Readymix Holdings International Pte Ltd v Wieland Process Equipment Pty Ltd (No 2)

• Jurisdiction: Australia Federal only
• Judgment Date: 03 October 2008
• Neutral Citation: [2008] FCA 1480
• Court: Federal Court

FEDERAL COURT OF AUSTRALIA

Readymix Holdings International Pte Ltd v Wieland Process Equipment Pty Ltd (No 2) [2008] FCA 1480

TRADE PRACTICES – misleading or deceptive conduct – representations as to future matters – no reversal of onus – need to adduce evidence to the contrary – aiding and abetting

CONTRACT – contract for sale of goods – implied term as to fitness for purpose – business efficacy

Judiciary Act 1903 (Cth), s 79

Sale of Goods Act 1895 (SA), s 14

Sale of Goods Act 1923 (NSW), ss 6, 19

Sale of Goods Act (Singapore), s 14

Trade Practices Act 1974 (Cth), ss 51A, 52, 75B

Australian Competition & Consumer Commission v Universal Sports Challenge Ltd [2002] FCA 1276 followed

Barton v Croner Trading Pty Ltd (1984) 3 FCR 95 applied

BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1977) 180 CLR 266 followed

Cairnsmore Holdings Pty Ltd v Bearsden Holdings Pty Ltd [2007] FCA 1822 cited

Campbell v Backoffice Investments Pty Ltd [2008] NSWCA 95, 66 ACSR 359 considered

Citrus Queensland Pty Ltd v Sunstate Orchards Pty Ltd (No 7) [2008] FCA 1364 followed

Codelfa Construction Pty Limited v State Rail Authority of NSW (1981) 149 CLR 337 considered

Como Investments Pty Ltd v Yenald Nominees Pty Ltd (1997) ATPR 41-550 applied

Construction, Forestry, Mining and Energy Union v Hadgkiss [2007] FCAFC 197, 248 ALR 169 cited

Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199 applied

Elders Trustee and Executor Co Ltd v E G Reeves Pty Ltd (1987) 78 ALR 193 applied

Genocanna Nominees Pty Ltd v Thirsty Point Pty Ltd [2006] FCA 1268 cited

Gibbett v Forwood Products Pty Ltd [2001] FCA 290 considered

Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 applied

Gould v Vaggelas (1985) 157 CLR 215 considered

Henville v Walker [2001] HCA 52, 206 CLR 459 followed

Jones v Dunkel (1959) 101 CLR 298 followed

Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458 applied

Lewarne v Momentum Productions Pty Ltd [2007] FCA 1136 not followed

McGrath v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2, 165 FCR 230 applied

Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 followed

Medical Benefits Fund of Australia Ltd v Cassidy [2003] FCAFC 289, 135 FCR 1 cited

Murphy v Overton Investments Pty Ltd [2004] HCA 3, 216 CLR 388 followed

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1981) 149 CLR 191 cited

Pereira v Director of Public Prosecutions [1988] HCA 57, 82 ALR 217 cited

Perre v Apand Pty Limited [1999] HCA 36, 198 CLR 180 followed

Priest v Last [1903] 2 KB 148 considered

Rawley Pty Ltd v Bell (No 2) [2007] FCA 583 cited

Ricochet Pty Ltd v Equity Trustees Executors and Agency Co Ltd (1993) 41 FCR 229 applied

RPS v The Queen[2000] HCA 3, 199 CLR 620 considered

Sheen v Fields Pty Ltd (1984) 58 ALJR 93 cited

Tillmanns Butcheries Pty Ltd v Australian Meat Industry Employees’ Union (1979) 42 FLR 331 cited

Ting v Blanche (1993) 118 ALR 543 not followed

Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 applied

Webster v Havyn Pty Ltd [2004] NSWSC 227 cited

Wright v TNT Management Pty Ltd (1989) 15 NSWLR 679 not followed

Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16, 216 CLR 515 followed

Yorke v Lucas (1985) 158 CLR 661 applied

Brown I, ‘The Swing of the Pendulum from Caveat Venditor to Caveat Emptor’ (2000) 116 LQR 537

READYMIX HOLDINGS INTERNATIONAL PTE LTD AND ANOR v WIELAND PROCESS EQUIPMENT PTY LTD AND ANOR

NSD 344 of 2004

FLICK J

3 OCTOBER 2008

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NSW DISTRICT REGISTRY	NSD 344 of 2004

BETWEEN:	READYMIX HOLDINGS INTERNATIONAL PTE LTD First Applicant PT READYMIX CONCRETE INDONESIA Second Applicant
AND:	WIELAND PROCESS EQUIPMENT PTY LTD First Respondent STUART MITCHELL WIELAND Second Respondent

JUDGE:	FLICK J
DATE OF ORDER:	3 OCTOBER 2008
WHERE MADE:	sydney

THE ORDERS OF THE COURT ARE:

1. The proceeding be stood over to 8 October 2008 at 9.30 am with a view to then making such orders (if any) as the parties may consider necessary to give effect to these reasons and setting a timetable for the conduct of the future hearing as to loss or damage and the hearing of the Respondents’ Notice of Motion as filed on 21 August 2008.

