Hobbs v Oildrive[2008] QSC 45

SUPREME COURT OF QUEENSLAND

1. On 7 November 2001, Mr Matthew Haller was slashing grass on the front paddock of the defendant’s mango farm, which fronted the Giru-Woodstock Road. Periodic slashing of grass was part of the farming activity ordinarily conducted by the defendant on its farm.

2. Mr Haller, an employee of the defendant, was riding a tractor trailing a slasher. The propulsion for the slasher mechanism was via a ‘power take-off’ shaft (‘PTO’), which was a shaft connected at one end to the drive train at the rear of the tractor and, at the other end, to a coupling on top of the slasher. Neither the tractor nor the slasher was fitted with a fire extinguisher. The slashing was undertaken by Mr Haller on that day from about 8.30 am until about 12.40 pm, when the incident which gave rise to this proceeding occurred.  The weather conditions on that day are admitted to have been ‘hot, dry and windy’, and Mr Haller accepted in evidence that the temperature in the middle of the day was about 30 degrees celcius.   It was further admitted that the grass and vegetation on the defendant’s property was dry, the grass being slashed was about 50 centimetres high, and the ground conditions on the defendant’s property were not damp or moist.  Whilst there was an orchard mister on the defendant’s property, which was ordinarily located in a shed on the property, there was no water tanker on the defendant’s property for use in the event of fire.

3. On 28 September 2001, the plaintiffs had contracted to purchase a mango farm (known as ‘Jarrah’) diagonally across the Giru-Woodstock Road from the defendant’s property.  Settlement of that sale occurred on 29 October 2001, at which time the plaintiffs acquired the land and improvements and all growing crop. There was no plant and equipment on the property to be sold.  Jarrah occupied a total of 47.08 hectares. Some 8,512 mango trees, of varying ages, sizes and varieties, were planted on Jarrah.  The mangoes were planted in two areas on the property – the front orchard faced the road, while the rear orchard was, as its name suggests, to the rear of the property.  Those orchard areas were further notionally subdivided into various sections.  The schedule to these reasons contains a plan of Jarrah showing the sections (exhibit 4).

4. At about 12.40 pm a fire started in grass accumulated on the PTO of the slasher. Mr Haller was the only witness to the fire starting.  He said in evidence that while he was driving the tractor, he looked back and saw a small area of blackened grass around the PTO.  He had never seen such a thing before.  When asked what he did when he saw this blackened grass, he said that, after a moment of evaluating it, he stopped the tractor.  Before he stopped the tractor he did not see any flames.  As soon as disengaged the drive gear and brought the tractor to a standstill, he saw a small flame ignite at the base of the clutch on top of the slasher.  He immediately got off the tractor and removed his shirt in an effort to stamp out the flames.  He said, however, that by the time he had got off the tractor, ‘the swirling wind had already picked up embers and distributed them off the back of the slasher, resulting in a fairly swift escalation of the fire off the tractor’.  He said that once off the slasher, the fire spread lengthways, widening very quickly.  He saw the fire spreading very rapidly and made a decision that he ‘needed to head back to the shed urgently because [he] felt that [he] was in danger, immediate danger if [he] stayed there’.  When asked about this danger, he said:

‘The fire was spreading very rapidly and I could see that I had no chance of extinguishing it and – and a very real possibility of suffering serious injuries if – if I had not left.’

5. Mr Haller then drove the tractor with slasher attached about 300 metres, through areas of long dry grass, towards the shed. This caused a series of fires to start over a 200 to 300 metre front on the defendant’s property.

6. The fire spread through the grass, vegetation and trees on the defendant’s property, into the grass and vegetation on the road curtailage and then, by flying heat and cinders, across the road into the plaintiffs’ property.

7. The fire spread through Jarrah. The plaintiffs have sued the defendant in negligence, seeking damages for the losses they suffered as a consequence of the fire, particularly by reason of the destruction or damage to the mango trees on Jarrah.

What duty was owed to the plaintiffs by the defendant?

8. In paragraph 2 of the further amended statement of claim (‘FASOC’), after pleading uncontentious facts about the respective physical locations of the properties, their states of vegetation, and the use of the tractor and slasher by Mr Haller, an employee of the defendant, as an ordinary part of the defendant’s farming activities, the plaintiffs alleged^[1]:

‘In the premises of this paragraph, the defendant by itself, its servants or agents, owed [the plaintiffs] a duty to exercise reasonable care in and about the management and conduct of the physical conditions and activities on the defendant’s property, by acting in a manner in which a reasonable man in the defendant’s position ought act in respect of any foreseeable risk of injury, having regard to considerations of magnitude of the risk, the degree of the probability of its occurrence along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have’.

9. A duty in cognate terms was pleaded against Mr Haller^[2].  I should say here that it was not in issue that the defendant would be vicariously liable for any negligent acts or omissions of Mr Haller while he was engaged in the course of his employment in an authorised activity within the scope of his employment, and that his slashing of the property fell within the course and scope of his employment.

10. It is immediately apparent that the plaintiffs’ formulation of the duty of care said to have been owed by the defendant seems to have been derived from the statement of Mason J (as he then was) in Wyong Shire Council v Shirt^[3]:

‘In deciding whether there has been a breach of the duty of care the tribunal of fact must first ask itself whether a reasonable man in the defendant’s position would have foreseen that his conduct involved a risk of injury to the plaintiff or to a class of persons including the plaintiff.  If the answer be in the affirmative, it is then for the tribunal of fact to determine what a reasonable man would do by way of response to the risk.  The perception of the reasonable man’s response calls for a consideration of the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have.  It is only when these matters are balanced out that the tribunal of fact can confidently assert what is the standard of response to be ascribed to the reasonable man placed in the defendant’s position.

The considerations to which I have referred indicate that a risk of injury which is remote in the sense that it is extremely unlikely to occur may nevertheless constitute a foreseeable risk.  A risk which is not far-fetched or fanciful is real and therefore foreseeable.  But, as we have seen the existence of a foreseeable risk of injury does not in itself dispose of the question of breach of duty.  The magnitude of the risk and its degree of probability remain to be considered with other relevant factors.’

11. Whilst this statement is undoubtedly authoritative in approaching the task of deciding whether there has been a breach of duty, it is not definitive of the content of the duty. Moreover, the High Court has, on several recent occasions, warned against the application of the ‘Shirt calculus’ by wearing the spectacles of hindsight.  It is sufficient, in that regard, to refer to the joint judgment of Gummow and
    Hayne JJ in New South Wales v Fahy^[4]:

‘[57]... Shirt requires a more elaborate inquiry that does not focus only upon how the particular injury happened.  It requires looking forward to identify what a reasonable person would have done, not backward to identify what would have avoided the injury.

[58]In Vairy v Wyong Shire Council, it was explained why it is wrong to focus exclusively upon the way in which the particular injury of which a plaintiff complains came about.  In Vairy, it was said that:

“[T]he apparent precision of investigations into what happened to the particular plaintiff must not be permitted to obscure the nature of the questions that are presented in connect with the inquiry into breach of duty.  In particular, the examination of the causes of an accident that has happened cannot be equated with the examination that is to be undertaken when asking whether there was a breach of a duty of care which was a cause of the plaintiff’s injuries.  The inquiry into the causes of an accident is wholly retrospective.  It seeks to identify what happened and why.  The inquiry into breach, although made after the accident, must attempt to answer what response a reasonable person, confronted with a foreseeable risk of injury, would have made to that risk.  And one of the possible answers to that inquiry must be ‘nothing’.”

It is only if the examination of breach focuses upon “what a reasonable man would do my way of response to the risk” (emphasis added) that it is sensible to consider “the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have”.’

12. After pleading the facts said to have given rise to the fire, the FASOC then continued:

‘5.A reasonable person in the position of the defendant, in respect of the farming activities conducted, or to be conducted on the defendant’s property prior to or on 7 November 2001, would have:

(i)fitted a fire extinguisher to the tractor or the slasher;

(ii)alternatively, instructed Matthew Haller in the use of the tractor fire extinguisher, mainly [sic] to use it immediately to extinguish any fire which ignited during tractor use;

(iii)instructed Matthew Haller not to undertake slashing on the defendant’s property other than in the early mornings when conditions were cooler, or in circumstances where the grass being slashed was damp;

(iv)instructed Matthew Haller that slashing ought not take place in conditions such as the conditions referred to in paragraph 4(vi) above;^[5] 

(v)instructed Matthew Haller not to undertake slashing without making the inquiries referred to in paragraph 4(xi) above;^[6]  ;

(vi)instructed Matthew Haller that, when slashing, any build-up or adherence of vegetation on the PTO ought be regularly removed so as to obviate or minimise the risk of a fire emanating therefrom;

(vii)instructed Matthew Haller that a water tanker must be kept in proximity to the tractor and slasher, to be used in the event of a fire so to douse such fire, and if not then not to slash;

(viii)instructed Matthew Haller that, in the event of a fire, which could not be immediately extinguished, he should not spread the fire by driving the tractor and slasher from the scene of commencement for any purpose but immediately stop and leave the tractor in place and then seek help;

(ix)installed a system of hydrants in the orchard of the defendant’s property, in the defendant’s irrigation system therein, so as to enable Matthew Haller, or any member of staff, to access the same in the event of a fire;

(x)equip the defendant’s property with a water tanker for use in the event of fire, and/or in the alternative, with an instruction to staff, including Matthew Haller, not to undertake any slashing without the water tanker being in close proximity;

(xi)promulgated, laid down and enforced a rural fire plan or system for the defendant’s property for the identification of fire risks thereon, and for training of, access by and compliance by staff, which in turn, would have comprised or yielded all the matters pleaded to above in this paragraph;

(xii)trained all staff, including Matthew Haller, in the last-mentioned plan or system;

(xiii)undertaken a risk assessment, under the Workplace Health & Safety Act 1995, which, if undertaken in accordance with that Act, would have yielded a risk assessment and system which comprised or yielded the matters pleaded above in this paragraph.’

13. In paragraph 6 of the FASOC, it was alleged that the defendant failed to undertake any or all of the steps referred to in paragraph 5, and accordingly had breached its duty.

14. Similarly, in respect of Mr Haller, it was pleaded in paragraph 7 of the FASOC:

‘7.A reasonable person in the position of Matthew Haller, in respect of his activities on 7 November 2001 would have:

(i)refrained from undertaking the slashing, for the period he did, he slashing from the morning right through until the middle of the day, rather than confining himself to the early morning or when grass and vegetation was otherwise damp;

(ii)refrained from slashing, in the conditions referred to in paragraph 4(vi) above;

(iii)arranged for a water tanker to be kept in proximity to the tractor and slasher so as to douse the fire ignited, and not slash if it could not be arranged;

(iv)kept the PTO clear of accumulated vegetation which might ignite;

(v)refrained from slashing without first requesting and being supplied with a fire extinguisher, fitted to the tractor or slasher, to use in the event of fire;

(vi)used the fire extinguisher to extinguish the fire;

(vii)refrained from driving the tractor after the fire ignited, he thereby spreading the fire, rather than leaving the tractor stationary;

(viii)contacted the Rural Fire Service or the local fire warden before commencing slashing to ascertain the fire rating.’

15. It was then alleged that, by his failure to undertake any or all of the steps referred to in paragraph 7, he breached the duty he owed to the plaintiffs.

16. This pleading, in my respectful view, suffers from the affliction of hindsight. Having sought to formulate the duty by incantation of part of the ‘Shirt calculus’, the pleading set out a range of specific actions and responses which, in hindsight, the plaintiffs contended would or could have countered the ignition or spread of the fire.  But, contrary to the manner in which the plaintiffs sought to plead the case, the ‘Shirt calculus’ is not, as I have said, an identification of the duty of care owed by one party to the other.  Rather, it provides guidance to the tribunal of fact to assist in determining whether a defendant’s conduct attained and observed the standard of care necessary to fulfil observance of the duty of care. 

17. In Shire of Brookton v Water Corporation,^[7] the Full Court of Western Australia had before it a case in which a fire had spread from grain smouldering on a waste disposal site.  The statement of claim in that case was described as pleading the duty of care in terms which were ‘broad ranging and specific’.  McLure J, with whom Anderson and Steytlen JJ agreed, said, at [25] – [27]:

‘[25]There is a danger in formulating a duty of care in specific terms.  It was referred to by McHugh, Gummow and Hayne JJ in Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54; (2002) 194 ALR 337.  McHugh J said (at 336):

“The duty of care owed by a manufacturer or producer to a consumer is a duty to take reasonable care to avoid injury to the consumer.  To formulate the duty in more specific terms invites error because it is likely to mix a question of law (whether a duty existed) with a question of fact (whether a breach occurred).  If the duty if formulated in specific terms, the issue on breach is whether the duty has been performed in accordance with the terms of the duty as formulated.  But, as Wyong Shire Council v Shirt shows, the question of breach is far more complex than an affirmative or negative answer to the question whether the defendant carried out the duty as formulate.  It involves evaluating and weighing a number of competing considerations.”

[26]The same point was made in a slightly different way by Gummow and Hayne JJ (at 388):

“An analysis of the competing considerations referred to in Wyong Shire Council is impeded, not assisted, by formulating the relevant duty of care in terms of its breach, which was the approach that the majority in the Full Court appeared to adopt. ...

A duty of care that is formulated retrospectively as an obligation purely to avoid the particular act or omission said to have caused loss, or to avert the particular harm that in fact eventuated, is of its nature likely to obscure the proper inquiry as to breach.  That enquiry involves identifying, with some precision, what a reasonable person in the position of the defendant would do by way of response to the reasonably foreseeable risk.”

[27]The respondent’s pleading of the duty of care suffers from the defects identified by the High Court in Graham Barclay Oysters (supra).  I am also of the opinion that the Master’s formulation bears the hallmark of a hindsight-assisted formulation that is too specific.  In my view, the Shire had a duty to take reasonable care to prevent damage to the respondents’ property as a result of a fire at the tip site.  This formulation is intended to cover the prevention of fires at, as well as controlling the escape of fire from, the tip site.’

18. Consistent with the proposition that any liability of the defendant in the present case will be founded in the ordinary law of negligence^[8], the defendant in this case accepted that it owed the plaintiffs a duty to take reasonable care to prevent damage to the plaintiffs’ property as a result of fire.  The defendant accepted that this formulation covered the prevention of fires at, as well as controlling the escape of fires from, the defendant’s property.  In my view, the formulation of the duty owed in this case by the defendant to the plaintiffs in those terms is apposite.

