Court of Appeal
Supreme Court
New South Wales
Medium Neutral Citation: TMA Australia Pty Ltd v Indect Electronics & Distribution GmbH [2015] NSWCA 343 Hearing dates: 25, 26, 27 February 2015;Written submissions 6, 25 March 2015 Decision date: 06 November 2015 Before: Macfarlan JA at [1];
Meagher JA at [5];
Bergin CJ in Eq at [154]Decision: 1. Appeals 2014/139124 and 2014/139128 dismissed with costs.
Catchwords: CONTRACT – construction – contract for purchase of software – where software required authenticity check every three months to continue operating – whether breach of term that licence to use would be of unlimited duration – whether breach of warranty that software would be fit for purpose
CONTRACT – implied terms – where individual contracts of supply in commercial relationship involving purchase, re-sale, installation and maintenance by distributor – whether implied term in supply contracts that original supplier would provide parts and support services to distributor as required for continued operation of systems for their lifetime, irrespective of whether distributorship arrangement terminated, and at prices applicable to ongoing resellers or distributors – whether conduct and statements of parties supported implication – whether implication of term necessary for reasonably effective operation of supply contracts with distributor
ESTOPPEL – equitable estoppel – conventional estoppel – whether assumption adopted between parties as to ongoing obligation of original supplier to provide to distributor and reseller parts and support necessary to ensure effective operation of systems for their lifetime – whether conduct, including statements between parties, points plainly to adoption of assumption said to constitute conventional basis of supply relationship
AUSTRALIAN CONSUMER LAW – unconscionable conduct under Australian Consumer Law, s 21 – whether supplier acted unconscionably by withdrawing support and ceasing direct supply to distributor and resellerLegislation Cited: Competition and Consumer Act 2010 (Cth), Sch 2 (Australian Consumer Law), ss 21, 22, 232
Uniform Civil Procedure Rules 2005, r 51.53(1)Cases Cited: Attorney-General (ACT) v Eastman [2008] ACTCA 6; 163 ACTR 46
Australian Competition and Consumer Commission v Lux Distributors Pty Ltd [2013] FCAFC 90
Baird Textiles Holdings Ltd v Marks & Spencer plc [2002] 1 All ER (Comm) 737
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Byrne v Australian Airlines Ltd [1995] HCA 24; 185 CLR 410
Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14; 160 CLR 226
Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd (1988) 14 NSWLR 438
DHJPM Pty Ltd v Blackthorn Resources Ltd [2011] NSWCA 348; 83 NSWLR 728
Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603
Grundt v Great Boulder Pty Gold Mines Ltd [1937] HCA 58; 59 CLR 641
J J Savage & Sons Pty Ltd v Blakney [1970] HCA 6; 119 CLR 435
Mackay v Dick (1881) 6 App Cas 251
Moratic Pty Ltd v Gordon [2007] NSWSC 5; 13 BPR 24,713
PT Ltd v Spuds Surf Chatswood Pty Ltd…
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- Case
- [2015] NSWCA 343
- Decision Date
CaseChat Overview and Summary
The Court was required to determine several legal issues. These included whether Indect's requirement for a three-monthly authenticity check for the software constituted a breach of a term that the licence to use would be of unlimited duration, and whether it breached a warranty that the software would be fit for purpose. Furthermore, the Court had to consider whether an implied term existed within the supply contracts, obliging Indect to provide parts and support services to TMA Australia for the continued operation of the systems for their lifetime, irrespective of the distributorship arrangement, and at prices applicable to ongoing resellers. The Court also examined whether equitable and conventional estoppel applied, based on an assumption adopted between the parties regarding Indect's ongoing obligation to provide necessary parts and support. Finally, the Court considered whether Indect's conduct in withdrawing support and ceasing direct supply to TMA Australia was unconscionable under section 21 of the Australian Consumer Law.
The Court of Appeal dismissed TMA Australia's appeals. It found that the authenticity check did not breach the term regarding unlimited duration of the licence, nor did it breach the warranty of fitness for purpose. The Court also held that no implied term for lifetime support existed, as the conduct and statements of the parties did not support such an implication, nor was it necessary for the reasonable operation of the supply contracts. Similarly, the Court found that the elements of estoppel were not established. Regarding the Australian Consumer Law claim, the Court concluded that Indect's conduct was not unconscionable.
Consequently, the appeals were dismissed with costs.
Orders
Orders of the court
1. Appeals 2014/139124 and 2014/139128 dismissed with costs.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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