Auspac Trade International Pty Ltd v Victorian Dairy Industry Authority

[1994] HCATrans 25

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
              Melbourne       No M31 of 1994

B e t w e e n -

AUSPAC TRADE INTERNATIONAL PTY
   LTD

Applicant

and

VICTORIAN DAIRY INDUSTRY          
   AUTHORITY and CAMPERDOWN-
   GLENORMISTON DAIRY COMPANY
   LIMITED

Respondents

Application for special leave
   to appeal

MASON CJ
BRENNAN J
DAWSON J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 16 SEPTEMBER 1994, AT 3.45 PM

Copyright in the High Court of Australia

MR C.W. PORTER, QC:   If the Court pleases, I appear with my learned friend, MR H.T. LONG for Auspac.  (instructed by Anthony Raso & Associates)

MR P. BUCHANAN, QC:   If the Court pleases, I appear with my learned friend, MS E.A. STRONG for the respondents.  (instructed by Minter Ellison Morris Fletcher)

MASON CJ   Mr Porter.

MR PORTER:   Your Honours, we seek to make a number of brief points in support of our summary.  The first one is that the Full Court demonstrated, in our submission, both by the language it used and by the analysis that it made - that is both in the case of estoppel and consideration - that it did not reach its own conclusions as would have been required by Warren. 

The second point is that the Full Court was not asked to disturb any findings of fact in the appeal.  There is one possible exception to that.  We did ask the court to conclude that the telexes constituted a promise and I suppose that could be said to be a finding of fact but we would say that the basic findings of fact were that the telexes were sent.

The third point is that the two questions which the Full Court should have considered were, (a) whether the Authority was estopped in all the circumstances from retreating from its implied promise not to terminate the contract and, (b) whether enough cartons of milk were or were likely to be affected by fat separation as to amount to a total failure of consideration either because the consignment no longer corresponded with what was ordered, that is, with its description or because there was not substantial performance.

Now, with regard to estoppel, we would say that there were sufficient findings of the trial judge from which the Full Court could have decided whether or not the authority was estopped.  That is having regard to the six points for convenience taken from Justice Brennan’s judgment in Waltons.  With regard to the failure of consideration, we would say, likewise, that there were sufficient findings of the trial judge from which the Full Court could have drawn its conclusions.

We would say that we can demonstrate that the Full Court should have reached conclusions in favour of Auspac in both respects.  In the case of estoppel, the trial judge, as the Full Court found, wrongly declined to infer the promises from the telexes.  So, that triggered the inquiry the Full Court had to make and we would say that the Full Court should have concluded that the trial judge wrongly declined to infer reliance by Auspac and an intention by the Authority that Auspac should rely.

We say that the latter inferences as Justice Brennan said in Waltons can be easily inferred but, in this particular case, that there was a finding by the trial judge which we have referred to in our summary which led to that conclusion.  We would go further and we would say that the strongest finding of the trial judge was that notwithstanding the Authority’s last telex informing Auspac that it would process orders, the Authority, without warning, served notice terminating the contract and that must surely indicate virtually all of the factors referred to by Justice Brennan.

BRENNAN J:   What do you say about page 133 on the views expressed by the Full Court there on the findings of the trial judge?

MR PORTER:   Your Honour, that has caused us some concern. 

BRENNAN J:   Understandably.

MR PORTER:   Your Honour, the four lines following the quote we initially thought were actually supportive of the trial judge.  We have rather come to the conclusion that they are not.  What the Full Court is saying there is that the finding of the learned trial judge depends on an assessment of the evidence of Mr Bezant generally on all issues of fact.  We think the Full Court was actually saying that perhaps that was not the right way to go.  The right way to go was, as it went on, to consider whether he acted on any promise implicit in the telex because the Full Court goes on and says:

Nevertheless, on this issue -

that is, whether he did act on the telex, well then -

a reading of the transcript shows that Mr Bezant’s explanation for his belief that Auspac was not required to pay invoices for defective products.....was “because they had been the discussion of credit notes and negotiations”.

And the discussion goes on into page 134 to conclude that:

nowhere did Mr Bezant explicitly claim that he relied upon the telexes.

