Faulkner-Mounsey v Baird [2019] QDC 219

DISTRICT COURT OF QUEENSLAND CITATION: Faulkner-Mounsey v Baird & Anor [2019] QDC 219 PARTIES: DONNA KATHLEEN FAULKNER-MOUNSEY (plaintiff) v ANDREW JOHN BAIRD (first defendant) and KETRINA BAIRD (second defendant) FILE NO: ID48/28 DIVISION: Civil PROCEEDING: Trial ORIGINATING COURT: Ipswich DELIVERED ON: 6 November 2019 DELIVERED AT: Brisbane HEARING DATE: 30 and 31 July and 1 and 5 August 2019 JUDGE: Horneman-Wren SC DCJ ORDER: 1. The plaintiff have judgment on her claim against the defendants for $28,530 for damages and $14,046 for interest. 2. The plaintiff have judgment on the defendants counterclaim. 3. I will hear the parties as to costs CATCHWORDS: BREACH OF LEASE - CLAIM FOR DAMAGES - COUNTERCLAIM FOR REPUDIATION OF LEASE AND FUTURE ECONOMIC LOSS; whether the leasee is liable for damages for unpaid rent - whether the lessor’s actions amount to interference of the leasee’s quite enjoyment of the demised premises - whether such an interference amounted to a repudiation of the lease - where the leasee was in rental arrears - where the lessor had taken all reasonable steps to mitigate damage of breach - where the leasee claims the lessors repudiation caused damage - where lessee claims damage for future economic loss Legislation: -- 1 of 26 -- 2 Uniform Civil Procedure Rules 1999; Federal Court Rules 2011; Cases: Aussie Traveller Pty Ltd v Marklea Pty Ltd [1998] 1 Qd R 1; Burns v M.A.N. Automotive (Aust) Pty Ltd [1986] 61 CLR 653; Byrnes v Jokona Pty Ltd [2002] FCA 41; Goldsworthy Mining Ltd v Federal Commissioner for Taxation (1973) 128 CLR 199; Gordon v Lidcombe Developments Pty Ltd [1966] 2 N.S.W.R. 9; Hawkesbury Nominees Pty Ltd v Battik Pty Ltd [2000] FCA 185; Hong Kong Fir Shipping Co Ltd v Kawaski Kisen Kai Sha Ltd [1962] 2 QB 26; Hudson Crushed Metals v Henry [1985] 1 Qd R 202; McRae v Commonwealth Disposals Commission [1951] 84 CLR 377; Meredith v Palmcam Pty Ltd [2001] 1 Qd R 645; Murphy v Overton [2004] 216 CLR 388; Robinson v Kilvert (1889) 41 Ch D 88; T.C. Industrial Plant Pty Ltd v Roberts Qld Pty Ltd [1963] 180 CLR; Tebb v Cave [1900] 1 Ch 642; Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 11, 173; Wham v Ella [1972] 127 CLR 454. COUNSEL: JAS Ford for the plaintiff DD Keane for the defendants SOLICITORS: Craven Lawyers for the plaintiff Two Hill Lawyers for the defendants Introduction [1] “Topside” and “King Pah Mountain” form part of a larger area of grazing property owned by the plaintiff in the Moogerah district in southeast Queensland. From October 2015 the defendants leased Topside and King Pah Mountain from the -- 2 of 26 -- 3 plaintiff for the purpose of grazing cattle. The lease was for a term of three years which was to expire on 30 September 2018. There was a three year option. The annual rental was $18,720 plus GST payable by monthly instalments of $1,560 plus GST. [2] Prior to 27 January 2016 the defendants vacated the leased property and ceased paying rent. They claim that they were entitled to do so because the plaintiff, by various alleged acts, had repudiated the lease. On 26 July 2016 solicitors for the defendants wrote to the plaintiff purporting to terminate the lease in acceptance of the plaintiff’s repudiation. [3] By a letter from her solicitors dated 23 August 2016, the plaintiff denied that she had repudiated the lease and asserted that the defendants’ removal of all stock from the premises and their continued failure to pay rent were themselves acts of repudiation of the lease, as was the defendants’ purported termination. The plaintiff purported to accept the defendants’ repudiation and elected to terminate the lease and reserved her right to claim damages. [4] This history gives rise to the central issue for determination on the trial: did the plaintiff by her conduct repudiate the lease thus giving rise to a right on the defendants’ part to terminate. Both the plaintiff’s claim in the defendants’ substantial counterclaim for lost income or profits1 rest upon the determination of that question. [5] For the reasons which follow, the question should be answered “no”. The plaintiff should have judgment on her claim and the defendants’ counterclaim. The plaintiff’s claim [6] The plaintiff’s claim is a simple one. [7] At the time of vacating the property the defendants were in arrears of rent of $4,220 plus GST. The total rental payable under the three year lease was $56,160 plus GST. The defendants made rental payments of $11,380 plus GST. [8] In an attempt to mitigate her damages, the plaintiff re-leased the property to third parties, Bostock and Hall. That lease was for a term of a little less than a year from 15 January 2017 to 31 December 2017. The rental under the lease was $10,400 per annum plus GST. There was no option, but Bostock and Hall stayed on the property and continued to rent it albeit at a reduced rate. From 1 January 2018 to 30 September 2018 (being the date upon which the lease with the defendants would have expired) Bostock and Hall were obliged to pay $5,850 plus GST. [9] The plaintiff, therefore, claims $28,530 ($56,160 - $11,380 - $10,400 - $5,850). [10] The defendants admit the arrears of rent. However, they contend that the plaintiff has not otherwise suffered loss by way of expectation damages. The basis for the denial of any expectation damages is that Bostock and Hall to whom the property was re- leased also leased adjoining land known a “Greens” from the plaintiff. The defendants submit that the plaintiff received rent from Bostock and Hall in the total amount of $70,460 for both Topside and King Pah Mountain (formerly leased to the 1 The basis upon which the defendants’ counterclaimed changed substantially in the course of the defendants’ closing submissions. -- 3 of 26 -- 4 defendants) and Greens, and that the sums paid were not differentiated as between the properties in the bank accounts or receipt book of the plaintiff. [11] In my view, the defendants’ submissions in this regard should not be accepted. [12] The plaintiff’s evidence was that following the departure of the defendants from the property she had attempted to re-lease the property by contacting the owners of the Silverdale Saleyards, one of whom is also a real estate agent. This had occurred at about the beginning of August, the defendants having removed their cattle from the property in July. She also spoke to another agency at about the same time. [13] The arrangements she did enter into with Bostock and Hall came about because Kerry Hall had been assisting her in trapping the cattle on Greens which belonged to the former tenant of that property, Ian Pearce. Hall enquired of her as to her intentions for the property and the plaintiff told him that she had to lease it because she had sold all of her own cattle. Hall expressed interest on behalf of himself and Bostock and “it went from there”. They entered a 12 month lease for Topside and King Pah Mountain and another 12 month lease for Greens at about the same time, however, Bostock and Hall leased Greens first and then leased Topside and King Pah Mountain.2 [14] The plaintiff was cross-examined about her failure to disclose any written lease between herself and Bostock and Hall over Greens. Her evidence was that there had been a lease, but she was unable to locate her copy as were the leasees.3 [15] The plaintiff said that she thought she could work out what the rent for Greens was based upon Bostock and Hall paying $11,880 including GST for both leases.4 That accords with the bank deposit to the plaintiff’s Suncorp bank account on 3 February 2017.5 It also accords with receipts issued by the plaintiff on 3 February 2017,6 18 April 20177 and 18 July 2017.8 [16] On that basis the overall rental, net of GST, would be $10,800 per quarter, or $43,200 per annum. Of that, the lease to Bostock and Hall of Topside and King Pah Mountain comprised $10,400 per annum or $2,600 per quarter. The division of the rent between Topside and King Pah Mountain under that lease and Greens under the other lease would be $2,600 and $8,200 respectfully. [17] The plaintiff’s evidence was that the cattle carrying capacity of Greens was about twice that of Topside and King Pah Mountain with the former being able to carry up to 300 head in a good season and the latter 150 head. [18] In both his written and oral submissions, counsel for the plaintiff went to elaborate lengths to demonstrate that on the evidence Bostock and Hall paid rent apportioned as between Topside and King Pah Mountain on the one hand, and Greens on the other hand, in much the same ratio (1:3) as the defendants paid under their lease to that paid by Pearce when occupier of Greens. In my view, no such exercise is called for. 2 Evidence of the plaintiff; transcript 1-40.13 to 1-41.45. 3 Transcript 1-72.15 to 1-72.17. 4 Transcript 1-42.1 to 1-42.5. 5 Exhibit 1, tab 27, p 130. 6 Receipt number 039454, Exhibit 1, tab 29, p 150. 7 Receipt number 039455, Exhibit 1, tab 29, p 151. 