Fermentation Industries (Aust) Pty Ltd v Burns Philp and Co Ltd

Fermentation Industries (Aust) Pty Ltd (the appellants) appealed to the New South Wales Court of Appeal against orders made by Rolfe J concerning a dispute with Burns Philp and Co Ltd (the respondent) regarding the interpretation of a supply agreement. The core of the dispute involved the respondent's entitlement to adjust the selling price under the agreement based on benefits provided to other customers and the inclusion of delivery costs in its pricing structure.

The legal issues before the Court of Appeal were whether the appointed expert, Warwick Finney, had the authority to determine if an adjustment to the selling price was required under the supply agreement to account for benefits the respondent provided to other customers, specifically in relation to capital equipment. Additionally, the court had to determine if the expert was entitled to assess whether an adjustment was necessary to reflect the inclusion of delivery costs in the respondent's "Current Large User Price," and whether the respondent was obliged to disclose details of this price to the appellants.

The Court of Appeal reasoned that the construction of the supply agreement, particularly the clauses relating to price adjustments and the role of the expert, supported the appellants' contention that the expert possessed the necessary authority. The court found that the agreement contemplated the expert's broad discretion in resolving disputes concerning pricing, including the consideration of benefits conferred on third parties and the components of the respondent's pricing mechanisms. The court held that the expert was entitled to make these determinations and that the respondent was obliged to provide the relevant pricing information.

Consequently, the Court of Appeal allowed the appeal, setting aside the orders of Rolfe J. The court declared that the appointed expert was entitled to determine the required price adjustments concerning capital equipment benefits and delivery costs, and that the respondent was obliged to provide details of its Current Large User Price to the appellants. The respondent was ordered to pay the appellants' costs of the proceedings at first instance and the appeal.