Gillogly v Iama Agribusiness Pty. Limited

Gillogly (the purchaser) appealed from a decision of the primary judge concerning a contract for the sale of a quantity of grain to Iama Agribusiness Pty. Limited (the vendor). The dispute arose from the vendor's delivery of contaminated grain after approximately forty per cent of the contracted quantity had been delivered. The contract contemplated that the grain acquired by the vendor would be delivered into a third-party storage depot, where it might be commingled with other grain of the same type and grade. Under the storage agreement, the vendor was not entitled to receive back the specific grain delivered but was entitled to receive or transfer grain of the same type and grade. The purchaser was to be entitled to call for delivery of the grain by instalments as and when required.

The central legal issues before the Court of Appeal were whether the property in the grain acquired by the vendor had passed to the purchaser, and whether the purchaser was entitled to terminate the contract for breach due to the delivery of contaminated grain.

The Court of Appeal, in dismissing the appeal, reasoned that the contract was one for the sale of unascertained goods. The property in the grain did not pass to the purchaser at the time of the contract, nor did it pass upon the vendor's acquisition of the grain. Instead, property passed when specific goods, identified and appropriated to the contract, were delivered to the purchaser or placed at their disposal in accordance with the contract. The court found that the vendor's delivery of contaminated grain constituted a breach of contract. However, the court held that the purchaser was not entitled to terminate the contract for this breach. The reasoning for this conclusion, though not fully elaborated in the provided text, likely involved an assessment of whether the breach was sufficiently fundamental to justify termination, or whether the purchaser's remedy lay in damages for the defective goods.

The appeal was dismissed with costs.