PARK v WRAGGE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P, PRIESTLEY and CLARKE JJA 29 March 1993, 8 April 1993 [1993] NSWCA 204 SALE OF GOODS — sale of barley seed — reliance on vendor's skill or judgment — express warranty as to condition — seed fails to germinate and later determined as "dead" — claim by purchaser against vendor — alleged representation of germination test 100% successful — trial judge (McDevitt DCJ) finds that purchaser, a more experienced farmer, did not, in fact, rely on the vendor' 8 skill and judgment — finds that express warranty as to germination test was not made as stated — on appeal to the Court of Appeal — held: (Priestley JA; Kirby P and Clarke JA concurring): (1) Having regard to the trial judge's finding of fact that there was no reliance by the purchaser on the vendor, the claim based on s19(1) Sale of Goods Act 1923 failed; (2) There was no proper basis for reversing the trial judge's finding as to reliance and in particular having regard to the purchaser's own statement that he was very experienced in the selection of grain and was a "better" farmer than the vendor; (3) There was also no basis for disturbing the judge' s conclusion that no express warranty of a germination test showing 100% germination was made; (4) Accordingly, the challenge to the judgment of the District Court failed. Coghlan v Cumberland (1898) 1 Ch 704; Abalos v Australian Postal Commission (1990) 171 CLR 167 applied. APPEAL - Court of Appeal - challenge to fact-finding - advantages of trial judge - determination of whether farmer relied upon another farmer's skill and judgment - advantage of seeing both witnesses - determination of whether representation as to quality of barley seed expressly made - advantage of seeing witnesses - findings of fact not disturbed. Abalos v Australian Postal Commission (1990) 171 CLR 167 applied. Sale of Goods Act 1923, s19(1). ORDERS Appeal dismissed with costs. Kirby P I agree with Priestley JA. Priestley JA In December 1988 Mr and Mrs Park took proceedings in the District Court at Albury against Mr Wragge. They claimed damages from him for losses they suffered because of the failure of a crop of barley. Mr Park was the active person on the plaintiffs' side and I will call him the plaintiff. I will call Mr Wragge the defendant. The plaintiff and the defendant were farmers with adjoining properties near Deniliquin. Somewhere in the April May June period of 1987 the plaintiff bought in the order of 20 to 22 tons of Clipper barley seed from the defendant. He sold five or six tons of this to another neighbour and planted the balance. This planting germinated satisfactorily. In July 1987 the plaintiff bought a further quantity of Clipper barley seed from the defendant to replace what he had sold from the first purchase to the other neighbour. He added the second amount he purchased to about two tons still unused from the first purchase and then sowed about 250 acres. This sowing failed almost entirely to germinate. From the unused seed left 2 UNREPORTED JUDGMENTS over from this second sowing samples were sent to a testing laboratory which reported that approximately 92% of the seed was dead. The plaintiffs claim against the defendant alleged that it was an implied term of the second purchase that the seed would be fit for growing a commercial crop of barley. At the hearing before McDevitt DCJ, this term was said to be implied because the requirements of s19(1) of the Sale of Goods Act were fulfilled, that is, the plaintiffs case was that he had made known to the defendant the particular purpose for which the seed was required so as to show that he relied on the defendant's skill or judgment, the seed being something which it was in the course of the defendant's business to supply. The plaintiffs case thus raised the issue whether, and made it necessary for him to prove, that in making the second purchase he had relied on the defendant's skill and judgment. The part of the plaintiffs evidence in chief relevant to his case on reliance was as follows: "Q. Did you say anything to him [the defendant] about the seed that you were picking up - this five ton? A. Yes yes I was a bit worried about the seed. Q. Why is that? A. Well because it had a funny colour to it at first. Q. What do you mean a funny colour? A. Well barley is generally a - how can T explain - a kind of a dull yellowy - well I'd say much the same as that ceiling. Q. What colour was this? A. The ball - the yellow up there in the wall. And this particular barley was more of a yellowy colour. HIS HONOUR: Q. Would you say it was too yellow? A. Yeah it was too yellow yeah, if I could - and that plastic bag over there was more like the colour of the barley. Q. Well in any event you say you thought it was too yellow? A. Yeah yeah I thought it had a strange look about it. WASILENIA: Q. Did you say anything to Mr Wragge? A. Yes I asked him if the barley was all right and had he had a germination test done of it and he said, "Yes I've had a germination test done. And it is a hundred percent. 'Q. And did he say anything else? A. I said, 'It smells a bit funny'. Because I noticed a smell coming fresh out of the silo it was kind of probably some people wouldn't have picked up the colour and the smell but - Q. What did he say anything when you said, it smells a bit -? A. No he said, 'it's all right'. He said, he's sown some myself and got a hundred percent strike. Q. Was there any conversation about what quantity you might sow? A. He did say, you could sow it a little bit heavier. Q. And did you continue loading your auger? A. Yes. Q. And did you give him a cheque that day? A. Yes I had to pay for the grain before it went off the place." In cross examination he gave the following evidence: "Q. Now I take it that you regard yourself as very experienced in the selection of grain? A. Yes. Q. Especially barley? A. Yes. Q. And when you observed this barley you had cause to have some concern? A. Yes. Q. Would you regard yourself as at least as good a grower and farmer of barley as