Did the defendant breach its duty of care to the plaintiffs?

19. In Swain v Waverley Municipal Council^[9], Gleeson CJ observed^[10]:

‘In legal formulations of the duty and standard of care, the central concept is reasonableness.  The duty is usually expressed in terms of protecting another against unreasonable risk of harm, or of some kind of harm;  the standard of conduct necessary to discharge the duty is usually expressed in terms of what would be expected of a reasonable person, both as to foresight of the possibility of harm, and as to taking precautions against such harm.  Life is risky.  People do not expect, and are not entitled to expect, to live in a risk-free environment.  The measure of careful behaviour is reasonableness, not elimination of risk.  Where people are subject to a duty of care, they are to some extent their neighbours’ keepers, but they are not their neighbours’ insurers.’

20. Moreover, the standards of conduct are those of the real world - as McHugh J said in Tame v New South Wales^[11], the law of negligence should accord with what people really do, or can be expected to do, in real life situations.  In Dovuro Pty Ltd v Wilkins^[12], his Honour also said^[13]:

‘If negligence law is to serve any useful social purpose, it must ordinarily reflect the foresight, reactions and conduct of ordinary members of the community or, in cases of expertise, of the experts in that particular community.  To hold defendants to standards of conduct that do not reflect the common experience of the relevant community can only bring the law of negligence, and with it the administration of justice, into disrepute.  That is not to say that a defendant will always escape liability by proving that his or her conduct was in accord with common practice.  From time to time cases will arise where, despite the common practice in a field of endeavour, a reasonable person in the defendant’s position would have foreseen and taken steps to eliminate or reduce the risk that caused harm to the plaintiff.  But before holding a defendant negligent even though that person has complied with common practice, the tribunal of fact had better first make certain that it has not used hindsight to find negligence.  Compliance with common practice is powerful, but not decisive, evidence that the defendant did not act negligently.  And the evidentiary presumption that arises from complying with common practice should be displaced only where there is a persuasive reason for concluding that the common practice of the field of activity fell short of what reasonable care required.’

21. If it be accepted that the duty of care owed by the defendant was as I have set out in [18] above, it seems to me, having regard to the alleged breaches of duty articulated in the FASOC (as summarized above), that two questions present for consideration in this case:

(a)Did the ignition of the fire on the slasher result from the defendant’s negligence?

(b)Did the spread of the fire (however caused) into the plaintiffs’ property result from the defendant’s negligence?

Ignition of the fire

22. Bearing always in mind the proposition that application of the ‘Shirt calculus’ is not an exercise in hindsight, the initial question for consideration is whether a reasonable man in the defendant’s position (or Mr Haller’s position on the tractor) would have foreseen a risk of fire igniting on the slasher. 

23. A preliminary issue needs to be addressed in this regard, namely whether I can be satisfied, on the evidence, as to the cause of the fire on the slasher. The short answer is that I cannot.

24. In paragraph 4 of the FASOC, the plaintiffs asserted:

‘(xviii)Plant and equipment used in an orchard could be a fire risk to the orchard or its immediate surrounds if not operated correctly, inadequately maintained or if not kept free of combustible matter;

(xix)Of the plant and equipment operated, to undertake slashing was a significant source of fire risk in an orchard or its immediate surrounds;

(xx)The risk of fire in slashing arose from striking a stone, piece of metal or other hard object which might produce a spark, or by a build-up of vegetation on a PTO used on a tractor/slasher combination, particular one without a protective guard over the PTO and gearbox, igniting by heat from the PTO;

(xxi)If vegetation on the PTO ignited then adjacent grass or vegetation could in turn ignite;

(xxii)Prior to and on [7 November 2001], the defendant knew ... or alternatively ought to have known by reasonable observation by reasonable inquiry and by common sense of it as a company engaged in commercial farming activity [of] the facts referred to in subparagraphs (xviii), (xix), (xx) and (xxi) above;

(xxiii)Matthew Haller knew, or ought to have known by reasonable observation, reasonable inquiry and by common sense, [of] the facts referred to in subparagraphs (xviii), (xix), (xx) and (xxi) above;’

25. The plaintiffs led no evidence at trial as to the reason for or cause of the fire igniting on top of the slasher. Counsel for the plaintiffs asserted in his final submissions that:

‘It is plain that the rotations of the PTO could generate heat where it connects with the slasher if the PTO shaft was encased in insulation and if that insulation was a combustible substance such as dry grass, then the risk of a fire being started in that combustible substance was real and ever-present and obvious to anybody who thought about it.’

26. There was no evidence to support that submission. There was no evidence to suggest that Mr Haller was not operating the tractor and slasher correctly, or that either the tractor or slasher was inadequately maintained. There was no evidence to base a finding, or draw an inference, that the slasher had struck a stone, piece of metal or other hard object which produced a spark to ignite the fire; indeed Mr Haller’s unchallenged evidence was that rock and other such objects had been cleared from the area. There was no evidence as to how much grass had accumulated on top of the slasher, or how much was in the vicinity of the PTO coupling. In cross-examination of Mr Haller, counsel for the plaintiffs sought to suggest that the grass had ignited as a consequence of heat generated by friction from what he described as the ‘rotating shaft’. Yet there was no evidence, let alone evidence of an expert mechanical or thermal engineering nature, from which I could deduce or make a conclusion as to the cause of the ignition of the grass on the slasher in this case.

27. Notwithstanding this lack of evidence, even if I were to assume that the fire started in the manner suggested by the plaintiffs’ counsel, namely as a result of friction from the rotating PTO shaft, it is necessary for the plaintiffs to have persuaded me that a reasonable person in the defendant’s position (or Mr Haller’s position) would have foreseen such a fire starting in that manner. The focus for that enquiry is on the ignition of the fire on the slasher, and not on whether, once ignited, the fire could spread in the admittedly hot and windy conditions. Thus, except to the extent that it could be proved that the weather conditions caused or contributed to the ignition of the fire on the slasher (and no evidence was led to establish such a nexus), the prevailing weather is not relevant to consideration of this point.

28. It is clear that Mr Haller did not foresee the ignition of the fire in the way contended for by the plaintiffs. His unchallenged evidence was that:

(a)For at least the nine years prior to November 2001, he had been working on the defendant’s mango farm (which was, in effect, his father’s family operation);

(b)Generally speaking, all of the area surrounding the trees and orchard was grassed;

(c)Rocks and other objects had been cleared from that area;

(d)He had a very good knowledge of the orchard area;

(e)In the nine years leading up to 7 November 2001 he had been involved in conducting slashing activities in the orchard, involving the use of a tractor and slasher;

(f)He carried out minor services on the tractor and slasher as appropriate, and regularly inspected the slasher and tractor for maintenance requirements;

(g)Prior to 7 November 2001 he had slashed during the hotter months of the year, and in particular had slashed on hot, dry, windy days;

(h)He had never seen sparks, fire, steam or smoke emanating from the area of the PTO on the slasher;

(i)At the end of each slashing session he had a practice of cleaning the slasher by clearing it of any loose debris and performing a minor visual check;

(j)As at 7 November 2001 he had never known that a slasher might cause a fire;

(k)He had no knowledge of any reason to carry a fire extinguisher for use on the slasher;

(l)In his years of operating the slasher on the orchard he did not see any steam or fire coming from the slasher or the PTO;

(m)7 November 2001 was a hot, dry, windy day, but it was not in any way exceptional from other days on which he had slashed the property;

(n)There were many days in the year when it was hot, dry and windy when he had previously slashed;

(o)The small area of blackened grass around the PTO which he saw on 7 November 2001, when he looked backwards to check the slasher equipment after passing through a drain that runs through the orchard, was something he had never seen before;

29. Mr Haller was asked questions in cross-examination about his knowledge of the propensity for the rotating shaft to cause the ignition:

‘Right.  Grass build-up on the slasher wouldn’t have affected it in – in a maintenance point of view.  Would you accept that? – That’s correct.  And it did not affect it from a – an operational point of view either.

You – you would have been aware of course that there was a – a rotating shaft going into the top of the slasher? – That’s correct.

And you probably weren’t aware of the rate of speed at which it was rotating, but you would have been aware that it was rotating at a fast rate of speed? – That’s correct.

And you would have been aware, had you thought of it I suppose, that that rotating shaft would generate heat, particularly if it was encased in grass? – Oh, well, I – I don’t know whether I would have drawn that conclusion.

Mr Haller, probably as a kid you would have tried to start a fire yourself by getting a stick and spinning it and with a bit of grass around and trying to give it a blow to see if you could get ----? – Pretty unsuccessfully I think ---

Yes, that’s right? – I may have – I may have tried it once.

But you’ve seen it – no doubt you’ve seen that sort of thing on Bush Tucker Man and that sort of thing, haven’t you, so you know that fires can be started in that manner, didn’t you?  You knew that on the 7^th of November 2001? – I presume so, yes.

...

You – you – you’re not suggesting that you would again repeat this exercise of slashing on a very hot day with two foot high grass – dry grass? – I – I have slashed in – grass of – of similar conditions.

In similar weather conditions? – Well, I wouldn’t say exactly the same conditions.

You see on that day as well there was a strong wind blowing, wasn’t there? – That’s correct.

You’d have recalled as a kid trying to start a fire with rotating a stick and a bit of grass.  You’d give it a blow to try and get the fire started as well? – Oh, I – I can’t recall trying that.

You’d have seen that sort of thing though, wouldn’t you? – I’ve seen it on television, yes.

You would have been aware that the strong winds would have been likely to perhaps fan and accelerate any heat that was generating around the grass that was building up on the top of the slasher? – Well, I hadn’t – I hadn’t considered that.  I – I wasn’t considering a – a fire when I was operating the slasher.

I’m sorry, you weren’t considering fire when you were operating the slasher? – I wasn’t considering the potential of a fire, no.  No, I was just slashing the grass.’

30. The present inquiry is not, however, as to Mr Haller’s actual state of knowledge. It is, rather, to test what a reasonable person in the circumstance of the defendant (as the owner and operator of the orchard) and Mr Haller (as the operator of the tractor and slasher) would have foreseen. In approaching this question, I remind myself that the foresight with which I am concerned is that of reasonable members of the community, particularly the farming community, in which the circumstances of this case are placed. And, of course, it needs to be recalled that the burden rests on the plaintiffs to persuade me on the balance of probabilities of these matters.

31. With the exception of one witness, there was a complete absence of evidence of slashers igniting fires, of there being concern or warnings within the farming community of the propensity for slashers to ignite fires, or that there was any knowledge within the farming community that there was a risk of slashers igniting fires.

32. Evidence was led from two independent farmers. Mr Cannavan, a sugar cane farmer from Home Hill, said that he had been involved in farming for about 45 years, during which time he had conducted slashing as part of his farming activities.  He had had about eight new slashers over the course of that 45 years.  In the course of his 45 years of slashing and farming, he had never experienced a slasher to cause or almost cause a fire, and had never seen a slasher to cause or almost cause a fire.  He had never seen grass on a slasher ignite, smoulder, or blacken while slashing.  Before 2001, he had never heard of any of those matters occurring, nor had he been warned of any risk that a slasher may cause fire.  From his years of farming and slashing experience, he did not regard the use of a slasher to be a fire risk and, before 2001, had never heard of a slasher being used by another farmer causing a fire.  He said that none of the manufacturers of the slashers he had owned had recommended the necessity for a fire extinguisher on the slasher or tractor while slashing, nor was he aware of any such recommendation having been made prior to 2001 by the Department of Primary Industries or the farmers’ association of which he was a member (the Inkerman Cane Growers’ Organisation).  Nor to his knowledge had it ever been recommended by the Rural Fire Brigade of which he was a member.  Mr Cannavan said that at the time of giving his evidence, his tractors and slashers did not carry fire extinguishers while slashing.  In contrast, he said that fire extinguishers were carried on the haul-out vehicles which carry cane out of the fields and on cane harvesters.  The reason for this, as was explored under cross-examination, was that cane trash can get jammed beside the back drive wheels of the harvester where the disk brakes are, and heat generated around the disc brakes can cause a fire.  The fire extinguishers on the haul-out vehicles are for back-up purposes in the event of a cane harvester catching on fire.

33. Mr Pegoraro was also a sugar cane farmer in the Home Hill area. He had been operating a commercial farm for about 30 years, during which time he had personally slashed his property about eight to ten times a year. Over that period he had owned two slashers. In his 30 years of slashing, he had never experienced or seen a slasher cause or almost cause a fire. He had never experienced or seen grass on a slasher ignite, smoulder, smoke or blacken. Before 2001 he had never heard of such a thing occurring, nor had he ever been warned or told about a risk of a slasher causing a fire. From his 30 years of farming and slashing experience, he had never considered the use of a slasher itself to be a fire risk. Mr Pegoraro was a member of the Rural Fire Brigade, and was able to say that before 2001, the Rural Fire Brigade had never recommended or advised that there was a risk of causing a fire while using a slasher, nor had the brigade recommended that one should have a fire extinguisher on the slasher while slashing. He said that there was no specific time of the day during which he slashed his property and that, apart from when it was raining, weather conditions did not make a difference as to when he slashed. Prior to 2001 he had never seen or heard of a fire extinguisher being carried on a slasher or tractor while slashing, although he did have fire extinguishers fitted to his cane harvester and trucks. He had a water tractor that was used when he was controlling the burn-off of the sugar cane fields, but this was not used or kept on standby while he was slashing. None of this evidence from Mr Pegoraro was challenged.

34. The only evidence of an occurrence of a slasher having previously ignited came in the course of the cross-examination of Mr Wood, a witness called by the plaintiffs to speak particularly to the question of the preparation of risk management plans. I will discuss Mr Wood’s other evidence later, but note here that in the course of cross-examination he said that on one occasion he had personally observed a slasher ignite a fire. When asked further about the occurrence of the fire he said ‘No, it actually was a build-up of long, dry material – long vegetative matter on the gearbox and the take-off end of the power take-off on top of the machine.’ I note that his first reference to this incident was under cross-examination. Were it of any significance to him, one would have expected him to have mentioned it in his report or in evidence-in-chief.

