Orrcon Operations Pty Ltd v Capital Steel & Pipe Pty Limited [2007] FCA 1319

FEDERAL COURT OF AUSTRALIA

Orrcon Operations Pty Ltd v Capital Steel & Pipe Pty Limited [2007] FCA 1319

TRADE PRACTICES – CONSUMER PROTECTION – UNCONSCIONABLE CONDUCT – Application for interlocutory injunctions – where contract for sale of goods – where seller beneficiary under irrevocable documentary letter of credit – where third-party bank assignee of proceeds under letter of credit – where third-party bank relied upon assignment – where goods alleged to be defective – where seller alleged knowingly to have delivered defective goods – where seller purported to draw down on letter of credit – where seller not able to repay amounts drawn down – whether serious question to be tried that goods defective – whether serious question to be tried that seller engaged in trade or commerce in conduct that is unconscionable within the meaning of the unwritten law contrary to s 51AA Trade Practices Act 1974 (Cth) – whether s 51AA an exception to the autonomy principle – whether alleged conduct capable of constituting unconscionable conduct as a matter of law – whether serious question to be tried of facts alleged – whether interest of third-party bank prevents relief from being granted – whether balance of convenience favours relief.

Held:- serious question to be tried that goods defective – no serious question to be tried that seller engaged in conduct that is unconscionable contrary to s 51AA – balance of convenience favours refusal of relief – application dismissed.

Bank of New South Wales Act 1850 (NSW) Corporations Act 2001 (Cth) Federal Court of Australia Act 1976 (Cth) s 23 Federal Court Rules O 25A, r 5(5) Trade Practices Act 1974 (Cth) s 51AA, s 52

Australian Broadcasting Authority v Lenah Game Meats Pty Limited (2001) 208 CLR 199 referred to Australian Broadcasting Corporation v O'Neill (2006) 80 ALJR 1672 referred to Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 referred to Australian Competition and Consumer Commission v Samton Holdings Pty Ltd (2002) 117 FCR 301 Boral Formwork and Scaffolding Pty Ltd v Action Makers Ltd (in administrative receivership) (2003) ATPR 41-953 referred to Cardile v LED Builders Pty Limited (1999) 198 CLR 380 referred to Ciavarella v Balmer (1983) 153 CLR 438 referred to Clough Engineering Limited v Oil and Natural Gas Corporation Ltd [2007] FCA 881 referred to Clough Engineering Limited v Oil and Natural Gas Corporation Limited (No 2) [2007] FCA 927 referred to Codelfa Construction Proprietary Limited v State Rail Authority of New South Wales (1982) 149 CLR 337 referred to Legione v Hateley (1983) 152 CLR 406 referred to Olex Focas Pty Ltd v Skodaexport Co Ltd [1998] 3 VR 380 referred to Stern v McArthur (1988) 165 CLR 489 referred to Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 referred to United City Merchants (Investments) Limited v Royal Bank of Canada [1983] 1 AC 168 referred to