IGA Distribution Pty Ltd v King and Taylor Pty Ltd

[2002] VSC 391

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 2068 of 2001

IGA DISTRIBUTION PTY LTD	Plaintiff
v
KING & TAYLOR PTY LTD	First Defendant
DELAHEY PROPERTIES PTY LTD	Second Defendant

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RULING NO. 2

JUDGE:	Nettle J
WHERE HELD:	Melbourne
DATES OF HEARING:	3, 4, 5 and 6 September 2002
DATE OF RULING:	6 September 2002
CASE MAY BE CITED AS:	IGA Distribution Pty Ltd v King & Taylor Pty Ltd and anor
MEDIUM NEUTRAL CITATION:	[2002] VSC 391

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R.M. Garratt QC with Mr M.K. Moshinsky	Cornwall Stodart
For the First Defendant	Mr J.D. Hammond QC with Ms J.E. Richards	Richard Szental
For the Second Defendant	Mr P.J. Hayes with Ms L. Hannon	Efron & Associates

HIS HONOUR:

1. I propose to reverse my decision to allow questioning on the state of mind of Ms Zusman at the time that she sent her letter of 21 June 2001.

1. This morning, just before the luncheon adjournment, objection was taken to a question asked by Mr Hammond QC concerning the state of mind of Ms Zusman at the time that she sent her letter of 21 June 2001 to the Assetta Group.  That letter is relied upon by the defendants as evincing an intention on the part of the plaintiff no longer to be bound by the agreement for lease of which the plaintiff now seeks specific performance.

1. Mr Garrett QC objected to the question as irrelevant.  He submitted that the question of whether a written communication amounts or is capable of amounting to repudiation of a contract is to be decided objectively, having regard to the contents of the document and thus as to how they would be perceived by an objective recipient.  It is not to the point, he submitted, that the sender of the communication believed or did not believe in the truth of contents of communication or indeed that the sender had any view about the contents at all.

1. Mr Hammond submitted in reply that the subjective state of mind of the sender, although perhaps not of direct relevance, was nonetheless admissible as being likely to assist the court in reaching a view as to how the communication would be perceived by an objective recipient.

1. Having regard to something which I thought I recalled had been said by Callaway JA in 10^th Dancote Pty Ltd v Pyramid Building Society (In liquidation)[1], I was minded to accept Mr Hammond’s submission and immediately before the luncheon adjournment I signified that I would be disposed to disallow the objection.

   [1]Unreported No. 5618 of 1991;  BC 970, 1646.

1. Over the luncheon adjournment, however, I have had the chance to reflect upon the matter and to look again at what Callaway JA said in Dancote.  Contrary to my recollection, his Honour did not suggest that the intention of the sender of a communication might be relevant to the question of whether a written communication evinces an intention to throw up the contract, but rather that the state of mind of the recipient might be of assistance in determining whether an objective recipient in the position of the actual recipient would have regarded the communication as repudiatory.

1. With respect, that makes considerable sense but it says nothing to support the view that the state of mind of the sender can be relevant. 

1. That raison d’etre of the Anglo-Australian theory of contract is one of objective perception.  To accept that the state of mind of the sender of a commercial communication is relevant flies in the face of that precept. 

1. Therefore, notwithstanding the view which I earlier expressed, I do not consider that Ms Zusman’s state of mind is relevant or otherwise of assistance in determining whether the letter of 21 June 2001 was repudiatory, and accordingly I uphold Mr Garrett’s objection to the question.

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