Grunt Labour Services Pty Ltd v Mulber Pty Ltd
[2004] QDC 68
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- Grunt Labour Services Pty Ltd v Mulber Pty Ltd[2004] QDC 68
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Grunt Labour Services Pty Ltd v Mulber Pty Ltd[2004] QDC 68
Grunt Labour Services Pty Ltd v Mulber Pty Ltd[2004] QDC 68
DISTRICT COURT OF QUEENSLAND
CITATION: | Grunt Labour Services Pty Ltd v. Mulber Pty Ltd [2004] QDC 068 |
PARTIES: | GRUNT LABOUR SERVICES PTY LTD (Plaintiff) v. MULBER PTY LTD (Defendant) |
FILE NO/S: | D1313 of 2002 |
DIVISION: | Civil |
PROCEEDING: | Trial |
ORIGINATING COURT: | District Court Brisbane |
DELIVERED ON: | 5 April 2004 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 16,17,18, & 19 of March 2004. |
JUDGE: | Forde DCJ |
ORDER: | Judgment for the Plaintiff in the sum of $89,697.00 Judgment for the Defendant in the sum of $67,967.00 |
CATCHWORDS: | Breach of contract – misleading and deceptive conduct – contract to provide labour and supervise mango harvest – counter claim for failing to harvest in a proper manner – lack of proper supervision – question of contribution by landowner – whether workers were independent contractors or employees of the Plaintiff – damages for breach of contract. Trade Practices Act 1974 ss. 51A,52; Equity Access Pty Ltd v Westpac Banking Corporation (1990) ATPR 40-994. James v ANZ Banking Group Ltd (1986) 64 ALR 347. Western Australia v Bond Corporations Holding Ltd (1991) ATPR 41-081. Watson v Foxman (1995) 49 NSWLR 315 at 318-9. Astley v Austrust Ltd (1989-99) 197 CLR 1. Hollis v Vabu Pty Limited [2001] 207 CLR 21. Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313. Hadley v Baxendale (1854) 9 Ex 341. Hardware Services Pty Ltd v Primac Ass. Ltd. (1988) 1 Qd R 393. |
COUNSEL: | Mr R Myers for the Plaintiff Mr M Martin for the Defendant |
SOLICITORS: | Carter Newell Lawyers Charlton’s Lawyers |
Introduction
- [1]The Plaintiff, Grunt Labour Service Pty. Ltd., claims monies owing under an agreement to provide labour to the Defendant, Mulber Pty Ltd. The Defendant was a grower of mangoes and the Plaintiff contracted to harvest the mangoes by providing the necessary labour. The work was carried out between 24 December 2001 and 8 February 2002 on properties owned by the Defendant in the Bundaberg district.
- [2]The Defendant concedes that the sum owing to the Plaintiff under the said agreement for the 2001-2002 harvest is $89,697.19. There is a counter-claim by the Defendant alleging that the Plaintiff was in breach of the said agreement by employing inexperienced pickers and failing to properly supervise the harvest. The claim is pleaded also in negligence and as a breach of s. 52 of the Trade Practices Act. The quantum of the counter-claim as amended during the trial is $67,967.00. The basis of the counter-claim is that because there was excess sap on the mangoes a greater percentage of mangoes were sent for juicing than would otherwise be sent.
- [3]A related issue is whether the Plaintiff had agreed to supervise the harvest or whether the principal of the Defendant company, James Lyne, was the field supervisor for the harvest and so was responsible for supervising the Plaintiff’s pickers. The Plaintiff also contends that the workers were not employees but independent contractors for whom it is not liable.
Nature of the Agreement
- [4]The agreement as pleaded is:
“3. In or about December 2001, at Bundaberg in the State of Queensland by an agreement made partly orally and partly in writing it was:
- (a)Orally agreed between one Ken Watton on behalf of the plaintiff on the one part and the Defendant on the other part that the plaintiff would provide experienced labour including supervisors suitable for the management, harvesting and packing of mangoes (“the work”) for the Defendant for reward the rate of which varied during the course of the work.
- (b)In so far as it was made in writing, the agreement was contained in or is to be inferred from the following documents or some or one of them:
- (i)letter from the Plaintiff to the Defendant dated 15 November, 2001.
- (ii)agreement to hire dated 10 December, 2001.
- (iii)letter from the Plaintiff to the Defendant dated 14th January, 2002 (“the agreement”).
4. It was an (sic) implied term of the agreement that the plaintiff and its agents would carry out the work in a good and proper manner and exercise reasonable care in the performance of the work”.
