OF AUSTRALIA. 443 (HIGH COURT OF AUSTRALIA.) a 3 : : : z . APPELLANT; AND IN AND ANOTHER ety di.i~ > RESPONDENTS. ON APPEAL FROM THE SUPREME COURT OF : NEW SOUTH WALES. apossibility—Acquisition of wheat by State—Wheat Acquisition Act 1914 = —— 1.8.W.) (No. 27 of 1914), secs. 3, 7, 8. SypNey. Aug. 27, 28, Where a document is prepared and executed with the intention that it 29; 3 hall be the record of a contract, prior negotiations are inadmissible for the e of qualifying the contract expressed in the document. prea eo by the broker who brought about the sale, which note described the quantity and quality of certain wheat together with the season ' its growth, y Held, that evidence was not admissible to show that the sale was of a specific cel of wheat. ered in each of the first three months of 1915. 'The defendants elected to er at Sydney. On 24th December 1914 the Government of New South es, pursuant to the Wheat Acquisition Act 1914 (N.S.W.), which had come H. C. or A. 1917. Sw GELLING v. CRESPIN. HIGH COURT excluding wheat then actually in transit to other States of the Commonw and thereafter the authority controlling the wheat so acquired would to grain merchants. Held, that on the defendants' election to deliver at Sydney they were b to deliver wheat grown in New South Wales in the season 1914-1915 ¥ was of fair average quality of that season according to the standard in South Wales for that season. Held, also, that in the absence of evidence that it was impossible for ¢ defendants to obtain wheat of the specified kind then in, or in course of tran: to, other States sufficient in quantity to satisfy the contract, the defen were not excused from performing the contract, even if the aequisition by Government would have afforded an excuse upon such evidence. Decision of the Supreme Court of New South Wales: Gelling v. Ore 16 S.R. (N.S.W.), 558, reversed. Apprat from the Supreme Court of New South Wales. An action was brought in the Supreme Court by Christo, James rllling aaah Gain George Crespin and George H G. G. Crespin & Sons, for non-delivery of certain wheat pursi to a contract of sale and purchase made between the defend and Gelling & Sons Ltd., a company registered in New South Wi hearing evidence formally entered judgment for the plaintiff £3,328 2s. 6d., reserving all questions of law and fact for the The defendants thereupon moved for a rule setting aside the ve and ordering a nonsuit or entering a verdict for the defendants 0 reducing the amount of the verdict. The Full Court made an ord setting aside the verdict and ordering a verdict to be entered fo the defendants : Gelling v. Crespin (1). : From that decision the plaintiff now appealed to the High C Knox K.C. (with him Delohery), for the appellant. No' standing the election of the respondents to deliver in New So Wales the contract does not require the respondents to sup (1) 16 8.R. (NS.W.), 558. Al OF AUSTRALIA. heat of a certain quality (see Azémar vy. Casella (1) ), and if it that quality it does not matter where it is grown. If the ntract requires delivery of wheat grown in New South Wales, evidence does not establish that it was impossible for the re- ndents to perform the contract. All that the evidence establishes at all the wheat in New South Wales on 24th December 1914 nment. The burden was on the respondents to show that could not have obtained sufficient New South Wales wheat nin, or in course of transit to, another State to satisfy the con- Apart from that, the acquisition by the Government did not the contract impossible so as to excuse the respondents, for the Wheat Acquisition Act 1914 (N.S.W.) the Board appointed the Act had power to sell wheat which had been acquired (sec. 7), and the fact that they would not sell to grain merchants yrds no excuse to the respondents. The position is the same as wheat market had been cornered. [He referred to Wilson _ Ltd. v. Pennants (Lancashire) Ltd. (2); Bolckow, Vaughan Ltd. vy. Compania Minera de Sierra Minera (3).] Even if respondents established that it was impossible for them to per- n the contract they are not excused, because the contract was for the sale of specific goods (Brown v. Royal Insurance Co. (4) ; 'Shipton, Anderson & Co. and Harrison Brothers & Co.'s Arbitra- ) ). cs J. referred to Horlock v. Beal (6); E. Hulton & Co. Ltd. & Taylor Ltd. (7).] sibility is also not an excuse, because it arose from an act . State other than the State where the contract was made—that etoria. In a contract of this kind it cannot be implied as a ion that if all the wheat gets into the hands of persons who ot sell it, the vendors are to be excused. The only condition 431. (5) (1915) 3 K.B., 676. 1K.B., 208. (6) (1916) 1 A.C., 486. K.B., 1776. (7) 33 T.LR., 363. 