Case W20

Members:
P Gerber DP

Tribunal:
Administrative Appeals Tribunal

Decision date: 23 January 1989.

Dr P. Gerber (Deputy President)

The taxpayer in this application is a family trust (henceforth referred to as ``the trust'') which made a number of payments in 1983 and 1984 through its trustee (``the trustee'') to a company - Austral Estates Limited (``Austral''), purporting to be ``lease payments'' for some six acres on a property known as ``Daalkoo'', situated near Whiporie in northern New South Wales. The major part of Daalkoo was to be used for planting a eucalypt known as tea tree which produces a highly priced oil said to have powerful germicidal qualities with the ability, so it is claimed, to ``heal infected areas that do not readily respond to penicillin''. The trust claimed the lease payments for three acres in 1983 and for a further three acres in 1984 as allowable deductions in its returns in each of those years. The Commissioner disallowed these claims in both years for a number of reasons, including, inter alia, on the grounds that the amounts claimed as lease payments were losses or outgoings of a capital nature, and/or that the taxpayer was not, during the years of income, carrying on a business of primary production. No argument was advanced on the application of sec. 82KH to 82KL.

2. The case proceeded over three days, involved numerous witnesses and included over 800 pages of exhibits. As the evidence progressed, the taxpayer appeared to be confronted by a different hurdle at every turn, including the undoubted fact that at no relevant time did the lessor (Austral) have any title - legal or equitable - over the land which would enable it to grant enforceable leases to the taxpayer. For good measure, to the extent that the lessor purported to grant a lease, no attempt was made to identify the land. In addition, it was not clear just when the agreements for the 1983 leases were executed, nor was it established to my satisfaction that any of the six acres involved in this application - to the extent that an attempt was made to identify them - were the subject of any activity which would qualify as ``primary production'' at any relevant time.

3. This tea tree venture may be said to have begun officially on 21 March 1983 when Austral was formed ``after a 5 year feasibility study on the propagation of Melaleuca alterifolia known as Tea-Tree''. In glossy brochures, used as part of its marketing strategy to attract investors, Austral claimed to have ``purchased a 4,279 acre property north of Grafton near Whiporie... Here we are cultivating approximately 3,500 acres of Tea-Tree, leaving the rest of the property in its native state for ecological and aesthetic reasons''. I have not been able to identify the exact date of issue of this material. However, a local newspaper, the Northern Star reported on 8 July 1983 that ``a Sydney based company, Austral Oil Ltd., yesterday announced plans to set up Australia's first large-scale commercial tea-tree plantation and tea-tree oil distillery. The company has bought 1,750 hectares of land near the hamlet, and aims to have more than 400 hectares under tea-tree cultivation by the end of the year''.

4. Just what was the state of Daalkoo at this critical time was the subject of conflicting evidence. At some unspecified time, one Nigel Perry, who had been employed by the vendor as manager of the property which was run as a cattle station, transferred his employment to Austral. Perry puts his transfer down to ``either May or June 1983''. In the absence of any contract of sale or other document evidencing a transfer from the vendor to Austral or any of its associated companies in the years now under review, I am unable to establish a more specific date, although it would seem from other exhibits that such contracts of sale as there were, were not executed until 30 June 1983. Ignoring any possible deficit in Austral's title for present purposes, in a letter to the Deputy Commissioner of Taxation, Sydney, dated 27 April 1984, one Keith Knight, who may be said


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to have been the principal promoter of this tea tree venture and of whom it can be truly said that he was a man who, ``in this life, played many parts'', stated: ``Prior to June 10, 1983, Nigel Perry spent much time on behalf of Austral Oil, visiting other Tea Tree Plantations and arranging for machinery purchase and usage''.

5. A document headed TEA TREE PROJECT, compiled by one Hans von Lieven, managing director, purporting to chronicle the activities of the company in sequence, commences the recapitulation of events with the date 30 June 1983: ``Paid for property (followed by a sentence which is illegible)... Nigel Perry appointed to property... (illegible)''. The whole of this document is attached to my decision and marked Appendix A.

