McMullin, Brian & Anor v ICI Australia Operations Pty Ltd & Ors (No. 7) [1998] FCA 962

FEDERAL COURT OF AUSTRALIA

DAMAGES – Losses sustained by owners of cattle contaminated with chlorfluazuron – No question of principle. BRIAN McMULLIN and LEONE McMULLIN v ICI AUSTRALIA OPERATIONS PTY LTD, ICI AUSTRALIA LIMITED and CROP CARE AUSTRALIA PTY LIMITED NG305 of 1995 JUDGE: WILCOX J DATE: 14 AUGUST 1998 PLACE: SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG305 of 1995

BETWEEN: BRIAN McMULLIN AND LEONE MARGARET McMULLIN

Applicants

AND: ICI AUSTRALIA OPERATIONS PTY LTD

First Respondent

ICI AUSTRALIA LIMITED

Second Respondent

CROP CARE AUSTRALIA PTY LIMITED

Third Respondent

JUDGE: WILCOX J

DATE: 14 August 1998

PLACE: SYDNEY

REASONS FOR JUDGMENT (NO 7) WILCOX J: These reasons concern the quantum of damage suffered by two grazing partnerships, N and M Harris & Sons and Bruce and Elsie Harris & Co, as a result of CFZ contamination of their cattle. The reasons should be read as supplemental to my Reasons for Judgment (No 4), dealing with issues of liability and reported at 72 FCR 1, and Reasons for Judgment (No 5), dated 27 November 1997 and relating to other damages claims. In particular I repeat, and intend to apply where relevant, the general principles enunciated at 2 to 4 of the latter judgment. To the extent of their relevance to the present claims, I also take into account my findings as to market conditions at 4 to 11 of those Reasons.

The partnerships There is a family connection between the members of the two claimant partnerships. Bruce Maylon Harris (born 26 July 1934) and Norman Frederick Harris (born 18 February 1938) are brothers. A third brother, Harry, operates Gogo Station at Fitzroy Crossing, in the Kimberley area of Western Australia. He is not a member of either of the present claimants. At the time of the brothers' births, their parents farmed a small property near Coonabarabran, New South Wales, on which they grew wheat and ran some 2,500 sheep and 20 to 30 cattle. Bruce and Norman Harris each left school at about the age of 14 years. Each claims to have difficulty in reading and writing. After they left school, each worked on their parents' property. Their father died in 1957 and the two young men then took over control of the farm. They acquired some adjoining land, so the farm contained some 1,000 acres by the time it was sold in 1964 or 1965. In 1964 Bruce and Norman Harris and their wives went into a partnership business on their own account. They purchased "Moomin", a property containing 6,064 acres at Rowena near Collarenebri. Mr Norman Harris said this property was then "an undeveloped scrub grazing block". They used it to graze some 3,000 sheep and a "small number" of cattle. Shortly afterwards the members of the partnership acquired a nearby property, "Avondale", of 2,560 acres, and then "Merrywinebone" (10,000 acres). In about 1974 the partners acquired "Krui", a 16,300 acre property at Bellata, and another Rowena district property, "Hemmingford" of some 5,300 acres. In 1977, with a third party, the partners purchased "Moomin Plains" (26,000 acres) at Rowena. In about 1981 the two brothers decided to dissolve their partnership so that each of them could form a business partnership involving their children. The properties were split, Mr Bruce Harris taking "Avondale", "Merrywinebone" and most of "Moomin Plains" while Mr Norman Harris took "Krui", "Moomin", "Hemmingford" and the balance of "Moomin Plains". They also split the water licences, covering some 24,000 acres, that the partnership then enjoyed. The present partnerships were then formed. There have been changes in membership over the years, owing to deaths and marriages; but in each case the founding partner (Mr Bruce Harris and Mr Norman Harris) has remained, taking a leading role in the partnership's affairs. After their establishment in 1981, each partnership acquired additional properties. Bruce and Elsie Harris & Co acquired "Myralga", a 7,000 acre property adjoining "Merrywinebone", in 1982 and another adjoining property, "Oreel" (15,000 acres), in 1986. In 1990 this partnership acquired four contiguous properties comprising 35,000 acres and in 1994 a further three properties containing 25,000 acres. These properties are all in the immediate vicinity of "Merrywinebone". Throughout the 1980's Bruce and Elsie Harris & Co grew some cotton – it seems never more than about 2,000 acres per year - and some wheat, mainly as a crop rotation. The partnership was also a party to a sharefarming agreement with Ronald Greentree under which Mr Greentree grew wheat on "Merrywinebone", "Moomin Plains" and "Oreel" on the basis that Bruce and Elsie Harris & Co received one-third of the crop. In about 1991 Mr Greentree suffered some financial difficulties; as a result, Bruce and Elsie Harris & Co took over responsibility for providing plant and machinery in return for an increased share of the crop. Throughout the whole of this period the partnership's main business was with cattle. Cattle constituted Mr Bruce Harris' background and predominant interest, although his sons and partners, Kenneth and Robert, were interested in expanding the partnership's involvement with cropping. The likely timing and extent of that expansion is a major factual issue in the case. The situation was similar in relation to N and M Harris & Sons. In 1982 a family company purchased "Woodvale" at Rowena (8,800 acres) for use by the partnership. In 1987 Mr Norman Harris' sons and partners, Peter and Malcolm Harris, purchased "Kindamindi" (also 8,800 acres). In 1988 and 1989 Mr Harris' son Andrew purchased "Wathanoo North" and "Wahroonga" (2,800 acres and 6,600 acres respectively) and in 1991 Mr Norman Harris, his wife and son Ronald, purchased "Wean" (9,800 acres). There were further purchases by family members over the following six years: "Ruglan" in Queensland (5,000 acres) in 1994, "Jindeena" at Balranald, New South Wales (4,000 acres) in 1995, "West Haran", Queensland (20,000 acres) in 1996, "Lyolia", Queensland (5,000 acres) in 1996 and "Cleveland" at Mungindi, New South Wales (20,000 acres) in 1997. Mr Norman Harris said in his written statement: "The overall investment objective of my family has been to buy underdeveloped properties that enabled us to maintain a balance between irrigated and dry land farming, and cattle production." The current position seems to be that N and M Harris & Sons is effectively a partnership between Mr Norman Harris, his sons Peter and Malcolm and their respective wives. The three men are engaged full-time in the partnership's operations, the farming and cropping program being managed by Peter and Malcolm being responsible for cattle trading. Mr Norman Harris undertakes a general supervisory role.