8 Receipt number 039457, Exhibit 1, tab 29, p 152. -- 4 of 26 -- 5 [19] First, it must be borne in mind that the duty or obligation to mitigate her damages fell upon the plaintiff9, but the content of that duty is to do what was reasonable in mitigation of loss.10 [20] Secondly, if it were to be alleged the plaintiff had failed to mitigate her damages, that was a matter for the defence to raise and upon which the defendants would have borne the onus.11 [21] The defendants did not, however, raise as an issue any failure on the part of the plaintiff to mitigate damages. To the contrary, the defendants’ submissions12 were to the effect that through re-leasing the property together with Greens the plaintiff had completely mitigated her loss. The rental obtained through the re-leasing exceeded that which would have been paid under the lease to the defendants such that no expectation damages have been sustained at all. [22] In my opinion, the plaintiff has demonstrated the she acted reasonably in re-leasing the property to Bostock and Hall. I see no reason to go behind the best evidence of the rent payable under that lease which is the lease document itself.13 The further evidence of the plaintiff of the payments made by Bostock and Hall satisfies me that whilst a total amount was paid each quarter by them in respect of both the lease of Topside and King Pah Mountain and the lease of Greens, the proportion of that total rental referable to the former was that which was reflected in the lease. [23] The defendants’ attempt to establish that there was a further amount not brought to account by the plaintiff being that represented by an acceptance of “mustering, trapping, transport to works and saleyards” services in lieu of three months rental of the combined properties for January, February and March 2017, as reflected in rent receipt number 039434,14 also failed. The plaintiff’s evidence concerning that receipt15 was that it was not given to Bostock and Hall. She and they had originally spoken about it, but they had paid anyway. I accept the plaintiff’s evidence. It is consistent with receipt number 039454 dated 3 February 2017 for $11,880 for three months rent from 15 January 2017 to 15 April 2017.16 That receipt is consistent with the deposit in that amount made on 3 February 2017 to the plaintiff’s bank account.17 [24] For those reasons, the plaintiff has proven her claimed loss. Subject to the findings concerning her alleged repudiation of the lease, that loss would sound in the award of damages. The defendants’ counterclaim [25] As pleaded,18 the defendants’ counterclaim repeated the conduct alleged to have been engaged in by the plaintiff as constituting her repudiation of the lease. They alleged 9 Wham v Ella [1972] 127 CLR 454 at 463. 10 Burns v M.A.N. Automotive (Aust) Pty Ltd [1986] 61 CLR 653 at 673; Murphy v Overton [2004] 216 CLR 388 at 414 (70). 11 T.C. Industrial Plant Pty Ltd v Roberts Qld Pty Ltd [1963] 180 CLR 130 at 138. 12 Particularly at paras 28-31 of their written submissions and oral submissions at transcript 4-20.37 to 4-20.44. 13 Exhibit 1, tab 22. 14 Exhibit 1, tab 29, page 149. 15 Transcript 1-73.37 to 1-74.21. 16 Exhibit 1, tab 29 p 150. 17 Exhibit 1, tab 27, p 130. 18 Further amended defence and counterclaim filed 28 February 2018; court document number 26. -- 5 of 26 -- 6 that by that conduct they have suffered loss and damage. The loss alleged to have been suffered by the defendants can conveniently be placed into three categories: direct loss of cattle through the plaintiff’s conduct; loss occasioned by forced sale of cattle in suboptimal conditions following departure from the leased premises; and future economic loss caused by their inability to remain on the property and execute their three year business plan.19 [26] It is convenient to deal with the last of these categories first. [27] The defendants’ claim in respect of this category of loss was dependent upon it establishing the following pleaded facts: (a) That during the period over which the lease was negotiated, being between September 2015 and March 2016,20 the defendant21 twice advised the plaintiff, once face to face and once by telephone, that he needed the land for three years for the purposes of growing cattle and selling them for profit;22 (b) That having been told those things, and by virtue of her having been in the cattle business in excess of thirty years, the plaintiff knew, or ought to have known, that the defendants intended on a minimum three year plan to breed cattle, grow cattle to a greater weight and to buy and sell cattle for profit;23 (c) That as a result of the plaintiff’s repudiation of the lease the defendants suffered reasonably foreseeable loss and damage which was particularised by projection of the growth in the defendants’ herd on the leased land, increases to their stud herd and sales of cattle which activities would be carried out “in accordance with traditional cattle breeding practices”.24 [28] The defendants called expert evidence from a chartered accountant, Mr Lucas Garner, in support of their counterclaim. Mr Garner had prepared an affidavit to which a report was exhibited. The report had been informed by, amongst other things, a document described in the index to Mr Garner’s brief as “three year business plan”. It was also informed by the matters pleaded in the defendants’ counterclaim and the assumptions as to cattle breeding and growth rates forecast therein. [29] The three year business plan which had informed the report was not placed into evidence. The extent of Mr Baird’s evidence as to what his plan for the property was once he leased it was: “So what was the plan for Topside and King Pah once you had the lease? --- Well, once I had the lease the plan was to stick my breeding herd down there, breed animals down there, have – well, at the start I wouldn’t have anything on my place or, you know, one or two animals or something and then use my place to bring animals back to fatten and to, you know, start operations so you can grow your heifers out, 19 These descriptions of the categories of loss are my own. 20 The lease was entered into on 18 March 2016 with a commencement date of 1 October 2016. 21 Throughout the pleading the defendants plead the singular “defendant” as having done various things. The singular defendant is not, in terms identified in the pleading, however, on the basis upon which the proceeding was conducted it is clear that it was the first defendant. 22 Further amended defence and counterclaim para 27. 23 Para 27A. 24 Para 27E. -- 6 of 26 -- 7 you can grow your bulls out, you know, prepare your bulls for sale and all that sort of stuff. So that was the plan, is to – is to have 100 to 120 down there as the weather dictated and bring everything that I weaned instead of selling them straight away back home. And were you going to still sell? --- You’ve got to sell a certain amount here and there for cash flow. You know, going from – going from 60 to 120 breeders is a bit of jump and when you buy cattle in, even though you buy pretested in – you don’t know what your – it’s a lottery what you’re buying. So they might have a calf on them and they might not calve the next year. They might not get any calves. So you’ve got to – you’ve got to exit the ones that don’t calf and put ones in there that are going to calf because the calf on the grounds where the money is, not – not anything else, you know.” [30] There was no evidence which made good the assumptions as to the pleaded cattle breading and growth rates. As Mr Keane for the defendants frankly acknowledged in his oral submissions, there was a fundamental problem in that the cattle numbers set out in the pleadings exceeded the holding capacity of the land as otherwise established by the evidence.25 [31] In those circumstances it is unsurprising that in his written and oral submissions Mr Keane eschewed any reliance upon Mr Garner’s report.26 Notwithstanding that abandonment of the evidentiary basis upon which the quantification of the defendants’ counterclaim was sought to be proven, Mr Keane nonetheless submitted that there was evidence of loss suffered by the defendants and that it was incumbent upon the court to assess damages even if this were a difficult exercise. [32] In support of this submission he cited what was said by Dixon and Fullagar JJ in McRae v Commonwealth Disposals Commission27 that it is undoubtedly true “that mere difficulty in estimating damages does not relieve a tribunal from the responsibility of assessing them as best it could.” The defendants’ written submissions also cited at length from the judgment of Allsop J (as his Honour then was) in Byrnes v Jokona Pty Ltd28 in support of this proposition. [33] As a general proposition, the defendants’ submission that where it has been demonstrated that damage has been suffered the court must do its best to assess damages notwithstanding difficulty in doing so, may be accepted. But the principle must be applied in the context of the particular case. [34] Rule 150(1)(b) of the Uniform Civil Procedure Rules 1999 requires every type of damage claimed to be specifically pleaded. Rule 155(1) requires, in mandatory terms,29 that the pleadings state the nature and amount of the damages claimed. Rule 155(2) requires the party claiming damages to include in the pleading: the nature of the loss of damage suffered; the exact circumstances in which the loss or damage was suffered; and the basis on which the amount claimed has been worked out or estimated. Rule 155(4) requires the party to specifically plead any matter relating to 25 Transcript 4-16.15. 26 Defendants’ written submissions para 32 and transcript 4-14.41. 27 [1951] 84 CLR 377 at 411-412. 28 [2002] FCA 41 at [108]-[111]. 