35. Apart from this incident, Mr Wood had not otherwise observed a slasher ignite a fire. He said that the slasher which he had seen catch fire was not dissimilar to the one being used by Mr Haller – neither slasher had a guard around the gearbox. He said that the fire occurred when he was slashing power line corridors with grass in the order of one metre in length. There was no further investigation in evidence with Mr Wood of the precise circumstances of the ignition of the fire which he saw on his slasher, nor as to the state of maintenance of his slasher, the quantity of material built up on top of his slasher compared with that built up on the defendant’s slasher.

36. The plaintiffs urged that I should discount the evidence of Mr Cannavan and Mr Pegoraro because ‘they are sugar cane farmers who have been operating their slashers in an entirely different environment as sugar cane farmers to the environment in which Matthew Haller was operating the defendant’s slasher at 12.40 pm on 7 November 2001’.  True it is Mr Cannavan and Mr Pegoraro farmed different crops in a different geographical location, and perhaps even with a somewhat different climate pattern, to the defendant.  But the point of their evidence was not merely as to their own personal experiences, but to give me insight into the common experience of members of the North Queensland farming community for the purposes of determining whether the risk of the slasher igniting in the way suggested by the plaintiffs is something which would have been reasonably foreseeable by an ordinary, reasonable member of that community.  I accept their evidence in that regard.

37. Notwithstanding the isolated incident described by Mr Wood, I am persuaded that, as at 7 November 2001, a reasonable member of the farming community in the position of the defendant and Mr Haller would not have foreseen the risk of the slasher igniting in the manner suggested by the plaintiffs. It was not a matter of knowledge or warning from relevant interest groups, such as the Rural Fire Brigade and farmers’ organisations. There were no warnings on slashers about the danger of ignition, nor any manufacturer’s instruction or recommendation that a fire extinguisher should be carried when using the slasher. In light of the evidence of each of Mr Cannavan and Mr Pegoraro, it would be artificial for me, far-removed from the circumstances of the fire, and having the benefit of hindsight, to reasonably expect foresight of such a risk from the defendant and Mr Haller.

38. Accordingly, I find that a reasonable person in the position of each of the defendant and Mr Haller would not, as at 7 November 2001, have foreseen the risk of a fire igniting on the slasher in the circumstances of this case.

The spread of the fire

39. The case pleaded by the plaintiffs in this regard is set out in paragraphs 5 and 7 of the FASOC (quoted above). The case ultimately advanced by their counsel was that the defendant should have:

(a)devised and implemented a risk management system to identify potential fire risks, including the risks associated with slashing grass on the defendant’s property;

(b)had on hand suitable and functional fire fighting equipment, having regard to the conditions on the day in question;  and

(c)instructed Mr Haller to keep the top of the slasher clear of grass at all times^[14]

and that the defendant’s failure to fulfil these requirements caused the fire to spread to the plaintiffs’ property.

Ruling on evidence of Mr Caddies

40. Before dealing with these issues, however, it is necessary for me to record my reasons for excluding from evidence reports dated 13 September 2006 and 22 August 2007 by Mr Graham Caddies on which the plaintiffs sought to rely and to which the defendant objected. 

41. Mr Caddies is the principal of ‘Advanced Profit Plan’. According to his resume, he has ‘over 24 years experience in management and supervision in general management and resource management’ and ‘has specialized in risk, health and safety injury rehabilitation and human resource management for the last 24 years’. It further states that this ‘scope was expanded 13 years ago to include quality compliance, environment and business management’.

42. His resume further states, inter alia:

‘He has working and/or consulting experience in the building/construction, sugar/meat/dairy, manufacturing, mining, transport, retail and training/education Industries.

Graham has been in the consulting field for 24 years.  Eight (8) years with NSCA, six (6) years of this time he was the North Queensland Manager of the National Safety Council of Queensland with 4 consultants in his team.  While at the NSCA he was involved in assisting organisations identify their needs, weaknesses and risk exposure, developing action plans, policies/procedures and management systems to improve the way they managed their business.  The work also involved developing and presenting courses to management and the workforce in the areas of risk, safety, personnel, maintenance and compliance management.  It also involved conducting audits to assess compliance to legislation and their management system.

During the period Aug 88 to Dec 92 he was the Occupational Health, Welfare and Safety Adviser and Comcare case Manager for the Northern Region of the ATO.  He served on the Comcare State Management consultative committee for three years and was instrumental in forming a group for Commonwealth case managers in North Qld. Based in Townsville.  He was on the executive committee for Interlock (from 1989 – 1999), which provides Employee Assistance Programs and Comcare case management.  He prepared and conducted a six-month part time Risk Management course for TAFE Townsville.  It was one subject forming part of the Certificate in Business Management.

Graham is a full member of the following professional bodies:-

• Australian Institute of Management (since 1984). Appointed a “Fellow” June 02
• Risk Management Institute of Australasia.  Formally the Australian Institute of Risk Management (since 1992).  Appointed a “Fellow” Jan 02
• Safety Institute of Australia (since 1983). Appointed a “Fellow” March 2002
• Environmental Institute of Australia (since 1997)
• Australian Institute of Company Directors (Graduate Member) (since 2000)
• Australian Institute of Management Consultants (Member) (January 2002)
• Quality Societh of Australia (QSA) Member (January 2002) Since Jan 2005 Now AQS

...

Graham was appointed a Certified Practicing Risk Manager (CPRM) in November 2002.  Graham is the preferred Consultant with Commerce QLD (Townsville Region) for Business/Quality/Safety/Environment and Human Resources.  He assists their members meet their obligation and to develop plans and Management Systems.  He is also their preferred trainer for all safety related training.  Graham is an accredit Workplace Health & Safety Officer Trainer with Workplace Health & Safety Qld for Service, General and Construction Industries.  Graham is an accredited Safety Auditor with WH&S Qld for P.Q.C. and a registered Auditor with D.E.T for GTO National Standards.’

The ‘Summary of Formal Training’ appended to his resume records that in 1992 he undertook a three day Commonwealth Fire Board fire safety training course.  That appears to be the extent of his fire safety training.  

43. The report dated 13 September 2006 commenced by posing the following questions:

‘Questions Relating to Owner of Property

The following questions need to be answered in respect of owner of property where fire commenced.

1. What should he have had in place to prevent fire starting?

2. What processes should be in place in event of a fire starting:

a.Getting it under control.

b.Preventing it escalating/escaping.

3. How could they have know what to do as a responsible orchardist/employer:

a.Is there any Australian Standards or guidance available?

b.What Government organisations could be consulted?

(i)Rural Fire Service/Qld Fire & Rescue

(ii)Local Authority

(iii)Farm Safe Part of WHS Qld (DIR)

(iv)WHS Qld (DIR)

4. Is it possible for a fire to start from:

a.The blade of the slasher hitting a rock, metal creating a spark and then starting fire?

b.Grass build up on top of slasher around gear box, getting so hot from gear box to be able to burst into flames?

5. What Fire Fighting Equipment should they have had on hand:

a.On Tractor?

b.Close by?

6. Fire Breaks:

a.How effective are they, what is their purpose?

b.What is an acceptable specification for construction to be effective?

7. Training:

a.Safe use of plant (tractor/slasher).

b.What do do to prevent fire starting.

c.What to do to control if fire starts.

d.How to use fire equipment provided.

8. Employees Actions:

Was the employee’s action the right action when fire started:

a.Removing shirt to try and extinguish it?

b.Driving tractor (with slasher attached) to shed?  Did this contribute to spread of fire?

9. Weather Conditions:

Given the weather conditions on day, what should they have done?

a.Should they have slashed that day?

b.What should they have done to reduce the likelihood of a fire starting?

10. Engaging a Consultant

If the owner had engaged me to give advice on how to protect his property and employees what advice would I have given:

a.Six (6) months one (1) week before incident

b.If he had followed that advice would it have eliminated or minimised the fire and or prevented it spreading?’

44. The report then identified the documents which had been ‘reviewed’ by Mr Caddies, being specified legislation, documents that he described as ‘general documents’ (being further identified as a document from the Victoria County Fire Authority on farm safety and fire prevention/control, a ‘research report’ prepared by Mr Stewart Wood on request from Mr Caddies, and a ‘brief report produced by Natalie Donnelly on ease of finding information on the web on request from Graham Caddies’), and a number of documents which had been provided to him by the plaintiffs’ solicitors, being a report by Dr Peter Moore on bush fire management, police statements and a Bureau of Meteorology report dated 17 July 2006. 

45. Mr Caddies then stated his ‘methodology’ of analysing ‘facts gained from the information provided and other information sourced and to come up with my findings and conclusions’ based on ‘risk management process as defined in Australian Standard AS/NZ S4360 and the Queensland Risk Management Code of Practice’ and on ‘Tap Root® Causal Analysis Process’^[15].  Mr Caddies described his ‘fact gathering process’ as delegating to other people (Ms Donnelly and Mr Wood) the task of sourcing information on the internet about ‘safe operation of slashers and how easy it would be to start a fire while using a slasher’ and ‘what is the advice on reducing the fire risk in relation to orchards’, interviewing a ‘cross-section of Government departments who could possibly give information pertaining to the incident’ being representatives from Farm Safe, the Department of Main Roads, and the Regional Director Rural Fire Inspectorate, and interviewing ‘organisations within the slashing industry’, specifically Spotless (which has a contract with the Townsville City Council for slashing), someone from the Thuringowa City Council Parks and Gardens Department, and Tracpower NQ Pty Ltd, which is a supplier of slashers.  He said that ‘the purpose of these interviews was to see what the industry standard was in relation to standard procedures for slashing and for preventing/controlling fires that may be generated during a slashing process’.

46. Under subsequent headings in his report, Mr Caddies set out ‘key points’ he had extracted from the documents he had received and the interviews he had conducted, and then stated what he considered to be the outcomes of the ‘research’ he had delegated to the ‘non-expert’ person by way of internet research and the report he had obtained from Mr Wood.

47. Under the heading ‘Findings and Assumptions’, Mr Caddies then:

(a)purported not only to state the statutory obligations which rested on the defendant at the relevant time, but concluded that the defendant, by its representatives, had breached the Fire and Rescue Act and the Workplace Health and Safety Act;

(b)stated what he considered to be the ‘findings and assumptions’ which could be deduced from the documents and research;

(c)stated what advice he would have given the defendant if he had been engaged before the fire to help ‘develop a management system to meet [the defendant’s] obligations and to eliminate or minimise the various risks encountered in the orchard especially the risk of fire’.

48. Finally, in the report of 13 September 2006, he set out what he described as ‘Other Facts/Considerations’ in the following terms:

‘7.4.4Other Facts/Considerations

The following are additional conclusions, findings:

a.It is well known and accepted that slashers do cause fires from sparks generated by blades hitting rocks, metal etc. and from build up of grass on moving parts (PTO shaft);

b.It is standard practice to have a fire extinguisher on tractors and to have other items readily available to fight/control, extinguish fires;

c.Fire breaks are mainly for access to back burn or fight fires and would not have stopped the fire in high wind, high temperature, low humidity;  dry conditions which were the case on the day.  The only solution was they should not have been slashing on the day;

d.The son, Matthew Haller was a worker under the definition of the Workplace Health & Safety Act.  He took direction from his father (Representative of the employer Oildrive Pty Ltd) and was working with another employee;

e.Employees (workers) were put at risk of serious injury (burns) or death due to no procedures being in place and using shirt to fight the fire.

f.Had Matthew Haller been regularly checking the slasher for grass build up and removing it the fire would not have started because of grass build up around the PTO shaft.

g.Had the tractor had a 1.5kg (or larger) dry chemical fire extinguisher fitted to the tractor and had Matthew Haller known how to use it, he may have been able to extinguish the fire before it spread to the surrounding grass.’

49. The criteria for the admission of expert opinion evidence were summarized by Heydon JA (as he then was) in Makita (Australia) Pty Ltd v Sprowles^[16]:

“85.In short, if evidence tendered as expert opinion evidence is to be admissible, it must be agreed or demonstrated that there is a field of “specialised knowledge”;  there must be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert;  the opinion proffered must be “wholly or substantially based on the witness’s expert knowledge”;  so far as the opinion is based on facts “observed” by the expert, they must be identified and admissibly proved by the expert, and so far as the opinion is based on “assumed” or “accepted” facts, they must be identified and proved in some other way;  it must be established that the facts on which the opinion is based form a proper foundation for it;  and the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached:  that is, the expert’s evidence must explain how the field of “specialised knowledge” in which the witness is expert by reason of “training, study or experience”, and on which the opinion is “wholly or substantially based”, applies to the facts assumed or observed so as to produce the opinion propounded.  If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert’s specialised knowledge.  If the court cannot be sure of that, the evidence is strictly speaking not admissible, and, so far as it is admissible, of diminished weight.  And an attempt to make the basis of the opinion explicit may reveal that it is not based on specialised expert knowledge, but, to use Gleeson CJ’s characterisation of the evidence in HG v The Queen (at 428 [41], on “a combination of speculation, inference, personal and second-hand views as to the credibility of the complainant, and a process of reasoning which went well beyond the field of expertise.”

50. A number of pitfalls may be encountered as a result of the indiscriminate reception into evidence of reports purporting to contain expert opinion. These pitfalls were described by Callinan J in Fox v Percy:^[17]

‘In the long run the undiscriminating tender of inadmissible unreliable or valueless evidence, the acquiescence in its tender by counsel on the other side, and its reception into evidence, will prolong and increase the costs of trial.  It will increase the margin for judicial error as occurred here, and will also lead to uncertainties and difficulties in courts of appeal.  No court is bound to accept evidence of no probative value and evidence of slight probative value will rarely provide a foundation for any confident finding of fact, particularly if strong contrary evidence is available.’

