Conclusion: Sale or Agency
176 I have already foreshadowed my conclusion and have referred in passing to elements in the evidence upon which one or other of the parties has relied to support the characterisation of the relationship for which it contends. As will be seen, their submissions in substance depend upon fact findings each invites me to make.
177 By way of preface to my own conclusions, I should make the following general observations. The relationships of TVO and Farmlink, and of Farmlink and Freshmart and Mak respectively, were clearly interdependent ones as the evidence of the process of making and filling orders reveals. It was open to Farmlink to choose to so structure its relationship with TVO - or for that matter with Freshmart or Mak - in a manner which obliged it to act in the interests either of TVO in the sale of cherries or of Freshmart or Mak in their purchase. It equally was open to Farmlink to choose to structure its relationships with TVO and the overseas buyers in a manner which, while requiring cooperation with, and some level of trust in, them, served its own several interests: cf Gibson Motorsport Merchandise Pty Ltd v Forbes (2006) 149 FCR 569 at [17]. In my view, Farmlink chose the latter course. This was clearly manifest in its price agreement with TVO and in its seller-purchaser relationship with the overseas buyers. There was nothing fiduciary about it.
178 The rival contentions of the parties can be simply put. TVO's case is that an overarching (or framework) conditional contract was entered into in or about December 2003 under which it agreed that, if it accepted an order or orders to sell cherries to Farmlink, it would do so at the prices that the parties had previously agreed. That agreement was effectuated in the individual orders filled by TVO.
179 Under the shadow of the principles to which I earlier referred and of the decisions of International Harvester Co, Ex parte White; In re Neville and Witt in particular, the factual matters upon which TVO relies primarily for this conclusion are: (i) the transaction between TVO and Farmlink was at a firm price; (ii) the documentation all reflected a sale from TVO to Farmlink; (iii) Farmlink set the price for the overseas sale and kept its sale price and margin a secret; (iv) Farmlink engaged all the freight forwarders and paid the freight costs itself; (v) Farmlink never accounted to TVO in a way which showed the total amount received, its margin and amounts paid for freight, etc; (vi) Farmlink issued invoices to its overseas customers; (vii) Farmlink alone knew the identity and location of its overseas customers; (viii) Farmlink identified itself as the shipper on the bills of lading and airway bills; (ix) Farmlink negotiated the changes in price without checking or obtaining instructions from TVO or Mr Hannaford; and (x) significantly in the year that there was insurance, the insured was Farmlink, the consignee's interest was noted, but there was no recording of TVO having any interest in the cherries.
180 Farmlink's submission is that the relationship formed in December 2003 was one of agency. The indicators of this, it contends were: (i) the parties did not intend, and there was no mutual assent to, a contract of sale whereby the property in the cherries was transferred to Farmlink; (ii) there was no identifiable "offer" and "acceptance" of a contract for sale of goods; in particular, there was no price agreed - except to say it was agreed that TVO would accept whatever Farmlink stated on the completed and delivered purchase order; (iii) the course of dealings between the parties, including acceptance by TVO of the purchase discounts as applied by Farmlink, was more consistent with an agency for sale than a sale of goods; (iv) Farmlink accounted periodically for the proceeds of sales, by detailing the purchase discounts; it did not simply pay an agreed price; (v) remuneration was by a margin of $0.65 per kilogram, not by Farmlink making a profit on resale; (vi) in TVO's letter by its solicitors of 26 March 2004, TVO acknowledged that Farmlink was an agent for sale, not the buyer of its cherries; (vii) the arrangement was that Farmlink exported TVO's cherries, not that Farmlink bought the cherries as Farmlink's own property at a fixed price and resold them for what Farmlink could get, keeping any profit or taking any loss; (viii) the fact that "the price" was not ascertained until Farmlink completed the purchase order including any discounts was inconsistent with there being a contract of sale.
181 It is, in my view, not open to serious doubt that in effecting sales to Freshmart and Mak, Farmlink acted as seller of the cherries consigned, passing the property in them to the buyers and at prices agreed between it and the buyers. The respondents appear to have accepted as much. Farmlink was acting as a principal in the conduct of its own export business and not simply as an agent in the ordinary course of its principal's business. The email communications between Ms Churchill and Mak and Mr Koh exemplify this. They are redolent of transactions being effected between Farmlink and the overseas buyers: cf Ms Churchill's often stated judgments about "suitability" of cherries to be exported; her indications of the quality instructions she gave to her suppliers; and, in her email of 3 January 2004: "I will reduce the price $2.50/ctn on the 24mm".
