International Harvester Co of Australia Pty Ltd v Carrigan's Hazeldene Pastoral Co

International Harvester Co of Australia Pty Ltd v Carrigan's Hazeldene Pastoral Co - [1958] HCA 16 - HCA 1958 case summary — Zoe

[6]

The action was brought by a firm of farmers and graziers for breach of warranty on the sale of an agricultural implement or machine, namely an International automatic pick-up hay baler a model called No. 50-T. In buying the machine the plaintiffs dealt, not with the defendant, the International Harvester Company of Australia Pty. Ltd., but with a company carrying on business at Gunnedah in New South Wales called Hassan & Kensell Pty. Ltd. That company is now in liquidation. The plaintiffs did issue a writ against Hassan & Kensell Pty. Ltd. claiming damages for breach of warranty by them as vendors of the machine but that action has not been brought to trial. The defendant company in the present action denies that any contractual relations ever existed between it and the plaintiffs; it maintains that Hassan and Kensell Pty. Ltd. sold the machine as principals to the plaintiffs, that they did not sell as agents for the defendant company and had no authority to contract on behalf of the defendant company but on the contrary bought the machine from the defendant company and resold it to the plaintiffs. It was also contended for the defendant company that in any case a written instrument constituted or at least formed part o the contract of sale and that by the terms of that instrument the very warranty or warranties on which the plaintiffs had recovered were negatived or excluded. The appeal and cross-appeal covered between them no inconsiderable number of other points but this Court having heard the foregoing questions discussed by counsel for the appellant and for the respondents formed a provisional opinion that the defendant's contention as to both the matters was correct. It seemed more satisfactory in these circumstances to take time to consider the question whether this provisional opinion we had formed should be given effect to before entering on the argument of the matters which merely affected the question whether the former trial had so miscarried that a new trial must be had. Having considered what must be the basal question in the case, namely whether the defendant company came under any contractual liability to the plaintiffs, we are confirmed in the view that clearly it did not do so. We think that on that simple ground the action ought to have failed. We state the conclusion positively in this form because we do not think that upon the evidence there was any question for the jury on this point.

[10]

Hassan & Kensell Pty. Ltd. employed a man named Eather whom the plaintiffs knew. On 15th September 1952 Eather came to see the plaintiffs and discussed the buying of a hay baler with two of them. He produced some of the literature of the International Harvester company about their hay balers. At length the two plaintiffs decided to buy a model No. 50-T baler. Eather said that it would be necessary to obtain one from Geelong. The price was given as approximately £1,620 plus transport charges. The amount of the freight from Geelong, whence it was to come by road, was not known definitely. The two plaintiffs present expressed their desire to pay cash. Eather asked that an order form should be signed and, according to one of the two brothers, when asked what the form was, answered "To get release from the International Harvester firm at Geelong". One of them signed an order form. The document was put in evidence without proof under a general admission, covering this among other documents, that they were signed or executed as they purported respectively to have been. The document begins "To Hassan and Kensell Pty. Limited Gunnedah". The witness, however, said that at the time it was signed he did not think the name of the person to whom it was addressed was filled in. "As far as I can recollect it was not". When asked whether he might not be in error in saying that, he replied "I do not think I would be". In fact the order was addressed in ink to "Hassan and Kensell Pty. Limited Gunnedah" and no one would suppose from the ink or penmanship that this was not filled in at the same time as the remainder of the document. The document is a long form of order for purchase by instalments on hire-purchase terms. There is a printed clause however that if the total rental be paid on delivery, an allowance of £ being the difference between the total rental and the net cash retail selling price of the machine effective at the date of the document will be made. The blanks for the instalments the price and the amount of the allowance were not filled in but in the margin was written "invoice at date of delivery". After the direction to Hassan & Kensell Pty. Ltd. Gunnedah, the opening words of the order are "Please forward to me on hire on or about the". There is then written "as soon as possible". The clause proceeds in print and writing "f.o.b. Geelong consigned at my risk to Gunnedah freight from the f.o.b. point to be paid by me the following 1 50-T Pick Up Hay Baler". The order is dated 15th September 1952, signed by one of the plaintiffs for the firm and witnessed by Eather. The document nowhere refers to the defendant company but beside the word "Dealer" is written "Hassan and Kensell Pty. Limited". The print contains a clause excluding all implied and statutory warranties and conditions and another clause dealing with the course which will be followed if the machine fails to work properly. This clause ends "No agent of the Owner has authority to alter add to or waive the above warranty which is agreed to be the only warranty given." The expression "owner" is defined at the beginning of the document where, after the space in fact filled in with the name Hassan & Kensell Pty. Ltd., are printed the words "(herein referred to as "the Owner")".