445, grown in New South Wales. The contract requires delivery H. ©. oF A. 1917. Yw LING v CreEsPIN. G H.C. or A. are to be excused. Where the performance is rendered imp, 1917. GELLING v CresPrn, HIGH COURT by the act of another State not directed to rendering contra that kind illegal but having the incidental effect of rendering formance of the contract impossible, the vendor is not exe (Jacobs, Marcus & Co. v. Crédit Lyonnais (1) ; Barker v. Hod (2); Spence v. Chodwick (3) ). [Counsel also referred to Zine Cor- poration Ltd. v. Hirsch (4); Maine v. Lyons (5).] Leverrier K.C. (with him Coghlan), for the respondents. [( was not called on to argue as to the construction of the contra It is not necessary that the respondents should show that S formance by them of the contract was absolutely impossible. is commercial impossibility which the respondents must (Horlock v. Beal (6) ), and it was sufficient to prove generally t they were prevented from delivering by the action of the Gov ment. It was in the contemplation of the parties that the wl should be procured in New South Wales ; that is shown by the vision that delivery is to be on trucks at Sydney, which imp that the wheat had come on the trucks from some part of New South Wales. Where the state of things which the parties contemplat at the time the contract was made is entirely altered by some event which they did not contemplate, the contract is discharged (Ki v. Henry (7) ). The state of things contemplated by the pai was completely altered by the acquisition by the Government; it was a cutting off of the New South Wales supply. The burden upon the appellant to show that the respondents could have sufficient wheat outside New South Wales to fulfil the contr: On the evidence, the subject matter of this contract was the wheat bought by the respondents from Aitken, and the contract therefore for specific goods. The broker's note is not the cont1 but is only a memorandum of it. There was a concluded cont when the broker informed the respondents that Gelling & Sons had accepted their offer, and if one term of it is not set out in the n that term can be supplied by other evidence (Pitts v. Beckett (8) (1) 12 Q.B.D. 2 (5) 15 C.LR., 671. (2) 3M. & 7. (6) (1916) 1 A.C., 486, at p. 499. (3) 10 Q.B., 517; 16 L.J.Q.B., 313. (7) (1903) 2 K.B., 740. (4) (1916) 1 K.B,, 541. (8) 13 M. & W., 743. OF AUSTRALIA. 8 J. referred to Gordon v. Macgregor (1).] order that a contract with respect to wheat should be avoided c. 8 (2) of the Wheat Acquisition Act 1914, it is not necessary sec. 8 (1), but it is sufficient if the parties look to wheat which subject of such other contract to fulfil their contract. saacs J. referred to New South Wales v. The Commonwealth Cur. adv. vult. e following judgments were read :— 210N J. At the trial the plaintiff recovered a formal verdict 328 2s. Gd., all questions of law and fact being reserved for red a verdict for the defendants. The present appeal is against judgment. following summary is from the judgment delivered by Street State, and Street and Gordon JJ.:—'' On 30th July 1914 xy Walker & Co., a firm of grain brokers carrying on business State and in Victoria, negotiated a sale, in Sydney, of 15,000 s of wheat from a firm named Aitken Brothers to the defendants. subject matter of the contract, and the price to be paid, were Three shillings and ten pence farthing per bushel on ;, Adelaide, Melbourne, or Sydney, at sellers' option.' The rs' option as to the place of delivery was to be declared by Ist ber 1914, and 5,000 bags were to be delivered in each of the months of January, February and March 1915. On 17th 1914 Lindley Walker & Co., again acting as brokers, ated, in Victoria, a sale of a similar quantity of wheat from ndants to Gelling & Sons Ltd. The bought and sold notes identical terms, except as to price, with those employed s C.LR., 316, at p. 322. (2) 20 C.LR., 54, at pp. 96-97. H.C. or A. 1917. ~~ GELLING v. CRESPIN. Sept. 6. H.C. or A. 1917. w GELLING v. CRESPIN. Barton J. HIGH COURT on the purchase by the defendants from Aitken Brothers. 30th November 1914 Aitken Brothers notified the defend: that they proposed to deliver at Sydney under their contract, on 2nd December the defendants wrote to Gelling & Sons notifying them of a similar election under their contract. Not! turns upon the circumstance that the latter notice was a two late." The price of the wheat sold by Gelling & Sons Ltd. to the r spondents was 4s. 0}d. a bushel. On 11th December in the same year there came into op the Wheat Acquisition Act 1914, which empowered the Governo to declare by notification published in the Gazette that any wheat therein described or referred to was acquired by His Majesty, : enacted that upon such publication the wheat should become absolute and unencumbered property of His Majesty, and the rights and interests of every person in the wheat at the of the publication should be taken to be converted into a for compensation. Pursuant to that authority on 24th De 1914 a notification was published acquiring all wheat then in South Wales other than wheat actually in transit to other § of the Commonwealth. No wheat was delivered either by Ait Brothers to the defendants, or by the defendants to Gelling & S is the assignee of their rights under their contract. The a by the appellant is for non-delivery of the wheat sold to Gellin, Sons Ltd. by the respondents, whereby the purchasers were deprivt of the profit which would otherwise have accrued to them. The first plea was withdrawn during the argument before The second plea had already been abandoned. The pleas rem: to be considered are the third and fourth. The third was that th contract was one with respect to wheat which was the subject mat of a certain other contract made in the State of New South Wi prior to the passing of the Wheat Acquisition Act for the New South Wales 1914-15 wheat to be delivered in that that the last-mentioned contract had not at the date of the p of the Act or at all been completed by delivery, nor under su last-mentioned contract had any portion of the wheat relati LR.) OF AUSTRALIA. ch contract been delivered at the said date or at all. I do not H.C. or A. 