New South Wales Supreme Court CITATION : Perigord Truffles of Tasmania Pty Limited v Patrick Fitzgerald [2008] NSWSC 643 HEARING DATE(S) : 23, 24, 25, 26, 27 June 2008 JUDGMENT DATE : 18 July 2008 JUDGMENT OF : Hammerschlag J DECISION : Verdict for the Plaintiff CATCHWORDS : CONTRACT – Joint Venture – Whether either party repudiated – test to be applied – acceptance – whether party otherwise entitled to accept repudiation precluded by its own conduct from doing so – DAMAGES – assessment of value of future opportunity to earn profit where proof unattainable CATEGORY : Principal judgment Shevill & Anor v Builders Licensing Board (1982) 149 CLR 620 Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1988) 166 CLR 623 McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 Foran v Wight (1989) 168 CLR 385 DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 CASES CITED : Ross T Smyth & Co Ltd v TD Bailey, Son & Co [1940] 3 All ER 60 Summers v Commonwealth (1918) 25 CLR 144 Wenham v Ella (1972) 127 CLR 454 Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286 Sellars v Adelaide Petroleum NL & Ors (1994) 179 CLR 332 at 349 The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 Perigord Truffles of Tasmania Pty Limited ACN 009 500 332 Patrick Fitzgerald Jarrod Fitzgerald PARTIES : Carolyn Fitzgerald Ruth M Fitzgerald Lorraine M Fitzgerald Kylie J Fitzgerald Kynan Jordan FILE NUMBER(S) : SC 50179/2006 COUNSEL : C. Birch SC with S. Coleman (Plaintiff) G. McNally SC (Defendants) SOLICITORS : King-Christopher Carpenter (Plaintiff) Matthews Dooley & Gibson (Plaintiff) - 18 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST HAMMERSCHLAG J 18 July 2008 50179/2006 PERIGORD TRUFFLES OF TASMANIA PTY LTD –V- PATRICK FITZGERALD JUDGMENT INTRODUCTION 1 HIS HONOUR: The French black or Perigord truffle is a desirable subterranean edible fungus native to southern continental Europe. It is produced when spores of the fungus attach to the roots of oak and hazel trees to form a symbiotic relationship. It is predominantly harvested by the use of trained dogs (in earlier times, pigs). A plantation of truffle-bearing trees is known as a trufferie. 2 The plaintiff company alleges that in about May 2001 it and the defendants entered into an agreement ("the agreement") pursuant to which the plaintiff would over a period of twenty-five years provide material and services for the establishment and operation on the first defendant's land of a trufferie, and would share with the defendants in the risk and profits associated with the harvesting, marketing and sale of the truffles produced there. 3 The defendants are a partnership. They are members of the Fitzgerald family who have, in their dealings with the plaintiff, been represented by Mr Patrick Fitzgerald (the first defendant) and his son Mr Jarrod Fitzgerald (the second defendant). Unless otherwise stated or the context otherwise indicates references to Mr Fitzgerald are to Mr Patrick Fitzgerald. I shall refer to Mr Jarrod Fitzgerald as "Jarrod" with no disrespect intended. Mr Fitzgerald owns a farming property at Pinnacle Road, Orange in the State of New South Wales ("the property"). 4 The plaintiff says the defendants breached and repudiated the agreement. It sues for damages for breach of contract. 5 A claim for damages for alleged misleading and deceptive conduct on the part of the defendants and cross-claims by the defendants for damages for breach of contract and for damages for alleged misleading and deceptive conduct on the part of the plaintiff were appropriately abandoned in submissions. FACTUAL BACKGROUND 6 Mr Garvey is one of the plaintiff's two directors. The other is Mr Peter Cooper. Mr Garvey is an agronomist and was the person principally responsible for the plaintiff's dealings with the defendants. 7 The plaintiff was formed in 1992 to exploit what Mr Garvey perceived was an opportunity of producing truffles in Australia for marketing. In Europe truffles are harvested in winter. Mr Garvey saw the prospect of harvesting them in the Australian winter being out of season in Europe. He visited France a number of times to investigate the truffle industry. It was proposed to produce truffles in Australia by inoculating trees with spores of the fungus. The plaintiff's first endeavours took place in Tasmania. The first truffle was produced in northern Tasmania on 19 June 1999. During winter 2000 there was a small commercial harvest at three sites in that State. 8 The plaintiff's early business strategy was to establish joint ventures with farmers in Tasmania. Later it expanded its endeavours to mainland Australia. 9 In 2000 the plaintiff placed an advertisement in The Land newspaper seeking interest in truffle ventures. In July 2000 Mr Fitzgerald contacted Mr Garvey in response to the advertisement. 10 Mr Garvey explained to Mr Fitzgerald that the plaintiff was keen to expand its operations to the mainland. He says he told Mr Fitzgerald that they were offering two options: either a purchase of trees together with a joint venture arrangement or an outright purchase of trees on a "non-contract" basis. He says he told Mr Fitzgerald that under the first option the trees would be sold at a lower price because they would be subsidised by the plaintiff. Mr Fitzgerald does not accept that there was discussion about two prices. 11 Mr Garvey subsequently visited Mr Fitzgerald in Orange. He says that he explained the breakdown of the tree price under a joint venture arrangement into actual tree price, management and agronomic advice with a total of $22 compared to a non-contract price for only the tree of $26. If there was a non-contract sale the plaintiff would not be committed to offer advice or support. He says Mr Fitzgerald said that if he was to go ahead he would do so under the joint venture arrangement. Mr Fitzgerald disputes Mr Garvey's version. 12 It is, however, not disputed that in the same conversation they discussed a proposed arrangement under which there would be a 50/50 split of the gross sale price of truffles produced and that the plaintiff shared the risk of production by committing to do the harvesting and marketing. 13 On this occasion Mr Garvey and Mr Fitzgerald inspected "the paddock" Mr Fitzgerald was considering using to establish the trufferie. Mr Garvey made recommendations about the application of lime to the soil. Mr Garvey took a soil sample and sent it to a laboratory in Victoria for analysis. He later sent a report to Mr Fitzgerald. 14 In about September or October 2000, under cover of an undated letter, Mr Garvey sent Mr Fitzgerald some written material which included a document entitled "Joint Venture Arrangement" which in brief terms stated that the joint venture arrangement would involve the plaintiff providing, at no additional cost to the grower, a number of services. It also stated that income derived from the sale of truffles would be equally divided between "the company and the growers". 15 The material included a spreadsheet projecting cash flow from the production of truffles over a period of 20 years with the first production assumed to happen in the fifth year. A document entitled "notes on financial analysis" was included. The notes stated that French experience suggested that established and well-maintained trufferies could expect to yield 90 to 120 kilos per hectare and that the calculations were based on a conservative yield of 60 kilos per hectare. The spreadsheet reflected a yield in year five of 3 kilograms per hectare, 10 in year six, 15 in year seven, 20 in year eight, 40 in year nine and 60 for each year after that. The budgeted price to the farmer per kilogram was assumed at $750. 16 Mr Garvey visited Orange again in the week of 22 January 2001 and met with Mr Fitzgerald and Jarrod. On this occasion Mr Garvey said that there would be a joint venture agreement to be signed which he was in the process of getting drawn up because he had only Tasmanian ones at that time. Mr Garvey outlined the terms of the proposed arrangement. 17 In late February 2001 the defendants decided to form a partnership and to invest by acquiring from the plaintiff sufficient trees to create a trufferie of five hectares with a density of about 600 trees per hectare. 