29 Meredith v Palmcam Pty Ltd [2001] 1 Qd R 645 at 647 [6]. -- 7 of 26 -- 8 the assessment of damages that, if not pleaded, may take the opposing party by surprise. [35] The defendants complied with those pleading obligations by pleading economic loss based upon Mr Baird’s three year plan, of which there is no evidence, and containing assumptions of which there is no proof. [36] Furthermore, the pleaded basis for economic loss was also dependent upon the direct communication of the three year plan to the plaintiff. Whilst the three year plan itself was simply unproven in the sense that no evidence of it or its underlying assumptions was adduced, the evidence concerning the pleaded express communication, including the evidence of Mr Baird himself, directly disproved any such communication. [37] In her evidence, the plaintiff had said that Mr and Mrs Baird had never told her of their plans for the property, nor of any three year plan.30 Mr Baird’s evidence was even more cogent. When asked if he had ever told anyone about his plan he said: “Just my wife and accountant. My wife and I discussed, like, how we’re going to do it and how we’re going to try and make some money. Our aspirations for the place.”31 [38] He said that he did not discuss the plan with anyone else. When asked what discussions he had with the plaintiff as to his purpose for leasing the property, he said: “Basically I was going to put cows down there.”32 [39] He said that he did not go into any more detail and explained: “There was no reason to. It was pretty self-explanatory. We put cows down there, they have calves, and the rest of it takes care of itself.”33 [40] Therefore, having pleaded the exact circumstances in which the loss or damage is alleged to have been suffered, and the basis on which the amount claimed has been worked out or estimated, the defendants have simply failed to prove any of those matters. They are the circumstances in which the defendants now invite the court to apply the principles as to the court’s obligation to assess damages notwithstanding the difficulty in doing so. They do so by abandoning their pleaded case and the evidence adduced intended to prove it, and by asking the court, without amendment, to “resolve it on the evidence that is before the court”.34 [41] The method of assessing damages which the defendants now ask the court to adopt is, effectively, to extrapolate into future years the amount of $30,000 which the defendants obtained for the sale of 38 cattle approximately two and a half months before they vacated the property, on the basis that this would appear to be “a fair assessment of the defendants’ (annual) revenue”.35 To that amount they would seek to have added a further 50 per cent of the $70,000 purchase price of the cattle which they bought to stock the property as a reasonable “increase in the value of the cattle and for those calves which would not have been sold”.36 30 Transcript 1-13.9 to 1-13.12. 31 Transcript 2-51.13 to 2-51.16. 32 Transcript 2-51.18 to 2-51.21. 33 Transcript 2-51.26 to 2-51.28. 34 Transcript 4-15.41. 35 Defendants’ written submissions, paras 35 and 36. 36 Ibid at para 37. -- 8 of 26 -- 9 [42] Those circumstances in which the defendants seek application of the identified principle are markedly different to, and can be contrasted with, those in which the principle was applied in Byrnes v Jokona Pty Ltd upon which the defendants rely for support. In Byrnes, the claim which was allowed was simply described by the court as “a claim for damages arising from breach of the lease, undoubtedly entered, of sufficient seriousness as entitled … the tenants to terminate the lease”.37 There is no further exposition of how, if at all, the applicants pleaded their claim for damages. This is unsurprising. Under the Federal Court Rules 1979 (under which the claim was pleaded) the only requirement to plead facts and matters relied on to establish a claim for damages was in respect of exemplary damages.38 There was otherwise no requirements under the Federal Court Rules equivalent to those imposed by r 155 of the UCPR. [43] What is apparent from the reasons for judgment, however, is that there was evidence from a Mr Ballas which his Honour considered to be “of great value”.39 Mr Ballas had provided an assessment of the likely profitability of the relevant business. For that purpose he had undertaken a financial exercise on what a well-run business on the premises could earn in three years. The assumptions upon which he relied were set out and his Honour made some comments about some of them based upon the evidence.40 His Honour considered Mr Ballas’ business model to be “the most reliable guide to, or framework for, assessing what might have happened had the premises been well run with improved facilities”.41 His Honour also took into account Mr Ballas’ view of the business acumen of the applicants (which he did not rate highly) and made certain other adjustments in assessing damages.42 [44] From this it can be seen that the reliable evidence before the court for an assessment of damages consistent with the applicants’ case was the context in which Allsop J applied the principle which he had identified of assessing damages despite difficulty in doing so. That is in complete contrast to this case. [45] Mr Ford for the plaintiff said in submissions that he would have opposed an amendment to the pleading of that part of the defendants’ counterclaim had it been sought.43 Had leave to amend been sought,44 in the circumstances which I have identified, I would not have granted it. To do so would, in my opinion, facilitate the plaintiff being surprised in the way sought to be avoided by r 155. [46] For those reasons, the third of the categories of damage claimed by the defendants on the counterclaim has not been made out and should be rejected. [47] Each of the first two categories rely upon particular alleged conduct of the plaintiff being proven. If proven, the claim should be allowed. If not, it should be rejected. It is, therefore, convenient to deal with those categories of claimed damages in the consideration of the alleged breaches by the plaintiff. 37 [2002] FCA 41 [3]. 38 Order 12, r 4. The equivalent, limited requirement is now contained in r 16.44(2) of the Federal Court Rules 2011. 39 Supra at [124]. 40 Supra at [134]-[135]. 41 Supra at [139]. 42 See generally from [140] to [160]. 43 Transcript 4-39.11 to 4-39.20. 44 Rule 380 UCPR. -- 9 of 26 -- 10 The plaintiff’s alleged repudiation [48] The letter from the defendants’ then solicitor purporting to terminate the lease in acceptance of the plaintiff’s alleged repudiation set out seven alleged occurrences upon which the defendants relied. They were: “1. Unauthorised and unlawful sale of one of our client’s beasts at Moreton Saleyards in April 2016. We understand that charges are presently before the court in respect of this matter. 2. Unauthorised and unlawful cross branding of our client’s stock. 3. Unauthorised and unlawful removal NLIS ear tags from our client’s stock. 4. Unauthorised and unlawful conversion of our client’s stock, being seven calves, for your own use and/or purpose. 5. Unauthorised entry onto the demised property without our client’s consent by or on your behalf. 6. The repeated opening of gates and allowing those gates to remain open thereby disrupting our client’s use and quiet enjoyment of the property. 7. Failure to allow our clients full and proper use of the yards referred to in clause 13(b) of the agreement by failure to unlock all of the gates forming part of the yards.” [49] The plaintiff pleads she did not engage in that conduct.45 [50] In their defence, the defendants plead that the plaintiff did engage in that conduct.46 Although the defendants plead that the plaintiff did engage in that conduct, it is not specifically that conduct upon which the defendants relied to support their allegation of repudiation in their pleaded case. Rather it is the conduct set out in paragraphs 2A to 2H of their further amended defence and counterclaim.47 [51] The defendants plead that by the conduct set out those paragraphs the plaintiff interrupted and interfered with their quiet enjoyment and use of the property.48 Each will be addressed. First, though, it is necessary to set out the relevant principles to be applied in determining whether any of the matters alleged, if proven to have occurred, would, either alone or in combination, amount to an interference with, or interruption of, the defendants’ quiet enjoyment of the property such as to constitute a repudiation of the lease. The principles are not controversial. 45 Third amended statement of claim, paras 10 and 11. 46 Further amended defence and counterclaim, para 2. It is actually pleaded that: “The defendant did engage in the conduct alleged in the letter from Richard Darvall, solicitor dated 27 July 2016, reference number RLDNFHMA294/16.” However, the reference to “the defendant” is obviously a typographical error and should read “the plaintiff”. 47 Paragraph 3. 