'ink that this plea, which relies on sec. 8 (2) of the Wheat Acquisi- m Act, is sustained. Both the contracts were probably made in a, and therefore escape the provisions of sec. 8. However may be, I think the respondents have failed, as I shall presently ow, to prove the essential allegation in this plea that the contract 'on was in respect of wheat which was the subject matter of a other contract as described, by which the respondents mean r purchase from Aitken Brothers. it the defence on which the respondents mainly rely is stated fourth plea, which sets up that the contract was for the of wheat grown in the State of New South Wales (duly by the respondents as the State in which delivery would le under the contract) ; that after contract and before breach G overnor, acting under the Acquisition Act made the notifica- ion already mentioned, which acquired all wheat in the State of South Wales other than wheat actually in transit on its to Australian States outside New South Wales; that the the subject matter of the contract, being wheat then in r South Wales and not at the date of the notification actually it, was compulsorily acquired under the Act and notifica- whereby the defendants were unable to deliver any of the be seen that the respondents rely for this main part of their e on two branches : first, that on their electing Sydney as ee of delivery, the contract became one for the delivery of t grown in New South Wales, and next, that the compulsory ition of the wheat described in the Governor's notification it impossible for them to perform that contract. o the first branch I agree with the Full Court in thinking e contract must be read as if the wheat stipulated ue were n in that State. The reasons given by their Honors of e Court for their opinion on this point are quite satis- me, and I see no necessity for adding to them. With of their Honors on the second branch, namely, the 1917. Sw GELLING v. CRESPIN. Barton J. H.C. or A. question of impossibility, I find myself, with great respect, 1917. ww GELLING v. CRESPIN. Barton J. HIGH COURT to agree. § The attempt of the respondents to show that the wheat sold b them to Gelling & Sons Ltd. was the specific wheat purchased fro Aitken Brothers has, I think, failed. It is true that the two conti were in identical terms, but that mere fact does not confine a di tion of the subject matter, expressed so as to refer to a certain ¢ of wheat, to any specific parcel of such wheat. It must be establish in the first instance, if it is sought to prove that the two were identi that the grain sold by Aitken Brothers was some specific Aitken's sale, like that of the respondents, was in general and would be satisfied, as theirs would be, by the delivery wheat grown in New South Wales which answered the descrip of f.a.q. wheat of the season 1914-15. It is fruitless, therefor to attempt to identify as something specific wheat sold by eith Aitken Brothers or the respondents in those general terms. attempt was made to identify them by means of the letter of brokers' manager to the respondents of 2nd February 1915, months after the contract now sued upon. This, if admi does not seem to me to carry the case any further. If it is a sible, so also is the telegram sent by the brokers to Gelling & Son Ltd. on 15th August, which the manager of Gelling & Sons admitted that he had seen. That was simply that "Crespin o five thousand sacks each month January February and Ma Sydney Melbourne or Adelaide, sellers' option declared Decem four shillings one farthing per bushel, advise you to accept the o no prospect of doing better" ; the answer to which was as follo "in reply to your letter of yesterday you may buy Golding's « tract hundred cash" (the letter clearly referred to Golding's co1 tract because there was no such letter as to Crespin's offer) Crespin's line three States four shillings one farthing per bushel, « better if possible.'" From these telegrams it is plain that & Sons Ltd. at the time of their acceptance had no knowle the Aitken transaction, and therefore could have no know! any assumed identity of Aitkens' parcel with Crespins'. Pitts v. Beckett (1) was relied on. That went entirely question of the broker's authority to sign the contract sued vy. Macgregor (2) is in favour of the appellant rather than spondents. of 17th August, and upon these it is impossible to contend success that the contract sued on was for the sale of