Australia 13 October 2006 Supreme Court of New South Wales [Appellate Court] (Italian Imported Foods Pty Ltd v Pucci S.r.l.)
[Cite as: http://cisgw3.law.pace.edu/cases/061013a2.html]
DATE OF DECISION:
JURISDICTION:
TRIBUNAL:
JUDGE(S):
CASE NUMBER/DOCKET NUMBER: 15801/2005
CASE NAME:
CASE HISTORY: 1st instance Magistrates Court
SELLER'S COUNTRY: Italy (defendant)
BUYER'S COUNTRY: Australia (plaintiff)
GOODS INVOLVED: Capers, semi-dried tomatoes, eggplant and capsicum
APPLICATION OF CISG: Yes, but plaintiff first sought to plead the CISG in the appeal, which the court did not allow
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
38A [Buyer’s obligation to examine goods: time for examining goods]
Descriptors:
EDITOR: Dr. Bruno Zeller, Victoria University, Melbourne
This was an appeal from the Magistrate Court in relation to the failure to supply goods of merchantable quality. The appeal was based on an attempted change of position to that taken at trial. The original case was based on the domestic Sale of Goods Act instead of the CISG. It is curious to note that there are still cases surfacing which display a lack of knowledge of the relevant applicable law.
The judge of the Supreme Court dismissed the appeal. Whether the fact that the wrong law was pleaded gives rise to an appeal in itself is of little significance here. More importantly is the fact that the appeal would have failed in any case. Not only did the Australian importer not know that the CISG is the relevant applicable law but once he found out he did not understand the basic rules within the convention.
If the Australian importer would have consulted article 38 only he would have realized that he had lost any chance of invoking the CISG. It was established in the original trial that the importer refused to have any testing done on the goods after they arrived in Australia. The importer was of the erroneous view that it was not his responsibility to undertake the tests. It is embarrassing to realize that not only was the first trial based on the wrong law but that once that was discovered no real attempt was made to make sure that the appeal has a chance of succeeding by analyzing the relevant articles of the CISG.
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(b) Other abstracts
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CITATIONS TO TEXT OF DECISION
Original language (English): Text presented below; see also <http://austlii.edu.au/cases/nsw/supreme_ct/2006/1060.html>; [2006] NSWSC 1060
Translation: Unavailable
CITATIONS TO COMMENTS ON DECISION
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Go to Case Table of ContentsText available on the Internet courtesy of the AustLII website
13 October 2006
Last updated: 16 October 2006
[...]
In the Supreme Court of New South Wales Common Law Division
JUDGMENT of Associate Justice Malpass
1 HIS HONOUR: The defendant is a supplier of preserved goods (its place of business is in Italy).
In early July 2002, it agreed to supply goods (capers, semi-dried tomatoes, eggplant and
capsicum) to the plaintiff (its place of business is in New South Wales). The goods have a shelf
life of about three to four years. On or about 22 July 2002, the goods were delivered to the
plaintiff's shipping agent in Italy for transportation. Thereafter, the goods arrived at the premises
of the plaintiff in Australia. Subsequently, they were sold to customers in Sydney and elsewhere.
2 Whilst no complaint has been made as to the quality of the capers and the eggplant, complaint
came to be made concerning the capsicum and the semi-dried tomatoes. No payment was
made by the plaintiff.
3 The defendant brought proceedings in the Local Court to recover the price of the goods. The
plaintiff claimed by way of set-off, inter alia, costs and loss of profits.
4 The dispute went to a hearing. It was heard and determined by Sweeny LCM. Her Honour
found in favour of the defendant.
5 The plaintiff now seeks to challenge the decision in this Court. Subsequent to the filling of the
summons, the plaintiff filed a notice of motion, which sought leave to file an amended summons.
Commendably, the proposed amendment sought to reduce the numerous grounds to three in
number only. However, one of the three grounds raises an issue that was not litigated before
Her Honour. This aspect of the amendment was opposed by the defendant. In the
circumstances, there was a consensus to the hearing of the application for leave to amend
together with the hearing of the appeal itself.
6 The appeal was heard on 9 October 2006. Both parties were represented by Counsel.
Counsel relied on written submissions, supplemented by oral argument.
7 For present purposes, the relevant issue raised by the plaintiff in its defence was a failure to
supply goods of merchantable quality. The case conducted by the plaintiff in the lower Court
was that this term was implied by the provisions of the Sale of Goods Act 1923.
8 Before the Magistrate, the defendant relied on evidence from Marissa Tazzari (its export
manager) and Grazia Farneti (its quality control manager). There was also documentation
(including control sheets).
9 The plaintiff relied on evidence from Furio Rossi (a director of the plaintiff) and Domenic
Mercuri and Robert Genobile (both being customers of the plaintiff).
10 The Magistrate accepted the evidence of both Marissa Tazzari and Grazia Farneti. There
was conflict between evidence given by Marissa Tazzari and Furio Rossi. In resolving this
conflict, the Magistrate preferred the evidence of Marissa Tazzari. The Magistrate took a poor
view as to the credibility of Furio Rossi.
