BJEK Pty Ltd as trustee for the EL & SL Fogarty Family Trust v Henbury Cattle Company Pty Ltd and Others (No 3)

• Jurisdiction: Northern Territory
• Court: Supreme Court
• Judge: Kelly J
• Judgment Date: 27 October 2021
• Neutral Citation: [2021] NTSC 82
• Docket Number: FILE NO: 59 of 2016 (21631761)

[2021] NTSC 82

SUPREME COURT OF THE NORTHERN TERRITORY

IN THE SUPREME COURT OF THE NORTHERN TERRITORY OF AUSTRALIA AT DARWIN

JUDGMENT OF:

Kelly J

FILE NO: 59 of 2016 (21631761)

Between:

BJEK Pty Ltd as trustee for the EL and SL Fogarty Family Trust (ACN 105 399 675)

Plaintiff

and

Henbury Cattle Co Pty Ltd (ACN 169 887 629)

First Defendant

and

Cross Country Fuels Pty Ltd (ACN 080 235 927)

Second Defendant

and

Ashley Robert Anderson

Third Defendant

and

FAR Management Pty Ltd (ACN 065 559 613)

Fourth Defendant

and

David Rohan

Fifth Defendant

and

Neville Anderson

Sixth Defendant

REPRESENTATION:

Counsel:

Plaintiff: A Harris QC with N Floreani

Defendants: P Franco QC

BJEK Pty Ltd as trustee for the EL & SL Fogarty Family Trust v Henbury Cattle Co Pty Ltd & Ors [2019] NTSC 86; Ezekiel-Hart v Law Society (ACT) [2012] ACTSC 103; Simonson Properties Pty Ltd v Hardy [2014] NSWSC 363 referred to

Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; Fountain Selected Meats (Sales) Pty Limited v International Produce Merchants Pty Limited [1988] FCA 202; (1988) 81 ALR 397; NIML Ltd v Man Financial Australia Ltd (No 2) [2004] VSC 510 applied

COSTS — plaintiff essentially unsuccessful on both claim and counterclaim — plaintiff to pay defendants' costs of and incidental to the proceeding

COSTS — application for indemnity costs — allegations of dishonesty made without evidentiary foundation — allegations contradicted by photographic and documentary evidence — evidence drawn to plaintiff's attention and plaintiff put on notice of intended application for indemnity costs — plaintiff to pay defendants' costs of the plaintiff's claim on an indemnity basis

COSTS — different considerations applying to counterclaim — plaintiff to pay defendants' costs of the counterclaim on the standard basis to the date of the defendants' offer of compromise

COSTS — unreasonable refusal of offer to compromise damages claim for an amount less than that ultimately awarded — plaintiff to pay defendants' costs on an indemnity basis from the date of the offer to compromise

REASONS FOR JUDGMENT

(Delivered 27 October 2021)

1 In these proceedings between the owners of neighbouring cattle stations (Palmer Valley owned and operated by the plaintiff and Henbury operated by the first defendant) the plaintiff claimed:

• (a) damages for breach of a deed of settlement reached between the parties when they ceased operating Henbury together;

• (b) damages for conversion of cattle it claimed had been wrongfully retained by the first defendant;

• (c) delivery up of the plaintiff's cattle;

• (d) damages for detention of the plaintiff's cattle; and

• (e) a mandatory injunction compelling the defendants to completely muster the cattle on Henbury, to be supervised and overseen by a representative or representatives of the plaintiff.

2 The first defendant counterclaimed against the plaintiff for damages for conversion of Henbury cattle which had wandered from Henbury to Palmer Valley and had been retained by the plaintiff and the progeny of such cattle.

3 The parties had formerly operated Henbury station together; Henbury had largely been stocked by sale cattle purchased from Palmer Valley and another station owned by the plaintiff (Mt Ebenezer). Since the sale cattle bore Palmer Valley and Mt Ebenezer brands, the parties had agreed that sale cattle would be differentiated from Palmer Valley and Mt Ebenezer cattle by having red or purple floppy tags inserted in their nearside 1 ears. After the parties fell out and ceased operating Henbury together they entered into a deed which (among other things) provided for Henbury to be mustered and the drafts attended by a representative of the plaintiff who must not be Mr Ted Fogarty. 2 After Ted Fogarty attended a draft on Henbury, the first defendant conducted a draft without notice to the plaintiff; the plaintiff obtained an injunction restraining the first defendant from conducting further drafts except in accordance with a protocol specified in the injunction; and further drafts were conducted in accordance with the protocol at which cattle were called for Henbury or Palmer Valley or noted as “disputed”.

