ON APPEAL FROM THE SUPREME COURT OF Contract-Sale of goods-Delivery f.o.b. at port-Demand by buyer for delivery
elsewhere-Refusal by seller-Security for payment for goods-Failure of buyer to provide-Action by buyer against seller for non-delivery-Condition precedent PERTH,
-Non-performance by plaintiff. Oct. 26, 29, 30; Nov. 2.
By contracts in writing made during 1915 in Perth for the sale of flour it was agreed that the buyers, who were merchants in Egypt, should accept responsibility of providing freight that the price should be £8 per ton f.o.b. Fremantle; that local credit should be established to enable sellers (a Western Australian company) to obtain payment in exchange for documents at Fre- mantle, and that the flour should be shipped during January 1916. The buyers arranged for the Bank of Australasia in Perth to negotiate, at the exchange of the day, the drafts, with recourse on drawers, of the sellers upon a bank in London, for account of the buyers payable at sight, against shipping documents relating to Australian flour f.o.b. Fremantle. Subsequently the buyers demanded delivery to the Bank of Australasia at Fremantle against payment; the sellers refused to make such delivery, and the buyers cabled insisting upon compliance with their demand. Thenceforth nothing further was done by either party until after the end of January 1916. An action was brought by the buyers against the sellers for damages for non-delivery of the flour to
Held, that on the true construction of the contracts the only obligation of the defendants as to delivery was to deliver flour free on board a ship or ships
provided by the plaintiffs: and, consequently, that the defendants were not bound to make the substituted delivery to the bank demanded by the plaintiffs.
Held also, that even if the defendants' refusal to deliver to the bank was not justified, the plaintiffs had neither established a local credit within the meaning of the contracts appropriate to the altered delivery, nor shown that they had been ready and willing to establish such credit but had been absolved from doing SO by the defendants' refusal to deliver to the bank; and that, consequently, they were not entitled to sue the defendants for breach of
Byrne v. Van Tienhoven, 5 C.P.D., 344, applied. Decision of the Supreme Court of Western Australia: Ockerby &Co. Ltd. V. Cohen &Co., 19 W.A.L.R., 40, affirmed.
APPEAL from the Supreme Court of Western Australia.
An action was brought in the Supreme Court by Maurice Cohen &Co., of Alexandria, Egypt, against Ockerby &Co. Ltd., of Perth, Western Australia, upon two contracts in writing for the sale by the defendants to the plaintiffs of certain flour, dated 15th and 16th October 1915 respectively.
The contracts were made by H. A. Evers &Co., brokers, of Perth, acting for both the plaintiffs and the defendants; and the terms of the two contracts, which differed only in respect to the quantity of flour sold-that in the contract of 16th…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Cohen & Co v Ockerby & Co [1917] HCA 58
Case
[1917] HCA 58
Decision Date
CaseChat Overview and Summary
The parties to this appeal were Maurice Cohen & Co, merchants from Egypt, and Ockerby & Co Ltd, a Western Australian company. The dispute arose from two written contracts for the sale of flour, dated October 1915, which stipulated delivery f.o.b. Fremantle during January 1916. The buyers sought damages for non-delivery, claiming the sellers refused to deliver the flour as contracted. The High Court of Australia heard the appeal from the Supreme Court of Western Australia.
The legal issues before the court were whether the sellers were obligated to deliver the flour to the Bank of Australasia in Fremantle as demanded by the buyers, and if not, whether the buyers had fulfilled their contractual obligations regarding the establishment of local credit to enable payment. The court also considered whether the buyers' demand for delivery to the bank constituted a waiver of the f.o.b. term and whether the sellers' refusal to comply with this demand absolved the buyers from their own obligations.
The court reasoned that the contracts clearly stipulated delivery f.o.b. Fremantle, meaning the sellers' obligation was to place the flour on board a ship provided by the buyers. The buyers' demand for delivery to the bank at Fremantle against payment was a departure from this agreed term. Furthermore, even if the sellers' refusal to deliver to the bank was considered a breach, the buyers had failed to establish the required local credit for payment, nor had they demonstrated readiness and willingness to do so. The court applied the principle that a party suing for breach must show they were ready and willing to perform their part of the contract, even if performance was excused by the other party's prior refusal.
The High Court affirmed the decision of the Supreme Court of Western Australia, holding that the sellers were not bound to make the substituted delivery to the bank. The court found that the buyers had not established a local credit appropriate to the altered delivery, nor had they shown they were ready and willing to do so, and therefore they were not entitled to sue for breach of contract. The appeal was dismissed.