The “first meeting”
- [5]There was a telephone call between Mr. Watton and Mrs. Lyne prior to the first meeting but nothing turns on it. The first meeting relevant to a binding contract was between Mr. James Lyne and Mrs. Lyne on behalf of the Defendant and Mr. Ken Watton on behalf of the Plaintiff. Mr. Watton was the area sales manager for the Plaintiff. It occurred in mid November 2001 in the kitchen of the home of Mr. and Mrs. Lyne who gave evidence that Mr. Watton promised that experienced labour would be provided. Mr. Lyne said that he would not be able to be in the orchard as he was to be involved in the packing shed and the machinery. They said that Mr. Watton agreed to provide supervisors.
The “second meeting”
- [6]This meeting occurred in early December at the home of Mr. and Mrs. Lyne. Mrs. Lyne said Mr. Watton confirmed the earlier arrangements. Exhibits 6 and 7 were agreed upon. Mr. Lyne said that the method of harvesting was discussed. Mr. Lyne stated that he told Mr. Watton that “we would require them to be harvested with a 10 millimetre stalk and to be snipped off”. Mr. Lyne agreed to supply buckets, mango wash and the gear to use in picking.
- [7]Mr. Watton gave evidence that he spoke to Mrs. Lyne on the telephone in the first instance. He said that at the first meeting the Plaintiff would provide the:
“workers for the farm with the best experience if we can find them and that we’d do all the administration for the farm and that the only thing they’d have to do was the paperwork with the time sheets…”.
He denied Mr. Lyne mentioned that he would not be in the orchard working. Mr. Watton said that Mr. Lyne was to “look after them (the workers) the same as every farm”[1]. Then subsequently, Mr. Watton stated (178.50) :
“Well, he’d say in the previous year there was a supervisor in the field and that they hadn’t done a good job but what I said was that we’d put a crew supervisor in charge of each of crew so that the field supervisor could actually talk to them instead of trying to talk to 20 or 30 people and passing on the information. From what I can gather, Jim was going to be the field supervisor.”[2]
- [8]Mr. Watton in his evidence in chief agreed that Mr. Lyne never agreed to be the field supervisor. The evidence of Mr. Watton as to his understanding does not coincide with the actual conversations. I accept the evidence of Mr. and Mrs. Lyne where it contradicts that of Mr. Watton. I find that the Plaintiff undertook as part of the agreement to provide the necessary supervisors in the field. Whether that involved one of the more experienced supervisors as the field supervisor was not discussed. What Mr. and Mrs. Lyne were led to believe was that there would be adequate supervision in the field by the Plaintiff. That finding is supported by the following evidence also:
- (a)The letter 15 November 2001 whereby the Plaintiff was to charge for a supervisor loading per bin picked.[3]
- (b)Exhibit 7 which reflected the changes suggested by Mr. Lyne and clearly sets out the additional duties of the supervisors. It required the supervisors to properly train any new pickers, direct as to the care and handling of the fruit and use of the mango wash/soap.
- (c)The invoices rendered which included bonuses for the supervisors and the field supervisor Mr. Macklin.[4]
- (d)The evidence of Mr. Macklin which clearly established to my satisfaction that he performed the role of field supervisor by checking on picking, water and loading from time to time and discussing problems with the other supervisors including Mr. Dennis Sullivan and Mr. Wayne Thatcher.[5] The fact that he was formally appointed late in the harvest is, I find, a belated recognition by Mr. Watton that a field supervisor was necessary apart from his own visits.
- [9]Therefore, the evidence of the manner of picking and problems with sap has to be considered in light of the finding that the Plaintiff undertook as part of its agreement with the Defendant that it would properly supervise the harvest.
Nature of the harvesting
- [10]Evidence was given by different persons involved in the harvesting, picking and marketing of the mango crop. Mr. Peter Richards, who worked with Moraitis Wholesale, visited the farms during the growing and harvesting period. He was of the view that the crop was a “very, very good” one. He complained to Mr. Lyle a short time after the initial two days harvest was delivered to Brisbane. He went to the orchard and observed poor harvesting methods. The mangoes were falling to the ground, there were long stems, the sap was not being directed away from the mangoes, and there were low levels of water for the mango wash. He was of the view that supervision was poor. He expected that only some 8-10% of the crop would normally be sent for juicing.
- [11]Similar evidence was given by Mr. Michael Keyworth and Peter Wardlaw. The former was an advisor on the caring of fruit and had his own orchard. He was familiar with the Defendant’s crop which he described as “excellent on the trees”. He noticed a lot of sap on the mangoes in the shed. He described the method of picking as poor. This included leaving the fruit on the ground and delays in desapping, breaking off the stem haphazardly, pickers covered with sap, indicating poor technique, fruit falling to the ground and debris in the fruit. He used virtually the same method of harvesting as that used by the Defendant. He described this as follows (99.9(f)):
“The evidence in this proceeding is that the method which Mr. Lyne wanted adopted was the removal of the mangoes from the tree with a long stem on it of 10 centimetres and then the cutting with a pair of secateurs of the stem down to about three-eights of an inch to 10 millimetres with the mango held upside down, and then the sap would come out of this little stub? –Yep.
