Supreme Court New South Wales Medium Neutral Citation: Ware v Amaral Pastoral Pty Ltd (No 5) [2012] NSWSC 1550 Hearing dates: 30 & 31 July, 1, 2, 3, 6, 7, 8 and 31 August 2012 Decision date: 14 December 2012 Jurisdiction: Common Law Before: Beech-Jones J Decision: Plaintiff succeeds against First Defendant on claim for back pay, payment in lieu of notice and tractor hire but fails on claim for bonus. First Defendant partially successful on cross claim for recovery of payment made for bore drilling. Cross claim otherwise dismissed. Catchwords: CONTRACT - employment contract - farm manager terminated - recovery of unpaid wages and superannuation - whether implied term requiring reasonable notice - whether conduct warranted summary dismissal - whether entitled to bonus - contract for tractor hire - whether oral agreement - whether term deferring payment until farm's cash flow allowed void for uncertainty - whether implied term that entitlement to payment for tractor hire arises on termination of employment contract - whether unauthorised self-dealing - whether breach of obligation of good faith and fidelity - whether breach of fiduciary duty - findings of credit adverse to defendant. Legislation Cited: Evidence Act 1995 - s 64(3) Cases Cited: - BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 - Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336 - Byrne v Australian Airlines Ltd [1995] HCA 24; 185 CLR 410 - Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; 149 CLR 337 - Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd (1988) 14 NSWLR 438 - Fettes v Robertson [1921] WN 136 - Fox v Percy [2003] HCA 22; 214 CLR 118 - Hawkins v Clayton [1988] HCA 15; 164 CLR 539 - Head v Kelk [1962] NSWR 1363; (1961) 80 WN (NSW) 290 - Jones v Dunkel [1959] HCA 8; 101 CLR 298 - Ledingham v Bermejo Estancia Co Ltd [1947] 1 All ER 749 - Lumbers v W Cook Builders Pty Ltd [2008] HCA 27; 232 CLR 635 - Meehan v Jones [1982] HCA 52; 149 CLR 571 - Miller v JLCS Pty Ltd [2007] FCA 74; 158 FCR 1 - Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; 144 CLR 596 - Ware v Amaral Pastoral Pty Ltd (No 4) [2012] NSWSC 920 - Watson v Foxman (1995) 49 NSWLR 315 - White v Shortall [2006] NSWSC 1379; 68 NSWLR 650 Texts Cited: A.M. Gleeson, "Judicial Legitimacy" (2000) 20 Aust Bar Rev 4 Category: Principal judgment Parties: Peter Michael Ware (Plaintiff/Cross Defendant) Amaral Pastoral Pty Ltd (First Defendant/ Cross Claimant) Gregory Scott Amaral (Second Defendant) Representation: Counsel: Mr R.J. Weber SC, Ms A. Munro (Plaintiff/ Cross Defendant) Mr G. Curtin SC, Mr S. Gardiner (Defendants/ Cross Claimant) Solicitors: Slater & Gordon (Plaintiff/Cross Defendant) Henry Davis York (Defendants/Cross Claimant) File Number(s): 2009/297486 Judgment 1The plaintiff, Peter Michael Ware, sues the first defendant, Amaral Pastoral Pty Ltd ("Amaral Pastoral") for various amounts arising out of his employment and then dismissal from his position as the manager of a farm owned by Amaral Pastoral called "Torry Plains". Mr Ware also sues for unpaid "tractor hire" during this period. Amaral Pastoral cross claims against Mr Ware for various items of unauthorised expenditure that it is said Mr Ware incurred on its behalf when he was employed as its farm manager. 2These reasons are structured as follows: (i) background ([3] to [12]); (ii) credit of Mr Ware and Mr Amaral and the development of Torry Plains ([13] to [44]); (iii) proceedings against Mr Amaral ([45]); (iv) Mr Ware's claim for back pay ([46); (v) Mr Ware's claim for payment in lieu of notice ([47] to [49]); (vi) Mr Ware's bonus claim ([50] to [62]); (vii) Mr Ware's claim for tractor hire ([63] to [183]); (a) the conversations concerning the machinery contract ([65] to [104]); (b) tractor usage ([105] to [154]); (c) enforcement of the machinery contract ([155] to [183]); (viii) cross claim: alleged unauthorised sale of the seeder ([184] to [196]); (ix) cross claim: alleged unauthorised water bore payments ([197] to [219]); (x) balance of the cross claim ([220] to [226]); (xi) further disposition ([227] to [230]). Background 3Amaral Pastoral is part of a business conducted by the second defendant, Gregory Scott Amaral, of investing in farming and ranching properties. Mr Amaral is based in California and mostly invests in farms and ranches in the United States. 4In December 2001, Amaral Pastoral purchased "Torry Plains". Torry Plains is a 45,000 acre property near Maude which is south-west of Hay in New South Wales. 5One of the properties adjacent to Torry Plains was Warewaegae. This was the family property of Mr Ware. Mr Ware had worked on that farm from the age of fourteen. After studying agricultural science, he returned home to manage the farm. 6Mr John Brennan worked as a consultant for Amaral Pastoral, or Mr Amaral, from the mid-1990s until late 2003. In August 2001 he came to Australia at Mr Amaral's request to inspect Torry Plains. At that time the owner of Torry Plains was in receivership. He described it as a run-down and neglected property. He considered it was worth purchasing, although its development would be a significant undertaking. 7Mr Ware was recommended to Mr Brennan, who in turn suggested him to Mr Amaral. Initially Mr Ware was asked to oversee the purchase and to look after Amaral Pastoral's interests until the sale was completed. The purchase was completed in December 2001. Around this time Mr Brennan rang Mr Ware and suggested he start preparing a job description for himself as "Farm Manager". Over the next few months Mr Ware's proposal was clarified in conversations between himself, Mr Brennan, Mr Amaral and, to an extent, Ms Teresa Hamner, who had the title of Chief Financial Officer of Amaral Pastoral. 8From January 2002 to March 2005 Mr Ware was employed by Amaral Pastoral. He was paid a flat rate of $30 per hour with four weeks annual leave. He also received various amounts which he described as bonuses, to which I will return. 9In April 2002 Mr Ware travelled to California and had a number of meetings with Mr Brennan, Ms Hamner and Mr Amaral. According to Mr Ware, during the discussions on that visit and after, they agreed on a set of priorities for Torry Plains set out in a document entitled "Priority List". Item No 3 was "Increase safflower production - improve agronomy practices". This appears to be a reference to Torry Plains growing safflower on its own account. At the time of its purchase, Torry Plains was being used for sharefarming. 10At some point a document entitled "Farm Manager Job Description" was prepared by Mr Brennan and provided to Mr Ware (the "Job Description"). The document was not signed by the parties. However they both treated it as having some contractual quality. Mr Ware pleaded that it was the written component of an employment contract that was partly oral and partly written. In one of his affidavits Mr Amaral stated that it contained "all of the matters we agreed" and it formed the foundation for part of Amaral Pastoral's cross claim. 11Between April 2002 and March 2005 Mr Ware performed the role of farm manager at Torry Plains. It seems to have been a full time role. He was assisted by various staff whom I refer to below. He provided financial data to Ms Hamner, although there was a dispute about the adequacy of this reporting and who bore responsibility for any defaults. In May 2004 Mr Ware again travelled to the USA, to visit Mr Amaral. This time he was accompanied by Nathan Wilson, another employee at Torry Plains. Mr Amaral visited Torry Plains for the first time in June 2003 and returned again in 2005. Ms Hamner visited Torry Plains in October 2002 and May 2004. 12In March 2005 Mr Ware's employment was terminated summarily. The circumstances surrounding the termination were disputed in a number of respects. On the fifth day of the trial, Amaral Pastoral applied for leave to amend its defence to plead conduct on the part of Mr Ware which was said to justify his summary dismissal. I refused that application (Ware v Amaral Pastoral Pty Ltd (4) [2012] NSWSC 920). I refer to certain aspects of the dismissal below as they are relevant to other issues between the parties. The credit of Mr Ware and Mr Amaral and the development of Torry Plains 13As I will explain, there were a number of very sharp disputes in the evidence, especially concerning various conversations between Mr Ware and Mr Amaral. Not surprisingly each side attempted to provide support for their respective versions from other witnesses. Mr Ware was more successful in that regard. The evidence of Mr Amaral's main supportive witness, Ms Hamner, was in large measure neutralised by cross examination. 14In broad terms I have sought to resolve the evidentiary disputes by considering the competing versions against a background of the objective likelihoods and the supporting evidence, bearing in mind which party bore the relevant legal or evidentiary onus. However it is necessary that at this stage to note three points, two of which concern the credit of Mr Ware and Mr Amaral. 15First, regrettably I did not form a favourable impression of Mr Amaral as a witness. I have recorded my rejection of those parts of his evidence which concern particular topics (at [34], [75] to [81]), [194], [201]. My rejection of him as a credible witness in part flowed from those matters, and in part flowed from my impression and observations of him when giving evidence. It also followed from the following aspect of his dealings with Mr Ware. 16On 4 January 2005 Mr Amaral sent Mr Ware an email about certain payments for water bores that had been sunk on neighbouring properties (see [197] to [219]) which stated: "Peter: The Bank auditors are breathing down my neck not only on Torry but on several other projects as well. They want accountability from Greg Amaral Ltd. Pension Plan & Trust which owns Amaral Pastoral which coincidentally owns Torry Plains. BOTTOM LINE: If Greg Amaral does not supply good books for ALL AMARAL OPERATIONS - I lose my Banker's. This is NOT going to happen. Greg PS I cannot provide by [sic] Banker's with a good answer to the following question - perhaps you can help me. 'Why did Amaral Pastoral pay for bores on Nap Nap and the Ware property?' Please E-mail an explanation so that I can E-mail it on to them. Our books at Torry are going to become VERY GOOD in 2005 because my Banker's demand." (emphases in original) 17Mr Amaral told the Court that the reference to the Bank auditors breathing down his neck was "false" and: "Q. You decided you would tell him another lie, correct? A. Yes. Q. And was it also a lie to say that the bank wants accountability from your pension trust which owns Amaral Pastoral? A. Yes." 18He agreed that the reference to him "losing" his bankers was false and the suggestion that they had made demands concerning the accounts was "another lie". 19Mr Ware immediately responded to Mr Amaral's request by email. Mr Amaral replied two days later, stating "I am impressed with Amaral Pastoral Torry Plains books". In cross examination, Mr Amaral stated that this comment was also false. 20Mr Amaral also deceived Mr Ware on other occasions. In October 2004 he sent an email to Mr Amaral posing various questions which he stated were necessary for a meeting with one of his "key advisors", Mr Kevin Keeley. Mr Amaral conceded this facsimile contained a number of deliberate falsehoods. He was asked: "Q. Are you suggesting that you told him that you needed the information for your big meeting with Mr Keeley but that was false? A. Yes. Q. Why did you seek to deceive him in that matter? A. Because I was trying to get information from Peter and it was difficult to get accurate information. I assumed this method might be helpful." 21This answer and the tone in which it was delivered suggested that, without any hesitation, Mr Amaral decided to embark on a process of deliberately deceiving Mr Ware. Further, although in this answer Mr Amaral asserted that it was difficult to get accurate information from Mr Ware, it is notable that there is not one document in the material which suggests that at any time prior to October 2004 Mr Amaral had raised concerns with Mr Ware about the accuracy of information he provided, or any other matter concerning his employment. To the contrary, he was continually advising Mr Ware of his complete confidence in Mr Ware's management of Torry Plains. 22It might be said in Mr Amaral's favour that he frankly conceded his own lies, but even that has problems. The concessions were not set out in his affidavit but only emerged in cross examination. To an extent, these admissions of dishonesty disappointed the cross examiner, who was seeking to build on the truth of the documents that Mr Amaral said contained lies. The end result is that Mr Amaral presented as a person who was prepared to lie to Mr Ware without hesitation. 23I did not consider Mr Amaral to be an honest witness. I am not prepared to accept the evidence of Mr Amaral on any disputed matter unless it is corroborated. 24Second, I formed a favourable impression of Mr Ware as a witness. The events surrounding his employment and then termination from Torry Plains were clearly a source of great stress for him. Nevertheless, even when subject to a searching cross examination that went through the events in detail he was generally a responsive witness who was prepared to make appropriate concessions. 25A number of submissions were put by the defendants on matters said to demonstrate that Mr Ware's evidence lacked either credibility or reliability. Most of those submissions are addressed below in the context of my discussion of the issues to which they relate (see [85], [87] to [101], [108] to [122],[187] and [211] ff). However, for the sake of completeness I will address the balance of the submissions attacking Mr Ware's credit. 26It was submitted that: "Ware, as his financial records show was in some personal financial difficulty. He wanted a bore on his property from which he could make money either by selling water or by boosting the value of his property. Yet his evidence was that his bore was dry. Either that evidence was untrue, or his contemporaneous statements to Amaral about the bores and as recorded in their written communications was untrue." (references omitted) 27I discuss the evidence concerning the sinking of a bore on Mr Ware's property at Warewaegae below (at [197] to [219]). The statement that Mr Ware made to Mr Amaral in his "written communication" in January 2005 was that he was "quite happy for you to have the water for years to come in exchange for getting the licence" being a reference to Torry Plains obtaining water from the bore while Warewaegae retained ownership of the water licence which authorised the water's extraction. This statement was said to be misleading because it was asserted that Mr Ware had stated that the testing had revealed that the bores on his property were dry. In cross examination it was suggested to Mr Ware that "in your third affidavit, you say the bore on your property did not have any water. It was a dry bore". Mr Ware's "third affidavit", which was sworn 27 July 2012, does not address this topic at all. In any event, Mr Ware explained: "Q. What is the water that you were happy for him to have from the Ware bore which you say was dry? A. It had minor water available, and there was no reason why we couldn't have drilled another hole in a different spot to produce another bore. Q. It wasn't dry. It had minor water? A. I just told you, it [had] some water down the logs because you read the logs, and it says it wasn't economically feasible to screen it and extract it." I accept this explanation. It was not suggested to him that his interpretation of the drilling logs was incorrect. 28Amaral Pastoral also submitted that Mr Ware's credit was damaged because of a contradiction between himself and a Mr Kevin Keeley as to the latter's involvement in a budget Mr Ware prepared in 2005. This submission has no substance. 29As at February 2005 Mr Keeley worked for Sacramento Valley Farm Credit and was Amaral's "relationship manager". As I have noted above Mr Amaral falsely told Mr Ware in October 2004 that he needed answers to certain questions for a big meeting with Mr Keeley. In his affidavit sworn 11 August 2010 (his "first affidavit") Mr Ware stated that in early 2005 he "worked on developing a budget with Mr Keeley". Mr Keeley denied that he did so. Tendered in evidence was a series of emails recording the exchange of draft budgets between Mr Ware, Mr Amaral and Mr Keeley. In his evidence Mr Keeley was contemptuous of the quality of the documents emanating from Mr Ware. He agreed that he discussed budget issues with Mr Amaral and that he made "suggestions" but denied this amounted to being "involved". 30Thus, in the end this was an arid debate about differing perceptions of the level of Mr Keeley's involvement. This submission only highlights the difficulties with Mr Amaral's credit, not Mr Ware's. No doubt Mr Ware's belief that Mr Keeley was "involved" in the budget preparation was in part engendered by Mr Amaral's lies about his role in October 2004. Otherwise this material assists Mr Ware because the "budgets" he prepared made substantial provision for the payment of tractor hire (see below at [71]). 31Third, from the outset Mr Amaral intended to expand the operations of Torry Plains to growing crops in its own right (as opposed to sharefarming) as a means of turning around its previous poor financial performance. 32In his affidavit sworn 24 May 2011 (his "first affidavit") Mr Amaral stated that his intention in acquiring Torry Plains was to continue to use it for sharefarming, and he did not have any intention of "doing any cropping myself". It was in his interests to assert this because, had he accepted the proposition that from the outset he had intended to undertake substantial cropping at Torry Plains, he would then have had to explain how he proposed to undertake that without the use of tractors on a pretty much full time basis, as Mr Ware alleged. 