Hosken, Ian John & Anor v Telstra Pty Ltd [1998] FCA 326

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VG 205 of 1994

BETWEEN: IAN JOHN HOSKEN

First Applicant

BERENICE ANN HOSKEN

Second Applicant

AND: TELSTRA PTY LTD (ACN 051 775 556)

Respondent

JUDGE: RYAN J

DATE OF ORDER: 2 APRIL 1998

WHERE MADE: MELBOURNE

MINUTES OF ORDER

THE COURT ORDERS: 1. That the respondent pay to the applicants the sum of $179,803.18. 2. That the application be adjourned to a date to be fixed for the taking of submissions on interest and costs. Note: Settlement and entry of orders are dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VG 205 of 1994

BETWEEN: IAN JOHN HOSKEN

First Applicant

BERENICE ANN HOSKEN

Second Applicant

AND: TELSTRA PTY LTD (ACN 051 775 556)

Respondent

JUDGE: RYAN J

DATE: 2 APRIL 1998

PLACE: MELBOURNE

REASONS FOR JUDGMENT This action is brought by way of a claim for compensation pursuant to s 134 of the Telecommunications Act 1981 and at common law for damages in trespass or negligence. Section 134 provides, so far as is relevant: (1) In exercising its powers under this Division, a carrier must take all reasonable steps to ensure that it causes as little detriment and inconvenience, and does as little damage, as is practicable. (2) If a person suffers financial loss or damage because of anything done by a carrier under section 128, 129 or 131 in relation to any property owned by the person or in which the person has an interest, there is payable to the person by the carrier such reasonable amount of compensation as is agreed between them or, failing agreement, as is determined by a court of competent jurisdiction. ... (4) In this section: "court of competent jurisdiction", in relation to property, means: (a) the Federal Court; Sections 128, 129 and 131 respectively confer powers on a carrier to enter land for purposes of inspection, to construct or attach a facility on to land and carry out necessary ancillary works, and alter, remove, replace or maintain a facility so constructed on, or attached to, land. THE FACTUAL BACKGROUND The first applicant has, since 1989, owned a property near Finley in New South Wales known as "Glen Cluan" comprising 283.6 hectares or 702 acres. Since 1961 he has, in partnership with his wife, the second applicant, conducted a mixed farming business on the property. The history of the farming operations reveals that the applicants have traditionally derived income first from cattle and sheep raised for sale to abattoirs, secondly from variously cropping wheat, barley, sorghum, rice and, more recently, oaten hay, and thirdly from the sale of pasture hay. In 1978, Mr Hosken suffered a head injury in a serious motor cycle accident. Those injuries have affected his ability to readjust his farming techniques or the staples of the business which he and his wife have conducted. In 1987, the applicants were persuaded to concentrate on oaten hay as their staple crop. They persevered with that crop for some years but encountered difficulty in obtaining prompt payment from their principal purchasers. In 1991, Mr Cal Wilson became established as a reliable purchaser of oaten hay for export and entered into a contract to buy the whole of the applicants' oaten hay crop for 1992. In about December 1991, employees or agents of the respondent, ("Telstra") were observed carrying out repairs to a telephone line near the western boundary of the applicants' property which abuts Walkers Road. It seems that, in the course of the work, temporary lines were laid inside the boundary of the applicants' property for a distance of at least 465 metres along the whole of the western edge of a 21 hectare or 52 acre paddock designated as "Paddock 2". There were two lines each of a single strand of thin copper wire encased in an outer coating of plastic. After the work had been completed, the temporary lines were not removed and the applicants were not told of their existence. Consequently, in March 1992 when Mr Hosken came to prepare Paddock 2 for the planting of part of his oaten hay crop, the wire was broken up and distributed in the course of disc ploughing, scarifying and harrowing. Thereafter, the crop was sown and it was not until July 1992 when the crop of oaten hay was approximately five inches high, that Mr Hosken, in the course of looking for weeds, detected pieces of wire in Paddock 2. He thereupon contacted Mr Douglass of Telstra who confirmed that the wire represented remnants of the temporary line which had been laid in December 1991. In December 1992 Telstra conceded that the temporary lines had extended into Paddocks 1 and 3. The applicants were also told that the wire was not degradable in the ground and would, in effect, remain indefinitely. Subsequently, further lengths of wire were found, some of them hundreds of metres from the western boundary of Paddock 2. By letter dated 5 July 1992, Mr Hosken wrote to Mr Douglass of Telstra recounting the discovery of the wire and continuing: In March this year I commenced preparing the paddock to sow oats to fulfil a contract I have to supply hay to Japan. This has been a major part of my income for some years. Initially I was not aware that your Telecom staff had left behind in the dry grass considerable amounts of plastic covered wire. Consequently the scarifier, harrows and combine have chopped and spread the wire over the paddock. These implements are tyned and the wire has wrapped around the tynes, worn through by the friction of the earth passing through, broken into pieces and spread over the paddock. Having walked the paddock on two occasions and again today with your Mr Douglass I am appalled how far the wire has spread and am utterly at a loss how I can be sure no pieces will be picked up as the crop is being mowed, raked or baled. I know my crop will be rejected if a tiny piece of wire is found in the hay. Recently a shipment of hay to Japan was rejected and returned to Australia because of the finding of a clod of earth in a bale. I have budgeted on this paddock yielding a return of $20,000. I am already in debt for fuel, seed, super, labour and machinery costs. I urgently need your assurance that all wire will be off that paddock. By October 1992, an inspection of the crop was carried out by Mr Plumbe, the Field Manager for Telstra, who advised that he had been informed by Cal Wilson that he would not purchase the current crop because of the risk of contamination by wire. Thus, on 8 October 1992 Mr Hosken wrote to Mr Plumbe a letter which included these passages: You stated you had spoken to Mr Rod and Mr Cal Wilson in regard to their purchase of the oats for Japanese export. Yesterday I spoke to both Wilsons and have now been told they will not accept that crop for export because of the risk of contamination with wire. They also require written confirmation from your Department that wire has not been left in other paddocks where I also have oats for export this year. They have also stated that unless the paddock or paddocks can be guaranteed free of this copper wire they cannot take the risk of buying the oats in following years. I am devastated - I have budgeted on 30 days' payment from the time of delivery to Wilsons. I estimate the crop will be ready to harvest in approx. two weeks. Please tell me what action you plan to take as soon as possible because I will be urgently needing that income. That letter elicited this reply dated 12 October 1992 from Mr Deadman, Administration Manager, Riverina Murray District for Telstra: With regards written confirmation that Telecom wire has not been left in paddocks owned by you, these paddocks being one opposite PineLea Telephone Exchange and another located in Walkers Road, Telecom advises that cable was not temporarily laid out on these paddocks. This is the only assurance Telecom can give regarding the condition of the two paddocks in question. The paddock on your western boundary, where Telecom wire was discovered by yourself in early July is a separate matter. To allow for an accurate assessment of possible compensation regarding this paddock could you please formalise, in writing, your claims upon this Corporation addressing correspondence to this office. Mr Hosken next wrote on 16 October 1992 to Mr Blount, the Chief Executive Officer of Telstra asserting, amongst other things: In order to harvest the crop, the hay must be cut, raked and baled and, in the process, wire already lying on the surface and buried wire brought to the surface, will be baled in the hay. Messrs. Rod and Cal Wilson from Wilson Pastoral Company have informed me that their company will not accept contaminated hay to fulfil the Japan contract. The contract contains strict quality control provisions. Recently, a shipment of hay to Japan was rejected and returned to Australia because of contamination with a clod of earth. Wire in hay would be considered far more injurious to animals.