48 Further amended defence and counterclaim, para 2I. It is to be noted that the defence does not plead, in terms, the covenant of quiet enjoyment created by cl 13(f) of the lease. That covenant is, however, pleaded in the defendants’ counterclaim at para 21. Notwithstanding the absence of any direct pleading of cl 13(f) in the defence, it is clear that it is the express covenant upon which the defendants rely and the proceedings were conducted on that basis (see, for example, para 5 of the plaintiff’s closing submissions). -- 10 of 26 -- 11 [52] In Goldsworthy Mining Ltd v Federal Commissioner for Taxation49 Mason J identified the function of the covenant for quiet enjoyment, whether express or implied, to be twofold “first, it is a limited undertaking as to title; secondly, it is a covenant that the tenant should peaceably hold and enjoy the demised premises without interruption by the lessor or persons claiming through or under him”. [53] In Hawkesbury Nominees Pty Ltd v Battik Pty Ltd50. It was said: “The principle, as the cases discussed below indicate, may be expressed in the following way: There will be a breach of the covenant for quiet enjoyment where the ordinary and lawful enjoyment of the demised premises is substantially interfered with by the acts of the lessor or those lawfully claiming under him, whether or not the title to the land or the possession of the land is otherwise affected. Whether what is complained of amounts to a substantial interference will be a question of fact. A breach may result either from acts of commission or omission by the landlord.” [54] In Byrnes v Jokona Pty Ltd51, Allsop J said: “Where the demise has been granted for the carrying by the tenant of a particular business known to both parties, it is that business which forms the framework of the analysis as to whether there has been interference with the possession of the tenant. It is the ordinary and lawful enjoyment of the demised premises for the known purpose which is to be protected from interference which is substantial.” [55] His Honour observed that it is a question of fact whether the lessee’s ordinary use of the premises has been substantially interfered with.52 [56] The act which causes the interference need not occur on the demised premises so long as it is reasonably foreseeable that interference will result.53 [57] As to whether any interference found to exist is “substantial”, McPherson JA in Aussie Traveller Pty Ltd v Marklea Pty Ltd54 reviewed a number of authorities, and particularly Street J’s construction of “substantial disturbance” in Gordon v Lidcombe Developments Pty Ltd55 as requiring “interference which reached a level at which it practically frustrated the purpose for which the lease was granted”. McPherson JA (with whom Thomas J agreed) said: “For my part, I do not consider that, in order to establish a breach of the lessor’s implied obligation recognised in O’Keefe v Williams (1910) 11 CLR 171, the law insists on ‘practical frustration’ of the purpose of the lease. At least that is so where, as here, the claim is for damages and not, as in Gordon v Lidcombe Developments, for an injunction to restrain the alleged disturbance in circumstances in which damages would be an adequate remedy for the breach.” 49 (1973) 128 CLR 199 at 214. 50 [2000] FCA 185 per Hill J with whom Gallop and Gyles JJ agreed. 51 [2002] FCA 141 at [61]. 52 Ibid at [62]. 53 Robinson v Kilvert (1889) 41 Ch D 88. 54 [1998] 1 Qd R 1. 55 [1966] 2 N.S.W.R. 9 at 14-16. -- 11 of 26 -- 12 [58] His Honour’s remarks were cited with approval in Hawkesbury Nominees Pty Ltd v Battik Pty Ltd56 and in Byrnes v Jokona Pty Ltd.57 In the latter, Allsop J, in agreeing with McPherson JA, said: “… it is not necessary for there to be practical frustration of the lease, or that the interference render it impracticable or uneconomic to carry on the lessee’s business for there to be a breach of the covenant. However, as is discussed below, the degree of seriousness of the breach is central to the assessment of the legal consequences of breach, in particular whether the tenant is entitled to terminate the lease.” [59] In the absence of a specific term of the lease making it such, the covenant of quiet enjoyment is not an essential condition of the lease, any breach of which would entitle the lessee to terminate.58 The nature and extent of any breach of the covenant will determine the remedy available to the lessee. A breach may be so serious or substantial as to evince an intention on the part of the lessor not to be bound by the lease and thus a repudiation of it by him, or be such as to deprive the lessee of substantially the whole of the benefit which it was the intention of the parties that he would obtain. In either case, the lessee will have the right to terminate.59 [60] The court may look to a number of breaches as a whole in determining whether there has been a repudiation60 such that breaches which are minor in themselves may, in combination, evince an attention not to be bound.61 (I) Removal of NLIS tags [61] It is convenient to commence with the allegation that the plaintiff, either herself or by her servants or agents, without authorisation, unlawfully removed an NLIS tag from an unknown cow at an unknown place and time.62 [62] NLIS tags form part of the National Livestock Identification System. The NLIS is conveniently explained in a “Tech Tips” document entitled “Device Numbers – Cattle NLISID/RFID” published on the NLIS database.63 It describes the system as follows: “The National Livestock Identification System requires cattle to be identified with an NLIS-accredited device, so they can be traced from property of birth to slaughter. The Property Identification Code (PIC) allocated to livestock properties by State or Territory governments forms part of the NLISID number. Cattle are fitted with a white RFID ‘breeder’ device before they leave their property of birth. The device should remain attached until the animal dies or is slaughtered, but if cattle are no longer on the property of birth and the breeder device is lost or cannot be read electronically, 56 Supra at [39] per Hill J. 57 Supra at [64]. 58 Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 11, 173 at 11, 176; Byrnes v Jokona Pty Ltd, supra at [70]. 59 Hong Kong Fir Shipping Co Ltd v Kawaski Kisen Kai Sha Ltd [1962] 2 QB 26 per Upjohn LJ at [64] and Diplock LJ at [6]. 60 Hudson Crushed Metals v Henry [1985] 1 Qd R 202 at 205-207 per Connolly J. 61 Byrnes v Jokona Pty Ltd supra at [74]. 62 Further amended defence and counterclaim paras 2D and 23C. 63 Exhibit 1, tab 21. -- 12 of 26 -- 13 an orange post-breeder device that is registered to the PIC on which the animal now resides should be applied to maintain traceability. The NLISID number is printed on the outside of an electronic ear tag used to identify cattle (or on the visual ear tag indicating that a rumen bolus has been applied). The RFID number is the transponder number inside the ear tag or bolus. The NLISID number is read visually. The RFID number is read electronically, using a hand-held or fixed panel reader. The manufacturer registers both the NLISID and RFID numbers for your PIC on the database at the time of device purchase. As the numbers are linked on the database, either the NLISIDs or the RFIDs can be entered when you submit a transaction, such as moving cattle from one property to another. To prevent ‘bad format’ errors, the device numbers must be entered in the correct format.” [63] The plaintiff admits to cutting off the NLIS inserted in the ear of one of the defendants’ beasts. Her evidence as to how that occurred was that the first defendant had told her husband that he (the first defendant) had accidentally branded one of their calves and that they (the Mounseys) would have to fix it up by rebranding the calf and taking out its tags. About a month later, in February 2016, the Mounseys were branding cattle which had been mustered. The plaintiff had seen one calf with the yellow tag in its ear64 and a brand on it which she assumed was the calf the first defendant had spoken of with her husband. [64] The calf came up to the crush. It had the defendants’ brand on it so the plaintiff cross- branded it by putting her brand underneath that of the defendants’, took the tags out of its ear and replaced the NLIS tag with one of her own. She said that she believed that if it had the defendants’ NLIS tag in its ear its lifetime traceability would have been compromised. The removed tag fell to the ground.65 [65] Mr Mounsey gave evidence of a conversation which he had with the first defendant. He said that it was the first occasion on which he had met the first defendant and it occurred when Mr Mounsey was on the road and the first defendant was at the yards working. His evidence of that conversation was: “He was branding calves. I got out pretty much just to introduce myself and say g’day and he told me that he had accidentally tagged and branded one of our calves. He knew it was one of ours because he released it and it ran over to a few of our cows that had come in in his muster and was sucking from her so it was obviously a mistake. He just told me about that and I said, ‘Yeah, that’s alright. We’ll – you know, we’ll fix that up’.” [66] The first defendant gave similar evidence. He said there was an occasion on which they were mustering on his leased property and there were 15 or 16 of the plaintiff’s cows and calves. Believing the calf was one of his own he branded him. The first defendant put the calf in with his cows, but it later returned wanting to get to his mother which was one of the plaintiff’s cows. The first defendant said that he had 64 The evidence was that yellow tags are management tags. 65 Transcript 1-29 to 1-30. -- 13 of 26 -- 14 spoken to the plaintiff’s husband to inform him of what had occurred; that he had accidentally branded one of the plaintiff’s calves. He said that he told Mr Mounsey that the calf was in the yard with the plaintiff’s other cows and calves.66 [67] The content and circumstances of the conversation as recounted by the first defendant were in terms similar to those said by the plaintiff to have been recounted to her by her husband. [68] However, the first defendant’s evidence was that the calf he accidentally branded would not have had an NLIS tag put in at that time “because that’s not what I do, but he may have had a management tag in”. He had earlier given evidence that he didn’t put NLIS tags in his cattle until they left the property. In evidence in chief he was asked what his practice was in relation to tagging cattle when they are born. He said: “I brand them and then I’ll pull nuts out or dehorn them and I’ll put a management tag in. I don’t put NLIS tags in until they leave the property.”67 [69] The fact that the first defendant’s practice was not to put NLIS tags in a beast’s ear until it was leaving the property would not cause me to doubt the plaintiff’s