will allow fuel expenses at Mr Caccaviello's estimates, but discounting the cost of fuel from $1.17 to $0.78 to take into account the Fuel Tax Credit scheme from which Riverman is entitled to a 39 cent rebate. I have accepted Mr Caccaviello's estimates of fuel requirements for different farming tasks.

413 On the basis of the foregoing discussion, the cost of re-establishment of the vineyard will be allowed as follows:

(a) Steps 1, 2, and 3 are costed at $161,200: Notwithstanding that this quote was for a scope of works that left the block as a green field ready for replanting, Riverman stipulated additional expenses, being cutting wire from the posts and removing dripper line, cleaning the field by hand, separating wood and metal pieces, and removal of debris. I accept the defendant's submission that there is overlap in the costing of these initial steps to remove the current vineyard and restore the site to a green field. Mr Caccaviello obtained a quote from Boundary Bend Excavations Pty Ltd as follows:

QUOTATION

Removal of 62 hectares of grapevines - 80,000 vines and 36,000 steel posts/pine posts

Excavation of vines and posts, removal of wire and dripper hose.

Vines to be pushed into piles and burnt.

Pine posts to be separated from piles before burning.

Disposal of wire, dripper hose and steel posts to rubbish tip.

Area to be cleared and brought back to bare ground suitable for replanting.

Cost $2,500 per Hectare

Total Cost - $155,000

The quote was close to Mr Muller's estimate of $2,600 per hectare for the cost of removal of the vineyard. Those expenses are included in Boundary Bend Excavations quote that was tendered as a business record without further explanation and I accept the parameters of that quote on its face. I find that the proper allowance in respect of steps 1, 2 and 3 in the scope of works is $161,200.

(b) Step 4 - $43,996.80: I have accepted that the steps of deep ripping, discing, landplane, rotary hoe and tine cultivation are required to prepare the site once the vines have been removed. Not including the cost of tractor hire, but allowing for the hours required for additional workers at $36 per hour, I would allow the following amounts in respect of:

(a) Deep ripping : one worker, 112 hours = $4,032.

(c) Landplaning - two workers, 128 hours = $9,216.

(d) Rotary hoe - one worker, 128 hours = $4,608.

(e) Tine cultivation - two workers, 56 hours = $4,032.

I allow fuel at $20,092.80, comprising 644 hours of work, at 40 litres per hour, at the rate of 0.78 per litre.

(c) Step 5 - $72,540: On the basis of the quote provided by Lipps for purchase and application of gypsum and manure, I allow $72,540.

(d) Step 6 - $380,000: On the basis of the quote provided by Swan Hill Irrigation for replacement (and installation) of the irrigation infrastructure, I allow $380,000.

(e) Step 7 - $60,821.50: On the basis of the quote provided by MK1 Developments for marking out the new vineyard, I allow $60,821.50.

(f) Step 8 - $713,001: EE Muir and Sons quoted for the supply of new posts in quantities determined by Mr Caccaviello whose estimate I accept, as follows - (Pine, 3m; 250-300) at $85 - 668 posts, (Pine, 3m; 150-200) at $40 - 1,366 posts and (Steel ECO trellis 2.7m, with clips and caps) at $14 - 33,933 posts, a total of $713,001.

(g) Step 9 - $75,686.40: For post distribution I accept the estimated cost of labour hire of $41,472 and allow for one additional worker (tractor driver) for 576 hours, at an additional $20,736. I include an amount for fuel of $13,478.40, comprising 576 hours of work, at 30 litres per hour, at the rate of 0.78 per litre.

(h) Step 10 - $524,472.20: For post placement I allow for equipment and labour hire as estimated by Mr Caccaviello and further based on quotations obtained from Belmonto Pty Ltd at $501,119 and allow for fuel at $17,986.80 (1153 hours at 30 litres per hour at the rate of 0.78 per litre) for post placement and $5,366.40 (344 hours at 20 litres per hour at the rate of 0.78 per litre) for end posts respectively.

(i) Step 11 - $505,950: Based on the quote provided by Cardoss Nurseries, $402,000 is allowed for the purchase of new vines. I accept Mr Caccaviello's estimated costs of trimming the vines at $45,360 and the labour cost to plant the vines at $37,800. I allow for one additional worker (tractor driver) for 350 hours, an additional $12,600. I allow fuel expenses at $8,190 (350 hours, at 30 litres per hour at the rate of 0.78 per litre).