And the mangoes were -----? – That is ideally the best way to do it, even though sometimes they will still just snap the stem off almost flush with the fruit.
Sorry, I left one step out. The mangoes are then placed in mango wash before -----? -- On the tray.
No, before the stem is cut, taken out of the mango wash, then cut, and the sap is meant to come out and then they are placed in a tray. Now can you comment on that method of desapping the mangoes? – Septone Mango Wash has been used fairly heavily now for six or seven years, it is the major ----
What is that method of desapping? – Once that moisture is over that fruit, any chance of any sap burn is almost negated because of the dilution effect of the mango wash and the water coming around the fruit.
So do you see any difficulties if that method is adopted? --No. Been doing it for years.”
- [12]Mr. Keyworth was of the opinion that 5-10% of the crop was acceptable for juicing. This may be for different reasons. He stated that the obligation should be on the grower. Of course, that depends on the contractual obligations of which he was not aware. Mr. Keyworth was told by the Plaintiff’s representative that they were bringing trained labour from Darwin. That statement coincided with what Mr. Lyne was told. Mrs. Lyne had given Mr. Watton a list of acceptable workers and these were also employed. The balance came through the Employment National in Bundaberg. No audit was done to verify that the workers were in fact experienced except that they may have told Mr. Richard Jillette that they were experienced. He was working for Employment National at the time and now works with the Plaintiff. He took what they said at face value with no reference checks. Although they were interviewed by Mr. Watton, he himself had had no experience with mango picking. Therefore, it is open to find that in relation to those workers not nominated by Mrs. Lyne that the Plaintiff’s agent, Mr. Watton, had no reasonable basis for thinking that about half the workers were experienced. Even if questions were asked about the type of mangoes picked in the past, the methods used or the length of the experience, neither Mr. Watton nor Mr. Jillette were properly qualified to assess the information. There were some workers from Darwin who may have been experienced. Also, Mrs. Lyne nominated some workers who had previously worked for them.
- [13]One comment which Mr. Keyworth did make is that he would not put mangoes with long stems in the bins. He was of the view that there was a lack of supervision on the job.[6] I generally accept his evidence and that of Mr. Richards.
- [14]The evidence of Mr. Wardlaw adds to their evidence. Mr. Wardlaw was in market research.. He had inspected the Defendant’s crop in October and described it as “very good and promising”. In January, he observed that there was a lot of sap burn and that the harvest was not being carried out correctly. He saw contaminated water being used and no water at all. Mr. Lyne accepted that for a day or two there was no water early in the pick. Mr. Wardlaw saw mangoes being dropped out of the tree. His company did not purchase any fruit. He was of the view that the fruit if it had been picked and graded as expected as premium fruit then the price would have been $16-22 per tray. This latter evidence was not really disputed. I accept his evidence. In cross examination, he stated that the mangoes should be washed virtually straight away to avoid sap burn. He saw no proper supervision.
- [15]Finally, there is the evidence of Mr. Bock. He was a broker for Fresh Direct a division of Carter and Spencer. They purchase for Coles. He carried out regular visits to the Defendant’s farms. He said that it was a “stand out crop”. He had been prepared to purchase 5000 trays and ended up buying only 500. He observed sap burn and marks of all kinds on the mangoes in the bins.
Evidence of Mr. Macklin
- [16]Mr. Peter Macklin was employed initially as a picker then after speaking to Mr. Watton was made a supervisor. Mr. Macklin had limited experience as a picker. He had picked in the 1984-5, 1988-9 and 1991 seasons. He had a certificate in horticulture and other qualifications but there was no attempt to relate them to knowledge or experience with mangoes. Mr. Macklin was an eloquent witness. He stated that Mr. Lyne said that he would be taking care of running things. Mr. Lyne explained the method of picking. Mr. Macklin was critical of various aspects of the method of picking including defective poles, lack of racks, picking dry in the first instance, fruit being left on the ground, not enough buckets for water, problems with stem lengths and problems with loading given the longer stem lengths. Many of these problems could have been solved, I find with proper supervision. Mr. Macklin was a crew supervisor and subsequently a field supervisor. Findings have been made with respect to the obligations of the Plaintiff in this regard.
- [17]There are some aspects of the evidence of Mr. Macklin which makes his evidence somewhat unreliable. Firstly, he said that he was instructed to cut the stem before putting the mango in the water and allow the squirt to happen whilst washing. This inevitably would pollute the water and leave sap on the skin. No other witness supported this system. Secondly, Mr. Macklin said that initially the stems were to be cut below the knuckle but later a longer stem was to be left above the knuckle to avoid sap burn. This of course would not have allowed proper release of the sap. No other witnesses were called to support this version nor was the length of the stems commented upon by any of the Defendant’s witnesses. It was denied by Mr. Lyne as something he had instructed. Thirdly, in cross examination Mr. Macklin suggested that he had spoken to Jay Lyne about the manner in which the mangoes were being loaded. Jay Lyne was the son of Mr. Lyne and was responsible for picking up the mangoes after they were desapped and also providing water to the teams for washing The longer stems were being broken causing sap to cover other mangoes in the bins. This was never put to Jay Lyne. Overall, I found the evidence of Mr. Macklin to be unreliable on the harvesting processes.
