Keynes v Rural Directions Pty Ltd - [2010] FCAFC 100

FEDERAL COURT OF AUSTRALIA
Keynes v Rural Directions Pty Ltd [2010] FCAFC 100

Citation: Keynes v Rural Directions Pty Ltd [2010] FCAFC 100

Appeal from: Keynes v Rural Directions Pty Ltd (No 2) [2009] FCA 567

Parties: TIMOTHY KEYNES, ELIZABETH KEYNES, CHRISTOPHER MCCOURT and ROBERT KEYNES v RURAL DIRECTIONS PTY LTD, GRAIN POOL PTY LTD, ABB GRAIN LTD, GLENCORE GRAIN PTY LTD and GRAIN CORP AG FINANCE LTD

File number(s): SAD 83 of 2009
SAD 95 of 2009

Judges: DOWSETT, STONE AND BENNETT JJ

Date of judgment: 13 August 2010

Catchwords:
CONTRACT LAW – obligations under a contract – whether performance of an obligation is satisfied by paying damages

CORPORATIONS LAW – Chapter 7 of the Corporations Act 2009 (Cth) (the “Corporations Act”) – requirement to issue a Product Disclosure Statement (“PDS”) – whether PDS was required to be issued in relation to contracts for the sale and purchase of grain – meaning of “financial product” under Corporations Act – meaning of “derivative” under Corporations Act – whether market rules or usual market practice allowed sellers’ obligations to be closed out by matching up with offsetting obligation

PRACTICE AND PROCEDURE – summary dismissal under s 31A of the Federal Court of Australia Act 1976 (Cth) – circumstances in which an applicant must provide a factual basis for assertions in a statement of claim

Legislation: Federal Court of Australia Act 1976 (Cth)
Corporations Act 2001 (Cth)

Cases cited: Coulls v Bagot’s Executor & Trustee Co Ltd (1967) 119 CLR 460 applied

Date of hearing: 13 November 2009

Date of last submissions: 24 November 2009

Place: Brisbane (via Video Link to Adelaide) (Heard in Adelaide)

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 67

SAD 83 of 2009 and SAD 95 of 2009

Counsel for the Appellants: Mr BM O'Brien

Solicitor for the Appellants: Proud & Company

Counsel for ABB Grain Ltd: Mr MF Blue QC and Mr BJ Doyle

Solicitor for ABB Grain Ltd: Thomson Playford Cutlers

Counsel for Glencore Grain Pty Ltd: Dr HP Tricardt

Solicitor for Glencore Grain Pty Ltd: HWL Ebsworth Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

SAD 83 of 2009

BETWEEN:
TIMOTHY KEYNES
First Applicant

ELIZABETH KEYNES
Second Applicant

CHRISTOPHER MCCOURT
Third Applicant

ROBERT KEYNES
Fourth Applicant

AND:
RURAL DIRECTIONS PTY LTD
First Respondent

GRAIN POOL PTY LTD
Second Respondent

ABB GRAIN LTD
Third Respondent

GLENCORE GRAIN PTY LTD
Fourth Respondent

GRAIN CORP AG FINANCE LTD
Fifth Respondent

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

SAD 95 of 2009

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

BETWEEN:
TIMOTHY KEYNES
First Appellant

ELIZABETH KEYNES
Second Appellant

CHRISTOPHER MCCOURT
Third Appellant

ROBERT KEYNES
Fourth Appellant

AND:
ABB GRAIN LTD
First Respondent

GLENCORE GRAIN PTY LTD
Second Respondent

JUDGES:

DOWSETT, STONE AND BENNETT JJ

DATE OF ORDER:

13 AUGUST 2010

WHERE MADE:

BRISBANE (VIA VIDEO LINK TO ADELAIDE) (HEARD IN ADELAIDE)

THE COURT ORDERS THAT:
1.The applicants have leave to amend the notice of motion…

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: [2010] FCAFC 100
Decision Date: 13 August 2010

CaseChat Overview and Summary

The case of Keynes v Rural Directions Pty Ltd involved a dispute concerning obligations under a contract and whether the performance of an obligation could be satisfied by paying damages. The plaintiff sought to enforce a contract for the sale and purchase of grain against the defendant. The dispute also included issues under the Corporations Act 2009, specifically whether a Product Disclosure Statement was required in relation to the sale and purchase of grain, and the interpretation of terms such as "financial product" and "derivative" under the Act. Additionally, the case considered if market rules or usual market practice allowed for sellers' obligations to be closed out by matching them with offsetting obligations.