Mr Wragge? A. Better. Q. Did you regard yourself as a better farmer at that stage? A. Yes. It never came up to be mentioned but - URJ PARK v WRAGGE (Priestley JA) 3 Q. But yet you would choose to rely on the opinion of somebody you regard as not your equal in questions of barley. Is that what you're saying? A. Well, when you pick up the paper, right, and you read an ad off it, right - seed barley. You get it advertised there, right. You go to the place, right. You buy the barley, right. I quizzed him. I said to him. I said, it seems a bit funny, right. The colour and it did smell a little bit coming out of the silo, right. But I asked him had he had a germination test done of it and he said, yes. He said I've sown it as well and I got 100 per cent strike. So after that I thought, right, fair enough - Q. So you were prepared to accept what he said, even though you had some concern? A. Yes. Q. And in your experience, this barley looked different to any other barley you had had before? A. I've never struck it before like it. Q. And it was different to the barley you'd bought a little while before? Is that right? A. Mmm. It appeared to be, yeah. Q. It appeared in appearance and in smell? A. Yeah. Q. Did not the alarm bells ring in your head when you observed that barley? A. Yeah well it did, that's why I spoke to Alan about it but then when he assured me that the barley was okay and that he'd had a germination test, I thought, well you can't go past that." The defendant gave a somewhat different version of what was said between him and the plaintiff at the time of the second purchase. On this version, if accepted, the plaintiff would have to fail. Before coming to that however it seems clear that on what the plaintiff himself said about reliance, as set out above, it was open to the trial judge to conclude that the plaintiff had not relied on the defendant's skill and judgment in deciding to make the second purchase and, as it happened, the trial judge, basing himself on what the plaintiff himself had said, came to the conclusion that the plaintiff had not established reliance for the purposes of s19(1) of the Sale of Goods Act. That finding meant that the case pleaded in the plaintiffs statement of claim must fail. However it is also apparent from the passages of the plaintiffs evidence set out above that what he did establish, if his evidence was accepted, was that in making the second purchase he was relying not on the defendant's skill and judgment but upon his warranty that he had had a germination test done showing that the seed was a hundred per cent. In the course of the appeal the court was told that although a case of this kind was not pleaded it was in substance argued on behalf of the plaintiff before the trial judge. This assertion is consistent with a sentence in McDevitt DCJ's reasons in which he said he preferred the evidence of the defendant to that of the plaintiff when the defendant denied that he told the plaintiff that he had a germination test done. It thus appears that the trial judge considered the alternative way in which the plaintiff put his case but found against him on a fact the non establishment of which meant that the alternative case must also fail. What the defendant said had taken place at the conversation when the second purchase was effected by the plaintiff was that after the approximately five tons of seed had been loaded into the plaintiff's auger the plaintiff asked him to look at it because from its colour and smell it appeared to be poor quality. The defendant said that he had told the plaintiff some of the grain was weather damaged, but that he (the defendant) had "previously sown some of the seed at a higher rate because of the weather damage and the germination had been all 4 UNREPORTED JUDGMENTS right". He added that if the plaintiff wanted to look at the growing barley he could. The plaintiff said "No, that's all right". In cross examination what the defendant had meant by saying he had "sown some of the seed at a higher rate" was clarified when it was put to him that he had said to the plaintiff that a germination test had been done; he denied this, but when asked whether the way he wanted to reassure the plaintiff was to tell him to sow the seed heavier he answered "I assured him that ''d sown some at a double rate and he could have a look at it if he wanted to where I'd sown it". A little later he said he had told the plaintiff that he had had an adequate strike at double the rate. He denied he told him it was a hundred per cent. The trial judge accepted the defendant's version of this conversation. There was no documentary evidence of any kind throwing any light on what the plaintiff and the defendant said to one another at the time of the second purchase apart from the plaintiffs cheque butt on which the total price for the two purchases was noted. Counsel for the plaintiff in the appeal began his submissions by acknowledging the difficulty of an appeal of this kind in which the essential issues had been decided by the trial judge after considering conflicting oral evidence and forming views about what parts of the evidence he accepted. The long line of cases of which Coghlan v Cumberland (1898) 1 Ch 704 is one of the earliest and Abalos v Australian Postal Commission (1990-91) 171 CLR 167 one of the latest, has produced the position that an appellate court will not interfere with the findings of the trial judge unless there are features in the evidence so strongly indicating that the judge was mistaken in coming to the conclusion that he did notwithstanding the advantage of seeing and hearing the witnesses that the court concludes the judge must have been mistaken. Having acknowledged that the plaintiff must show an error of this kind on the part of the trial judge, his counsel then sought to do so. His first point was that the judge had made a mistake in his finding of the purchase price of the first batch of seed. He pointed out that it was impossible to reconcile this finding with the total price paid for the two