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Renard Construction v Minister for Public Works, Court of Appeals, NSW, 12 March 1992, for commentary click HERE this case is of importance in relation to Priestly J who in an obiter refered to article 7(1) good faith.

Roder Zelt und Hallenkonstruktionen GmBH v Rosedown Park Pty Ltd, 13 ACLC 776 (extracts) [1995] 17 ACSR click HERE for case text and commentaries [The same case is also obtainable from austlii an Australian data base click HERE ]

Downs Investment Pty Ltd v Perwaja Steel SDN BHD [2000] QSC 421 (17 November 2000) click HERE for text

South Sydney District Rugby League Football Club v News Ltd [2000] FCA 1541 (3 November 2000) in an obiter Finn J. refered to the uncertain stage of good faith in Australian domestic law and noted "in passing" that the States have enacted article 7(1) of the CISG into Domestic law. Click HERE to view relevant text

PERRY ENG P/L (REC AND MAN APPT'D) v BERNOLD AG No. SCGRG-99-1063 [2001] SASC 15 (1 February 2001) [The same case is also obtainable from austlii an Australian data base click HERE ]

This case is an illustration and warning to those who ignore the CISG or are not aware that an international sale is governed by the CISG. A plaintiff in Australia tried to sue a Swiss firm by relying on the South Australian Sale of Goods Act. As Judge Burley correctly pointed out the CISG is part of the law of South Australia and hence the CISG and not the Goods Act is applicable.

It is surprising that the earlier four appearances by Perry Engineering were not as forcibly rejected as Judge Burley did. Noticeably Judge Burley commented that: "The statement of claim has been drawn up on the assumption that the South Australian Sale of Goods Act applies. This seems to me to be fatal to the plaintiff's ability to proceed to judgment ..."

The simple fact is that the CISG cannot be ignored and that ignorance of the CISG can result in unnecessary expenses for clients.

Downs Investments Pty Ltd (in liq) v Perwaja Steel SDN BHD [2002] 2 Qd R 462. This case is available under the Pace Website click HERE

Downs Investments Pty Ltd (in liq) v Perwaja Steel SDN BHD [2002] 2 Qd R 462

Ginza Pte Ltd v Vista Corporation Pty Ltd [2003] WASC 11 (17 January 2003) This case is available from the Australian Website click HERE

Vista imported contact lens solutions from Ginza, which is incorporated and conducts business in Singapore. Two express clauses in the contract are of importance (1) that goods supplied would be manufactured according to the requirements of the Australian Therapeutic Goods Administration (TGA); and (2) hat the goods would be sterile.

In brief the goods upon examination by the TGA were found to be contaminated with bacteria. An audit of the Singapore plant by the TGA resulted in a recommendation that all the goods manufactured by Ginza were to be recalled. Ginza sued for payment for outstanding invoices whereas Vista sued for damages pursuant to articles 50 and 51(1) of the CISG.

This case is characterized by a lack of a basic understanding of the CISG. It is disappointing to note that relevant international case law or academic writing has not been used. It is interesting to note that counsel for the defendant attempted to rely upon the provisions of “the Sale of Goods Act 1895 (WA) or the CISG”. It is patently clear that pursuant to article 1(1) the CISG is the only applicable law in this case. However Barker J in a rather tentative approach commented that “on the face of it, the terms of the Convention would appear to govern all relevant issues.” Furthermore Barker J in several instances made comments such as that fitness for purpose and merchantable quality “find expression both in the Sales of Goods Act and the CISG.” Such observations are irrelevant as only the CISG is applicable.

Article 35 was correctly isolated but logically there should have been an inquiry whether articles 38 and 39 as well as article 40 are applicable. This question was never addressed by either party. The facts are not clear enough to determine whether the seller could have relied on article 38 and 39.

The court found that the buyer could rely on articles 50, 51(1) and 74. Again one can only assume that in this particular case article 50(2) does not apply, as the whole factory was declared unsafe. In essence the buyer should have avoided the contract under article 25 as the seller has committed a fundamental breach.

Playcorp Pty Ltd v Taiyo Kogyo Limited [2003] VSC 108 (24 April 2003) This case is available from the Australian Website Austlii click HERE

This is another disappointing case where the CISG should have been applied but was in essence ignored. It appears that the CISG has not fallen on fertile ground in Australia.

This case between an Australian buyer and a Japanese seller deals with a breach of a distribution agreement as well as a claim for damages for the supply of defective goods. As there was no choice of law clause in the contract the CISG namely article 35 is applicable. As far as the distribution agreement is concerned domestic law needs to be applied pursuant to article 4.