Findings on harvesting
- [18]It is clear on the evidence that the harvest was carried out by some persons who were not experienced as mango pickers. The mangoes had excessive amounts of sap and were left exposed to sap or sunlight for periods in excess of what is normal. There was a failure to desap and wash in a good and proper manner and in accordance with good practice. There was certainly, I find, a failure to properly supervise on the part of the Plaintiff’s supervisors. They were paid to supervise. Mr. Watton contracted on behalf of the Plaintiff that there would be proper supervision. One supervisor had no idea according to Mr. Lyne what to do. I accept his evidence in that respect. Mr. Lyne had complained about the poor picking standards and offered to pay more per bin for a better job. Mr. Watton accepted an extra $16.00 per bin but the standard of the picking did not improve. The evidence of Mr. Macklin confirms that lack of supervision was seen as a factor and belatedly he was made a field supervisor. The case put to the Plaintiff’s witnesses was that Mr. Lyne was the field supervisor. As discussed, the documents produced and the agreement with Mr. Watton point in the opposite direction. I find that Mr. Watton should have paid closer attention to the problems at an earlier stage and either supervised the work himself or appointed someone to be the field supervisor at an earlier stage. The picking and supervision was done by the Plaintiff’s workers in a negligent manner and in breach of its contractual obligations.
Conduct of Mr. Lyne
- [19]Although I am satisfied that the obligation to supervise fell to the Plaintiff, the parameters set by Mr. Lyne changed. For example, initially there was a dry pick. Mr. Lyne accepted in cross examination that there were some problems leaving mangoes on the ground. Extra trays had to be provided. This may have been avoided if the supervisors had been more astute. Some 300 trays were found by Mr. Lyne and Mr. Macklin sitting in a paddock. Then, Mr. Lyne changed the requirement as to the length of the stem according to Mr. Macklin. I have difficulty accepting Mr. Macklin’s evidence in some aspects. Mr. Lyne accepted that he instructed that the length be three eights of an inch or 10 millimetres. Subsequently, Mr. Lyne introduced a detergent called Tepol to try to avoid the sap problem. This commenced after the third or fourth day because of the problems with the sap.
- [20]Mr. Lyne was willing to make concessions concerning the problems which he faced during the harvesting. He rejected the propositions that the secateurs on the poles were defective. It does little credit to the Plaintiff’s case in this respect as one of its workers was entrusted with maintenance of the secateurs. Mr. Lyne also rejected the proposition that he instructed the pickers to cut the stems then let them squirt into the water and wash them. The latter evidence was given by Mr. Macklin. No other witness supported him on that issue. The washing prevented the sap from getting on the skin of the mango after it was desapped. It would be highly unlikely that someone of Mr. Lyne’s experience would want his pickers to contaminate the water by squirting the sap into the water. He was also well aware that if the stem was cut above the knuckle then the spray sap would not be able to be got rid of. His instruction was, I find, that the mangoes be washed before the desapping occurred, that the stem be cut above the knuckle and that they were then supposed to be placed with stem down on a 45 degree angle in the tray or rack.
- [21]The video evidence[7] which Mr. Lyne confirmed as his instructions to the pickers was, I find, generally an appropriate method of harvesting. It was not really contested by the Plaintiff’s expert Ms. Piccone as inappropriate. Her concerns were about the sap dripping into the wash and the need to use a detergent. Unfortunately, the opinions given by Ms. Piccone relied upon versions of the harvesting of the Plaintiff’s workers whom were not called and the evidence of Mr. Macklin in whose evidence in relation to the harvesting methods and processes I have rejected. For example, the length of the stem prior to desapping assumed by Ms. Piccone was 8 to 30 millimetres. She also incorrectly observed that the sap was let drip into the water bucket on the video. Her evidence is of little assistance. Her report is marked Exhibit 35. It was not tendered. It was exhibited to an affidavit. It was perhaps an oversight that it was not tendered. Ms Picone was cross-examined on her report. There were objections and I have had regard to those in these reasons. I reject the evidence of Mr. Macklin on the point that he was instructed that the mangoes be washed in the water just after the stem was cut. If this was the practice which he adopted, it reflects on his lack of experience and failure to properly supervise. Whatever the changes of instructions, I find that the substantial cause of the problems with the sap burns to the mangoes was the lack of supervision of workers by the Plaintiff’s supervisors entrusted with the job of supervision.