51. In my view, the report dated 13 September 2006 by Mr Caddies was objectionable as expert opinion evidence for numerous reasons:

(a)Nowhere was it made clear what discipline or field of ‘specialized knowledge’ underpinned the conclusions expressed in the report;

(b)Even if I were to accept that there are some identifiable topics within the rubric of ‘risk management’ which may constitute a field of specialized knowledge for the purposes of expert evidence (such as issues of workplace health and safety) the particular topic to which this report was supposed to be addressing itself is far from apparent;

(c)Nor was it clear what particular expertise Mr Caddies brought to bear for the purposes of expressing the opinions relevant to the issue of fire risk management, for example to ‘develop a management system to meet [the defendant’s] obligations and to eliminate or minimise the various risks encountered in the orchard especially the risk of fire’;

(d)The report is redolent with expressions of conclusions of law (such as that the defendant ‘breached’ particular statutory provisions) and conclusions as to the very issues which are for the Court to determine in this case.  Indeed, so much is clear from the questions which Mr Caddies posed for himself at the outset of the report;

(e)There is nothing ‘expert’ about Mr Caddies’ methodology.  It amounted to going to other sources, extracting from other sources matters which he regarded as ‘key points’, and then pronouncing a series of ‘findings and assumptions’, most of which, as I have said, were the very matters to be determined by this Court.

52. The report was argumentative to the point of being adversarial. So much is apparent from the content of the ‘other facts/considerations’ which I have quoted above.

53. The overriding duty of a person giving expert opinion evidence to the Court is to assist the Court; that duty overrides any obligation the person may have to the party who is liable for their fees or expenses.^[18]  That does not mean that an expert may not seek to be persuasive about his or her opinion – it would be surprising if an expert were not convinced that his or her viewpoint was correct.  But there is a distinction between appropriate persuasiveness and inappropriate polemic.

54. Put at its highest, the report of 13 September 2006 was Mr Caddies’ summary of a mixture of fact and opinions derived from other people and sources, which he then interpreted for the purposes of forming his own conclusions on the very matters which are in issue in this case. There was nothing ‘expert’ about the information gathering process. Even if it be accepted that there may be a field of expertise associated with fire risk management, Mr Caddies had no qualifications or particular experience in that field of endeavour.

55. The further report by Mr Caddies of 22 August 2007 which the plaintiffs sought to tender contained further commentary by Mr Caddies in relation to specific allegations made in the defence. It is sufficient to observe that this report, on its face, clearly went beyond the proper provision of an expert opinion. Not only did it consist of a statement of conclusions in relation to allegations contained in the defence, it contained a peroration that could only be described as adversarial and argumentative.

56. Accordingly, I upheld the objection to the tender of these reports.

Risk management system

57. The plaintiffs submitted that the defendant should have had a risk management system to identify potential fire risks, including the risks associated with slashing grass on the defendant’s property. Particular reliance was placed in that regard on the evidence of Mr Wood, the director of Stewart Wood & Associates Pty Ltd, described as ‘primary industry and natural resource consultants’. Mr Wood has considerable experience in consulting to the horticultural and agricultural industries, particularly in relation to the establishment of agricultural businesses and consulting on issues concerning tree crops, annual plantings and forestry crops. His curriculum vitae says that he is an environmental consultant whose business focuses ‘on providing services to primary industry in a range of different aspects of their business as well as to natural resource managers in environmental consulting with particular emphasis on the assessment of organisations for environmental compliance’. In relation to the management of fire risks in the rural environment, however, it appears that Mr Woods’ experience was related to controlled burning and wild fires, as opposed to the ignition and behaviour of fires. He had no scientific qualifications in relation to fire management.

58. Be that as it may, in a report dated August 2006 (the report he prepared for Mr Caddies), Mr Wood said:

‘Fire in orchards is a rare occurrence and usually occurs because of sparks from machinery, the overheating of machinery or controlled burns escaping into the orchard.  Fire in tropical mango orchards can usually be controlled by the use of the irrigation system but this will be greatly influenced in its effectiveness depending on how under tree vegetation in the orchard is managed.  The volume and moisture content of the under tree vegetation and meteorological conditions will control the intensity of any fire in an orchard.

On hot dry days of low humidity with a wind blowing the risk of fire is greatly increased and damage likely to be caused by fire in the orchard will be greater, than on still days with similar under tree fuel loads.  This report examines briefly the management systems typically used in mango orchards in tropical Australia.  An assessment is also made of the key risk areas associated with the use of powered machinery within the orchard and on areas adjoining the orchard.

A fire risk management plan should be prepared for all orchards because of the large ongoing impact that can result from fire damage to permanent tree plantings that are the basis of economic returns from the orchard.  Damage to most permanent tree plantings is effectively irreversible (unlike in the case of some Australian native vegetation) and, in almost all cases, will require the replanting of the trees with loss of income for a number of years from the area of the orchard where trees have been destroyed by fire.’

59. Notwithstanding the ‘hindsight’ element of the plaintiffs’ pleading, the case which I apprehend the plaintiffs would seek to make in this regard is that observation of and compliance with the defendant’s duty to take reasonable care to prevent damage to the plaintiffs’ property as a result of fire necessarily calls for a reasonable person in the defendant’s position to devise and implement a risk management system to identify potential fire risks (including the slasher), and that, had such a fire risk management system been devised and implemented, the risk associated with slashing grass on the defendant’s property on this day would have been identified. In other words, the plaintiffs’ case on breach of duty presupposes that a reasonable person in the position of the defendant would have undertaken the risk management profiling postulated by Mr Wood (and, for that matter, Mr Caddies in the report [exhibit 37] which was admitted into evidence limited to risk management methodology), and that this risk management assessment would have identified the fire risks associated with slashing grass on the defendant’s property, as well as the responses necessary to address that risk.

60. However, apart from the statement of Mr Wood mentioned in [58] above, the plaintiffs led no evidence to the effect that a fire risk management plan ‘should be prepared for all orchards’ which would enable me to conclude that the sort of sophisticated fire risk management assessment process propounded by Mr Wood is something which would have been expected to be undertaken by a reasonable person in the position of the defendant at the time. No evidence was led as to the cost to a farmer in 2001 of undertaking such a risk assessment, the availability in the region of fire risk assessment consultants to undertake such assessments, whether there was any practice, let alone a common practice, amongst members of the relevant rural community at the time to have such fire risk assessments undertaken, or whether the desirability of performing such an assessment was recommended or advertised to the community by such groups as the Rural Fire Board or farmers’ associations. Mr Wood and Mr Caddies both gave evidence of what they would have advised if they had been engaged by the defendant, but again that presupposes that a reasonable person in the position of the defendant ought, as a matter of law, have engaged them to give that advice. No evidence was led to enable me to reach such a conclusion. Mr Haller gave evidence of what was, in effect, the practical ‘risk minimisation’ procedures he followed in connection with the use of the slasher:

-At the end of each day, he cleared the slasher of any loose debris and performed a visual check;

-If he saw that maintenance was required or the slasher had not been operating efficiently, he would evaluate whether he was able to tend to it and if not, would call in an external party to repair it;

-When operating the tractor and slasher, he regularly looked back to monitor the operation of the slasher – he said ‘I would spend at least as much time looking backwards that I would looking forward’;

-He did that ‘to ensure that everything is operating correctly’ and ‘to ensure the slasher is working efficiently and that ... there’s no damage ... or incidents that I need to be aware of’.

61. The assertion that the defendant breached its duty by failing to prepare a risk management plan also suffers from the difficulty that there is nothing in the evidence from which I could conclude that the preparation of such a plan would have alerted the defendant to the risk of the slasher igniting in the way in which this one did. The risk management strategies proposed by Mr Wood and Mr Caddies really addressed themselves to fire control measures, including the desirability of having fire fighting equipment available. Neither of their reports nor their evidence made it clear as to how the preparation of risk assessment plans would have alerted the defendant to the risk of fire igniting on the top of the slasher. Mr Wood, for example, asserted in his August 2006 report that:

‘Many of the items of plant and equipment used in an orchard can be a fire risk if not operated properly, maintained and kept clean and free of combustible matter.  The highest risk item to be used in an orchard is any slasher used to control vegetation either within the orchard or around the immediate orchard surrounds.’

62. In the present case, there was no evidence that this slasher was not operated and maintained properly. There was no evidence that it was not kept clear and free of combustible matter, other than such as accumulated in the course of its ordinary use. Mr Wood gave no basis for his assertion that the use of ‘any slasher used to control vegetation’ was the ‘highest risk item to be used in an orchard’. Indeed, as I have already observed, the only evidence of a slasher having caused a fire came under cross-examination of Mr Wood, when he referred to a fire having occurred at his home. There was no evidence as to the mechanical state of his slasher at the time, whether that slasher has continued to be used (and if so, whether it has ignited further fires) and, importantly, what actually caused the fire on his slasher. I accept the defendant’s submission that this anecdotal evidence of one occasion (not involving a farmer) is not sufficient to lead me to conclude that this risk was reasonably foreseeable by a farmer in the position of the defendant, particularly in view of the evidence that, despite many years of slashing, neither the defendant nor the other farmers from whom evidence was called had experienced or even suspected a fire being caused by slashing.

63. The plaintiffs’ difficulties on this aspect of the case are, perhaps, best summarised by referring to the plaintiffs’ final submissions, in which it was submitted:

‘32.There is no evidence to suggest that the defendant could not have ascertained the recommendations of Mr Caddies and Mr Wood from due inquiry and complied with those safety precautions.

33. Had the defendant done as suggested by both Caddies and Wood there would have been no fire.’

64. This submission, with respect, patently reverses the appropriate position. It was not for the defendant to persuade me that it could not have ascertained those recommendations. Rather, it was for the plaintiffs to persuade me that a reasonable person in the position of the defendant should have obtained those recommendations. For the reasons I have identified, the plaintiffs have failed to satisfy me in this regard.

65. If I am wrong about that, it is then necessary to consider the plaintiffs’ further submissions that the defendant:

(a)should have had on hand suitable and functioning fire fighting equipment, having regard to the conditions on the day in question, and

(b)should have instructed Mr Haller to keep the top of the slasher free of grass at all times.

66. As to the first of these, Mr Wood said that:

‘I would have ensured that there were fire extinguishers of the appropriate type fitted to each item of mobile plant (dry chemical powder type or pressurised water type).  I would also have had a water tank (at least 500 litres in size) full of water on a separate vehicle equipped with a purpose designed fire fighting pump and fire hose with fire fighting nozzle to extinguish any fire that may have started.’

67. Mr Caddies would have had ‘at least a 1.5 kg or larger dry chemical extinguisher fitted to the tractor’ and had ‘a trailer mounted tanker and pump readily available to put out spot fires’.

68. On the other hand, the evidence of Mr Cannavan and Mr Pegoraro was to the effect that fire extinguishers, water tankers, and hydrants are not fitted or in place when they carry out slashing – whether on a hot day or otherwise.

69. Despite that conflict in evidence, even if I were to accept that a reasonable person in the position of the defendant would have had a fire extinguisher on the tractor or the slasher, Mr Haller’s unchallenged evidence was that a fire extinguisher would not have prevented the fire spreading. His evidence was:

‘Now, in that regard – in – in regard to fire extinguishers – to give his Honour some idea of the extent of the fire if there had been a fire extinguisher on the tractor what was the extent of the fire by the time it would have taken you to get the fire extinguisher operational? – I would imagine if there was a fire front approximately 12 to 15 feet wide with flames approximately six feet high in the time that it – it would have taken to remove and – and activate an extinguisher.

And from your knowledge of the use of such extinguishers was – what – what was the, in your view, the ability of that extinguisher to affect the fire? – I do not believe that it would have been effective in extinguishing the fire purely by the fact that the embers were spread to several areas and the fire front was large and significant in a very very short period of time.’

70. No evidence was called from which I could conclude that a fire extinguisher on the tractor or the slasher would have extinguished this fire or prevented it from spreading in the manner described in evidence by Mr Haller.

71. A report dated 14 July 2006 by Dr Peter Moore was tendered by the defendant without challenge by the plaintiffs. He was not required for cross-examination. He is employed by GHD as a fire management specialist. He holds undergraduate and post-graduate degrees in forestry and fire behaviour. His masters degree (from the University of Montana) and his doctorate from the Australian National University were in fire management.  He has over 20 years of operational, management and policy experience in relation to fires in the forestry and rural environment.  Dr Moore analysed the weather conditions, the state of the grass being mowed and the reported spread of the fire, and concluded, amongst other things, that:

-In the conditions on the day in question, he predicted the fire to have spread more than 145 metres in five minutes and reached a fire breadth of more than 29 metres.  He said that a ‘grass fire under these conditions would have been very difficult to contain or control’.

-If Mr Haller had left the slasher in situ, the fire would have spread 875 metres from this point source in 30 minutes.  His driving the tractor and slasher back to the shed was predicted by Dr Moore to have resulted in a fire spread of 1,750 metres after 30 minutes.  The rural fire brigade arrived about 30 minutes after the ignition but, in Dr Moore’s opinion, a fire spread of either 875 metres of 1,750 metres would have ‘exceeded the capacity of the fire fighters to contain or control it’.

-Even if Mr Haller had left the tractor, gone to the shed for a water service, and returned (allowing five minutes), he ‘would not have been able to extinguish the fire five minutes after ignition from a point source even with the aid of a water source or the orchard sprayer’.

72. As to the suggestion that there should have been a tanker and pump available, I am not persuaded on the evidence that the provision of such a measure would have been the response of a reasonable person in the circumstances of the defendant. In particular, no evidence was led as to the cost which would have been incurred in providing such fire fighting equipment. Mr Wood suggested in evidence that such a tanker should be ‘self-propelled or drawn and have someone available to operate it’. The cost and feasibility of providing that equipment and personnel to be on stand-by during slashing operations was not explored in evidence. Nor was any evidence led to suggest that such a measure was actually put into practice in the broader farming community.

73. As to the submission that a reasonable person in the defendant’s position would have instructed Mr Haller to keep the top of the slasher clear of grass at all times, I have already referred to the lack of evidence from which I can conclude that a reasonable person in the circumstances of the defendant would have been required to give this instruction to a person operating a slasher. Such a warning would only have been necessary, and meaningful, if the evidence established that a reasonable person in the circumstance of the defendant would have been aware of the risk of a fire igniting on top of the slasher in circumstances such as this. For the reasons I have identified above, the evidence in this case does not permit such a conclusion.

74. Accordingly, the plaintiffs have failed to persuade me that:

(a)the ignition of the fire resulted form the defendant’s negligence, or

(b)the spread of the fire (however caused) into the plaintiffs’ property resulted from the defendant’s negligence.

Their claim will therefore be dismissed.

