Locklands Pastoral Pty Limited v Horwood Bagshaw Australia Pty Limited

[2005] FCA 1265

FEDERAL COURT OF AUSTRALIA

Locklands Pastoral Pty Limited v Horwood Bagshaw Australia Pty Limited [2005] FCA 1265

LOCKLANDS PASTORAL PTY LIMITED ACN 008 222 491 & ORS v HORWOOD BAGSHAW AUSTRALIA PTY LIMITED ACN 008 281 605

SAD 268 of 2004

LANDER J
6 SEPTEMBER 2005
ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 268 OF 2004

BETWEEN:	LOCKLANDS PASTORAL PTY LIMITED ACN 008 222 491 PETER GEORGE LOCK HELEN MARIE LOCK APPLICANTS
AND:	HORWOOD BAGSHAW AUSTRALIA PTY LIMITED ACN 008 281 605 RESPONDENT
JUDGE:	LANDER J
DATE OF ORDER:	6 SEPTEMBER 2005
WHERE MADE:	ADELAIDE

THE COURT ORDERS THAT:

1.The applicant file and serve a statement of claim in accordance with the draft statement of claim submitted, except for deleting the words ‘which was intended’ and following in paragraph 18, and deleting paragraphs 121.2.1, 121.4, 121A, 122.2.1 and 122.13.

2.The applicants pay the respondent’s costs of and incidental to the applications to amend the statement of claim.

3.The respondent file and serve any defence and cross-claim on or before 27 September 2005.

4.The applicants and the respondent provide discovery by 11 October 2005.

5.Inspection occur before 25 October 2005.

6.The applicant file its affidavits of their evidence-in-chief of their witnesses by 7 December 2005.

7.The respondent to file its affidavits of its witnesses’ evidence-in-chief by 28 January 2006.

8.The applicants to file any affidavits of the evidence-in-chief of any witnesses in reply by 25 February 2006.

9.The applicant deliver any experts’ reports upon which they intend to rely by 25 February 2006.

10.The respondent to serve any experts’ reports upon which it relies by 25 March 2006.

11.The applicant to file any experts’ reports in reply to the respondent’s experts’ reports by 7 April 2006.

12.The parties to issue any subpoenas returnable on 14 April 2006.

13.The matter be set for hearing on 4 September 2006 for four weeks.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 268 OF 2004

BETWEEN:	LOCKLANDS PASTORAL PTY LIMITED ACN 008 222 491 PETER GEORGE LOCK HELEN MARIE LOCK APPLICANTS
AND:	HORWOOD BAGSHAW AUSTRALIA PTY LIMITED ACN 008 281 605 RESPONDENT

JUDGE:	LANDER J
DATE:	6 SEPTEMBER 2005
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

1. The respondent is the manufacturer of farm machinery.  It employed three persons, Mr Durant, Mr Sweeney and Mr Stag.  The applicants are in the business of farming, share farming and contract farming in respect of agricultural activities.  Some time in 2002 the applicants approached the respondent in relation to the purchase of a minimum till Airseeder with specific features.

2. Some time during that year Mr Durant represented to the second-named applicant that the respondent had the ability to supply and had manufactured a cultivator bar and Airseeder with the necessary features.  In July 2002 Mr Durant sent, by post to the applicants, brochures which addressed the features available on the machinery manufactured by the respondent.  It is alleged in the statement of claim that the brochures contained a number of representations.

3. On 23 August 2002 the second-named applicant attended the respondent’s premises at Mannum and had a discussion with Messrs Durant and Sweeney in which they advised Messrs Durant and Sweeney they were seeking to acquire for the 2003 cultivation and planting season, a cultivator bar and an Airseeder that had a number of essential features, all of which are pleaded in paragraph 17.  Those features go to the physical form of the machinery and the capacity of the machinery to perform. 

4. It is pleaded in paragraph 18 of the statement of claim, at the same time and place, and in response to their inquiries of the second-named applicant, Sweeney verbally represented to the second-named applicant that the respondent had the ability to supply a cultivator bar and Airseeder that incorporated all of the essential features and which could perform the task required of it in the conditions described by the second-named applicant (the Sweeney representations).

5. In the proposed second amended statement of claim, the words, ‘which was intended by Sweeney to be understood and which was understood by the second-named applicant to include an ability to supply that equipment in time for the 2003 cultivation and planting seasons’ has been added to the end of paragraph 18.  It is not pleaded that any representation was made by the respondent by silence in relation to the matters raised in paragraph 17.  All that is proposed to be pleaded is that Mr Sweeney ‘intended to be understood and was understood by the applicant that the respondent could supply the equipment in time for the 2003 cultivation and planting season’.