18 On 8 May 2001 Mr Garvey and Mr Cooper met with Mr Fitzgerald. Mr Garvey says Jarrod was present. Jarrod says he was not. Either way at this meeting Mr Garvey was informed that the defendants were going to proceed under the joint venture. Mr Garvey gave evidence that as at 8 May 2001 he regarded himself and Mr Fitzgerald as having reached an oral agreement to embark on the joint venture. 19 Mr Garvey says that at this meeting he said that he would send a modified contract when his solicitor had completed changes to reflect "the NSW title". Mr Fitzgerald denies any such conversation. 20 The evidence indicates that on 15 May 2001 Mr Garvey received from his solicitor the form of an agreement for use with land located in New South Wales or Victoria. He says he sent it on to Mr Fitzgerald in the week following 15 May 2001 under cover of a letter. But he did not keep any such letter and Mr Fitzgerald denies ever having received either the letter or the form of agreement. 21 On 25 June 2001 the plaintiff invoiced the defendants for 2,922 trees at $22 per tree. Mr Garvey says that before sending the invoice he spoke to Mr Fitzgerald and Jarrod on the telephone and said to them that in order to invoice the trees properly he needed to know whether or not they would be proceeding with the joint venture or whether they were just purchasing the trees. He says that the response from both was "we are comfortable with the joint venture". That conversation is not denied. 22 The invoice was for $70,712 which amount included the price of the trees, an amount for management advice, a consulting fee and GST. The defendants paid $35,000 of this amount on 8 August 2001. 23 The trees were dispatched in August 2001 and invoices for freight were rendered shortly thereafter. 24 The plaintiff delivered 216 replacement trees in November 2002. 25 From 2002 until 2005 the parties cooperated. They had no signed agreement. 26 In March 2005 Mr Garvey says that in the process of tidying up the plaintiff's paperwork he noted that he did not have a signed joint venture agreement from the defendants. 27 Shortly thereafter a telephone conversation took place between him and Mr Fitzgerald during which the absence of a signed agreement was raised. Mr Garvey's version is that he said: "I don't seem to have a signed joint venture agreement with you Pat, where are we at with it?" and Mr Fitzgerald said: "I don't know – I will follow it up with Jarrod, as he is looking after the paperwork." 28 Mr Fitzgerald's version is that his answer was: "I haven't seen it. You should check with Jarrod because he looks after all the paperwork." 29 On 24 June 2005 Mr Garvey sent an email to Jarrod in which he said: "Re JV agreement I sent a long time ago. We have modified agreement to suit NSW better. I have attached a copy. If you have a chance to review and come back to me as I want to finalise agreement." 30 Jarrod's evidence is that he did not look at the agreement at the time and later accidentally deleted both the covering email and the attached agreement. He said he was not concerned about the deletion because at that stage the parties had been operating without a written agreement for four years. 31 There are a number of differences between the version of the proposed written agreement that Mr Garvey sent in 2005 and the version he says he had posted in 2001. 32 In the meantime (that is in the middle of 2005) the parties contemplated and discussed the possible lease to a third party investor of land owned by Mr Fitzgerald alongside the trufferie for the establishment of additional trufferies. Mr Fitzgerald had outlined his requirements for such a lease and a draft lease had been prepared. Jarrod had provided fairly extensive comments to that draft to Mr Fitzgerald and to Mr Garvey in an email to Mr Garvey dated 8 July 2005, and Mr Garvey responded on 11 July 2005. Ultimately the lease proposal did not proceed because there were difficulties with guaranteeing water availability to a proposed lessee. 33 Some differences arose between the parties in mid-2005 about fencing, pruning and the use of herbicides. 34 Mr Garvey wrote a letter to Mr Fitzgerald on 21 August 2005 concerning these issues. 35 They met in mid-October 2005 and there was apparently some tension. Mr Garvey was unhappy about the state of the trufferie and Mr Fitzgerald was unhappy about the contents of the letter. 36 At the end of the conversation, according to Mr Garvey, Mr Fitzgerald said: + "Well, we are just not going to sign the Joint Venture Agreement." and that Mr Garvey replied: "Pat we have an agreement." 37 Mr Fitzgerald's version of this conversation is that he said: "I am happy to continue under our current arrangements but I am not signing that agreement that you sent me." and that Mr Garvey said: "Well I don't know if we operate under handshake agreements." 38 This encounter, it seems, was the beginning of the end. From that time there was no direct communication between Mr Garvey and Mr Fitzgerald. 39 In January 2006 Jarrod called Mr Garvey and told him he had deleted (from his computer) the agreement he had received and asked for another. He raised with Mr Garvey the difficulties that had apparently arisen between Mr Garvey and Mr Fitzgerald. At one point the telephone conversation became somewhat heated. 40 Jarrod's version is that he said to Mr Garvey: "Why can't we go on with just a handshake agreement as we have been." To which Mr Garvey replied: "That's not the way we do business." 41 Mr Garvey's version is that he said: "Jarrod we still don't have a signed copy of that agreement." Jarrod replied: "I can't find it, so could I have another copy?" Mr Garvey said: "The day your father spoke to me after I chipped him about the pruning, he said he wasn't going to sign up." Jarrod replied: "I don't know why he would say that. I really don't know where he is coming from. It is just not an issue. I will sort it out because we want to continue the relationship. I will be (sic) keep you informed." 42 On 19 January 2006 Mr Garvey emailed a copy of a form of written agreement to Jarrod. 43 On 2 March 2006 Mr Garvey emailed Jarrod asking him; "Where are we at with the JVA? It would be nice to know." 44 The same day Jarrod responded apologising for the delay. He said: "I am seeing Dad this weekend and will be discussing the whole thing with him, so we are moving forward, and I will endeavour to speed things up so that we can keep things moving." 45 Jarrod says that when he read the agreement Mr Garvey had sent he became concerned about a number of the terms in it including numerous terms that had never been discussed. He says the defendants consulted a solicitor and had a family meeting at which they agreed not to sign the agreement but agreed that they would like to continue their oral agreement with the plaintiff. The evidence did not elucidate what they contemplated as their oral agreement. 46 On 24 March 2006 Mr Garvey emailed Jarrod and asked: "How are things progressing?" 47 On 27 March 2006 Jarrod emailed Mr Garvey ("Jarrod's 27 March 2006 email") saying: "Due a number of reasons, we have decided not to sign the JV." 48 Mr Garvey's response was in an email on the same day ("Mr Garvey's 27 March 2006 email") in the following terms: "Re Decision not to sign the JVA Prior to establishing the trufferie in September 2001 you were presented with two options either to purchase the trees under the Joint Venture Agreement or on a non-contract basis. Your decision was to pursue the JVA option and the trees were invoiced accordingly. The JVA as detailed in the contract which you have had in your possession for a number of years the arrangement is clearly defined. With respect to the non-contract option there was no formal arrangement and the growing, harvesting and marketing of the truffles was the responsibility of the farmer. In 2001 the price of the trees under the JVA was $22 which was made up of $5 for the tree and $17 for the management and agronomic advice. The price of the trees purchased as non contracted was $26. Therefore there is an outstanding amount of $11,688 plus GST of $1,168.8 representing an additional $4 per tree on the 2822 trees purchased." 