ACT Land Developments Pty Limited & Ors v CSR Limited trading as The Readymix Group

[1992] HCATrans 31

IN THE HIGH COURT OF AUSTRALIA

Registry No Cl9 of 1992

B e t w e e n -

ACT LAND DEVELOPMENTS PTY

LIMITED, ROSS JOSEPH LENTINI

and DOMINIC ANTHONY LENTINI

Applicants

and

CSR LIMITED trading as THE

READYMIX GROUP

Respondent

Application for special leave

to appeal

BRENNAN J
DEANE J

DAWSON J

Land 1 4/2/93

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 4 FEBRUARY 1993, AT 11.41 AM

Copyright in the High Court of Australia

MR R.G. THOMAS:  I appear for the applicants, if the Court

pleases. (instructed by J. Pappas)

MR P.M. BISCOE, QC:  If the Court pleases, I appear with my

learned friend, MR R.M. SMITH, for the respondent.

(instructed by Gallens Crowley & Chamberlain)

BRENNAN J: Yes, Mr Thomas?

MR THOMAS:  Your Honour, might I hand up some submissions?

My friend does have a copy.

Your Honours, a matter has come to my

attention this morning. I am indebted to my

learned friend. If I can take Your Honours to

page 12 of the submissions, the applicants'

submissions, at paragraph 7.3, I refer to and rely

upon the amended defence, ground 31. Your Honours,

in the Federal Court appeal there was some little

discussion about whether the correct amended
defence by the applicants had been filed. In the appeal book itself the defence that appears there

contains ground 31.

This morning it has come to my attention that

in fact that defence apparently was a defence that

the trial court gave leave to file, but as the

record now stands it may not have been filed.	In
fact I must accept that it was not filed.	The

defence that was filed, an amended defence, was

filed on 3 January 1990, and I had a copy of that

from my learned friend this morning. That does not

contain ground 31, although it does contain

ground 28, which I will read to Your Honours in a

moment.

In my submission, there is for the purposes of

this application no material difference between

ground 28 and ground 31. If I might read to

Your Honours - and unfortunately having received

only the copy, I do not have a copy for

Your Honours, although I can hand this one up of

course. My friend has some spare copies; I am

indebted to my learned friend.

If I could take Your Honours to page 8,

paragraph 28, the paragraph there reads:

Further and in answer to the whole of the

Amended Statement of Claim, the First

Defendant and the Second Defendants -

that is the applicants in this application -

say that it was an express or alternatively

implied term and condition of the Agreement on

Land 2 4/2/93

which the Plaintiff sues that the concrete sold and delivered by the Plaintiff to the

First Defendant would be concrete having an

adequate quantity of 20 mm aggregate, maximum

80 mm slump, and SAA Type A Portland cement.

Your Honours, I accept that that is the appropriate

ground for defence. I submit that the material in

it does not alter or in any affect the application.

I move on the affidavit of Ross Lentini dated

8 October 1992.

BRENNAN J: Yes,. we have read the materials, Mr Thomas.

MR THOMAS:  The submission is put in this way, and I will

just mention the heads. What is said is that there

were several grounds of defence but one important

ground which was pleaded expressly - I refer

Your Honours to paragraph 28 I have just read - and

which appeared in the grounds of appeal to the

Federal Court, grounds 2 and 3. One crucial ground

was that the agreements - and the plaintiff argued

there was only one, and that is, in my submission,

not material except in the way that it transpires -

contained a term which required the respondent to

deliver Portland A cement.

While at that time the cement industry was not

totally aware of the differences, there is a

material difference between cement that is composed

of Portland A cement and cement that is composed of

slagrnent. As the learned trial judge found, the

first delivery of cement was cement containing

Portland A and thereafter without notification to

the applicants, the respondent delivered slagrnent.

Certainly the trial and the appeal spent a lot of

time talking about whether that different cement or
the curing process caused the resulting cracking of

the concrete.

But fundamentally the other ground was

pleaded, namely that it was a material condition, a	term of the contract which required the delivery of
Portland A cement. The evidence of Mr Bailey,
which was uncontradicted at trial and not contested
on appeal, was that that was the sort of cement
that was always ordered, they did not want any other sort of cement; it had to be Portland A. It
is clear that the experts were well aware that
there is a difference between the two.

The main difference, Your Honours - perhaps I

should indicate this, because it is not entirely

clear on the appeal even - the main difference is

that slagrnent retains water, and there is much more

water for two or three days in that cement and that

results in a special need to cure that concrete and

Land 3 4/2/93

if you do not know it contains slagment, then the
curing process is different to ordinary cement and

the result is, or well may be, and we submit in

this case it was, a result in the concrete cracking

because of that fundamental difference over those

first few days.

