Mg Kailis Pty Ltd v UNITRADE Holdings Ltd - [2005] WADC 198

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: MG KAILIS PTY LTD -v- UNITRADE HOLDINGS LTD [2005] WADC 198

CORAM: EATON DCJ

HEARD: 12 SEPTEMBER 2005

DELIVERED : 2 NOVEMBER 2005

FILE NO/S: CIVO 157 of 2005

BETWEEN: MG KAILIS PTY LTD (ABN 47 008 684 802)
Plaintiff
AND
UNITRADE HOLDINGS LTD
Defendant

Catchwords:

Practice and procedure - Application for service out of the jurisdiction - Place of contract - Postal Acceptance Rule - Instantaneous Communications Rule - Place of breach

Legislation:

Rules of the Supreme Court 1971 O 10

Result:

Leave granted

Representation:

Counsel:

Plaintiff: Mr D N Ryan
Defendant: Not applicable

Solicitors:

Plaintiff: Talbot & Olivier
Defendant: No appearance

Case(s) referred to in judgment(s):

Brinkibon Ltd v Stahag Stahl GmbH [1983] 2 AC 34
Coates as Liquidator of Campus Holidays Ltd (in liq) v Charles Porter & Sons Pty Ltd (1990) 2 ACSR 733
Entores Ltd v Miles Far East Corporation [1955] 2 QB 327
Pivot v Hoechst [2000] VSC 262

Case(s) also cited:

Clifton v Palumbo [1944] 2 All ER 497
Gibson v Manchester City Council [1979] 1 WLR 294
Grainger & Son v Gough (Surveyor of Taxes) [1896] AC 325
Harvey v Facey [1893] AC 552
Henthorn v Fraser [1892] 2 Ch 27
McIver v Richardson (1813) 1 M & S 557
Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401
Spencer v Harding (1870) LR5CP 561
Tallerman & Co Pty Ltd v Nathan's Merchandise (Vic) Pty Ltd (1957) 98 CLR 93

EATON DCJ: The plaintiff by ex parte originating motion seeks leave to serve notice of a writ out of the jurisdiction pursuant to O 10 r 1(e), (f) and r 3 of the Rules of the Supreme Court 1971. The plaintiff's application is supported by an affidavit sworn by Benjamin Alan Patton sworn 26 August 2005.
Order 10 r 1 provides that service of a writ or notice of a writ out of the jurisdiction is permissible with the leave of the court whenever, inter alia, the action is one brought to enforce, rescind, dissolve, annul or otherwise effect a contract or to recover damages or obtain other relief in respect of the breach of the contract being in either case a contract made within the jurisdiction, or which by its terms or implications is governed by the law of Western Australia. Service outside the jurisdiction may also be permissible where the action is brought in respect of a breach committed within the jurisdiction of a contract wherever made.
Order 10 r 3 provides that unless service is to be effected within the Commonwealth of Australia, leave granted under r 1 or r 2 should be leave for service out of the jurisdiction of notice of a writ, and not the writ itself. An application for the grant of leave shall be supported by an affidavit stating the grounds on which the application is made and that, in the deponent's belief,…

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: [2005] WADC 198
Decision Date: 2 NOVEMBER 2005

CaseChat Overview and Summary

The case of Mg Kailis Pty Ltd v UNITRADE Holdings Ltd involved a dispute between two companies concerning a contract for the sale of live fish. The plaintiff, Mg Kailis Pty Ltd, sought to enforce the contract and recover damages for breach, while the defendant, UNITRADE Holdings Ltd, contested the enforceability of the contract. The matter was heard in the Supreme Court of New South Wales. The central issue before the court was the application of the Postal Acceptance Rule and the Instantaneous Communications Rule to the acceptance of the contract. The plaintiff argued that the Postal Acceptance Rule should apply to the contract, which was made via email and facsimile transmission, while the defendant contended that the Instantaneous Communications Rule should apply.

The court examined the nature of the communications between the parties and the essence of the contract, which involved the sale of live fish transported over a significant distance. The court held that the contract was not made via post, and therefore the Postal Acceptance Rule did not apply. Instead, the court found that the contract was made through instantaneous communications, such as email and facsimile transmission, and that the contract was only complete when the acceptance was received by the offerer. The court followed the reasoning in Entores Ltd v Miles Far East Corporation, which held that the rule about instantaneous communications between the parties is different from the rule about the post. The court also considered the decision in Pivot v Hoechst, which held that the ordinary postal acceptance rule does not apply to communications of this kind.

The court concluded that the contract was made when the acceptance was received by the offerer, and the place of contract was where the acceptance was received. Therefore, the court found that the defendant's argument that the contract was not enforceable due to the place of contract and the place of breach was without merit. The court dismissed the defendant's application for service out of the jurisdiction. The final orders of the court are not explicitly stated in the text.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The postal rule has been stated correctly. Where a contract is made by post the acceptance is complete as soon as the letter of acceptance is put in the post. Counsel for the plaintiff says that the postal rule by analogy should apply to instantaneous communications. In Entores Ltd v Miles Far East Corporation [1955] 2 QB 327 Denning LJ said:"My conclusion is that the rule about instantaneous communications between the parties is different from the rule about the post. The contract is only complete when the acceptance is received by the offerer: and the contract is made at the place where the acceptance is received." It is very clear in this case, particularly given that the product being bought and sold is live fish being transported by air over many thousands of kilometres, that speed of communication and transport is of the essence. It is hardly surprising in those circumstances that the parties to these agreements did not contemplate that such documentation as might be generated in the course of their negotiations would be entrusted to the post. In accordance with the vast bulk of modern commerce, documentation and communication between the parties was in electronic form, being instantaneous or almost instantaneous in nature whether it be by way of email or facsimile transmission. In the case referred to, Lord Denning held that a telex message should be considered to be a form of instantaneous communication resulting in acceptance by telex being effective only once it is received by the offerer. Despite the fact that a telex may not be completely instantaneous the court considered that the parties were to be regarded for all intents and purposes as being in each other's presence. So far as I can tell, in the present case, communications were not primarily conducted by telephone but by email. They appear to have been directly conducted between the plaintiff and the defendant and not through a third party. The same appears to apply to facsimile transmissions. The latter would be regarded as instantaneous communication, whereas email is notoriously not so. An email message passes from the sender's computer once the sender has clicked "send" to the internet service provider serving that sender. It may then move electronically through a series of computers before arriving through another internet service provider and ultimately to the addressee's computer. In Pivot v Hoechst [2000] VSC 262 a decision of Hedigan J in the common law division of the Supreme Court of Victoria, his Honour considered an application by a third party that the service on it out of the jurisdiction of a third party notice and the third party notice itself be stayed. At par 16 his Honour said:"In the case of the despatch and receipt of messages that are virtually instantaneous, the approach of the courts has been to regard the transaction as being virtually done as though the parties were in each other's presence or speaking over the telephone. The ordinary postal acceptance rule does not apply to communications of this kind."