49 An invoice for $12,856.80 was enclosed with the caption "Differential between tree (sic) purchased under JVA". 50 The response on behalf of the defendants came from Longman Hill, a firm of solicitors at Orange, in the form of a letter dated 10 April 2006. It is necessary to set it out in full: "Please be advised that we act for the above and are in receipt of your correspondence including your letter and invoice dated 27 March 2006. We note your admission that there is no existing joint venture agreement. This is in accordance with our clients' understanding. With regard to your assertion that the price was in fact $26 per tree we reject this on a number of grounds including: (a) to charge one class of customers $5 per tree and another class of customers $26 per tree would amount to price discrimination which is prohibited under the Trade Practices Act . (b) to be the contract price $26 would need to have been agreed upon at the time. The figure of $26 was not even disclosed in June 2001, the first mention of it being in March 2006. Clearly there is no agreement. (c) the tax invoice dated 25 June 2001 makes no mention of any joint venture. The fact of the invoice complies with our clients' understanding that with the purchase of each tree management advice and consulting would be provided. In fact no free management advice or consulting was provided. No agronomic, horticultural or husbandry advice or literature was provided pursuant to those items. The only advice that was provided was invoiced separately on an ongoing basis following each visit. It is clear that should this matter be taken to Court our client would have a substantial cross-claim for a refund of the management advice and consulting fee together with interest and legal costs. We put you on notice that we shall be applying for legal costs on an indemnity basis and will be relying upon this letter in making such application." 51 Mr Garvey responded with a lengthy letter to Longman Hill dated 24 April 2006. Likewise, it is necessary to set it out in full: "We refer to your correspondence of the 10 April 2006 and note that you act for the above. With respect to your stated grounds for rejecting independent grower's contract price of $26 per tree we address each below in turn. (a) prohibition under the Trade Practices Act (and by this we assume you refer to section 49) applies where a corporation treats differently those who are alike in a relevant sense. There is no application here on a number of grounds. Firstly, customers who are joint venture partners and customers who are not are unalike in a very relevant sense. The discounted price for joint venture partners represents part of Perigord's contribution to the initial investment as consideration for any eventual profit gained through the existence of the Joint Venture. Independent farmers provide no possibility of later income stream for Perigord and therefore Perigord does not subsidise their initial purchase. Secondly, even if independent farmers and joint venture partners were "alike" we dispute that any discrimination has occurred. Every customer is given the option to buy as either a joint venture partner or independently. The difference in price is a result of their own election as to how they wish to proceed. (b) The specific contract price of $26 ($9 per tree + $17 consultancy and management advice) for independent farmers was not discussed until recently because Perigord was led to believe by your client that they wish to become a joint venture partner. In that context Perigord worked on the subsidised figure for both the trees and consulting services provided. We note here that at no point were consulting services declined, nor did your clients request a specific contract price for trees if they were to purchase independently of the Joint Venture Agreement. This was despite that fact that they knew that such a figure was available and that they have had the Joint Venture Agreement document in their possession for a number of years. We are confident that if this matter were taken to Court your clients would be estopped from denying that the parties were proceeding on the assumption that the Joint Venture Agreement would be signed and that your clients would in fact become a joint venture partner. (c) Whether Perigord's tax invoice dated 25 June 2001 does or does not mention the joint venture agreement is irrelevant. It was an invoice issued under an agreement between the parties which your client led Perigord to assume would be executed. If your clients had no intention of entering into a joint venture with Perigord then that invoice was issued under a misapprehension. A new invoice has been issued for the difference of $4 per tree. You are correct in stating that no 'free' management/consulting advice was provided – advice was always paid for by a fixed consideration of $17 per tree where the customer is a joint venture partner. Independent farmers are billed for consulting and management services after each visit. The visit fee which was invoiced separately following each visit and to which you refer in you (sic) letter, was an amount agreed to defray Perigord's travel and accommodation costs in travelling to the customer to assess the trufferie and deliver this advice. No amount was included for Duncan Garvey's time and expertise as we were operating under the assumption that your client would be a joint venture partner. We cannot conclude without expressing our disappointment at what we find to be the dishonourable manner in which your client is proceeding. Perigord has always acted with utmost good faith in all its dealings with your client and in many instances provide (sic) unremunerated advice and assistance. Your client has always acted as if they were a joint venture partner, and have gone as far as requesting and accepting replacement trees at Perigord's expense, something which Perigord is only obliged to do for its joint venture partners. Because we have always acted in good faith we assumed your clients would do the same and certainly we now feel that an attempt is being made to exploit our trust and good will. Needless to say, should we need to take this matter further; we are more than confident of our position and will be pursuing not only the outstanding invoice but a claim for the replacement trees and consulting services delivered but not as yet invoiced. Also we will be pursuing compensation for the truffle searches already conducted (these are part of Perigord's obligations under the Joint Venture Agreement but are billed to independent farmers at a rate of $190 per hour). Finally as invoices were sent out on a joint venture basis due to your clients' misrepresentations as to their intentions we will also be seeking interest on these amounts. Moreover, we put your client on notice that we will apply of (sic) legal costs on an indemnity basis. We are at this stage willing to accept the payment of our invoice for the outstanding difference of $4 per tree as a settlement of your clients' obligations to Perigord, but will only hold that offer open until the 10 May 2006. Thereafter we will be seeking full reparations and or seeking to enforce our rights as a joint venture partner in your Client's trufferie the terms of which were clear, documented and accepted even if they were not executed." 