GEORGE AND COURTIER PTY LTD v TERREY and ORS [1996] NSWCA 206

GEORGE AND COURTIER PTY LTD v TERREY and ORS SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

CLARKE, SHELLER JJA and Simos AJA 19 August 1996, 3 September 1996

[1996] NSWCA 206

CONTRACT FOR SUPPLY OF MACHINERY — WHETHER PARTY WAS AN AGENT, OR PRINCIPAL OR RESELLER — DOCUMENTATION, CONVERSATIONS AND CONDUCT CONSIDERED TO DETERMINE WHO WERE PARTIES TO THE CONTRACT

In 1986 the first respondents, who were fruit growers, approached the second respondent, who were machinery agents, in order to investigate the purchase of a fruit sorter and grader for their orchards. The second respondent referred the first respondents to the appellant, which carried on business as a manufacturer and supplier of farm machinery. The appellant consequently manufactured and delivered to the first respondent a fruit sorter. Difficulties were immediately encountered with the machine and many attempts were made to rectify the problems. The first respondents sued the appellant and second respondent claiming, inter alia, that it was a term of the contract of purchase that the sorter would be reasonably fit for the purpose for which it was purchased, and that this term had been breached.

Sinclair DCJ found that the contract of sale was between the first respondents and the appellant and that the breach of the contractual term had been proved. The appellant appeals from that decision on the basis that his Honour erred in concluding that the contracting parties were the appellant and

the first respondents. The second respondent cross-appeals seeking indemnity against the appellant in the event that it (that is, the second respondent) is found to be the contracting party.

Held:

(1) Because a clear picture as to who were the contracting parties does not emerge solely from the documentation, the issue must be ascertained from a consideration not only of the documents, but also of the conversations and conduct of the parties relating to the transaction.