Rider v Pix

Case [2019] QCA 182

SUPREME COURT OF QUEENSLAND

CITATION:

Rider & Anor v Pix [2019] QCA 182

PARTIES:

MICHAEL JOHN RIDER
KATE RIDER
(appellants)
v
TREVOR KEITH PIX
(respondent)

FILE NO/S:

Appeal No 3665 of 2019
SC No 12976 of 2009

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane – [2018] QSC 235 and [2019] QSC 45 (Holmes CJ)

DELIVERED ON:

10 September 2019

DELIVERED AT:

Brisbane

HEARING DATE:

22 August 2019

JUDGES:

Sofronoff P and Morrison JA and Flanagan J

ORDERS:

1.   The appeal is dismissed.

2.   The appellants pay the respondent’s costs of the appeal.

CATCHWORDS:

SALE OF GOODS – SALE OF GOODS LEGISLATION – FORMATION OF CONTRACT – CONDITIONS AND WARRANTIES – IMPLIED CONDITIONS AND WARRANTIES – QUALITY OR FITNESS FOR PARTICULAR PURPOSE – SELLER DEALING IN GOODS OF RELEVANT DESCRIPTION – where there was a contract for the sale of a sailing catamaran – where the sellers had previously decided to undertake a boat-building venture – where the sellers were the directors and shareholders of a company that built the catamaran in question – where the catamaran was originally intended to be a demonstration model – where the company sent invoices to a partnership between the sellers for the construction of the catamaran – where the partnership recorded these invoices and the sale of the catamaran as capital expenses and sales of the partnership – where, prior to the sale, the sellers had decided to discontinue the boat-building venture – where, subsequent to the sale, blisters and cracking started to appear in the catamaran’s paintwork – where the buyer commenced proceedings for, among other things, breach of contract and negligence – where the learned Chief Justice held that the sellers had breached the condition term implied by s 17 of the Sale of Goods Act 1896 (Qld) that the catamaran would be of merchantable quality – whether the sellers, as distinct from the company that built the catamaran, were dealers in goods of the catamaran’s description

DAMAGES – GENERAL PRINCIPLES – DIFFICULTY OF ASSESSING DAMAGES – where there was a contract for the sale of a sailing catamaran – where the catamaran was used for enjoyment – where subsequently, blisters and cracking started to appear in the paintwork – where the learned Chief Justice held that the sellers had breached the condition implied by s 17 of the Sale of Goods Act 1896 (Qld) that the catamaran would be of merchantable quality – where the catamaran was dry docked for repairs to the paintwork – where the buyer claimed among other things damages for being deprived from using the catamaran while it was being repaired – where the learned Chief Justice assessed the buyer’s loss as reflecting the interest that could have been earned on the capital tied up in the catamaran during the period of repairs – whether the learned Chief Justice should have instead awarded damages reflecting the amount by which the value of the catamaran depreciated while being repaired

Partnership Act

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Rider v Pix [2019] QCA 182
Case
[2019] QCA 182
Decision Date

CaseChat Overview and Summary

In the matter of Rider v Pix, the plaintiff, Mr Pix, sought to establish that Suncoast Marine was liable under the contract of sale as an undisclosed principal. His primary contention was that there had been a breach of the condition concerning merchantable quality implied by s 17(c) of the Sale of Goods Act 1896 (Qld). Alternatively, he claimed that both Suncoast Marine and the Riders were liable in negligence. The primary legal issues before the court involved the interpretation of the Sale of Goods Act and the determination of whether Suncoast Marine or the Riders were liable under the contract, and whether there had been a breach of the implied condition of merchantable quality. The court also needed to determine the appropriate measure of damages for the loss suffered by Mr Pix.

The learned Chief Justice found that Suncoast Marine was responsible for the defects in the painting and fairing of the Jalun but could not be held responsible for the water ingress. The court also dismissed the allegation concerning the Jalun’s failure to meet survey standards. Importantly, the Chief Justice concluded that the Riders were the sellers under the contract of sale and did not act as agents for Suncoast Marine. Moreover, Mr Pix, as a subsequent purchaser, was not owed a duty of care by Suncoast Marine. The Riders were not liable in negligence either. However, the court found that the Riders had breached the implied condition of merchantable quality due to the paintwork defects. The court reasoned that the Riders, despite having decided to discontinue their boat-building venture, were still properly characterised as sellers dealing in goods of the Jalun’s description. Therefore, the implied condition of merchantable quality applied to their sale of the catamaran.