6. Turning to Perry's evidence, the following took place in evidence-in-chief:

``MR DE WIJN. Now when you commenced employment at the land at Daalkoo, what did you start doing? - We proceeded by some early cleaning up work with the equipment that Austral purchased from S.H. Lock at the time they bought the property, and it was not very long before we started buying in equipment to continue to clean up the areas that had been roughly cleared; they had never been cleared with the intention of cultivation. So there was additional work to be done on all the land, stumping and levelling grounds and preparing. We proceeded to do that, and at the same time we started seed collection, because tea tree seed of the variety we wanted is not available - was not available on the market at that time, so we collected seed from select areas in the bush, and did some trial work on that. We also started a programme of spraying in some of the areas to kill the more persistent of the weeds and grasses, and we took a decision - or a decision was taken that we would plant the tea tree plantation at that stage by planting the seeds directly into the ground.

MR DE WIJN: What time was that decision taken? - That was taken very early on, because my feeling is that there was never in the early stages any other option than to plant, as far as my instructions were concerned, to plant the seed into the ground.

MR DE WIJN: Did you have anyone working for you that was expert in the other area? - Yes. Mr David Whitworth.

MR DE WIJN: Who was he? - He was employed by Austral Oil as a horticultural consultant.

MR DE WIJN: When was he employed? - In August, I believe, of 83.

MR DE WIJN: And did he give you any instructions as to the method of planting? - Yes. He had the information available for us to build what is known as a fluid drill, that is planting the seed with a fluid into the soil. He helped in the development of that machinery, and we set up a system and went ahead and started seeding straight into the ground.

MR DE WIJN: When did you first start seeding? - I would believe about October. The early work would have been done October, and the majority in November (1983).''

7. In an unsigned statement by Perry, given to the Corporate Affairs Commission of New South Wales, which he agreed was accurate, Perry stated in summary that:

  • (a) in about May 1983, Knight and von Lieven came to Daalkoo and indicated an interest in purchasing the property. No mention of tea tree production was mentioned on that occasion;
  • (b) Knight and von Lieven came back several times to look at the property during the next few weeks and that he was ``eventually'' invited to Sydney by Knight... who offered him the job of Plantation Manager of the Daalkoo property:
  • (c) he commenced to work for Austral Oil in June 1983;
  • (d) when he started working for Knight, Daalkoo was still a cattle property and that Knight told him to go ahead and make arrangements to plant 400-500 acres of tea tree, clear the land, get ready for planting and to plant the trees.

8. I now turn to the evidence of the trust's principal witness, an accountant who is and was a director of the company which in turn is the trustee of the trust. He asserted that he was first approached about the tea tree venture by Knight in or about March 1983, at which time


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he claimed to have received all the Austral promotional material exhibited in this case relating to the tea tree project, including photographs of Daalkoo showing stands of tea trees in their natural habitat. This material refers to the acquisition of the property and the cultivation of some 3,500 acres (quoted in para. 3 above). He also claims to have visited Daalkoo in about April 1983 and to have seen ``a lot of tea trees, natural stands on the property... There was a guy called Hans von Lieven who was a director and owner of the project''.

9. This witness' evidence as to dates is irreconcilable with the timetable which emerges from the rest of the evidence, both oral and documentary. Whilst I am satisfied that he did his best to place the events in their correct chronological sequence, to the extent that his dates do not fit the course of events as recorded by the other witnesses and supported by the documentation. I must reject his testimony on this aspect.

10. On the whole of the evidence, I am satisfied that no activity of any kind took place on Daalkoo up to 30 June 1983, and whilst Perry may have investigated the feasibility and logistics of tea tree propagation in the neighbourhood towards the dying days of the 1983 financial year, this is a far cry from Austral being engaged in a business of primary production; a company is not so engaged ``of whom no more can be said than that it intends to engage (therein)'', per Barwick C.J.,
Southern Estates Pty. Ltd. v. F.C. of T. (1966-1967) 117 C.L.R. 481 p. 488. Brochures and looking around the neighbourhood do not a primary producer make.

