Zwanenberg Australia Pty Ltd v Moira Mac's Poultry and Fine Foods Pty Ltd [2014] FCA 1072

FEDERAL COURT OF AUSTRALIA

Zwanenberg Australia Pty Ltd v Moira Mac's Poultry and Fine Foods Pty Ltd [2014] FCA 1072 Citation: Zwanenberg Australia Pty Ltd v Moira Mac's Poultry and Fine Foods Pty Ltd [2014] FCA 1072

Parties: ZWANENBERG AUSTRALIA PTY LTD (ACN 130 900 015) v MOIRA MAC'S POULTRY AND FINE FOODS PTY LTD (ACN 006 929 102)

File number: VID 706 of 2013

Judge: JESSUP J

Date of judgment: 6 October 2014

Catchwords: CONTRACTS – Construction CONTRACTS – Contract for the supply of goods, on order, at unit prices – Prices based on manufacturing and capital costs, with mark-up – Provision for regular adjustment – Whether buyer in breach of obligation to calculate adjustment – Provision for coverage of seller's fixed manufacturing costs at minimum production – Whether limited by estimate or based on actual costs – How costs referable both to manufacture of products and to seller's other business to be apportioned – Provision for review of model for coverage of minimum costs – Whether buyer in breach of obligation to review CONTRACTS – Breach – Whether breach constituted by mere threat that fundamental obligation under contract would not be observed. CONTRACTS – Repudiation – Whether repudiation established by party's intimation that it would not observe fundamental obligation unless other party made payment which it was not required to make under contract – Affirmation – Whether constituted by continued dealing under contract in conjunction with the issue of proceedings alleging repudiation CONTRACTS – Implied Terms – Contract for the supply of goods, on order, at unit prices – Whether buyer's own decision to cease dealing in goods amounted to breach of implied term of co-operation – Whether term implied on facts of case requiring buyer to continue actively seeking business in relevant area – Whether term should be implied requiring seller to mitigate its costs under the contract TRADE AND COMMERCE – Negotiation of long-term contract for the supply of goods at prices referable to seller's costs – Seller giving estimate of costs – Whether representation as to future matter – Whether reasonable grounds existed for making of representation – Whether representee suffered or likely to suffer loss PRACTICE AND PROCEDURE – Setoff – Whether debtor entitled to set off debt owed by creditor to debtor's parent company