evidence that the calf rebranded had an NLIS tag which she cut off. In fact, it is uncontroversial the plaintiff cut off an NLIS tag from one of the calves. She was convicted of an offence of having removed the tag.68 [70] The NLIS tag cut off by the plaintiff bore the unique identification number QBESO465LBK03172. That tag was in the ear of the beast purchased by the defendants for the purposes of stocking the leased premises. The number appears on the Buyer Reconciliation report prepared by the selling agents. It records the sale of 77 head on 9 November 2015. The seller was Lockyer Pastoral Holdings Pty Ltd.69 [71] The weighbill for the consignment of those cattle identifies that the 77 head comprised 46 Brahman cross cows and 31 Droughtmaster/Charolais cross calves.70 Although the weighbill refers to the cattle being consigned to an address at Crofting Road, Moogerah, it is common ground that they were delivered to the leased premises. [72] In his submissions, counsel for the defendants sought to establish that the plaintiff had given evidence about the circumstances of the cutting out of the NLIS tag which she knew to be wrong. He sought to demonstrate that by reference to her evidence given in the prosecution proceedings in the Magistrates Court on 28 July 2017. He sought to demonstrate that notwithstanding her evidence on that earlier occasion and her conviction for having unlawfully removed a tag, she persisted in her evidence in these proceedings in her assertion that she had cut the NLIS tag from one of her own calves which had been wrongly branded and tagged by the first defendant. In my opinion, these attempts failed. [73] In my view, the plaintiff was not seeking to assert that state of affairs as the true state of affairs in her evidence to this court. Rather, she was simply giving evidence of 66 Transcript 2-54.40 to 2-55.40. 67 Transcript 2-31.42. 68 Exhibit 5. 69 Exhibit 1, tab 2. 70 Exhibit 1, tab 1. -- 14 of 26 -- 15 what her belief and understanding of the state of affairs had been at the time at which she cut out the tag. [74] In her evidence in chief, having given the evidence set out above, she was asked “Now, do you think you could have got the wrong calf?” to which she answered “At the time I didn’t, but yes, now I do”. [75] When cross-examined about this issue, the following exchange took place: “And you said that you believed the only tag you’ve ever removed of Mr Baird’s, that is, a tag on – from one of his cattle is that tag?--- Yes. And so your evidence today is that that would have his PIC number on it?--- I thought so at the time. Yes. And you were familiar with Mr Baird’s PIC number, weren’t you?--- I had no idea what Mr Baird’s PIC number is. … Okay. So your evidence is that while you don’t know the tag number, it was the tag that would have been inserted by Mr Baird?--- I thought it was the calf that he branded, so I thought the tag was his. But you know, don’t you, that that’s not correct and that you have cut a tag out that Mr Baird did not put in for one of his cattle? You know that, don’t you?--- Now I do, yes.” [76] On that evidence, it is clear that the plaintiff was recounting what had occurred at the time at which she cut out the tag, based upon her then understanding of which calf it was, but accepting, now, that she was mistaken in that regard. [77] Furthermore, the plaintiff was insistent that it was a calf not a cow, from which she cut the NLIS tag. She was consistent in this insistence in her evidence in the Magistrates Court and in these proceedings. The evidence does not establish in which of the 77 beasts purchased by the defendants the particular NLIS tag was placed. It is, in my view, most likely that it was in one of the 31 calves. That explains the plaintiff’s insistence that it was a calf from which she removed the tag. It also explains why a calf of the defendants would have an NLIS tag in its ear even if it was the first defendant’s practice only to tag cattle born on his land at the time that they leave the property. [78] There was also evidence of the plaintiff having cut off other NLIS tags, but that was because upon her father’s death cattle had been inherited by her but her sister had inherited his PIC. An attempt had been made to electronically transfer the cattle from her father’s PIC to her own, but the technology had failed. As a consequence, whenever she sold one of those cattle and the new owner transferred the registration, her sister would be notified. The plaintiff, therefore, cut out those earlier NLIS tags and replaced them with her own to avoid the notifications going to her sister.71 [79] In those circumstances, and accepting the plaintiff’s evidence as to how she came to remove an NLIS tag from the defendants’ beast, as I do, I do not consider that her 71 Transcript 1-31. -- 15 of 26 -- 16 conduct evinced an intention on her part not to be bound by the lease. I do not consider it to be a fundamental breach of the lease and I do not consider it to be a substantial interference with the defendants’ enjoyment of the demised property. (II) Other alleged interferences with the defendants’ cattle [80] At paragraphs 2B and 23A of the further amended defence and counterclaim the defendants plead that on or around 1 May 2016 the defendant mustered the cattle on the demised land, with 102 head of cattle counted at muster. The defendants found that eight weaners/calves and a cow were missing from the property. Paragraph 2B also pleads that on or around November 2015 101 head of cattle were put on the demised property which were not transferred pursuant to the NLIS and that between November 2015 and May 2016 11 calves were born although one was killed. Those paragraphs, of themselves, plead no conduct on the part of the plaintiff. [81] At paragraphs 2C and 23B the defendants plead that on or about 6 June 2016 police executed a warrant at the plaintiff’s property and conducted a muster in which four head of cattle belonging to the defendants were located and returned to the defendants. A calf bore the plaintiff’s brand below that of the defendants’. [82] It is alleged that “the plaintiff and/or her servants or agents unknown, cross-branded the defendants’ stock at a place and time unknown between 1 January 2016 and 6 June 2016”. [83] In paragraphs 2E and 23D it is pleaded that after the police search of the plaintiff’s property four head, being two cows and two calves/weaners, were returned to the defendants. It is alleged that there remains outstanding six Brahman cross cattle, mixed-sex, calves/weaners born late 2015 “in the premises the plaintiff and/or her servants or agents or servants [sic] unknown, without the consent of the defendants dealt with the defendants’ six head of cattle in a manner inconsistent with the defendants’ rights and converted the six head of cattle”. [84] It is unclear from paragraphs 2E and 23D whether “the premises” referred to are restricted to those matters pleaded in those paragraphs and paragraphs 2C and 23D concerning the search of the plaintiff’s property, or extend to the removal of the NLIS tag pleaded at paragraphs 2D and 23C and/or the matters pleaded at paragraphs 2A and 23. Paragraphs 2A and 23 plead that the plaintiff sold a red Brahman cow belonging to the defendants at a cattle sale at the Moreton Saleyards on 26 April 2016. [85] An understanding of “the premises” from which the defendants say it would be concluded that the plaintiff “or others on her behalf” dealt with and converted six head of the defendants’ cattle is not assisted by the defendants’ written submissions. Indeed, it becomes less clear. Those written submissions suggest that the removal of the NLIS tag, the four cattle located on the plaintiff’s property during the police muster, the assertion of ownership of two of those cattle in an application commenced by the plaintiff on the same day as these proceedings were commenced but subsequently discontinued after her conviction, and the first defendants’ evidence that he was missing a number of head of cattle following his May 2016 muster, support the conclusion that the plaintiff sold a beast belonging to the defendant’s at Moreton Saleyards on 26 April 2016.72 At paragraph 19 the defendants submit: 72 Defendants’ written submissions paras 15-19. -- 16 of 26 -- 17 “The inescapable inference from this evidence73 is that the plaintiff did indeed sell a cow belonging to the defendants at the Moreton Saleyards on 26 April 2016. This is consistent with the plaintiff removing a NLIS tag from the defendants’ cattle74 and the assertion of ownership over the defendants’ cattle.” [86] Given those submissions, it is convenient next to consider the allegation that the plaintiff sold a beast belonging to the defendants at the Moreton Saleyards on 26 April 2016. [87] Eric Ruhland is a contract musterer. He has been so for more than 50 years. He knows both the plaintiff and first defendant. He was contracted by the first defendant to muster for him on the property in about May 2016. [88] Mr Ruhland also works as a stockman at the Moreton Saleyards. His job there is to draft mobs of cattle from larger mobs into smaller mobs and to pen them. He remembers a mob of cattle coming in from the plaintiff for sale at the saleyards about Anzac Day 2016. He recalls it to have been a mob of about 16 or 17 cattle. He recalls them being drafted into two pens, and that they were uneven. From those two pens cattle would be “painted out”. That is a process whereby cattle which were different from others in the pen would be separately identified by a painted marking. They would be sold separately. The difference may be in breed or condition, such as a different level