Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd

Peter Turnbull & Co Pty Ltd (the plaintiff) appealed to the High Court of Australia from a decision of the Full Court of the Supreme Court of New South Wales, which had overturned a verdict in favour of the plaintiff. The dispute arose from a contract for the sale of oats, where the plaintiff agreed to buy and the defendant to sell a quantity of oats f.o.b. Sydney, to be loaded on a ship nominated by the plaintiff during January or February 1951, with fourteen days' notice required. The plaintiff subsequently entered into a resale contract, relying on the defendant's supply. The defendant ultimately informed the plaintiff that it could not supply the oats in Sydney but offered to supply them f.o.b. Melbourne, an offer which the plaintiff was unable to accept. The plaintiff then purchased oats at a higher price to fulfil its resale obligation.

The central legal issues before the High Court were whether the plaintiff was entitled to succeed in its claim for damages for breach of contract, despite failing to nominate a ship and provide the requisite fourteen days' notice within the contractual timeframe. Specifically, the court had to determine if the defendant's conduct had dispensed the plaintiff from fulfilling these conditions precedent, and if the defendant's inability to supply the oats in Sydney constituted a repudiation of the contract that the plaintiff was entitled to accept.

A majority of the High Court, comprising Dixon C.J., Webb and Kitto JJ., held that the plaintiff was entitled to succeed. Their reasoning was that the defendant, by its persistent refusal to supply oats in Sydney and its efforts to substitute a Melbourne shipment, had clearly indicated to the plaintiff that it was futile to attempt to fulfil the contractual conditions regarding nomination and notice for a Sydney shipment. This conduct amounted to dispensing the plaintiff from strict compliance with those conditions, a principle supported by established case law concerning prevention of performance or express or implied intimation that performance is useless. The majority found that the defendant's actions went beyond a mere anticipatory breach and created a situation where the plaintiff was excused from performing its obligations.

Consequently, the High Court allowed the appeal, reversed the decision of the Full Court of New South Wales, and restored the original verdict and judgment in favour of the plaintiff for £2,100. The court found that the defendant's conduct had excused the plaintiff from fulfilling the conditions precedent of nominating a February ship and providing fourteen days' notice, thereby entitling the plaintiff to claim damages for the defendant's breach of contract.