Metalcorp Recyclers Pty Ltd v Metal Manufacturers Ltd

Metalcorp Recyclers Pty Ltd (appellant) appealed to the New South Wales Court of Appeal against a decision of the District Court that had dismissed its claim against Metal Manufacturers Ltd (respondent). The dispute concerned Metalcorp's claim for payment for scrap metal supplied to Metal Manufacturers.

The Court of Appeal was required to determine whether Metal Manufacturers had made a misrepresentation to Metalcorp, either by silence or by a partial statement of the truth, in the context of their established course of business. This involved considering whether Metal Manufacturers had a duty to disclose certain information to Metalcorp and whether its conduct amounted to misleading or deceptive conduct.

The Court found that Metal Manufacturers had engaged in misleading and deceptive conduct by failing to disclose material information to Metalcorp. In the context of their ongoing business relationship, where Metal Manufacturers had previously accepted scrap metal that did not meet certain specifications, its silence regarding the non-conformance of later deliveries constituted a misrepresentation. This was because Metalcorp was led to believe, by the established course of dealing and the lack of objection, that the scrap metal continued to be acceptable. The Court applied principles relating to misrepresentation by silence and partial statements of truth, particularly in commercial contexts where parties have a history of dealings.

Consequently, the appeal was allowed. The judgment of the District Court in favour of Metal Manufacturers was set aside, and judgment was entered for Metalcorp for $254,164.74, plus pre-judgment interest. Metal Manufacturers was also ordered to pay Metalcorp's costs in both the District Court and the Court of Appeal.