Minister for Supply and Development v Servicemen's Co-operative Joinery Manufacturers Ltd

The High Court of Australia heard an appeal from the Supreme Court of South Australia concerning a dispute over the sale of woodworking machinery. The appellant, the Minister for Supply and Development (representing the Commonwealth), had sold machinery to the respondent, Servicemen's Co-operative Joinery Manufacturers Ltd. The respondent claimed ownership of the machinery, alleging the property had passed to them under a contract dated 3 October 1946, and sued for detinue and conversion after the Commonwealth resumed possession of the premises where the machinery was located. The respondent contended that the property passed on the contract date, or alternatively, that the Commonwealth's demand for payment of the purchase price acknowledged the passing of property.

The central legal issues before the High Court were whether the property in the machinery had passed to the respondent company under the contract of sale, and if not, whether the Commonwealth's subsequent demand for payment of the purchase price precluded it from asserting its proprietary rights. Specifically, the Court had to determine the effect of the contractual term "Net cash before delivery" on the passing of property and the seller's right to sue for the price.

The majority of the High Court, comprising Latham C.J. and Williams J., reasoned that the term "Net cash before delivery" meant that the property in the machinery was not to pass until the purchase price was paid. They held that this contractual stipulation gave the Commonwealth a right of action for the price, distinct from a right to recover damages for breach of contract, even though the property had not yet passed. Consequently, the Commonwealth's demand for payment was not inconsistent with its claim that ownership had not transferred. Webb J., dissenting, found that while the demand for payment did not necessarily imply delivery had occurred, the evidence was insufficient to establish that the property had passed to the respondent.

The High Court, by majority, reversed the decision of the Supreme Court of South Australia. The Court found that the property in the machinery had not passed to the respondent company because the purchase price had not been paid, and the contract stipulated payment as a condition precedent to the passing of property. Therefore, the Commonwealth was entitled to retain possession of the machinery.