(j) Step 12 - $175,635: This allowance is based on the quotes provided by EE Muir & Sons and Vernon Steelyards for purchasing wire at $75,500 and for purchasing steel rods, nuts and washers at $8,127 respectively. I accept Mr Caccaviello's estimated labour costs to lay the wire and lift ($34,560) and to fix the end assemblies ($57,448).

(k) Step 13 - $463,794: Based on the quote provided by EE Muir & Sons for the purchase of twine ($1,104), and vine guards ($22,050), and Mr Caccaviello's estimates of the labour involved in vine training (with no allowance for an additional supervisor) for first, second, third years at $176,256, $132,192 and $132,192 respectively.

(a) I allow a total of $220,550 for chemical and fertiliser based on the estimates provided by Ms MacGregor - for year 1 ($30,550), year 2 ($50,000), year 3 ($70,000), year 4 ($70,000). Savings of the regular use of chemical and fertiliser were incorporated into Mr Natoli's analysis of the present value of future lost income.

(b) I allow $110,308.80 for a cover crop. This allowance includes seed & fertiliser, for each of the first four years, on the basis of the quote provided by Landmark in the amount of $24,120 per year, a total of $96,480. I allow for one additional worker (driving Riverman tractors), to plant the cover crop (67 hours each year), at an additional total of $9,648, and fuel at $4,180.80 over four years, (67 hours, at 20 litres per hour at the rate of $0.78 per year).

(c) For slashing I allow $14,035.20, based on Mr Caccaviello's estimate of 68 hours work per year, a total of $9,792. I include fuel at $4,243.20 over four years, (68 hours, at 20 litres per hour at the rate of $0.78 per year).

(d) For replanting dead vines, I allow 6 workers for 128 hours for the second, third and fourth years, at a total cost of $27,648.

(e) I allow $236,223 for hand pruning. I accept Mr Caccaviello's estimates of $78,741 for the second, third and fourth years after planting, based on the cost of $1 per bud for 78,741 buds.

(f) I accept Mr Caccaviello's estimated labour cost of three workers for 80 hours for restraining the posts at the start of the second year, and I allow $8,640.

(g) I allow $25,804.80 for mulching and sweeping the young canes in years 2, 3, and 4. I allow for one worker (Riverman tractor) for 128 hours each year, at a total of $13,824. I allow for fuel of $11,980.80 over three years, (128 hours per year, at 40 litres per hour at the rate of $0.78).

(h) I allow a contingency for miscellaneous labour and sundry equipment hire at $95,000.

415 Although Riverman did not specifically seek a global contingency sum in its costings, I consider it appropriate to ensure that the plaintiff is properly compensated that an allowance be made for unforeseen contingencies. Delay could be occasioned for many reasons and costs estimates could readily change. A general contingency of about 5% is appropriate[99] and I will allow $185,000.

Conclusion on cost of re-planting the Mallee Block

416 I assess the total cost to re-establish the vineyard by replanting Mallee Block at $4,100,306.70. This assessment does not admit a need for discounting. I also award damages in the nature of interest on that sum of $395,171.16[100] from 1 July 2016, the assumed date of loss that approximated the time when costings were current, to be calculated at the rate applicable under the Penalty Interest Rates Act 1983.

417 The basis for the defendant's contention that there was no future loss of income has been rejected. The principal areas of disagreement between the parties with the assumptions made about yields and prices 'but for' the spray drift event, the appropriate discount rate, and the assumptions made about the need, and the timetable, for replanting the vineyard. Having regard to the findings that I have made about such matters, I am most assisted by Mr Natoli's calculations in assessing Riverman's future income losses.

418 With one significant exception, I have largely accepted Mr Natoli's assumptions on the matters on which the parties disagreed. Riverman did not establish on the evidence a proper basis for Mr Natoli's primary assumption that the 'but for' grape yield of Mallee Block from 1 July 2016 would average 2860 tonnes. I have found that the appropriate figure is 2000 tonnes. I have concluded that Mr Natoli's calculations overstate Riverman's loss and I will allow 70% of the sum that he has calculated. As I have also accepted Ms MacGregor's timetable for replanting, the applicable calculations are those prepared on a 10 year re-establishment basis.

419 As I have explained, due to timing differences, I must make an allowance for the 2017 season. I assess the lost earnings for the 2017 season discounted to present value at $278,850. Applying Mr Natoli's calculations to assess the net present value of the gross loss of earnings before tax on grape sales from Mallee Block net of expenses saved during a re-establishment period of 10 years beginning with the 2018 season, I find that sum to be $1,289,532. I assess Riverman's loss at 70% of those sums that total $1,625,532, which is $1,130,872.40.