specific respondents, nevertheless, maintain that they have estab- the defence that they were excused from their contract by possibility of delivery. It is not necessary to inquire whether a defence is maintainable where the article sold is not specific, it were maintainable it has not been proved. As has been d, the notification of 24th December 1914 relied on contained wiso which prevented it from operating on all wheat then in State of New South Wales, because the proviso expressed that the declaration of acquisition should not extend to wheat then actually to States of the Commonwealth other than New South es. Moreover, any of the wheat untouched by the proviso ld have been sold by the Government after acquisition, had so chosen, and the fact that they refused to sell could not lish impossibility as a defence, any more than it would have in the case of any other possessor of wheat not compulsorily red, who declined to sell. The respondents admitted that the ering" of the market by any private speculator would not given them a defence. The acquisition by the Government not appear to me to be of greater avail to them by reason of aving been a compulsory purchase. But even supposing that rnment's retention of its wheat had established any impossi- » that would only have been pro tanto, and the contract, for 'appears, could have been satisfied by purchases of wheat in or in transit to other States. The respondents say that as was a limitation of the quantity of wheat available caused by ce 13M. & W., 743. (2) 8 C.L.R., 316. 1917. ww GELLING v CReEsPIN. Barton J. H.C. or A. the notification the onus was shifted to Gelling & Sons Ltd. 1917. ww GELLING v CRESPIN. Barton J. HIGH COURT they would have to show that there was sufficient wheat in o1 transit to other States to enable the sellers to satisfy their con tra Tam by no means of that opinion. Even supposing that the G ment's acquisition could be held to establish a partial impossibili it was still for the respondents to show that their contract wa impossible of performance because sufficient other wheat could n be obtained, and this they have not shown. But they would ha: to show it for the purpose of establishing what they call practic impossibility in relation to a mercantile contract, and the autho rities cited do not help them in the absence of evidence to bring this ca within them. I think it unnecessary either to canvass the numet cases cited or to discuss the evidence any further. I think that th plaintiff should hold his verdict and that the appeal should be allowed with costs. Isaacs J. The first question to be determined is: What is th contract? The respondents say the contract includes a ve stipulation made, it is said, between the brokers' Melbourne mai and Wiseman, the respondents' Melbourne manager, in the cot of negotiations. This is put intwo ways. First, that the bough and sold notes countersigned by the parties are no more than me randa of the verbal contract, and the verbal stipulation refe is omitted. Then it is urged that even if the countersigned di ments were intended as the reduction of the contract itself to wri it is open to the defendants to rely on the verbal stipulation refi t to. There is no doubt of the materiality of the stipulation in q tion. It is directed to make the contract between the present pa dependent on a contract between Aitken and the respondents. But the answers to the respondents' contention are these. countersigned documents, according to their own internal cont and the evidence relating to them, were written and signed for purpose of reducing the agreement to writing. The bargain i written agreement. There is not, and, according to the New So Wales procedure in such a case, there could not be, any claim rectification. The document being the agreed record of the cont OF AUSTRALIA. are inadmissible for the purpose of qualifying it. Some of st important authorities are collected in Gordon v. Macgregor 'The latest, and for us perhaps the most authoritative on the , is Yorkshire Insurance Co. v. Campbell (2). next step is to construe the written contract. The first it passage is the description of the wheat sold, namely where delivery is made." The view taken by the Supreme as to this is clearly right. It means, when coupled with the option, that the wheat was to be wheat grown in New South the-season 1914-15 and to be fair average quality according » standard for New South Wales of that season. The appellant's ation that any wheat would do, so long as it was equal to fair quality of that season's New South Wales wheat, is an the respondents went further, and contended that it must t only wheat grown in New South Wales, but also wheat which t was to procure in New South Wales. It was said this was by the fact that it was to be placed "on trucks Sydney," ence being that it was to reach Sydney from the country sof the State. But certainly it could be procured in Sydney ar as the contract was concerned ; and the strict answer is that contract leaves it open to the sellers to procure the wheat where please, so long as it complies with the description and they it where prescribed. This eliminates the New South Wales priation as a sufficient justification for failure to deliver, even arding the point as to the Board being at liberty to sell. 