Orix Australia Corp Ltd v Peter Donnelly Automotive Pty Ltd

Orix Australia Corp Ltd, a finance company, initiated proceedings against Peter Donnelly Automotive Pty Ltd, a car dealership, in the Supreme Court of Victoria. The dispute arose from the sale of a vehicle, where the dealership had taken delivery of the vehicle without providing further response to Orix’s written offer. The central issue before the court was whether a contract had been formed between the parties and, if so, when the property in the vehicle passed to the purchaser.

The court had to determine whether the conduct of the parties could be interpreted as an implied contract for the sale of the vehicle and when, if at all, the property in the vehicle passed to Peter Donnelly Automotive. The court considered the principles of offer and acceptance, as well as the relevant sale of goods law concerning the passing of property and risk. It was necessary to establish if the act of the dealership taking delivery of the vehicle constituted acceptance of the written offer and whether this acceptance was sufficient to form a binding contract.

The court held that a contract was indeed formed by the conduct of the parties, evidenced by the dealership’s acceptance of delivery of the vehicle. However, regarding the sale of goods, the court found that the property in the vehicle did not pass until payment was made. As the purchase was on a cash-on-delivery basis, the property remained with Orix until payment was received. The court concluded that no contract for the sale of the vehicle had been concluded until payment was made, and consequently, the property did not transfer to the dealership until that point. The court ordered that the vehicle remain with Orix until the full purchase price was paid.