52 Longman Hill on behalf of the defendants responded on 18 May 2006 in the following terms: "We refer to your letter of 24 April 2006. With regard to price discrimination the prohibition is against treating customers differently when they are unalike. It is the product that needs to be alike in a relevant sense. With regard to the alleged contract price of $26 we note your agreement that this was not discussed until recently. That fact alone puts it beyond doubt that no contract for such a price ever existed. There was no offer let alone acceptance. With regard to your estopple (sic) argument this would only be of any relevance if you were proceeding to attempt to enforce the joint venture agreement. We note however that you have previously conceded that it is not in existence. The fact that the tax invoice makes no mention of the joint venture agreement is with the greatest of respect central to any case that you may wish to run. You say that entering into the joint venture agreement was an essential condition of issuing the tax invoice dated 25 June 2001. Our client says that there was no such condition. The fact that the invoice dated 25 June 2001 makes no mention of it is fatal to your case. The agreement on the face of the tax invoice is complete within itself. Even if you were allowed to lead evidence of your 'understanding' (which is extremely doubtful as it would be inadmissible under the parole evidence rule), this only gets us to the point that there was no genuine meeting of the minds or 'misapprehension'. The fact there was no agreement does not entitle you to substitute some other arrangement that you would have done if you had known. It just means there is no agreement therefore no cause of action upon which you can sue. With regard to the cross-claim you again fall into error by seeking to substitute conditions that were never discussed into the agreement. The invoice of 25 June 2001 makes it quite clear that management advice and consulting have already been paid for. We note that you agree that no free advice was then given. It is no answer to the cross-claim to say yes I charge you for the advice but I would have charged you even more under some other arrangement. None of these amounts were ever discussed. We do not intend to enter into any more correspondence with you. If you truly consider you have a claim enforceable at law then we have instructions to accept service. We note that the appropriate jurisdiction is the Orange Local Court as this is where the defendants reside and where the consulting occurred." 53 The plaintiff commenced these proceedings by summons sued out of this Court on 13 November 2006 seeking a declaration as to the existence of the agreement and damages. THE JOINT VENTURE AGREEMENT 54 The plaintiff originally pleaded an express agreement partly in writing and partly oral. It pleaded that the written terms consisted of the document entitled "Joint Venture Arrangement" which had been sent in September or October 2000 and the "Truffle Agreement" which Mr Garvey says he sent to Mr Fitzgerald shortly after 15 May 2001. 55 During the course of the hearing the summons was amended twice. 56 By the first amendment the allegation of an agreement partly in writing was abandoned and instead the plaintiff pleaded an oral agreement which included the terms contained in those two documents and an additional oral term that the parties would sign a document recording the terms of the agreement as pleaded. 57 By the second amendment the plaintiff pleaded, in the alternative, an oral agreement entered into in or about May 2001 under which the parties would be associated with each other in the enterprise of growing truffles on land owned by Mr Fitzgerald on terms that: a the plaintiff would supply the defendants with 2,922 inoculated trees; b the plaintiff would render the defendants advice and assistance in the operation of a trufferie on the land; c the arrangement would have a duration of twenty-five years; d the plaintiff would undertake the harvesting and marketing of truffles at its own cost and would account to the defendants for 50 per cent of the gross selling price of truffles which it harvested and sold. 58 The second amendment also pleaded for the first time that the agreement had been brought to an end by the plaintiff's acceptance of the defendants' repudiation. 59 A fair reading of the defendants' original Commercial List Response filed on 6 March 2007 is that they denied any agreement. In an Amended Commercial List Response filed on 21 September 2007 (in line with the 10 April 2006 Longman Hill letter) they admitted an oral agreement for the supply of trees and the provision by the plaintiff of ongoing management advice and consulting services at a fixed price which was paid, but denied the existence of a joint venture. 60 It became clear during the hearing, however, that the defendants no longer disputed that there was a joint venture agreement and, consequent upon the plaintiff's second amendment (pleading the alternative oral agreement), the defendants filed a second Commercial List Response which admitted an oral agreement entered into on 8 May 2001 on the terms pleaded by the plaintiff. 61 It is not necessary to dwell for long on the assertions of an agreement on the terms of the written Truffle Agreement or any other document. It is also not necessary to dwell for long on the proposition that there was an oral term that the parties were bound to sign a document. Those contentions have insuperable difficulties. Their discussions after receipt by the defendants of the "Joint Venture Arrangement" document were no doubt predicated upon its contents. But the evidence never established any agreement under which they bound themselves to the specific content of that or any other document. Whilst the parties clearly contemplated the execution of a written document at some time, nothing in their dealings amounted to any agreement that bound them to do so or made execution of it a condition of performance. The parties operated with no written agreement for upwards of four years without any controversy. This conduct is inconsistent with the contention.. 62 I accept the evidence of Mr Garvey that he sent a form of agreement in 2001. He asserted it in later written communications before any dispute had arisen. I have significant reservations about Mr Fitzgerald's evidence that he never received an agreement in 2001. Jarrod says that he deleted the agreement Mr Garvey sent to him on 24 June 2005. There was no suggestion he gave it to Mr Fitzgerald before deleting it. Yet Mr Fitzgerald's version of the conversation with Mr Garvey in mid-October 2005 included a reference to "that agreement you sent me". Mr Fitzgerald's reference must have been a reference to an agreement sent earlier than the one which Jarrod deleted. In addition Mr Fitzgerald's initial affidavit evidence was to the effect that he never received any agreement from the plaintiff until sometime after 19 January 2006 when he received copy of an agreement via Jarrod. This evidence was wrong and during the hearing he swore a supplementary affidavit to the effect that he did receive an agreement in about mid-2005, but he did not say how he got it. Whether Mr Fitzgerald got it or not does not matter because he never agreed to be bound by it and the document which Mr Garvey proffered in 2005 was different from the Truffle Agreement he says he originally sent in 2001. 63 I accordingly proceed on the basis that from 8 May 2001 there was an oral agreement between the parties on the terms pleaded by the plaintiff in the alternative and admitted by the defendants. I will refer to this agreement as "the agreement". THE PLAINTIFF'S CONTENTIONS 64 The case for the plaintiff (for which Mr C S Birch of senior counsel together with Mr S Coleman appeared) was ultimately put as follows: a the defendants repudiated the agreement from or about 27 March 2006 when by Jarrod's email the defendants evinced an intention not to be bound by it. If Jarrod's 27 March 2006 email itself did not evince that intention then the subsequent letters from Longman Hill put it beyond doubt; b the plaintiff accepted the defendants' repudiation by not harvesting truffles in the winter 2006 season and allowing the defendants to sell them on their own account and to retain the proceeds, and by commencing these proceedings claiming damages for the loss of economic opportunity under the agreement; c the venture would have been profitable; d the plaintiff's damages are the profits it would have earned over the 25-year period of the agreement had the defendants performed under it. THE DEFENDANTS' CONTENTIONS 65 The case for the defendants (for whom Mr G McNally of senior counsel appeared) was ultimately put as follows: a Jarrod's 27 March 2006 email was not repudiatory. Whilst it communicated a refusal to sign the document proffered, it was not a disavowal of the existence of the agreement; b the plaintiff repudiated the agreement by Mr Garvey's 27 March 2006 email by purporting to "revert" to an arrangement for the outright sale of trees and by claiming the additional amount of $11,688 plus GST; c by the Longman Hill