Australian Foods Co Pty Ltd v Co-operative Bulk Handling Ltd
[2002] WASC 182
AUSTRALIAN FOODS CO PTY LTD -v- CO-OPERATIVE BULK HANDLING LTD & ORS [2002] WASC 182
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASC 182 | |
| Case No: | CIV:1787/2002 | 2 JULY 2002 | |
| Coram: | MATHEWS AJ | 3/07/02 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Interim injunction not extended | ||
| B | |||
| PDF Version |
| Parties: | AUSTRALIAN FOODS CO PTY LTD CO-OPERATIVE BULK HANDLING LTD T J SAMPSON PTY LTD BABOO PTY LTD |
Catchwords: | Application for extension of interlocutory injunction Plaintiff seeking to restrain first defendant from releasing wheat to second and third defendants Written agreement transferring wheat to second and third defendants inconsistent with alleged oral condition precedent Finding that written agreement prevailed |
Legislation: | Bulk Handling Act 1967 |
Case References: | Hoyts Pty Ltd v Spencer (1919) 27 CLR 133 Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507 Pym v Campbell (1854) 119 ER 903 ABC v Lenah Game Meats Pty Ltd (2001) 185 ALR 1 Bank of Australasia v Palmer [1897] AC 540 Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 Chapman Bros v Verco Bros & Co Ltd (1933) 49 CLR 306 Christmas Island Resort Pty Ltd v Geraldton Building Co Pty Ltd (No 5) (1997) 18 WAR 334 Dey v Victorian Railways Commissioners (1949) 78 CLR 62 Fancourt v Mercantile Mutual Credits Ltd (1983) 154 CLR 87 Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 General Steel Industries Inc v Commissioner of Railways (NSW) (1964) 112 CLR 125 H Jones & Co Pty Ltd v Talbot (1948) 180 CLR 63 L G Thorne & Co Pty Ltd v Thomas Borthwick & Sons (A/Asia) Ltd (1955) 56 SR (NSW) 81 Packer v Meagher [1984] 3 NSWLR 486 Re Bond Corporation Holdings Ltd (1990) 1 WAR 465 Webster v Lampard (1993) 177 CLR 598 Williams v Spautz (1992) 174 CLR 509 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
CO-OPERATIVE BULK HANDLING LTD
First Defendant
T J SAMPSON PTY LTD
Second Defendant
BABOO PTY LTD
Third Defendant
Catchwords:
Application for extension of interlocutory injunction - Plaintiff seeking to restrain first defendant from releasing wheat to second and third defendants - Written agreement transferring wheat to second and third defendants inconsistent with alleged oral condition precedent - Finding that written agreement prevailed
(Page 2)
Legislation:
Bulk Handling Act 1967
Result:
Interim injunction not extended
Category: B
Representation:
Counsel:
Plaintiff : Mr C A Grasso
First Defendant : Mr J A Thomson
Second Defendant : Mr J A Thomson
Third Defendant : Mr J A Thomson
Solicitors:
Plaintiff : Millsteed Grasso
First Defendant : Michael Whyte & Co
Second Defendant : Michael Whyte & Co
Third Defendant : Michael Whyte & Co
Case(s) referred to in judgment(s):
Hoyts Pty Ltd v Spencer (1919) 27 CLR 133
Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507
Pym v Campbell (1854) 119 ER 903
Case(s) also cited:
ABC v Lenah Game Meats Pty Ltd (2001) 185 ALR 1
Bank of Australasia v Palmer [1897] AC 540
Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148
Chapman Bros v Verco Bros & Co Ltd (1933) 49 CLR 306
(Page 3)
Christmas Island Resort Pty Ltd v Geraldton Building Co Pty Ltd (No 5) (1997) 18 WAR 334
Dey v Victorian Railways Commissioners (1949) 78 CLR 62
Fancourt v Mercantile Mutual Credits Ltd (1983) 154 CLR 87
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1
General Steel Industries Inc v Commissioner of Railways (NSW) (1964) 112 CLR 125
H Jones & Co Pty Ltd v Talbot (1948) 180 CLR 63
L G Thorne & Co Pty Ltd v Thomas Borthwick & Sons (A/Asia) Ltd (1955) 56 SR (NSW) 81
Packer v Meagher [1984] 3 NSWLR 486
Re Bond Corporation Holdings Ltd (1990) 1 WAR 465
Webster v Lampard (1993) 177 CLR 598
Williams v Spautz (1992) 174 CLR 509
(Page 4)
1 MATHEWS AJ: This matter comes before the Court as an application by the plaintiff to extend an interim injunction and an application by the defendants for summary judgment in the proceedings.
