Quarry Industries Ltd v Joan Carmel Fazzalari and Nick Vincent Fazzalari No. SCGRG 94/699 Judgment No. 4855 Number of Pages 16 Contract Sale of Goods

[1994] SASC 4855

COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA KING CJ(2) MILLHOUSE(3) AND PERRY(1) JJ

CWDS
Contract - sale of goods - warranty of fitness - Appeal from District Court judgment for damages for breach of contract for the sale of sand and metal mix to a merchant who supplied contractors and others - mix contaminated by impurities which caused pitting of the surface of the cured concrete - held that the trial judge correctly found that the mix was not fit for sale and was unmerchantable. Sale of Goods Act 1895 s141 and s11(3).

Contract - damages for breach - Held that the trial judge correctly found that loss of profits from repeat orders was within the reasonable contemplation of the supplier and provide a proper basis for the award of damages.

MacDonnell East Pty Ltd v McGregor (1936) 56 CLR 50 and Bayview Quarries Pty Ltd v Castley Development Pty Ltd (1963) VR 445 considered.

HRNG ADELAIDE, 7 November 1994 #DATE 8:12:1994

Counsel for appellant:     Mr J Rau

Solicitors for appellant: Johnston Withers

Counsel for respondent:    Mr K McCarthy QC with him Ms K Schulz

Solicitors for respondent: Phillips Fox

ORDER
Appeal and cross-appeal should be allowed.

JUDGE1 PERRY J This is an appeal and cross-appeal arising out of proceedings in the District Court in which the appellant sued the respondents for the balance said to be due on an account relating to the supply by the appellant to the respondents of various quantities of sand and metal.

2. The respondents counterclaimed for damages by reason of the alleged defective quality of some of the sand and metal supplied.

3. The learned trial Judge gave judgment for the appellant against the respondents for $40,669.75, and separately assessed damages payable by the appellant on the counterclaim at $79,056, together with interest of $6,000.

4. The appellant complains that the trial Judge should not have awarded anything on the counterclaim. In their cross-appeal, the respondents assert that the learned trial Judge erred in not setting off the amount awarded on the claim from the amount awarded on the counterclaim. The respondents contend that there should have been one judgment in favour of the respondents for the difference, and that there should have been one order for costs in their favour.

5. At the relevant times, the respondents carried on business under the name Northern Sand and Metal from an address at Salisbury Plains. They sold sand, metal, loam, landscaping requirements, building materials and some hardware.

6. In the early 1980s, the respondents began mixing and selling pre-mixed concrete. At first they obtained the sand and metal separately and mixed it in what was described as a "batching plant". One of the appellant's salesmen suggested that if the respondents obtained their supplies from the appellant the appellant could pre-mix the sand and metal, which would simplify the process. The respondents agreed, and the appellants began supplying the respondents' requirements of sand and metal in a pre-mixed form.…