Trade Practices Act – Section 52.
- [22]This provision provides:
“(1) A corporation shall not, in trade and commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”
It is not disputed that the Plaintiff is a corporation involved in trade and commerce. The Plaintiff’s counsel in his written submissions refers to the principles conveniently summarised in Equity Access Pty Ltd v Westpac Banking Corporation[8]:
“For conduct to be misleading or deceptive the conduct must convey in all the circumstances of the case a misrepresentation…”
In the present case, the misrepresentations as pleaded are:
“11(a) The plaintiff represented to the Defendant that it would supply labour and supervisors experienced in harvesting and/or packaging of mangoes to manage the harvesting as alleged in paragraph 3 hereof;
(b) the plaintiff agreed to the implied term alleged in paragraph 4 aforesaid.”
- [23]It is difficult to know how agreeing to an implied term “that the work be carried out in a good and proper manner” etc. can amount to a misrepresentation unless at the time that the misrepresentation was made it was known that it was not practicable to achieve it due to lack of skills or workers. Paragraph (a) is more about a future act. In his written submissions, counsel for the Defendant recognised this feature of the pleading. Reference was made to s.51A of the said Act. This section provides as follows:
“(1) For the purposed of this Division, where a corporation makes a representation with respect to any future matter (including the doing of , or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.
(2)For the purposes of the application of sub-section (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation”.
- [24]The mere fact that representations as to future conduct or events do not come to pass does not make them misleading or deceptive: James v ANZ Banking Group Ltd[9]. At the time that the agreement was made, the Plaintiff had the ability to obtain experienced pickers and to provide proper supervision. Mr. Watton could have carried out the instructions of Mr. Lyne once he realised there were problems in relation to supervision I am not satisfied that the provisions of s. 51A has been established. In any event the section was not raised in the Further Amended Defence and Counter-claim in a clear manner. It did not put the Plaintiff on warning that it ought to have pleaded that it had reasonable grounds for making any representation: Western Australia v Bond Corporation Holdings Ltd[10] . The claim under the Trade Practices Act fails.
- [25]Counsel for the Plaintiff did not deal with s. 51A in his written submissions. However, he argued that the provisions of s. 52 had not been established. For completeness, I find that the representations made at the time of the formation of the said agreement were not misleading or deceptive. At the relevant time there was no misrepresentation by Mr. Watton. Thereafter the labour was chosen and the arrangements for supervision were made. Mrs. Lyne believed that Mr. Watton would be involved as a field supervisor. To some extent he tried to rectify problems raised by Mr. Lyne but not to the extent necessary to be efficient and effective. It does not follow that any representations made were deceptive or misleading within the meaning of s. 52: Watson v Foxman[11].
Breach of Contract and the conduct of Mr. Lyne
- [26]It has already established that there was a breach of contract and negligence on the part of the Plaintiff in terms of paragraph 5 of the Further Amended Defence and Counter-claim. It is not necessary to deal with the negligence aspect. The causes of action in contract and in tort are concurrent. Damages awarded pursuant to a claim in contract cannot be reduced by reason of conduct that constitutes contributory negligence for the purposes of the apportionment legislation: Astley v Austrust Ltd[12]. The important question which was decided in that case was whether the contributory negligence of the plaintiff also required the apportionment of damages between the plaintiff and the defendant where the plaintiff has sued in contract in circumstances where he or she had, or could have, sued in tort. The High Court (by a majority) stated[13]:
“Absent some contractual stipulation to the contrary, there is no reason of justice or sound legal policy which should prevent the plaintiff in a case such as the present recovering for all the damage that is causally connected to the defendant’s breach even if the plaintiff’s conduct has contributed to the damage which he or she has suffered. By its own voluntary act, the defendant has accepted an obligation to take reasonable care and, subject to remoteness rules, to pay damages for any loss or damage flowing from a breach of that obligation.”
- [27]It has been suggested by the Plaintiff’s counsel that Mr. Lyne was in fact the field supervisor. That it was Mr. Lyne who undertook to carry out the tasks of the field supervisor. I have made findings to the contrary earlier in this judgment. However, to the extent the method of harvesting contributed to the extent of the damage suffered by the Defendant, it is not relevant to the claim in contract. The breaches of contract by the Plaintiff have been found to have substantially caused the losses suffered by the Defendant. It is unnecessary to decide to what extent any negligence by Mr. Lyne contributed to the losses save that it was not substantial. A material cause of the losses and in fact the substantial cause was the failure to properly supervise the pickers some of whom were inexperienced. Had it been necessary to assess the contribution by Mr. Lyne it would not have exceeded 10%. The absence of water for a couple of days, lack of trays, which were later provided and a load of buckets were due to the Defendant’s oversights.
