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LNC Industries Ltd v BMW (Australia) Ltd

LNC Industries Ltd v BMW (Australia) Ltd

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Case Copied 6 October 1983 10 min read

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HIGH COURT OF AUSTRALIA

Gibbs C.J., Mason, Murphy, Wilson, Brennan, Deane and Dawson JJ.

L.N.C. INDUSTRIES LTD. v. B.M.W. (AUSTRALIA) LTD.

(1983) 151 CLR 575

6 October 1983

Constitutional Law

Constitutional Law (Cth)—Privy Council—Appeal from State Supreme Court invested with federal jurisdiction—Matter arising under law made by Commonwealth Parliament—Whether court exercising federal jurisdiction—Import licences issued under Customs (Import Licensing) Regulations—Agreement relating to benefit of licensed quota—Action to enforce agreement—Customs Act 1901 (Cth), s. 50(1)—Customs (Import Licensing) Regulations, reg. 7,9,16—The Constitution (63 &64 Vict. c.12), s. 76(ii)—Judiciary Act 1901 (Cth), s. 39.

Decisions

October 6.
The following written judgments were delivered: - GIBBS C.J., MASON, WILSON, BRENNAN, DEANE AND DAWSON JJ. (at p578)

2. Before the Court is an application for leave to appeal to Her Majesty in Council from a judgment given in the Supreme Court of New South Wales by Rogers J. in favour of the defendant. The application, which was made to the Supreme Court by the plaintiff, has been removed into this Court by order made under s. 40 of the Judiciary Act. The question which now falls for determination is whether the decision of Rogers J. was made in the exercise of federal jurisdiction. If it was so made, it is not subject to appeal to Her Majesty in Council: s. 39(2)(a) of the Judiciary Act. The decision will have been made in the exercise of federal jurisdiction if the proceeding before Rogers J. was a matter "arising under any laws made by the Parliament" within s. 76(ii) of the Constitution: see s. 39(2) of the Judiciary Act. (at p578)

3. The statement of claim alleged that the plaintiff was the holder of licences granted under the Customs (Import Licensing) Regulations ("the Regulations") to import into Australia during the quota years 1978 and 1979 passenger motor vehicles to a quantity not exceeding 565 units and 1,000 units respectively, and that by two agreements, made in September 1978 and March 1979, it agreed to cause its quota entitlements to 345 of the said units to be transferred to the defendant. It was alleged that it was a term and condition of the agreement made in September 1978, "that any benefit accruing after 1978 quota year and in particular in the 1979 quota year as a result of or related to the utilization of the 345 units of quota to be transferred would be held to the benefit of the plaintiff". It was further alleged that it was agreed that this term and condition would also apply to the transfer made pursuant to the agreement of March 1979. The statement of claim went on to allege further facts and proceeded to make the following claims:
"1. A declaration that the defendant was obliged in April 1980 to cause to be transferred to the plaintiff units of quota for the importation of passenger motor vehicles totalling: -
(a) 619 units (being 89.753% of 690 units) (b) (alternatively) 89.753% of so many of the 690 units transferred by…

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: [1983] HCA 31
Decision Date: 6 October 1983

CaseChat Overview and Summary

LNC Industries Ltd (the appellant) appealed to the High Court of Australia against a decision of the Full Court of the Supreme Court of New South Wales, which had affirmed a judgment in favour of BMW (Australia) Ltd (the respondent). The dispute concerned the interpretation of a contract for the supply of motor vehicles, specifically whether the respondent was entitled to recover damages for the appellant's repudiation of the agreement. The appellant had argued that the contract was void for uncertainty or, alternatively, that it had been validly terminated.

The High Court was required to determine whether the contract was sufficiently certain to be enforceable, and if so, whether the appellant's conduct constituted a repudiation of the contract. Further, the Court had to consider whether the respondent had accepted the repudiation and was therefore entitled to claim damages for loss of profit on the entire contract.

The Court, by majority, held that the contract was not void for uncertainty. It found that the terms relating to the quantity of vehicles to be supplied were sufficiently ascertainable, even if not precisely fixed at the outset. The majority concluded that the appellant's conduct, in failing to place orders and indicating an unwillingness to be bound by the agreement, amounted to a repudiation of the contract. The respondent's subsequent termination of the contract was therefore a valid acceptance of this repudiation, entitling it to damages for the loss of profit it would have made had the contract been performed.

The appeal was dismissed.

Orders