11 The dispute in the Local Court on the merchantable quality issue was identified and resolved
by the Magistrate as follows [at page 31]:-
"At the end of the plaintiff's case, its evidence could be summarised as being that it supplied
goods of merchantable quality to the defendant pursuant to an agreement and it has not been
paid. The defendant's solicitor submitted that the plaintiff bore the onus to demonstrate on the
basis of its quality control procedures that the goods were of merchantable quality when they
arrived in Australia. The plaintiff's council (sic) says the relevant time is the time of delivery to
the plaintiff's shipping agent in Europe and I am of the view that that is the appropriate time.
The plaintiff cannot be held liable for the goods once they are in the possession of the defendant
and its agent.
In my view the plaintiff did establish that at the time of delivery the goods were of merchantable
quality. I have referred to the evidence of Ms Farneti and Ms Tazzari as to the tests conducted
and the quality of the goods. The defendant did not establish otherwise either by impeaching the
plaintiff's witnesses or educing (sic) any contrary evidence. Indeed the defendant's position was
that it refused to have any testing done as it was of the view that it was not its responsibility.
12 The plaintiff contends that the view taken by the Magistrate was erroneous (she erred in
finding that the relevant time to assess merchantable quality was when the goods were delivered
to the plaintiff's agent in Italy). The plaintiff now contends that the goods should remain
merchantable for a reasonable period subsequent to delivery. In support of that contention, the
Court has been taken to a number of decided cases (including Lambert v Lewis [1981] 2
W.L.R. 713).
13 It can be observed at this stage that this represents a change of the position taken by the
plaintiff before the Magistrate. The relevant point of time is no longer when the goods arrived in
Australia. It is for a reasonable period after delivery was taken by it.
14 This is not the only change of position contemplated by the plaintiff. It is now conceded that
the Sale of Goods Act did not apply to the transaction. Instead, it is said that the transaction
was governed by the Sale of Goods (Vienna Convention) Act 1986. It is this attempt to rely on
the latter legislation which has aroused the opposition to the application to amend the summons.
15 It seems to me that these attempts to change stance now place the plaintiff not only in an
awkward position, but an untenable one.
16 There is an implicit concession that the defence litigated before the Magistrate could not
succeed. There is an attempt in this appeal to run a new defence. The respective provisions of
the Sale of Goods Act and the Sale of Goods (Vienna Convention) Act are not the same. They
throw up different considerations and there were questions which were neither argued nor dealt
with by the Magistrate.
17 In my view, the plaintiff should not now be allowed to depart from the case that it elected to
run at trial and present a case which relies, inter alia, on the Sale of Goods (Vienna Convention)
Act.
18 Accordingly, leave to amend is refused in respect of the first of the three grounds.
Otherwise, leave to amend is granted.
19 There are two bases for this refusal. Firstly, because if the point had been raised in the Court
below the defendant might have conducted its case differently at trial (Chilcoton Pty Limited &
Anor v Cenelage Pty Limited & Ors [1999] NSWCA 11). Secondly, in any event it would be
futile to do so.
20 I shall now proceed on the assumption that there was a defence that had the capacity to
succeed at trial. It first needs to be observed that the plaintiff had the onus to make good that
defence (that the goods were not of merchantable quality).
21 The Magistrate described the evidence adduced by the plaintiff on the question of "asserted
defects" as being "scant". She had difficulty in concluding whether this evidence revealed any
fault or defect. These were views that she was entitled to take. The plaintiff's evidence fell well
short of making good a defence that the goods were not of merchantable quality. The result that
she reached was consistent with a finding to that effect. This made any error as to point of time
immaterial. The plaintiff's evidence failed to demonstrate that the goods were not of
merchantable quality at any point of time.
22 Accordingly, the plaintiff's case could be dealt with by reason of its own evidentiary
weaknesses. In the circumstances, the defence could be disposed of without having regard to
the evidence led by the defendant.
23 Leaving aside that state of affairs, there was powerful non-controversial evidence that
militated strongly against the plaintiff's defence.
24 There was evidence that following the arrival of the goods in Australia, Furio Rossi informed
the defendant that the goods had arrived in good condition. There was evidence of other
conversations had with him prior to the making of any complaint. The Magistrate found that
there had been no complaint made about the quality of the goods until December 2002. She
also found that there was no written complaint until February 2003. The plaintiff did not itself do
any testing of the goods. The goods were a portion of a larger batch delivered to other
customers. There was evidence that there had been no complaint from any other customers.
25 In the light of this material, it could not be said that there was no evidence to support a
finding that the goods were not of merchantable quality.
26 Apart from this evidence, there was also the evidence of Marrisa Tazzini and Grazia Farneti,
together with the documentation. It was argued by the plaintiff that part of this evidence was
expert evidence and should not have been received. Having regard to what has already been
said, this consideration does not need to be pursued.
27 However, for completeness, I will observe that much of the evidence given by these two
persons, and challenged by the plaintiff, would not fall within the category of expert evidence
and added more weight to the material confronting the plaintiff. Even if it be assumed that some
of it did fall within that category, it would not assist the plaintiff in this appeal.
28 The plaintiff bears the onus of satisfying the Court that there is error in point of law that
justifies the disturbing of the decision of the Magistrate. In my view, the plaintiff has failed to
discharge their onus.
29 The summons is dismissed. The Plaintiff is to pay the costs of the summons. Exhibits may be
returned.
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