Damages

75. It is necessary for me now to turn to assess the damages claimed by the plaintiffs in this case.

76. The plaintiffs elected not to claim for the diminution in value of their property caused as a consequence of the fire. Rather, they made claims for loss of income from the mango orchard, removal and replacement of 8,512 mango trees in the orchard, and replacement of damaged equipment, including a shed on the property. When opening the plaintiffs’ case, their counsel quantified the damages claimed by the plaintiffs as follows^[19]: 

Past loss of income from mango trees              $844,011.00

Interest thereon              $286,626.14

Future loss of income from mango trees              $2,230,071.23

Replacement and replanting of 8,512 mango trees              $103,951.20

Removal of 8.512 damaged mango trees              $106,480.00

Replacement of lost and damaged irrigation equipment              $62,217.00

Replacement of lost and damaged fencing              $19,817.85

Replacement of lost building              $5,000.00

Removal and replacement of damaged electrical equipment              $3,754.99

Total              $3,661,929.41

77. Clearly, the major component of the damages was the plaintiffs’ claim for lost income from the mango trees, and it was to this issue that most of the evidence on damages was directed.

78. Before dealing with those individual heads of damage, it is necessary to put the claim into some historical context.

79. Jarrah was previously owned by Mr John Conaghan. He and his wife owned the property for about 18 years before it was sold to the plaintiffs. They had bought the parcels as natural bush, and he and his wife had developed it over time into an orchard. Initially they planted macadamia trees on the property. Some time later he planted Kensington Pride mango trees in the area known as section 5. He later cut down the macadamia trees because they were not economical. In the early 1990’s, Mr Conaghan became the first commercial grower of Keitt mango trees in Australia.  These were initially planted on section 5.  Subsequently he planted Keitt trees on section 4, and thereafter on sections 1, 2 and 3 on the property.  Eventually he also planted Keitt trees on sections 6 and 7, at the rear of the property.  He subsequently also planted mangoes in sections 8 and 9, but the variety planted in section 9 were the mango known as R2E2.  Apart from the Kensington Pride mangoes he initially planted, and the R2E2 mangoes in section 9, all of the other mango trees on the property were Keitts.  Mr Conaghan also grafted and sold Keitt seedlings.  He said he sold about 25,000 grafted trees over the years.

80. Mr Conaghan described improvements he performed on the property, including the erection of some deer fencing both internally between the front and rear sections of the property and also around part of the rear part of the property behind sections 6 and 7. Mr Conaghan said that he had removed the deer fencing at the western part of the property before the property was sold, and that his neighbours on that side of the property erected new boundary fences on their properties. A fence along the northern part of the boundary had, on Mr Conaghan’s evidence, been in place for some 10 years before the property was developed. The southern side of the property was fenced, but there was no fence along the road frontage. The deer fencing which was still in place when the property was sold had been there for some 15 to 18 years. Mr Conaghan described its condition at the time he last saw it before the property was sold as being ‘in a very very poor state’ because the posts had rotted out and the mesh had rusted.

81. Mr Conaghan described the irrigation system he had installed through the orchard, both front and back. The system involved the running of main pipes, with thin poly-pipe sub-mains branching out and connected to sprinklers at the base of each tree. Although he had originally installed sprinklers to each tree, about two years prior to him abandoning the farm he started selling off the sprinklers that had been installed in the rear section of the property. There were bores both on the front section and the rear section of the property. By the time of the sale, however, only two bores at the front of the property had pumps operating on them.

82. Mr Conaghan gave evidence as to the horticultural management involved in producing fruit from the Keitt mango trees, including as to the pruning requirements and the various chemicals which need to be applied, particularly to avoid a problem which occurs with Keitt fruit known as ‘internal breakdown’. This is a condition by which the flesh within mango fruit breaks down around the seed.

83. He spoke of the difficulties associated with harvesting the Keitt fruit. He said that harvesting of Keitts on Jarrah started about mid-January and went for about eight weeks. He experienced difficulties in harvesting because of the Burdekin’s wet weather pattern at that time of year, particularly at the back block of the property. He said ‘Up the back there it was just ... a quagmire’.

84. Mr Conaghan said that he and his wife had estimated that it cost them about $6,000 a month to run the orchard.

85. He referred to difficulties that he had encountered in marketing the Keitt mango variety, stating that the market’s preference is for the Kensington Pride variety (also known as ‘Bowen mangoes’). He said that by the 1998/1999 mango season, he experienced difficulties in continuing to run and efficiently conduct the orchard because of financial problems. By that time, large Kensington Pride mango plantations had been established in southern areas such as Mundubbera, the Sunshine Coast and Byron Bay.  Fruit harvested from those southern properties were competing in the mango market with late picked Keitt mangoes from the Burdekin.  Mr Conaghan said that when the Kensington Pride mangoes from those southern orchards came onto the market, people just bought them instead, and the prices he could achieve dropped three or four dollars per tray of mangoes. 

86. At the end of the 1998/1999 mango season, Mr Conaghan and his wife decided to abandon the back part of the orchard, that is the 6,000 (approximately) trees planted at the rear of the property. They stopped irrigating, pruning, and tending to the plants. He said, ‘We did nothing’. From January or February of 1999 he sold off the sprinklers to raise some money, and also sold off the deer fencing at the rear of the property, also to raise money. He sold off other equipment, such as pumps from the bores, and tractor and farm equipment.

87. Eventually, in February 2001, Mr Conaghan abandoned the entire orchard, and from that time acted as a caretaker of the property only.

88. Mr Conaghan said that by 1998, there were ‘quite a few’ other Keitt mango orchards established in the area, but he also knew that ‘lots’ of them had shut down or abandoned their Keitt operations, or simply cut down the Keitt trees. He identified four other local properties on which Keitt mango orchards had either been abandoned or bulldozed into the ground.

89. Mr Conaghan’s mortgagee, Suncorp, eventually took possession of Jarrah as mortgagee of the property. He said that prior to the mortgagee taking possession, he and his wife had tried to market and sell the property for some years. They had received no offers. He considered that there would have been a lot of expense just to restore the farm to production. He identified the equipment and implements needed to be acquired, including pumps, and noted also the necessity to prune the trees to ‘get rid of all the neglected two years of growth’. He said ‘It would be massive cost to bring that farm back’.

90. In April 2001, Mr James Lyons, a registered valuer prepared a valuation of the property for Queensland Rural Adjustment Authority. Mr Lyons was instructed to assess the property’s current market value. He assessed its value as at 19 April 2001 at $260,000.  His valuation described the property, and the improvements on the property, including the mango orchards.  He considered the highest and best use of the property at that time to be rural residential, together with hobby farm usage.  By the time of his valuation, only about 2,000 of the trees on the property were being farmed, with the balance abandoned.  He noted that ‘the property is poorly presented at present with slashing throughout and general tidying up required.’  There were four bores at the front section of the parcel, with two of those equipped with pumps.  There were three unequipped bores at the rear of the property, but two were not considered serviceable.  He described the fencing then in place.  He referred to comparative sales for the purposes of assessing market value, and noted also a number of further factors which impacted on his valuation at that time, including turmoil within the mango industry.  He considered that the mango trees on the property had ‘minimal added value’. 

91. Another valuer, Mr Katter, inspected and valued the property as at 31 July 2001. This valuation was performed on the instructions of Suncorp ‘to provide a market value ... for mortgage security purposes’. He described the property as follows:

‘The subject property appears to have undergone extensive development over the years.  The main component of this development has been extensive clearing and planting of approximately 8,000 mango trees varying in age and variety.  The mango orchard at the southern section of the block generally comprises more mature trees that are reasonably well established.  These trees have reticulated PVC irrigation lines with sprinklers and are supplied by water from two equipped bores.  A portion of these trees also have steel protective bracings erected along the rows.

The middle portion of the site on the northern side of other creek has been largely cleared and comprises two areas fully fenced with eight foot deer fencing, however would be suitable for running a variety to stock.

On the far northern section of the site is an additional crop of seedlings that are in poor condition and are overrun by weeds and have evidently been overall poorly maintained.  We believe the cost to restore this orchard would largely detract from any perceived added value these trees may have in the market.’

92. Later in his report, Mr Katter referred to the consideration ‘that any particular purchaser looking at the current condition of the property would be faced with a significant development cost to bring the farm back into a reasonable state of production’.  Mr Katter’s opinion was that the current market value of the property at that time was $165,000 with a forced sale range of $140,000 to $160,000. 

93. A report from another valuer, Mr Peter Honnef, was tendered, and he also gave evidence at trial. Although Mr Honnef did not inspect the property until 4 July 2006, he made an assessment of the market value of the property before the fire on 7 November 2001, its value after the fire, and its value as at 4 July 2006.  He assessed the property’s market value before the fire at $180,000 (exclusive of GST), the value after the fire as $160,000 (exclusive of GST), and its value as at 4 July 2006 as $295,000 (exclusive of GST).  In his evidence at trial, he assessed the current value of property as being in the range of $450,000 to $500,000.

94. Mr Hobbs was a qualified diesel fitter and, as at September 2001, was working for Detroit Diesel-Allison Australia Pty Ltd in Townsville, earning about $57,000 per annum. Ms McLellan was a flight attendant, earning about $40,000 per annum. In 1998, he and Ms McLellan commenced their personal relationship. In late 1999 or early 2000, they purchased a house together at 16 Garrick Street, Townsville.  They paid about $100,000 for that house, borrowing some $85,000 of the purchase price.  Over the next two years they renovated and improved that property.  They decided to look for another property.  Mr Hobbs said:

‘We decided that after all the hard work that we’d put into the house and it was going to be sold it would be beneficial for us in the long term to be able to purchase maybe a rural property that when we put our endeavours into it over many years that we would still be able to enjoy the fruits of our labour further on down the track.’

95. Mr Hobbs said that he was interested in purchasing ‘a mango farm that had a profitable potential’, and that he had formed the view ‘that 4,000 mango trees’ was capable of producing enough profit to sustain a four person family unit.

96. Neither Mr Hobbs nor Ms McLellan had any prior experience in mango farming or managing mango orchards. Mr Hobbs said, however, that he was not deterred by that lack of experience because he had, he considered, many of the practical skills required, particularly in the machinery area, and also that he knew where to source information, that is from the Department of Primary Industries, other farmers and the internet.

97. Mr Hobbs and Ms McLellan first inspected the property in September 2001. He said that there was Rhodes grass growing up to a height of six feet throughout the rows of the orchard.  They drove around the property and through several of the different sections of the orchard.  He thought the trees appeared healthy with full green leaves, and an ‘abundance’ of fruit on the trees.  As to the rear orchard, he said the larger trees ‘definitely had a fair bit of fruit on them’ but the smaller trees did not have any large quantities of fruit.

98. Mr Hobbs made inquiries with the selling agent, and received a pamphlet describing the layout of the property, its location, the number of trees on the property, and irrigation.^[20] 

99. Mr Hobbs and Ms McLellan entered into a contract dated 28 September 2001 to purchase the property from Suncorp Metway Ltd, as mortgagee in possession, for $160,000. Completion of the contract was due 30 days thereafter, but Mr Hobbs and Ms McLellan were given access to the property about 10 days before settlement occurred. After being given permission to go onto the property, they borrowed a tractor and slasher from Ms McLellan’s brother, and started on the job of slashing the front footpath and all of the rows in the front orchard. They had the electricity to the front orchard transferred into their names, and also undertook some repair work to the irrigation system to the front orchard.

100. Settlement of the sale to Mr Hobbs and Ms McLellan occurred on 29 October 2001. At the time of, or shortly after, settlement, Mr Hobbs had discussions with a Mr Danziger in relation to the possible sale to Mr Danziger of fruit then on the trees.  I will refer to this evidence in more detail shortly. 

101. Mr Hobbs said that, at this time, the Kensington Pride and Keitts trees on the front orchard were all ‘heavily laden with fruit’. That was a total of some 2,500 trees. In the rear orchard, he said that there were some 2,300 trees which were similarly ‘heavily laden’ with fruit. The other, smaller trees on the rear orchard had fruit that he did not consider as being marketable.

102. Mr Hobbs said that his intention at the time was to continue cleaning the property up by slashing grass that had grown throughout the orchard, to continue to upgrade the irrigation system, and prune and manage the trees ‘so that in the following season we’d be able to sell the fruit off the property at that time for A grade fruit’.

103. Mr Hobbs said that he and Ms McLellan would provide the labour for improving the property. He would keep his job, but he expected that Ms McLellan would give up her then employment as a flight attendant at Flight West (although she would have had to have done some flights to keep her airline status current). He summarized their intentions as follows:

‘Yes.  All right.  And what was your long term goal in respect to the property and in respect to – of employment for both yourself and Karen? – Well with respect to the long term goals for the farm it was to be brought up to a level of production that could sustain both our lives so that we could both live and – and maintain ourselves at the farm.

Yes? – I was of the view that Karen was going to maintain a minimal amount of flying hours.

Yes? – So that if we needed to go back and she needed to fly again for any financial reason that she would be capable of doing that.’

104. Mr Hobbs described their intention to sell the Garrick Street property, leaving only a debt over the farm.  He also described the plant and equipment which he considered it necessary for them to buy.  The ‘essential list’ consisted of a tractor, slasher, a standard-type spray unit and an orchard-type spray mister.  He subsequently acquired all of these items.

105. The fire which started on the defendant’s property spread through Jarrah on 7 November 2001.  On 9 November and 14 November, Mr Hobbs took video film of the property showing the damage done^[21].  None of the fruit then growing on the trees was able to be salvaged. 

106. In the course of his evidence, Mr Hobbs described the work which was entailed in removing and re-fencing the property after the fire, and renovations that he and Ms McLellan did to the house. 

107. The Garrick Street property was sold in March 2002 for $165,000.  That left a secured debt owing on the Jarrah property of some $130,000. 

108. After the fire, Mr Hobbs and Ms McLellan also installed a ‘trickle tape’ type irrigation system through the front orchard. That is the means by which they have kept the front orchard irrigated since the time of the fire.

109. At the end of 2002, Mr Hobbs ceased paid employment, and commenced his own contracting business in partnership with Ms McLellan. He subcontracts his services to various mining groups, particularly for providing field service maintenance on mine sites. After he started that contracting work, Ms McLellan stopped outside work and has spent all her time on the property.

110. Some fruit has been produced from the front orchard since the time of the fire. It has been sold to Mr Piva, who gave evidence.

111. Mr Hobbs confirmed that it was his intention at the time of purchasing the farm to ‘run it as intensively’ as he could, but he would continue working in his job as a diesel fitter because, as he said, ‘You’d have to still have an income until such time as the farm can take over’.