letter of 10 April 2006 the defendants accepted the plaintiff's repudiation and thereby brought the agreement to an end; d even if the defendants had repudiated the agreement, the plaintiff had itself from 27 March 2006 repudiated the agreement and had not resiled from its position and was therefore precluded from accepting the defendant's repudiation; e the plaintiff continued to repudiate by asserting an unsigned agreement on the terms of the written agreements when the terms of the parties' oral agreement were different; f if both parties repudiated and neither termination was effective, the parties had abandoned the agreement; g if the defendants repudiated but the plaintiff did not, the defendants' repudiation was brought about by the wrongful conduct of the plaintiff in demanding an extra $4 per tree. In these circumstances the plaintiff was precluded from terminating because allowing it to do so would permit the plaintiff impermissibly to take advantage of its own wrong. The plaintiff's purported termination would in those circumstances have been ineffective so that the agreement was abandoned; h the plaintiff did not establish that it had suffered any loss. 66 There is no issue between the parties that the agreement is no longer on foot. THE ISSUES 67 The issues are thus: a whether the plaintiff or the defendants or both repudiated; b if the defendants repudiated whether the plaintiff brought the agreement to an end by accepting that repudiation and, if so, how and when. This includes the question whether the plaintiff was precluded by its own conduct from accepting the defendants' repudiation; c if the plaintiff repudiated whether the defendants brought the agreement to an end by accepting that repudiation and, if so, how and when; d whether the agreement was abandoned; and e if the plaintiff terminated as a consequence of the defendants' repudiation, quantum. THE LEGAL PRINCIPLES 68 A party repudiates a contract by evincing an intention not to be bound by it or refusing to perform a fundamental obligation under it: Shevill & Anor v Builders Licensing Board (1982) 149 CLR 620 at 625-6. 69 Repudiation is not concerned with whether the alleged repudiator subjectively intended to repudiate his obligations. Repudiation depends upon objective acts and omissions and not upon uncommunicated intention. It is established when the conduct concerned, viewed objectively, has been such as to convey to a reasonable person in the situation of the other party, repudiation or disavowal either of the contract as a whole or of a fundamental obligation under it: Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1988) 166 CLR 623 at 657–8. 70 If one party repudiates its obligations the other acquires the right to terminate the contract. If that right is exercised the parties are discharged from the obligation further to perform. The right is exercised by "acceptance" of the repudiation, that is by the innocent party electing to terminate performance of the contract: McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 at 469-470. 71 Breach of a contractual obligation which has a prospective element is called an anticipatory breach and a repudiation may include words or conduct which can be treated as such a breach. A party rescinding for anticipatory breach must at the time of rescission be ready and willing to perform the contract in its essential respects when performance is due: Foran v Wight (1989) 168 CLR 385; DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423. 72 Repudiation of a contract is a serious matter and is not to be lightly found or inferred: Ross T Smyth & Co Ltd v TD Bailey, Son & Co [1940] 3 All ER 60 at 71; Shevill & Anor v Builders Licensing Board at 633. But the test remains objective: Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd at 657-8. 73 Whatever the terms of a contract may be, it is possible for the parties so to conduct themselves as mutually to abandon or abrogate it: Summers v Commonwealth (1918) 25 CLR 144 at 151-2; DTR Nominees Pty Ltd v Mona Homes Pty Ltd at 434. 74 Upon valid termination by the wronged party, that party obtains the right to sue for damages for the loss of the bargain it had. The measure of damages is that the plaintiff should be put in the position that it would have been in but for the breach, that is, the position if the contract had been performed: Wenham v Ella (1972) 127 CLR 454. 75 A plaintiff claiming to have suffered loss by reason of a defendant's breach of contract bears the onus of proving the extent of that loss or damage: Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286. 76 The assessment of damages for a loss which depends on future chances or possibility of benefit may be fraught with difficulty and attended by uncertainty, but the mere fact that damages cannot be assessed without difficulty and uncertainty does not relieve a Court from the responsibility of attempting to assess them as best it can. Where there has been an actual loss of some sort the common law does not permit difficulties in estimating the loss in monetary terms to defeat an award of damages. A lost commercial advantage or opportunity is a compensable loss even where there is a less than 50 per cent likelihood that the commercial advantage will be realised. Damages for breach of contract are to be assessed by reference to the probabilities or possibilities of what would have happened: Sellars v Adelaide Petroleum NL & Ors (1994) 179 CLR 332 at 349; The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 125. 77 Where future or hypothetical events must be taken account of in assessing damages and proof of them is necessarily unattainable, the Court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect that degree of probability: Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 at 643; Sellars v Adelaide Petroleum NL & Ors at 350. LIABILITY Did the defendants repudiate the agreement? 78 Whether the defendants repudiated the agreement depends on whether a reasonable person in the position of the plaintiff would, in all the circumstances, have concluded that by their conduct the defendants were evincing an intention that they were not bound by it or were refusing to perform a fundamental obligation under it. 79 The plaintiff relied on Jarrod's 27 March 2006 email seen against the background of the events which preceded it as evincing an intention not to be bound and further (or in the alternative) on the subsequent letters from Longman Hill. 80 The terms of the Longman Hill letter of 10 April 2006 leave little room for doubt that the defendants were communicating that their position was that there was not then, nor had there ever been, a joint venture agreement. Paragraph (c) of the letter made it clear that the defendants' position was that there had not been a joint venture agreement on 25 June 2001 when the plaintiff rendered its invoice. 81 The letter sought to characterise the plaintiff's 27 March 2006 email and invoice as an admission that accorded with the defendants' understanding that there was no joint venture agreement and (because they so understood it) there had never been. 82 It constituted a clear disavowal by the defendants of the agreement and satisfies the test for repudiation. 83 Thus from at least 10 April 2006 the defendants were repudiating the agreement. Their repudiation contained the prospective element that they were not going to perform in future and was an anticipatory and fundamental breach because it denied the very existence of the agreement. 84 Did they, however, repudiate earlier? 85 The plaintiff put that Jarrod's 27 March 2006 email was on its own and in its context a repudiation because the refusal to sign the "JVA", properly viewed against preceding events known to both parties, it amounted to the defendants denying the existence of the agreement. 86 The defendants submitted that the email did no more than communicate a refusal to sign a document which they were not obliged to sign anyway and that the email was not consistent with the acknowledgement of the agreement and wanting things to continue as a joint venture but not as one formalised in writing. They put that this was what in effect Mr Fitzgerald and Jarrod had communicated to Mr Garvey in their earlier conversation about signing a written agreement. 