$200k payout over misrepresented bull overturned in appeal

A judge’s decision to order a prominent Angus stud to pay out more than $200,000 has been overturned by the NSW Court of Appeal.

Irelands Angus Kelleher K34 was sold in the stud's August 2015 sale.

A JUDGE’S decision to order Irelands Angus to pay out more than $200,000 for misrepresenting a bull’s sire has been overturned by the NSW Court of Appeal.

The prominent NSW stud, owned by Corey and Prue Ireland, sold the bull – K34 – at auction to Bongongo Angus in September 2015 for $28,000.

Its sire was listed in the auction catalogue as stud bull Granite Ridge Thomas, but DNA testing later revealed otherwise.

Bongongo was consequently not entitled to register K34 as a stud bull on the Angus Society of Australia’s registers, making its value considerably less than the auction purchase price.

In March, a NSW District Court judge awarded damages of $200,191.88 to Bongongo, which included the difference between the stud and commercial cattle value of K34’s progeny.

The court had heard that before DNA testing, Bongongo joined K34 with various of its breeding females, producing 78 calves, of which 74 were delivered live.

Bongongo’s claim was reduced to 28 bulls and 25 females after the exclusion of a number of K34’s progeny which were not suitable for sale.

A disclaimer had been included in the Irelands’ 48-page auction catalogue regarding the correctness of information included, stating: “whilst all due care and attention has been paid to accuracy in the compilation of this catalogue and the information neither the vendors, selling agents or representatives thereof assume any responsibility what so ever for the correctness, use or interpretation of the information included herein”.

The case was appealed on the basis of two issues:

WHETHER the judge had failed to consider the character of the Irelands’ conduct as a whole, with particular regard to the impact of the disclaimer in the auction catalogue, when considering whether their conduct had been misleading or deceptive.

WHETHER the primary judge erroneously assessed damages by awarding Bongongo its expectation loss.

The Court of Appeal found that the Irelands’ statement was a representation as to their belief, not a representation of fact, and did not constitute misleading and deceptive conduct.

It also found that the evidence would not have supported an award of damages for expectation loss because there was no evidence of the number and quality of the progeny that an average stud bull would have produced in the relevant period.

The Court of Appeal set aside the original judgment and the $200,191.88 costs order and ordered that Bongongo pay the Irelands’ court costs.