The court dismissed the appeal and ordered the appellants to pay the respondent’s costs of the appeal. This decision underscores the importance of understanding the nature of the sale and the status of the parties involved in determining the applicability of implied conditions under the Sale of Goods Act.

Orders

Orders of the court

1. The appeal is dismissed.

2. The appellants pay the respondent’s costs of the appeal.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

First, Mr Pix claimed that Suncoast Marine was liable under the contract of sale as an undisclosed principal. Notably, Mr Pix claimed that there had been a breach of the condition as to merchantable quality implied by operation of s 17(c) of the Sale of Goods Act 1896 (Qld). In the alternative, he claimed that both Suncoast Marine and the Riders were liable in negligence.The decision below As observed above, the learned Chief Justice found that Suncoast Marine was responsible for defects in the painting and fairing of the Jalun. Her Honour could not be so satisfied in respect of the water ingress.[2] Her Honour also concluded that the allegation concerning the Jalun’s failure to meet survey standards was unsubstantiated.[3][2][2018] QSC 235 at [40].[3][2018] QSC 235 at [42]. Her Honour found that the Riders were the sellers under the contract of sale; they did not enter into the contract as Suncoast Marine’s agents. Further, as a subsequent purchaser, Mr Pix was not owed a duty of care by Suncoast Marine. The Riders were not otherwise liable in negligence. Her Honour did, however, conclude that they had breached the implied condition of merchantable quality by reason of the paintwork defects. The relevant part of her Honour’s Reasons are [48] to [51]:“[48] Relying on s 17(c) of the Sale of Goods Act, Mr Pix contended that there was to be implied into the contract a condition that the Jalun would be of merchantable quality. Section 17, so far as is relevant, provides:‘(1)Subject to the provisions of this Act and of any statute in that behalf, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows—…(c) when goods are bought by description from a seller who deals in goods of that description (whether the seller is the manufacturer or not) there is an implied condition that the goods shall be of merchantable quality;(d) however, if the buyer has examined the goods, there is no implied condition as regards defects which such examination ought to have revealed.’For the Riders, it was said that the sale was not by description; that Mr Pix had inspected the boat; and that the Riders were not shown to have dealt in goods of the Jalun’s description.[49]Mr Rider’s evidence was that he and his wife had decided to build boats through the vehicle of Suncoast Marine, and I draw the inference from the evidence that their purpose was to sell the vessels built by that company. They had a client for the purchase of the boat while it was still in construction; ultimately, of course, they sold to Mr Pix. By the time that sale took place they had decided not to go further with the boat‑building business and hence had no more vessels to sell. But it does not follow that they did not undertake the transaction as dealers in boats of the Jalun’s general description.[50]In Ashington Piggeries Ltd v Christopher Hill Ltd,[4] Lord Guest, in the majority, considering the expression ‘deals in goods of that description’ used in the cognate section of the English Sale of Goods Act 1893, referred to the judgment of Mellor J in Jones v Just[5] as the basis of the provision, before accepting a submission that the words were intended:[4][1971] 1 All ER 847.[5](1868) LR 3 QB 197.‘…to confine the section to a dealer in the way of business as opposed to a private capacity [so that] a fair interpretation of the words would be “who deals in goods of that kind”’.[6]In a similar vein, Lord Wilberforce observed:‘A seller deals in goods of that description if his business…is willing to accept orders for them. I cannot comprehend the rationale of holding that the subsections do not apply if the seller is dealing in the particular goods for the first time or the sense of distinguishing between the first and the second order for the goods or for goods of the description. … Consideration of the preceding common law shows that what the Act had in mind was something quite simple and rational: to limit the implied conditions of fitness or quality to persons in the way of business, as distinct from private persons’.[7]As had Lord Guest and Viscount Dilhorne, Lord Wilberforce held that the words, ‘goods of that description’ simply meant ‘goods of that kind’.[8] [51]The Riders may have abandoned any idea for the future of building and selling boats, but that had been their business. This was no private sale. I am satisfied that they are properly characterised as sellers dealing in goods of the Jalun’s description.”[6][1971] All ER 847 at 859.[7][1971] All ER 847 at 875.[8][1971] All ER 847 at 859, 868 and 876.

Ratio Decidendi

Legal Principle Established

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