Ilhan v Cvitanovic - [2009] NSWSC 479

CITATION: Ilhan v Cvitanovic [2009] NSWSC 479

HEARING DATE(S): 22/05/09

JUDGMENT DATE :
22 May 2009

JURISDICTION: Equity

JUDGMENT OF: White J

EX TEMPORE JUDGMENT DATE: 22 May 2009

DECISION: 1. Order in accordance with paras 1 and 2 of the originating process; 2. Defendant pay the plaintiffs' costs; 3. Exhibits may be returned after 28 days.

CATCHWORDS: CORPORATIONS - winding up - appeal from liquidator's rejection of proof of debt - hearing de novo - SALE OF GOODS - conditions and warranties - implied conditions and warranties - plaintiffs made known to company the purpose for which they required goods so as to show that they relied on the company's skill or judgment - breach of implied warranty as to fitness for purpose

LEGISLATION CITED: Sale of Goods Act 1923 (NSW)
Trade Practices Act 1974 (Cth)

CATEGORY: Principal judgment

CASES CITED: Ilhan v Cvitanovic [2009] NSWSC 160; (2009) 69 ACSR 702
Watson v Foxman (1995) 49 NSWLR 315
Mead v Watson [2005] NSWCA 133; (2005) 23 ACLC 718
Re Mendarma Pty Ltd (In Liq) (No. 2) [2007] NSWSC 99; (2007) 25 ACLC 193
Silvia v Brodyn Pty Ltd [2007] NSWCA 55; (2007) 25 ACLC 385

TEXTS CITED: Kenneth Sutton, Sales and Consumer Law, 4th ed (1995)

PARTIES: S Semih Ilhan & Anor v Daniel I Cvitanovic

FILE NUMBER(S): SC 4597/08

COUNSEL: Plaintiffs: R J Brender & J Wilcsek
Defendant: Ms K Watson (solicitor)

SOLICITORS: Plaintiffs: Forbes Dowling Lawyers
Defendant: Meehans Solicitors

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

WHITE J

Friday, 22 May 2009

4597/08 S. Semih Ilhan v Daniel I Cvitanovic

JUDGMENT

1 HIS HONOUR: This is an appeal from a liquidator's rejection of a proof of debt. In May 2006 the plaintiffs purchased two air-conditioning units from a company then called Hartrez Pty Ltd ("the company"). The company installed the units in the plaintiffs' house in Roseville. There is no defect in the air-conditioning units and they work according to their intended capacity, but they do not adequately heat the living areas of the plaintiffs' house. It is not in dispute that the units are not reasonably fit for the purpose for which the plaintiffs purchased them; namely, to provide such heating.

2 The units were installed on 23 May 2006. Almost immediately after the installation, the plaintiffs complained that the system was inadequate. The company refused to take the units back. That was because the tests made by the manufacturers showed that there was no defect in the units. That was not the plaintiffs' complaint.

3 The plaintiffs took proceedings in the Consumer, Trader and Tenancy Tribunal and obtained an order on 21 March 2007 that the company pay a sum of $8,135 immediately and collect the two units by 30 March 2007. Those orders were made after a hearing which the company did not attend. The orders were not complied with. The Tribunal refused the company's application for a rehearing.

4 On 30 November 2007…

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.

Continue reading Ilhan v Cvitanovic

Details

AGLC: Ilhan v Cvitanovic [2009] NSWSC 479
Case: [2009] NSWSC 479
Decision Date: 22 May 2009

CaseChat Overview and Summary

The case of Ilhan v Cvitanovic was heard in the Federal Court of Australia. The plaintiffs, Ilhan and his wife, brought an action against the defendant, Cvitanovic, who was the liquidator of a company that had gone into liquidation. The dispute centred on a claim by the plaintiffs that the company had breached an implied warranty as to the fitness for a particular purpose of goods sold to them. The plaintiffs sought to have their debt recognised by the liquidator for the amount of the breach of warranty.

The central legal issues the court needed to decide were whether the plaintiffs had relied on the skill or judgment of the company to supply goods suitable for a particular purpose, and whether such reliance constituted a breach of the implied warranty of fitness for purpose. Additionally, the court had to determine the appropriate remedy for the breach, which included whether the plaintiffs' debt should be recognised by the liquidator.

The court found that the plaintiffs had indeed made known to the company the specific purpose for which they required the goods, which demonstrated their reliance on the company's skill or judgment. This reliance was sufficient to trigger the implied warranty of fitness for purpose. The court further held that the company had breached this warranty by supplying goods that were not fit for the intended purpose. As a result, the plaintiffs were entitled to compensation for the breach. The court ordered that the plaintiffs' debt should be recognised by the liquidator in the amount of the damages awarded for the breach of the implied warranty.

Orders