McRae v Commonwealth Disposals Commission [1951] HCA 79

High Court of Australia Webb J. Dixon, McTiernan and Fullagar JJ. McRae v Commonwealth Disposals Commission

ORDER Appeal allowed with costs. Discharge judgment of Webb J., and in lieu thereof adjudge that plaintiffs do recover from the defendant Commonwealth of Australia the sum of £3,285 as damages for breach of contract. Order that defendant Commonwealth pay plaintiffs' taxed costs of action. Cross-appeal dismissed with costs.

Cur. adv. vult.

1950, May 8 Webb J . delivered the following written judgment:—

The plaintiffs claim against the defendants damages for breach of contract, deceit and negligence. The claim arises out of the sale of an oil tanker to the plaintiffs by the defendant Commonwealth Disposals Commission in April 1947.

The defendants offered to deliver to the plaintiffs an oil barge as being the oil tanker sold, but the plaintiffs refused to accept delivery of it as not being an oil tanker. The defendants submit that a barge is an oil tanker, or alternatively, that if it is not an oil tanker, then there was a misdescription of the thing sold, and the defendants are not liable under the conditions of tender and the conditions of the sales advice note. In the further alternative the defendants submit that, if there was not a misdescription, then there had been a mutual mistake as to the identity of the subject matter, and therefore no contract. They also denied deceit and negligence.

I find that sometime before April 1945 an oil barge was wrecked on a reef surrounding Jomard Islands. Its position on the reef was latitude eleven degrees sixteen minutes forty seconds south, longitude one hundred and fifty-two degrees eight minutes east. It was still in that position when the defendants offered to give delivery of it to the plaintiffs. It was a steel vessel two hundred feet six inches long, forty feet broad and fourteen feet deep. It contained four tanks for the carriage of liquid cargo. It was not self-propelled. It was inspected by a salvage officer on behalf of the Commonwealth on 9th April 1945. Nos. 1 and4 tanks were then dry and Nos. 2 and3 contained about 1,000 tons of oil. On 11th April 1945 the Commonwealth endeavoured to salvage the vessel by lightening the buoyance by discharging some of the oil and towing the vessel off the reef. As a result the transverse bulkheads were strained and Nos. 2, 3 and4 tanks contained about the same amount of oil; the hull was straining badly, and on 20th April there was a constant oil slick spreading.