11. It follows that to the extent that lease payments were made in the 1983 tax year, they come at a point too soon to be properly regarded as expenditures incurred in gaining or producing the assessable income or necessarily incurred in carrying on a business.

12. Having concluded that no activity of primary production was carried on by Austral in the 1983 tax year, the taxpayer cannot succeed in that year.

13. Other considerations apply in the 1984 tax year. Although I was invited to find that Austral's farming venture was still in an experimental stage and that no business had commenced, I am unable to accede to that submission. It is directly contradicted by the evidence of Mr Stotter, whose association with Austral, although only brief, was during a relevant period (August to December 1984). Stotter's evidence was impressive and his expertise unchallenged. Indeed, he is now engaged in a very large and prosperous tea tree oil production venture. He has persuaded me that at some time before he joined Austral in 1984, a dam had been constructed on Daalkoo, at least 100 or so acres had been cleared and planted with tea trees, a large machinery shed had been built and that nurseries were in situ with approximately one million tea tree seedlings, ranging from early stages of development right through to being ready for transplantation. There was also a small steam generator. All this is amply supported by contemporaneous photographs. The respondent sent an investigator to look over Daalkoo on 8 and 9 October 1984. He was shown over the entire property and took a number of photographs, including one of part of a 100 acre lot fully planted with tea tree and identified by a wooden marker peg stuck in the soil with the sign ``G4''. This peg satisfied the investigator ``that the investor had an identifiable lot, because G4 would have been a certain investor's lot''. I am not prepared to make any such an assumption for reasons which will appear shortly. It seems from this witness' evidences - although this was not explored in any detail by either counsel - that there appeared to be only one 100 acre lot which was then under cultivation, which does not, semble, include any of the acreage claimed to have been leased to the trust in the two years now before me, assuming that these were identifiable in any legal sense. In the view I have formed of the evidence, this feature is merely one of the many nails in this taxpayer's coffin. This witness concluded his evidence with the following answers to questions put by me:

``DEPUTY PRESIDENT: Well, what level of tree planting would you regard as a farming venture? - Well, I also took into consideration Mr von Lieven's statement on what had happened during the time period up until I wrote the report, and from his statement it was either an experimental or trial planting, and my understanding has always been that if you are only experimenting, you have not started a


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business as yet, you are only into the capital stage... I could understand if you were planting wheat, where you could fall back on somebody and find out how you should plant wheat, but when I spoke to the people at the Department of Agriculture, I said, `What are the chances of this being a successful concern, before I - you know, even start?' And the gentleman there turned around and said to me, `Well, there has never been a commercial plantation. We don't know. We can't give you an answer.'

DEPUTY PRESIDENT: Your overall impression was that the whole thing was still at an experimental, stage? - Yes, in the preliminary research and development, more than anything else. Even - they were still collecting seeds to find out what type of seeds were best suited for planting, to get the maximum amount of oil... Actually, I think Mr von Lieven's statement backs that up.''

14. Whilst it is probably true that, by the middle of 1984, the most appropriate methods of planting and management of tea trees on Daalkoo were still being explored, I am satisfied on the whole of the evidence that the activities of Austral, which included substantial clearing and planting, had reached the critical mass sufficient to convert a mere intention to engage in primary production into an activity which justifies the characterisation of a business; cf.
Ferguson v. F.C. of T. 79 ATC 4261 per Bowen C.J. and Franki J. at pp. 4264-4265 and Fisher J. at pp. 4268-4269. However, Austral is not the taxpayer and it must still be shown (i) that the trust had a lease over its six acres and (ii) that its land was being used for primary production.

