Readymix Holdings International Pte Ltd v Wieland Process Equipment Pty Ltd

Outline of principal proceedings contextually to present interlocutory disputes 1 The principal proceedings were commenced on 15 March 2004 by application and statement of claim, and relate to claims brought by the corporately related or otherwise associated applicants Readymix Holdings International Pte Ltd ('Holdings') and PT Readymix Concrete Indonesia ('PT') (together referred to below as 'Readymix' unless inconsistent with the context) against Wieland Process Equipment Pty Limited ('Wieland') for damages for contravention of s 52 of the Trade Practices Act 1974 (Cth). Both applicants are corporately resident offshore. After the commencement of the proceedings, a substantial amount of affidavit evidence was filed by both Holdings and Wieland, following which there occurred the filing of an amended statement of claim on 29 April 2005, involving the addition of PT as a second applicant in the proceedings. 2 By that amended statement of claim ('A/S/C'), the following was pleaded by Readymix which I have summarised below: (i) PT manufactured and supplied concrete and quarry products to the East Java markets and is a partly owned subsidiary of Holdings; (ii) Holdings conducted a ready mixed concrete, crushing and quarry business in the Asian region; (iii) Wieland supplied plant and equipment to the crushing and mining industry, and in particular a certain rock crusher machine called a Pegson primary crusher coded SLP 1100 ('the first SLP 1100'), and also certain screening machines; (iv) at least in the years 2002-2003 Chemex Pte Limited ('Chemex') was a distributor for Wieland of plant and equipment to the crushing and mining industry in those markets; (v) in May 2002 Holdings decided to replace its existing Pegson primary crusher at PT's quarry site in East Java; (vi) a decision was taken by Holdings to acquire a new rock crusher for PT's use at that quarry site, which would involve cost savings; (vii) Chemex on behalf of Wieland proposed to Holdings the purchase of a new rock crusher and pursuant to an agreement made on 11 September 2002 ('the Chemex Agreement'), that rock crusher ('the first SLP 1100'), along with certain screening machines, were acquired by Holdings on behalf of PT and commissioned on site on 26 December 2002; and (viii) the first SLP 1100 failed to operate properly, and a dispute arose as to the reason for or cause of that failure; settlement of that earlier dispute was reached in or about February 2003. 3 In the context of that settlement, Holdings agreed to purchase on behalf of PT from Wieland a replacement SLP 1100 ('the second SLP 1100'). Readymix pleaded that such contract was made partly in writing (being written agreement bearing date 7 February 2003), partly oral and partly implied; to the extent oral, the contract was particularised as made between Messrs Nicholas and Jonathon Cocks on behalf of Holdings with Messrs Stuart Wieland and Steve Mellor on behalf of Wieland. To the extent implied, reliance was placed by Holdings upon s 20 of the Sale of Goods Act 1923 (NSW) and s 15 of the Sale of Goods Act 1895 (SA). 4 It was further pleaded by Readymix that at the time of formation of the Chemex Agreement, Wieland knew that Holdings required the second SLP 1100 for the purpose of quarrying operations at its quarry site in East Java, and for the provision in particular of crushed rock therefrom for Holdings' use in concrete production generally, and in order to enable Holdings to fulfil its obligations to supply crushed rock for the manufacture of readymix concrete, in particular, to the Surabaya Airport construction site. 5 At a time not referred to in the A/S/S, but implicitly prior to February 2003, it was further pleaded thereby, additionally or alternatively, that in consideration of Holdings purchasing the second SLP 1100, Wieland warranted, collaterally to that contract of purchase, that the same had the capacity and would fulfil the purposes outlined in [4] above. Reference was made in that context to the following documents: (i) an email dated 4 September 2002 from Mr Mellor on behalf of Wieland to Mr Nicholas Cocks on behalf of Holdings; (ii) various oral communications between Messrs Nicholas and Jonathon Cocks on behalf of Holdings and Messrs Wieland and Mellor on behalf of Wieland. 6 Contractual conditions were pleaded by Readymix to have taken effect, implicitly in relation to the supply of the second SLP 1100, as to: (i) reasonable fitness for the particularised purposes, pursuant to s 19(1) of Sale of Goods Act (NSW) ands 14(A) of the Sale of Goods Act (SA),in order to give business efficacy to the transaction of supply; (ii) merchantable quality, pursuant to s 19(2) of the Sale of Goods Act (NSW)and to s 14(b) of the Sale of Goods Act (SA), and in order to give business efficacy to that transaction. 7 Contractual conditions taking effect collaterally were additionally pleaded by Readymix as to the capacity of Wieland for the fulfilment by the second SLP of those purposes as to reasonable fitness and business efficacy. 8 It was next pleaded by Readymix that the second SLP 1100 was delivered by Wieland to PT and commissioned on or about 16 April 2003, yet the same was not fit for the purposes pleaded, nor was of merchantable quality, but was defective and 'unmerchantable'. Reliance was placed by Readymix on affidavit evidence provided by Messrs Nicholas Cocks, Jonathon Cocks and Sulfan Hidayat. Additionally breach of the collateral conditions (in the nature of warranties) was pleaded by reason of the second SLP not being free from defects, but instead being defective and unmerchantable. What I have thus far summarised in terms of the subject matter of pleading averments were categorised by Readymix as the 'initial representations'. 9 The Readymix A/S/C further pleaded so-called 'subsequent representations' in relation to the second SLP 1100 supplied by Wieland, being first as to merchantable quality, secondly as to fitness for the purpose of crushing work required by Readymix's third party contractual obligations relating to the East Java quarry site, and as to suitability for that use, and in that context as not requiring 'anything other than servicing as suggested in [Wieland's]… service manual', thirdly as to meeting the working requirements of Readymix, and fourthly as having certain characteristics and features appearing in Wieland's promotional media comprising its brochure, a certain newsletter, its website, its operating (ie service) manual, and a letter and five emails sent by Wieland to Readymix between 4 September 2002 and 1 August 2003. The representations to the extent made orally were particularised to be between Messrs Wieland, Mellor and Messrs Nicholas and Jonathan Cocks and as made between June 2002 and September 2003. 10 Readymix further pleaded by the A/S/C reliance on the representations I have above summarised as having occurred in the course of Holdings entering into the contract to purchase the second SLP 1100 from Wieland, and thereafter the absence of merchantable quality, fitness for the purpose represented, unsuitability of the second SLP 1100 for its represented purpose of use, a shortfall otherwise in meeting the working requirements of Holdings and PT, and an absence of the specific characteristics and standard features represented by Wieland. Assertions were pleaded moreover by Readymix as to consequential loss and damage sustained by it. Alternatively, causes of action were pleaded by the Readymix A/S/C as to negligent misrepresentation, reliance and consequential loss and damage.