33In cross examination Mr Amaral resolutely resisted any suggestion that he had any intention of undertaking any cropping at Torry Plains other than via sharefarming. He agreed that at the time of acquisition the farm was in a "financially distressed position" but agreed that he was "proposing to run it in precisely the same way as it had been run in the past" but with the "goal" of running it better. How this was to occur was not expanded upon nor addressed in re-examination. 34I have already referred to the Job Description above at [10]. It set out as one of its goals to "achieve maximum profits" and conferred on Mr Ware a bonus entitlement of 3% of net crop income. I have already referred to the priority list which bore the date 15 April 2012 and included item 3 concerning safflower production. In addition item 7 refers to the need to concentrate, inter alia, "on seed production". None of these are referable to sharefarming. Despite its description as a "priority list", Mr Amaral tried to dismiss this document as merely a "discussion paper" and reiterated his commitment to only being a sharefarmer. I reject that aspect of his evidence. 35On 11 April 2002 Mr Brennan sent Mr Amaral an agenda for an upcoming meeting at a time when Mr Ware was in America. It included the items "cropping - potential crops (i.e. Rice, Safflower, Wheat, etc)" and "crop budgets". It also included an item "new equipment, needed equipment". They are all suggestive of an expansion by Torry Plains into cropping or more cropping on its own account. 36On 12 March 2002, 12 June 2002 and 21 August 2002 Mr Amaral wrote to Mr Ware advising him that he would be paid bonus payments and praising the work he was doing at Torry Plains. Throughout his time at Torry Plains Mr Amaral was continually reassuring Mr Ware as to his confidence in him. 37In [77ff] below I describe the events surrounding the receipt by Mr Amaral in January 2003 of a draft budget prepared by Mr Ware that contemplated significant cropping by Amaral Pastoral in its own account. Mr Amaral reviewed that budget and responded approvingly. 38Mr Amaral accepted that Amaral Pastoral was cropping on its own account by 2003. When asked when that decision was made, he said "I don't recall". This cropping was well under way by the time of Mr Amaral's 2003 visit. There was not a single document suggesting that this represented some form of new approach or reappraisal on the part of Mr Amaral. 39In his first affidavit Mr Amaral states that in mid-2003 he had a conversation with Mr Ware about obtaining farm equipment for the purpose of enabling Torry Plains to grow its own crops (see [184ff] below). The conversation as recounted by Mr Amaral was as follows: "Ware: 'If you want to do some more farming here for yourself, you are going to need some more equipment. I suggest that you buy a seeder, a prickle chain and a smudge board. If we had a really good seeder, we should be able to do some very efficient farming.' Me: 'I agree that more equipment will be needed if we want to farm. It would be helpful if you could provide me with some information on those items of equipment so I can make a decision about purchasing those items. We have to get the right equipment to farm on a flood plain.' Ware: 'Sure, I will get some information together for you.' " (emphasis added) 40I address this conversation below (at [80] and [184] ff). For present purposes all that need be noted is that the entire topic of the discussion was obtaining further equipment in order for Torry Plains to do some "more farming". The conversation reads as though the two parties to it were acting upon a common understanding of increasing the level of cropping that Torry Plains was undertaking on its own account. 41Mr Amaral discovered some notes of telephone conversations between himself and Mr Ware in September 2003, which included detailed discussions between them about crops, including the growing of 5,000 acres of Torry Plains own safflower, compared with 3,000 acres for sharefarmers and 400 acres of wheat compared with just over 2,000 acres for sharefarmers. This conversation was consistent with what was intended from the outset by Mr Amaral. 42On or around 1 June 2004 Mr Amaral sent to Mr Ware an email which included the statement "let's continue to work on purchasing the additional equipment that will be required to farm". This was a reference to equipment for cropping on the part of Torry Plains. 43Amaral Pastoral purchased Torry Plains in late 2001. At that time the property was in a poor state of repair. Sharefarming had been conducted on the property for some years but it was obvious that it had not yielded profits. Mr Ware was engaged as farm manager. His job description identified the achievement of profits as a responsibility of his position and the bonus structure within it confirmed that. The priority list for his position suggested that increased cropping by Amaral was a major aspect of how it was envisaged by all that those profits would be achieved. This is strongly demonstrated by the fact that, after taking time to repair the property, a major effort of cropping on its account was undertaken in 2003 with the knowledge and apparent approval of Mr Amaral. 44I will now address each of the parties' respective claims. Proceedings against Gregory Amaral 45Paragraphs 33 to 41 of the Further Amended Statement of Claim ("FASC") pleaded a cause of action against Mr Amaral for injurious falsehood in respect of various communications he was alleged to have made after Mr Ware's employment was terminated. On the first day of the hearing I was advised that these claims were not pressed. As this was the only cause of action alleged against Mr Amaral personally, it follows that there will be a verdict in his favour. Mr Ware's claim for back pay 46Paragraph 29 of FASC sought the recovery of wages and superannuation benefits for the period from 1 January 2003 up to Mr Ware's termination on 10 March 2005. The amount owing as at that date was agreed between the parties at $9,106.95. Mr Ware is entitled to recover that amount together with interest. Mr Ware's claim for payment in lieu of notice 47Upon his termination Mr Ware was not paid any amount in lieu of notice. Paragraph 31 of FASC seeks an amount representing three months' wages and benefits in lieu of notice. The plaintiff contends that, in the absence of an express term prescribing a period of notice, it was an implied term of his contract of employment that he would receive reasonable notice of his termination (Byrne v Australian Airlines Ltd [1995] HCA 24; 185 CLR 410 at 429). As I have stated, Amaral Pastoral sought to defeat this claim by applying to amend its defence to allege conduct on the part of Mr Ware which warranted his summary dismissal. I rejected the application (Ware v Amaral (No 4)). 48Accordingly the only remaining issue is the length of notice to which Mr Ware was entitled. He claims an entitlement to three months. Amaral Pastoral contends he is only entitled to one month's notice. 49Mr Ware was 53 years of age at the time he was dismissed. He had worked in the position for almost three years. The position was a relatively senior one in that he was managing a substantial commercial enterprise. His position had considerable autonomy in that he was only accountable to Mr Amaral and, to a lesser extent, Ms Hamner. In those circumstances I consider that the three month claim made on his behalf is established. He is entitled to recover an amount representing the benefits he would have received had he continued to be employed from 10 March 2005 to 10 June 2005. I understand this amounts to $19,890.00 in wages and $1,790.10 in superannuation, although some allowance for taxation is necessary. As it will be necessary for the parties to bring in short minutes they should confer as to the appropriate amount for this item, including interest. Failing agreement, they should address its quantification briefly in supplementary submissions. Mr Ware's bonus claim 50In the Job Description", the following appears under the heading "Salary". "Hourly rate of $AU30.00. Yearly Bonus: 3% of net crop income" 51Mr Ware seeks to recover an amount of approximately $20,500.00 plus superannuation calculated by what he contends was the "net crop income" derived by Amaral Pastoral in the period 1 July 2003 to March 2005. 52Although there are a number of conversations about this aspect of Mr Ware's employment contract referred to in the affidavits, in the end the parties accepted that the relevant contractual entitlement was to be found in the job description. The debate before me proceeded by reference to the principles stated by Mason J in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; 149 CLR 337 at 352. 53The debate between the parties turns solely on what is meant by the phrase "net crop income". Mr Ware contends that "net crop income" meant gross crop income less payments to sharefarmers and selling costs. In particular, he contended that it did not include all the costs of growing crops, such as seed, petrol, water, etc., but only covered direct selling costs such as use of agents and perhaps transport to a sales yard. Mr Ware's contention equated the phrase "net crop income" to a commission on the sale of crops. 54Amaral Pastoral contended that Mr Ware's construction made no commercial sense, and that the only sensible meaning of the phrase was "gross crop income minus all costs related to earning that crop income". It submitted that, if that construction was correct, there was no attempt in the plaintiff's evidence to apportion all of the costs related to the earning of income of Torry Plains. Consequently the defendants submitted the Court could not be satisfied that any profits were earned. 55Codelfa enables circumstances that are either known to both parties or are notorious, to be called in aid of interpreting a contract whose language is ambiguous or susceptible of more than one meaning. Accepting for present purposes that there is some ambiguity in the phrase "net crop income", it is difficult to ascertain any surrounding circumstances that will assist in the adoption of Mr Ware's suggested construction. The background and context of this contract included the distressed and run-down state of Torry Plains and a shared objective of renovating and restoring the property, with particular emphasis on a need to expand its own cropping. However, those facts do not point strongly in favour of the adoption of the construction suggested by Mr Ware. As noted by Amaral Pastoral, a construction that involved him being effectively paid a commission might have the effect of providing him with an incentive to significantly expand Torry Plains' own cropping, but that may have the consequence of a significant increase in expenses which would not be brought to account in the calculation of any bonus. 56The difficulties with Mr Ware's construction are highlighted by the manner of the calculation of the bonus that he sets out in his third affidavit. Mr Ware identifies three sources of "income" for Torry Plains, namely proceeds of sale of crops that were farmed by Amaral Pastoral staff (i.e. cropping on its own account), proceeds of sale of crops sold by Amaral Pastoral but farmed by Torry Plains' sharefarmers, and remittences from sharefarmers for crops they grew on Torry Plains and sold themselves in accordance with the relevant sharefarmer agreements. As I have stated, Mr Ware contends that only the direct selling costs and not the total costs of growing crops should be deducted from the amount of income derived from Amaral Pastoral's own cropping. With the second category of income, Torry Farms would receive the income from the sale of the crops but would remit a substantial proportion to the sharefarmers. In that category, the remitted proportion of the sharefarmers would effectively include a component for all the growing costs as they would have been incurred by the sharefarmers. The same would apply to the third category of income. If Mr Ware's construction was correct, then for income derived from cropping on its own account, all direct costs of growing the crop would be excluded from the calculation of the bonus. Conversely, in respect of crop income for crops grown by sharefarmers, the "cost" of growing that crop as encompassed by the sharefarmers' proportion, would be deducted. In my view, this inconsistency highlights the overall difficulty with Mr Ware's suggested construction. 57In the end result, there is nothing in the surrounding circumstances that suggests any reason why the direct costs incurred by Torry Plains in the growing of its own crops should be excluded from the concept of "net crop income". As a matter of commercial sense, there is no reason to exclude those costs. 58In its submissions, Amaral Pastoral set out a table detailing the losses incurred by Torry Plains over the period the subject of this part of Mr Ware's claim. It did not attempt to allocate costs between those directly incurred in growing crops and other expenses. Mr Ware did not undertake that task either. As I understand it, the likelihood is that if it were attempted it would still show an overall loss. In the end result, I am not satisfied that, on the construction contended for by Amaral Pastoral, which I accept, any amount is owing by way of bonus. 59Mr Ware sought to rely upon a concession given by Mr Amaral in cross examination that the "bonus was meant to be a "real practical incentive to [Mr Ware] to maximise the returns from cropping on [Torry Plains]", and that it was intended to be more than merely an "illusory concept which would never result in a payment". He also referred to a note that Mr Amaral wrote to Ms Hamner on 21 August 2002 in which he stated that he had attempted to calculate Mr Ware's bonus for the year ending 30 June 2002 and added: "We roughly estimated the 2001-2002 farming income at Torry to determine Peter's bonus. We want to err in Peter's favour and have decided to round the June 30, 2002 bonus to $10,000.00 Australian Dollars." 60It was submitted on behalf of Mr Ware that this note was an admission by Mr Amaral that Amaral Pastoral was capable of calculating the bonus and that "taxable income does not equal net crop income". The concession made by Mr Amaral does not assist me in resolving the competing constructions. On no view of Codelfa, or the cases that have considered Codelfa, could Mr Amaral's concession bear on the true construction of the clause. It might be different if Mr Amaral conceded he was aware of some factual matter at the time the agreement was entered into which could form the foundation for a submission based on Codelfa. His concession was not of that character. 61The memo written by Mr Amaral in August 2002 has similar difficulties. It is not possible to isolate any particular admission from the memo which is of any assistance to Mr Ware. Further, I was not presented with any figure for crop income (net or gross) which would produce a 3% bonus of approximately $10,000.00. It is unclear how Mr Amaral "roughly estimated the farming income". However, the tax returns for Amaral Pastoral reveal that for the financial year ended 30 June 2002 the gross income, other than interest, was $206,273.00. Even if the entirety of that amount was "crop income", 3% of that figure is $7,808, and that is before the deduction of any costs. 62I reject Mr Ware's claim for recovery of bonus payments. Mr Ware's claim for tractor hire 63Mr Ware claims that in April 2002 he and Amaral Pastoral entered into an oral contract pursuant to which he would provide machinery for use on the property (the "machinery contract"). He says that it was an express term of the machinery contract that Amaral Pastoral would pay $60 per hour, exclusive of GST, for use of a tractor, all expenses associated with the upkeep and maintenance of the machinery, and that such charges would apply to such use as had occurred since January 2002. He also alleges that it was an express term of the agreement that "payment of the charges under the machinery contract would be deferred until the cash flow of the enterprise allowed it", and that this clause has been satisfied with the result that it is due and owing. Alternatively, Mr Ware contends that it was an implied term of the machinery contract that the charges would become due and owing on the termination of his contract of employment. He maintains a further alternative claim in restitution for these amounts and, failing all other forms of relief, seeks declarations reflecting the existence of an agreement for tractor hire. Amaral Pastoral denies each and every aspect of Mr Ware's claim. 64The structure of these reasons is that I describe and analyse the evidence concerning the formation of the machinery contract ([65] to [104]) before addressing the evidence of the level of tractor usage ([105] to [154]). This should not be taken as suggesting that I have considered this material separately. To the contrary, all of the (voluminous) evidence on this topic is interrelated and I have considered it in its entirety before reaching a finding as to whether I have an "actual persuasion" of the happening of the conversations said to give rise to the machinery contract, and the performance by Mr Ware's tractors of the number of hours claimed (see Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336, at 361-362 per Dixon J). The conversations concerning the machinery contract 65Mr Ware stated that from 2001 onwards he owned a number of pieces of farm machinery including two "Steiger" brand tractors. He was subjected to a detailed cross examination as to whether he had in fact owned them throughout the relevant period, but in the end the defendants did not submit to the contrary. Mr Ware states that he brought the two Steiger tractors onto Torry Plains in December 2001 and started using them immediately. In his first affidavit he states that when he visited California in April 2002 he had a conversation (the "April 2002 conversation") with Mr Amaral to the following effect: Mr Ware: "Torry Plains doesn't have much equipment. I have my own equipment which I have parked at the farm. I'm willing to use it for Torry Plains and hire it to the company." Mr Amaral: "The company won't have any cash flow so won't be able to pay any hire." Mr Ware: "That's okay, so long as the company maintains any breakages. Hire can be paid when the cash flow permits it. We can do it at the rate of $60 per hour which is a discount on the normal rate." Mr Amaral: "Okay, we'll do it that way." 66Mr Ware said that this conversation occurred during the "course of my meetings with Brennan, Amaral and Hamner", although it is not clear from his affidavit whether this equates to a recollection that Mr Brennan and Ms Hamner were present. 