6. Mr O’Sullivan, who led for the respondent, pointed out that the plea in paragraph 17 related to the physical aspects of the machinery and the capacity of the machinery to perform.  Those matters were described as the essential features.  Paragraph 18, in its form, addressed those essential features.  The proposed amendment is to add to paragraph 18, the words to which I have referred.  Mr O’Sullivan has pointed out there is nothing in any of the earlier pleas by which it could be understood that that was the intention of Mr Sweeney or that that was the understanding arrived at by the applicant.

7. The applicant did not contract with the respondent for the supply of the machinery.  Instead, at the direction of the respondent, the applicants contracted with a dealer in the machinery who in turn placed an order with the respondent.  There can be no criticism of the applicant for the way in which it proceeded.  It was told by the respondent that the machinery could only be purchased through one of its dealers: paragraph 20.

8. It is pleaded in paragraph 21 that the respondent was or ought to have been aware as a result of its position as a manufacturer of agricultural machinery, including seeding equipment, that:

   ‘21.3Iit was essential that the dealer then be able to deliver the seeding equipment, so assembled, thoroughly checked and tested to the customer in sufficient time to allow the customer to be trained by the dealer on the equipment prior to the 2003 seeding season, commencing as stipulated by the respondent in paragraph 3.12 of its Dealer Agreement with the dealer.’

   It is pleaded in paragraph 23:

   ‘By reason of the matters set out in paragraphs 11 to 22, inclusive, hereof, the applicants believed and were entitled to believe that the respondent would provide to them, through the dealer, a Scaribar, an Airseeder that:

   …

   23.3would be provided in a timely fashion at least in sufficient time to enable the dealer to assemble, thoroughly check and test the seeding equipment before delivery to the customer as stipulated by the respondent, paragraph 3.6 of its Dealer Agreement with the dealer; and for the dealer then to be able to on-deliver the seeding equipment so assembled, thoroughly checked and tested to the customer by 28 February 2003 or alternatively in sufficient time to allow the customer to be adequately trained by the dealer in the operation of the equipment prior to 2003 seeding season commencing as stipulated by the respondent, paragraph 3.12 of its Dealer Agreement with the dealer.’

9. There is no mention in the pleading that the respondent was ever made aware by the applicants of a delivery date of 23 February 2003, nor is there any mention that the respondent was ever made aware that the machinery had to be delivered in sufficient time to allow the customer to be adequately trained by the dealer in the operation of the equipment prior to 2003 season.

10. It is pleaded, in paragraph 19 of the statement of claim, that the second-named applicant placed an order for the Scaribar and Airseeder with the dealer on the express condition that both the Scaribar and Airseeder would be delivered by 28 February 2003.  The applicant’s case is that the pleas to which I have referred give rise to a duty of care on the part of the respondent.  In paragraph 121.1, it is pleaded that the respondent owed the applicants a duty to exercise reasonable care to ensure the supply of the machinery which operated properly or alternatively in accordance with the representation made by the respondent to the applicants.

11. The respondent does not challenge that plea.  However, a further duty is pleaded in 121.2, that is a duty to:

    ‘121.2warn the applicants in relation to the Scaribar and the Airseeder of any:

    121.2.1inability to deliver both the Scaribar and the Airseeder to the dealer in sufficient time to enable the dealer to assemble, check and test them and to then on-deliver them to the first-named Applicant:-

    121.2.1.1    by the 28^th February 2003; or, alternatively,

    121.2.1.2in sufficient time to allow the servants or agents of the first-named Applicant to be adequately trained by the dealer in the operation of the equipment prior to the commencement of the 2003 seeding season.’

12. It is argued by the respondent that there is no factual substratum for the duty of care pleaded in paragraph 121.2.  There are no facts alleged against the respondent which would allow it to be said that the respondent ever knew or ever agreed that the delivery ought to occur in sufficient time to enable a dealer to assemble, check and test the machinery and on delivery them to the first-named applicant by the date pleaded in 121.2.1 or by the time pleaded in 121.2.1.2.

13. In paragraph 121.4, it is pleaded that a duty was owed to deliver the Scaribar and Airseeder to the dealer in sufficient time to allow it to be used by the applicants for the whole of the 2003 sowing season.  Again it is argued that there is no factual substratum in the paragraphs to which I earlier referred, which allow it to be said that a duty of that kind could ever have arisen or be imposed on the respondent.