15. Having concluded that Austral had, by June 1984, commenced in a business of primary production, the applicant would, on the case as pleaded, be entitled to succeed in that year. However, the facts, as they emerged, paint a very different picture. Mr Knight, who, I find on the evidence, was more concerned with fleecing investors by misusing public funds than ensuring the viability of this venture; a recklessness which resulted in a failure to ensure that investors obtained enforceable leasehold interests over the acreage with respect to which the lease payments were made. (``There is no doubt at all that there were significant problems in the administration of the scheme and inter-company transactions. The details of the administration show what is common with this sort of scheme, that is, that public moneys went to lease one Rolls Royce, one Cadillac, one Mercedes for key directors, Japanese cars for other executives and a luxury boat, and what was left was devoted to tea trees.'' per Young J.;
CAC v. Austral Oil Estates Ltd. (1986) 4 ACLC 71 at p. 73; (1985) 10 A.C.L.R. 1 at p. 2.) A lease agreement (all leases involving this taxpayer are identical), dated 26 September 1983, was entered into between Bowanna Pty. Ltd. (this company changed its name to Austral in December 1983) as lessor and the trustee as lessee. This document states, inter alia, that the lessor ``has a good right of possession of the lands described in the second schedule''. The second schedule sets out the various lots by title description which, collectively, are said to make up Daalkoo, including ``Portions 31, Volume 12479 Folio 3''. The foundation for Austral's assertion of a ``good right of possession'' is not stated.

16. The lessee, in turn, asserts that it ``wishes to lease the number of acres within the said land as set out in the third schedule hereto on the terms and conditions hereinafter contained''. The third schedule merely states: ``Number of acres: THREE (3)''.

17. Just what rights the various ``leases'' conferred on the hundreds of ``lessees'' was subsequently investigated by Messrs Dawson Waldron, a firm of Sydney solicitors, on behalf of the new board of directors appointed after this South Sea Bubble venture had burst. Thus, in a letter addressed to the managing director dated 21 August 1985, the writer notes, inter alia, that the lands comprising Daalkoo were transferred to a company - Barjedo Pty. Ltd. (``Barjedo'') - on 30 June 1983. What relationship existed between Barjedo and Austral was never made clear. As of the date of the above letter, all the various lots were still registered in the name of Barjedo. However, Dawson Waldron sighted a duly stamped contract for sale and transfer from Barjedo to Austral, both dated 20 August 1984 in respect of those parcels of land of Daalkoo which, I am prepared to assume for present purposes, include the lots ``leased'' to this taxpayer. This transfer was not registered as of the date of the above letter. Thus, while the statutory form of transfer may confer an equitable title until


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registration which, on registration, is effective to pass the legal title; cf.
Abigail v. Lapin (1934) A.C. 491 at p. 500, this need not be explored further in this application, if only because there has, in any event, been a total failure to identify any of the six acres involved in the two years now under review. This deficit is not cured by extrinsic evidence, such as exhibit D, which is a sketch plan showing a subdivision of some 300 or so hectares of Daalkoo, divided into single acre (0.40469 hectare) allotments, most of which are numbered and lettered and on which someone has marked crosses on lots identified by letter and number (e.g. ``H45'') which are claimed to be the six acres leased to the trust in the two years under review. Again, a series of exhibits are claimed to be copy documents headed PAYMENT MODULE and which the trust's principal witness explained as ``a payment module produced by Austral on themselves on their computer, outlining acres that I leased and also payments that I had made to date and what was outstanding''. The witness conceded that it was a mere invoice. A notation containing the same tags as shown above appear without explanation at the bottom of these documents. None of these documents was incorporated by reference or otherwise into the ``leases''.

18. There are apparently other defects in the leases set out in advice from Messrs Dawson Waldron which point to the failure in the leases to comply with various statutory requirements of the Real Property Act (N.S.W.). Other possible defects in title are said to arise from the apparent fact that the proposed leases were not approved under the Local Government Act. There are problems with the options granted. For good measure, these leases may well be illegal on further grounds set out in the opinion. No argument was addressed to me on any of these. In the circumstances, I do not propose to examine these possible defects as I am satisfied, as already noted, that the failure to identify any of the ``leased'' one acre plots is in itself sufficient to render the leases unenforceable, affording the lessor no greater right than to approach the Supreme Court of New South Wales to obtain a legal interest in the land. This is not an ``interest'' sufficient to characterise the payments as lease payments incurred in gaining or producing the trust's assessable income at any time relevant to this application. Mr de Wijn, well aware of this potential difficulty, submitted that even if there were such defects (which were not admitted), the applicant could fall back on his contractual rights. I therefore propose to examine these.