of fat covering. [89] His recollection was that there was one different cow. It was a Brahman amongst Santa Euro cross cows. It was taller as well. In Mr Ruhland’s words, “one was just different”.75 He also thought the cow could have been in milk a couple of weeks before. He recalled the NLIS tag on the cow’s ear to have been “shiny and new”.76 [90] He was familiar with the plaintiff’s brand and the cow that he recalled did not have her brand on it. He recalled it as having a “COD” brand on it. Other cows in the mob had been cross branded. Other cows he thought had new NLIS tags also. Other cattle had a “ZZY” brand on them. He was familiar with that brand because he had worked for the owner of that brand and “had probably put that brand on every beast he had”.77 [91] When Mr Ruhland mustered for the first defendant in May 2016, the first thing he said he noticed was that the cows had the same brand on them as the different cow at the sale in April. [92] When cross-examined Mr Ruhland described the Brahman cow that stood out amongst the others in the pen saleyards as “Not as fat. Not poor, but not as fat”.78 He said that he would have expected the cow to have been painted out. That, though, was not his function. That fell to someone else, usually the agent. [93] Despite Mr Ruhland’s confidence in his recollections, there was much evidence to the contrary. I have concluded that he was mistaken in his recollections. As he said 73 “[T]his evidence” appears to be a reference to all the matters set out in paras 15-19. 74 It is to be noted that the plural “cattle” is used whereas it was only ever asserted, and proven, that one NLIS tag was removed from one of the defendants’ beasts. 75 Transcript 3-33.24. 76 Transcript 3-33.31. 77 Transcript 3-34.17. 78 Transcript 3-41.15. -- 17 of 26 -- 18 when cross-examined about the number of cows in the plaintiff’s mob delivered to the saleyards, “It’s a long time ago”. [94] The plaintiff gave evidence that a couple of weeks prior to the sale she had drafted about 40 to 50 head into a paddock known as “Mincho’s” with a view to selling about 24 head. She had been assisted by Philippa Demayne and Peter Spratt. On the day prior to the sale, 25 April 2016, she and Katrina Kerwin-Spratt had gone to Mincho’s paddock to get out the cattle which had been previously drafted up there. They found that four panels in the fence had been smashed and other cattle had become mixed in with those previously drafted. They took the cattle from the paddock to the yards to sort them out. First they took out the cows and calves. Then they took out cows in poorer condition which could not be sold. The plaintiff realised some of the cattle did not have NLIS tags. As they were running late for the truck which had been booked to transport the cattle to the saleyards, those without NLIS tags had also to be drafted out. As a result, she could not get a full load. She could sell only 20. She said she even put a steer in with the cows to make up the numbers, explaining that you pay for the truck, not per head. [95] That 19 cows and one steer was sold on behalf of the plaintiff at the sale on 26 April 2016 is confirmed by the agent’s Vendor Detail Statement79 and the Vendor RFIDS Transfer Report80 and the weighbill signed by the transporter.81 These documents demonstrate that Mr Ruhland is mistaken in his recollection as to the number of cattle. [96] The plaintiff also gave evidence that when selecting the cattle to be sold she was looking at them very closely. She was looking at their age. She also wanted to see if they were wet; that is, producing milk. Only dry cows were to be drafted out to be sold. She explained that she did not want to sell a cow that was still producing milk as the cow would have a calf. [97] She said that she did not see a taller Brahman cow which was skinnier and which was wet, either on the day on which the final selection was made or on the occasion of the earlier muster into Mincho’s paddock. She said that such a cow would have stood out and she definitely did not want to sell any cows that were producing milk. She also said that she was looking for brands and did not see any COD branded cattle. [98] Katrina Kerwin-Spratt is a contract musterer. She impressed me as a witness. She gave evidence of having assisted the plaintiff in mustering a mob of about 35 to 40 cattle from Mincho’s paddock to the yards. The plaintiff was selecting the beasts she thought suitable for sale. She recalled that they put 19 cows in a pen. She looked “very closely” at the cattle during the process. The plaintiff would give her a description of the beasts selected by reference to its physical features. She was also looking at brands. She was familiar with the plaintiff’s brand. She did not see anything like the COD brand. She did not see any red Brahman or red Brahman cross cow which was a bit taller, a bit skinnier and perhaps wet. A cow of that description would have stood out. She said that as a rule of thumb when you are selling cattle, especially to a saleyard, you try to keep a pen at an even height, even colouring and even weight management so that anyone looking to buy the pen is buying an even line. So to put one in that was different to the others would be very noticeable. 79 Exhibit 1, tab 9. 80 Exhibit 1, tab 10. 81 Exhibit 1, tab 8. -- 18 of 26 -- 19 [99] Philippa Demayne is also a contract musterer. She gave evidence of having mustered with the plaintiff and Peter Spratt on the plaintiff’s property in April 2016. They were mustering to get some fat cows in for sale. They were “after dry, fatter cows and probably older cows”.82 [100] Ms Demayne explained that you could tell wet cows from fat cows by their udders and that cows with calf don’t hold their weight like fat cows. She could not recall how many cattle were drafted off from the 170 to 200 mustered although she thought it was between 16 and 30, although it could have been more. Those that were drafted off were taken to Mincho’s. [101] She recalled seeing one cow and one calf with the defendants’ brand on them on a couple of occasions, but she was not sure whether or not it was on that day. Those cattle were drafted out and placed on the defendants’ property, but they ran around the yards and jumped the grid and re-joined the plaintiff’s mob. [102] She said that they definitely would not have selected a wet cow. [103] The evidence of the three people who were involved in the process of selecting the cattle to be sent to sale would cause me to have doubt about Mr Ruhland’s recollection. However, the evidence which removes any doubt from my mind that he was in fact mistaken is that of Mr James Bartholomew. [104] Mr Bartholomew is an auctioneer and livestock agent and has been for in excess of 50 years. He is a member of the firm Boyd, O’Brien, Bartholomew. They sell cattle from Moreton Saleyards, which he described as a live weight selling centre where cattle are sold, mainly for going to processors. [105] He explained that vendors send their cattle to the saleyards where they are drafted “according to their quality, condition, size or suitability for trade”.83 He said that “size plays a big part”.84 [106] He is directly involved in the process of selection of the cattle to be penned together. He explained the process of painting out smaller, bigger, fatter or skinnier cattle. He explained that those painted out are sold separately. Mr Bartholomew was, as the plaintiff submits,85 a witness who knew his business well. [107] He recalled the sale of 26 April 2016. When asked if he did so, he said “Yes I do. Yeah. I know, it’s a long time ago, but I do. Yeah”.86 I accept his evidence that he recalls this sale amongst all those in which he had been involved because of the stock squad becoming involved and the criminal proceedings which followed.87 [108] Mr Bartholomew was “pretty sure” that the plaintiff’s cattle were drafted and penned in three lots. He thought that some were painted out because there were some cows which were different. He remembered that there was a Charolais cow which was painted out. His recollection in that regard is confirmed by the Vendor Detail Report which records there being one Charolais cow which was painted on the loin. He said 82 Transcript 2-12.26. 83 Transcript 2-70.1. 84 Transcript 2-70.15. 85 Plaintiff’s written submissions para 46. 86 Transcript 2-71.9. 