It is astounding to note that the defence argued that the CISG is not applicable because Japan is not a signatory to the convention. The fact that they submitted to a Victorian court would have made it clear - and the court noted it- that they submitted to Victorian law. However equally astounding is the fact that the plaintiff and the court used terms contained in s 19 of the Goods Act 1958 Vic such as fitness for purpose and merchantable. The Court noted:

“It was not suggested that there was any material difference or inconsistency between the provisions of art 35 and s 19(a) and (b) and because of that and the way the case was conducted, it is unnecessary to consider whether there is. Counsel proceeded on the basis that there was no material difference or inconsistency.”[1]

The question is not whether there is an inconsistency the simple fact is the Goods Act does not apply. The CISG does not use remedial terms such as breach of warranty or condition. Furthermore the remedial regime of article 35 is different to the one prescribed by s.19. The court did note that there was difficulty and uncertainty in the ascertainment of damages.

Article 74 should have been the first step in looking for remedies or article 25 if a fundamental breach is envisaged. Instead the court looked at domestic case law for guidance and never consulted the CISG. It is well established in academic writing and case law that he CISG does not permit the use of domestic law in the interpretative process. It has been suggested - and it is also my view - that a breach of article 7 can lead to a successful appeal in law no different to a misapplication of any article within the convention.

It is also interesting to note that the defence never explored articles 38 and 39. In brief the buyer must examine the goods within a short period and pursuant to article 39 looses the right to any remedy if he does not notify the seller of such defects within reasonable time after discovery of the defects. Furthermore the question of mitigation of damages pursuant to article 77 was also never addressed.

SUMMIT CHEMICALS PTY LTD -v- VETROTEX ESPANA SA [2004] WASCA 109 (27 May 2004) his case is available from the Australian Website Austlii click HERE

The facts are simple. Summit Chemicals the importer has to defend an action by Aqua Technics for the supply of defective goods. The defendant wishes to join the Spanish manufacturer as a First third party to the litigation. In this matter the defendant applied for leave to appeal as the court of first instance refused leave to amend third party statements of claim.

The appellant in the original statement of claim asked for damages for breach of contract and breach of duty of care. The legislation, which was relied upon, was the Sale of Goods Act and the Trade Practices Act, both domestic legislation. As this is an international Sale the CISG should have been applicable and not domestic legislation. Subsequently article 35 of the CISG was added to the claim. The court did not appreciate the fact that the original claim was wrong and that the inclusion of the CISG does created a new claim contrary to the view expressed by the court.[1] The court ought to have looked at Perry Enge, P/L v Bernold AG[2] where the court dismissed a claim as domestic law namely the Goods Act was pleaded and not the CISG. The court did note that “an amendment will not be allowed to introduce a new cause of action not previously raised which would be time-barred under any applicable law of limitations ..”[3]

The point was that the domestic limitation period of six years as well as domestic law determining amendments was taken as being relevant and not article 39 of the CISG, which puts the periods at two years. Of consequence is that the period go give notice “commences when the buyer discovered or ought to have discover the lack of conformity”[4]

The purchases dated from mid 1996 to 4/4/97. The court action started in July 97, which is outside the two-year limitation period. Amendment of claims are governed by domestic law as the CISG is silent on this issue however this cannot be done without notice being taken of article 39.

It appears that the goods were either not examined or no notice of lack of conformity was ever issued nor raised pursuant to articles 38 and 39. The only reference is a question as to moisture content which was answered by the seller. In essence the whole matter should have been argued on the question of the examination of the goods and whether a notice to that effect was issued within a reasonable time after discovery of the defects. Possibly article 40 could also be of relevance as it is not clear whether the seller new that the goods were faulty or he merely gave wrong advise.

[1] At para 41.

[2] [2001] SASC 15

[3] At para 42.

[4] CISG-AC Opinion no 2 Examination of the Goods and Notice of Non-Conformity: Articles 38 and 39, 7 June 2004; Rapporteur Professor Eric Bergsten, Emeritius, Pace University School of Law, New York. [http://www.cisg.law.pace.edu/cisg/CISG-AC-op2.html]

Hughes Aircraft Systems International v. Airservices Australia [1997] 558 FCA (30 June 1997)

Finn J. used the UNIDROIT Principles namely artile 1.7 as a means to interpret the applicable domestic law. He found that the principle of good faith was not recognised as such or at best its status was indecisive. The court stated that the principle of good faith is fundamental in international comercial contracts. For case text see austlii data base. click HERE (relevant pages are 39 to 48

Alcatel Australia Limited v. Scarcella & Ors Matter Nos CA 40797/97; CA 40798/97 [1998] NSWSC 483 (16 July 1998)

click HERE to view case. Used extensively to elaborte on the principle of good faith. The best domestic case illustrating the tentative foothold good faith has in Austalian domestic law