14. In paragraph 121A the applicant pleaded further duties.  It is pleaded, at all material times, for the reasons set out in paragraphs 1 to 32 hereof, the respondent owed the applicants a duty of care to ensure that the Scaribar and the Airseeder were delivered to the dealer in sufficient time to enable the dealer to assemble, check, and test them and to then on-deliver them to the first-named applicant by 28 February, 2003 or, alternatively, in sufficient time to allow the servants or agents of the first-named applicant to be adequately trained in the operation thereof prior to the commencement of the 2003 seeding season and were free from defects etcetera.  The plea then refers to the vulnerability of the applicants and the proximate relationship between the applicants and the respondents.

15. However, the argument put by the respondent is that there is simply no facts which could support the duty of care which is alleged to have arisen in paragraph 121A.  It is also argued that if the duty of care does not arise, then the plea in 122.2.1 of the breach, and 122.13 of the further breach should be struck out. 

16. In my opinion, the pleas in paragraphs 17, 18, 20, 21, 22 and 23 do not identify facts from which the duty of care pleaded could arise.

17. The applicants have an obligation, if they wish to plead that a duty of care of the kind arises, to plead the facts upon which the duty of care is constructed.  In my opinion, the facts which are contained in the paragraphs to which I have referred could not, of themselves, give rise to the duties which are pleaded in paragraphs 121.2.1, 121.4 and 121A.  There is no allegation that the a representation was made by silence by the respondent.  The only allegation against the respondent is that it was told, in August 2002, that the applicants were seeking to acquire the machinery for the 2003 cultivation season, to which Mr Sweeney did not comment.

18. There are no facts to support the proposed amendment to paragraph 18 to support the plea of Mr Sweeney’s intention.  True it is that the dealer was made aware that the machinery had to be delivered by 28 February, 2003 but there is nothing in the pleas, as they presently stand, which would allow it to be said that the respondent ever acquiesced in the dealer’s contractual obligation such as to give rise to a duty of care against the respondent.  The applicants, for whatever reasons, have not sought to sue the dealers who, apparently, did not deliver in accordance with their contractual obligation. 

19. Rather, they have sought, in my opinion, as I have said on earlier occasions, to construct a duty of care against the respondents in circumstances where the factual sub-stratum does not exist.  For those reasons, I will not allow the proposed amendment to paragraph 18, the words ‘which was intended’ and following, and I will not allow, in the second amended statement of claim, the pleas in paragraphs 121.2.1, 121.4, 121A, 122.2.1 and 122.13.  The two last paragraphs are a consequence of not allowing the pleas of duty of care.

20. I direct:

    (1)that the applicant file and serve a statement of claim, in accordance with the draft statement of claim submitted, except for deleting the words ‘which was intended’ and following in paragraph 18, and deleting paragraphs 121.2.1, 121.4, 121A, 122.2.1 and 122.13;

    (2)that the applicants pay the respondent’s costs of and incidental to the applications to amend the statement of claim;

    (3)that the respondent file and serve any defence and cross-claim on or before 27 September, 2005;

    (4)that the applicants and the respondent provide discovery by 11 October, 2005;

    (5)that inspection occur before 25 October, 2005;

    (6)that the applicant file its affidavits of their evidence-in-chief of their witnesses by 7 December, 2005;

    (7)the respondent to file its affidavits of its witnesses’ evidence‑in‑chief by 28 January, 2006;

    (8)the applicants to file any affidavits of the evidence-in-chief of any witnesses in reply by 25 February, 2006;

    (9)that the applicant deliver any experts’ reports upon which they intend to rely by 25 February, 2006;

    (10)the respondent to serve any experts’ reports upon which it relies by 25 March, 2006;

    (11)the applicant to file any experts’ reports in reply to the respondents experts’ reports by 7 April, 2006;

    (12)the parties to issue any subpoenas returnable on 14 April, 2006;

    (13)the matter be set for hearing 4 September, 2006 for 4 weeks.

I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander.

Associate:

Dated:            12 September 2005

Counsel for the Applicants:	Mr P Slattery QC with Mr C J Pearce
Solicitor for the Applicants:	Scales and Partners
Counsel for the Respondent:	Mr S O’Sullivan
Solicitor for the Respondent:	Cosoff Cudmore Knox
Date of Hearing:	6 September 2005
Date of Judgment:	6 September 2005