67Mr Brennan did not set out such a conversation in his affidavit, but instead recounted a conversation about tractor hire in 2003 (see [72] below). In cross examination Mr Brennan was asked about his recollection of this topic being raised around the time of Mr Ware's engagement. He did not nominate any conversation to the effect stated by Mr Ware, but did not reject it either. He maintained that both he and Mr Amaral were aware that Mr Ware owned tractors and he would use them for general clean up work. He said there were "numerous conversations", but could only recall "general clean up work" being contemplated at the time. I address Ms Hamner's recollection below at [102]. 68Mr Ware stated that in June 2003 Mr Amaral visited Torry Plains. Mr Ware arranged for a light plane to fly Mr Amaral and himself over the farm. He said the tractors were visible from the plane (although they may have been in or near sheds). He recalls Mr Amaral stating (the "June 2003 conversation"): "What are we doing about hire for the use of the tractors?" Mr Ware states that he replied: "Everyone at Torry Plains is dedicated to making the farm work and if I have to wait for payment then that is not an issue." Mr Amaral is said to have replied: "Good. Amaral Pastoral will pay ongoing maintenance and a reduced hire when cash flow improves. I am not concerned about progress because Torry Plains is a 10 year project and I fully expect a slow start." 69Mr Ware stated that at the end of the visit they had a further conversation in which Mr Amaral stated: "I'm very happy with the progress of Torry Plains. Pay yourself a bonus of $10,000 plus an extra $2,000 to go towards the car which you are using for work." Mr Ware states that he replied: "For simplicity I'll just charge the company some tractor hire" and that Mr Amaral said: "Okay". 70On 9 April 2004 Mr Ware provided an invoice to Amaral Pastoral for tractor hire of $13,750.00 inclusive of GST. This invoice and the conversation were the subject of detailed submissions by Amaral Pastoral which are addressed below (at [94] to [99]). 71Mr Ware states that in February 2005 Mr Amaral told him that Mr Keeley (see [20] above) had expressed concern that no payments had been made to Mr Ware for tractor hire, and then it was mentioned as being included in the budget for calendar year 2005. A spreadsheet prepared by Mr Ware bearing the date "02/02/05" includes a line item under the heading "Expense - Machine Hire/Contract (Machine Hire)" for "tractor" of $146,860.00 in December 2005. Mr Ware stated that this did not include tractor hire for previous years and was based on his estimate of how many hours of work each paddock would require, multiplied by the rate of $60 per hour. (The spreadsheet is addressed at [113] to [114].) 72I have referred to the role of Mr Brennan above. He ceased working for Mr Amaral in October 2003. Amaral Pastoral's submissions alleged Mr Brennan had some ill feeling towards Mr Amaral, however nothing was established that would even come close to laying the foundation for imputing his honesty as a witness on the basis of some bias or grievance. Mr Brennan stated that he recalled a conversation in 2003 about planting safflower "on the account of Amaral Pastoral" (i.e. not through sharefarmers) to the following effect: Mr Ware: "My machinery is at Torry Plains. We can use my machinery to plant the Safflower. We will need tractors for planting Safflower." Mr Amaral: "We will use your tractors for farming. However, we cannot afford to pay machinery hire at this point. We will pay you for the hire at the normal rate from the crop income." Mr Ware: "That is fine." 73Each side relied on this evidence for their own purposes. Mr Ware pointed to it as a conversation about the hire of the tractors in similar terms to that which he asserts. Leaving aside Mr Amaral's denials of any conversation to this effect, Amaral Pastoral pointed to the differences between this and the April 2002 conversation alleged by Mr Ware, namely that it only related to farming on Amaral Pastoral's account and contemplated payment out of "crop income" rather than cash flow. It submitted that this reinforces the caution that needs to be exercised in accepting Mr Ware's account of those decade old conversations. Amaral Pastoral relied on the comments of McClelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 319, where his Honour discussed the fallibility of human memory in the context of an allegedly misleading oral communication made some years prior to the proceedings. His Honour stated: "... human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time ... and the processes of memory are overlaid, often subconsciously, by perceptions of self- interest as well as conscious consideration of what should have been said or could have been said." 74In a similar vein , Mr Ware relied on an affidavit from Mr Wilson. Mr Wilson began working for Mr Ware's earthmoving business driving one of his tractors in early 2001. He started working at Torry Plains with Mr Ware sometime in late 2001-eary 2002. As I will explain, this included driving tractors. Mr Wilson travelled to the USA with Mr Ware in April 2004. He recalled Mr Amaral saying to Mr Ware on or around 14 April 2004: "Peter, I know that you have been using mainly your own equipment to get this work done. Obviously, we will reimburse you for the machinery hire once the farm is up and running." He also recalls Mr Ware replying: "That's fine Greg". Mr Wilson also recalled a further conversation at this time about the purchase by Amaral Pastoral of farming equipment from Mr Ware which is referred to below at [186]. 75In his first affidavit Mr Amaral denied having any conversation to the effect suggested by Mr Ware. As I have mentioned, he stated that when Amaral Pastoral acquired Torry Plains it had no intention of undertaking cropping on its own account. He noted that Amaral Pastoral had purchased some farm equipment, including a tractor from the Torry Plains receivers which he intended to use for earthmoving, not cropping. I note that it had a written down value of $8,500.00. He also annexed various invoices indicating that other tractors has been hired. In both his affidavit and his affidavit sworn 18 November 2011 (his "second affidavit") he denied any knowledge of Mr Ware's tractors being used on Torry Plains. 76I have already described my misgivings about Mr Amaral's evidence. Two matters that were raised with Mr Amaral in cross examination in particular served to undermine his denials and bolster this aspect of Mr Ware's case. 77First, in January 2003 Mr Ware sent to Mr Amaral a proposed budget for the period 2003 to 2004. Mr Amaral sent a fax reply stating "Thank you for the budget. This is exactly the tool we need for planning. It will be helpful." Mr Amaral's fax attached a copy of Mr Ware's budget with a handwritten annotation from Mr Amaral recording that he had detected an error in a line item concerning agistment costs. 78This budget contemplates the receipt of significant income by Amaral Pastoral cash from cropping on Amaral's own account. It contain a large expense item for "fuel, lubricants and gas" ($102,000.00) and significant amounts for "repairs and maintenance" ($6,000.00 per month) but has assigns a nil value to "equipment hire". This budget is entirely consistent with Mr Ware's case in that it contemplates significant cropping and use of equipment, but no cost for hire of the equipment; i.e. the use of tractors on a deferred payment basis. The budget also envisages a positive cash flow outcome at the end of the two year period but does not make provision for payment of tractor hire then. However, in his second affidavit Mr Ware explained that he was prepared to wait for payment "until Torry Plains became more financially stable". This explanation was not challenged. 79When he was cross examined on this document Mr Amaral sought to deflect the suggestion that he had closely examined it. He attempted to suggest that he had written his response before he had analysed it which does not sit with his annotation about agistment costs. He claimed he did not review it. To the contrary I consider that his annotation and response suggests he did review it and noted those entries that I have referred to which were consistent with the agreement alleged by Mr Ware. 80Second, I have described in [39] above the conversation that Mr Amaral states that he had with Mr Ware in mid 2003 concerning the purchase of farming equipment. Mr Ware stated that he had a conversation which was in some respects similar in May 2004. These conversations are further addressed below at [184ff] below as they concern an aspect of Amaral Pastoral's cross claim which alleges that Mr Ware improperly procured the sale of a seeder he owned to Amaral Pastoral in 2004. For present purposes it suffices to note that even on his own account Mr Amaral was seeking farming equipment. Mr Amaral was cross examined about this as follows: "Q. I want to suggest to you that in addition to discussing the use of Ware's two Steiger tractors, there was also a discussion about the need to obtain for Amaral Pastoral - to obtain various farm implements? A. We discussed farm implements at sometime. I don't know if it was during their visit but we did discuss farm implements. Q. Farm implements, that were needed for Amaral Pastoral's cropping programme? A. Yes. [Mr Amaral then agreed that those implements included a pickle chain, a smudge board and a seeder] ... Q. Quite large pieces of agricultural equipment? A. As I know it. Q. And they are definitely pulled behind a tractor? A. Yes. Q. And, so you were discussing the need you agree. Leaving aside the exact time when you had these discussions you did discuss the need for Amaral Pastoral to obtain these farm implements; correct? A. We did. Q. For the coming programme of Amaral Pastoral? A. For the potential - yes, for the future. Q. You knew that these implements had to be pulled behind a tractor, correct? A. It didn't come to mind. These implements have to be pulled behind a tractor I believe that. Q. And you knew that at the time you had the conversations? A. I never thought about that. Q. Only because it was so obvious you didn't need to? A. It wouldn't be something that I had to consider. Q. You didn't think Mr Ware and his wife were going to pull the seeder around manually did you? A. I never considered that. Q. Is that a serious answer? A. It is. Q. You knew that these implements were needed to be pulled around by a tractor, correct? A. Yes. Q. And you knew that Amaral Pastoral owned no suitable tractors for that purpose? A. Yes. Q. You knew that that was not an issue by this stage because you had agreed with Ware that he would pull the equipment, that you were proposing to purchase, with his Steiger tractors? A. That is untrue." 81Even though Mr Amaral denied the ultimate proposition put to him, in my view the concessions that preceded it are telling. The discussions that Mr Amaral and Mr Ware had concerning the purchase of farm equipment for cropping strongly suggest a common understanding between them that his tractors would be used to pull the purchased equipment, an understanding derived on Mr Amaral's part from his belief that the tractors were already in use. 82I have already expressed a general preference for the evidence of Mr Ware compared with that of Mr Amaral and that is very much applicable to their evidence on this topic. However, in determining whether the conversation which is said to give rise to the machinery contract occurred, I do not consider that this is simply a matter of preferring one witness over another. I have already referred to Mr Curtin SC's submission invoking the comments of McLelland CJ in Eq in Watson v Foxman as to the frailness of human memory and the tendency to reconstruct events. Mr Curtin SC also submitted that, in resolving this conflict, I should reason as far as possible by using "contemporary materials, objectively established facts and the apparent logic of events", referring to Fox v Percy [2003] HCA 22; 214 CLR 118 at [31]. I agree. However, these factors support Mr Ware's version. 83I have already stated how some support for Mr Ware's version can be derived from the budget he prepared in 2003 and the discussions about purchasing farm equipment in 2003 to 2004. I have already referred above to the understanding that at least part of the means by which Torry Plains could become profitable was by increasing the cropping it did on its own account. How was this to occur without the significant use of equipment, especially tractors? I have already described the state of the farm from the time of its purchase by Amaral Pastoral. It was significantly run down. It had no substantial equipment of its own. Tractors would be required to repair it. The new farm manager had two tractors of his own. Amaral Pastoral could and did engage external tractor hire companies, but Mr Ware's tractors represented an easily available resource that was very much needed. 84There was nothing in the job description that suggested that any part of Mr Ware's remuneration reflected the use of his own equipment. In the next section I address the level of usage of the tractors by Mr Ware. While there is room for debate about the amount of hours the tractors were used, I consider the evidence that there was a significant amount of usage of Mr Ware's tractors on Torry Plains during the years 2002 to 2005 to be overwhelming. I regard the objective likelihood that Mr Ware allowed his tractors to be used on Torry Plains without some agreement that he would eventually be reimbursed to be low. Mr Ware's salary was relatively modest and so was his potential bonus. Why would he not just keep his salary and hire his tractors elsewhere? 85At various points Amaral Pastoral suggested that Mr Ware may have utilised his tractors in some effort to make his employment more secure. At one point in his cross examination it was suggested to him that, if he had made his tractors available, he did so to "keep [his] job". However, no evidence was put forward that in the years 2002 to at least mid-2004, he had any reason to doubt the security of his employment. On the contrary, it seems to be highly likely that Mr Amaral gave Mr Ware an incentive, beyond the bonus, to further develop the farm by giving him the chance of substantial reward if Torry Plains became cash flow positive. I find that he did so in the manner stated by Mr Ware. 86It is appropriate that I address a number of further submissions made by Mr Curtin SC concerning this part of Mr Ware's evidence. 87Mr Curtin SC submitted that Mr Ware's evidence concerning this topic suffered from multiple inconsistencies. First he points to the fact that Mr Ware said he brought the tractors onto Torry Plains in December 2001 and commenced working there before the April 2002 conversation is said to have occurred. He noted that in the conversation he did not refer to their use in the past and he only stated that he was willing to use them in the future. I do not attribute any significance to this. In cross examination Mr Ware said that by the time of the conversation they had only done "odds and ends" consisting of mainly cleaning up the house. He said that Mr Brennan was aware that they were present and in use on the farm. This is consistent with Mr Brennan's evidence, who in turn said that Mr Amaral was aware of this (see [100] below). 88Second, it was submitted that Mr Ware's credibility was damaged because in his second affidavit he refers to a further conversation about tractors which was not referred to in his first affidavit. The conversation was one that is said to have occurred in early 2002 in which he states that he told Mr Amaral that his tractors would "do the broadacre work and the general work around the farm as they are big and powerful tractors that will work out cheaper as I will hire them to you at a discounted rate", and that Mr Amaral is said to have responded "using your tractors is the best course of action". 89I see no inconsistency between this conversation and the April 2002 conversation. The former appears to be a conversation that pre-dates the latter conversation and may well have been an immediate precursor. Any suggested inconsistency between the two was not taken up with Mr Ware. 90Third, it was submitted that the June 2003 conversation (see [68] above) is inconsistent with the April 2002 conversation. I do not discern any necessary contradiction between the two conversations. According to Mr Ware, in the June 2003 conversation, after Mr Amaral introduced the subject of tractors, he responded with a statement that included the following "and if I have to wait for payment then that is not an issue". This is capable of being a reference to an earlier discussion in which the deferral of payment had been discussed. 91Fourth, Amaral Pastoral submits that there was an inconsistency between the April 2002 conversation and the terms of a letter that Mr Ware wrote on 23 March 2005 to Mr Amaral. This letter was sent some eight days after Mr Ware's dismissal when their relationship was acrimonious. In the letter Mr Ware sought recovery of an amount for fencing materials and included the following statement: "Also there is an amount of approx 4,500 hours my tractors have done in cleaning up and cropping your farm. Hourly rate of $60 would normally be applicable." 92This is said to be inconsistent because of the inclusion of the phrase "normally be applicable", whereas Mr Ware's case is that $60 per hour was agreed upon. However, I again do not see any necessary inconsistency between this letter and the pleaded case in that what would "normally be applicable" is that the hourly rate of $60 would be paid immediately and not be deferred. This submission of Amaral Pastoral does not advance the matter. 