19. On the same day as the second lot of lease agreements are entered into, i.e. 26 September 1983, a management agreement is entered into between the same parties, Austral wearing a different hat. (All management agreements in both years are identical for present purposes.) The relevant parts of which state:

``WHEREAS:

  • A. The Lessee is the Lessee of certain of the lands set forth in the schedule hereto.
  • B. The Lessee is desirous of establishing a plantation of Melaleuca alternifolia commonly called `tea-tree' on three (3) acres of land within the said lands which lands together with all other hereinafter be called `the plantation' and which the manager has identified and shall identify as most suitable for the purpose.
  • C. It is intended that the Manager will establish operate and manage a tea-tree plantation on the plantation for the production of Melaleuca Oil and provide the services hereinafter referred to on the terms and conditions hereinafter contained.

NOW IT IS HEREBY AGREED AND DECLARED:

  • 1. The Manager agrees to establish operate and manage the plantation on the terms and conditions hereinafter set forth for a period commencing on the date of this Agreement and expiring on the 1st day of July, 1998.
  • II. The Manager shall:
    • (a)-(c)...
    • (d) Acquire and have planted out Melaleuca alternifolia of a suitable quality sufficient to establish the plantation and in any event by planting approximately fourteen thousand (14,000) tea-trees to the acre.
    • (e)...

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    • (f) Promote in a proper and husband like way the health safety and development of the tea-trees.
    • ...
    • (k) Harvest the crop as required throughout the term of this agreement.
  • III. The Lessee shall agree to the reimbursement from oil proceeds to Manager of all direct costs, without any margin of profit for the first five years of this agreement and thereafter at a margin of profit equal to fifteen per cent (15%) of such costs relating to harvesting of the trees, distillation of the oil, packaging of bulk oil and delivery to the stated delivery place but not in any circumstances exceeding twenty per cent (20%) of the gross oil proceeds payable to the Lessee in respect of a particular harvest.
  • V. The Manager shall not be obliged, in the harvesting of the crop, to keep separate and distinct the exact quantity referable to any particular area of land; but may aggregate the produce of the plantation with that of other land in the vicinity which is also managed by the Manager where to do so is in the opinion of the Manager necessary for the economical harvesting of the crop and is not prejudicial to the Lessee.
  • XIV. This Agreement shall not be construed as constituting the Lessee and the Manager as partners with each other nor as constituting any relationship other than that of independent contractors, with the Manger providing services for the Lessee in accordance with the terms hereof. Either party may assign its interests under this Agreement provided that in case of any assignment by the Manager such assignee shall be demonstrably capable of fulfilling the Manager's functions hereunder.''

20. The above two documents set out the whole of the contractual arrangements between the parties.

21. The first thing to observe is that the title description of the land referred to in lease agreement differs from the title description where it appears in the management agreement (Portions 31 are excluded from the latter). Be that as it may, it seems to me that deduction claimed as ``lease payments'' cannot be salvaged by recourse to contractual rights said to emerge in a management agreement not incorporated into the lease or forming part of it. Furthermore, the provision in para. V, which entitles the manager to aggregate the crop ``with that of other land in the vicinity'', makes it clear that, at its highest, the trust was merely a party to a profit-making scheme conducted by Austral qua manager. If the unenforceable lease is put to one side, what emerges is that the trust made a series of payments to Austral for the right to participate in the future profits to be derived from a tea tree growing venture, its entitlement to the profits being the numerator of a fraction, the denominator of which is the contribution of all the investors. The payment is thus no different in kind from, say, buying a share in an adventure to salvage the Titanic.