182 The documentation passing between Farmlink and Freshmart and Mak respectively admits of no other conclusion, the more so given the international trading context in which the dealings occurred. It is, in my view, most improbable that the overseas buyers would reasonably have committed themselves to a contractual arrangement with a principal of whose actual identity or circumstances they may have been unaware, especially where the goods in question were perishables of a type that were apt to give rise to some level of quality issue during periodic dealings over a season: on the distinction between unidentified and undisclosed principals, see Carminco Gold & Resources Ltd v Findlay & Co Stockbrokers (Underwriters) Pty Ltd (2007) 243 ALR 472. The view I take of Farmlink's contracts with Freshmart and Mak is that they were ones to which TVO was a stranger. If the prices in those contracts were to be re-negotiated for reasons of quality defects, market conditions or whatever, that was to be by the contracting parties alone. Likewise if claims for defects in quality permissible under the applicable law against the seller were to be made they were to be made against Farmlink.
183 The final comment I would make on Farmlink's relationship with the overseas buyers is that it would have been obvious to them that Farmlink was not the grower of the cherries Freshmart and Mak purchased. It was an exporter. But there is nothing in the evidence reasonably to suggest that Farmlink was acting, or was purporting to act, in the overseas sales in a "representative" capacity: cf above 47.
184 The issue that remains is: what was the true character of the TVO-Farmlink relationship? As I have earlier indicated, while the relationships of agency and sale are mutually exclusive, it is not uncommon for an intermediary to be the agent of its seller-principal but to be a principal vis-ŕ-vis a third party on a sale to it: see above [55]. In my view the present is not one such case. And it is, in any event, far removed from the reservation of title clause type of case exemplified by Romalpa on which the respondents' rely.
185 The evidence, in my view, simply cannot sustain a conclusion that Farmlink acted on TVO's behalf in a "representative": cf Bowstead & Reynolds at [1-001]; Colonial Mutual Life Assurance Society at 48-50; or "fiduciary": cf Restatement of Agency, Second, s1.01; capacity in selling its cherries. Farmlink was a purchaser buying for the purposes of resale. It is significant in this that (i) the parties agreed in advance the prices at which TVO would sell its cherries - they were not simply indicative prices (I will refer below to the significance in this of purchase discounts); (ii) while the consignments were into markets with which TVO had some, albeit rudimentary knowledge, they were simply two of the overseas markets into which TVO cherries were consigned by exporters in the 2003/2004 season; (iii) Farmlink, in contrast, was knowledgeable about, and experienced in, those two markets at that time: cf Witt at 18-19; (iv) TVO did not assume responsibility for the export or the costs associated with the export - this was at Farmlink's expense: cf Witt at 18-19 - and Farmlink, not TVO, bore responsibility for misadventures happening to the cherries after delivery to it; (v) TVO was not in a position to exercise practical control over Farmlink (other than by refusing orders); (vi) TVO was unaware of Farmlink's price; (vii) while Mr Hannaford doubtless understood that Farmlink would obtain its own return on the sales (howsoever this was done), there was nothing unusual about his having no interest in that matter as his relationship with Farmlink did not otherwise point to an agency relationship: cf Mercantile International Group plc at [5] and [36]; and (ix) TVO happened to know the Singapore buyer was a company with which Mr Koh was associated but did not know the identity of the Hong Kong buyer. In short, having regard to the context in which they dealt with each other, the relationship they formed in the making and filling of orders was that of seller and buyer for resale. The contrary inference that TVO appointed Farmlink its agent for sale is neither a reasonable, nor the most probable, deduction from the known facts.
186 I would add, because it is a matter relied upon by the respondents, that I do not derive any assistance from the manner in which Farmlink received payments from its buyers and "accounted" to TVO. If it was an agent, then, subject to how its accounting to TVO was (or was taken in the circumstances to have been) agreed, the manner in which it held the proceeds of sale of its principal's property (ie in its own trading account) may itself have constituted a breach of trust: see Palette Shoes Pty Ltd v Krohn (1937) 58 CLR 1 at 30; but cf The "Tiiskeri" [1983] 2 Lloyd's Rep 658 at 663 ff. For understandable reasons, I have not been addressed on this. However, if, as I have held, Farmlink was receiving the purchase price for its consignments from its purchaser and then was settling with its own seller, there was nothing unusual in the manner of its so doing. I would add that it may well have been the case that the timing of its settlement was an implied actual term of their framework contract (the bulk of orders being settled en bloc at the end of the season).