2 The background of the litigation can be stated relatively briefly. Both T J Sampson Pty Ltd (Sampson) and Baboo Pastoral Co Pty Ltd (Baboo) are, in effect, wheat growers. The plaintiff, Australian Foods Company Pty Ltd (AFC), is a grain trader which purchases grain directly from farmers and sells it, on its own account, to overseas markets. Co-operative Bulk Handling Ltd (CBH) operates grain storage, handling and other facilities in Western Australia. Its operations are to a large extent regulated by the Bulk Handling Act 1967.
3 In March 2002, AFC entered into separate contracts to purchase grain from each of Sampson and Baboo. In Sampson's case the agreed price was $168 per metric tonne. In the case of Baboo it was $169. In each case the grain was stored at CBH's warehouse in Albany.
4 Complaints were made, separately, by Sampson and Baboo, about AFC's failure to pay them the agreed price under the contract. Mr Pavan Shivnani, a director of AFC, said that this situation arose because, when AFC entered into the agreements to purchase these consignments, it was told that they were available for immediate delivery. This turned out not to be the case, as the wheat was being detained by CBH for fumigation. By reason of this delay, Mr Shivnani said, AFC was unable to complete export contracts for the sale of the wheat and was therefore unable to pay either Sampson or Baboo. In fact, AFC paid Sampson the sum of $10,000 on 24 May 2002 as part payment under its contract.
5 On 30 May 2002, Mr Timothy Sampson, a director of Sampson, arranged to meet with Mr Shivnani of AFC the next day, 31 May. Before going to the meeting, he discussed the matter with Mr Ian Smith, a director of Baboo, who requested that Mr Sampson act on behalf of Baboo at the meeting with Mr Shivnani. He authorised Mr Sampson to sign any agreements on behalf of Baboo.
6 On 31 May 2002, Mr Sampson and Mr Shivnani met at Mr Shivnani's office. After a lengthy discussion, Mr Shivnani, on behalf of AFC, agreed to retransfer the whole of the wheat to both Sampson and Baboo. Mr Shivnani reached this agreement because he wanted to maintain the plaintiff's good reputation amongst wheat growers. This much is undisputed. It is also undisputed that Mr Shivnani drew up two agreements under the letterhead of AFC, one with Sampson and one with
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- Baboo. They were in essentially similar terms except that the Sampson contract contained two additional clauses relating to the disposition of the $10,000 paid to that company a week earlier. The operative clause in each case was:
"Australian Foods Company Pty Ltd hereby agrees to transfer (and here was specified the quantity and type of grain) 'to T J Sampson Pty Ltd' (in the first case) and 'to Baboo Trust' (in the other case)."
8 Each agreement was signed by Mr Shivnani on behalf of AFC and Mr Sampson on behalf of the transferee.
9 At the same time a CBH transfer of ownership form was completed in relation to each transaction and signed by both Mr Shivnani and Mr Sampson. According to the evidence, this was the standard form used by CBH to evidence transfer of ownership of wheat held in its custody. The instructions signed by Mr Shivnani were to the following effect: "Please transfer the above tonnages to the nominated buyer." The form contained a printed clause to the following effect:
"Once this form is completed with the required signatures, the transfer will be effected and all future charges will be invoiced directly to the buyer. Grain will not be released until all outstanding charges have been paid."