Independent contractors or agents
- [28]The Plaintiff seeks to avoid any liability on the further ground that it was not responsible for any actions by its independent contractors. This can only relate to the pickers as Mr. Watton was the area sales manager. To the extent that there was a failure to supervise, the Plaintiff would be liable for any default by Mr. Watton. This was not the subject of separate submissions by either party. However, from the evidence of Messrs. Keyworth, Richards, Lyne, and Wardlaw which I have accepted the failure to supervise was the main factor apart from the inexperience of the labour. Some of this failure was due to the crew supervisors viz. Messrs. Macklin, Sullivan and Thatcher. Mr. Wardlaw had overall control of these workers.
- [29]The letters from the Plaintiff to the Defendant evidencing the agreement refers to the labour as independent contractors. The following matters ought to be taken into account in determining this issue from a factual basis:
- (a)The hired labour were paid by the Plaintiff
- (b)They were told by the Plaintiff where and when to attend work
- (c)The rules applicable to them (Exhibits 6 and 7) were agreed to by Mr. Watton on their behalf
- (d)Mr. Watton attended regularly and spoke to the workers and gave directions following complaints from Mr. Lyne
- (e)The Plaintiff had power to dismiss any worker. In fact, Mr. Macklin as a supervisor did just that. If he was an independent contractor, how could he dismiss another independent contractor?
- (f)The increase in bin charges to the Defendant was negotiated by Mr. Watton during the course of the harvest.
- (g)Mr. Watton appointed Mr. Macklin as the field supervisor towards the end of the harvest.
- (h)Mr. Macklin as crew supervisor changed his crew during the course of the harvest.
- (i)The workers did not provide any equipment except Mr. Macklin who brought along a copper brush.
- (j)The manner of harvesting was supervised by the Plaintiff and instructions issued by Mr. Lyne from time to time.
- (k)The remunerations to the workers was based on a per bin amount.
- (l)As part of its service to customers, the Plaintiff ‘s hire rate for labour included Workcover, Payroll Tax, Superannuation, Taxation and Payroll Administration an Public Liability Insurance for each worker.
- [30]The decision of the High Court in Hollis v. Vabu Pty Limited[14] is of some assistance in determining this issue. In that case a courier company engaged individual bicycle couriers to deliver articles. A person was injured by the negligent act of a courier. The injured person sued the company. The company paid couriers by fixed rates. It deducted a certain amount from their remuneration to contribute towards the cost of insurance. The couriers were required to use their own bicycles, but the company provided radio equipment and it allocated jobs by radio. It directed them to conduct their work in accordance with specific instructions concerning dress, appearance, language, delivery procedures and dealing with clients. The couriers were able to deal with the company as sole traders or members of a partnership or by means of their own companies. The latter feature was not evident in the present case. Also, Exhibits 6 and 7 set the parameters for the conduct and duties of the workers.
- [31]It was held that the company was vicariously liable for the negligent act of the bicycle courier on the grounds that the courier was an employee of the company or[15] that the courier was not an employee or independent contractor of the company but an agent acting within his authority as its representative in carrying out its contractual obligations for its benefit. The majority stated also that in general under contemporary Australian conditions, conduct of an enterprise which persons are identified as representing that enterprise should carry an obligation to third persons to bear the cost of injury or damage to them which may fairly be said to be characteristic of the conduct of the enterprise[16].
- [32]The High Court pointed out that:
“Terms such as “employee” and “independent contractor”, and the dichotomy which is seen as existing between them, do not necessarily display their legal content purely by virtue of their semantic meaning”.[17]
Thus, the use of the term “independent contractor” in the contractual documents is not decisive of the legal meaning and its consequences. McHugh J. in Northern Sandblasting Pty Ltd v Harris[18] stated that :
“The rationale for excluding liability for independent contractors is that the work which the contractor has agreed to do is not done as the representative of the employer.”
- [33]The “control” test is but one of the matters which is relevant to the question of vicarious liability.[19] One has to look at the totality of the relationship. The present case shows that the pickers did not provide their own equipment, they were told where to be and what to do, they did not have the independence to just pick where they chose. It was the subject of supervision and direction. The rules to which they agreed and are evidenced by Exhibit 6 and 7 show that they were subject to tight control as to how they conducted themselves and how they carried out the task. They had little control as to the manner of performing their work. They were required to work specific hours and according to Mr. Macklin not persisted with if they had the wrong work ethic. The skill which the pickers were supposed to have was of a limited nature. It could not be considered akin to a trade or profession. They were subject to reprimand and dismissal by the Plaintiff or Mr. Lyne for that matter. The latter did not exercise that power. The workers did not seem to be part of the bargaining process either initially or later to determine the bin payments. The fact that Mr. Lyne gave instructions from time to time can be seen as part of his prerogative as the owner of the farms.
