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CISG CASE PRESENTATION

Australia 28 September 2010 Federal Court of Australia (Castel Electronics Pty. Ltd. v. Toshiba Singapore Pte. Ltd.)
[Cite as: http://cisgw3.law.pace.edu/cases/100928a2.html]

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

Case Table of Contents


Case identification

DATE OF DECISION: 20100928 (28 September 2010)

JURISDICTION: Australia

TRIBUNAL: Federal Court of Australia [Victoria District Registry, General Division]

JUDGE(S): Ryan J

CASE NUMBER/DOCKET NUMBER: VID 141 of 2008

CASE NAME: Castel Electronics Pty. Ltd. v. Toshiba Singapore Pte. Ltd.

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Japan (Defendant)

BUYER'S COUNTRY: Australia (Plaintiff)

GOODS INVOLVED: Color Television Receivers


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 35 ; 50 ; 74

Classification of issues using UNCITRAL classification code numbers:

35A [Conformity of goods to contract: quality, quantity and description required by contract ; Requirements implied by law];

50A ; 50B ; 50C [Buyer's right to reduce price for non-conforming goods ; This right available whether or not the price has been paid ; Buyer may not reduce price when];

74A ; 74B [Loss suffered as consequence of breach ; Outer limits of damages ; foreseeability of loss]

Descriptors: Non-conformity ; Damages

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Editorial remarks

EDITOR: Bruno Zeller

Australia 28 September 2010 Federal Court of Australia (Castel Electronics Pty. Ltd. v. Toshiba Singapore Pte. Ltd.)

This case suffers from the same problems as previous cases. It does recognise that the CISG applies and invokes article 35. However article 7 CISG is ignored as the claimant "invoked, further or alternatively, the warranties of fitness for purpose and merchantable quality implied by s 19(a) and (b) of the Goods Act 1958 (Vic) ("the Goods Act").[1]

Such statements are repeated in other sections by noting that the claimant is "relying on any implied warranty of merchantable quality or fitness for purpose arising by force of the CISG or s 19 of the Goods Act."[2]

This is surprising specifically as the court noted "… that the CISG governs the rights and liabilities of Castel and TSP under each sales contract to the exclusion of any operation which the Goods Act might otherwise have"[3] which is inconsistent with relying on the Goods Act. This confusion is excemplified by stating:

"Those provisions have been treated by Australian courts as imposing, effectively, the same obligations as the implied warranties of merchantable quality and fitness for purpose arising under s 19 of the Goods Act; see Playcorp Pty Ltd v Taiyo Kogyo Ltd [2003] VSC 108 at [235], Ginza Pte Ltd v Vista Corp Pty Ltd [2003] WASC 11, at [189]-[191] and Summit Chemicals Pty Ltd v Vetrotex Espana SA [2004] WASCA 109."

If the editorial notes re Summit Chemicals and others would have been consulted the remarks by Zeller and Spagnolo would have shown that the above statement is patently wrong.. Spagnolo specifically notes:

"Certainly, the case betrays a level of misunderstanding about the operation of the CISG. Buyer's counsel sought to plead, inter alia, both the CISG and Sale of Goods Act as alternatives. Clearly, the CISG's application excludes that of the Sale of Goods Act, and had the seller's counsel made such an application, the Sale of Goods Act claims should have been struck out."[4]

As a matter of fact in all three quoted cases the editorial remarks by Zeller and Spagnolo criticise the same matter.

Furthermore when discussing the issue of damages, the court distinguished between expectation interest and reliance interest. It is generally accepted that the CISG specifically article 74 will supply the same answer in both cases. The court noted correctly that article 74 is applicable. However when discussing the amount of damages and which damages are allowable the court referred to domestic common law cases which is in breach of article 7 CISG.. Not a single "international" case was considered which would have shed light on the discussion. It is also interesting to note that article 35 was noted but the important articles 38 and 39 CISG are not mentioned at all. It is without doubt that article 35 cannot be invoked if compliance with articles 38 and 39 has not been established. In sum; again a disappointing case.


FOOTNOTES

1. Castel Electronics Pty Ltd v Toshiba Singapore Pte Ltd [2010] FCA 1028 (28 September 2010), at para 53.

2. Ibid at para 115 and 119.

3. Ibd para 122.

4. Lisa Spagnolo, Editorial remarks, Australia 27 May 2004 Supreme Court of Western Australia - Appellate Court (Summit Chemicals v Vetrotex Espana) [http://cisgw3.law.pace.edu/cases/040527a2.html]

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (English): AustLII website <http://www.austlii.edu.au/au/cases/cth/FCA/2010/1028.html>

Translation: Unavailable

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Pace Law School Institute of International Commercial Law - Last updated August 4, 2011
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