Walsh v KC & WL Brain Pty Ltd (No. 4) [2024] NSWDC 199

District Court New South Wales

Medium Neutral Citation: Walsh v KC & WL Brain Pty Ltd (No. 4) [2024] NSWDC 199 Hearing dates: 30 January 2024 - 2 February 2024 Date of orders: 2 February 2024 Decision date: 02 February 2024 Jurisdiction: Civil Before: Neilson DCJ Decision: See par [141]. Catchwords: Defendant did certain work and provided certain goods for Plaintiff - No agreed rate for charges - Claim by defendants for restitution - Quantum meruit - Rulings on 14 of the 15 claims made by Defendant. Legislation Cited: Nil. Cases Cited: Mann v Paterson Constructions Pty Ltd [2019] HCA 32, [203]. Texts Cited: Nil. Category: Consequential orders Parties: Plaintiff – Alan David Walsh Defendant – KC & WL Brain Pty Ltd Representation: Counsel: Plaintiff – Mr Gunning, M. Defendant – Mr O'Connor, J.

Solicitors: Plaintiff – Rural Law Defendant – Walsh & Blair Solicitors File Number(s): 2020/00107856 Publication restriction: Nil.

Judgment

Defendant's Quantum Meruit Claim 1. HIS HONOUR: This week I am dealing with the claims made by the Defendant for work done on its behalf for the Plaintiff which can be shortly described as the Defendant's quantum meruit claim.

Item A1 1. The first item concerns the input of the Defendant in the harvest of the Hawker's wheat crop. The wheat crop was grown on a series of farms known as the Hawker Agglomeration and which was to be purchased by the Plaintiff from the Hawker brothers who owned that series of farms at the same time as he sold the Dalree property to the Defendant. 2. There is no dispute that the harvesting of the Hawker's wheat crop occurred over seven days between 21 and 24 December 2016 and then between 27 and 29 December 2016. There is also no dispute that there were two harvesting machines being utilised; one being driven by the Plaintiff, or his employee, and the other being driven by one of the members of the Brain family. 3. The machine being driven on behalf of the Defendant was a John Deere header known as a 9770 machine. I shall refer to that merely as the 'John Deere machine'. The machine being driven by or on behalf of the Plaintiff was a Gleaner R62 header. That machine had been hired by the Plaintiff from CJ and LH Wiesner Pty Ltd of Walla Walla. 4. The invoice for the hire of that machine is annexed to the affidavit of the Plaintiff, Mr Alan David Walsh, sworn on 28 February 2022, which is Exhibit K. The relevant entry in the invoice from Wiesner's is this: "Dry hire of Gleaner R62 header, 70 hours @ $260/hour special rate." 1. The amount charged was $20,020, which is inclusive of GST, meaning that the appropriate rate of hire prior to the addition of GST was $18,200. 2. An issue that arises is, what does the "70 hours" in that description mean? Does it mean 70 road hours? That is, 70 hours of the machine being driven? Or, does it mean 70 rotor hours? 3. According to the evidence given by Mr Brain yesterday, the rotor hours record the number of hours the machine is actually harvesting, rather than the number of hours that the machine is being driven. It represents the time when the header is engaged in harvesting the wheat. 4. The Plaintiff, himself, obviously did not know which measure the 70 hours in the description referred to when he swore Exhibit K. Paragraphs 9 and 10 of that Affidavit are these: "9. If the agreement was for rotor hours, this equates to 12.70 tonnes per hour across the 70 hours that I was charged for. 10. If the agreement was for engine hours, the kilometres travelled by the header have to be taken into account. There was a total of around 11 hours driving which means that some 59 engine hours were spent harvesting, which equates to 15.12 tonnes per hour across the 59 hours of actual harvest work." 1. The reference to the number of tonnes per hour is a reference to the fact that the Plaintiff used this header not only to harvest the Hawker's wheat crop, but also the wheat crop at his property, Archdale, at Deniliquin. 2. He harvested 275.30 tonnes of wheat from Archdale and 620.37 tonnes of the Hawker's rice crop, the total of which was 1,240.74 tonnes. It is common ground that the Plaintiff or his employee harvested half of the Hawker's wheat crop and the other half was harvested by the Brains. 3. It appears to me to be more probable than not that the 70 hours referred to in the Wiesner's invoice are in fact rotor hours. If they were road hours that would mean that 59 engine hours were spent harvesting both the Hawker rice crop over seven days as well as the number of days it took to harvest the Archdale wheat crop. Unfortunately, Mr Walsh has not deposed to how long it took him to harvest the Archdale wheat crop. That becomes a matter for speculation, but it would have taken at least a day. So, eight days of harvest would not adequately be represented by 59 hours. I therefore accept that the 70 hours were rotor hours. 