10 The dispute between the parties relates to the payment of certain additional charges, which are briefly described as freight and handling charges in relation to the wheat. Mr Shivnani said that Mr Sampson agreed that these charges would be paid by Sampson and Baboo before the grain was to be delivered. It was due to an oversight, he said in his affidavit, that this clause was omitted from the agreement.
11 Mr Sampson in his affidavit said that these charges were not discussed during the meeting. He said that later that evening he received
(Page 6)
- a telephone call from Mr Shivnani asking to meet him the next day which he agreed to do. At that later meeting, according to Mr Sampson, Mr Shivnani said that he needed to amend the quantity of grain to be transferred under the agreements in order to take account of transport and handling costs. Mr Sampson refused to take responsibility for these charges.
12 On 4 June 2002 Mr Sampson faxed to CBH the transfer forms which had been signed at the meeting of 31 May 2002. In the meantime, numerous attempts had been made by Mr Shivnani to prevent CBH from releasing the grain to Baboo or Sampson without receiving a specific authority from himself. CBH at first appeared to be prepared to comply with this request. However, on 5 June 2002, the secretary of CBH wrote to AFC pointing out that the industry recognised protocol for the transfer of grain held by CBH required the completion of the "transfer of ownership form" which had been transmitted in this case. The letter continued:
"CBH is under no legal obligation to comply with any additional protocols, such as those Australian Food Company Ltd is attempting to impose upon it and which are outside of CBH usual course of business."
13 In the meantime, but only after Mr Sampson had told Mr Shivnani that the disputed fees would not be paid, AFC purported to onsell the wheat to an overseas buyer. This was the principal ground relied upon by AFC to support its claim for urgency when it commenced these proceedings. As Mr Shivnani said in his supporting affidavit, AFC would incur penalties for its failure to fulfil its overseas contracts, as at this time of year it is very difficult to find such a quality of grain for sale.
14 On 11 June 2002 AFC commenced these proceedings against CBH seeking an injunction restraining it from releasing the wheat in question to Sampson or Baboo. There was also an unspecified claim for damages.
15 An interim injunction in the terms claimed by AFC was granted on 11 June 2002 returnable on 18 June 2002.
16 On 17 June 2002, CBH lodged an interpleader application supported by an affidavit of Peter Keith Dean. The affidavit set out the relevant history of the matter. It noted that CBH claimed no interest in the grain which was the subject of the injunction and was willing to dispose of it in such manner as the Court might direct. The competing claims to
(Page 7)
- ownership of the grain were said to be between AFC on the one hand and Sampson and Baboo on the other.
17 As a result of this application, CBH was excused from any further participation in the proceedings. Sampson and Baboo were added as second and third defendants. The interim injunction was continued until yesterday, 2 July 2002. On that occasion Mr Grasso appeared for the plaintiff, AFC, and Mr Thomson for the second and third defendants, Sampson and Baboo. The defendants opposed any extension of the interim injunction and applied for summary judgment on the principal proceedings.
18 The statement of claim in these proceedings asserts that AFC is the owner of the grain in question. This, it is acknowledged, is the central issue in this part of the proceedings. If AFC does not own the grain it has no entitlement to prevent CBH from releasing it to Sampson and Baboo.
19 Both Sampson and Baboo rely upon the agreements dated 31 May 2002 as conferring ownership of the grain upon them. They point to s 18(3) of the Bulk Handling Act which provides that the proprietary interest in grain is vested in the person who for the time being is entitled to obtain it from bulk stocks held by CBH. Under CBH's normal protocols the Transfer of Ownership forms which were completed at the same time as the transfer agreements meant that Sampson and Baboo were entitled to obtain the wheat from CBH and that they therefore had the proprietary interest in the wheat.