The argument that was put before the learned

trial judge and raised in grounds 2 and 3 was that

it was a description, a term of the contract, that

these goods were sold by description and required

Portland A. The learned trial judge,

Chief Justice Miles, found that the first delivery
of concrete - and Your Honours will remember there

were a number of deliveries over a period of time -

the first delivery of concrete was required to
contain Portland A but he held the other deliveries

did not.

BRENNAN J:  Mr Thomas, if you had succeeded before the Full

Court in satisfying them that the specification of

SAA Type A Portland cement was a term of the

contract, how would that have assisted you as a

matter of defence to the claim for the price of the

goods sold?

MR THOMAS:  The submission is put this way, Your Honour. It

is that then the Court would have been compelled to

deal with the issue as to the right and

circumstances under which a buyer who receives

goods which do not comply with the description can

resist the price, perhaps reject the goods in some
circumstances, certainly resist the price, and

claim damages.

That issue is the fundamental issue which

flows from that first point, but it was never

reached, I must admit, and the difficulty that it

causes me, Your Honours, is that it certainly was

never pressed at trial nor on appeal. On the

authorities - I can come to those authorities if

Your Honours require in a moment - on the

authorities the point was squarely raised and it

would only be reached if the Court found, on that

first point, namely that there was a description in

relation to each of those contracts.	The
significance that arises in this case -

DEANE J: But the Full Court effectively assumed that in

your favour.

MR THOMAS: Except, with respect, Your Honour -

DEANE J:  By saying the result will be the same in terms of

their reasoning even if that were so.

Land 4 4/2/93

MR THOMAS:  Yes, and my point about the submission in

relation to that, Your Honour, is certainly there

was evidence before the trial court which could

have enabled the trial judge to reach a conclusion

as to what the applicants would have done if

advised, and in fact Your Honours will remember

they were in fact advised to the contrary by a

representative of the respondent; advised namely

that all the deliveries contained Portland A when

they did not.

But, putting that matter to a side, which - I do not wish to resile from it, as an important

issue, but in my submission there was clearly

evidence upon which the court could have concluded

what the applicants would have done if advised, and

that evidence was to the effect that they would

have rejected that contract.

In order for the majority, as Your Honours

correctly pointed out, to say that the result would

not have been different, it is necessary in my

respectful submission for the majority to deal with

the issue of under what circumstances may a buyer

of goods reject, when the nature of the contract

requires that the goods be delivered to a third

party and become, in this case, attached to land,

without any opportunity for investigation or

inspection by the actual buyer.

DEANE J: But, is not your problem this: we are concerned

only with the question whether this is an

appropriate case to be granted special leave to

appeal.

MR THOMAS:  Yes.

DEANE J: Well now, what we are now faced with is the Full

Court assumed, effectively in your favour, the

first two points. Your real complaint is that the

trial judge and the majority of the Full Court did

not deal with a point which was not critical to the

way the case was litigated and which, if one looks

at the way it is now put, turns to a considerable
extent upon the construction of statutory

provisions which were not examined in the lower

courts, apart of course from the dissenting

judgment in the Full Court ..

MR THOMAS:  Yes, well I accept what has fallen from

Your Honour.

DEANE J:  Do not think I am trying to say you are out of

Court, but I am simply trying to direct your

attention to what seemed to me to be very serious

difficulties lying in the path of the grant of

special leave.

Land 4/2/93

MR THOMAS:  I accept that, Your Honour. In answer to

Your Honour, if I can take Your Honour to the

application book, to the judgment of the

Full Court, to page 84. There are two aspects to the judgment -

DEANE J:  Mr Thomas, do not let me take you out of your

course.

MR THOMAS:  No.

DEANE J:  You deal with it your way. I was simply trying to

be helpful.

MR THOMAS: It is a fundamental issue, I think, with

respect, Your Honour. At page 84 there are two

aspects to the majority judgment there, in my

respectful submission. The first is that the first

full sentence where Their Honours say:

We have not found it necessary to express a

definitive opinion upon this aspect of the

matter for the acceptance of the appellants'

submission would not have the consequence that

the appeal should be allowed.

And that is the first point that Your Honours put

to me. However, at the bottom of the page they go

on to say that:

Before parting with the matter, we should add

that we have not expressed any view upon the

effect or application of the provisions of ss

38 and 39 of the Sale of Goods Act 1965 (ACT). Your Honour, what is submitted is that the only way

in which the first statement can be corrected is to

say or to deal - in saying that the issue about

whether each of the contracts contained a term

requiring Portland A, to say that even if that is

majority to have reached conclusions which, in my accepted it would make no difference requires the	respectful submission, they did not because they
purposefully say they do not - as to the
circumstances under which the applicants in this
case are deemed to have waived their rights in respect of misdescription and that can position can
only be reached by either reading out of section 39 of the Territory Sale of Goods Act the words "subject to" and applying the authorities in the
way that I submit a number of people have perceived
them as applying, namely that when title has
transferred in accordance with the opinions of the
Lord Justices in Hardy v Hillerns and Fowler, that,
in other words, section 39 is the dominant section rather than section 38.