22. The applicant having put all its ``eggs'' in the basket of lease payments, I am satisfied on the evidence that these payments do not qualify under this head. The applicant has thus not proved the case it sought to make out, nor has demonstrated any other basis which would entitle it to the claimed deductions. It therefore fails on the onus of proof. No argument was advanced by the respondent that the payments to Austral were a capital expense and disqualified from deduction on that ground. No concluded opinion on this aspect is therefore required.

23. For the sake of completeness, I find that no assessable income was derived by the trust from this tree growing venture and, to the extent that some nominal amount (either $207 or $309) was returned as ``INCOME - TEA TREE'' in 1984, this was conceded to have been a mere device by Austral to lend greater verisimilitude to its activities of primary production. Again, an amount of $5,514, claimed as an expense ``INTEREST ON LOAN TO LEASE TEA TREE - INTEREST ONLY'' was conceded at the hearing to have involved a loan wholly unconnected with the tea tree venture. No evidence was led which would enable me to permit this deduction; indeed Mr de Wijn virtually conceded as much.

24. I feel bound to add that this trustee did all that could reasonably be expected of a prudent trustee determined to ensure that the proposed investment was commercially sound;


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he obtained legal advice and himself looked into the viability of the venture, even to the point of visiting the property. He is not the first to have become a victim of Mr Knight's proverbial charm, nor the first to have lost his investment.

25. I have set out the facts of this case with greater particularity than is customary since I was informed from the bar table that this case was in the nature of a ``test'' case. It is therefore possible that there may be other taxpayers, having different leases, who may be able to distinguish their facts from those of this unfortunate taxpayer.

26. For the above reasons, the Tribunal will affirm the objection decisions in the two years under review.

APPENDIX A

THE TEA TREE PROJECT

Major points of development from purchase of the property until now in chronological order. Compiled by Hans von Lieven, Managing Director.

[Next part of document illegible]

JULY 1983 Purchase of 3 tractors, Road Grader, Large Truck, 2 4WD Vehicles, Small Ploughs and harrows etc. from the vendors of the property to enable us to commence work.

Started to clean up some of the cleared land, remove old tree stumps, maintain fire breaks etc. The property was a cattle property before and had been somewhat neglected in recent years. The cleared areas were not suitable for cultivation as they stood.

AUGUST 1983 We appointed David Whitworth as horticulturist consultant and devised with him a method of seeding the trees straight into the paddocks. A seeding machine was designed and built on the property in our own workshop.

SEPTEMBER 1983 A Case 2090 4WD tractor was bought for the heavy work as well as a Case 1150 B Bulldozer and we took over the lease of a Range Rover 4WD vehicle. A company owned 8 seater van was transferred to the property to shuttle the workers daily from Casino to the property and back. The property is 50km from Casino and this was deemed necessary to attract the right labour for the project. A Tunnel Greenhouse 20' X 110' was ordered and an area cleared and gravelled for its erection.

OCTOBER 1983 The Greenhouse arrived and was erected, a watering system fitted, trays were seeded and the trial work on growing plants in a hothouse environment began. This was deemed necessary as a fallback situation in case the direct seeding method did not work. A small experimental still was built and trial distillation started to determine the best seed trees. Seed collection commenced.

A large set of harrows was purchased for the big 2090 tractor as well as a compressor for the workshop. The workshop was upgraded. A comprehensive research and development program was mapped out and initial negotiations with Associated Food Laboratories of Australia (AFLA) in Brisbane began on matters of quality control, oil testing, medical trials etc.

NOVEMBER 1983 Trials with direct seeding were begun and modifications to the seeding machine made as it did not work as fast as expected also there were flow problems. This was gradually overcome and the seeding program commenced. We seed about 300 acres over the next 3 weeks. The seed germinated in the paddocks and everybody was delighted - Five days later however, all the tiny plants were dead. David Whitworth departed but we looked around for another horticulturist.

[Next part of document illegible]

and one of the first things he did was suggest methods of making the hothouse operation more efficient. An International 585 4WD tractor was purchased and the design of a planting machine for hothouse grown seedlings began. At this time there were doubts expressed about the suitability of open paddock seeding but [illegible] still with a CIG Steam Generator. Commissioned J. Smith Engineering to build the still. 300 acres of oats seeded as cover crop for open paddock seeding - it was felt that if we let the oats grow to about 6-12 inches we could then seed the Tea Trees between and get protection from windburn, heat etc.