93Fifth, Amaral Pastoral refers to an email exchange between Mr Ware's then solicitor and Mr Amaral in April 2005 which included a summary of his claims as being "tractor hire at $40 per hour as the company maintained the tractors as agreed" with a listing of the total hours of 4,868. Amaral Pastoral pointed to the discrepancy between the $40 per hour stated, and the $60 per hour figure referred to in the April 2002 conversation. When cross examined about this Mr Ware stated that his solicitor "got it wrong". This was not pursued further. I do not attribute much weight to this given Mr Ware's description of the emotional effect of his termination upon him and the difficulties that can occur when solicitors first obtain instructions. This email includes figures for the starting and finishing hours for the tractors on Torry Plains which correspond with the hours he claimed. 94Sixth, Amaral Pastoral points to the terms of a letter that Mr Ware sent to the Department of Industrial Relations on 23 May 2005. It contended that no reference was made to any agreement for the hire of the tractor in that letter. The relevant part of the letter states as follows: "My equipment has done well over 4,500 hours of work on his property. On 9.04.04 we invoiced him for this tractor hire and were paid. Both he and the financial controller were informed at the time. It is less than 10% of the hire remaining to be paid. Invoices are in his files and he is fully aware of the facts. He has claimed back the GST component from the Govt." 95The reference to "9.04.04" was to the invoice issued by Mr Ware for $13,750.00 including GST on 9 April 2004. Mr Ware states that he invoiced Amaral Pastoral for this amount following a conversation he had with Mr Amaral about payment of a bonus (see above at [69]). Mr Ware stated that the invoice had been recorded in the monthly accounts and sent to Ms Hamner at the end of that month. Although there was a dispute as to whether accounts were provided monthly, it was not suggested that the invoice was not provided to Amaral Pastoral. 96Amaral Pastoral contended that Mr Ware's evidence suggested he had deceived the taxation authorities by taking a bonus by way of tractor hire. I reject that contention. To the contrary, the conversation and subsequent invoicing is entirely consistent with the agreement Mr Ware says he had in relation to invoicing for tractor hire. According to Mr Ware, they agreed that when cash flow permitted, money would be paid for tractor hire. It was open to Mr Ware and Mr Amaral to vary this agreement so that part of the amount for tractor hire would be paid immediately. In that sense it was a "bonus" in that it was paid even though cash flow did not permit. However, it was not a deception of the taxation authorities because tractor hire had occurred and the parties had simply agreed that part payment was now due. In substance the moneys were paid "for" tractor hire. 97Otherwise, I do not discern any necessary inconsistency between the letter to the Department of Industrial Relations sent on 23 May 2005 and the agreement pleaded by Mr Ware. Implicit in the entries is that tractor hire was agreed and his letter points to the payment of the invoice as a matter supporting the agreement he says he had. He explained that he and Amaral Pastoral "would reconcile the tractor hire at some stage and [the $13,750] could quite easily be taken off the sum owed in tractor hire" 98Mr Ware was cross examined about the letter and the taking of bonus as tractor hire at some length. He eventually agreed with a proposition that was put to him that the letter to the Department was misleading to the reasonable reader because "it does not even give any hint that it [i.e. the invoice] was for something else, such as a bonus" but reiterated that he did not knowingly mislead the Department. 99I do not attribute anything to this concession, such as it was, as to the misleading nature of the letter. It came after repeated questioning which was predicated on the contention that the invoice was being rendered "for" a bonus which was disguised as tractor payments. However, as I have explained, on Mr Ware's version there was no disguise. Instead there is an offer of a bonus and then an agreement that tractor hire which had been incurred would be paid. The invoice was truly "for" tractor hire but represented a "bonus" in that under their pre-existing arrangement payment was not yet due and owing, but that arrangement was varied to allow payment of this amount by Amaral Pastoral to Mr Ware. The letter to the Department states that Mr Amaral was aware of what occurring. On Mr Ware's version of events that was correct and Mr Amaral's acceptance that the bonus could be taken as tractor hire was consistent with Mr Ware's case about an agreement for hire of the tractors. His letter to the Department was not relevantly misleading. I do not accept that he sought to knowingly mislead anyone by sending it. 100Seventh, Amaral Pastoral pointed to the evidence of Mr Brennan that I have referred to above. I have already noted how each party relied upon the conversation that Mr Brennan referred to in 2003 for their own purposes. From Amaral Pastoral's perspective, if I was to accept that a conversation in those terms occurred it is not inconsistent with an anterior agreement between Mr Ware and Mr Amaral. It can sit comfortably with their earlier discussion as one focused on the particular consideration that was being given at that point in time to the planting of safflower. Mr Ware and Mr Amaral were simply confirming that the use of the tractors for the planting of safflower would be governed by terms which were the same or similar to the terms of the more general agreement they had struck the previous year. 101Amaral Pastoral also relies on the fact that Mr Brennan did not recall a conversation in the previous year in the terms recounted by Mr Ware. Mr Brennan was cross examined about his recollection of the discussions about that topic. He was emphatic in suggesting that at all times Mr Amaral was aware that Mr Ware was going to use tractors on the property, and that was perceived to be one of the advantages in hiring him. A review of his cross examination reveals that he could not say one way or another whether a conversation of the type referred to by Mr Ware had occurred, although he had a general recollection of discussions about using Mr Ware's tractors for "general clean up work at the headquarters". My impression of his evidence was that he had a genuine absence of recollection on this issue one way or another. His evidence strikes me as equivocal. 102Lastly, I note that Ms Hamner addressed this topic in both of her affidavits. In her first affidavit sworn 24 May 2011 Ms Hamner said that she had "no memory of being present" during any such conversation. In her second affidavit sworn 24 July 2012 she addressed this conversation again and stated "I deny being present during any conversation when words to the effect" of what is suggested by Mr Ware was stated. She added "I was not present during any discussion with Ware concerning Amaral Pastoral hiring his tractors for use on Torry Plains". 103On some occasions, the difference between having no memory of a particular conversation and denying being present when a particular conversation is said to have occurred can be elusive. However, the fact that Ms Hamner addressed the same conversation twice and responded to it differently suggests that either at least her, or those who assisted her in drafting the affidavits, perceived some difference. In any event, the cross examiner drew her attention to the change in the affidavits and she was asked what she actually meant. She said "I mean I don't recall". Ms Hamner's evidence does not advance the matter. 104In the end result of the persons other than Mr Ware who may have been present during the April 2002 conversation, both Mr Brennan and Ms Hamner have an absence of recollection and Mr Amaral positively denies the conversation. I have already rejected Mr Amaral's evidence. I consider that the "available materials, objectively established facts and the apparent logic of events" points strongly to the existence of an agreement between Mr Ware and Mr Amaral for use of Mr Ware's tractors on a deferred payment basis which was linked to Torry Plains' performance and cash flow. These matters do not point to the suggested rate of $60 per hour. I accept this figure is completely reliant on Mr Ware's recollection. Some aspects of the submissions and evidence that I address next under the heading "tractor usage" bear upon the reliability of his evidence as to that rate. It suffices to state that I accept Mr Ware's evidence in that regard. Tractor usage 105As I have stated, Mr Ware stated that as of late 2001 he owned several items of farm machinery that included two "Steiger" tractors. In his first affidavit, Mr Ware stated that when he first brought the tractors onto Torry Plains in December 2001 he recorded their usage at 10,149 and 5,623 hours respectively. He said he kept a handwritten note of his hours which is annexed to his first affidavit. He stated that after he was terminated he had the tractors moved from Torry Plains and was assisted by a friend, Sharon Hedwards. He said they both recorded the hours on the tractors as 12,805 and 7,735 respectively. He said he "watched as Sharon wrote the correct tractor hours in her diary". He said he had not retained the paper upon which he recorded the hours, but annexed a copy of the piece of paper said to be from her diary. The difference in hours is 4,768 from which he deducted 50 hours being his estimate of some work they undertook on Warewaegae in 2004. Thus he claimed 4,718 hours. In cross examination he volunteered that a further two hours should be deducted for the time involved in transporting a "laser bucket" off Torry Plains. 106In his second affidavit Mr Ware described the work done on the tractors in considerable detail. He stated that it was necessary to cultivate more fields than were sowed so that many fields could be ready for when water became available. This aspect of his evidence was the subject of comment by Amaral Pastoral which I address below. Mr Ware stated that he told Mr Amaral that he was adopting that approach. He said he reported to Amaral by telephone about once a week and told how much land was being cultivated. He annexes various records showing the land that was sewn and from that annexes a table of the acreage that was cultivated. 107Amaral Pastoral's response to this assertion was encapsulated by a short passage in Mr Ware's cross examination where the following alternative propositions were put to Mr Ware: (i) the tractors did not do any work between December 2001 and March 2005 at Torry Plains; (ii) however if they did it was only to the extent that was actually invoiced; and (iii) but even "if they did do a little bit more work" it was only undertaken because Mr Ware wanted to "keep this job" and have fuel, breakages and maintenances paid. Mr Ware denied all three (alternative) propositions. 108There were five main points taken up in cross examination of Mr Ware concerning tractor usage that were developed in Amaral Pastoral's final submissions. 109The first contention was that Mr Ware's honesty should be doubted because he conceded that one of his tractors had been used for 20 hours on a sharefarmer's allotment and this was not referred to in his affidavits. This contention has no substance. Mr Ware explained that this occurred when a particular sharefarmer experienced personal difficulties and effectively walked away from his crops. He explained that the crops were taken over by Amaral Pastoral which received the proceeds from their sale. 110The second contention concerned the figure for tractor expenses that was included in the budget for the calendar year 2005 that he prepared in early February 2005. The budget included a figure for $146,860.00. In his first affidavit Mr Ware explained that this was calculated by estimating which paddocks would be farmed, what their area was, how many tractor passes were required, and then determining what hours were required to perform the task. He said he multiplied this figure by the rate of $60.00 per hour. 111In cross examination Mr Ware agreed to the best of his recollection he prepared the estimate using "tens of hours". It was then pointed out that $146,860.00 is not neatly divisible by $60 or $66.00. It was then put: "Q. Whatever you did do, it was not a calculation using whole hours, correct? A. If you say so. I don't actually remember how the hell I did the thing. I might have done it per acre. I don't know. Q. You have said in your affidavit how you did it. Now you don't remember, you mightn't know, you might have done it a different way as set out in your affidavit; is that right? A. I'm confused. Q. What you did do, wasn't it, is you plucked a figure out of the air to put it in there because the writing was on the wall for your future employment? A. No. Q. And that's why it appears for the very first time in one of your budgets in about February or March 2005? A. No. It was the first time we were doing a serious budget where we did a serious plan on a 12 month projection. Q. What were the earlier budgets? A. The earlier budgets we had a guess figure, with Mr Brennan we developed a budget. But for the first 2 years before that all we did was drive from one end of the farm to try and fix the latest fire and get operating." 112I have set this out in its entirety because parts of this extract were set out verbatim in Amaral Pastoral's written submissions. The suggestion that Mr Ware prepared the 2005 document as ammunition in advance of his likely dismissal because he was aware that his employment was in jeopardy has no evidentiary support. I have described in [16] above the exchange that occurred on 4 January 2005 when Mr Amaral falsely advised Mr Ware that he (Mr Amaral) was under pressure from his bankers about the state of Torry Plains' books and sought an explanation for the bore payments to provide to his bankers. This was the subject of an immediate response from Mr Ware. Mr Amaral replied to that by reassuring Mr Ware that he was "impressed" with the state of the books and thanking him "for getting right on it". Other than the email of 4 January 2005 there was not a single document tendered to suggest that there was any basis upon which Mr Ware would have anticipated that his employment was at risk when he prepared the budget. It is otherwise noteworthy that the budget only anticipates payment of tractor costs when cashflow is positive. 113It was submitted that the combined effect of Mr Ware's evidence (in his affidavit) as to how he calculated the budget figures, and his answers in cross examination, are "evidence that there was no agreement per hour". The cross examination stopped short of suggesting to Mr Ware that he used a different hourly rate to the one he claims to have agreed upon in the April 2002 conversation. The range of rates for tractor hire mentioned in the evidence was between $40 and $80 per hour. It was not clear whether those figures were inclusive of GST or exclusive. The sum of $146,860.00 is evenly divisible by $70 (2098 hours). However the figure of $146,860 could have been a typographical error in that the $146,880.00 is evenly divisible by $60 (2448 hours). Alternatively Mr Ware could have utilised a comparable figure such as a proportion of the crop income or adopted an outright guess. The end result is that while I am not satisfied that the figure supports his evidence as to the use of a figure of $60 per hour, I am also not satisfied that it is inconsistent with it either. 114Much was made in Amaral Pastoral of the reference in the above extract from Mr Ware's cross examination to the reference to the "earlier budgets" which involved a guess figure. It was said that this demonstrated that Mr Ware was "dishonest" because it was said "[t]here were no earlier 'guess figures'" in that he had budgeted "for $0 equipment hire". The suggestion that it was a lie was not put to Mr Ware in cross examination. For my part I am uncertain as to what "earlier budgets" Mr Ware is referring to. As I have already discussed there was tendered in evidence a budget that Mr Ware prepared in January 2003 for the two year period to December 2004. This could be the budget prepared with Mr Brennan that Mr Ware referred to but that was not clarified. If so then the "earlier budgets" are budgets from a much earlier period so that Amaral Pastoral's submission does not advance the matter. If it was meant to be a reference to the 2003 to 2004 budget above, then for the reasons already addressed, I consider that the contents of that budget support Mr Ware's case. 115The third contention was that Mr Ware's evidence as to the recording of the hours on the tractors at the conclusion of his employment was inconsistent with that of Ms Sharyn Hedwards. I summarise Ms Hedwards' evidence below. It was submitted that Mr Ware falsely stated firstly that they both moved the tractors from Torry Plains and secondly that he was present when she recorded the tractor hours in her diary. As for the first point, Ms Hedwards initially nominated a Mr Leslie Schultz as the person who helped her move the tractors from Torry Plains, but when asked whether she was sure of this she stated she was "not a hundred per cent, no". The falsity of Mr Ware's evidence in this respect has not been demonstrated. In relation to the second point Ms Hedwards agreed she did not make the note in her diary recording tractor hours on the day the tractors were moved, but did state that she recorded them on a piece of paper that was later transferred to the diary. It could have been this that Mr Ware witnessed. 116The evidence from Ms Hedwards upon which this submission was based was not given until after Mr Ware had finished being cross examined so the suggested inconsistencies were not taken up with him. Nevertheless, none are such as to cause me to doubt Mr Ware's evidence. They are the type of discrepancies that can be expected when two different people are seeking to recall the same incident from a number of years previous. 