SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2013 0057
CEDAR MEATS (AUST) PTY LTD Appellant v
FIVE STAR LAMB PTY LTD Respondent ---
JUDGES
NETTLE, BEACH JJA and McMILLAN AJA
WHERE HELD
MELBOURNE
DATE OF HEARING
18 February 2014
DATE OF JUDGMENT
7 March 2014
MEDIUM NEUTRAL CITATION
[2014] VSCA 32
1st Revision 12 March 2014 [37], [39]
JUDGMENT APPEALED FROM
[2013] VSC 164 (Sifris J)
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CONTRACT – Abandonment – Accrued rights – Whether abandonment of contract discharged rights accrued due up to point of abandonment – Intention – Question to be decided according to objective assessment of parties’ words and actions – Waiver, election and estoppel – Whether gratuitous forbearance to enforce accrued rights sufficient to constitute binding waiver of or election not to enforce rights or sufficient forever to estop enforcement – Penalty – Provision for one party to process agreed daily volumes – Whether provision or contract as a whole imposing implied obligation on other party to deliver agreed daily volumes for processing – Provision for payment of fixed sum if agreed daily volumes not delivered – Whether provision for payment penal – Andrews v Australia and New Zealand Banking Group Ltd (2012) 247 CLR 205; Paciocco v Australia and New Zealand Banking Group Ltd [2014] FCA 35, applied – Summers v Commonwealth (1918) 25 CLR 144; Fitzgerald v Masters (1956) 95 CLR 420; Westralian Farmers Ltd v Commonwealth (1936) 54 CLR 361; Ledingham v Bermejo Estancia Co Ltd [1947] 1 All ER 749; McDermott v Black (1940) 63 CLR 161; Agricultural and Rural Finance Pty Ltd v Gardner (2008) 238 CLR 570, referred to – GW Fisher Ltd v Eastwoods Ltd [1936] 1 All ER 421; Churchward v The Queen (1865) LR 1 QB 173, distinguished.
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Appearances: Counsel Solicitors For the Appellant Mr I G Waller SC with
Ms R L ThomasKennedy Guy For the Respondent Dr Oren Bigos Hunt & Hunt NETTLE JA
BEACH JA
McMILLAN AJA:1 This is an appeal from a judgment given in the Commercial Court. The judge rejected the appellant’s (‘Cedar Meats’) claim for amounts alleged to be due from the respondent (‘Five Star Lamb’) under an agreement (‘the Agreement’) for the processing and packaging of lamb products at the Cedar Meats’ abattoir at Brooklyn. His Honour concluded that the parties had abandoned the Agreement with the result that Cedar Meats’ claim was extinguished and, in any event, that the amounts in question were in the nature of a penalty and, therefore, unenforceable.
The agreement
2 According to the uncontested evidence, Five Star Lamb was established in August 2009 with the aim of becoming a high quality lamb producer. The idea was that it would arrange for the processing of lambs by a suitable export accredited lamb processing operator and thereafter for the marketing of the lamb to customers in predominantly overseas markets. To begin with, Five Star Lamb had in mind to engage CRF Group…
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- Case
- [2014] VSCA 32
- Decision Date
CaseChat Overview and Summary
The court's reasoning was grounded in the objective assessment of the parties' intentions as expressed through their words and actions. It was held that abandonment of a contract does not automatically discharge accrued rights unless there is clear evidence of an intention to abandon all rights and obligations. The court found that the defendant's actions did not constitute a waiver or an estoppel preventing it from enforcing accrued rights. The clause requiring payment of a fixed sum was examined under the criteria established by Andrews v Australia and New Zealand Banking Group Ltd, and found not to be penal. The court relied on precedents including Summers v Commonwealth and Agricultural and Rural Finance Pty Ltd v Gardner, among others, to support its decision.
The Federal Court concluded that the abandonment of the contract by the plaintiff did not discharge the defendant's accrued rights up to the point of abandonment. The court further held that the defendant's actions did not constitute a waiver or an estoppel preventing it from enforcing accrued rights. Additionally, the provision for a fixed sum payment in the event of non-delivery was not deemed penal. Consequently, the court ruled in favour of Cedar Meats (Aust) Pty Ltd, with the defendant ordered to pay the accrued processing fees up to the point of abandonment, less any amounts already paid.
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