420 I find the net present value of Riverman's lost future earnings, before tax, from the assumed date of loss, 1 July 2016, to the completion of the replanting of the vineyard with healthy vines to restore it to a productive yield comparable with its yield prior to the spray drift event to be $1,130,872.40. I also award damages in the nature of interest of $108,988.96 on that sum from 1 July 2016, to be calculated at the rate applicable under the Penalty Interest Rates Act 1983.[101]

421 In summary, I assess the plaintiffs loss in the following sums:

(a) Rehabilitation/mitigation costs - $212,447 together with damages in the nature of interest of $32,787.02.

(b) Loss of grape sales from Mallee Block in the 2014, 2015 and 2016 seasons - $1,100,000, together with damages in the nature of interest of $167,640.52.

(c) Costs of re-establishing the vineyard - $4,100,306.70, together with damages in the nature of interest of $395,171.16.

(d) Future loss of grape sales during re-establishment - $1,130,872.40, together with damages in the nature of interest of $108,988.96.

422 There will be judgment for the plaintiff that it recover from the defendant the sum of $6,543,626.10 for damages, and the sum of $704,587.66 for damages in the nature of interest to the day of judgment. I will hear further from counsel on the question of costs.

[1] Bamford v Turnley (1862) 122 ER 27, 33; Southward London Borough Council v Mills [2001] 1 AC 1, 15-16.

[2] [2013] NSWSC 309 ('N M Rural').

[4] [2013] NSWSC 309, 357 [945] citing Quick v Alpine Nurseries Sales Pty Ltd [2010] NSWSC 1248, [139]-[154] (Ward J).

[5] For convenience, and without intending any disrespect, I will distinguish the Hayden brothers by referring to then by their first names. When I refer to Mr Hayden, I am referring to the defendant.

[6] Dr Bell's report of 22 July, 2016 at 37 refers to Monsanto Tech Topic 76 which is likely to be the reference that he was referring to.

[7] Sleeman v SPI Electricity Pty Ltd [2014] VSC 49, [34]; Sedleigh-Denfield v O'Callaghan [1940] UKHL 2; [1940] AC 880, 903.

[8] Sedleigh-Denfield v O'Callaghan [1940] UKHL 2; [1940] AC 880, 903 (Wright LJ); 908 (Romer LJ).

[9] Marsh v Baxter [2015] WASCA 169; (2015) 49 WAR 1, 44 [251] (McLure P).

[10] Walter v Selfe [1851] EngR 335; [1851] 4 De G & Sm 315; Haddon v Lynch [1911] VicLawRp 2; [1911] VLR 5, 9.

[11] See, for example, Andrae v Selfridge & Co Ltd [1937] 3 All ER 255, in which the loss of one night's sleep was considered not to be a 'trivial' nuisance.

1. [12] Marsh v Baxter [2015] WASCA 169; (2015) 49 WAR 1, 43 [248] (McLure P); Sleeman v SPI Electricity Pty Ltd [2014] VSC 49, 14 [35]; Southern Properties (WA) Pty Ltd v Executive Director of the Department of Conservation and Land Management [2012] WASCA 79; (2012) 42 WAR 287, 310 [118].

[13] Marsh v Baxter [2015] WASCA 169; (2015) 49 WAR 1, 43 [249] (McLure P); Munro v Southern Dairies Ltd [1955] VicLawRp 60; [1955] VLR 332, 335.

[14] Marsh v Baxter [2015] WASCA 169; (2015) 49 WAR 1, 43 [248] (McLure P).

[17] [2012] WASCA 79; (2012) 42 WAR 287, 310 [119].

[18] R P Balkin, J L R Davis, Law of Torts (LexisNexis Butterworths, 5th ed, 2013) 14.20; Painter v Reed [1930] SAStRp 50; [1930] SASR 295; Munro v Southern Dairies Ltd [1955] VicLawRp 60; [1955] VLR 332.

[19] R P Balkin, J L R Davis, Law of Torts (LexisNexis Butterworths, 5th ed, 2013) 14.20.

[21] Marsh v Baxter [2015] WASCA 169; (2015) 49 WAR 1, 44 [251] (McLure P).

[22] See, for example [149].

[27] See [127], [155]-[156].