87 Transcript 2-73.10. -- 19 of 26 -- 20 that if anything had been out of place the cow would have been painted out, that is, if there had been a cow of the description suggested by Mr Ruhland. He explained why that was so. He said: “The last thing you want to do is if you’ve got a pen of cows and – and say there’s 10 in the pen and one of the buyers say, ‘No, I want to buy eight. Leave two out,’ or something like that, that slows the sale, disrupts the sale. You want the sale to continue, continuity so you try and get it right the first time and yeah, most of the time we get it right, yeah.”88 [109] That explanation, to me, seems compelling. It becomes even more compelling when the circumstances of the purchase of the cow (had it been amongst those sold) are considered. He said that a taller, leaner cow would be painted out and would not be sold with a group of other cattle. By reference to the Vendor Detail Report,89 he was able to explain that there were in fact three pens: pens 116, 117 and 119. Thus it can be seen that Mr Ruhland’s recollection as to the number of pens was also incorrect. The report also shows that certain cattle were painted out in those pens. [110] He explained that the buyers who attend are mainly buying behalf of meatworks. [111] Mr Bartholomew did not remember having seen any cattle with the COD brand on them. He did not recall seeing a taller, thinner cow that was perhaps wet. He explained, most persuasively in my view, why it is most unlikely that a wet cow would be included. He said: “If there was a cow that was wet and she – and she had a big udder of milk – when you – we’re selling on a live weight basis. They’re buying – the buyers buy them on a live weight basis and they look at the cow and they say – it comes down to the yield from a live weight to dead weight and the yield can vary dramatically. If you’ve got a cow like a dairy cow, say, for instance, that has a bigger udder of milk, that – that could weigh 8, 10, 15 kilos. So the buyer has to take that into account and he will take that into account. So if there’s a wet cow or something like that, she would be sold at a reduced rate if she had a big udder because the buyers are aware of the yield. Like, an overfat cow won’t yield either because they cut the fat off and they don’t get paid for it, and a dairy cow with a big udder, they cut the udder off and so the yield might go from 50 percent down to 42 percent or something like that. So they’re losing 8 percent of what they’ve paid, which is a considerable cost.” [112] The police investigation was led by Detective Senior Constable Scott Petrie. Officer Petrie gave evidence that in the course of the investigation all but eight of the cattle sold were able to be traced. The allegedly stolen cow was not found amongst those which could be traced. The remaining eight which could not be traced had been sold to Teys meatworks at Beenleigh and had been killed prior to a complaint being made.90 [113] From the Vendor Detail Report it is evident that the allegedly stolen cow must have been part of a lot of eight Brahman cross cows sold from pen 116. There were 11 88 Transcript 2-72.2 to 2-72.8. 89 Exhibit 1, tab 9. 90 Transcript 3-50.25. -- 20 of 26 -- 21 head in total in pen 116: the eight sold as one lot and three Brahman cows which were painted out and sold together as a separate lot. [114] It seems inconceivable that a buyer buying on behalf of meatworks would purchase as part of a lot of eight head a beast which was so different from the other seven so as to stand out as described by Mr Ruhland. That is particularly so when three others had in fact been painted out in the same pen. To purchase such a different, and perhaps thinner and wet cow would expose the purchaser to the potential loss of deadweight yield so clearly explained by Mr Bartholomew. It seems quite improbable that a beast which was so different that all the witnesses, including Mr Ruhland, would expect it to be painted out would not, in fact, be painted out. It becomes improbable in the extreme that having not been painted out against all expectations, a buyer from a meatworks with his primary concern being the deadweight yield from the cattle would proceed to bid for and purchase it at the same price as fatter, dry cows. [115] For these reasons, I conclude that the plaintiff did not sell or cause to be sold a beast the property of the defendants at the sale conducted at the Moreton Saleyards on 26 April 2016. None of the other evidence to which the defendants point as supportive of a conclusion that such a sale did occur in any way causes me to alter my view. None of that evidence can affect the glaring improbability of such a sale having occurred. The inference is not “inescapable” as the defendant submits. It does not, in my opinion, arise at all. [116] Therefore the plaintiff did not engage in that conduct which the defendants allege interfered with their quiet enjoyment of the demised premises. [117] Returning then to the allegation as pleaded at paragraphs 2E and 23D of the further amended defence and counterclaim that “in the premises” the plaintiff converted six of the defendants’ cattle. If by that pleading it was intended that the premises included the alleged sale of the defendants’ cow, then that fact, having not been made out, could not support the conclusion that the six other beasts were converted. [118] In my view, the defendants have otherwise failed to prove the allegation of conversion of their cattle. The allegation depends upon the acceptance of the first defendant’s evidence that at the time of the muster there ought to have been 110 head but there were only 102. As the plaintiff submits, there is some unreliability in the evidence concerning what stock numbers there ought to have been on the defendants’ property at that time. As the plaintiff submits, whilst there is clear and independently verifiable evidence of the number of cattle purchased and brought onto the property, the balance of the herd was made up from the defendants’ existing stock which the first defendant says were transferred to the leased property, together with calves born. As the plaintiff also points out, the police investigation never sought to verify those stock movements and numbers beyond the first defendant’s statement. As the plaintiff correctly submits, the documents which do purport to record tallies made by the first defendant from time to time contain inaccuracies. [119] The plaintiff’s written submissions seek to demonstrate that rather than there being two cows too few when the defendants moved their cattle from the leased property in July 2016, when account is taken of those which were brought on to the property (66) -- 21 of 26 -- 22 and those which were moved or sold, there was in fact one cow more than the number which would be expected. That analysis would appear correct.91 [120] However, in my view, in the absence of evidence which more definitively established the number of cattle which the defendants had on the property, I would not be prepared to find that there were, in fact, fewer cattle on the property than there should have been either at the time of the May muster (other than those found to be on the plaintiff’s property) or when they were moved off in July 2016. Furthermore, to the extent that there may have been fewer, I would not infer that this was due to the plaintiff having converted them. [121] The more telling reason not to draw that inference is simply that they were not found on the plaintiff’s property when the police conducted a forced muster under the authority of a warrant on 6 June 2016. Police did find four head belonging to the defendant. That, of itself, is not surprising and is not something from which I would conclude that the plaintiff had acted with any impropriety. The first defendant himself said it was not unusual for cattle from one neighbour’s property to wander onto another neighbour’s property.92 The first defendant himself also said that it was probably not unusual that there would be cattle missing when a muster is conducted.93 He gave evidence of the plaintiff’s cattle having been found by him on his property. [122] In my view, rather than some sinister conclusion being drawn from four head of the defendants’ cattle having been located on the plaintiff’s property during the police muster, I would consider it simply what one might expect based upon all the evidence. Furthermore, I would conclude that any and all of the defendants’ cattle which were on the plaintiff’s property at that time were found. [123] Having failed in their attempts to prove that the plaintiff had previously sold one of their cows, in the absence of any allegation, let alone proof, that she had ever otherwise sold or disposed of any other of the defendants’ cattle, it would be nothing other than pure speculation to conclude that the plaintiff had somehow converted other of the defendants’ cattle. [124] The defendants have failed to make out that part of their case. There has been no such conduct by the plaintiff in interference with their quiet enjoyment of the demised premises. [125] The remaining allegations may be dealt with quite briefly. [126] At paragraphs 2F and 23E of the Further Amended Defence and Counterclaim, the defendants allege that on four separate unknown occasions between 1 January 2016 and 7 June 2016, “the plaintiff and/or her servants or agents unknown… opened the yard gates of the plaintiff’s property and without authorisation allowed four of the plaintiff’s bull to enter on to the demised property”. [127] The evidence in the defendants’ case in support of this allegation is far from compelling. In his evidence in chief the first defendant was asked, “How do you know they were letting the bulls out of the yard?” to which he replied: 91 Plaintiff’s written submissions paras 24-41. 92 Transcript 2-120.25. 93 Transcript 2-37.20. -- 22 of 26 -- 23 “I came home early one day – 3 o’clock. It was Tuesday. And I always come that way to check the animals. And – and I come to the grid and Donna was in the yard. The car is parked out near the gate, near the road. The gates into the yards were open. She was stumbling around, flapping her arms, and the horse was out. The horse was gone. The stallion was gone. And the bulls were all coming out. And I said, ‘Donna, where are you – where are you putting these? Where are they going?’ Yeah. ‘So they’re going into – across the road.’ And I went, ‘oh the gate is not open’. The gate across the road into her paddock wasn’t open. So the bulls came out onto the road and up the road. So I raced out, jumped in my car, cut them off. I managed to – to get them back down in the yard. Opened all the gates across the yards, parked my car across the road and then I managed to get them all into across the road. And – and Donna said, ‘Oh thanks very much’. And she was – she was a bit under the weather.” [128] As the plaintiff submits, such an occasion on which she was “stumbling around” or was “a bit under the weather” was not put to the plaintiff in cross-examination. [129] The first defendant said that other than on that occasion he never saw the gates opened by the plaintiff. He said that he saw the gates across the road open on one occasion, but he could not recall if the bulls were out on that occasion. Although, it was not the gate to the bull paddock, it was the cow gate. [130] When asked how many times the bulls came onto his property he said: “About four or five times. When I – when I – when I mustered I rounded them up and left them in the yard, so – because the bull paddock was up the road. So I, you know, I didn’t take them up the road. Well, that’s where they were kept a bit. Whether they were across the road when she put the bulls in with the cows I don’t – I don’t know.”94 [131] The plaintiff denied having opened the gates in quite emphatic terms. She described it as “absolute nonsense” that she left the gates open, saying she had been on the farm all her life and that “you do not leave gates open”. She also said “it never happened” when it was suggested that she opened the gates and forgot to close them.95 [132] In her evidence in chief the plaintiff had given evidence of having on one occasion found gates opened down opposite her yards into King Pah paddock.96 She gave that evidence in the context of cattle moving between her property and the property leased to the defendants. She said it occurred maybe once a month. She explained that they shared a boundary. Bulls would be fighting. Cows and calves would get separated. They would push through the fence. Bulls would fight through the fences and break them which would make an opening which would allow cattle to move freely back and forth. She said that was not out of the ordinary and it happened on every property. She said that she would repair the fences, as would the first defendant. He would put her cattle back and she would put his cattle back.97 94 Transcript 2-54.10 to 2-54.40. 95 Transcript 1-89.15. 96 Transcript 1-15.25. 97 Transcript 1-15.17 to 1-15.35. -- 23 of 26 -- 24 [133] The plaintiff denied opening the gates between the properties and allowing them to remain open.98 In dismissing the suggestion that she would put her bulls in the defendants’ paddocks on purpose as “just ridiculous”, the plaintiff gave quite compelling evidence as to the reason why that would be so. She said: “That’s just ridiculous, if I was putting my bulls in his property how are my calves going to get in – my cows going to get in calf… that’s my business, breeding calves.”99 [134] When asked if there was any benefit to her in having her bulls on the defendants’ property she responded: “There’s absolutely no benefit whatsoever and in fact, it’s causing me damage to have my bulls in his property, because my calves aren’t getting – my own cows aren’t getting in calf.”100 [135] Both the plaintiff and the first defendant gave evidence that the business of grazing cattle is fairly simple; you breed calves. The plaintiff’s evidence as to why it would not be in her interests to open gates to allow her bulls to mix with the defendants’ cows seems to me to pretty much sum up that simplicity. [136] Furthermore, she explained that there would be risks to her herd in having her bulls on the defendants’ property. She said: “Yeah. I – well, they were mostly bought cattle. I don’t know where his cows had come from, if they – I don’t know if he inoculates for Pestivirus, if he inoculates for Lep-vibrio, if he inoculates for Lepto. They all cause contagious abortion in a herd; I don’t want my cattle mixing with cattle I don’t know.”101 [137] The plaintiff did say that there were ways bulls could get into the paddock other than by opening the gates. She admitted that they fought all the time. She said it was a joint responsibility for neighbours to fix common fences.102 She said that the first defendant had mentioned gates being opened to her. She said she had also told the first defendant about gates being open. She said they both saw a gate open down at the yard and she ended up putting wire on it after which the gates weren’t opened again.103 [138] I prefer the plaintiff’s evidence as to why she would not open gates to allow her bulls to enter the property of the defendants’ to the first defendant’s quite unspecific evidence about a quite unspecific and unparticularised allegation. The evidence could not support the conclusion that the plaintiff or unknown persons on her behalf, opened gates on four occasions and allowed her bulls to enter the defendants’ property. [139] There has been no interference with the defendants’ quiet enjoyment of the demised premises on that basis. [140] The evidence does support the conclusion that there were occasions on which cattle from the adjoining properties wandered from one property to the other, be that from the plaintiff’s property to the defendants’ property or vice versa, and mixed with the 98 Transcript 1-33.44. 99 Transcript 1-33.44. 100 Transcript 1-34.1. 101 Transcript 1-34.12. 102 Transcript 1-34.20. 103 Transcript 1-35.35. -- 24 of 26 -- 25 neighbour’s herd. However, I would conclude that they did so as a consequence of the ordinary vicissitudes of occupying adjacent cattle grazing properties. I would conclude that to the extent that those occurrences interfered with the quiet enjoyment of the property of either neighbour, it did not do so to any substantial extent. That is the only conclusion to be reached on the whole of the evidence including that of the first defendant that there was nothing unusual in itself of finding his cattle were amongst the plaintiff’s or vice versa. (III) Locked gates [141] The final allegation which needs to be addressed is that pleaded at paragraphs 2H and 23G of the Further Amended Defence and Counterclaim. That allegation is that on or around 7 June 2016 the plaintiff and/or her unknown servants or agents locked all gates on the perimeter of the plaintiff’s property including the yard gates. A request for access to the yards was made between 10 and 20 June 2016 but was refused. A second request was made between 10 and 27 June 2016 after which only two yard gates were unlocked. [142] This allegation may be addressed quite briefly. Two provisions of the schedule to the lease permit the defendants to access the yards on the plaintiff’s property. Clause 6(l) provides: “The lessee is authorised to use the dip yards (but not the holding yards) owned by the lessor and adjoining the demised property upon giving the lessor not less than 5 days notice of its intention to do so. In this regard, the lessee uses the dip yards at its own risk and: (i) indemnifies the lessor against any loss or damage; and (ii) must repair any damage to the fences and dip yards which may be caused as a result of the lessee’s use pursuant to this clause.” [143] Clause 13 provides, in terms inconsistent with clause 6(l): “The lessee acknowledges the yards in lots 91 and 97 on the eastern side of Croftby Road remains under the control of the lessor. The lessee may have the use of the yards on their delivering to the lessor a 7 day notice of their need to use the said yards.” [144] At their highest, each of clause 6(1) and 13(b) create a license in favour of the defendant to use the yards upon certain conditions. [145] Item 5 of the lease itself expressly excludes the yards and holding paddock from the demised premises. [146] Even assuming the correctness of the factual allegation as to the plaintiff’s refusal of use, such could not amount to an interference with the defendants’ quiet enjoyment of the demised premises. Such a refusal would not be conduct occurring outside the demised premises which caused a substantial interference to the defendants’ enjoyment of and on the demised premises.104 104 Compare Tebb v Cave [1900] 1 Ch 642; Robinson v Kilvert (1889) 41 Ch D 88. -- 25 of 26 -- 26 [147] In any event, the evidence of both the plaintiff105 and that of the first defendant106 demonstrates that all that occurred was that the plaintiff insisted on the first defendant giving notice as required by the lease and that access to the yards was provided, albeit that one of the gates remained closed. [148] There was in my opinion, no interference with the defendants’ quiet enjoyment of the property. Conclusion [149] The defendants have failed to make out any breaches of the lease on the part of the plaintiff which, either alone or in combination, substantially interfered with their quiet enjoyment of the demised premises. The defendants have failed to prove that the plaintiff repudiated the lease. [150] Therefore, the defendants have failed to make out their defence against the plaintiff’s claim and have failed to prove the remaining bases for their counterclaim. [151] The plaintiff should have judgment on both the claim and the counterclaim. The plaintiff should have judgment for $28,530 for damages and $14,046 for interest.107 [152] By their agreement under the lease,108 the parties agreed that the defendants would pay the plaintiff’s costs on a solicitor and on a client basis in relation to any enforcement action for breach of the lease by the defendants. Therefore, the plaintiff claims her costs on an indemnity basis. The defendants have not made submissions on costs. It is appropriate that I hear the parties on the issue of costs before concluding what the order should be. 105 Transcript 1-18 and 1-78 to 1-80. 106 Transcript 2-52 to 2-53. 107 The agreed rate of interest under the lease is 15% per annum. Exhibit 1, tab 6, clauses 1(g) and (5). The period is 27 July 2016 to 6 November 2019 (1198 days). 108 Exhibit 1, tab 6, clause 5(f)(v). -- 26 of 26 --