We are not entirely persuaded that that is correct but what we would say, Your Honours, is that the question here was not confined to an analysis of the evidence of Mr Bezant.  There were other factors here involved which the Full Court did not consider.  All the Full Court did was to consider whether the trial judge was obliged - using that word, to find that Auspac acted or abstained from acting in reliance on the promise.  Auspac’s submission never was in fact put as being tantamount to saying that the learned judge was not entitled to make the finding he did.  Auspac’s submission always was that there should be an independent analysis and the crucial material on which the Full Court could be expected to rely was that having found contrary to the trial judge that a promises was contained in the telex, it was almost unthinkable that, in the circumstances, the Full Court would conclude that Bezant did not rely on that promise.

BRENNAN J:   Mr Porter, even putting your argument at its highest and best, does it not come to this, that Warren v Coombes says “independent assessment”?  Here is a case where Their Honours, at least on your interpretation of what they said, did not independently assess?

MR PORTER:   Yes.

BRENNAN J:   Well now, where is the special leave point?

MR PORTER:   Regularity, Your Honour.  What we would say is what we are entitled to is, having shown that the trial judge was wrong on two points to an independent assessment, taking into account the two new points.  I have put that badly, Your Honours.

BRENNAN J:   Do you say that the court did not regularly perform its function and that this Court should intervene to set it right?  Is that right?

MR PORTER:   Yes, I do, Your Honour, but I say it because before the Full Court we succeeded in showing that there was a promise.  Now, the trial judge had said there was not.  What we expected the Full Court to do then was to consider for itself whether there was reliance both by Auspac and an intention that there should be reliance by the Authority having regard to the new circumstances which were found and we did not get that.  Same with consideration.

BRENNAN J:   But if you look at the circumstances, the trial judge says, “Bezant wants to raise the case of estoppel but I don’t think that there was enough there to give him a basis to rely on any promise.  I don’t think there was any promise really being made.  So, he didn’t rely on anything.  He wasn’t estopped”, and the Full Court come along and they say, “Well, looking at it objectively, we think there was enough there but the trial judge takes the view that Bezant was thinking that there was nothing there and therefore there was no reliance on it.”

MR PORTER:   Would it say that the Full Court did not perform that function though, Your Honour?  You see, that is clear from what the Full Court said at page 134.  It did not say, “All right, we’ll take into account the promise.  We will consider the circumstances surrounding that promise and we’re still not persuaded that Bezant relied.”  But what it said was, “We’re not persuaded that the learned judge was obliged to find that Auspac acted or abstained from acting in reliance on the promise.”  That was not the independent consideration that was spoken of in Warren, say, by Mr Justice Aickin.  We would say that the language clearly indicates that the fettered approach was being taken by the Full Court.

Your Honours, we would have to concede that the position is that simple but in each case, if one goes back to consideration - the relevant passage is at page 125 of the application book, lines 25 to 30 - the Full Court said, having reviewed the evidence on consideration:

However, that evidence was, in our view, neither sufficiently cogent nor specific to lead to the conclusion that only one finding was reasonably open to the Judge.

So, what we say we have got here, Your Honour, is a clear indication by the Full Court that it is not adopting, as it were, an independent review of the facts. 

The same type of statement appears at page 143 in relation to our third point on damages.  Line 25:

It is sufficient to say that in our view the Judge was entitled to make that finding.

There are similar statements in connection with other factual considerations which were raised before the Full Court.  What the Full Court was analysing in each case was whether the appellant had persuaded it in each case that the trial judge could not have found as he did, and we would say that is not the independent assessment spoken of in Warren.  It is a stricto sensu approach.  We would say if you look at the reasoning which leads the Full Court to that conclusion in each case, it can be seen that that is all the Full Court was inquiring into.  It was not actually conducting an independent assessment in drawing its own conclusion in each case.

Your Honours, if there is anything further that I can add I would be happy to do so but, really, that is, in our submission, the basic point.  We would simply say that there was enough material there for the court to make its independent conclusion and, what is more, certainly, a good deal of material on which we are entitled to say that it would have decided in favour of the appellant.  Thank you, Your Honours.

MASON CJ:   The Court need not trouble you, Mr Buchanan.

Although the terms in which the judgment of the Full Court of the Supreme Court is cast lends some support to the submissions that have been made by counsel for the applicant, we do not consider that the case raises a point of sufficient public importance to warrant the grant of special leave to appeal.  The application is therefore refused.

MR PORTER:   If the Court pleases.

MR BUCHANAN:   We would ask for costs, Your Honour.

MASON CJ:   You cannot oppose that, Mr Porter?

MR PORTER:   No, Your Honour

MASON CJ:   The application is refused with costs.

AT 3.58 PM THE MATTER WAS ADJOURNED SINE DIE