Sanmik Food Pvt Ltd v Alfa Laval Australia Pty Ltd

Sanmik Food Pvt Ltd (Sanmik) and Alfa Laval Australia Pty Ltd (Alfa Laval) were parties to litigation concerning the supply of two coconut milk production plants. An initial agreement for the sale of these plants was terminated by a deed of settlement, which stipulated a "new supply" of two plants. The dispute centred on whether this "new supply" was entirely independent of the initial contract, and whether Alfa Laval could claim delivery of parts under the initial agreement as satisfying its obligations under the settlement.

The Court of Appeal of New South Wales was required to determine two primary legal issues. Firstly, it had to construe the term "new supply" in the deed of settlement to ascertain if it implied a supply wholly separate from the original contract, or if it permitted Alfa Laval to rely on deliveries made under the initial agreement towards its obligations under the settlement. Secondly, the court needed to interpret a release clause within the deed of settlement, specifically whether it extinguished Alfa Laval's claim to title over the plants delivered under the initial agreement, given that the full purchase price had not been paid and title had not passed to Sanmik under that agreement.

In its reasoning, the court applied principles of contract construction, considering the language of the deed of settlement in its commercial context. The court found that the "new supply" was intended to be a fresh start, independent of the prior agreement, and that Alfa Laval could not rely on deliveries made under the initial contract to satisfy its obligations under the settlement. Regarding the release clause, the court referred to the principles established in *Grant v John Grant & Sons Proprietary Limited*, holding that the release clause was broad enough to encompass claims relating to title to the plants, even where the initial contract's conditions for passing title had not been met.

The appeal was dismissed, and Sanmik was ordered to pay Alfa Laval's costs.