4. There are a number of different ways in which it is alleged that I should deal with the current claim. Mr Ken Bullen, the expert retained by the Plaintiff, in his report of 8 February 2022, stated that a contract harvesting rate of $14 per tonne for harvesting wheat was a commercially acceptable rate in 2016/17. On the other hand, the Defendant's expert, Mr Michael Ryan, in his report of 8 March 2021 accepted that a rate of $16 to $18 per tonne plus GST and fuel was a reasonable price for harvesting wheat. 5. The Plaintiff suggests that I should apply one of those rates. Applying the rate of $14 per tonne produces a total cost of $8,685.18 for the 620.37 tonnes of wheat harvested by the Defendant from the Hawker wheat crop. Applying the rate of $16 per tonne, the lower of the figures advocated by Mr Ryan, produces a total cost of $9,925.92. Applying the upper rate advocated by Mr Ryan of $18 per tonne produces a total cost of $11,166.66. 6. However, the Defendant does not claim any of those three sums, but claims $61,680 being the cost of 102.8 rotor hours on its John Deere Harvester at a rate of $600 per rotor hour. 7. The Defendant's submission in chief [MFI 12] is this: "It is submitted that it was appropriate for the Brains to charge Mr Walsh for the harvest work they undertook to harvest the Hawkers wheat crop based on the rotor hours of $600 per hour having regard to the following evidence: (a) Ken Bullen, Michael Ryan, and Rod Gribble all agree that $600 per rotor hour for a John Deere 9770 (as opposed to a rate per tonnage harvested), is an appropriate charge rate in circumstances where the conditions for harvesting wheat are unsatisfactory; (b) Mr Brain gave evidence that the wheat crop was very light in yield, which meant the distance to travel to harvest the wheat was increased and takes longer to harvest as less grain is going into the header (transcript, 9 March 2022 pages 35 to 36); (c) Caryn Plant [the Plaintiff's sister] gave evidence that Hawkers was a badly laid out property and was in a 'crap' condition which indicates that conditions were unsatisfactory for harvesting (transcript, 7 March 2022, page 86 to 87); (d) Michael Ryan gave evidence that Hawker's contours made it more time consuming to harvest the crop (Court Book page 2371); (e) Mr Brain gave evidence that the Hawker's wheat crop was difficult to harvest because he was harvesting around trees and on rough ground which meant the harvesting was slower and took longer (Mr Brain's affidavit dated 20 December 2021 at [97], Court Book Volume 4 page 1630); (f) Mr Brain gave evidence that he read the header meter before starting and finishing work on the Hawker's wheat crop (Mr Brain's affidavit of 20 December 2021 at [47], page 1621 of Volume 4 of Court Book); (g) Mr Brain kept contemporaneous records (log book, a copy which is at page 1223, Volume 3 Court Book) of the hours operated by the header whilst harvesting the wheat (Mr Brain's affidavit sworn 23 October 2020 at [56], Court Book page 967, Volume 3 of Court Book)." 1. The submission goes on to record other facts to which I have already referred. 2. In addition, Mr Brain gave evidence yesterday about the poor quality of the conditions for the harvesting of the Hawker wheat crop. According to Mr Brain, when the crop had been sown, the ground had been too wet which caused the paddock or paddocks in which the wheat was sown, to be irregular. He referred to wheel or tyre marks in the soil which were holding water in them. He also referred to the trees in the paddocks and the necessity to have to drive around them but as close to them as possible and that slowed down the rate of harvest. The paddocks were irregular, and it was necessary to harvest following the contours of slopes because the paddocks were not flat, nor were they square. 3. He referred to the rate of harvesting being abnormally slow. His remarks about the unsatisfactory nature of the Hawker's farm are confirmed by the evidence of Caryn Plant, albeit that she was only there for the harvesting of the Hawker rice crop, not for the harvesting of the Hawker wheat crop, but if the rice paddocks were in a parlous condition, or to use her word "crappy," one would expect the wheat paddocks to be in a similar state. 4. In his evidence yesterday, Mr Brain introduced the original records recording the rotor hours for the John Deere harvester. The original record is Exhibit 17. This is an old notebook issued by Elders, obviously to farmers, which has on the inside of the front cover, the calendar for the year 2006 and on the inside of the rear cover the calendar for the year of 2007. It commences with giving the details of Elders head offices in Australian States, some promotion of Elders products, their major wool location centres in mainland Australia, the school terms for each of the States and Territories for the year 2006, the public holidays for year 2006, then the "dressed weight price to live weight price conversion", obviously referrable to the growing of stock; then breeding tables for sheep, goats, horses, cows, and pigs, and dogs. Then a handy measurement of different sorts of grains and live animal assessment guidelines; obviously with the view to the butchering of sheep and cattle. However, the majority of the notebook is blank pages. 