Mallonland Pty Ltd v Advanta Seeds Pty Ltd

The appellants, referred to as "the growers," appealed a decision concerning their claim against the respondent, Advanta Seeds Pty Ltd ("the producer"). The growers, who cultivate and sell grain sorghum, alleged they purchased contaminated seed from an authorised distributor of the producer and suffered pure economic loss as a result. This loss comprised reduced income and increased expenditure, stemming from the need to remediate their fields due to the contamination, which they could not detect before planting. The growers did not allege property damage or economic loss consequential to property damage.

The central legal issues before the court were whether the producer owed the growers a duty of care to take reasonable steps in its production process to prevent them from suffering pure economic loss due to a hidden defect in the seed. Specifically, the court considered whether the producer had assumed responsibility towards the growers to exercise such care, and whether the salient features of the relationship between the producer and the growers established a duty of care to avoid causing pure economic loss.

The court reasoned that the producer did not owe the growers the alleged duty of care. While acknowledging the "salient features" approach to establishing a duty of care in cases of pure economic loss, the court found no assumption of responsibility by the producer towards the growers. The producer's packaging included a prominent disclaimer of liability, stating that it was the purchaser's responsibility to ensure the product was fit for its intended use and that the producer would not be liable for any loss arising from the use of the product, whether due to negligence or otherwise. The court concluded that the growers' case, which relied on the foreseeability of economic loss, was contrary to established principles, and that the producer's disclaimer was effective in negating any such duty.

Consequently, the appeal was dismissed with costs.