MANILDRA FLOUR MILLS MANUFACTURING PTY LTD v BELTAVIA PTY LTD T/AS BEN FURNEY FLOUR MILLS [1989] NSWCA 136

MANILDRA FLOUR MILLS MANUFACTURING PTY LTD v BELTAVIA PTY LTD T/AS BEN FURNEY FLOUR MILLS

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL Hope, PRIESTLEY and MEAGHER JJA

11 April 1989, 31 May 1989

[1989] NSWCA 136

CONTRACT — PURELY ORAL — TERMS OF THE CONTRACT

Meagher JA This case concerns a contract between two rural flour mills. The contract seemsto have been wholly oral, although to some extent evidenced in writing.

The plaintiff Beltavia Pty Ltd, the respondent to this appeal, contracted to_mill the defendant's wheat and deliver the resultant flour to a location of the defendant's choosing. The plaintiff was to invoice the defendant for the flour delivered, and the defendant was to invoice the plaintiff for the wheat supplied. The plaintiff's spokesman was a Mr Newby, and the defendant's spokesman was a Mr Yeatman. The wheat was milled, the flour delivered, and invoices were monthly exchanged and paid.

The amount which the plaintiff was entitled to, and did, charge the defendant was calculated in accordance with a formula, which was set out in a letter from the plaintiff to the defendant dated 4 May 1984. Omitting formal parts, it read as follows: "Following our discussions and your visit, we agreed to supply flour to you in accordance with the following formula.

WHEAT PRICE $155.00 less freight

GRIST RATE $ 1.31 to be reviewed periodically;

Wheat 155 x 1.31 = 203.05

Offal 100 x.310 = 31.00

172.05

Production costs + Margin 72.95

Flour $245.00 per tonne, delivered Auburn

As originally discussed in February when the industrial Wheat price was $155/tonne and the agreed flour price was $248/tonne these prices will fluctuate together. That is, all flour milled from Wheat costing $158/tonne will cost $248/tonne, and so on.

We trust that this agreement will be to our mutual satisfaction and you can be assured of our cooperation, quality control and service at all times."