'then, say the respondents, at least the contract left it open to buy the wheat either in New South Wales or elsewhere, the opportunities for buying in New South Wales were so ve proportionately to the opportunities of getting 15,000 New South Wales wheat elsewhere, the deprivation of the ity within the State so altered the contemplated situation to the root of the contract and relieve the sellers from SC.LR., 316, at pp. 322-323, (2) (1917) A.C., 218, at p. 225. thorities are clear that it is conclusive and that prior nego- H. C. or A. 1917. GELLING v CRESPIN. Isaacs J. H. C. or A. 1917. es) GELLING v CRESPIN. Isaacs J. HIGH COURT liability to deliver. There was considerable discussion as to would constitute an impossibility sufficient to exonerate a p from performance The case of Horlock v. Beale (1) contains authoritative passages on this point. See per Lord Ath Wrenbury at pp. 525 et segg. The result of what is there may, I think, be stated in the following formula, which ree charged with a breach of contract all depends, not upon pu external causes preventing the operation of the contract, upon the construction of the contract itself. The q always is this: Was the obligation which is said to have failed? If upon its true construction—regard being had circumstances which legitimately enter into construction contract is found by the appropriate tribunal to include a dition express or implied that the parties must be taken to h regarded as essential to performance by one or both of them, obligation is not absolute and the non-fulfilment of the conditio relieves any party for whose benefit it exists of his obligatio performance. - If the present contract itself on its true construction would satisfied—as it would be—by delivery of wheat to be wholly cured entirely outside New South Wales so long as it complied essential to its performance by the sellers. The expectation by t sellers that any particular source or sources would be available them may have operated as a material inducement to them to to by both parties. Another condition suggested was that the wh should be "commercially procurable" either inside. or outs New South Wales. It is unnecessary to pronounce upon this as condition, because, taking it at its best for the respondents, # (1) (1916) 1 A.C., 486. OF AUSTRALIA. ar resolves itself into a pure question of fact upon the evidence s particular case. clear from the evidence that what is termed " a fair quantity " New South Wales wheat was at the time of the Proclamation in it beyond the State, and went out up to the beginning of 1915, that is, for about a week. The evidence says it went out in "small quantities" making up in all "a fair quantity," but is quite comparative, and when millions of bushels are in question fair quantity " may easily far,exceed 15,000 bags. The actual quantity and quality of that wheat are left practically undetermined. 'he return which the Chairman of the Wheat Acquisition Board said he could easily give was not in evidence or accounted for. The answer Wiseman referred to in the judgment appealed from, which was follows : " The action of the Government in acquiring the whole he wheat in New South Wales prevented us from supplying wheat in New South Wales under the contract," when read with the rest of s actually taken by the Government. From his answers to three preceding questions it is plain he based the answer relied el ng was the identical wheat he had bought from Aitken, and for it or some other reason, the wheat he sold was not in course of nsit on 24th December. There is little doubt he answered as he did assuming a construction of this contract, and very likely suming in that connection that he could rely on the prior negotia- Tn that view his answer could be read as strictly accurate, but se not. The question and answer following strengthen » impression stated as to his meaning. n the result, the respondents have failed to adduce evidence to tiate the " commercial impossibility" of procuring outside South Wales wheat to satisfy the contract, that is assuming, but nly without deciding, that that fact if proved would afford a ient defence in law. 'he appeal should, therefore, be allowed, and the judgment of J. restored. the onus of establishing its non-fulfilment. And so the whole 4. ©. oF A. 1917. Sw GELLING v CREsPIN. Isaacs J. oe 456 HIGH COURT i H.C. or A. My learned brother Rich has authorized me to state that he. 1917. ww ; Gere [Note.—Since delivering this judgment I have seen the Creeps, Lennants (Lancashire) Ltd. vy. C.8. Wilson & Co. Ltd. (1), decid with this judgment. 5 " commercial impossibility." —J.A.I.] ' Appeal allowed. Judgment appealed charged with costs. Judgment ent plaintiff for £3,328 2s. 6d. with Respondents to pay costs of this appeal Solicitors for the appellant, Dibbs & Farrell, Temora, by | Cowper. . Solicitors for the respondents, C. 4. Coghlan & Co. (1) 33 T.L.R., 454; (1917) A.C., 495.