Garraway Metals P/L v Comalco Aluminium Ltd

[1992] FCA 809

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JUDGMENT No. . .ZQ~ ..,, 1 - 9 2 , ,

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THE FEDERAL COURT OF AWLL'RALIA	1
)
VICTORIA DISTRICT REGISTRY	No. VG 68 of 1991

1

GENERAL DIVISION	)
B E T W E E N :

-WAY MET-S PTP LTD

Applicant

- and -

COMALCO ALUMINIUM LIMITED

Respondent

JUDGE :  Heerey J

RECEIVED

m:  4 November 1992

09 NOV 1992

PLACE :  Melbourne FEDERAL COURT OF

AUSTRALIA

RULING

On 12 June 1992 I gave a ruling which dealt with a number of

contractual issues which had arisen between the parties. I am

told that, consequent upon that ruling, the parties have been

able to work out the monetary consequences as a matter of

liability with one exception.	I have been asked today to rule
on that remaining contentious issue.	(There is also a dispute
Comalco collection centres for Victoria whose names are set

as to liability for consequential loss which will be heard
next month.)

The present issue arises in relation to UBC which Garraway Metals itself, in its capacity as a as a Comalco collection centre, sold to Comalco. Garraway Metals, as well as handling the baling and transport arrangements which were the subject of the agreement of 6 May 1988, was also one of the authorised

out in exhibit FSG4 to the affidavit of Frank Stephen
Garraway, sworn 28 January 1992.

That list, which was typical of price lists published by Comalco from time to time, shows that, as at 6 March 1990, the price per kilogram which Comalco agreed to pay Garraway Metals was 95 cents. The issue before me today concerns the construction of clause 1.3 of the agreement of 6 May 1988. That clause provides:

"Within seven days of receipt of goods at Comalco
Yennora weighbridge, Comalco agrees to reimburse
Garraway Metals Pty Limited for authorised payments
made to Comalco collection centres."

In attachment A to its further and better particulars of loss and damage dated 25 September 1992, Garraway Metals has set out details month by month of what it calls "Garraway purchases", that is to say UBC it purchased from persons other than authorised collection centres and which it in turn sold to Comalco at the agreed rate.

Garraway Metals says that under clause 1.3 it is entitled to

reimbursement at the agreed rate. It says it was acting in
this regard both as a collection centre, entitled to be paid

the agreed rate by Comalco for the UBC it sold, and also in

its capacity as a paying agent. In a sense, it was on

Comalco's behalf paying itself for its entitlement as a collection agent.

Put another way, Garraway Metals says that clause 1.3 does not apply to the payments it made to the persons who supplied UBC to it (Garraway Metals) because that would not be a case of reimbursement for payments made to "Comalco collection

centres " .

Comalco argues that, in the light of the construction I have put on the contract, it is really a matter of strict reimbursement, and that Garraway Metals are only entitled to be reimbursed for payments actually made.

In my opinion, the Garraway Metals contention is correct. It

seems to me that there was, on the evidence, a clear
distinction between the two functions that Garraway Metals
carried out and that the true sense of the agreement was that,
in its role as an authorised collection centre, it was to
receive payment from Comalco in accordance with the prices

agreed from time to time.

I think the commercial setting in which this agreement was

made was that Comalco was to agree a price with its collection

centres, some of which were charities, others of which were
commercial scrap and bottle dealers, at prices which it will
be seen varied quite significantly over the life of the
agreement. But the prices (if any) which those collection
centres paid to obtain the material was to be a matter for
their own judgment. They were simply resellers to Comalco.
So, for those reasons, I uphold the Garraway Metals
submissions.

I certify that this and the
preceding (3) three pages are
a true copy of the reasons for
judgment of his Honour Mr

Justice Heerey.

Dated: /(/&~-~k, 1 1 7 2

Appearances

Counsel for the applicant:	Mr M B Phipps QC with Mr J D
Elliot
Solicitors for the applicant:	Phillips Fox
Counsel for the respondent:	Mr P J O'Callaghan QC with M r
P D Santamaria
Solicitors for the respondent:	Arthur Robinson and Hedderwicks
Dates of hearing:	4 November 1992