4 On 3 December 2020, following the trial of the proceeding, I made the following orders:

ORDERS:

• 1. There will be declarations that, of the disputed cattle identified in the musters since June 2016:

  • (a) all cattle with a red or purple floppy tag in the offside ear belong to the first defendant;

  • (b) all cattle with a white floppy tag in either ear belong to the first defendant;

  • (c) the four Palmer Valley branded steers with the backs of floppy tags only belong to the first defendant;

  • (d) of the 12 Mt Ebenezer branded cattle without floppy tags:

    • (i) the seven steers mustered from the area around Harts Camp belong to the first defendant;

    • (ii) the remaining cattle (four cows and one bull) belong to the plaintiff;

  • (e) of the four Palmer Valley branded bulls without floppy tags:

    • (i) the three bulls mustered at Mt Gloaming belong to the first defendant;

    • (ii) the bull mustered at Cave Hole/Three Mile belongs to the plaintiff;

  • 2. All of the other claims by the plaintiff (including the claim for a mandatory injunction) are dismissed.

  • 3. In relation to the 18 cattle which the plaintiff took possession of following the 25 June 2016 muster by Mr Crawford:

    • (a) the plaintiff is to account to the first defendant for the proceeds of sale of such cattle;

    • (b) alternatively, the plaintiff is to pay the first defendant damages of the full value of such cattle for conversion of the cattle.

  • 4. The plaintiff is to account to the first defendant for the proceeds of sale of the two “Lucy Creek” cattle which the plaintiff sold to an abattoir.

  • 5. The plaintiff is to pay damages to the first defendant of the full value of 1,500 cattle (being wandering stock and the offspring of wandering stock) for conversion of those cattle.

  • 6. The interlocutory injunction granted on 12 August 2016 is dissolved.

5 On 23 February 2021, I published a written decision on the assessment of damages which contained the following:

[43] I assess damages for the conversion of 1,143 cattle at $1,521,014 made up as follows:

• calves $ 95,121

• adult female cattle $ 644,081

• adult male cattle $ 781,812

TOTAL $1,521,014

[44] To that must be added the following amounts for the value of specific cattle which have been agreed between the parties:

• two Lucy Creek cattle $ 3,588

• 20 cattle from Crawford drafts $28,780

TOTAL $32,368

[45] That brings the total damages on the first defendant's counterclaim to $1,553,382 ($1,521,014 + $32,368).

[46] Interest on that amount to the date of judgment (23 February 2021), calculated in accordance with Rule 59.02(3) of the Supreme Court Rules 1987 (NT), will be allowed in the amount of $402,560.

6 Also on 23 February I made directions for the parties to file and serve written submissions on costs and it was agreed that I would make a decision on costs on the basis of those written submissions without the need for a further oral hearing.

7 The defendants have submitted that I should order the plaintiff to pay their costs of and incidental to the proceeding on an indemnity basis.

8 The plaintiff concedes that it would be appropriate for the Court to order the plaintiff to pay the defendants' costs of the counterclaim but not on an indemnity basis. The plaintiff contends that it should not have to pay the defendants' costs of the claim, on an indemnity basis or at all. Rather the plaintiff seeks an order that the defendants pay its costs in respect to its claim on “a party/party basis”.

9 The plaintiff contends:

• (a) that the application for an injunction was precipitated by the fact that the defendants conducted a muster on 16 and 17 June 2016, without notifying the Fogartys and the interlocutory injunction served a purpose in that after the interim injunction was granted on 12 July 2016 (and the later interlocutory injunction on 12 August 2016), the drafts proceeded according to the protocol fixed by the injunction;

• (b) it was necessary for the Court to determine the ownership of the “disputed cattle”;

• (c) the plaintiff was successful in relation to part of its claim; and

• (d) one of the causes of the difficulties the parties experienced in determining the ownership of cattle on Henbury was the fact that the defendants had not diligently transferred all the sale cattle onto the Henbury PIC. (The plaintiff contended that the defendants should not be rewarded for their failure in this regard.)

10 I do not accept these contentions by the plaintiff. The plaintiff was essentially unsuccessful on both the claim and the counterclaim and should pay the defendants' costs of and incidental to the whole proceeding.

11 The basis for the granting of the injunction was an allegation by the plaintiff, which turned out to have no evidentiary basis, that the defendants had dishonestly dealt with Palmer Valley cattle in an attempt to steal them. There is no reason why the plaintiff should not pay the defendants' costs of the injunction.

12 In the main proceeding, the plaintiff made the following categories of claim against the defendants:

(1) The Orange Creek mob

13 The first category of disputed cattle consisted of cattle which Mrs Fogarty says she saw on Henbury on 22 June 2016. The plaintiff failed to establish the facts underlying its claim that the defendants converted cattle associated with the Orange Creek mob and this claim was unsuccessful. 3

(2) Cattle classed as “disputed” in the 2016 and 2017 drafts after 22 June 2016

• Beasts with red or purple floppy tags in the offside ear

14 The next (and largest) category of disputed animals comprised 144...