Cumplimiento de la UEFA

Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 [11.09], [11.10]

Facts  An Australian company (Hospital Products) was USSC’s agent in Australia.

Hospital Products was to be the sole Oz distributor for a product made by USSC, called Auto-Suture. The contract (written) between Hospital Products and USSC stated that Hospital Products was to use its “best efforts” to promote the sale of Auto-Suture. Failure to do this would be breach of contract (and this happened and was found in the court case).

 Whether there’s a breach of fiduciary duty.

 Hospital Products had developed a competitor for Auto-Suture and pursued their own interests in selling their own product rather than

Auto-Suture when the opportunity arose – this is what USSC complained about.

 Either party were free to terminate the contract at any time. The

agreement didn’t define what quantities of Auto-Suture had to be sold by Hospital Products. They didn’t have to purchase a quantity of Auto-Suture.

 Whether the relationship between Hospital Products and USSC was a contractual relationship and, in addition, a fiduciary relationship.

 Hospital Products v United States Surgical Corporation (1984) 156 CLR 41, 66 per Gibbs CJ:

i. ‘One person is obliged, or undertakes, to act in relation to a particular matter in the interests of another and is entrusted with the power to affect those interests in a legal or practical sense’;

ii. ‘The special vulnerability of those whose interests are entrusted to the power of another to the abuse of that power’

Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337

Facts State Rail contracted with Codelfa to excavate the site for the Eastern suburbs railway line. Codelfa was required to complete the work in 130 weeks from the commencement date of 7 March 1972. Codelfa commenced work on that date operating three shifts a day. The work generated considerable noise and vibration and on 28 June 1972, local residents successfully obtained

injunctions restricting the hours of work to between 6am and 10pm. Codelfa settled the subsequent litigation by abiding by those hours and further restrictions on the removal of soil on Sundays. Codelfa then claimed from State Rail an additional amount of money to cover the additional costs and the lost profit brought about by the litigation. Codelfa asserted that there was a warranty implied into the contract that if it were restrained from working, then State Rail would indemnify Codelfa from any loss brought about by such a restraint.

Outcome Held: The court finds for State Rail, only on the issue of the implied term (not on the issue of whether the contract had been frustrated – Codelfa won on that issue), that is, a term covering the ramifications of the injunction could not be implied. The court applied Lord Simon’s five (from BP Refinery (Westenport) Pty Ltd –v- Shire of Hastings (1977) 180 CLR 266) conditions to ground an implied term.

Con-Stan Industries of Australia v Norwich Winterhur Insurance (Australia) (1986) 160 CLR 226

Facts In 1976, Stan employed Bedford as their insurance brokers. In 1977, Con-Stan sought insurance to cover motor vehicles, workers’ compensation and manufacturer’s output. Norwich was selected as the insurer. The premiums were paid to Bedford but Bedford did not pay them to Norwich. Norwich moved to wind up Bedford but did not recover the premiums. Norwich then

sued Con-Stan for the premiums.

Issue Was there an implied term in the contract of insurance to the effect that the broker was liable to pay and not C?

Outcome Held: The court finds in favour of Norwich Insurance, on the basis of a four point test.

(i) The existence of a custom or usage will justify the implication of a term into the contract is a question of fact;

(ii) There must be evidence that the matters relied on are so well known and acquiesced in that everyone making a contract in the situation can reasonably be presumed to have imported a term embodying them into the contract;

(iii) A person may be bound by custom notwithstanding the fact that he had no knowledge of it; and

(iv) But a term will not be implied into a contract on the basis of custom where it is contrary to the express terms of the agreement.

The court stated that this case failed the second test.

CONSTRUCTION OF CONTRACTUAL TERMS – other notes Gordon v Macgregor (1909) 8 CLR 316 [12.07C]

Facts P (Macgregor, R before HC) was a timber merchant. He sued on a contract to supply a quantity of log timber. He proved that a document has been signed by the parties which said that the logs were to be of an average girth not less than 10ft 6in. No time for delivery was stated. D said that two essential terms had not been included in writing:

(1) Delivery was to commence 3 months after date of contract (2) Min. girth of 6ft had been agreed upon.

SC of QLD gave a judgment for D n the basis that the contract included the alleged terms.

Issue Whether D could prove the document, which was executed, did not express all the terms of the contract.

Outcome HC agreed with the FC, with the result that P retained the judgment for $2500 damages for breach of contract.

Appeal dismissed.

