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CISG CASE PRESENTATION

Australia 24 October 2008 Federal Court [South Australia District] (Hannaford v Australian Farmlink Pty Ltd)
[Cite as: http://cisgw3.law.pace.edu/cases/081024a2.html]

Primary source(s) of information for case presentation: Case text

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Case identification

DATE OF DECISION: 20081024 (22 October 2008)

JURISDICTION: Australia

TRIBUNAL: Federal Court of Australia, South Australia District Registry

JUDGE(S): Finn J

CASE NUMBER/DOCKET NUMBER: SAD 251 of 2005

CASE NAME: Hannaford v Australian Farmlink Pty Ltd

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Australia (defendant)

BUYER'S COUNTRY: Hong Kong and Singapore

GOODS INVOLVED: Cherries


UNCITRAL case abstract

AUSTRALIA: Federal Court of Australia, 24 October 2008
(Hannaford (trading as Torrens Valley Orchards) v Australian Farmlink Pty Ltd)

Case law on UNCITRAL texts [A/CN.9/SER.C/ABSTRACTS/96],
CLOUT abstract no. 958

Reproduced with permission of UNCITRAL

Abstract prepared by Lisa Spagnolo

An Australian grower, TVO, sold cherries through F, an Australian exporter of fruit, to buyers in Hong Kong and Singapore. The latter buyers were not party to the proceedings. Due to defects, the exporter claimed to be entitled to pass on price reductions made by the overseas buyers to TVO. TVO brought action against the exporter, arguing that this latter was not entitled to set any automatic reduction of price. The exporter objected that its right to reduce the price was due to a "course of dealing" previously established with TVO.

Justice Finn determined that the relationship between TVO and the exporter was one of sale, not of agency. This meant the CISG did not apply to the dispute. Had the opposite conclusion been reached, then the contracts of sale would have been between TVO and the overseas buyers. The CISG would have applied to the Singapore contracts, as Singapore is a CISG Contracting State under Art. 1 (1)(a). However, the Hong Kong contracts might not have been governed by the CISG. Certainly, the CISG would not be applicable through Art. 1 (1)(a); as Finn J observed China has not yet taken the necessary steps to make Hong Kong a Contracting State.

Although the Convention did not apply, Finn J made various references to its provisions, including Art. 39, Art. 50, and Art. 9, and also cited relevant CISG authority. In particular, the Justice mentioned the need for buyers to notify lack of conformity in a timely fashion pursuant to Art. 35, 39 and 44; the right to unilaterally effect a price reduction (Art. 50), and the influence of usages on contractual terms (Art. 9). While admitting that reference to practices and usages could have imply a different decision on some of the requests of the respondent, Finn J stated that "the [Court's] conclusions were based on the evidence"

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Classification of issues present

APPLICATION OF CISG: No. However, opinion contains references to the CISG

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 7 ; 39 ; 50 [Also cited: Articles 9 ; 35 ; 44 ]

Classification of issues using UNCITRAL classification code numbers:

7A1 ; 7B1 [Principles of interpretation: international character; Materials for interpretation: international case law and scholarly studies];

39A11 [Requirement to notify seller of lack of conformity: buyer must notify seller in reasonable time];

50A [Buyer's right to reduce price for non-conforming goods]

Descriptors: Internationality ; Lack of conformity notice, timeliness ; Reduction of price, remedy of

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Editorial remarks

EDITOR: Lisa Spagnolo

Excerpt from analysis of Australian case law on the CISG. Reproduced with permission of 10 Melbourne Journal of International Law (2009) 203-204

Hannaford (trading as Torrens Valley Orchards) v Australian Farmlink Pty Ltd [440]

A recent case to mention the CISG was another judgment of Finn J. An Australian grower, TVO, sold cherries through Farmlink, an Australian exporter of fruit, to buyers in Hong Kong and Singapore. The latter buyers were not party [page 203] to the proceedings. Due to defects, Farmlink claimed to be entitled to pass on price reductions made by the overseas buyers to TVO.

Finn J determined that the relationship between TVO and Farmlink was one of sale, not of agency.[441] This meant that the CISG did not apply to the dispute before the Court. Had the opposite conclusion been reached, then the contracts of sale would have been between TVO and the overseas buyers. The CISG would have applied to the Singapore contracts, as Singapore is a CISG Contracting State under art 1(1)(a). However, the Hong Kong contracts might not have been governed by the CISG. Certainly, the CISG would not be applicable through art 1(1)(a); as Finn J observed, China has not yet taken the necessary steps to make Hong Kong a Contracting State. Notably, in reaching this conclusion, Finn J referred to relevant CISG sources, including scholarship and a French case.[442] Given the hypothetical nature of the question, the Court understandably did not explore the (unlikely) possibility the CISG might apply through art 1(1)(b).

Although the CISG was not directly applicable, Finn J made a number of references to its provisions, and in particular, the need for buyers to notify lack of conformity in a timely fashion pursuant to art 39, the right to unilaterally effect a price reduction pursuant to art 50, and art 9 on the influence of usages on contractual terms.[443] Not only this, but his Honour also cited relevant CISG authority in doing so.[444]

The CISG is treated in Hannaford as an autonomous body of law, and interpretation of it was conducted by reference to international CISG decisions and scholarship. Finn J makes it clear that, although the CISG did not apply in the dispute before the Court, if it had, different questions would have arisen, and a very different result might have ensued. Certainly the decision demonstrated proper interpretation of the CISG, guided by CISG sources alone. Although the case properly required application of local sales law rather than the CISG, the CISG, UNIDROIT Principles and comparative law were still used to illuminate global trends in relation to issues pertinent under local sales law.

Finally, Australia has produced a case in which the CISG is treated autonomously and in an internationalist spirit, albeit it a case in which the CISG was inapplicable. Nonetheless, Hannaford stands as a lonely but bright beacon for future Australian courts applying the CISG.
_________________________

440. [2008] FCA 1591 (Unreported, Finn J, 24 October 2008) ('Hannaford'). Also reported internationally on: Pace Law School, <http://cisgw3.law.pace.edu/cases/081024a2.html>; available from CISG-online, Search for Cases (Case Nos 1743/1782) <http://www.globalsaleslaw.org/index.cfm?pageID=29>; available from UNILEX, <http://www.unilex.info>.

441. Ibid [7], [181].

442. Ibid [5], citing Socit L v CM Ltd (Cour de Cassation, France, 2 April 2008) <http://cisgw3.law.pace.edu/cases/080402f1.html>; Ulrich G Schroeter, 'The Status of Hong Kong and Macao under the United Nations Convention on Contracts for the International Sale of Goods' (2004) 16 Pace International Law Review 307.

443. Hannaford [2008] FCA 1591 (Unreported, Finn J, 24 October 2008) [5], [43], [56], [190], [197], [233], [242], [276]. See also above n 67.

444. Ibid [5], [43], [56], [233], citing Peter Schlechtriem and Ingeborg Schwenzer, above n 130, UNIDROIT, UNIDROIT Principles, above n 190, and a German CISG case in relation to art 39 on perishables: Flowers Case (Oberlandesgericht Saarbrücken, Germany, 3 June 1998) <http://cisgw3.law.pace.edu/cases/980603g1.html>.

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1367&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language (English): CAN 087 011 541 [2008] FCA 1591 (24 October 2008); AustLII website <http://www.austlii.edu.au/au/cases/cth/FCA/2008/1591.html>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1367&step=FullText>

Translation: Unavailable

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Pace Law School Institute of International Commercial Law - Last updated October 22, 2010
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