- [34]It could not be said that the individual picker was conducting any business of his or her own. I find that the relationship between the Plaintiff and each worker was one of employer and employee. Alternatively, the workers were acting as agents for the Plaintiff within their respective authority as its representative in carrying out its contractual obligations for its benefit. In either case, the Plaintiff is vicariously liable for any breach of those contractual obligations.
Quantum of Damages
- [35]The Further Amended Defence and Counter-Claim contains the following particulars:
“POTENTIAL INCOME IF MANGOES HAD NOT
BEEN SAP BURNT BEYOND ACCEPTABLE
LIMITS
69.23 Bins for juicing at 419 Kilograms per bin at 40
cents per kg. = $11,604
83.5 Bins at 419 Kilograms per bin at $16 per 6.8 kg
tray = $82,321
$93,925
ACTUAL MANGOES SENT FOR JUICING
152.73 Bins at 419 Kilograms per bin at 40 cents per kg = $25,958
Loss $67,967”
- [36]The format of the claim has been changed for convenience. The total number of bins produced by the Defendant for the 2001-2002 season was 692.29. It is accepted by the Defendant that in the ordinary course of things up to 10% of the mangoes in the bins could be sent for juicing due to sap burn and other markings. Blemishes are a separate issue. Mangoes affected by blemishes are usually downgraded not sent for juicing. Therefore, the next step is to deduct 69.2 bins for juicing from the total of 152.73 which were actually sent for juicing. The total income received was $25,958.00[20]. The Defendant’s case is that if the crop had been harvested in a proper manner then the losses to juicing would have been 10% or less. The loss is the difference between the acceptable level of bins for juicing (69.23) add the income lost for premium mangoes (83.5 bines at $16 per 6.8 kg tray) and the income received from the actual number of bins sent (152.73 bins)
- [37]The Defendant subject to proving its case is entitled to the amount of $67,967 based upon the ordinary principles of breach of contract. The rule in Hadley v Baxendale[21]provides:
“We think the proper rule in such a case as the present is this: where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonable be considered either arising naturally, i.e. according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.” (per Alderson J.)
- [38]The Plaintiff in its arguments has implicitly accepted the methodology adopted by the Defendant. Also, the arithmetic is not challenged. The challenge by the Plaintiff is much more fundamental in relation to quantum. It must be remembered in approaching the task that once there has been some substantial loss shown to have occurred as a result of the Plaintiff’s breach, the fact that an assessment is difficult is not a reason for awarding nominal damages only: Hardware Services Pty Ltd. v. Primac Ass. Ltd.[22]
Plaintiff’s case on quantum
- [39]There has been no allegation that the Defendant has failed to mitigate its loss. The argument is that Defendant through Mr. Lyne adopted an inappropriate manner of harvesting and that it has failed to discharge the burden of proving that it has suffered any losses referable to any breach by the Plaintiff. Reference was made to the Summary of Receival Assessments (Exhibit D). Objection was taken by Counsel for the Defendant to that summary. It does reflect the figures which are contained in Exhibit 33. Therefore, Exhibit D becomes Exhibit 34. What Exhibit 34 shows in relation to Lyne Harvesting is that some 44.29% of mangoes chosen was affected by sap. Counsel for the Defendant made the point that the figures are only a sample of the total. For example, only 50 are taken as a sample whereas each bin contains 450 mangoes approximately. It is not a complete assessment of every mango. To that extent the figures must be limited. The figures must have some validity as they were prepared as part of the Defendant’s operations in the shed.
- [40]Another issue which must be addressed at this stage is to distinguish between mangoes which have blemishes and those with sap burn. Mangoes which are marked or blemished are not usually sent for juicing. They are downgraded from premium grade to grade 1, 2 or 3. Mangoes which are affected by sap are usually, but not always, sent to juicing. Counsel for the Plaintiff made the point that during the first days of production in December that a large number of bins were sent for juicing.[23] It was accepted in argument[24] that the Defendant had 21% of its crop affected by sap burn. Exhibit 23 is the basis for that concession. It contains a summary of the Reject Analysis Sheets of the Defendant. The Defendant has accepted that it for the purposes of the case that it would allow 10% as an acceptable loss for juicing. Expert evidence allowed from 2% (Ms. Piccone) to 10% (Mr. Keyworth and Mr. Richards). The higher figure would include juicing due to other factors such as disease. The subject crop did not suffer from disease. It is not contested that the Defendant’s crop was a good one on the tree. Therefore, to concede that some 10% of that crop would be expected was a generous concession. It allows one to be more definite that any other defects which still allows juicing and which are not the fault of the Plaintiff have been accommodated as part of the 10%. It was not established through any witnesses that a rate greater than 10% for juicing was justified if the picking was done in a workmanlike manner.