JANUARY 1984 Pilot distillation plant installed powered by a CIG Steam Generator. Trial distillations on a semi commercial level begun. Research and development work at AFLA begun on Golden Staph and oil testing.


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FEBRUARY 1984 300 acres Tea Tree seeded between the oats, the same story. The trees germinated O.K. but died in the first week. Seeding program abandoned. Plans drawn up to build 15,000 sq. ft. nursery. Trial planting of the seedlings we had raised in the hothouse tunnel commenced in several locations of the property. Fertilizer trials mapped out. Seed collection continued. Construction of the nursery started. Market research program commenced on large scale. Letters to all Australian Trade Commissioners and foreign companies.

MARCH 1984 Nursery Manager Graham Merry appointed. Roof of the new nursery arrived and was installed. 2 Generators 12.5 KVA were purchased and a 80 hp. boiler was bought for the new distillation plant. Computer purchased and installed in Sydney. Testing of programs specially written for us. Completed design of seedling planting machines.

APRIL 1984 Large dam built next to nursery. Front End Loader purchased. Boiler arrived and was installed. Nursery seeded. Constructions of a 15,000 sq. ft. shade house commenced. Begun work on the watering system. Started construction of planting machine.

MAY 1984 Plans drawn up for a 2nd large nursery (20,000 sq. ft.). Constructions started immediately 25KVA Generator arrived and was installed. Some clearing of isolated stands of timber. Cleaning up of paddocks. First planting machine completed.

JUNE 1984 Shade cloth installed. Shade area now operative. Construction on 2nd nursery continued. Dam constructions on front of property. 10 acres planted. Traded our truck for an Army Tip truck, purchased 4WD utility. Started construction on second planting machine.

JULY 1984 Construction of 2nd nursery completed. 100 acres of timber cleared and stacked into windrows. Construction of second planting machine completed.

AUGUST 1984 2nd nursery in operation, seeding of nursery completed. Computer controlled watering system installed. Another 100 acres cleared and stacked into windrows. Case 1394 4WD tractor, Case 2094 4WD tractor and disk harrow purchased for planting program. 1 [illegible] acres planted. Purchased 1500 acres

[Next part of document illegible]

SEPTEMBER 1984 First crop of No. 1 nursery ready - 50 acres planted. Travelling irrigation system purchased. Another 100 acres cleared and stacked into windrows.

OCTOBER 1984 Another 50 acres planted. Another 100 acres cleared and stacked into windrows. Second travelling irrigation purchased. Modifications made to pilot still.

NOVEMBER 1984 Another 100 acres cleared and stacked into windrows. Another 50 acres planted. Case 1450 bulldozer purchased. Symonds Stickrake and Tea Tree Harvester purchased.

DECEMBER 1984 20 acres planted. Started Stickraking on newly cleared country. Holiday season workers paid off. Seedling tray filler and plant divider arrived.

JANUARY 1985 Nigel Perry departed - Harry Wilkinson appointed as plantation Manager. New crew hired for plantation. 10 acres planted.

FEBRUARY 1985 Second dam near nursery constructed. 30 acres planted. Weeding of planted areas. Tea Tree branch harvester for wild stands purchased. Upgrading floors of the nurseries. Oil distillation commenced.

MARCH 1985 Experiments with new nursery techniques. Trench method started. 50 acres planted. Rainy season started. Gravel pit discovered on property overburden removed.

APRIL 1985 Too wet to work in the paddocks. Maintenance program on buildings and machinery. Work on 5 ton distillation unit.

MAY 1985 Still too wet to work in the paddocks. Continuation of maintenance program. Distillation recommenced. Design of large production still finished and commissioned to be built. Small experimental hothouse built to be solely used for tissue culture plants. 2000 tissue culture plants transferred from the growing medium to trays with potting mix.


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