[11]

The machine arrived from Geelong within a little over a week and delivery was accepted by the plaintiffs. An invoice dated 19th September 1952 was sent from the Sydney district office of the defendant company to Hassan & Kensell Pty. Ltd. at Gunnedah for the baler. It describes the machine as 1 US 10 20 50-T pick-up baler and indicates that one was ordered and one was shipped: it gives the date of shipment as 17th September 1952 and the mode as "road". The invoice includes some twine and states the total price as £1,463 0s. 0d. There is a note "please complete the attached form and return as soon as possible". In compliance apparently with this, the invoice was sent back bearing an ink deduction of "less 2½% £36 11s. 6d." leaving a price of £1,426 8s. 6d. There is a note upon it "cheque 10/11/52". In fact Hassan & Kensell Pty. Ltd. sent to the defendant company at Sydney their cheque for £1,427 17s. 6d. bearing that date. The difference in the amounts £1 9s. 0d. is for exchange as is shown by an accompanying document. It is called "Dealer's Cash Remittance" and states the description of the charge against Hassan & Kensell Pty. Ltd. (that is, it names the machine), the net price, the discount therefrom and the net amount remitted. In the meantime Hassan & Kensell Pty. Ltd. had rendered to the plaintiffs an account for the machine. The amount charged was £1,672 for the baler £64 5s. 3d. for freight from Geelong to Gunnedah making up a price of £1,736 5s. 3d. which was brought up to £1,772 4s. 1d. by the addition of the price of ten balls of baler twine. On 10th November 1952 the plaintiffs gave their cheque for this amount in favour of Hassan & Kensell Pty. Ltd. and obtained a receipt from that company. In the course of cross-examination a witness called for the defendant who was formerly secretary for Hassan & Kensell Pty. Ltd. summarised the relations between his company and the defendant company thus: "The position is we buy the machines from I.H.C. and sell them". From a notice to admit reproduced for some reason in the transcript record it appears that there was a "Dealer-Sales and Service Agreement", doubtless governing the relations between the defendant company and Hassan & Kensell Pty. Ltd., but the document was not put in evidence. But without that document the materials referred to up to this point make it clear enough that the summary by the witness was correct. There is nothing to indicate that the defendant company ever authorised Hassan & Kensell Pty. Ltd. to contract on the former's behalf and nothing to indicate that Hassan & Kensell Pty. Ltd. purported to do so. The employment of the word "agents" in the description of their business supplies no reason for making any contrary assumption. There was no "holding out" of Hassan & Kensell Pty. Ltd. as having authority - such a case was in fact disclaimed on the argument of this appeal - and there was no authority in fact from the defendant company to contract on their behalf whether as an agent of an undisclosed or of a disclosed principal.

[14]

The letters are consistent with the conclusion to which everything else irresistibly leads that Hassan & Kensell Pty. Ltd. sold the machine as principals in the agreement to sell and had no authority from the defendant company to contract otherwise. The correspondence opens with a letter of 5th August 1954 addressed to Mr. S. Chapman at the postal address at Lidcombe of the defendant company. It complains of the unsuccessful operation of the baler, which the letter says the plaintiffs "bought through your agents Hassan and Kensell of Gunnedah" a description which the writer again applies to that concern in a passage in which he asks for recompense from the defendant company. "Your agent says the baler cannot be made to work successfully". The letter concludes "I have approached Hassan and Kensells and have informed them that I want a return of the purchase price or a satisfactory machine and they informed me that it was a matter for the International Harvester Co., as it has cost them much more than they got out of the sale of the baler". This letter produced two letters from Mr. Chapman who signed himself "District Manager: General Sales". One of them was addressed to Hassan & Kensell Pty. Ltd. and consisted of a complaint and remonstrance. What perhaps may be material is a passage saying that no complaint about the machine had been received from Boggabri or their zone service supervisor. According to the evidence one of the men named, the zone service supervisor, had visited the plaintiffs and had addressed himself to the working of the machine. Mr. Chapman's letter, after saying in effect that Hassan & Kensell Pty. Ltd. should have exchanged another machine for that in question and not sought a refund from the defendant company, requests all the relevant information "so that we may in some way endeavour to satisfy this client". The second letter was a reply to the plaintiffs' letter. Mr. Chapman wrote that they were at a loss to understand why the plaintiffs had had the recurring troubles and why the defendant company had not been informed. The letter said that they were calling for a report from the zone manager and zone service supervisor. After which, the letter continued, "we will be in a better position to advise you of our thoughts in this regard".

At a glance

Court

Decision date

Before

Source

Judgment (21 paragraphs)

Parties