87 There are significant difficulties with this submission. 88 Firstly, from the start both parties had contemplated the signing of a written agreement. In the conversation in mid-October 2005 Mr Fitzgerald had, however, let Mr Garvey know that he did not want to sign one and Mr Garvey had made it clear that he would not be happy without one. 89 The respective versions of Mr Garvey and Mr Fitzgerald of the conversation differ. Mr Fitzgerald's version was that he said he was happy to continue "under our current arrangements" but was not signing the agreement which Mr Garvey had sent. Mr Garvey's version was that Mr Fitzgerald said he was just not going to sign. He denied that Mr Fitzgerald made any reference to "current arrangements". 90 I prefer Mr Garvey's version of the conversation. It sits more comfortably with the probabilities and is more consistent with the defendants' subsequent behaviour. But more importantly, Mr Fitzgerald could not, by his reference to "the current arrangements", have meant a joint venture agreement (and therefore the agreement). 91 Leaving aside that Mr Garvey did not take it that way but took it rather as a communication that Mr Fitzgerald did not want to sign up (he said so much to Jarrod), the 10 April 2006 Longman Hill letter (which was not suggested to have been written without instructions) says that the defendants' understanding throughout was that there was no agreement other than one that with the purchase of each tree, management advice and consulting would be provided. Mr Fitzgerald's understanding as put by Longman Hill was that there was no, and had never been, a joint venture agreement. His reference to current arrangements could therefore not have been a reference by him to a joint venture or the agreement. 92 Secondly, even on Mr Fitzgerald's version what he said did not amount to a communication of an acknowledgement of the joint venture arrangement, but rather requested that the current arrangements continue which did not include the execution of a written agreement which was something the parties had contemplated from the outset. 93 In my view a reasonable person in Mr Garvey's position would not have understood it in the way the defendants contend. 94 Thirdly, on Jarrod's version of the conversation with Mr Garvey in January 2006, Mr Garvey had made it clear to Jarrod that he wanted a written agreement. After all this is what the parties had contemplated throughout. 95 Jarrod's version of that part of the conversation dealing with the agreement is clearly incomplete. Mr Garvey's version is that in the conversation he raised Mr Fitzgerald's refusal to sign such an agreement and his evidence that Jarrod's response was that he would speak to his father and "sort it out" and that Jarrod would endeavour to speed things up sits comfortably with the contemporaneous events and the probabilities and I accept it. Jarrod did not deny it. 96 Far from intimating that the defendants' position was that there would be no written agreement, Jarrod told Mr Garvey that he would endeavour to speed things up. 97 The last communication from Mr Garvey to Jarrod before the 27 March 2006 email was an email asking "how are things progressing?" 98 Jarrod's 27 March 2006 email gave no indication of any willingness to sign any written agreement (in any form), nor did it give the reasons why there was a refusal to sign the "JVA" and was hardly consistent with Jarrod's earlier sentiments that he wanted to speed things up because he wanted their relationship to continue. 99 Fourthly, the terms of the refusal to sign were in stark contrast to both Mr Fitzgerald's and Jarrod's preparedness to negotiate in detail with respect to the proposed lease to the investor. 100 The refusal to sign the "JVA" would in the circumstances have conveyed to a reasonable person in the situation of Mr Garvey on behalf of the plaintiff that the defendants were disavowing any joint venture arrangement. 101 Finally, and as a safety check, to construe Jarrod's 27 March 2006 email as the defendants suggest would mean that he wrote something with a meaning inconsistent with his own state of mind as disclosed by the 10 April 2006 Longman Hill letter. 102 I accordingly find that by 27 March 2006 the defendants were repudiating the agreement. 103 By the Longman Hill letters dated 10 April 2006 and 18 May 2006 the defendants persisted in their stance that there was no agreement and maintained their repudiatory position. 104 I accordingly uphold the plaintiff's submission that on and from 27 March 2006 the defendants' conduct was a repudiation of the agreement. Did the plaintiff repudiate the agreement? 105 The defendants put that Mr Garvey's 27 March 2006 email and the rendering of the invoice with it was a repudiation because it conveyed an intention not to be bound by, and was inconsistent with the maintenance of, the agreement. 106 The inconsistency resides in the plaintiff claiming $4 per tree on the basis that was the "non-contract" price. Charging that price is therefore inconsistent with the existence of the agreement. 107 When the defendants received Mr Garvey's 27 March 2006 email and invoice, their position was that there was not and had never been a joint venture agreement. 108 It follows that reasonable persons in the defendants' position could not have construed Mr Garvey's email and invoice as disavowing either such an agreement or the plaintiff's fundamental obligations under it. 109 Mr Garvey's 27 March 2006 email did by implication accept that, because of the defendants' disavowal, there was then and would no longer be a joint venture agreement. It also contained a misconceived claim for the tree price differential based on that acceptance. 110 I am inclined to think that, properly characterised, Mr Garvey's 27 March 2006 email was an acceptance of the defendants' earlier repudiation. That possibility was very briefly canvassed in debate between the Court and the defendants' counsel but the plaintiff neither pleaded it nor put a submission to that effect. It is therefore not appropriate to determine it. 111 Even if, contrary to my finding, Mr Garvey's 27 March 2006 email was a repudiation, the defendants themselves were then not ready or willing to perform their side of the bargain and were repudiating it and future performance of it so that it was not open to them to accept the repudiation. 112 The letter from the plaintiff dated 24 April 2006 did not constitute a repudiation either. Although it sought to maintain various misconceived claims, it concluded with an offer to take the tree price differential in settlement of the defendants' obligations and concluded with the statement that if the offer was not accepted the plaintiff would seek "to enforce our rights as a joint venture partner in your Client's trufferie the terms of which were clear, documented and accepted even if they were not executed." 113 In clear terms the letter communicated that there had been an agreement or that there was an estoppel precluding the defendants from denying one. 114 In addition the response from Longman Hill on 18 May 2006 did not construe the 24 April 2006 letter as a repudiation. It could not have because the defendants were saying that there was no agreement. 115 The general tenor of the 24 April 2006 letter leaves little room for doubt that the plaintiff was ready and willing to continue with the joint venture and would have done so had the defendants recanted from their position. 116 If Mr Garvey's 27 March 2006 email was a repudiation by its 24 April 2006 letter the plaintiff resiled from that position and could therefore treat the defendants' conduct as a repudiation and could rescind accordingly: DTR Nominees Pty Ltd v Mona Homes Pty Ltd at 434. 117 Very little was put by the defendants with respect to the plaintiff's insistence on execution of the written agreement or agreements it proffered (or says it proffered). Nothing which the plaintiff did showed a lack of preparedness to negotiate with respect to the documentation. The execution of an agreement was in accordance with both parties' contemplation. Mr Garvey had requested to be told what was happening with the documents. His conduct cannot fairly be characterised as evincing an intention not to be bound, but quite the opposite. 