Prenn v Simmonds [1971] 1 WLR 1381 [12.13C]

Fact Simmonds (P, R before House of Lords) was employed as MD and lead technician of a company owned by RTT. Under cl of an agreement, P was entitled to acquire from D $% interest in RTT. However, P’s right was subject to provisos set out in cl2.

D contended that as less than $300,00 provides were available for dividend over the relevant period, cl2(b), was not satisfied. D based his contention on the profits of RTT along.

P argued that the required amount had been exceeded because ‘profits’

meant the consolidated profits of the group of companies consisting of RTT and its subsidiaries. In order to support this he sought to reply on extrinsic evidence, namely prior negotiations of the parties.

Issue What was the meaning of the phrase ‘profits…available for dividend?

Were the prior negotiations of parties admissible on the interpretation issue?

Outcome Decision of COA upheld. Simmonds was entitled to acquire 4% interest in RTT.

Appeal dismissed.

Schuler -- a machine tool manufacturer -- entered into a contract with Wickman in which Wickman would have the sole right to distribute one of S's products in the UK. The contract had a term 'it shall be a condition of this agreement that' W visit six specified dealers one a weekly basis to promote S's product. On a few occasions W failed to do this. S repudiated the contract, claiming that W had breached a condition. The House of lords held that stating that something was a condition was evidence that it was, but not irrebutable. In this case, they reasoned that the parties could never have intended a breach of this nature to result in the destruction of the contract when they first entered into it.

Pym v Campbell (1856) 119 ER 903 [12.23C]

P (Pym) agreed to sell D three one-eight parts of the benefits which might accure from his invention. It was alleged to be a term of the agreement that P would explain the invention to two engineers appointed by D and if they approved the invention the sale would go through. One of the engineers did not approve of the invention. D alleged that this meant they were not contractually bound to the purchase

At trial the verdict was in favour of D. P btained the rule nisi for new trial on grounds of misdirection

Resolution: The rule of nisi was discharged. Favour of D.

Rule Dismissed.

P agreed in writing to lease to D some sound reproduction equipment as described in a schedule. When P sued for the hire, D said by way of set-off that only second hand equipment had been provided instead of new equipment. D wanted to submit evidence to this effect. This matter was heard as a preliminary issue.

Resolution: Appeal dismissed. HC did not consider that there was any obligation on RCA to ensure that the equipment was new. D’s claim therefore failed and D was liable to pay for the hire.

Gilberto v Kenny (1983) 48 ALR 620 [12.39C]

Mrs Kenny (P, R before HC) agreed the existence of an agreement to purchase property from A. The document headed ‘offer and

acceptance’, which was signed by R and A, stated that R agreed t pay for the land. But the document also said that A agreed to sell the land to Mr Kenny (they intended the purchase the land together). When A refused to go on with the transaction.

Resolution: Appeal dismissed. Court was able to resolve the patent ambiguity in the contract by recourse to extrinsic evidence. The order for specific performance was confirmed.

J Evans & Sons

 Defendant (carriers) shipped machinery for plaintiffs

 Used standard conditions used by trade

 Pre-1967, defendants used trailers and agreed machinery would always be carried below deck

 1967, defendants switched to containers and assured plaintiffs machinery would still be stored below deck

 BUT new standard conditions said could be stored on deck

 Later plaintiff’s good were washed off deck

 Plaintiff sued for breach of contract successfully Resolution: Appeal allowed because COA considered that parol evidence rule did not prevent P from proving that the contract was partly written and partly oral.

Court held defendants could not rely on written contract only and allowed plaintiffs to adduce oral evidence

Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337

Facts State Rail contracted with Codelfa to excavate the site for the Eastern suburbs railway line. Codelfa was required to complete the work in 130 weeks from the commencement date of 7 March 1972. Codelfa commenced work on that date operating three shifts a day. The work generated considerable noise and vibration and on 28 June 1972, local residents successfully obtained

injunctions restricting the hours of work to between 6am and 10pm. Codelfa settled the subsequent litigation by abiding by those hours and further restrictions on the removal of soil on Sundays. Codelfa then claimed from State Rail an additional amount of money to cover the additional costs and the lost profit brought about by the litigation. Codelfa asserted that there was a warranty implied into the contract that if it were restrained from working, then State Rail would indemnify Codelfa from any loss brought about by such a restraint.

Outcome Held: The court finds for State Rail, only on the issue of the implied term (not on the issue of whether the contract had been frustrated – Codelfa won on that issue), that is, a term covering the ramifications of the injunction could

not be implied. The court applied Lord Simon’s five (from BP Refinery (Westenport) Pty Ltd –v- Shire of Hastings (1977) 180 CLR 266) conditions to ground an implied term.