Bekaa Dairy Products Pty Ltd trading as Ultimate Dairies v Sepak Industries Pty Ltd

Bekaa Dairy Products Pty Ltd trading as Ultimate Dairies filed an action in the Local Court against Sepak Industries Pty Ltd, seeking a debt owed under an instalment contract for a milk pasteurisation machine. The defendant, Sepak Industries, raised a defence and cross-claim asserting that the machine was defective, requiring rectification. The Local Court Magistrate dismissed the defendant's expert report as it was not served in accordance with the court's orders, and the defendant failed to obtain leave to rely on the expert evidence. Additionally, the court found that the expert witness did not acknowledge the expert witness code of conduct and did not demonstrate that their opinion was based on their specialised knowledge. The defendant also sought to rely on a contractual provision alleged to be a penalty, but the Magistrate refused to permit this, as the defence of penalty was not pleaded, and the defendant failed to adduce evidence that the contractual provision was a penalty.

The Supreme Court was asked to determine whether the Local Court Magistrate erred in rejecting the defendant's expert report, in refusing to permit the defendant to rely on the contractual provision alleged to be a penalty, and in other respects. The Court found that the Local Court Magistrate did not err in rejecting the defendant's expert report, as it was not served in accordance with the court's orders, and the defendant failed to obtain leave to rely on the expert evidence. The Court also found that the expert witness did not acknowledge the expert witness code of conduct and did not demonstrate that their opinion was based on their specialised knowledge. In relation to the contractual provision alleged to be a penalty, the Court found that the defendant failed to plead the defence of penalty, and did not adduce evidence that the contractual provision was a penalty. Therefore, the Local Court Magistrate did not err in refusing to permit the defendant to rely on the contractual provision alleged to be a penalty.

The Supreme Court dismissed the appeal and affirmed the decision of the Local Court Magistrate. The Court found that no errors were demonstrated, and therefore, the appeal was dismissed with costs. The defendant was ordered to pay the plaintiff's costs of the appeal, to be paid within 14 days.