117The fourth contention was that the evidence given by Mr Ware in his second affidavit concerning his cultivation of paddocks that were sown in anticipation of rain was "not believable". Amaral Pastoral relied on the fact that it only appeared after the service of two affidavits filed on its behalf from two farmers, Messrs Spinks and Blore. I summarise their evidence below but, in summary, they stated that the amount of acreage actually sewn by Amaral Pastoral should not have exceeded 450-500 hours compared with the approximately 4,500 that was claimed. It was submitted that the "lateness" of Mr Ware's evidence meant that the observations of Campbell J in White v Shortall [2006] NSWSC 1379; 68 NSWLR 650 at [71] to the effect that evidence which only emerges late can sometime be "very damaging to the credibility of a plaintiff's case" were apposite. 118The comments of Campbell J in White v Shortall were made in the context of additional oral evidence being led at the trial. They are not relevant to this case. Mr Ware's first affidavit was some 165 paragraphs long and addressed all the various issues raised by the pleadings, including the number of hours he claims his tractors worked. It was not incumbent on him at that point to set out in exhaustive detail all the matters he stated in his second affidavit concerning the detail of the hours worked and why. The full extent to which, if any, the work done on the tractor was in issue and more importantly the reasons why Amaral Pastoral contended that the work was not done would not have been apparent at the time of preparation of Mr Ware's first affidavit. 119The fifth contention concerns the absence of ongoing records of the hours of work performed by Mr Ware's tractors and where that work was undertaken. This contention is by far the most problematic part of Mr Ware's claim. 120Mr Ware agreed that in 2004 a tractor was hired from Gough & Gilmour. He explained that this related to a particular form of sowing suggested by some PhD students from the University of Melbourne who were advising on methods to increase safflower yields. However he agreed that it was usual practice for machinery hire operators when hiring on a per hour basis to record their start and finishing hours on invoices. Mr Ware did not maintain records of the particular hours performed by a particular tractor on a particular day or even in particular period. In a strict sense, the practice Mr Ware described of recording hours when the tractors arrived at and left Torry Plains equates to the usual practice for contractors he described. However, in the ordinary course one would employ better record keeping than that. Mr Ware stated that there were paddock records showing where the tractors worked, but each side blamed the other for their unavailability. 121There are some records and documents as well as some potential sources of documents. I have already referred (at [75]) to the records from Gough & Gilmour that were attached to Mr Amaral's affidavit. Mr Amaral's cross examination suggested that they did not account for all of the crop sewing that was done over Mr Ware's time as farm manager. I describe below the diaries entries of Ms Hedwards. There were also a number of fuel records and other documents attached to the affidavits of Ms Wells (see below). The fuel records suggest the consumption of a significant amount of fuel but apparently not many of them describe Mr Ware's Steiger tractors as having been filled. However Mr Ware explained that those records concern the filling up of machinery from bowsers on Torry Plains but that tankers located on the farm were also filled and then used to fill machinery. He stated that he would usually use one of these mobile tankers to refuel the Steiger tractors. In addition there were records of what acreage was sown and records maintained of the acres that were annexed to Mr Ware's second affidavit. I have described the budgets that were in evidence. Mr Ware stated that tractor driver timesheets were maintained but said they were in possession of the Amaral Pastoral. It denied having them and accused him of having taken them or destroyed them. 122The end result of this is that, leaving aside the pieces of paper recording the start and finish hours of the tractors, there is a series of incomplete and inconsistent documents that do not appear either to significantly corroborate or undermine this aspect of Mr Ware's case. Each party blamed the other for the inadequate state of the available records. 123I have already touched on the evidence of Ms Sharyn Hedwards. Two affidavits from her were read. In her first affidavit sworn 14 November 2011 Ms Hedwards stated that in January 2002, Mr Ware asked her to move into the house on Torry Plains as a caretaker. She describes her dealings with both Mr Amaral and Ms Hamner on their visits to Torry Plains. Ms Hedwards also describes in considerable detail the work she performed at Torry Plains using Mr Ware's two Steiger tractors. She recounts Mr Ware and Nathan Wilson doing the same. For example, she stated that in early 2003: "... we began doing some work preparing seeds and lands for crops and farming. Peter's tractors were used extensively for this work working the ground and getting it ready. The ground was ploughed, dragged and prickle-chained and then seeded. Peter's tractors were used for all or most of this work. This required an average of about six to eight passes to do all of this work." 124Ms Hedwards also states that after Mr Ware was fired "I helped him remove his equipment off Torry Plains. I took a note of the hour meter of both tractors in my diary. I wrote this down in the front of my diary as we were leaving Torry Plains, before we reached the river". She annexes to that affidavit a photocopy of a page from a diary referable to the period March and April 2005 which on a page from April 2005 has the following entry: "Tractor Hours for Peter Move from Torry to Hay over Nap Nap River. ***, it was scary. Never been to crossing site before. Straight down one bank and up the other side - full on scary. Dual 12,805 Single 7,735" 125In her second affidavit sworn on 31 July 2011 Ms Hedwards attaches extracts from her 2003 diary split into two sections being those recording the work she performed "using one of Peter's tractors" and the rest being examples of pages recording other work on Torry Plains. I have attached to this judgment a table of the recorded hours in 2003 "using one of Peter's tractors". I have done this because Amaral Pastoral's written submissions contended that her diary only records a total of 288 hours work which was said to not all be tractor work. However, my calculations indicate she recorded 401 hours of tractor work. 126In cross examination Ms Hedwards modified the account in her affidavit as to how she came to record the tractor hours after Mr Ware's dismissal. She recounts driving one of the tractors to the Nap Nap River. I have described her evidence as to who she moved the tractors with and how she recorded the tractor hours (at [115]). In addition, having regard to the layout of the note in the diary, she stated that she was not sure when she transferred the note she took of the hours into that diary, that is, whether it was soon after or possibly weeks later. She stated that her best recollection was that it was her husband who had asked her to make the note. The other significant modification to the version contained in her affidavit was that the diary recording the hours was not in fact her diary, but her husband's diary. She explained that it was in her husband's diary rather than her own because it reflected how relatively disorganised their home was. Effectively she stated that she just transferred the hours from a piece of paper into the nearest available diary. 127Towards the end of her cross examination it appeared to be suggested to Ms Hedwards that she had not moved the tractors at all, but ultimately no submission to that effect was made. She maintained that she had recorded the hours recorded on the tractors' meters when she moved them in 2005. 128It was submitted on behalf of Amaral Pastoral that Ms Hedwards' evidence should be rejected because of the discrepancies between her affidavit and her evidence in cross examination that I have summarised. Amaral Pastoral also pointed to inconsistent answers that she gave as to whether certain handwriting found immediately below the entry that I have extracted above was in her handwriting or that of her or her husband. 129I find none of these points persuasive. The discrepancies that existed in Ms Hedwards' account seem to me the type of discrepancies that one would expect of a person who is being asked to recall in 2011 and 2012 the circumstances in which they scribbled some notes back in 2005. At the time, the full significance of those notes was unlikely to have been appreciated by her and it can be expected that her memory in 2011 and 2012 of the precise manner in which she made them would not be strong although the broad details could be remembered. The strong impression I gained from her evidence was that she was emphatic in recalling the work done over a significant period using the tractors, was certain that she had moved the tractors and made the various notes. She was unclear as to precisely when and how the notes were made and was prepared to accept the possibility of the various means by which that had happened, as suggested by the cross examiner. 130I regard both the qualitative evidence that Mrs Hedwards gave of her observations of the amount of work that was done with the tractors, as well as her diary entries of the work she performed, as significantly corroborative of that part of Mr Ware's case concerning the number of hours his tractors worked at Torry Plains. As I have said, and contrary to Amaral Pastoral's submissions, her diary entries for 2003 record she worked 401 hours on Mr Ware's tractors. I expect this would be a reference to her hours of work and would probably overstate the number of the hours the tractors were operational. Even so, and assuming that they correspond to approximately 250 to 300 operational hours for a single tractor they suggest that for about one third of the period in question (i.e. 2003) she drove one of the tractors for around 6% of the total time it was said they were worked. Given the limited period in question and the time spent by Mr Ware and Mr Wilson on the tractors this seems to me to be broadly consistent with Mr Ware's claim. 131I accept her evidence concerning recording of the final hours of both of Mr Ware's tractors. 132Amaral Pastoral also made a submission that the inability of Ms Hedwards to produce her 2002 diary gave rise to an inference adverse to Mr Ware relying on Jones v Dunkel [1959] HCA 8; 101 CLR 298. Leaving aside all the other difficulties with this contention, it suffices to state that I reject it on the basis that it was not demonstrated that Ms Hedwards had access to her 2002 diary at the time of the hearing, much less that Mr Ware or his legal team had access to it. The evidence did not come close to enabling me to conclude that there was some deliberate decision by Mr Ware not to tender it because of some fear of what it might or might not reveal. 133Mr Ware also relied on evidence from Mr Wilson (see [74] above). He described the repair and ploughing work undertaken with the tractors in the period from 2002 to 2005. He states that Torry Plains was in a poor state of repair when he commenced. He stated that there was a clean up period in which the tractors were generally doing five days a week for twelve hours a day "over a period of 12 to 18 months". He stated that in 2002 they started preparing for farming by ploughing paddocks in the summer. He said they planted in the winter of 2003 in the majority of paddocks that had been fallowed previously. In the summer of 2003/2004 he said they began farming again, fallowing the paddocks that had been used in the previous years, and expanding upon the number of paddocks. He said there had been rain in 2003. He said they did not plant in all the paddocks that had been cultivated. He said he did not recall planting again in 2004 because there was no water available, but he said that they continued to do preparation work, fallowing and cultivating the paddocks using Mr Ware's tractors. 134Mr Wilson stated that during the time they were fallowing, the tractors were constantly in the fields. He said that fallowing took approximately two to three months, and during that period the tractors were in the field approximately six days a week, twelve hours a day. He stated that for the "period 2002 to March 2005 I used Peter's tractors on Torry every week for a minimum of 4 days a week. I often did 10 to 12 hour days. This was either the general clean up and repair work or cultivation and seeding". 135Mr Wilson stated that during Mr Amaral's visit in June 2003 he showed Mr Amaral the improvements that had been undertaken to the farm and told him that they had been undertaken using Mr Ware's equipment including his tractors. He stated that he regularly spoke to Mr Amaral when he rang to speak to Mr Ware and this included telling him of the paddock cultivation that was occurring in the anticipation of it raining. 136In cross examination Mr Wilson was asked to extrapolate from the estimates he gave as to the weekly tractor usage to arrive at overall figures for tractor hours. The results were significantly in excess of that claimed by Mr Ware. Hence, for the clean up period he accepted that if that that had lasted for twelve months with the tractors operating at his estimate of five days a week, twelve hours per day, it would yield 6,240 hours and if it was eighteen months it would yield 9,360 hours. Equally he agreed that if one took his estimate of the tractors working every week for a minimum of four days a week, ten to twelve hours per day, then it would yield an overall figure of somewhere between 10,000 and 15,000 hours between early 2002 and March 2005. 137Amaral Pastoral submitted that Mr Wilson's evidence is "clearly unreliable" because these estimates meant that he "cannot be an accurate historian". I have no difficulty accepting the proposition that Mr Wilson's evidence overstated the level of tractor usage. When he sat down in November 2011 to prepare his affidavit and sought to estimate tractor hours based upon his recollection of the level of work that he observed being undertaken, it is readily understandable how his estimate can differ so significantly from Mr Ware's estimate. Be that as it may, it certainly does not mean that his evidence as to the general usage of the tractors was dishonest much less generally unreliable. I consider that his evidence corroborates Mr Ware's claim in so far as it demonstrates that there was a high level of tractor usage. 138I have already described Mr Amaral's evidence on this topic and my rejection of it (at [76] to [81]). 139Amaral Pastoral also read two affidavits from the last remaining Australian employee of Amaral Pastoral, Lynette Wells. Ms Wells was employed as a book keeper at Torry Plains from February 2002 and stayed on after Mr Ware's dismissal. In her affidavits, she stated that she entered various information about the income and expenses for Torry Plains. Initially the software package that was utilised was "Phoenix" but in 2003 this changed to the Australian version of "Quickbooks". Apparently Ms Hamner used an American version of "Quickbooks". 140I have already referred above to the position in relation to documentary records (at [121]). There was a significant amount of evidence about the incompatibility between the various systems and who bore responsibility for that state of affairs. Ms Wells also attached some fuel records for the period from November 2002 to March 2003 and noted that only five entries were made "for fuel utilised for 'Steiger' tractors". I have already addressed this (at [121]). 141Ms Wells also attached to her affidavit some documents submitted to the National Association of Sustainable Agriculture Australia, presumably intended to demonstrate the amount of acreage that was cultivated at Torry Plains on Amaral Pastoral's own account. Presumably these were meant to provide the factual foundation for the opinion evidence of Mr Spinks and Mr Blore which I describe below. 142In cross examination Ms Wells stated that she thought Mr Ware only owned one tractor, that she never saw Mr Ware's tractor "towing any implement which is farming" but saw it "parked in the yard". However she also accepted that she overheard conversations involving Mr Ware and Mr Wilson about using tractors: "Q. So, you had heard. Had you ever heard Peter Ware say something that suggested he had been on his tractor, working up Amaral Pastoral? A. I have heard conversations of that but I have never physically seen it. ... Q. Have you ever had or overheard a conversation with Mr Wilson, in which he said that he had been using Peter Ware's tractors for the purposes of the Amaral business? A. Yes. ... Q. Blokes who operated the machinery could come in and go each time that you were there and you would hear discussions about what they were doing, didn't you? A. Sometimes. Q. And you would regularly hear conversations about the use of Peter Ware's tractors in relation to the business of Amaral wouldn't you? A. They would say we are on the tractor. That wasn't the only tractor there. ... Q. And you did form the view that those tractors were in use didn't you? A. Yes. Q. And you told Mr Amaral that very simple fact, didn't you? A. Yes. " 143Her evidence of the conversations she overheard involving Mr Ware and Mr Wilson satisfied s 64(3) of the Evidence Act 1995 so that it is evidence that they worked on Mr Ware's tractors. I consider it to be material strongly corroborative of Mr Ware and Mr Wilson's evidence, to the extent they asserted that they regularly worked on Mr Ware's tractors although it does not prove the amount of hours claimed. It is certainly inconsistent with so much of Amaral Pastoral's case that involves a denial that Mr Ware's tractors were used on Torry Plains. 