112. Ms McLellan described their reasons for seeking a move to the rural lifestyle as follows:

‘And what did – what did you decide as the lifestyle that you wanted to pursue in the future? – Ah, well we were wanting to pursue a – Phil and I both were wanting to pursue a rural lifestyle.

Yes? – But something where we could be earning a living from.

Yes? – On a full-time basis.

Yes? – And – and have – have the luxury of living – living in the rural sector and also working it.

All right.  Mmm-hmm.  So your ultimate goal was to have a – a rural property from which you could make a living and you could both work? – That’s correct, yes.’

In the course of her evidence, she described the fruit she saw on the mango trees prior to the fire, describing it as ‘quite substantial’, and saying ‘I haven’t seen that load of fruit on the trees since the fire’.  In relation to their intentions for working the property, Ms McLellan’s evidence was:

‘So, you made an offer to purchase and your offer to purchase was accepted.  I want you to tell me about two things.  What was in your mind then as to how you were – what you were going to do with the property from the time that your offer was made and accepted?  What was your – your future plans for the property? – The future plans for that property were to have it cleaned up.

Yes? – Have it – if – if we – if we couldn’t do anything with the fruit that year we would be set – set ourselves in the position where we could be starting a – some type of production the following season.

Yes? – That was our goal.  That was our aim.

Yes.  And – well, what was your long term goals?  What were your plans to do with it?  You were – you were going to clean it up.  How were you going to clean it up?  What were you going to do? – We had – well it needed – well first of all it needed to be slashed out.  There was rubbish to be – there was just rubbish.

Yes? – And a lot of the rubbish had to be removed actually before we could sort of get into some of the roads because it was really just everywhere.’

113. Ms McLellan described the work she has been doing on the property since moving there, which involves tending the orchard, farm maintenance, pruning, crop monitoring, spraying, irrigation repairs, gardening and light mechanical repairs.

Lost income

114. The plaintiffs’ case on income alleged to have been lost from the mango orchard really falls to be considered under two headings:

(a)Any income lost as a consequence of the destruction by fire of the crop of mangoes then available on the orchard as at the date of the fire, 7 November 2001;  and

(b)Whether the plaintiffs have established, on the balance of probabilities, that, by reason of the fire, they have lost the commercial opportunity to derive income from the orchard, and if so, to assess the value of that lost opportunity.

115. As to the first of these, if I am satisfied, on the balance of probabilities, that there was a crop of mangoes available to be sold, and that it was more likely than not that those mangoes would have been sold, then it is appropriate for the plaintiffs to be compensated for that loss.

116. The second element, however, requires some more detailed attention. In point of principle, the plaintiffs relied particularly on Lonie v Perugini^[22], a case in which trees in a cherry orchard had been damaged by a fire which had escaped from a neighbour’s property.  When discussing the proper approach for the assessment of damages in that case, Bray CJ said^[23]:

‘The trees, of course, in contemplation of law form part of the realty and it is no doubt true that one way, perhaps the normal way, of assessing damages for injury to real property is to award the amount of the depreciation in the value of the land as a result of the injury.  But this is obviously not sufficient, and perhaps not appropriate at all, if the land is devoted, or was intended to be devoted, by the owner to some profitable purpose which the damage has frustrated, postponed, interrupted or made less profitable.’

117. The learned Chief Justice then referred to the following observations by Sugerman J in Williamson v Commissioner for Railways^[24], a case in which fire caused damage to a grazing property^[25] (omitting citations):

‘The appropriate method of assessing damages in respect of damage caused by negligence (including the negligent lighting and spread of fire) to the property of another, is dependent upon the circumstances.  The plaintiff may claim (that is, as a capital loss) the difference in value of the property to him before and after the fire ... or, more particularly where the property is employed in a business, he may claim the cost of repairing or making good the damage, the diminution in value of the property after repairing or making good, and for losses sustained by reason of loss of use during the period occupied in repairing or making good.’

118. An obvious distinction between Lonie v Perugini and the present case, of course, is that Lonie concerned damage which was done to a functioning, operational, and profitable cherry orchard.  What the plaintiffs had purchased in the present case was an abandoned mango farm, which had not been tended, and in fact was neglected in large part for several years, with no equipment and little infrastructure.  It was obviously not an extant horticultural operation at the time they purchased the property.  At best for them, it held potential for the future. 

119. Notwithstanding the manner in which the claim for damages had been pleaded and presented during the opening, counsel for the plaintiffs, in his final submissions, put his clients’ case on the basis of lost opportunity.

120. To the extent, therefore, that the plaintiffs claim damage for deprivation of a commercial opportunity, those damages are ascertained by reference to the assessment of the prospects of success of that opportunity had it been pursued. So much was stated in terms by Mason CJ, Dawson, Toohey and Gaudron JJ is Sellars v Adelaide Petroleum NL^[26].  Their Honours continued:

‘The principle recognised in [Malec v JC Hutton Pty Ltd (1990) 179 CLR 638] was based on a consideration of the peculiar difficulties associated with the proof and evaluation of future possibilities and past hypothetical fact situations, as contrasted with proof of historical facts.  Once that is accepted, there is no secure foundation for confining the principal to cases of any particular kind.

On the other hand, the general standard of proof in civil actions will ordinarily govern the issue of causation and the issue whether the applicant has sustained loss or damage.  Hence the applicant must prove on the balance of probabilities that he or she has suffered some loss or damage.  However, in a case such as the present, the applicant shows some loss or damage was sustained by demonstrating that the contravening conduct caused the loss of a commercial opportunity which had some value (not being a negligible value), the value being ascertained by reference to the degree of probabilities or possibilities.  It is no answer to that way of viewing an applicant’s case to say that the commercial opportunity was valueless on the balance of probabilities because to say that is to value the commercial opportunity by reference to a standard of proof which is inapplicable.’

121. In the course of his separate reasons for judgment, Brennan J (as he then was) made the point^[27] that ‘provided an opportunity offers a substantial, and not merely speculative, prospect of acquiring a benefit that the plaintiff sought to acquire or of avoiding a detriment that the plaintiff sought to avoid, the opportunity can be held to be valuable.’

122. Accordingly, insofar as the plaintiffs’ case is that they were deprived of a commercial opportunity to produce and sell mangoes from the farm, it is necessary for them to establish, on the balance of probabilities, that the defendant’s negligence caused them to lose a commercial opportunity of some value, with that value being ascertained by reference to the degree of probabilities or possibilities. In order to be of ‘some’ value to the plaintiffs, however, the value so ascertained, on the assessment of probabilities or possibilities, cannot be a negligible value.

123. Application of those principles in the present case requires consideration of:

(a)the degree of likelihood, as opposed to minor possibility, of the plaintiffs exploiting the commercial opportunity;  and

(b)the degree of likelihood, as opposed to minor possibility, that exploitation of the commercial opportunity would have yielded any, and if so what, profits to them.

The crop lost in the fire

124. The plaintiffs claim that they had entered into a contract to sell the mangoes on the property as at the date of the fire which would have resulted in ‘gross proceeds of approximately $80,430 less their costs of picking and delivery’. This contract was said to have been entered into with Mr Danziger of ‘Strip Pickers’.

125. Mr Hobbs gave evidence that in late October 2001, in the course of making inquiries as to how he might dispose of the current crop, he came to learn of Mr Danziger.  He made contact with Mr Danziger and arranged to meet him to inspect the fruit ‘with the potential sale for the purpose of juicing’.  He understood Mr Danziger to be a buyer of mangoes.  He met Mr Danziger at the property, and they inspected the front orchard and the rear orchard at the right hand side.  This occurred on 27 October 2001.  Mr Hobbs said that the trees at this time were ‘in a large healthy state’ and ‘they had large mature looking fruit that was progressing well’.  He said that Mr Danziger offered to buy the fruit from him at the rate of $210 per tonne delivered to Mr Danziger, or $100 per tonne not delivered.  At that time, Mr Danziger had not set up his base of operation.  Mr Hobbs said he had a further meeting with Mr Danziger, at which it was agreed that harvesting of the Kensington Pride mangoes could start after 12 November and that the Keitt mangoes would be ready to pick at a later date.  Mr Hobbs said that, because there were only 250 Kensington Pride trees, he had decided that he and Ms McLellan would pick those mangoes and deliver them to Mr Danziger, but in relation to the Keitt mango trees, it was ‘left open ended’.  From this, I take it that it had not been decided whether Mr Hobbs and Ms McLellan would pick the Keitt mangoes and deliver them to Mr Danziger’s operation, or whether Mr Danziger would arrange for the harvesting of the Keitt mangoes.

126. Mr Danziger gave evidence. He said that when he inspected the property he estimated that eight to 10 trees would yield a tonne of fruit and that he thought there would be around 500 to 550 tonnes of fruit on the property. He described the quality of the fruit as ‘beautiful, 100 per cent’, and described the quality of the trees on the front block as ‘exceptional’, but said that the back block was ‘backward a bit’; it had a lot of grass growing, and it needed a lot of cleaning up, but ‘it would have been okay too’. He said that he was prepared to pay $100 per tonne for fruit on the tree or $210 per tonne if the fruit was supplied to his operation. He said in evidence-in-chief that he was as happy to buy Keitts mangoes as Kensington Pride and said there was no difference in price for Keitts as opposed to Kensington Pride. Whilst there were other Keitts producers in the area, this was the first block of Keitts mangoes that he had looked at purchasing.

127. It further emerged in the course of Mr Danziger’s evidence, however, that the ‘Strip Pickers’ business was not his alone;  he was in partnership with Mr Godfrey O'Neill.  Mr O'Neill was the proprietor of a fruit processing business called ‘Netherdale Foods’.  He then admitted that the ‘Strip Pickers’ business itself had no capacity to purchase the fruit.  Rather, it relied on Mr O'Neill to accept and pay for fruit delivered to his business, and the money paid by Mr O'Neill’s business would then be directed to payment of the grower. 

128. Further difficulties emerged in the course of Mr Danziger’s evidence which led me to have significant concerns about his reliability. A number of previous written statements he had made concerning the matter were put to him, which contained inconsistent, and clearly incorrect, factual assertions. For example:

(a)In a statement dated 24 November 2001^[28] he described the mangoes to be purchased as being on about 3,000 Keitt mango trees and 3,000 Kensington Pride trees, but in another statement dated 18 December 2006^[29] he said that there were 5,000 to 8,000 Kensington Pride mango trees on the plaintiffs’ property.  Both of these statements were clearly incorrect;

(b)In the statement dated 18 December 2006 he referred to the trees appearing to be in their ‘first bearing season’, which was patently incorrect;

(c)In the statement dated 18 December 2006 he referred to the orchard having a ‘new irrigation system installed to all the trees’, which was patently incorrect;

(d)In that same statement he referred to Mr Hobbs as having ‘sprayed the trees with appropriate pest control’, which was also incorrect.

129. Mr Danziger’s purported assessment of the potential harvest, particularly from the rear block, is also problematic. At the time of his inspection, the rear block was well overgrown, and the trees had been untended for several years. It strains credibility to think that Mr Danziger could have made any meaningful assessment of the potential harvest from the rear block in those circumstances.

130. Moreover, the proposition that the fruit from this orchard, predominantly Keitt mangoes, would be sold for juicing is not without difficulties. Mr Danziger said that this was the first operation in which he would have supplied Keitts for juicing to Mr O'Neill. Under cross-examination it was put to him that Mr O'Neill had told Mr Danziger to the effect that he was not interested in juicing Keitt mangoes and that he wanted Kensington Pride mangoes if he could get them but not Keitts. Mr Danziger confirmed this in a qualified way, asserting that Mr O'Neill couldn’t get enough Kensington Prides so he was going to mix Keitts with Kensington Prides.  The following evidence then fell from Mr Danziger:

‘You see, it is the case, is it not, that Kensington Pride are preferred for juicing? – They are.

So from your experience Keitt, if they’re not of a high quality to go into trays, it’s difficult to get anything for them because the juicers won’t buy it very much either? – They don’t buy a real lot of it, no.’

131. The amount which the plaintiffs claimed they would have earned from Mr Danziger was particularised as $80,430 less their costs of picking and delivery to Mr Danziger.  At $210 per tonne, this sum represents the sale of some 383 tonnes of mangoes.  There was no evidence as to where this 383 tonnes came from, and there was simply no evidence led to prove that 383 tonnes of mangoes would have been delivered, or accepted by Mr O'Neill for juicing at his processing plant.  Nor did the plaintiffs lead any evidence as to what their costs of picking and delivering the fruit would have been, to enable calculation of net loss.

132. I am unable to speculate on these matters. Notwithstanding the difficulties with Mr Danziger’s evidence to which I have referred, even if I had been prepared to find that there was some prospect of him acquiring the fruit from the plaintiffs, the plaintiffs have failed to discharge the onus of quantifying the value of that lost opportunity.

Claimed loss of opportunity to earn future profits

133. The most significant component of the claim is the plaintiffs’ contention that, by reason of the fire, they were and have been deprived of the valuable opportunity to derive profits from the mango orchard over many years following the fire. In seeking to prove the value of that lost opportunity, the plaintiffs relied particularly on written reports by Mr Gavin MacGregor and Mr Noel Meurant (both of whom had died by the time of the trial) and the evidence of Mr Dale Abbott, who is a horticultural consultant. In general terms this evidence was directed to identifying the extent of the damage done to the orchards and to quantify what would have been earned from the orchards if the fire had not occurred. For its part, the defendant led evidence from Mr John Kilpatrick, directed to the nature and extent of the damage to the trees, and from Mr Rodney Woolcock, who is a rural consultant. Mr John Thynne, a chartered accountant, gave evidence as to the trading performance which would have been obtained on the farm, based on Mr Woolcock’s conclusions.

134. It is fair to say that the positions presented were diametrically opposed – the plaintiffs’ position was that, but for the fire, they would have netted several million dollars profit from the farm; the defendant’s position is that, even absent the fire, the mango farm would not have been profitable.