118 In my view the plaintiff at no time repudiated the agreement or abandoned it. 119 It follows from what I have said above that the plaintiff was not by its own conduct precluded from accepting the defendant's repudiation. 120 The defendants put that in the event that the defendants repudiated (which I have found) and the plaintiff did not (which I have found) the defendants' repudiation was brought about by the wrongful conduct of the plaintiff in demanding an extra $4 per tree so that to permit the plaintiff to terminate would be contrary to the precept that a party is not permitted to take advantage of its own wrong. 121 This submission is untenable for two reasons: firstly the defendants' repudiation occurred before the $4 demand and was therefore not brought about by it; and secondly the defendants' denial of the existence of the agreement did not come about as a result of that demand. When did the agreement come to an end? 122 It was not put in issue that the agreement had in fact come to an end. Nor was it put by the defendants that if they had repudiated, and the plaintiffs were not precluded from accepting their repudiation, the agreement had come to an end by the plaintiff accepting the repudiation as pleaded. 123 The plaintiff, however, did not identify a particular date with respect to its conduct in allowing the defendants to harvest in the winter 2006 season, to sell and to keep the proceeds. 124 Having regard to this and to the fact that it was neither pleaded nor submitted that acceptance of the defendants' repudiation occurred on 27 March 2006 I find that the plaintiff validly accepted the defendants' repudiation and brought the agreement to an end on 13 November 2006 when it commenced these proceedings. DAMAGES 125 The plaintiff lost its bargain on 13 November 2006. 126 It is entitled to be put in the position it would have been in had the defendants performed. 127 Had the agreement been performed it would have had the opportunity to make a profit from the sale of the truffles produced at the trufferie. It has lost that opportunity. Its damages are (and nothing to the contrary was put) the present value of that profit (or the opportunity to make it) over the life of the agreement, that is until 7 May 2026. 128 The plaintiff's profit would have been the selling price of the truffles produced less the 50 per cent of that price it would have paid the defendants and less the costs it would have incurred in harvesting and marketing the truffles (as well as any additional cost it would have incurred as a consequence of providing its ongoing agronomic advice service). 129 Whether any truffles would have been produced, and if so how many, is a matter of future hypothesis of which proof is necessarily unattainable. 130 The price at which they could have been sold and the costs involved are also a matter of future hypothesis although that if sold there would have been a price payable and that costs would have been incurred are both certainties. 131 Thus whether a profit would have been earned and if so how much requires determination of future possibilities and hypothetical events of which proof is necessarily unattainable. 132 The Court must make an assessment of the possible yield and other relevant integers in the profit calculation and then adjust its award of damages to reflect the degree of probability. 133 The award must also take account that it will be an award payable now and thus will reflect the present day value of a potential return in the future. 134 The plaintiff approached the exercise by seeking to forecast an outcome on a yearly basis and to discount the result by a rate intended to bring the value to present day value by applying a rate comprising the risk-free rate (which brings to the present the future value of money) plus a premium rate to take account of the business risk that the projected outcome might not be achieved. 135 The elements of the calculation are: a the truffle yield on a yearly basis over the period; b the truffle price on a yearly basis over the period; c the cost of harvesting and marketing on a yearly basis over the period; d the discount rate. 136 The plaintiff proffered a series of tables reflecting three permutations each of yield, price and cost, that is, nine variations. 137 With respect to the discount rate it relied on the report of an expert accountant, Suzanne Delbridge-Bailey, who opined that an appropriate discount rate was between 15 and 20 per cent and therefore applied a discount rate of 17.5 per cent under each of the nine scenarios. 138 No issue was taken by the defendants with the plaintiff's methodology which applied a discount rate to the ultimate profit figure reached on assumed figures for yield, price and cost. 139 I have adopted the same approach. It is accordingly necessary first to make an assessment of future yield, price and cost and then to consider what discount rate should be applied. Truffle yield 140 The evidence on yield was limited to that of Mr Garvey who swore a lengthy affidavit recounting his experiences in France and in Australia and proffering the projections in the nine scenarios as alternatives. 141 The defendants led no evidence. 142 The uncertainty involved in this exercise was aptly described in an exchange Mr Garvey recounted in his affidavit evidence with M. Pallier, a French truffle farmer who said "you can have the correct soil and find no truffles or like me you can have the incorrect soil and find many truffles". 143 Additionally the defendants elicited from Mr Garvey during cross-examination a long list of factors that might affect yield: the chemical analysis of the soil, its physical characteristics, weed control, pruning, fencing to stop the incursion of native animals, effective harvesting, availability of highly trained dogs and handlers, climatic conditions, the availability of water and its management, the effective use of limestone, achievement of acceptable pH levels, low to moderate levels of phosphorous in the soil, cold winters, warm springs and warm to hot summers. 144 In October 2000 Mr Garvey prepared a business plan in which the following was said: "Based on realistic long-term yield estimates of 60 kg per hectare, PTT envisage that in five years they will be marketing up to 500 kilos. When new plantings reach production maturity, PTT anticipate producing between 8,000 to 10,000kg with an estimated value of 15 million dollars." 145 In the projections which he had given to the defendants in 2000 he had predicted yields commencing in year five with three kilograms per hectare and progressing as follows: 10 in year six, 15 in year seven, 20 in year eight, 40 in year nine and 60 from year ten to year twenty. 146 In his evidence before me Mr Garvey sought to adhere to those projections as realistic. 147 In the nine scenarios propounded by the plaintiff one series of calculations adopted a yield of 50 per cent of those originally predicted and one a yield of 120 per cent of those originally predicted. The 50 per cent alternative amounted to 1.5 kilograms per hectare in year five, 5 in year six, 7.5 in year seven, 10 in year eight, 20 in year nine and 30 thereafter. 148 The defendants put that little or no weight should be given to Mr Garvey's expressions of opinion with respect to future yield: firstly because it was evidence of an expert nature and he was not independent; and secondly because as cross-examination disclosed, and he accepted, his predictions have transpired to be "wildly inaccurate". 149 Whilst I formed the view that Mr Garvey's adherence to those projections as being realistic was an honest expression of an opinion truly held by him, I have taken the approach that I should give no weight to that opinion as I consider it unsafe to do so. 150 However with respect to the matters of fact of which he gave evidence including the factors which would affect yield I accept his evidence. The defendants led none to the contrary. 151 Truffle production in New South Wales is very recent. The trufferie was only the second plantation of trees for truffle production in this state. 