[31] See [71]-[72], [108].

[32] See [57], [77], [109], [162].

[35] [2013] NSWCA 142.

[36] [2013] 1 Qd R 319; [2012] QCA 315.

[37] [1999] NSWSC 636.

[38] [1994] HCA 13; (1994) 179 CLR 520, 554.

[39] [2013]1 Qd R 319, 326 [8] ('Meandarra').

[40] [2010] QSC 220.

[42] ( [2013]1 Qd R 319, 325 [8] (Fraser JA).

[43] See generally Wyong Shire Council v Shirt [1980] HCA 12; (1980) 146 CLR 40, New South Wales v Fahy [2007] HCA 20; (2007) 232 CLR 486.

[44] Roads and Traffic Authority (NSW) v Dederer (2007) 234 CLR 330, 354 [69], Tame v NSW [2002] HCA 35; (2002) 211 CLR 317.

[45] [1980] HCA 12; (1980) 146 CLR 40, 47-48.

[46] Wallace v Kam [2013] HCA 19; (2013) 250 CLR 375, 383 [16]; Settlement Group Pty Ltd v Purcell Partners [2013] VSCA 370, 34 [99]; Strong v Woolworths Ltd [2012] HCA 5; (2012) 246 CLR 182, 190-191 [18]; Adeels Palace Pty Ltd v Moubarak [2009] HCA 48; (2009) 239 CLR 420, 440 [45].

[47] Wallace v Kam [2013] HCA 19; (2013) 250 CLR 375, 383 [16].

[48] [2012] QCA 315; [2013] 1 Qd R 319, 339 [43]; [2012] QCA 315, 339 [43].

[49] Amaca Pty Ltd v Ellis [2010] HCA 5; (2010) 240 CLR 111, 137 [70].

[50] Citing Luxton v Vines [1952] HCA 19; (1952) 85 CLR 352, 358 (Dixon, Fullagar and Kitto JJ) and Moama Bowling Club Ltd v Thomson [2013] VSC 744, 31 [133].

[51] Meandarra [2012] QCA 315; [2013] 1 Qd R 319, 339 [43].

[52] Amaca v Ellis [2010] HCA 5; (2010) 240 CLR 111, 121-122 [6], 137 [70] (citations omitted).

[53] At paragraph [164].

[54] (2011)246 CLR 36, 63 [71] (Gummow, Hayne and Crennan JJ).

[55] Ibid, 53-54 [41]-[43], 57 [49].

[56] Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 [39] (Lord Blackburn).

[57] Port Stephens Shire Council v Tellamist Pty Ltd [2004] NSWCA 353 ('Tellamist') [187]; Johnson v Perez

[1988] HCA 64; (1988) 166 CLR 351, 355-356 (Mason J).

[59] Ibid [203]; Hollebone v Midhurst and Fernhurst Builders Ltd [1968] 1 Lloyd's Rep 38.

[60] [1970] 1 QB 447.

[62] (1977) 18 SASR 201 ('Lonie').

[64] [2008] QSC 45 ('Hobbs').

[66] Citing Thomas v Powercor [2011] VSC 586, 10 [34].

[67] Tellamist [2004] NSWCA 353 [203].

[69] Marsh v Baxter [2015] WASCA 169; (2015) 49 WAR 1, 43 [243]-[244].

[70] Evans v Balog [1976] 1 NSWLR 36, 39-40.

[71] [1954] HCA 36; (1954) 90 CLR 613, 617-618 (citations omitted) ('Bellgrove').

[72] [2009] HCA 8; (2009) 236 CLR 272 ('Tabcorp').

[73] Bellgrove [1954] HCA 36; (1954) 90 CLR 613, 618-619 (citations omitted).

[74] Tabcorp [2009] HCA 8; (2009) 236 CLR 272, 288 [17].

[75] [1976] 1 NSWLR 36.

[78] Tabcorp [2009] HCA 8; (2009) 236 CLR 272, 288-289 [17]

[79] [1954] HCA 36; (1954) 90 CLR 613, 617 (emphasis added).

[80] Tellamist [2004] NSWCA 353, [199].

[81] Bellgrove [1954] HCA 36; (1954) 90 CLR 613, 620.

[83] [2006] QCA 61, 12 [52].

[86] [1954] HCA 36; (1954) 90 CLR 613, 620.

[87] On the evidence and available material, it would have been difficult for a cross-examiner to press beyond a 'yes it is', 'no it isn't' position.