Ockerby and Co Ltd v Watson

Ockerby & Co Ltd appealed to the High Court of Australia from a decision of the Supreme Court of Western Australia. The dispute arose from an agreement between Ockerby & Co Ltd, who expected to be appointed Government agents for the wheat scheme, and George Knight Watson, whom they agreed to employ as a sub-agent. Ockerby & Co Ltd failed to secure the Government appointment, consequently terminating Watson's employment, leading Watson to sue for damages for breach of contract.

The central legal issue before the High Court was whether Ockerby & Co Ltd had warranted their appointment as Government agents, thereby making them liable for breach of contract when they failed to secure this appointment and subsequently terminated Watson's employment. The court was required to determine if the agreement was conditional upon Ockerby & Co Ltd obtaining the agency or if it contained an express or implied warranty of such an appointment.

The High Court, in dismissing the appeal, reasoned that the evidence, particularly a letter from Ockerby & Co Ltd and subsequent discussions, established that the company had warranted their ability to secure the Government agency. The court distinguished this situation from cases where performance becomes impossible due to the non-existence of a subject matter without fault, citing principles from *Krell v. Henry*. The presence of a warranty meant that Ockerby & Co Ltd remained liable for breach of contract, irrespective of the subsequent impossibility of their own appointment. The court affirmed the Supreme Court's finding that the agreement was not conditional but contained a warranty, and therefore, Ockerby & Co Ltd were liable to Watson for damages.