Intertransport International Private Ltd v Donaldson - [2005] VSCA 303

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 3728 of 2004

INTERTRANSPORT INTERNATIONAL PRIVATE LTD. and INTERTRANSPORT INTERNATIONAL LTD.
	Appellants
v.
BRUCE DONALDSON AND LIQUID BULK SOLUTIONS PTY. LTD.	Respondents

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JUDGES:	CHERNOV, EAMES and ASHLEY, JJ.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	7 November 2005
DATE OF JUDGMENT:	15 December 2005
MEDIUM NEUTRAL CITATION:	[2005] VSCA 303

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Contract – Restitution – Total failure of consideration – Whether mere breach of contract can constitute total failure of consideration – Whether mere non-delivery of goods can give rise to right of re-payment of purchase price.

Courts – Duty to give reasons for decision – Whether reasons so inadequate as to vitiate decision – Whether reasons for decision are necessarily implicit in judgment – Failure to call relevant witnesses without explanation – Whether adverse inference can be drawn from failure to call evidence.

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APPEARANCES:	Counsel	Solicitors
For the Appellants	Mr. C.R. Northrop	Middletons
For the Respondents	Mr. D.A. Klempfner	Coulter Roache

CHERNOV, J.A.:

This is an appeal against the decision of a judge of the County Court made on 6 May 2004 dismissing the appellants’ claim against the respondents for the recovery of money paid by them for the manufacture and delivery of specialised heat pads and other equipment that, in the event, the respondents never supplied. The total sum claimed by the appellants in the proceeding was US$72,701.20. This sum was reduced on appeal to $US65,971.20, as I shall explain later. Briefly, the amount claimed in the proceeding below was made up as follows:

(a)US$5,971.20, being the price of six of 25 heat pads which were paid for by the appellants on 28 December 2000, but which have not been delivered;
(b)US$6,730, being the sum paid by the appellants in February 2001 to have the respondents manufacture and deliver 500 promotional model containers, which have not been delivered; and
(c)US$60,000, being the sum paid by the appellants on or about 23 October 2001 for the manufacture and delivery of 50 heat pads, which have not been delivered.

It was common ground that the amounts in question were paid by the appellants to the respondents on or about the dates referred to and that the respondents have not delivered the units to the appellants. The respondents’ principal case below was that they were not required to produce or deliver the ordered heat pads until the appellants made a request for them and that no such demand was made before 6 August 2002 when the proceeding was filed. The respondents asserted that it was unsurprising that the appellants did not request delivery of the 56 undelivered heat pads, notwithstanding that they had ordered and paid for them, given that, in about June 2002, they sold the business in respect of which the heat pads were required. Thus, said the respondents, the appellants ceased to have any need for the heat pads and sought to recover the monies paid in relation to them notwithstanding that the respondents were at all times willing…

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: [2005] VSCA 303
Decision Date: 15 December 2005

CaseChat Overview and Summary

Intertransport International Private Ltd sought to recover the purchase price paid to Donaldson for the supply of goods. The dispute arose when Donaldson failed to deliver the goods as agreed. The case was heard by the Supreme Court of Queensland. The central issue was whether a mere breach of contract, specifically non-delivery of goods, could constitute a total failure of consideration, thereby entitling the purchaser to a right of re-payment of the purchase price. Additionally, the court needed to determine whether the reasons provided for the decision were adequate or if they were so inadequate as to vitiate the decision.

The court addressed the first issue by examining whether a mere breach of contract, such as non-delivery, could justify a claim for restitution. It held that the failure to deliver goods does not necessarily constitute a total failure of consideration. Instead, it must be shown that the consideration provided by the buyer was for something entirely different from what was contracted for, or that the consideration had wholly failed. In this case, the court found that the purchase price was paid for the goods themselves, and therefore, a mere breach did not amount to a total failure of consideration.

Regarding the adequacy of the reasons for the decision, the court scrutinised whether the reasons provided were sufficient. It noted that the reasons were not explicit and did not necessarily include all relevant considerations. The court also considered whether the failure to call certain witnesses without explanation could lead to an adverse inference. It concluded that while the reasons provided were inadequate, this did not vitiate the decision entirely. The court maintained that the decision was correct based on the evidence presented.

In conclusion, the court upheld the decision that a mere breach of contract, such as non-delivery, does not entitle the purchaser to a right of re-payment of the purchase price. It also found that the reasons for the decision, although inadequate, did not vitiate the outcome. The court's final order was that Intertransport International Private Ltd was not entitled to recover the purchase price from Donaldson.

Orders