144Amaral Pastoral also read two affidavits from two farmers, Michael Spinks and Stephen Blore. Mr Spinks owns a number of properties one of which adjoins Torry Plains. He has sharefarmed on Torry Plains at various points in time. He states that he was "regularly on the property" in late 2003 and 2004 and did not see Mr Ware's tractors undertaking any work there. He stated that one of Mr Ware's tractors had single wheels which he said was inappropriate for floodplain cultivation. He also stated that there was no use for cultivation when there is no water available. Based on his training and experience I allowed Mr Spinks to give opinion evidence as follows. He was asked to assume that between 2001 and 2005 Amaral Pastoral "farmed" (i.e. sowed) 3167.99 acres of safflower, 446 acres of sunflowers and 670 acres of "other row crops". He concluded that would or should have involved only a maximum of 450-500 hours of tractor hours. 145In cross examination he estimated that his sharefarming at Torry Plains amounted to only 20 per cent of his total farming operations. He agreed that opinions vary about using single wheel tractors and "quite often you use what you got". He agreed that there was some scope for variation as to how many hours were required depending on the quality and state of the paddock. He accepted the following scenario: "Q. But if you, you might work up a paddock because it's rained, and then expecting on the expectation that there might be more rain, you don't get that rain, then native weeds and the like start to get into your paddock before you sow, so unexpectedly, you've got to work it up again, correct? A.Correct." 146Mr Blore stated that he has been farming on the Lowbidgee flood plain since 1981. He states that in 1996 he purchased Warewaegae in 1996 from Mr Ware's mother. (The apparent contradiction between that and the balance of the evidence referring to Warewaegae as Mr Ware's family property after that date was not explored in the evidence.) In March 2005 he was one of the three lessees who farmed Torry Plains. He stated that Mr Ware's tractors were not suitable for flood plain farming as they had logger tyres and lacked the ability to connect to the "necessary equipment". Like Mr Spinks he was asked to express an opinion on the amount of tractor hours necessary to sow the amount of acres noted in [144] above. In relation to the 3167.99 acres of safflower he estimated that between 250 and 320 tractor hours would have been required to cultivate them. In relation to the 446 acres of sunflowers he did not nominate any figure for the hours required. Instead he stated that from his observation of the crop in situ a "tractor with linkage" was required to cultivate that crop, which he stated Mr Ware's tractors did not have. For the 670 acres of "other crops" he stated that he had not been provided with "sufficient information to express an exhaustive opinion", but estimated 25 to 30 tractor hours at the low end and 100 to 130 tractor hours at the high end would be required, depending on factors such as soil quality and moisture. 147In cross examination Mr Blore accepted that only one of Mr Ware's tractors had logger tyres. Unlike Mr Spinks, he was not prepared to accept that there might ever be a need to cultivate a paddock more than once before sowing a crop. 148Mr Ware did not appear to dispute Mr Blore's statement about the need for "linkages" in tractors cultivating sunflowers. Otherwise most of the points made in these affidavits about the capacity of Mr Ware's tractors were disputed in his second affidavit and there was no cross examination or submissions of Mr Ware directed to these topics. They do not assist me in resolving the question of how much work was undertaken on the farms. 149I make four further points about the evidence of Messrs Spinks and Blore. 150First I do not attribute much weight to Mr Spinks' failure to observe Mr Ware's tractors working on Torry Plains. He did not appear to travel to the property that often. Given the size of Torry Plains it was quite possible for him not to have observed those tractors working. As I have noted Mr Blore did not state whether or not he had seen the tractors working at Torry Plains. 151Second neither Mr Spinks nor Mr Blore addressed the amount of tractor hours likely to be involved in cleaning up and repairing Torry Plains in the period following its acquisition by Amaral Pastoral. 152Third, as I have stated, the opinions expressed by Messrs Spinks and Blore as to the amount of tractor hours required related to an assumed number of acres of crop that were said to have been sown (see [144] above). No attempt was made by Amaral Pastoral in its submissions to explain how that assumption was made good. In his second affidavit Mr Ware did not accept that assumption was correct. In cross examination it was suggested to him that some of his records indicated a maximum acreage of 7000 acres in 2003. I am left in a state of uncertainty as to the accuracy of the assumption that Messrs Spinks and Blore based their expert opinions on. 153Fourth, the evidence of Messrs Blore and Spinks needs to be placed in context. As I understand the relevance of their opinions is that it is said they negate so much of Mr Ware's case that sought to prove the number of hours of work the tractors performed. That experienced farmers considered the number of hours Mr Ware's tractors spent on the land to be excessive is legally irrelevant. Amaral Pastoral did not defend this aspect of this claim by contending that, if there was an agreement, it was limited to only so many hours as were reasonable etc. If the existence of the machinery contract is established then it left to Mr Ware in the first instance to decide how many hours to perform. However, as I will explain, this was subject to the power of Amaral Pastoral as his employer to direct him to limit his hours or stop using the tractors and, if necessary, report on how many hours were incurred and on what. In this regard one matter of debate between Mr Ware on the one hand and Messrs Spinks and Blore on the other was that Mr Ware considered it appropriate to cultivate paddocks in advance of rain and the latter did not. Irrespective of whether or not that was proper farming practice, Mr Ware states that he informed Mr Amaral that he was adopting that approach and he agreed. I accept that evidence. 154The starting point for this evidentiary trawl concerning tractor usage (at [105]) was the pieces of paper said to record the starting and finishing hours of Mr Ware's tractors on Torry Plains. Their veracity is supported by the evidence of Mr Ware and, in respect of the finishing hours, Ms Hedwards, whose evidence I accept. The balance of the evidence of Mr Ware, Ms Hedwards and Mr Wilson supports the veracity of those documents in a quantitative sense. Further support is to be found in the evidence of Ms Wells that I have referred to above. The balance of the documentary material (and the absence of certain material) cuts both ways and ultimately does not detract from the evidence that I do accept. Mr Amaral's evidence does not assist. The evidence of Messrs Blore and Spinks does not advance the matter far. In the end result I am satisfied that the start and finish hours of Mr Ware's tractors on Torry Plains was as recorded in the documents I have referred to. The difference between them is 4,768. I also accept Mr Ware's estimate that 52 hours should be deducted from that figure to allow for work done by the tractors off Torry Plains in the interim. Enforcement of the machinery contract 155My findings that Mr Ware entered into an "agreement" as recorded in the April 2002 conversation and that the tractors were used for the hours he claimed gives rise to five further issues. First, Amaral Pastoral contends that any such agreement is void for uncertainty having regard to the phrase "when cash flow permits". Second, Mr Ware contends that he has established that an amount is due in that cash flow was such that it permitted or enabled the amount incurred to be paid. Third, in the alternative, Mr Ware contends that there was an implied term that the amount incurred would become due and payable on the termination of his employment contract. Fourth, in the further alternative Mr Ware seeks recovery on a restitutionary basis. Fifth, failing other alternatives, Mr Ware seeks declaratory relief concerning his entitlements. 156In relation to the first issue, Amaral Pastoral submits that the word "permits" (or "allows") in the phrase "when cash flow permits" is so vague to be meaningless because cash flow is said to wax and wane depending upon various factors and the flow of cash through a business does not have an end point. 157I do not agree. I accept that there are difficulties in identifying the precise meaning of "cash flow" and determining when the entitlement to recover arises. Thus, in a given case there may be scope for argument about whether interest payments should be excluded or not. However such difficulties can be resolved by considering the commonly known or notorious facts and circumstances of the business in question. The compiled Australian Accounting Standards Board's "Statement of Cash Flows" Standard (AASB107) allows for the ascertainment and annual determination of cash flow. Further, depending on the nature of the entity's trading activities, which might be seasonal, the experiencing of sustained positive cash flow will in many cases be capable of ascertainment even if the precise point that it commenced is difficult to ascertain; "Twilight does not invalidate the distinction between night and day" (A.M. Gleeson, "Judicial Legitimacy" (2000) 20 Aust Bar Rev 4 at 11). 158In Head v Kelk [1962] NSWR 1363; (1961) 80 WN (NSW) 290, the plaintiff sought recovery of amounts he had lent to the defendant. The defendant pleaded that it was a term of the loan that he was only bound to "repay when he was financially able to do so". The Full Court overruled a demurrer by the plaintiff who had contended that the term pleaded by the defendant was "so vague and uncertain as to be unenforceable" (at 292.8). In the course of so finding Herron J (with whom McClemens and Brereton JJ agreed) stated (at 293): "If the court comes to the conclusion that parties intended to make a contract, it will, if possible, give effect to their intention no matter what difficulties of construction arise. Thus contracts which contained terms that the price was to be "reasonable", to "pay handsomely" for services, or to pay a commission on "the sum available for distribution" or a percentage of "the profits" of a business, in each case for services rendered, have been held to be enforceable according to the maxim id certumest quod certum redid potest. Thus an agreement based on consideration to waive interest on a loan "until such time as the company is in the position to pay the interest" was held to be valid. In Ledingham v Bermejo Estancia Co Ltd, Atkinson J construed such an agreement as meaning that payment of interest should be postponed until the company was in a position to pay the interest out of income so long as it carried on. By reference to a further term, as soon as it ceased business the agreement terminated and the whole of the interest became due but by force of the agreement as so construed the interest did not become due and payable until the condition of ability to pay was fulfilled. It was also held that the agreement was a binding contract since the offer contemplated legal relations." (some citations omitted) 159The opening statement of principle in the passage from Head is as correct now as it was when stated by Herron J in 1961 (see Meehan v Jones [1982] HCA 52; 149 CLR 571 at 589 per Mason J). In my view, there is no material difference between a clause referring to an individual person's ability to pay, as in Head, a company being in a position to pay interest out of income as in Ledingham v Bermejo Estancia Co Ltd [1947] 1 All ER 749 (referred to in the above extract from Head v Kelk), or when cash flow permits. I reject Amaral Pastoral's contention that the agreement suggested by the April 2002 conversation was too uncertain to give rise to an enforceable contract. 160The above passage addresses the second issue that I have noted at [155], namely whether Mr Ware has demonstrated that the amounts incurred have become due and owing because the cash flow of Amaral Pastoral permitted or allowed it. Herron J in Head noted the decision in Fettes v Robertson [1921] WN 136 to the effect that the onus was upon the party seeking recovery to establish the defendant's ability to repay the amount incurred. 161The accounts for Amaral Pastoral that have been tendered do not contain statements of cash flow. The profit and loss statements include substantial debits in favour of Mr Amaral's pension fund which appears to have funded the purchase or lent money to Amaral Pastoral. However even if these debits were for interest and were removed from the profit and loss statements the company was still incurring large losses. Cash flow and profits are not the same, but they are related. The repeated incurring of losses even after the exclusion of entries in favour of Amaral Pastoral makes it difficult to accept that it was cash flow positive at any point much less for a sustained period. Certainly the contrary has not been shown. 162Mr Ware also pointed to certain large cash transfers out of Amaral Pastoral's operating account during the period 8 September 2005 to 5 May 2006 which appear to have been sent to accounts in the USA. It was submitted that these "transfers indicate that the business was operating on a positive cash basis." Without further analysis I cannot be satisfied that that is so. The original source of these funds could have been Mr Amaral's pension fund with a temporary excess of funds being repatriated. Given that the business in question is a farm engaged in cropping and share farming, a firm conclusion that it is operating on a positive cash flow basis would require a sustained positive cash flow over a period that at least encompassed the period from the preparation of land for sowing of crops to the realisation of their proceeds of sale. The evidence did not establish that. 163Accordingly, I am not satisfied that the amounts incurred under the machinery contract became due and owing by the operation of an express term. 164The next issue that arises is Mr Ware's contention that there was an implied term that charges under the machinery contract would become due and payable upon the termination of Mr Ware's contract of employment. For present purposes I will confine this to only a termination by Amaral Pastoral as occurred in this case. 165The five preconditions necessary to found an implied term of a contract were stated by the Privy Council in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 at 283, being that "(1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract". In the case of written contracts that are complete on their face, these requirements have been endorsed by the High Court many times (e.g. Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; 144 CLR 596 at 605-6; Codelfa at 347 and 404). 166However, in Hawkins v Clayton [1988] HCA 15; 164 CLR 539 Deane J explained that those criteria do not apply with the same strictness in cases where the contract is oral or partly oral or the parties did not attempt to reduce their agreement into compete written form. His Honour rejected the application of any "precise mechanical test" instead stating (at p 573): "The most that can be said consistently with the need for some degree of flexibility is that, in a case where it is apparent that the parties have not attempted to spell out the full terms of their contract, a court should imply a term by reference to the imputed intention of the parties if, but only if, it can be seen that the implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case." 167In Byrne v Australian Airlines Ltd [1995] HCA 24; 185 CLR 410 at 442 McHugh and Gummow JJ agreed with this approach noting that in such cases the "the first task is to consider the evidence and find the relevant express terms." The subsequent discussion in their Honours judgment indicates the continuing relevance even if not the mandatory nature of some of the five criteria stated in BP Refinery. Thus, their Honours considered that the proposed implied term in that case would operate in a partisan fashion (i.e. it was not reasonable and equitable), was not so obvious that it went without saying and was thus not necessary for the reasonable or effective operation of the contract (at 442-443). To this it may be added that a term which is inconsistent with an express term of the contract could hardly be necessary for its reasonable or effective operation (Miller v JLCS Pty Ltd [2007] FCA 74; 158 FCR 1 at [114] per Sundberg J). 168The machinery contract as arrived upon in the April 2002 conversation was clearly one that was oral and not one in which the parties had spelled out all their terms so as to engage the strict application of the criteria stated in BP Refinery. Nevertheless, in terms of those criteria, the proposed implied term, modified so that it only applies in the case of termination by Amaral Pastoral, is capable of clear expression. Further it did not contradict any express term of the contract any more than the term implied in Ledingham that the moneys would be repaid on the cessation of the business contradicted the terms upon which the money was lent to the company. The discussion concerning this contract assumed the continuing employment of Mr Ware ("I'm willing to use ..."). The position follows his termination was simply not addressed. 169In relation to whether the proposed term was necessary for the reasonable or effective operation of the contract (or "obvious", "reasonable and equitable" and "necessary to give business efficacy to the contract"), the critical features of the machinery contract are as follows. 