Garmin v B & K Holdings (Qld) Pty Ltd [2018] QCA 353

This case was an appeal against a refusal of the primary judge to grant summary judgment.

 RELEVANT GLOSSARY

A claim for damages is a claim for compensation for a loss suffered by one person as the result of another person’s action or failure to act.

A debt claim on the other hand is a known amount that is owed by the debtor to the creditor. For example, if a gardener quotes $100 to mow the lawn and the quote is accepted but the work is then not paid for, the debt is $100.

A retention of title clause is a provision in a contract for the sale of goods that title to the goods remains with the seller until the purchaser fulfill certain obligations.

BACKGROUND AND ARGUMENTS AT FIRST INSTANCE

The plaintiff alleged that the defendant’s failure to pay for the goods delivered and invoiced by the plaintiff under the ‘Dealer Agreement’ entitled the plaintiff to recover the relevant amount as a debt. The defendant, relying on the retention of title clause in the agreement, claimed that the invoiced goods were not sold to it as the property in the goods did not pass, but rather that the defendant held them as a bailee. Therefore, the defendant argued that the plaintiff was entitled to the possession of the unsold goods rather than to their price as a debt owed. 

 WAS THE PLAINTIFF ENTITLED TO SUMMARY JUDGMENT?

The plaintiff in this case claimed its entitlement to the invoiced amount as a debt instead of a usual seller’s remedy for a breach of a contract of sale – damages (Ledger v Cleveland Nominees Pty Ltd [2001] WASCA 269). This argument was advanced either on the basis of the plaintiff’s contractual right to sue in debt or on the basis of the s51 Sale of Goods Act 1923 (NSW).

Sale of Goods Act Argument

Section 51(1) of the Sale of Goods Act provides that if under a contract of sale the property of the goods has passed to the buyer, and the buyer refuses to pay for the goods, the can sue against the buyer for the price of the goods.

The main complication for the plaintiff’s ‘Sale of Goods Act Argument’ was the retention of title clause, which provided that until the defendant has paid for the goods, the property in them remains with the plaintiff. The issue was whether property to the goods would have ever passed to the defendant without the defendant paying for them. Holmes CJ considered that in this case the agreement intended for the title to never pass to the defendant and instead to pass direct to the ultimate purchaser (the first person who in good faith purchases such new vehicle for purposes other than resale). Therefore, s 51(1) of the Act would not permit the plaintiff to sue for the price of the goods.

Section 51(2) states that if under a contract of sale the price is payable on a certain day irrespective of delivery, and the buyer refuses to pay such price, the seller can sue against the buyer for the price of the goods, although the property in the goods has not passed. As the agreement in this case linked the amount invoiced to the timing of the delivery, the plaintiff was unable to sue under this section.

Contractual argument

Her Honour stated that parties are able to reach an agreement regarding a price for goods being recoverable as a debt, despite the provisions of the Sale of Goods Act (Joinery Manufactures Ltd (1951) 82 CLR 621). However, there was no express term in the agreement as to this effect, therefore, the issue was whether the parties have impliedly agreed as to the circumstances in which the price for the goods is recoverable. The primary judge concluded that to resolve this issue it would be necessary to consider extrinsic evidence and surrounding circumstances, therefore,  raising the necessity for the trial.

CONCLUSION: WAS THE PLAINTIFF ENTITLED TO SUMMARY JUDGMENT?

Rule 292(2) of the Uniform Civil Procedure Rules confers on a judge a discretion to give summary judgment where he or she is satisfied that the defendant has no real chance of successfully defending the plaintiff’s claim and the need for a trial is absent.

The plaintiff in this case has failed to establish its Sale of Goods Act argument, while its contractual argument was not capable of being resolved without a trial. Therefore the Court of Appeal found the primary judge rightfully exercised her discretion to refuse a grant of summary judgment.