- [41]Counsel for the Plaintiff made the point there has been excessive quantities of mangoes for juicing in the previous season. Mr. Lyne stated that this was due to problems with the grading machine. Perhaps that is why he wanted to remain in the shed during the 2001-2 season. In fact according to Mr. Watton the problems continued that season. This really confirms why Mr. Lyne wanted to stay close to the shed. The shed supervisor could not be expected to fix any machinery. She had experience on the line only according to the evidence. In the circumstances of this case, high levels of juicing in the previous season do not assist in determining the levels for the 2001-2002 season.
- [42]Another issue raised by the Plaintiff is that other growers had lower or greater levels of sap problems. Only two other growers were dealt with in any detail. Mr. Keyworth said that he obtained the services of relatives and friends when he was picking. He had only a small orchard compared to the Defendant which had 9,000 trees. He obviously took extra care in further cleaning with mango wash just before the mangoes went into the shed. However, he left his mother in law to supervise. Her expertise and ability to supervise was not the subject of evidence. Obviously from the figures not all mangoes which are affected by sap go to juicing. Mr. Keyworth’s crop was affected to the extent of 46.85% yet some 33.14% went for juicing. In so far as the Defendant was concerned there was some 44.29% affected by sap yet according to the sample in the Receival Assessments (Exhibit 34) it was 38.57%. This figure may include juicing of mangoes for reasons unrelated to sap burn. Those figures perhaps reflect the inaccuracies of the sample testing which was a point made by the Defendant’s counsel. The more accurate figures are to be found in the Reject Analysis sheet (Exhibit 23). These figures were recorded in the shed. This figure as far as the Defendant is concerned for juicing due to sap burn is not disputed and is 21%. This is the figure which it is intended to act upon. Other factors may have increased the amount sent for juicing.
- [43]A more direct comparison was made with the farm of Mrs. Glennis Purdy. Her orchard contains some 450-550 trees. She engaged the Plaintiff company to carry out her picking. Mrs. Purdy believed that the pickers for her crop had come from the Defendant’s farms. She was involved in the field with them. She made sure that there was plenty of water and mango wash to wash the fruit and their hands.[25] The involvement of Mrs. Purdy particularly in relation to proper washing seems to distinguish her harvesting from that of the Defendant’s. The problems for the Defendant in that regard have been discussed. It is noted that the mangoes affected by sap for Mrs. Purdy was 28% . The amount sent for juicing was 8.66%. What that evidence proves is that the quality of supervision by the Plaintiff was poor. It does not detract from the general view which I have taken that if the Defendant’s crop had been harvested in a workmanlike manner then it could have expected that the amount of the crop which would have been juiced would have been less than 10%.
Findings on Quantum
- [44]Based upon the evidence as accepted the following findings are made:
- (a)Defendant’s crop of mangoes on the trees was a good crop.
- (b)In the ordinary course of harvesting, a juicing level of around 10% was to be expected.
- (c)The level of juicing due to sap burn which was recorded was 21%.
- (d)The number of bins for juicing over and above that accepted as usual is 83.5 or 12% of the total crop of 692.3 bins. That is 1% more than the 21% referable to the amount recorded as sent for juicing. The discrepancy is not significant. The Defendant was generous with its concession of 10% in any event given the expert evidence ranges from 2-10%.
- (e)The loss of income from sales of premium to lower grade averages out at $16.00 per tray (Exhibits 30, 31 and 32). This figure was not disputed.
- (f)The Defendant is entitled to as assessment of quantum in terms of Paragraph 9 of the amended counter-claim viz. $67,967.00
Orders
- Judgment for the Plaintiff against the Defendant in the sum of $89,697.19 together with interest at the rate of 10.5% per annum for the period from 8 March 2002 until judgment.
- Judgment for the Defendant against the Plaintiff on the counter-claim in the sum of $67,967.00 together with interest at the rate of 10.5% per annum for the period from 30 January 2003.
- The question of costs is reserved for further submissions.
Footnotes
[1] Transcript (178:38)
[2] Transcript (178:50)
[3] Part of Exhibit 4.
[4] Invoices 558 & 570 of Exhibit 4.
[5] Transcript (225:15;226:35-46;229:1-230:30;236:1).
[6] Transcript (115:24).
[7] Exhibit 9.
[8] (1990) ATPR 40,994 at 50,950.
[9] (1986) 64 ALR 347 per Toohey J.
[10] (1991) ATPR 41-081 at 52,279 per French J.
[11] (1995) 49 NSWLR 315 at 318-9.
[12] (1998-99) 197 CLR 1.
[13] Ibid p37.
[14] [2001] 207 CLR 21.
[15] (per McHugh J)
[16] Ibid p40.
[17] Ibid p38.
[18] (1997) 188 CLR 313 at 329-330,366.
[19] Hollis op cit. p41.
[20] Exhibit 10.
[21] (1854) 9 Ex341 at 354.
[22] (1988) 1 Qd.R. 393 at 400.
[23] Exhibit 22A.
[24] Transcript (275:5).
[25] Transcript (189:10).