152 There are, however, a number of incontrovertible facts: the trufferie produced in 2006 and 2007 and has already produced this year and truffles produced in 2006 and 2007 were sold. 153 According to Mr Fitzgerald, in 2006 (presumably in winter when this dispute was already on foot) 2.8 kilograms were harvested of which 1.624 kilograms were sold for $2,341. This was after only four years and therefore a year before Mr Garvey's projected maiden harvest. 154 In 2007 the yield was 0.28 kilograms of which 0.276 kilograms were sold for $524.59. 155 The harvest for 2008 has not been completed. To this point the defendants have harvested three hundred grams. 156 These facts alone establish that the plaintiff lost a commercial opportunity of worth. 157 In his affidavit evidence Mr Garvey made reference to a publication by Monsieur G Chevalier entitled "The truffle cultivation in France: assessment of the situation after 25 years of intensive use of mycorrhizal seedlings". The author concludes that when 50 per cent of the trees are producing or having produced and the yield is 15 to 20 kilograms per hectare, it is considered a good result. 158 Mr Garvey was cross-examined about this paper. It was put to him that M. Chevalier is an expert in the French truffle industry and Mr Garvey accepted that in some aspects of French truffle production M. Chevalier is so considered. 159 It was put to Mr Garvey that M. Chevalier's figures were more conservative than his and that M. Chevalier considered the optimal density to be 400 plants per hectare whereas the trufferie has a density of 600. Mr Garvey made the point that the author was considering unirrigated trufferies whereas the trufferie is irrigated. On the state of the evidence these two considerations cancel each other out. 160 The low end of M. Chevalier's good result spectrum is 15 kilograms per hectare. That is a rational starting point and I consider that it should be adopted as the maximum probable yield of the trufferie from year ten onwards. However the probability of that being achieved or that it might be achieved must be adjusted because the evidence shows that production outside of France, where the industry has been alive for centuries, has been disappointing. 161 In 2005 the Tasmanian trufferies achieved six per cent of projected figures (but a number of those trufferies were without water). 162 So far as the trufferie is concerned, its first year of expected production was winter 2007 but in 2006 it yielded just under 20 per cent of the 2007 prediction. In 2007 it yielded only a tiny fraction of the predicted production of three kilograms per hectare. 163 Experience in the United States, New Zealand and Western Australia has also been disappointing. 164 The trufferie should notionally reach optimal production after ten years. Taking into account (as appears below) the effect on the profit calculation of the further discount above the risk-free rate and that the calculation of damages should be made on an assumption of production commencing in year ten, I consider that the appropriate adjustment to reflect the degree of probability that the trufferie will yield 15 kilograms per hectare should be a reduction by a further 40%. The cumulative effect of these adjustments reflects my view that there is only about an even chance of the trufferie yielding 15 kilograms per hectare annually. Accordingly the figure for yield to be adopted in the profit calculations should be 9 kilograms per hectare commencing from year ten. 165 The plaintiff made no submissions about its entitlement to receive part of the moneys for which the 2006 truffles were sold when presumably the agreement was still on foot. 166 Given that the agreement would have ended in the autumn of 2026, the last harvest would have been in winter 2025 and the calculations referred to below are to done on that basis. Price 167 Mr Garvey's scenarios included three prices: a high price of $2,500 per kilogram, an average price of $2,200 and a low price of $1,500 per kilogram. 168 He was cross-examined on the effect on price of supply and demand and the possibility of increased production and competition. His evidence was that the average price for truffles in 2007 was $2,200 per kilogram and cross-examination did not in my view establish that there is a probability that the relative price will fall. 169 The defendants achieved $1,441 per kilogram for their truffles in 2006 and $1,898 per kilogram in 2007. 170 The average price of $2,200 is not the mean of the plaintiff's high price and low price scenarios. That mean is $2,000, which is close to the price achieved in 2007. It is that price which I think should be adopted for the profit calculation before application of the discount rate. Cost 171 In an affidavit sworn on 20 June 2008 Mr Garvey supported the estimates of the costs involved in truffle hunts, cleaning, grading and packaging based on his knowledge and experience. He was not seriously challenged. 172 No submissions were made on any incremental costs which the plaintiff would have occurred in providing the agronomic advice. There was no suggestion from the defendants that this would have been provided other than by Mr Garvey or Mr Cooper and that the costs to the plaintiff of providing their services would have involved any increment and would not otherwise have been incurred in any event. Accordingly I have made no allowance in this respect. 173 In my view those costs are appropriate and should be adopted in calculating the plaintiff's damages. Discount rate 174 Ms Delbridge-Bailey formed the opinion that the appropriate discount rate was 17.5 per cent which was derived by taking the risk-free rate and adding a premium for business risk. Although she did not "componentise" the present value discount from the business risk discount rate her evidence was that the risk-free rate is presently 6 per cent which means she assessed the additional risk at about 11.5 per cent. 175 Her range was between 15 and 20 per cent and she selected the mid-point. 176 As is apparent she applied this rate to the profit figure relying on the accuracy of Mr Garvey's assumptions as to yield, price and cost. 177 She accepted that had she been told that Mr Garvey's 2000 projections were quite wrong and ambitious she would have taken that into account as a relevant factor in reaching her discount rate and if she had formed the view that there was an extremely high risk of the projected figures being wrong a higher discount rate would have been appropriate. But the cross-examination did not extend to pressing her for her judgment on the facts which the defendant would have the Court accept. 178 For the reasons I have given I have disregarded Mr Garvey's yield projections and have applied a significant adjustment to reflect uncertainty of yield. I have also determined that production should be assumed to commence in year ten. 179 There should also be the application of a discount rate to take account of general business risk including adverse movements in yield and price, and increase in cost. 180 This rate is reflected in Ms Delbridge-Bailey's rate over and above the risk-free rate which I consider to be appropriate to be adopted in this case. 181 Accordingly the ultimate result will require additional calculation to be made by the parties on the basis that production commences in year ten, the yield is nine kilograms per hectare annually, the cost is as assumed by Mr Garvey and the discount rate to be applied is 17.5%. If the parties cannot agree I will hear submissions on any competing calculations. CONCLUSION 182 There will be a verdict for the plaintiff in an amount to be derived from the conclusions which I have reached. The parties are to co-operate in carrying out the necessary calculations to derive the final figure from those conclusions. 183 I will stand the matter over to a date to be fixed for that to occur and for the bringing in of Short Minutes to give effect to my conclusions or for submissions in the event agreement is not reached, and also to hear the parties on costs if there is no agreement on that subject and on any additional issues drawn to my attention as requiring to be resolved. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.