170First, the discussion that gave rise to the machinery contract took place in the context of ongoing discussions over Mr Ware's engagement as farm manager. Those discussions included the terms of his employment, his role and the future direction of the farm. It does not appear that any part of the discussions addressed either party's rights or obligations upon the termination of his employment. The Job Description does not address that topic either. 171Second, one term of his contract of employment provided for a bonus based on profit from net crop income. The Job Description also referred to the need to "maximise profits". 172Third, as I have already explained at [31] to [43] it was jointly understood by Mr Ware and Amaral Pastoral that an important element of achieving the future profitability of the farm was by Amaral Pastoral undertaking cropping at Torry Plains on its own account. This would obviously require equipment, especially tractors. 173Fourth, Mr Ware made it clear that he was the person who would use or supervise the use of the tractors (see above at [65]). Mr Amaral knew they were Mr Ware's tractors. His presence on the farm was essential to their continued use. 174Fifth, it was obvious to both parties that the use of the tractors to achieve a positive cash flow was something that, if achieved, would take considerable time especially if there was to be a significant expansion of cropping at Torry Plains. Before that could occur, the dilapidated state of Torry Plains would have to be repaired. Fields would have be cultivated, crops would have to be sown and harvested before income, much less profit, could be expected to be derived. 175Sixth, and consistent with the approach stated in Byrne at [442] (cited above at [167]), the machinery contract was one that was clearly terminable either at will or on reasonable notice. In the case of tractors, which can be redeployed elsewhere, "reasonable notice" would be reasonably short (see Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd (1988) 14 NSWLR 438). Thus while the machinery contract could not survive the termination of Mr Ware's employment the reverse was not the case. It was quite feasible for him to continue as farm manager even if Amaral Pastoral no longer required the use of his tractors. This meant that any time during Mr Ware's employment Amaral Pastoral could limit its exposure under the machinery contract by simply terminating it without necessarily dismissing Mr Ware. 176Absent the implied term sought by Mr Ware modified so that it only applies in the case of termination by Amaral Pastoral, Amaral Pastoral could receive the benefit of the use of Mr Ware's tractors over a sustained period but then terminate his employment and deny him the opportunity to manage the farm and recoup the amount incurred for tractor hire. The proposed implied term would not operate in a partisan fashion when it is remembered that, as his employer, Amaral Pastoral could at any time direct Mr Ware to limit or refrain from using the tractors. As I have explained, Amaral Pastoral could also terminate the machinery contract and thereby limit its exposure while allowing Mr Ware to hire his tractors elsewhere. In my view the proposed term would be "reasonable and equitable" in that it would prevent abuse by Amaral Pastoral of its position in circumstances where it had other means available to protect its position but Mr Ware had none. For the same reasons it is necessary for the reasonable operation of the contract to imply a term to that effect. The entire purpose and scope of the machinery contract would be undermined if Mr Ware's principal means of deriving a return from the use of his valuable assets by Amaral Pastoral could be removed by his termination. 177To an extent the implied term propounded by Mr Ware is analogous to the "further term" found in Ledingham that the moneys lent to the company would be repayable upon the company ceasing business. In so concluding, Atkinson J stated ([1947] 1 All ER 749 at 751): "What is the position when the company ceases to carry on? My interpretation of the agreement is that it [the term postponing payment] is a waiver until the company is in a position to pay the interest so long as the company carries on, but, if it ceases to carry on ... the whole basis of the bargain has gone, the reason for it has gone, the consideration for it has gone. Therefore, when the company ceases to carry on, the bargain ends and payment becomes due." 178Accordingly, I find that there was an implied term that the charges under the machinery contract would become due and payable upon the termination of his employment at the behest of Amaral Pastoral. 179In light of this conclusion it is strictly not necessary to deal with the fourth and fifth issues noted in [155] but in deference to the parties arguments I will briefly address them. 180Had I not concluded that there was an implied term to the effect that the tractor hire would be paid on the termination of Mr Ware's employment then I would not have upheld any claim on a restitutionary basis. To allow their recovery in restitution for the tractor hire in circumstances where it has not been demonstrated that the cash flow of Torry Plains was sufficient to allow payment, and there was no implied term as suggested, would have the effect of redistributing the risks that the parties bargained over in the first place (Lumbers v W Cook Builders Pty Ltd [2008] HCA 27; 232 CLR 635 at [79] per Gummow, Hayne, Crennan and Kiefel JJ). Thus, if allowed, the restitutionary claim would, on the hypothesis that there is no implied term to the effect contended for, not just outflank but effectively rewrite the parties' bargain. 181The final basis for relief contended for by Mr Ware was for declarations in the following circumstances: "Should the Court uphold the express terms of the Machinery Contract, but decline to find that payment of the charges is due and payable upon termination of the Employment Contract, the plaintiff submits that the court should exercise its power under section 90 of the Civil Procedure Act 2005 (NSW) and section 63 of the Supreme Court Act 1970 (NSW) to declare that: (a) the Machinery Contract is valid; (b) the defendant owes the plaintiff a sum of $269,210 under the Machinery Contract; and (c) upon sale of the Property, the monies owing to the plaintiff under the Machinery Contract should be paid." 182The possibility of the sale of Torry Plains was adverted to in the evidence. It suffices to state that there is no evidence that any offer has been made to purchase nor has any contract been exchanged. The sale remains no more than a mere possibility. Further, I doubt that the proceeds of the sale of the property would be incorporated into any concept of cash flow as it is simply the realisation of the sale of the business by Amaral Pastoral and not cash flow derived from its operation, i.e. the realisation of capital and not the receipt of income. It may be that, if there was no implied term of the kind that I have found, then by analogy with the decision in Ledingham, upon the sale of Torry Plains the agreement would come to an end and the amount incurred would become due. However this is all speculative. If I had not found the existence of an implied term, I am inclined to think that there would be some utility in making declarations as the existence and some of the terms of the machinery contract. However, it is not necessary nor possible to consider this further. 183I uphold Mr Ware's claim to recover an amount representing 4,716 hours of tractor hire at $60 per hour. The parties will need to address the quantification of this claim, including interest and the deduction of bonus payments taken as tractor hire. Amaral Pastoral's cross claim: alleged unauthorised sale of the seeder 184Amaral Pastoral's cross claim pleads that on or around 22 June 2004 Mr Ware purported to sell an agricultural seeder owned by him to Amaral Pastoral for $30,800.00 including GST. It is common ground that around that time Mr Ware drew a cheque on Amaral Pastoral's account for that amount and rendered an invoice. The cross claim further pleads that his conduct was unauthorised, was a breach of the contract of employment and contrary to a reasonable direction from Amaral Pastoral. In the alternative, it is pleaded that Mr Ware's actions were in breach of his obligation of good faith and fidelity in that he did not obtain an independent valuation of the seeder. It is also pleaded that his conduct was in breach of a fiduciary duty, in that it is alleged the purchase price was said to be excessive. 185In his first affidavit Mr Ware states that in May 2004 he had a conversation with Mr Amaral in which he pointed out that the sharefarmers were not performing well, and Mr Amaral stated that "it's clear that to make any money, we have to farm the country ourselves". They discussed obtaining farming equipment and Mr Amaral suggested that Mr Ware provide him with a list. This conversation was not denied in any of Mr Amaral's affidavits and it was not suggested to Mr Ware that it did not occur. In his first affidavit Mr Amaral set out a similar conversation which he states occurred in "mid 2003" which I have already recounted above at [39]. In this conversation Mr Amaral recalled Mr Ware suggesting that he purchase a "seeder, a prickle chain and a smudge board". If anything, that assists Mr Ware's case on this point. 186Nathan Wilson also recounts a conversation in the USA involving Mr Ware and Mr Amaral sometime after April 2004 which is similar to that suggested by Mr Ware, but also included Mr Ware making specific reference to a "smudge board, prickle chain and seeder", and Mr Amaral responding encouragingly "that makes sense". Mr Amaral denied that conversation although, it is not too different to the conversation he recounts as having occurred in "mid 2003". 187In light of the approach I take to their credit and the analysis below, I accept Mr Ware's evidence as to his conversation with Mr Amaral and its timing, although I consider it likely that he made specific reference to a seeder, prickle chain and smudge board. 188In May 2004 Mr Ware faxed Mr Amaral a list of the equipment. Neither party produced a copy of the facsimile. There was an email exchange between Mr Ware, Mr Amaral and Ms Hamner in early June 2004 which included reference to the seeder. On 1 June 2004 Mr Amaral sent Mr Ware an email which was copied to Ms Hamner stating: "I chased the Australian dollar last week - I never got any bought. I will call my foreign exchange girl in the morning. I will buy some this week. Please fax the equipment purchase list and accounting to Teresa at the office. The accounting I am looking for is the one you faxed to me last week at home, the one with the smudge board and pickle chain. Once I get the Australian dollar bought in the next two or three days, I will authorize Teresa to transfer the correct amount of money to your Torry Plains account to pay for these purchases. Greg Let's continue to work on purchasing the additional equipment that will be required to farm." (emphasis added) 189Mr Ware sent a reply on 2 June 2004 which was also copied to Ms Hamner: "The australian dollar has been moving faster than a one arm wallpaper hanger lately and today the Reserve bank is due to make an announce on interest rates so perhaps it will quieten down. The smudge board is from John Parker at Swan Hill T&I Quote Number 6262. Started at $23,060 now price is $17,985 for a 5 foot bigger machine (45ft). Prickle Chain started at $37,400 now $34,100. Seeder was valued at $30,000 plus tax or $33,000 last year by Mid Murray Machinery last Year. Sally and I paid $4000 on press wheels and such before it was used for the safflower. We are happy with $28,000 plus the $2,800 tax. Peter Raining and is expected to rain most of the day." 190The next email was sent by Ms Hamner to Mr Ware on 4 June 2004. She did not copy it to Mr Amaral. It stated: "Thanks Peter, I have received this message before and just wanted to make sure my figures and yours matched. I calculated: Smudge Board $17,985.00 Prickle Chain $34,100.00 Seeder $30,000.00 For a total of $82,085.00. Correct? Teresa" Mr Ware replied to that email on the same day stating, inter alia, "Spot on, lady". 191Ms Hamner became involved because it was her responsibility to forward funds to Amaral Pastoral's account in Australia which were to be used to purchase the equipment. Thus, Mr Ware sent an email to Mr Amaral on 2 June 2004 which included a proposal to sell his own seeder to the farm. The next email in response was from Ms Hamner to Ms Ware calculating a total price that included the seeder, and an amount representing that was sent Australia. Neither Ms Hamner nor Mr Amaral addressed whether there was any communication between them following Mr Ware's email of 2 June 2004 and Ms Hamner's response of 4 June 2004. 192Even if there was no such communication, and all that happened was that Ms Hamner incorrectly assumed that Mr Amaral's silence to the seeder proposal constituted an approval, this aspect of the cross claim would still fail. The combination of Ms Hamner's email and the forwarding of the funds to Australia would clearly constitute sufficient authorisation. It is more than sufficient to demonstrate that Amaral Pastoral has totally failed to prove its allegation that Mr Ware failed to comply with some lawful direction that was given to him. Mr Ware made a transparent proposal to sell his seeder, and then received correspondence from the CFO, Ms Hamner, confirming that funds would be transferred to fund the purchase of the seeder. Why should he have not treated that as sufficient authorisation? 193However the evidence suggests that Mr Amaral did authorise the sending of funds to Australia to purchase a seeder. His email states that he "will authorize Teresa to transfer the correct amount ...". Ms Hamner agreed in cross examination that generally she would not make a wire transfer to Australia of that amount without Mr Amaral's consent and that she sent her email of 4 June 2004 at Mr Amaral's request. 194In cross examination Mr Amaral did not accept this. He claimed there was a "very realistic" possibility that Ms Hamner sent $82,000.00 to Australia without his consent and denied that he authorised her to transfer the money. When he was pressed on this denial, he denied that he "wanted to know how many Aussie dollars" he had to purchase. Given the topics covered in the email correspondence and his explicit statement that he would "authorize Teresa to transfer the correct amount", I do not accept these denials. They reinforce my misgivings about his evidence. 195In his first affidavit Mr Ware stated that sometime "in about May 2004" he specifically discussed the sale of the seeder with Mr Amaral. He said he told him, inter alia, "You may as well buy the seeder off me. You have been using it on the farm for about two years". He said Mr Amaral agreed to purchase it. Mr Amaral denied that he did so. I accept Mr Ware's evidence on this topic except I consider it likely that the conversation occurred in June 2004 after Mr Ware's email of 1 June 2004 set out above. 196It follows that I reject Amaral Pastoral's cross claim in so far as it alleges that Mr Ware effected the purchase without authorisation, and did so contrary to a lawful and reasonable direction that was given to him. No separate submission was put in support of the allegation that he was obliged to obtain a valuation. A brief submission was made that there was a sale at an "over value" but no details were provided. There was evidence that the sale was at a price that exceeded its written down value but Mr Ware stated he had made significant improvements to the seeder and had received an oral valuation supporting the sale price. In the absence of any developed argument from Amaral Pastoral and given my acceptance of Mr Ware's evidence I am not satisfied that there was a sale at an under value. I reject this part of Amaral Pastoral's cross claim. Amaral Pastoral's cross claim: alleged unauthorised water bore payments 197Paragraphs 17 to 22 of Amaral Pastoral's cross claim seek recovery from Mr Ware of amounts that were spent by Amaral Pastoral on sinking bores on two properties neighbouring Torry Plains, Nap Nap Station and Warewaegae. Mr Ware does not deny that he was obliged to reimburse Amaral Pastoral for the cost of sinking a bore on Warewaegae, but states that he did so by a combination of a payment he made direct to the supplier and another payment he made on Amaral Pastoral's behalf to Anderson Earthmoving ("Anderson"). It is necessary to briefly explain the background to this issue. 198One of the properties neighbouring Torry Plains is Nap Nap Station. In May 2002 Mr Ware discussed with the manager of Nap Nap the possibility of Amaral Pastoral "purchasing" two bore licences authorising the taking of water from Nap Nap. The licences had been allocated identification codes by the relevant State Department. However, the licences were subject to conditions requiring that if their capacity to produce water was not demonstrated and they were not fully constructed by a particular time, the licences would lapse. The manager of Nap Nap wrote to Mr Ware on 5 March 2002 advising that one of them would lapse by 23 March 2005 and the other by 3 September 2005 "if works not commenced and completed". 199Mr Ware states that in about March 2003 he spoke to Mr Amaral and suggested that Amaral Pastoral pay for developing the bore holes and having the water licences issued, in exchange for which Nap Nap would "transfer them to us free of charge". He says Mr Amaral agreed. 200Mr Amaral's evidence on this topic is different. He recalls Mr Ware suggesting that the licences would be transferred "if we pay for the costs of the test bores" and he responded: "If those licences can be moved to Torry Plains and the bores drilled on Torry Plains then I am happy to proceed." 