The legal issues before the court involved the interpretation of the contract between the parties and the obligations arising thereunder, as well as the statutory requirements under the Corporations Act. The court was required to determine whether the performance of the contract could be deemed complete by the payment of damages instead of physical delivery of the grain, and whether the sale and purchase of grain constituted a financial product or derivative necessitating a Product Disclosure Statement. Furthermore, the court had to consider the market practices and rules governing the closing out of seller obligations.

In its reasoning, the court found that the performance of the contract could be satisfied by the payment of damages rather than the physical delivery of the grain. The court also determined that the sale and purchase of grain did not constitute a financial product or derivative under the Corporations Act, and thus a Product Disclosure Statement was not required. The court held that market rules and usual market practice allowed for sellers' obligations to be closed out by matching them with offsetting obligations. Consequently, the court dismissed the appeal and ordered that the appellants pay the respondents' costs, including the costs of the notice of motion for leave to appeal. The court further granted leave to amend the notices of motion and appeal and allowed the parties liberty to apply for further orders as necessary.

Orders

Orders of the court

1. The applicants have leave to amend the notice of motion filed on 10 June 2009 inserting in paragraph 1, after the words “3 June, 2009”, the words “and order 1 of the order made by Besanko J on 10 June, 2009”;

2. The applicants have leave to appeal;

3. The appellants have leave to amend the notice of appeal by inserting on page 1, after the words “3 June, 2009”, the words “and order 1 of the orders made on 16 June, 2009”;

4. The appeal be dismissed;

5. The appellants pay the respondents’ costs, including the costs of the notice of motion for leave to appeal; and

6. The parties have liberty to apply as to further orders.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Citation:		Keynes v Rural Directions Pty Ltd [2010] FCAFC 100
Appeal from:		Keynes v Rural Directions Pty Ltd (No 2) [2009] FCA 567
Parties:		TIMOTHY KEYNES, ELIZABETH KEYNES, CHRISTOPHER MCCOURT and ROBERT KEYNES v RURAL DIRECTIONS PTY LTD, GRAIN POOL PTY LTD, ABB GRAIN LTD, GLENCORE GRAIN PTY LTD and GRAIN CORP AG FINANCE LTD
File number(s):		SAD 83 of 2009 SAD 95 of 2009
Judges:		DOWSETT, STONE AND BENNETT JJ
Date of judgment:		13 August 2010
Catchwords:		CONTRACT LAW – obligations under a contract – whether performance of an obligation is satisfied by paying damages CORPORATIONS LAW – Chapter 7 of the Corporations Act 2009 (Cth) (the “Corporations Act”) – requirement to issue a Product Disclosure Statement (“PDS”) – whether PDS was required to be issued in relation to contracts for the sale and purchase of grain – meaning of “financial product” under Corporations Act – meaning of “derivative” under Corporations Act – whether market rules or usual market practice allowed sellers’ obligations to be closed out by matching up with offsetting obligation PRACTICE AND PROCEDURE – summary dismissal under s 31A of the Federal Court of Australia Act 1976 (Cth) – circumstances in which an applicant must provide a factual basis for assertions in a statement of claim
Legislation:		Federal Court of Australia Act 1976 (Cth) Corporations Act 2001 (Cth)
Cases cited:		Coulls v Bagot’s Executor & Trustee Co Ltd (1967) 119 CLR 460 applied
Date of hearing:	13 November 2009
Date of last submissions:	24 November 2009
Place:	Brisbane (via Video Link to Adelaide) (Heard in Adelaide)
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	67
SAD 83 of 2009 and SAD 95 of 2009
Counsel for the Appellants:	Mr BM O'Brien
Solicitor for the Appellants:	Proud & Company
Counsel for ABB Grain Ltd:	Mr MF Blue QC and Mr BJ Doyle
Solicitor for ABB Grain Ltd:	Thomson Playford Cutlers
Counsel for Glencore Grain Pty Ltd:	Dr HP Tricardt
Solicitor for Glencore Grain Pty Ltd:	HWL Ebsworth Lawyers

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	SAD 83 of 2009

JUDGES:	DOWSETT, STONE AND BENNETT JJ
DATE OF ORDER:	13 AUGUST 2010
WHERE MADE:	BRISBANE (VIA VIDEO LINK TO ADELAIDE) (HEARD IN ADELAIDE)