20 However Mr Grasso pointed out that the forms themselves have no statutory force. The general law as to ownership of property still applies. In this regard Mr Grasso conceded that the agreements of 31 May appear on their face to confer full and immediate ownership upon the respective transferees. However, he said the operation of these agreements was subject to a condition precedent, namely the payment of the freight and handling charges.
21 Mr Grasso relied in this submission on Pym v Campbell (1854) 119 ER 903. In that case a written contract was drawn up between the parties for the purchase and sale of certain machinery. It was understood by both parties at the time that the transaction was conditional upon a third person, A, approving the machinery. The third person did not do so. The defendant successfully defeated a claim under the contract upon the basis that the parties had never intended that there would be an agreement in the absence of A's approval. All Judges, in their characteristically brief
(Page 8)
- judgments, drew the distinction between evidence which seeks to vary the terms of a written agreement, which is not admissible, and evidence to show that there was no agreement in the first place, which is admissible.
22 Mr Thomson pointed out that the issue in Pym v Campbell related to the formation of contractual intention. He relied upon the proposition that the so-called condition precedent sought to be raised by AFC arises out of an alleged collateral contract which is inconsistent with the terms of the principal contract. For it was the essence of the written contract in each case that ownership passed immediately to the transferee. Yet the oral agreement sought to be raised by AFC would have the effect of deferring the passing of property until after payment of the freight and handling charges.
23 Mr Thomson took me through a well-known line of authority relating to the parol evidence rule. I shall recite only two of the cases here. They are, first, the judgment of Knox CJ in Hoyts Pty Ltd v Spencer (1919) 27 CLR 133 at 139:
"A distinct collateral agreement, whether oral or in writing, and whether prior to or contemporaneous with the main agreement, is valid and enforceable even though the main agreement be in writing, provided the two may consistently stand together so that the provisions of the main agreement remain in full force and effect notwithstanding the collateral agreement."
24 Further, in Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507 at 517 the court said:
"A collateral agreement made in consideration of a main agreement cannot effectively subsist unless it is consistent with the main agreement. Once an agreement is made in writing it is treated, unless the parties are shown otherwise to intend, as the full expression of their obligations. If it is established that the writing was intended to contain only part of a fuller agreement it may be otherwise. That, however, is not the present case. But it may be established that an entirely separate agreement was made by the parties. One of them may give a collateral promise in consideration of the other entering into the principal agreement. But if such a collateral agreement is to have effect as a contract it must be consistent with the provisions of the main agreement, the making of which by the other party provides the consideration. If the promise sought to modify,
(Page 9)
- control or restrict the principal agreement it would detract from the very consideration which is alleged to support the promise."
25 It is clear, in my view, from the terms of the written agreements signed on 31 May 2002, that the ownership in the grain was to pass immediately. It is therefore not open to AFC to seek to argue that, contrary to the terms of those agreements, the passing of property was deferred by reason of some further conversation between Mr Shivnani and Mr Sampson.
26 It follows that AFC is not the legal owner of the grain, as asserted in the statement of claim. It has no rights over the disposition of the grain and therefore no entitlement to seek injunctive relief against CBH. I will therefore not extend the interim injunction in these proceedings. The injunction is at an end.
27 As to the position of CBH in the proceedings, Mr Grasso has indicated that AFC will consent to an order that the proceedings against that company be dismissed. That leaves outstanding the proceedings against Sampson and Baboo. In those proceedings Mr Thomson seeks summary judgment. However, Mr Grasso says that AFC wishes to pursue its claim for damages against those companies. In my view it should be given an opportunity to seek to do so.
28 The orders I make are as follows:
(1) I decline to extend the existing interim injunction;
(2) by consent I dismiss the proceedings as against the first defendant, CBH;
(3) I direct that the plaintiff file an amended statement of claim within 21 days of today;
29 I also propose to order that the second and third defendants' costs of the proceedings be paid by the plaintiff. However, Mr Thomson has foreshadowed an application that costs be paid on an indemnity basis. I will hear argument on this matter before making any final costs orders.
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