Land 6 4/2/93

So that the court would have had to have

reached a conclusion as a matter of law on the

interpretation of those sections and applied that

to the facts of the case in order to determine

whether in these circumstances the waiver has

occurred and, with respect, the majority - - -

BRENNAN J: Waiver of what?

MR THOMAS:  Of the rights in regard to misdescription.

BRENNAN J: Where does 38 and 39 say anything about that.

MR THOMAS: Section 39, Your Honour. Section 39 of the

Territory Sale of Goods Act is expressed to be,

"Subject to section 38" - - -

BRENNAN J: Right.

MR THOMAS:  - - - which, apart from the provision in

South Australia changes, in my respectful

submission, the way in which those sections are

currently held to apply, particularly -

BRENNAN J: These deal with deemed acceptance of goods.

MR THOMAS: That is correct, Your Honour, yes.

BRENNAN J:  Now, your proposition is that there was no

deemed acceptance of the goods?

MR THOMAS: That is correct, Your Honour, yes.

BRENNAN J:	Was there any actual acceptance of the goods?
MR THOMAS:	Your Honour, that is the issue and it is my

respectful submission that was raised, and had to

be squarely raised, after the first issue, namely,

the question about the terms had to be dealt with,
and the central submission there is evidence that

was led at the trial court that would have enabled

the court to deal with that matter, but none of

these issues was - - -

BRENNAN J: Deal with what matter?

MR THOMAS:  The question of whether there was an actual wave

or actual acceptance, whether there was a deemed

acceptance or whether there was an actual

acceptance. The point about that, Your Honour, is

that the actual acceptance took place simply by delivery to a third party and attachment to the

land, and when problems arose in regard to the

cracking there was some investigation and a

representative of the respondent indicated to the

applicants that Portland A had been supplied at all

times which was not the case.

Land 4/2/93

DEANE J: There is a very special area of acceptance here, I

mean your argument is a little bit like saying when

somebody goes into a shop and says, "I will have a

cream bun" and is given it and eats it and is then

told, "that was a currant bun", is entitled, having

eaten what he was given, to say that he never

accepted it.

MR THOMAS:  I understand what Your Honour is putting to me,

but, with respect - - -

DEANE J:  I mean, you have obviously got your action to sue

for breach of warranty and that is the action on

which you have failed on decisions on fact.

MR THOMAS:  With respect, Your Honour, those decisions of

fact, we would say, were not actually dealt with in that way, they were dealt with differently, but the misdescription point was not pressed.

DEANE J: But to succeed on breach of warranty you need to

prove damage - - -

MR THOMAS:	Yes.
DEANE J:	- - - and blocking your success on damages are the

findings of fact of Chief Justice Miles.

MR THOMAS:  Perhaps Your Honour could take me to the

particular findings that you are referring to

because the submission that we would put is that

there were three issues, namely, the misdescription

issue which is significant because it goes to the

question of curing. In this case, in the nature

of - - -

DEANE J:  I thought Chief Justice Miles found that the

faulty result was not caused by the cement not

being Portland A.

MR THOMAS:

Yes, Your Honour, and perhaps that highlights

these type of goods one of the reasons as to why
the person who eats the cream bun might want to

the point that is significant, that in relation to

have an action and it certainly may not be

merchantable quality or fitness for purpose, may be

because they are allergic to currants, and in this

case, while they were not allergic if I can use

that analogy still, what was significant was that

if it was slagment then a number of steps had to be

taken differently in the way in which it was

handled, and the way in which it was screeded, and

the way in which the water was taken off,

et cetera, and without that information, working on

the assumption that the cement was Portland A, the

applicants proceeded to deal with the goods.

Land 4/2/93

Now, on the evidence, Chief Justice Miles

certainly reached the conclusion that the way in

which it was handled caused the problem, but that

is exactly, in my respectful submission, why the

rights in regard to misdescription become

important.

BRENNAN J:  That is basing it on breach of warranty. Your

paragraph 28 and your objection, as I understand

it, is not in terms of breach of warranty, it is by

way of a defence to an action for the price, and

you say that the price did not become payable.

MR THOMAS:	Yes.
BRENNAN J:	My question to you earlier was directed to see

whether section 38 and 39 had anything to say to

that point.

MR THOMAS:  Not directly, Your Honour, no.