135. The plaintiffs’ evidence to which I have referred, and to which the defendant’s evidence was largely responsive, proceeded on the assumption that the plaintiffs would immediately have commenced operating the property as a full-time, full-scale mango farm. It is, however, clear from the passages from their evidence I have extracted above that this was not their intention at all. They had ‘long-term goals’ for the property. Mr Hobbs was to continue working in his employment. Ms McLellan was going to give up most of her external employment as a flight attendant. This would have given them the opportunity to rehabilitate the farm over time. Ms McLellan had the goal of the property having ‘some type of production’ the following season. Mr Hobbs, as noted above, described his ‘long-term goal’ as being to bring the farm up to a level of production that would enable them to live and maintain themselves.

136. The lending officer at the National Australia Bank Mr Paul Mercer, when compiling a memorandum dated 8 October 2001 in support of the plaintiffs’ application for finance to purchase the farm, recorded having been told that the plaintiffs ‘will eventually generate income from the fruit to supplement their income and provide capital for improvements to the property within two to three years’ and that the plaintiffs have ‘no intention of leaving full-time employment and see this property as a long term proposal’. The accuracy of Mr Mercer’s record of these matters was not challenged.

137. Accordingly, I find that it was not the plaintiffs’ intention as at November 2001 to commence immediately with full-scale mango farming on Jarrah.

138. More fundamentally, even if the plaintiffs had desired to launch themselves immediately into full-scale mango farming, the evidence is that this would simply not have been financially achievable for them.

139. Mr Woolcock is a highly qualified and widely experienced agricultural economist, who holds a master’s degree from the University of Melbourne in agri-business, a degree in economics from the Australian National University and a degree in agricultural science from the University of Queensland.  His detailed curriculum vitae recited the many projects to which he has consulted in Australia and overseas over a long career, including his retainer in 1999-2000 as an agri-business analyst to a large mango industry investment project, and his retainer in 1998 as an agricultural/marketing consultant to a mango industry investment feasibility study for an investor client.  He also had the experience, when acting as a consultant to the Native Land Development Corporation of Fiji, of undertaking a feasibility study into the establishment of a large scale mango operation for the export market.  The plaintiffs did not seek to challenge Mr Woolcock’s expertise to give the report he had written.

140. Mr Woolcock’s report of August 2006 addressed the question of what net income could have been derived from the mango farm if the fire had not occurred. Relevant for present purposes is Mr Woolcock’s assessment of the capital expenditure which would have been required to bring the farm back to operation. Mr Woolcock’s report presents two scenarios – the ‘optimistic’ scenario had complete rehabilitation of the farm occurring after the January 2002 crop was cleared; the ‘pessimistic’ scenario allowed for a more progressive rehabilitation over several years. Mr Woolcock assessed the total capital expenditure required to rehabilitate the farm as $332,337, noting that most of these expenses would have needed to have been incurred within four months of acquisition of the property (i.e. by February 2002) if the optimistic scenario were to be achieved.  Even in the case of the pessimistic scenario, he estimated that $150,000 would have been required to be spent in 2002, with the balance $182,377 in 2003.

141. Mr Thynne’s evidence demonstrated that the plaintiffs clearly did not have the capacity to fund the immediate rehabilitation of the mango farm operation.

142. Mr Abbott, called by the plaintiffs, is a horticultural consultant, whose ‘core business is crop monitoring which involves insect, weed, disease, water and nutrition management’. He has a number of clients who are mango growers, and his business has monitored, advised on, and from time to time managed clients’ mango farms over the years. In his report of 23 March 2007, Mr Abbott purported to opine as to the notional cash flow which would have been derived through the farm if the fire had not occurred, but it emerged in the course of his evidence that he had no expertise to qualify him to prepare such a cash flow projection, and that this part of his report had effectively been derived from the work of an accountant, Mr Hansen. The giving of expert financial or economic opinion was clearly outside Mr Abbott’s area of expertise, and no weight can be given to those parts of his report. But even despite that, it is notable that:

- the Abbott report adopted the quantum of the operating expenses (fixed and variable) posited by the defendant’s experts Mr Woolcock and Mr Thynne;

-the Abbott report used the plant (i.e. mechanical, not herbaceous) replacement list prepared by Mr Woolcock as a guide and calculated on the basis that not all plant would be required in the first year nor would all the plant need to be new.  His calculations were performed on the basis of the plaintiffs obtaining a plant and equipment facility of $100,000 in the first year at 8.8 per cent paid monthly over five years, with this to be replaced with a $200,000 facility after five years.  His estimated value for the equipment to be acquired in 2002 was $255,444 plus $75,000 for irrigation, electricity and shed repair.  (It will be noted that the total of these figures is within $2,000 of the amount estimated by Mr Woolcock as required for rehabilitation.)

-the cashflow assumed (wrongly) that the property had been paid for by the owners, and noted (Note 14) that ‘an overdraft is required in the first three years to meet operating expenses’, and further ‘factored in’ a $75,000 loan over seven years to pay for the irrigation, electricity and shed upgrades.

-the cashflow projected a revenue deficit for the year ended 30 June 2002 of some $81,000.

143. The plaintiffs, however, led no evidence to prove that they had the financial capacity to fund the rehabilitation and ongoing operation of the orchard even on Mr Abbott’s model (which, as noted above, wrongly assumed that there was no debt owing on the purchase of the property), let alone either of the scenarios put forward by Mr Woolcock.  At the time they purchased Jarrah, they had some equity in their Garrick Street property, and borrowed all of the funds required to purchase the farm.  Even after the sale of Garrick Street, they owed the bank some $130,000 secured over the farm.  There was no evidence that a financier would have advanced the money needed to cover capital costs, operating expenses, and even initial trading shortfalls.  There was no evidence as to the business plan which the plaintiffs would have proposed to finance such an operation.  On the contrary, there was unchallenged evidence from Mr Thynne, who conducted, inter alia, an analysis of the plaintiffs’ capacity to fund the working capital and operating cost requirements for the property, that:

-the plaintiffs did not, as at late 2001, have either the collateral to secure a loan with an external financier or the personal equity necessary to fund rehabilitation and operation of the farm under either of Mr Woolcock’s optimistic or pessimistic scenarios;

-he could not reconcile how the plaintiffs would have been able to fund the working capital requirements postulated in Mr Abbott’s scenario;

-the plaintiffs did not have sufficient collateral to support the loans postulated in Mr Abbott’s scenario.

144. This all leads me to find, as I do, that as at the date of the fire, not only did the plaintiffs not have the intention of immediately embarking on the full-scale farm rehabilitation and operation on which their claim for ‘lost opportunity’ is based, they did not have the financial capacity to do so. The opportunity which they claimed to have lost can therefore not be described as anything other than speculative.

145. Even if I had not made these findings, however, I would not have been satisfied that the value of the opportunity lost had any value, let alone that contended for on their behalf.

146. The evidence of Mr Abbott was underpinned by reports which had previously been obtained form Mr Meurant and Mr MacGregor. Both of these men died prior to the trial, and reports they had prepared were admitted pursuant to s 92 of the Evidence Act.

147. Mr MacGregor’s report, dated 19 December 2003, was prepared after site visits he conducted in August, September, November and December 2002 and a further site visit in September 2003. Mr MacGregor was an agricultural and irrigation consultant, based in Bowen. His curriculum vitae relevantly disclosed mango production experience in the areas of orchard design, irrigation, general consultancy, research and development of the preparation of agronomic reports, and crop loss assessments. Mr MacGregor assessed that the fire caused ‘death and severe damaged to 7,942 trees’ which would need to be replaced, and that the only trees worth retaining were the 570 trees in section 4. Mr MacGregor assumed that replacement of the trees would commence in 2004, and that the replacement trees would reach full production by 2014. His methodology was to calculate the expected yield for the original 7,942 trees, calculate the yield over time of the replacement trees, and then calculate the difference over the time until the yield from the replacement trees would equal that which would have been obtained from the original trees. In calculating yield, he referred to both the yield of fruit for the fresh market (i.e. in trays) and fruit for processing. On his assumed figures, there was a loss of yield attributable to the replacement trees over the period 2001 to 2014 of 771,908 trays of fruit and 1,523,501 kilograms of processing fruit. He also calculated a loss of yield from the ‘remaining’ 570 trees of 35,340 trays and 88,350 kilograms of processing fruit over the period 2001 to 2013. The total loss of yield over the period under his analysis was, therefore, 800,408 trays and 1,663,151 kilograms of processing fruit. Mr MacGregor then set out the costs he would attribute to harvest and post-harvest costs (picking, packing and shed costs, cartage and freight) for both tray fruit and processing fruit. He set out his calculations of the return per tray (nett of agent’s commission), weighted according to a harvesting schedule for the different varieties, to come up with a total value nett return on the 800,408 trays of $4,441,126.60. For the processing fruit, he calculated a nett return of $0.25 per kilogram, yielding $415,787.75. His total loss of yield was, therefore, $4,856,914.30, from which he deducted production costs not incurred in relation to both the replacement trees and the remaining trees totalling $949,411, leading him to conclude that the ‘nett value of loss of yield’ suffered by the plaintiffs over the period would be $3,907,503.30.

148. Mr Meurant was a horticultural adviser who worked for many years as the District Adviser in North Queensland for the Department of Primary Industries.  He described himself as the ‘Queensland specialist in mangoes’.  His curriculum vitae certainly revealed many years involvement in the mango industry, including in relation to the farming of that fruit.  His first report dated 22 March 2004 describes in some detail the damage he said was caused to the trees on Jarrah.  That report, as he noted in a subsequent report, was prepared at the request of Mr MacGregor, and on the basis of site visits by Mr Meurant in June and July 2003.  His first report contained a detailed break-up by him of his opinion as to the nature and extent of the damage done to the trees on the various sections, and concluded that 7,941 trees were damaged beyond recovery due to the fire, and that only 590 trees in the ‘trellis’ section could be rejuvenated.

149. Mr Meurant’s second report, dated 6 June 2006 relevantly reviewed the report which had been obtained from Mr MacGregor and also reports which the defendant had obtained from Agricultural Loss Management Group (‘ALM’). Without repeating the detail of this report at length, it is sufficient to note that Mr Meurant:

(a)agreed in almost every respect with the report previously published by Mr MacGregor; and

(b)was highly critical of the ALM report, which had concluded that there was much less damage to the trees on the orchard than had been assessed by Mr Meurant and adopted by Mr MacGregor.

150. It should also be noted that this report stated the following assumptions by
     Mr Meurant:

‘6.Assumptions

6.1My report proceeds on the assumption that the plaintiffs would have had at their disposal all necessary equipment and requirements for a commercial mango plantations.  It was my view that the plaintiffs readily sought necessary information and advice regarding mango plantations.

6.2MacGregor and I have assumed that each of the seasons 2001 – 2007 would have had favourable weather conditions and market demand.

In my view both of the above assumptions are reasonable.’

At least the first of these assumptions would properly have been explored and challenged under cross-examination if Mr Meurant had still been alive.

151. The ALM report to which Mr Meurant was referring was one dated 26 May 2004 under the hand of Ms Megan Thomas. The contents of this report were adopted by Mr Kilpatrick as his own, he having accompanied Ms Thomas on the inspection of the farm on 27 April 2004 on which the report was based and also having assisted Ms Thomas in the preparation of the report. I will refer to Mr Kilpatrick’s evidence in some more detail shortly. The 2004 ALM report described the observed condition of the mango trees in the orchard. It is sufficient to note that, in relation to the front orchard, the report stated:

‘The MacGregor report states that 1,723 trees in the front orchard will need to be replaced.  Our inspection revealed there are only a few rows of dead trees in the front orchard.  Most of the trees appear to be reasonably healthy.’

152. In relation to the rear part of the orchard, the report stated that inspection confirmed ‘that the rear orchard had very few productive mango trees and consisted mainly of dead mango trees’. Section 6 was said to contain mostly dead mango trees, but there was a small area of trees that appeared to be relatively unaffected. Section 7 had very few healthy trees. It was commented that ‘any trees that were not dead were stunted and would not have been productive’. In relation to sections 8 and 9, it was reported that all mango trees in those blocks were dead and would need to be replaced.

153. After the death of Mr MacGregor and Mr Meurant, the plaintiffs retained Mr Dale Abbott, who provided, as already observed, a report dated 23 March 2007. In that report, Mr Abbott referred to the yield figures outlined in the MacGregor and Meurant reports, and said that he believed that the yield figures adopted by those men of 13 trays (per tree) ‘is conservative, but for the purposes of this report, I have adopted this figure as being accurate’. He then referred to the assessments which had been done by Mr MacGregor and Mr Meurant of the extent of damage done to the trees, and criticised in some detail the ALM report dated 26 May 2004. Mr Abbott then referred to his own observations of the state of health of the trees in the orchard, and concluded:

‘It is very clear from the assessments undertaken by myself and Meurant that the orchard is in a rate of steady decline in terms of tree health, growth and tree survival.  This is a direct result of the fire and its high temperatures causing damage to the bark and to the underlying cambial tissue.  Wounding of these tissues has resulted in cracks allowing the entry of termites and branch deterioration.’

154. Mr Abbott said that he agreed generally with the production calculations and methodology adopted by Mr MacGregor and the subsequent updates by Mr Meurant, and he adopted Mr MacGregor’s yield figures.  In purporting to calculate the value of the lost yield, he based his calculations on the figures provided by Mr MacGregor and Mr Meurant.

155. In the course of cross-examination of Mr Abbott, however, some serious difficulties were exposed both in relation to his areas of expertise for the purposes of producing at least parts of his report and also as to the assumptions on which his report was founded, including:

-His concession that analysis of investment and the money involved in operating a mango farm was not part of his expertise;

-His concession that he had no expertise to conduct an economic analysis in relation to the conduct of the mango business;

-The concession referred to above that he had no expertise to perform the cashflow projections contained in his report, and indeed had effectively outsourced these to an accountant;

-That, on instructions, he had not purported to make a comparison of the difference in nett profit positions, but limited himself to a comparison of gross profit positions (as had been done by Mr Meurant and Mr MacGregor);

-The fact that the yield figures from the trees on which Mr Abbott’s, and indeed Mr MacGregor’s, calculations were based proceeded on the basis of ‘total yield’ figures from the trees which were inflated by including both yield for trays and yield for processing;

-The yield figures on which Mr Abbott’s projections were based were significantly, if not far, greater than published data would suggest appropriate;

-He had assumed that the plaintiffs were going to commence full-time farming immediately from November 2001. 

