Henry Dean and Sons (Sydney) Limited v P O'Day Pty Ltd

Henry Dean and Sons (Sydney) Limited (the appellant) appealed to the High Court of Australia from a decision of the Supreme Court of New South Wales. The dispute arose from a contract for the sale of 150 bales of Liverpool wheat-sacks on a c.i.f.e. (cost, insurance, freight, and exchange) basis. The appellant claimed damages for non-delivery, while the respondent seller pleaded that the appellant buyer was not ready and willing to perform the contract.

The High Court was required to determine whether the appellant buyer was ready and willing to perform the contract, notwithstanding its refusal to accept the seller's draft and associated shipping documents. This involved considering the nature of a c.i.f. contract, the buyer's obligations upon tender of documents, and the effect of the seller shipping goods that did not conform to the contract description.

A majority of the High Court (Knox C.J., Higgins and Starke JJ.) held that the appellant was ready and willing to perform the contract. Knox C.J. and Higgins J. reasoned that under a c.i.f. contract requiring payment against documents, a buyer is not obligated to accept documents that do not, in fact, relate to goods of the contract description. Therefore, the appellant's refusal to take up the draft, based on a reasonable doubt about the conformity of the goods, did not demonstrate a lack of readiness or willingness to perform. Starke J. agreed, finding that while an insistence on inspection before taking up documents would be a breach, the evidence showed the appellant merely sought assurance that the goods matched the contract description before accepting the draft, which was permissible.

The High Court accordingly allowed the appeal, restored the verdict of the trial judge in favour of the appellant, and reversed the decision of the Full Court of the Supreme Court of New South Wales.