sales of seed. Although there is some substance in this submission, it is not one that has any significant bearing on the central issues of the case. The evidence of both the plaintiff and the defendant was never precise about the exact amount of seed bought on the two occasions, nor about the price per ton on either occasion. The judge's finding which was criticised was based on the evidence, although, on the evidence, there was no way of establishing, beyond the approximate figures I have earlier recounted, the amounts bought in the two purchases, nor the elements from the two purchases which went into the calculation of the aggregate price for the two purchases. A further submission was that the trial judge had overlooked the evidence of a witness who had corroborated the plaintiffs version of his conversation with the defendant particularly in regard to that part of it in which the defendant was alleged to have said that a test of the seed showed that it was one hundred per cent. The fact that this witness was not directly referred to by the trial judge in his reasons does not mean that his evidence was overlooked. The evidence was not of such a compelling kind as to give it any necessary significance in the case. The witness had been fifteen years old at the time, was the nephew of the plaintiff, had only very recently been asked for his recollection of the conversation and had discussed it with the plaintiff. The trial judge had to choose. between the "one hundred per cent" version of the plaintiff and his nephew and URJ PARK v WRAGGE (Priestley JA) 5 the defendant's account that what he had said was that the germination "had been all right" or "adequate", and it seems to me to have been well open to him in his fact finding function, not to be persuaded by the account coming from the plaintiff's side. This is particularly so in the light of the probabilities at the time of the critical conversation. The accounts from both sides are agreed that both plaintiff and defendant recognised the seed as to some extent damaged; as a practical matter it is highly unlikely that any sowing ever achieves a perfect result so far as germination is concerned, and an assertion to that effect in regard to seed obviously to some extent damaged would in most circumstances cause scepticism; that is, it was open to the judge to doubt whether such a sweeping statement would have been made. It is also inconsistent with the defendant having said to the plaintiff, as the plaintiff asserted in his evidence in chief, that the seed could be sowed "a little bit heavier". The other submissions made for the plaintiff attempted to bring to bear on the judge's findings of fact concerning the contractual conversation the central feature of the plaintiffs case and the basis of his grievance, that is, the testing of the sample seed which indicated that the seed he had sown had been 92% dead. Although in a logical sense, the circumstances surrounding this aspect of the matter had no bearing on the question of what was said at the contractual conversation there seems to have been some flavour at the trial of the idea that the fact that the seed turned out to be for practical purposes useless to the plaintiff had a bearing on the credibility of the defendant in the giving of his evidence about what he said to the plaintiff at the time of the second purchase of seed. As a result, considerable time was spent at the trial on the question whether the seed had been defective (in the sense of 92% dead) at the time of sale to the plaintiff or whether something had happened to it in the plaintiff's hands after purchase. The evidence going to this point was relevant also to the question whether the plaintiff, if he proved the alleged terms of the contract, had also proved breach. Although the trial judge did not make findings on this point, there was evidence before him that another local farmer bought some of the same seed at about the same time which had a moderately successful germination. There was also evidence that an expert grader of seed had inspected the seed in the silos from which the plaintiff's seed had been sold a day or so after the plaintiff's purchase and formed the opinion that the seed was in good condition. Further, there was some expert evidence from which it appeared that a possible explanation of the state of the plaintiff's seed at the time it was sown was due to the combination of the "pickling" process applied to it at or shortly before the sowing and its then condition. On this explanation, the problem causing the seed to die arose after the seed had been sold to the plaintiff. In other words, the position before the trial judge was not that there was no other explanation for the state of the seed than that it had been 92% dead at the time of sale, with the possible background effect such a fact may have had upon consideration of the defendant's credibility in regard to the contractual conversation. The plaintiff evidently felt strongly about this matter, as is shown by the appeal having been brought. The appeal however is not one in which this court starts afresh and considers the whole case again from the beginning. Unless the trial judge can be shown to have made a mistake of the kind I earlier described, this court must approach the appeal on the footing that the judge's findings of fact are correct. On the findings of fact of the trial judge the decision in the defendant's favour was the proper one. The critical matter in the appeal, from the plaintiffs' 6 UNREPORTED JUDGMENTS point of view, is that there is no basis in the evidence upon which this court can conclude that the trial judge made any appellable mistake in his fact finding. The appeal must therefore be dismissed with costs. Clarke JA I agree with Priestley JA. Appeal dismissed with costs Counsel for the Appellants: J Coombs QC/E Wasilenia 10 = Solicitors for the Appellants: Strikis and Trayer Counsel for the Respondent: JE Rowe Solicitors for the Respondent: Semple Long Glowrey by their city agents, WA 15 Baxter and Co