-Mr Abbott’s assumption as to harvesting occurring over four months was inapposite to this property, on which the significant bulk of the trees to be harvested were Keitts for which the harvesting season was in January/February;

-Mr Abbott made no assumption as to the level of previous neglect on the property;

-The market prices he used included irrelevant prices for April and May.

156. The difficulty one faces in placing any weight on the reports of Mr MacGregor and Mr Meurant, on which Mr Abbott relied so heavily, is that their observations as to the state of health of the trees, their assumptions as to yield, and their assumptions as to marketability of the Keitt fruit in particular were the subject of quite contradictory evidence before me. That other evidence was able to be tested, but, obviously, neither Mr Meurant nor Mr MacGregor were able to be tested by cross-examination in relation to those matters.

157. Mr Kilpatrick provided a further report dated 14 September 2006. Mr Kilpatrick worked for the Queensland Department of Primary Industries between 1962 and 1994, having previously undertaken qualifications in agriculture in England.  His work for the DPI included significant experience in relation to tree health, including the assessment of mango tree health.  Mr Kilpatrick also has his own small irrigation farm on the Atherton Tableland, on which he grows, inter alia, 150 Keitt mango trees which are now about nine or 10 years old.  His 2006 report was prepared after a further inspection by him of the property on 4 July 2006.  He updated the commentary on the state of health of the trees that had been set out in the 2004 report.  Without repeating the detail, there were no significant changes in his view.  He reviewed Mr MacGregor’s report, and particularly raised issues in relation to the correlation between the ages of the trees assumed by Mr MacGregor, especially those in the back orchard, as compared with the observed sizes of those trees.  In relation to Mr Meurant, Mr Kilpatrick referred to a letter dated 13 September 2004 which Mr Meurant had written to the plaintiffs following a visit by him to the property on 2 September 2004.  This letter set out a summary of advice Mr Meurant had given the plaintiffs about spraying, pruning, flowering, watering, fertilising and undertaking soil samples and leaf analysis.  As Mr Kilpatrick points out, there is no mention in this letter of the serious damage to the trees in the front orchard which had been pointed to by Mr Meurant in his expert reports, and indeed, the tone of his letter is one of optimism about the prospects for the trees in the front orchard.  Clearly, this is also a matter on which Mr Meurant would have needed to have been cross-examined.  Mr Kilpatrick also challenged individual assumptions and statements made in Mr Meurant’s 2006 report.  For example, Mr Meurant had stated in that report that it ‘should be recognised that there are a large number of commercial orchards grown without irrigation’, but Mr Kilpatrick said categorically that he did not know of any.  Again, this is a topic which would have been explored in cross-examination with Mr Meurant.

158. Importantly, Mr Kilpatrick expressly raised serious issues with the inspection methodology on which Mr MacGregor and Mr Meurant had drawn their conclusions as to the damaged state of health of the trees. Mr Kilpatrick said, in terms:

‘I’ve never heard of that method before.  If you understand what they’re describing in terms of looking at the cambium after the fire until I got involved in this case I’d never come across that technique before so I – I question its suitability.’

159. Mr Abbott, in his report, had criticised Mr Kilpatrick for basing his opinions on only superficial observations. Mr Abbott sought in his report to shore up this criticism by giving close-up attention to particular trees which on Mr Kilpatrick’s assessment were healthy, but which Mr Abbott said in fact were suffering from tissue damage and termites. Mr Kilpatrick countered this criticism in evidence by pointing out that the tree referred to by Mr Abbott did not show damage as a result of fire. Photographs demonstrated that the bark showed no sign of fire damage, and, to the extent that the photographs demonstrated damage to the tree, it appeared to Mr Kilpatrick that this had been caused by a branch breaking off. He admitted of the possibility of the tree having been weakened in health to admit termites, but noted that ‘termites go up healthy trees as well’.

160. There are other difficulties in relying on the reports of Mr Meurant, Mr MacGregor and Mr Abbott. The yield figures propounded by Mr MacGregor and Mr Meurant were the subject of challenge. For example, evidence was led from Mr Rowland Holmes, the extension horticulturalist specialising in mangoes with the Department of Primary Industries and Fisheries who confirmed advice he had previously given that a potential range of yield for Keitt mango trees would be from three to 22 trays per tree, based on Kensington Pride yields, because there are so few Keitt orchards in the area.  He also confirmed advice that yields in mango orchards could vary significantly, even in orchards that are located in the same region and are subjected to the same climatic and environmental factors.  Mr Ian Bally, a senior horticulturalist with the Department of Primary Industries and Fisheries in Mareeba gave evidence that he was not aware of any available data for production and yields of Keitt mangoes in the Burdekin region, and said that ‘from experimental data obtained from studies in Mareeba, in my opinion this would indicate a range and potential yield of five to 31 tonnes per hectare of Keitt mangoes which would also be applicable to the Burdekin area’.  Mr Angelo Torrisi, who was called on behalf of the plaintiffs to give evidence in relation to the cost of providing replacement mango trees, operates a mango nursery in Giru, and has been involved in the mango industry for about 40 years.  He referred to Keitts as being ‘a low bearing fruit tree’.

161. Mr Woolcock’s report postulated a yield in the order of 10 tonnes per hectare for the plaintiffs’ orchard. That yield rate was consistent with that posited by Mr Holmes, and was appropriately more conservative than the yield reported by Mr Nastasi, who is a large-scale producer of mangoes, including Keitt mangoes, on the Atherton Tableland, with a particular emphasis on high quality fruit for the export market.

162. Other avenues of challenge to the underlying assumptions to the reports of Mr Meurant and Mr MacGregor would have involved the extent to which they properly assessed the market for Keitt mangoes in Australia.  This has a number of elements.  First, there was clear evidence before me that the Keitt variety is nowhere near as popular as the Kensington Pride variety.  Indeed, as to the marketability of Keitt fruit which is not of the highest standard, Mr Nastasi went so far as to say:

‘Unfortunately there’s no market for low quality Keitt mango in Australia because the nectar has not got a very good flavour and it has a very poor shelf life.  And the dried mango because they then to have a sort of turpy taste.  What we call a turpy taste.  And if there’s no other mango around we have a market.  But we had to compete against say like Kensington Pride mangoes I don’t think the consumer would buy them.  And that’s why value adding into nectar or dried it’s not a very good product to do that.’

163. Secondly, neither Mr MacGregor nor Mr Meurant seemed to have factored into their projections the fact that orchards growing the more popular Kensington Pride variety have opened in diverse geographical locations, including as far south as Byron Bay.  This has had the effect of significantly extending the period of time during the year when Kensington Pride mangoes are available on the market, and therefore competing with the Keitt mangoes.

164. Mr Abbott assumed a yield from the Keitt mangoes on the plaintiffs’ property of 39.6 tonnes per hectare. I accept the defendant’s submission that, on the evidence before me, this was an entirely unrealistic assumption.

165. I have already referred to the evidence of Mr Woolcock, and his qualifications. Mr Woolcock’s report addressed his assessment of the estimated nett income potential of the farm, had the fire not occurred.  In preparing the report, he assumed that the property was in a neglected state following a prolonged period when the previous owner was unable to fund the operation of the mango business.  That assumption was consistent with the evidence led in the case.  Mr Woolcock addressed in some detail the characteristics of the Australian mango industry, described the price variances and characteristics which are attributable to seasonal factors, gave evidence as to the appropriate current method of referring to mango yields (that is yield per hectare, rather than tray per tree), and noted (on the basis of referenced research) that ‘although experimental evidence suggests quite high yields can be achieved (up to 30 tonnes per hectare in the case of Keitt), the best growers in the Burdekin achieve 15 to 18 tonnes per hectare, and an average figure for less experienced growers would like in the range eight to 10 tonnes per hectare’.  He assumed an average yield of 10 tonnes per hectare for the purposes of his calculations.  He addressed the various reasons why there are very few farms in the Burdekin on which Keitt mangoes are grown.  He then made an estimate of the yields which would have been obtained from the Jarrah orchards, both on the ‘optimistic scenario’ and the ‘pessimistic scenario’ referred to above.  He translated those yield projections into revenue projections for both scenarios, analysed the production costs and capital costs which would have been incurred, and concluded his report by providing cashflow projections on both the ‘optimistic scenario’ and the ‘pessimistic scenario’.  Mr Woolcock’s expertise to undertake and give an opinion on all of these matters was not challenged.  Mr Woolcock provided detailed calculations which demonstrated that in no year under either the ‘optimistic scenario’ or the ‘pessimistic scenario’ was a cash surplus forecast;  rather, the scenarios demonstrated annual losses (after the large initial losses arising from the necessity to undertake capital expenditure) generally in the range of $50,000 to $80,000 per year.  In short, Mr Woolcock’s opinion was that this business could never have been profitable.

166. For the reasons I have identified, I can give no weight to the reports of Mr MacGregor and Mr Meurant.  A combination of my lending no weight to their reports, together with his admitted lack of expertise in relation to financial matters, leads me to reject the evidence of Mr Abbott in favour of the expert evidence of Mr Woolcock.  Further, I prefer the evidence of Mr Kilpatrick in relation to the state of health of the trees on the property.  It is to be noted in this regard that, in contrast to the rather dire predictions of Mr MacGregor, Mr Meurant and Mr Abbott in relation to the health of trees on the front part of the property, those trees have, in fact, borne fruit over the years, and the plaintiffs have annually derived income from the sale of that fruit.  Mr Piva has been buying fruit from the plaintiffs in each year since the 2002/2003 season (except the 2005/2006 season, when there was no crop).  He described the orchard as being ‘well looked after’, and said that the orchard was ‘producing very heavily actually’, and that there had been a record crop from the orchard in the previous year. 

167. Having found that I accept the evidence of Mr Woolcock in relation to the non-profitability of the farm had the fire not occurred, it follows that it is my assessment that there was no commercial value to any opportunity which might have been lost to the plaintiffs to rehabilitate and operate the mango orchard as a commercial venture.

Claims for reinstatement and repair

Replacement of trees

168. The plaintiffs claimed $103,951.20, based on a quote from Mr Torrisi, for the cost of purchasing and delivering 8,512 mango trees to replace those which were said to be damaged or destroyed in the fire. In view of my findings above, however, the extent of the plaintiffs claim in this regard would be limited to the trees in the sections in the back orchard. There were 6,219 trees in the rear orchard, thus the claimed amount would be for about 75 per cent of Mr Torrisi’s quote – say $78,000.

169. Counsel for the defendant submitted that no amount should be allowed under this head on the basis that when land is damaged, the usual basis for assessment of damages is the diminution in value of the land, although it was also properly conceded that, in appropriate cases, the assessment may be measured by the cost of replacement or repair, sometimes allowing only a partial or limited reinstatement. In reliance on Bellgrove v Eldridge^[30], the defendant further submitted that the only reinstatement which would be allowed is that which is both ‘necessary’ and ‘reasonable’ in the circumstances of the case, those being questions of fact.  The defendant advanced a variety of reasons as to why it was neither reasonable nor necessary in this case for the trees to be reinstated, including that:

-the evidence of Mr Woolcock (which I have accepted) demonstrates that operation of this land as a Keitt mango farm would not be profitable;

-the valuation evidence reveals, and I accept, that the highest and best use of this land is not as a mango farm, but as a rural residence;

-the diminution in value immediately caused to the property by the fire was, on Mr Honnef’s uncontradicted evidence, only $20,000.  The property in its present state is now worth $450,000 to $500,000.  There was no evidence that replanting the mangoes would significantly increase that value.  Mr Honnef said in evidence that the effect of the fire on the current value of the property would be minimal, and that the existence of mango trees on this property would be of ‘limited added value’.

170. This property did not possess the characteristics of a ‘large dwelling of some distinction’ such as that which was in issue in Evans v Balog^[31], on which the plaintiffs relied.  But even in that case, Samuels JA, who delivered the judgment of the court, observed^[32] to the effect that where a property owner desired to reinstate a damaged property, the appropriate test was the reasonableness of the owner’s desire to reinstate, and this would be judged, in part, by the advantages to the owner of reinstatement measured against the extra cost to the defendant of having to pay for reinstatement, rather than damages calculated by the diminution in the value of the property.

171. In my opinion, it would be quite unreasonable for the defendant to be required to pay for reinstatement of the property by purchasing more than 6,000 mango trees. The planting of these trees would not add significantly to the value of the property, nor could they, on the evidence before me, provide the foundation for a profitable farming operation.

172. I would disallow this head of claim.

Removal and clearing

173. The plaintiffs relied on a quote from Mr Willing of Civilquip Earthmoving of $106,480 for clearing the 8.512 damaged mango trees, removing dead wood and material, removing and disposing of irrigation, steel and concrete, and final land preparation. Under cross-examination, Mr Willing confirmed that the clearing of the property could also reasonably be done by a bulldozer at a cost of less than $20,000. Moreover, Mr Willing’s quote was given in August 2007. If he had quoted in November 2001, the quoted prices then would have been about 20 per cent less.

174. Notwithstanding that differential, I would allow $20,000 under this head, so as to make allowance for the fact that something more than only bulldozing may be required, say for the removal of steel and concrete, but also recognizing that the land to be cleared is practically limited to the back orchard.

Lost and damaged irrigation equipment

175. On the findings I have made, I consider it would have been reasonable for the plaintiffs to recover for reinstatement of the irrigation sprinklers and lines in the front orchard at a cost which I assess on a proportionate basis on the quote from T & I Pumps and Irrigation as $30,000.

Lost and damaged fencing

176. On the evidence of Mr Conaghan as to the state of the deer fencing when he left the property, it was worthless and not worth replacing. I would not make an allowance for that component of the claim.

177. The plaintiffs otherwise claim for the cost of erecting 1,300 metres of four strand barbed wire fencing. Notwithstanding a concern that this may represent, in part, installation of fencing which was previously not present, I would allow a global sum of $10,000 to cover that expense.

Replacement of lost building

178. Despite the admitted age and less-than-perfect condition of the shed at the time of the fire, I would allow the $5,000 claimed for replacing it.

Electrical equipment

179. I am satisfied that the claimed sum of $3,754.99 is a reasonable amount to effect necessary repairs to and replacement of electrical switchboard components at the shed and the irrigator pump switchboard which were damaged in the fire, and would allow that sum.

Conclusions

180. As a consequence of my findings on liability, I order that the claim be dismissed.

I will hear the parties as to costs.