BRENNAN J: Well then, we then come to the stage where we

are concerned, if we are concerned with anything,

with breach of warranty.

MR THOMAS:  In so far as there are three breaches, the

fitness for purpose and merchantability, which have

been pushed to one side, and then if, with respect,

it was a condition, then it is a condition which

gives rise to a claim, a defence, and that was the

issue that was never dealt with.

BRENNAN J: Well, a defence or a claim for a breach of

warranty?

MR THOMAS: Well, certainly it is a claim, Your Honour, for

breach of warranty, and there was a cross claim

made in the action as well.

BRENNAN J: Well then your complaint is that the Full Court

did not deal with an issue which, if they had dealt

with it, would have opened the way for a

consideration of damages for breach of warranty.

MR THOMAS:  Yes. I am sorry, I misunderstood what

Your Honour was putting.

BRENNAN J: And that means that there are two questions

involved for us. One is whether that was ever a

case that was considered or put to the Full Court

for consideration. The second is whether the

findings that have been made by the trial judge on

questions of fact are matters which bear upon the

viability of that claim.

MR THOMAS: Yes, Your Honour. Well, Your Honour, I put it

in this way, that it is - and I mentioned this

Land 9 4/2/93

before - clear that at no stage were those

arguments, as expressed by Your Honour, directly

put at trial or on appeal. The issue, the first

stage of that, was raised and then as, perhaps by

inference in a sense from Justice Higgins's

judgment, the first stage was raised, submissions

were put, for example, on appeal by counsel for the

applicants, but after those submissions were put to

the court in relation to those rights, the whole

issue then resolved itself by a discussion in a

particular way in regard to the question of

merchantability, the question of causation.

BRENNAN J:  Once we put the 38 and 39 argument aside, what

is the basis of your application for special leave?

What makes the case special then?

MR THOMAS: Well, there are two aspects, Your Honour: one is

that in reaching the conclusion that only the first
delivery contained the special term, if I can use

it in that way, the principles that relate to

business contracts, for example the authority of

Codelfa's case, in regard to business efficacy,

were not addressed and, in my submission, that

raises both a question of the applicable law to the

fact situation and a question of construction of

the agreements; secondly, there is that issue of

38 and 39, but I understand what Your Honour has

put to me; and thirdly, the whole case raises the

significant issue of the circumstances under which

the rights of a buyer are lost or compromised in

circumstances like this, and the case is not simply

one which is unique to the parties. For example,

simply the delivery of concrete is a major issue, a

major commercial activity, and that the

ramifications of the decision clearly can flow

through that industry. That, in my respectful

submission, places the case in an area of special

importance.

There is also, in my respectful submission,

the issue about whether both the trial court and

the Full Court have dealt adequately with the

matters that were raised by the parties and the

fact that some aspects were not pressed as such,
and the authorities - perhaps Water Board

v Moustakas - is important, indicate that a party

ought not to be deprived of.a proper adjudication

simply because points were not fully pressed.
There is still the obligation to ensure that the

due process and the proper adjudication of matters, particularly when they involve questions of law and

of public importance occurs. So we would say that

there was, in the way in which ultimately the

matter was decided by the majority, an injustice or

an inappropriate way of dealing with the issue.

Land 10 4/3/93

Your Honours, I can take you to authorities in

relation to all those points.	They are set out in
the written submissions.	Does Your Honour want me
to read those?

BRENNAN J: Those are the factors which make the special

leave case, in your submission?

MR THOMAS:  Yes. Does Your Honour wish me to go to those

authorities?

BRENNAN J: There is no sense in developing the argument on

appeal; it is a question of identifying what the

issues are. Is there anything further you wish to

add?

MR THOMAS:  Not unless Your Honour wishes me to read from

those authorities in relation to those points about

injustice, procedural fairness and the like.

BRENNAN J:  I think the Court is fairly well familiar with the general principles.

MR THOMAS:  Yes. They are the submissions, if the Court

pleases.

BRENNAN J:  We need not trouble you, Mr Biscoe.

MR BISCOE: If the Court pleases.

BRENNAN J:  The case is not an appropriate vehicle for

considering ss. 38 and 39 of the Sale of Goods Act

1954 of the Australian Capital Territory. Once

that question is put aside, the issues which the
applicant seeks to raise arise from the manner in

which the applicant put its case in the courts

below and the correctness of findings of fact made

by the learned trial judge. These are not issues

which attract a grant of special leave.

Accordingly, the application is refused.

MR BISCOE:	We would seek costs, if the Court pleases.
BRENNAN J:	Have you anything to say to that, Mr Thomas?
MR THOMAS:	No, Your Honours.

BRENNAN J: Refused with costs.

AT 12.13 PM THE MATTER WAS ADJOURNED SINE DIE

Land 11 4/2/93