Ringstad v Gollin and Company Pty Ltd

The High Court of Australia heard an appeal from the Supreme Court of New South Wales concerning a contract for the sale of carbide of calcium. The appellant, Mr. Ringstad, had entered into a written contract with the respondent, Gollin & Company Pty Ltd, in March 1916 for the sale of 75 tons of carbide, to be shipped in six monthly instalments commencing one month after the completion of a prior contract. This later contract contained a clause stating it was subject to various contingencies, including war, that might cause delay or non-shipment, and that the vendors did not guarantee shipments due to difficulties beyond their control but would endeavour to ship as agreed. The prior contract was completed in May 1917, but no deliveries were made under the 1916 contract before the respondent purported to cancel it in April 1919. Mr. Ringstad subsequently sued for damages for breach of contract.

The central legal issues before the High Court were: first, the proper construction of the contract, particularly the interplay between the stipulated shipment schedule and the clause excusing performance due to specified contingencies; second, whether the prolonged delay in shipment caused by the war frustrated the commercial object of the contract; and third, whether Section 4 of the Enemy Contracts Annulment Act 1915 (Cth and NSW) applied to terminate the contract. The Supreme Court had entered a verdict for the defendant, finding that the contract was terminated under the Enemy Contracts Annulment Act.

The High Court, by majority, found that the contract was not terminated by the Enemy Contracts Annulment Act. The majority reasoned that the Act did not apply to contracts made after the commencement of the war, or alternatively, that the contract's performance was not "suspended" in the manner contemplated by the Act. On the construction of the contract, the Court held that the clause excusing delay due to war and other contingencies did not abrogate the contract but rather postponed the obligation to ship until those causes ceased to operate. Furthermore, the Court determined that the extensive delay caused by the war did not frustrate the commercial purpose of the contract, as the goods were a standard commodity and the contract's commencement and duration were already subject to significant uncertainty.

Consequently, the High Court allowed the appeal, discharged the order of the Supreme Court, and restored the verdict for the plaintiff, Mr. Ringstad, awarding him damages of £393 15s. The respondent was ordered to pay the costs of the appeal in both the High Court and the Supreme Court.