2. Costs of the proceeding to date be reserved.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules

IN THE FEDERAL COURT OF AUSTRALIA
NSW DISTRICT REGISTRY	NSD 344 of 2004

BETWEEN:	READYMIX HOLDINGS INTERNATIONAL PTE LTD First Applicant PT READYMIX CONCRETE INDONESIA Second Applicant
AND:	WIELAND PROCESS EQUIPMENT PTY LTD First Respondent STUART MITCHELL WIELAND Second Respondent

JUDGE:	FLICK J
DATE:	3 OCTOBER 2008
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1 The First Applicant in this proceeding, Readymix Holdings International Pte Ltd (Readymix Holdings), is one of what has been described as “the Readymix group of companies”. Readymix Holdings was previously known as Readymix Management Services Pte Ltd. The Readymix group is in the business of manufacturing and supplying ready-mixed concrete and quarry products in Indonesia, Vietnam, Brunei and Singapore, and to remote infrastructure projects across South East Asia.

2 The Second Applicant, PT Readymix Concrete Indonesia (Readymix Indonesia), is also a part of the Readymix group. Its business is that of manufacturing and supplying concrete and quarry products in the East Java market. The quarry it operates, known as the Jeladri Quarry, is located some two hours’ drive from Surabaya.

3 The First Respondent, Wieland Process Equipment Pty Ltd (Wieland Equipment), manufactures equipment used in the mining industry. The Second Respondent, Mr Stuart Wieland, is its Managing Director. He has held that position for a period in excess of ten years and has been involved in the manufacture of mining and earthmoving equipment since 1985.

4 The Application was first filed in this Court on 15 March 2004.

5 Whatever be the reason for the delay in the progress of this case to hearing, it is sufficient for present purposes to note that directions were finally made on 3 December 2007 for the filing of evidence. On 20 March 2008 the proceeding was set down for hearing for two weeks commencing 21 July 2008. Notwithstanding those directions, on 18 July 2008 the Applicants served upon the Respondents a further Affidavit in support of their claim for loss or damage. Not surprisingly, Counsel for the Respondents claimed prejudice and sought a vacation of the entire hearing.

6 No satisfactory explanation for the delay in the service of the Affidavit was then forthcoming from the Applicants and the claim of prejudice advanced on behalf of the Respondents could not summarily be dismissed. Prior to that Affidavit being served, no order had been sought for separate hearings on liability and damages. Other than vacating the hearing and ordering the Applicants to pay costs (possibly on an indemnity basis), little choice was left open other than to determine liability first and to reserve to the Respondents the opportunity to seek such orders as to costs occasioned by a resumed hearing on damages. Witnesses required for cross-examination had been flown to Sydney, including from overseas. The desirability of attempting to accommodate the convenience of expert witnesses also dictated that so much of the hearing as could then occur should proceed.

Claims Being Made

7 The Applicants in their Second Further Amended Statement of Claim as filed on 21 July 2008 claim:

(a) damages for breach of a contract executed on 7 February 2003 as between Readymix Management Services Pte Ltd and Wieland Equipment. The conditions of the contract said to have been breached include breach of both express provisions and provisions implied by reason of s 14(a) of the Sale of Goods Act 1895 (SA), s 19(1) of the Sale of Goods Act 1923 (NSW) and conditions implied “to give business efficacy to the Contract”;

(b) damages as against both Respondents for breach of s 52 of the Trade Practices Act 1974 (Cth); and

(c) damages by reason of negligent misrepresentation.

The claim reliant upon negligent misrepresentation was abandoned during the course of the hearing.

8 Albeit addressed in a different order to that pursued in the Second Further Amended Statement of Claim, for the reasons expressed below it has been concluded (in summary form) that:

(a) there has been conduct engaged in by the First Respondent contravening s 52 of the Trade Practices Act 1974 (Cth);

(b) the Second Respondent is also liable for such contravening conduct by reason of s 75B of the 1974 Act;

(c) there is an implied term of the February 2003 contract between Readymix Management Services Pte Ltd, now known as Readymix Holdings, and Wieland Equipment that the machine supplied pursuant to that contract (described as an SLP 1100) would be “fit for purpose”;

(d) there has been a breach of that contract as executed in February 2003 as the SLP 1100 supplied was not “fit for purpose”; and

(e) the Applicants have suffered loss or damage arising by reason of the contravention of the 1974 Act and the breach of contract.

It remains necessary to resolve at a resumed hearing the quantum of the loss or damage suffered by the Applicants.

Origins of the Dispute

9 The dispute between the parties has its origins in Indonesia.

10 In 1997 Readymix Indonesia decided to establish a crushing plant to produce concrete aggregates and it located a suitable site in that same year. By 2001 the demand for quarry products and concrete had increased and by May 2002 a decision had been made to replace an existing stone crusher, a 1970’s Pegson primary crusher. A “primary crusher” is usually the first in line of a number of rock crushing machines used to process and reduce rock to a required size.

11 The Pegson crusher over...