Ghan Constructions Pty Ltd v Southern Star Windows Pty Ltd - [2024] VSC 483

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S ECI 2023 03870

Ghan Constructions Pty Ltd (ACN 141 485 350)	Plaintiff
v
Southern Star Windows Pty Ltd (ACN 100 012 431)	Defendant

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JUDGE:	Quigley J
WHERE HELD:	Melbourne
DATE OF HEARING:	25 July 2024
DATE OF JUDGMENT:	15 August 2024
CASE MAY BE CITED AS:	Ghan Constructions Pty Ltd v Southern Star Windows Pty Ltd
MEDIUM NEUTRAL CITATION:	[2024] VSC 483

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MAGISTRATES’ COURT APPEAL — Appeal to Supreme Court from final order made in civil proceeding — Appeal on a question of law — Magistrates’ Court Act 1989 (Vic) s 109.

CONTRACT — Construction — Credit agreement — Romalpa clause — Whether clause entitles supplier of goods to enter land and retake goods not paid for by purchaser — Whether implied term allowing supplier to retake goods not paid for by purchaser — Adaz Nominees v Castleway [2020] VSCA 201 applied.

DAMAGES — Assessment of damages for trespass — Mitigation of damage — Where supplier of goods trespassed to land and retook goods not paid for by purchaser — Whether Magistrate erred in determining that purchaser failed to mitigate loss by not paying supplier for goods taken as soon as it became apparent that they had not been stolen — Healing (Sales) Pty Ltd v Inglis Electrix Pty Ltd (1968) 121 CLR 584; Payzu v Saunders [1919] 2 KB 581; Portbury Development Co Pty Ltd v Ottedin Investments Pty Ltd [2014] VSC 57; Sotiros Shipping Inc v Sameiet Solholt (The Solholt) [1983] 1 Lloyd’s Rep 605; Strutt v Whitnell [1975] 1 WLR 870 considered.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr B. Carr	Mahons with Yuncken & Yuncken Lawyers
For the Defendant	Mr E. Twomey	Coulter Legal

HER HONOUR:

INTRODUCTION

The appellant, Ghan Constructions Pty Ltd (‘Ghan’), is a building company. The respondent, Southern Star Windows Pty Ltd (‘Southern Star’), is a manufacturer and supplier of windows and doors.

Since 2012, Southern Star has supplied goods to Ghan, the terms of which are governed by a credit agreement dated 25 January 2012 (‘Credit Agreement’).[1] Ghan’s obligations under the Credit Agreement are guaranteed by Mr Abdul Karim Khawari pursuant to a deed of guarantee and indemnity of the same date.
[1]On 25 January 2012, Ghan executed a credit application form pursuant to which it agreed to be bound by Southern Star’s terms and conditions of trade (which were attached to the form). These documents are referred to together as the ‘Credit Agreement’. The Credit Agreement governs the terms under which Southern Star supplies goods to Ghan on credit and recoups payment for those goods (and other work and labour done or services rendered).

The proceeding before the Magistrates’ Court of Victoria at Geelong, from which this appeal arises,[2] was a claim filed by Southern Star to recover an outstanding debt in respect of windows and doors supplied to Ghan by Southern Star. Prior to bringing…

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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Details

Case: [2024] VSC 483
Decision Date: 15 August 2024

CaseChat Overview and Summary

Ghan Constructions Pty Ltd appealed against a final order made by the Magistrates' Court in a civil proceeding. Southern Star Windows Pty Ltd was the defendant in the lower court. The dispute involved the interpretation of a Romalpa clause in a credit agreement between the parties. The crux of the matter was whether the clause entitled the supplier of goods to enter the land and retake goods not paid for by the purchaser, and whether there was an implied term allowing the supplier to retake such goods. Additionally, the case addressed the assessment of damages for trespass and the issue of mitigation of damage.

The legal issues before the court included the interpretation of the Romalpa clause and its implications for the supplier's rights to enter land and reclaim goods. The court had to determine if the clause allowed for the retaking of goods and whether there was an implied term permitting such action. The court also examined the purchaser's obligation to mitigate losses by paying for the goods once it became apparent they had not been stolen. Cases such as Adaz Nominees v Castleway [2020] VSCA 201, Healing (Sales) Pty Ltd v Inglis Electrix Pty Ltd (1968) 121 CLR 584, Payzu v Saunders [1919] 2 KB 581, Portbury Development Co Pty Ltd v Ottedin Investments Pty Ltd [2014] VSC 57, Sotiros Shipping Inc v Sameiet Solholt (The Solholt) [1983] 1 Lloyd’s Rep 605, and Strutt v Whitnell [1975] 1 WLR 870 were considered to resolve these issues.

The court examined the Romalpa clause and found that it did not entitle the supplier to enter the land and retake goods. The court held that there was no implied term allowing such action. Regarding damages for trespass, the court found that the purchaser did not fail to mitigate losses by not paying for the goods immediately. The court concluded that the purchaser was not obligated to pay for the goods as soon as it became apparent they had not been stolen. Therefore, the appeal was dismissed.

The Supreme Court affirmed the final order of the Magistrates' Court. The Romalpa clause was interpreted as not granting the supplier the right to enter the land and retake unpaid goods. Additionally, the court held that there was no implied term allowing the retaking of goods. The decision underscored the importance of the purchaser's actions in mitigating damages for trespass, clarifying that payment for the goods was not a requisite action.

Orders