5. In Exhibit 17 there is one page for the Hawker's wheat harvest, and another page for the Hawker's rice crop. The rest of the notebook is blank and obviously unused other than for the two pages noted. The first entry under the heading "Wheat Harvest Hawkers" was made by Ms Ellie Brain, the daughter of the principals of the Defendant, Mr and Mrs Brain. She wrote the heading and then the date 21/12/16 and recorded a reading of 851.7 rotor hours. 6. Other than some figures which are additions made by Ellie, the remaining entries were made by Mr Brain. Those entries are these: "24/12/16 891.4 stop." "30/12/16 891.4 start." "6/1/17 954.5 stop." 1. Ellie has calculated the difference between the two stop and start dates and then added the total of those two figures which comes to 102.8. 2. Yesterday, Mr Brain gave most of his evidence in chief by way of an affidavit sworn on 6 June 2023, and that affidavit, which is Exhibit 16, contains this: "5. Going back through the records of deliveries of the Hawker's wheat crop, I realise I made a mistake on one of the start dates. The log book records: '30/12/16 981.4 Start'. This is a mistake. The logbook should record '27/12/16 891.4 Start'. 6. I identified this mistake when I compared the log book to the dates recorded in the GrainCorp Grower Delivery Summary Report relating to the Hawker's wheat crop. This is Volume 3, pages 935 936 of the Court Book. This report identifies that the Hawker's wheat crop was harvested and delivered to GrainCorp's Coleambally depot between 21 24 December 2016 and then 27 29 December 2016. 7. I was present each day the Hawker's wheat crop was harvested. Our header was harvesting each day. The wheat was delivered to the GrainCorp Coleambally depot. 8. After we completed the harvest of the Hawker's wheat crop, we left the header at Hawker's. We also left two tractors, auger bin, and the mother bin. We left it there because it was my daughter, Kimberley's 18th birthday on 31 December 2016. Then there was the holidays and we didn't want to be on the road while it was busy with holiday makers. We also had plenty of other work on watering maize and soy beans. 9. On 6 January 2017, I returned to Hawker's to remove these items and drive them back to our farm located at Farm 600, Graham Road, Coleambally. Moving the machinery is a big job involving between five six people. It requires two escort vehicles because the header is over width. The header can only travel at 30 kilometres/hour. The distance between Hawker's and Farm 600 is about 12-14 kilometres via Cadell Road, then Kidman Way, then onto Graham Road. Kidman Way is busy with traffic, being the main road between Jerilderie and Griffith." 1. In the following paragraph, Mr Brain attested to doing no other harvesting work on "winter crops" between 21 December and 6 January 2017. When being driven on the road, the rotor hours are not engaged because the machine is not actually harvesting. One can understand then that the end date being 6 January 2017 either when they entered the harvester to drive it from the Hawker farms or when they got it back to their home base on Graham Road. 2. The vice in Exhibit 17 is obviously the mistake of recording 30 December rather than 27 December. In cross examination, Mr Brain was forced to admit that the issue about this erroneous entry in what he says is a contemporaneous document was addressed by Mr Walsh in his affidavit of 16 February 2022 at [35] which can be found in Volume 3 of the Court Book at page 922. Mr Brain admitted that this discrepancy did not come to his attention until the time he swore the affidavit on 6 June 2023. 3. That it took Mr Brain some time to realise the problem posed by Exhibit 17 is understandable. In my primary judgment given on 3 March 2023, I said this at [14]: "Mr Ken Brain attended Coleambally Central School, completing year 10 at the age of 17 years. He has dyslexia. In cross examination what he said in his affidavits or was said in documents about which he was cross examined had to be read to him, not by him. Like Mr Walsh, Mr Brain worked in his youth on his father's holdings. At the age of 24 or 25 he married his wife on 11 March 1989." 1. I then go on to record other salient factors. However, Mr Brain may not have had his attention drawn to the discrepancy first identified by the Plaintiff. It is, in the circumstances, understandable and more understandable given the sheer volume of the material which originally was six lever arch binders being the "Court Book" but there have been many additional tenders since that time. 2. In it was suggested, very strenuously, to Mr Brain that Exhibit 17 was bogus, a document concocted for the purposes of this case. Like its brother, Exhibit 18, another book of exactly the same type issued by Elders which contains one page of entries for contract header 9650, another header owned by the Defendant. All the entries in Exhibit 18 are in the hand of Mr Brain other than the additions and the total of the additions which additions and total were made again by his daughter, Ellie. 