201In a number of paragraphs in his affidavits Mr Amaral stated that he told Mr Ware that he would not agree to drilling bores on any property other than Torry Plains. I do not accept this evidence. There was correspondence between Mr Ware, the manager of Nap Nap station and the Department of Land and Water Conservation in 2002 and the first half of 2003 about the possibility of a transfer. The entire assumption of the correspondence is that test bores would have to be sunk before a transfer could be considered. If Mr Amaral had issued an edict that Amaral Pastoral would not pay for the sinking of test bores on Nap Nap, I expect Mr Ware would have informed Mr Amaral that this would make it impossible for the transfers to be achieved. 202Further, in November and December 2003 there was correspondence from Mr Amaral to Mr Ware about the payment of the account from the drilling company (Drilltec) in which Mr Amaral acknowledged he was aware that drilling on Mr Ware's property was included. Thus, on 1 December 2003 Mr Amaral wrote to Mr Ware seeking the drilling logs for the bores on Nap Nap and Mr Ware's property. On the same day he wrote to Mr Ware stating: "Please fax us a copy of the $63,000.00 bill for our files. I realize that your (Ware property) water well [is] included in the $63,000.00 bill. We will get it straightened out." 203There is no suggestion in any of the correspondence around this time that Mr Amaral regarded Mr Ware as having disregarded any instruction given to him about not paying for the drilling of bores on other properties, including Nap Nap, nor that there was any expression of a difficulty with an intermingling of an account that includes a personal expense of his and of Amaral Pastoral. As I have stated in late 2004 Mr Amaral sought further information from Mr Ware by engaging in a deceit (see [20]). Even if Mr Amaral was unhappy with Mr Ware's conduct by that time, there is no evidence of Mr Amaral communicating that to Mr Ware. 204Mr Ware took various steps to arrange the drilling, including corresponding with the relevant Departments. It is unnecessary to set out the details here. 205At some point he engaged Drilltec to drill a bore on Warewaegae. Drilltec undertook the drilling work in July 2003. They sank three test bores, two on Nap Nap and one on Warewaegae. On 30 September 2003 Drilltec issued an invoice for $73,353.50 for sinking the three bores. Mr Ware paid $11,353.30 of this account from his funds and the balance of $62,000.00 was paid for by Amaral on 27 November 2003. 206Mr Ware stated that in November 2003 he telephoned Ms Hamner and told her that his personal share of the Drilltec costs were paid by the combination of the payment of $11,353.30 and a payment of $15000.00 he had paid previously on Amaral Pastoral's behalf. He recalls Ms Hamner stating "Greg understands that. Don't worry about it". 207In her affidavit sworn 24 May 2011 Ms Hamner stated that she could not recall this conversation, but in her affidavit sworn 24 July 2012 she stated that she did not state the words attributed to her, and that the topic of make up payments for the cost of drilling bores was not discussed with her. As with the similar discrepancy between her affidavits in relation to tractor hire, in cross examination this difference was drawn to her attention. She reverted to the position that she could not recall the conversation. 208I accept Mr Ware's evidence as to the conversation with Ms Hamner. 209Accordingly I am satisfied that Mr Amaral agreed to Amaral Pastoral bearing the cost of sinking bores on Nap Nap Station in advance of that occurring. It was for that reason that neither he nor Ms Hamner expressed any concern about it to Mr Ware later. Further, it was also made clear to Mr Amaral that the Drilltec invoice which paid for the drilling included the drilling on Warewaegae. His letter of 1 December 2003 accepted that, provided the issue was "straightened out", i.e. Mr Ware paid his proportion. It is not in dispute that Mr Ware paid $11,353.00 of the Drilltec invoice. The remaining issue is whether he had paid $15,000.00 to Anderson on account of Amaral Pastoral which can be set off against the amount he owes for the drilling on Warewaegae. 210In his first affidavit Mr Ware explained the circumstances in which he paid Anderson $15,000.00 on behalf of Amaral Pastoral. Mr Ware stated that the invoice from Anderson was for "their work constructing channels on Torry Plains". He attaches an invoice from Anderson dated 7 January 2003 addressed to Amaral Pastoral for $31,627.20. It refers to work done in November and December 2002 on excavating drains on the "Sth side" and "Nth side" as well as 'Channel repairs". 211Mr Ware states that in June 2003 he received a "progress payment invoice" from Anderson for excavating work done on Torry Plains. He states that the principal of Anderson requested payment as soon as possible, and annexes documents from Anderson demonstrating that a payment for $15,000.00 was made on or about 13 June 2003. In his second affidavit he stated that he paid it then as he was concerned that Anderson's invoice had been issued in January 2003 but still had not been paid. He stated that Amaral Pastoral's cash flow in early 2003 was tight and for that reason he paid some of the invoice from his own funds and the balance over time from Amaral Pastoral's accounts. He attaches a document produced by Anderson recording payment of Anderson's invoice in three amounts, $9,998.70 on 13 June 2003, $15,000.00 on 13 June 2003 and $6,627.20 on 5 September 2003. 212In cross examination Mr Ware was pressed on this explanation. He accepted that between January and June 2003 Amaral Pastoral had sufficient funds in its account to pay Anderson's account yet he did not arrange payment and then waited until June 2003. Mr Ware accepted that he had delayed in making payment but explained that he "met [Mr Anderson] on the road" and "that he needed money fast". He agreed that he had claimed the $15,000.00 payment as a tax deduction. He agreed that that was a mistake but stated "That's the money for the bore". 213At one point in the cross examination it was put to Mr Ware that the "$15,000.00 you paid him as recorded in your financial document, was for work Anderson did for you?" which he denied. Later it was put to him that he had "invented this story ... of paying Andersons in June 03" which he also denied. These suggestions were mutually exclusive. The second must have been a slip in an otherwise careful cross examination because Mr Amaral specifically stated in his affidavit sworn 30 July 2012 that he agreed that Mr Ware paid Anderson $15,000.00. 214The colourful submission put on behalf of Amaral Pastoral in relation to this issue was as follows: "Ware's evidence of paying Anderson for Amaral Pastoral work out of his own funds is as credible as the notorious police officers exposed in the Wood Royal Commission who denied it was them in surveillance video when their faces were in plain view. Ware agreed in cross-examination that there were sufficient funds in Amaral Pastoral's bank account between January and June 2003 to pay Anderson. Ware would have the Court believe that not only did he pay Anderson $15,000 for Amaral Pastoral work, but then mistakenly claimed that payment as a tax-deductible expense in his tax return. If the payment to Anderson was for Amaral Pastoral work, then he was knowingly dishonest with the ATO in claiming the tax-deduction, contrary to his assertions of honesty." (emphasis added, citations omitted) 215The reference to the "Wood Royal Commission" seems to be an attempt to conjure up images of people making large cash payments in informal settings. It is not particular helpful. It is not clear whether this submission is asserting that Mr Ware did not pay Anderson $15,000.00 or that he did but it was not for Amaral Pastoral work or both. To the extent the passage contends that he did not pay Anderson, it cannot be reconciled with Mr Amaral's agreement in his affidavit that Mr Ware did pay Anderson. If this submission is made then it fails to address the material from Anderson recording the fact that a payment of $15,000.00 was made. If the payment was made then, and the source of the funds was Amaral Pastoral, then it would have been a relatively straightforward matter to trace via bank records, etc. If the payment was not made then the material from Anderson recording receipt of the funds is most likely a fraudulent concoction, a matter that was not suggested, much less explored. 216If the submission is only that the payment made by Mr Ware was not for work performed for the benefit of Amaral Pastoral then neither these submissions nor the cross examination attempted to grapple with the invoice from Anderson that I have referred to above. It is addressed to Amaral Pastoral and on its face suggests that it is for work done for Amaral Pastoral. There is nothing to suggest that it was work done for Mr Ware's benefit and it was not suggested to him that he concocted it or somehow arranged for Anderson to concoct it. I give it significant weight. 217The point made by Amaral Pastoral about Mr Ware's action in claiming a tax deduction does not have much force. As Mr Ware attempted to explain when first asked about the payment, on his case, which I accept, ultimately the $15,000.00 payment represented an amount for his portion of the bore payments on Warewaegae and he could claim a deduction for that amount. 218I accept that Mr Ware paid $15,000.00 of an invoice properly directed to Amaral Pastoral out of his own funds. He is entitled to offset that payment against his proportion of the Drilltec invoice. 219A further issue arises out of the attribution of the cost of the Drilltec invoice between Warewaegae and Torry Plains. Mr Ware's calculations involved dividing the costs by three and allocating two-thirds to Torry Plains and one-third ($24,451.12) to Warewaegae. Mr Amaral reviewed the Drilltec invoices which broke down some of the costs on a bore by bore basis. The costs directly attributable to Warewaegae were $27,545.00 exclusive of GST, to which he added one-third of the set up-costs ($2,563.33) yielding a total of $30,108.33. Presumably GST is excluded by him on the basis that Amaral Pastoral claimed an input credit for the invoice. Mr Amaral's methodology is more appropriate, and I adopt it. After allowance for the payment of $11,353.30 made by Mr Ware and the $15,000.00 payment made to Anderson, it means that Mr Ware owes $3,755.03. I uphold Amaral Pastoral's claim on this issue to that extent only. Balance of Amaral's cross claim 220Two further claims were pressed in Amaral Pastoral's submissions. 221First, Amaral Pastoral sought recovery of an amount it paid out for an invoice dated 9 April 2004 issued by Mr Ware for fencing materials in the amount of $4,200.00 plus GST of $420.00. In his first affidavit Mr Ware explained that when he commenced at Torry Plains the fences were in a state of poor repair. He said they erected fences and used a number of fence posts that he had stockpiled. These were the subject of his invoice. He also states that a significant amount of other fencing material owned by him was used but never invoiced. The only aspect of this evidence that was taken up in Mr Ware's cross examination was the claim that he did not invoice for some outstanding fencing materials. His evidence that the invoice represented the cost of his fence posts that were used on Torry Plains was not challenged. 222The only reference to this issue in Amaral Pastoral's submissions is the assertion that Mr Amaral "wrongfully paid to himself for ... railway line - $4620.00". The cross claim asserts that the payment to himself constituted a breach of his contract of employment and of a lawful and reasonable direction issued by Amaral Pastoral. In relation to the latter, the reference to a lawful and reasonable direction is pleaded as being an oral direction given by Mr Amaral on various dates and times that Mr Ware not conduct any transactions between himself and Amaral Pastoral without Mr Amaral's prior approval. The giving of such a direction was not established by any evidence. 223The terms of the contract of employment said to be contravened were various implied terms as to his obligation of fidelity and good faith and acting in the best interests of Amaral Pastoral. In the circumstances described by Mr Ware I am not satisfied that any such breach has been established. It was also pleaded that, in causing this payment to be made, Mr Ware breached an express term of his contract of employment to the effect that he could not incur any expenses on behalf of Amaral Pastoral exceeding $1,000.00 without the express approval of Mr Amaral. This is a reference to part of the Job Description which stated "Expenses exceeding $AU1,000.00 will need to be approved by Amaral Pastoral Pty Ltd". The parties proceeded on the basis that this required prior approval. I will do likewise. 224Mr Ware sought to defeat any reliance by Amaral Pastoral on this clause in relation to this issue and some other parts of the cross claim by asserting that Amaral Pastoral was estopped from relying on this clause. This issue was addressed in Mr Amaral's cross examination. After accepting that, at least intermittently, Amaral Pastoral received financial reports from Mr Ware, Mr Amaral was asked: "Q. Did you go through those reports? A. I did. Q. Closely analyse them? A. I did. Q. Did you notice that there were items of expenditure disclosed in those reports for in excess of $1,000? A. I did. Q. Did you write to Mr Ware in respect of every one of them and say, "What's this for"? A. I did not. Q. You were content for him, within reason, to incur debts in excess of $1,000 in his discretion, weren't you? A. I let it get away from me. Q. You allowed that practice to develop, didn't you? A. I would say I did." 225These concessions represented a strong start for Mr Ware in seeking to establish an estoppel, but he need not go that far. To establish any damages flowing from any such breach of this clause of the employment contract, Amaral Pastoral has to establish that, had approval been sought to incur the items of expenditure, then it would not have been granted. In the case of the fencing materials (and all items of expenditure the subject of the cross claim in respect of which prior approval was not sought) I am not satisfied that Amaral Pastoral, via Mr Amaral, would have refused permission for the expenditure to be incurred. 226Second, recovery was also sought of the amounts paid to Mr Ware by Amaral Pastoral for tractor hire and some tractor parts. It follows from the above findings that one way or another, these payments were authorised by Mr Amaral. These claims fail. Further Disposition 227In summary: (i)Mr Amaral is entitled to a verdict against Mr Ware; (ii)Mr Ware is entitled to recover from Amaral Pastoral the agreed amount of wages owing ($9,106.95) with interest; (iii)Mr Ware is entitled to recover from Amaral Pastoral an amount representing three months salary and superannuation benefits in lieu of notice with interest; (iv)Mr Ware has not succeed in his claim for the payment of further bonus payments; (v)Mr Ware is entitled to recover from Amaral Pastoral an amount for 4,716 hours of tractor hire at a rate of $60 per hour less tractor hire payments already made with interest from the date of the termination of his contract of employment; (vi)Amaral Pastoral is entitled to recover from Mr Ware an amount of $3,755.03 with interest from 27 November 2003 on account of its payment of an invoice which in part related to the cost of drilling bores on Mr Ware's property; and (vii)the balance of Amaral Pastoral's cross claim will be dismissed. 228The parties will need to bring in proposed short minutes and file supplementary submissions on any issue concerning those minutes and costs. I will make directions accordingly. The parties should first confer to ascertain if the forms of order necessary to give effect to my reasons can be reached by consent. Copies of the material filed should be e-mailed direct to my associate. 229To give the parties some certainty in relation to the future progress of the matter I will fix the matter for further submissions before me at 9.30am on 21 February 2013 on the understanding that those submissions will be brief. If that date is unsuitable to the parties they should confer and then liaise with my associate. 230I order as follows: (1)On or before 8 February 2013 each of the Plaintiff and Defendants file and serve: (a)either agreed or competing proposed forms of order; (b)any submissions on costs and in support of the proposed forms of order including any calculations of interest owing up to and including 21 February 2013, such submissions not to exceed seven pages; and (c)any affidavits concerning the question of costs. (2)The proceedings be adjourned for further submissions before Beech-Jones J at 9.30am on 21 February 2013. *********** Mrs Hedwards' Diary of Tractor Hours Date Time Hours 5 March 2003 8 - 4 8 6 March 2003 8 - 4 8 7 March 2003 8 - 4 8 10 March 2003 8 - 4 8 11 March 2003 8 - 4 8 17 March 2003 8 - 7 11 18 March 2003 7.30 - 8.30 13 8 August 2003 8 - 4 8 9 August 2003 8 - 5 9 10 August 2003 8 - 6 10 18 August 2003 8 - 7.30 11.5 19 August 2003 8 - 11.30 3.5 20 August 2003 8 - 8 12 6 October 2003 7.00 - 5.30 10.5 7 October 2003 7.00 - 5.30 10.5 13 October 2003 8 - 5 9 14 October 2003 8 - 7.30 11.5 15 October 2003 8 - 7 11 16 October 2003 8 - 7 11 17 October 2003 8 - 2.30 6.5 20 October 2003 7.30 - 4.30 9 21 October 2003 8 - 4 8 22 October 2003 8 - 7.30 11.5 23 October 2003 8 - 3.30 7.5 24 October 2003 8 - 7 11 25 October 2003 8.30-11.30; 4.30-8 6 26 October 2003 5.30 - 12.30 7 27 October 2003 8 - 8 12 28 October 2003 8 - 4; 12 29 October 2003 8 - 4 8 30 October 2003 8-4; 7-10 11 31 October 2003 8 - 7 11 1 November 2003 8 - 9 13 2 November 2003 8-11.30; 1.30-4.00 6 3 November 2003 8 - 8 12 4 November 2003 8 - 5 9 7 November 2003 8 - 1.30 5.5 8 November 2003 8 - 6 10 9 November 2003 8 - 12 4 17 November 2003 8 - 8 12 18 November 2003 8.30 -9.30 1 19 November 2003 4.30-8.30 4 20 November 2003 4.30 - 4.30 12 24 November 2003 8 - 4 8 25 November 2003 10 - 4 6 TOTAL 401 Amendments 17 December 2012 - Amend case title by adding the following: (No 5) Amended paragraphs: Cover sheet 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. Decision last updated: 17 December 2012