3. One can understand that if the Brains had a supply of old, free handouts from Elders that could be used to record things, they might be so used. 4. The fact that Exhibit 17 has no other entries other than for the work done for Mr Walsh is explained by the fact that since working for Mr Walsh, the Brains have not done any contracting work for any other person. I accept that the documents are genuine. However, for this exercise I only need accept that Exhibit 17 is genuine. 5. In Mann v Paterson Constructions Pty Ltd [2019] HCA 32, Nettle, Gordon and Edelman JJ said, at [203], that the defendant's claim must be limited to the reasonable value of the work performed and the costs incurred in anticipation of the joint venture which did not eventuate. Here, we have such a non‑completed or non‑accepted proposed joint venture. 6. When the defendant agreed to assist Mr Walsh in harvesting the Hawker's rice crop, it was assumed by both sides that they may enter into the joint venture at some future time. That did not occur, owing to the breakdown in the relationship between the plaintiff and the defendant, but, again, the cost must be a reasonable one. 7. I have been addressed at some length, in writing, in MFI 12, and orally, by both parties, on this issue. It appears to me that some form of compromise is called for. 8. One thing that I did form a view about initially in this case was that the plaintiff, Mr Walsh, was a very experienced farmer. I discussed his farming career at the commencement of my primary judgment. That is quite well attested to by Ms Caryn Plant, his sister, when giving evidence in cross‑examination. At page 86 of the transcript of 7 March 2022, Ms Plant said this: "My father died in 2016 and he'd been growing rice for 50 years, there was one photo out of that that had been taken in 50 years and, .. I'm sorry, but I didn't want my brother to not have any photos. And also I thought that this was an adventure that, ... my brother was just starting and he was so excited about this venture. I thought, 'If you want to' ‑ I'm a family historian and I thought if we, ... took some photos now, that we'd look back at Hawker's and see how poorly laid‑out it was, and my brother would have made that look like the most amazing property 'cause that's what he does and that's what he's best at, and it would have been great to look at what a crap it .. is now to what it would have been ‑ to what he would have been able to make it and you would have looked back on that, which he does with Dalree and every other property that he's touched, you can see what his ... done, and that is the reason why I took the photos." 1. In other words, he was a farm buyer and farm improver, and enhancer of properties, and I am confident that his own primary holding, Archdale, at Deniliquin, would have been in a much better condition than the Hawker's Agglomeration. 2. It is clear from the Wiesners' invoice that 70 rotor hours were recorded for the Gleaner that the plaintiff hired to harvest the Archdale wheat crop and half of the Hawker's wheat crop. There were 275.30 tonnes of wheat harvested from Archdale and 620.37 tonnes of rice that the plaintiff harvested from the Hawker's property. Of the total wheat harvested, 37.4% was harvested from Archdale and 69.26% was harvested, by the plaintiff, off the Hawker's farms. However, I would expect that it would have been much easier for the plaintiff, with his improved property, to harvest off Archdale than he would have harvested off Hawker's. 3. I do not accept, therefore, that only 69.26% of the time incurred by the Gleaner hired by Mr Walsh from Wiesners was spent on the Hawker's property. Some adjustment has to be made because Archdale would have been a much easier wheat crop to harvest. I am prepared to accept that 75% of the time of the Gleaner was used on the Hawker wheat crop. 4. 75% of 70 hours is 52.5 hours. At the rate charged by Wiesners to the plaintiff, $260 per hour, the total amount would be $13,650. However, the Wiesners' invoice makes it clear that there was a special rate applied to this hiring to the plaintiff. What was special about the rate, I do not know. Furthermore, I do not know anything about the state of the Gleaner which was hired by the plaintiff. It may have been an older machine, it may have been in poor condition. 5. The question is: at what rate should I allow the defendant to charge for the use of the John Deere 9770 header? I have come to the view that I should apply the rate of $600 per rotor hour. Applying that rate, which is common to the experts, was an appropriate rate to charge, if rotor hours were being used. 52.5 times 600 is $31,500. 6. I, therefore, allow for this item, which is item A1, the sum of $31,500.