Haines Bros Earthmoving Pty Ltd v Rosecell Pty Ltd

(2016) 92 NSWLR 47; [2016] NSWCA 112

NSW Court of Appeal

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Interrogate

Catchwords

1. Torts
2. › Conversion
3. › Unauthorised sale of goods by third party
4. › Defence under Sale of Goods Act
5. › Whether owner precluded by conduct from denying seller's authority
6. › Sale of Goods Act 1923 (NSW), s 26(1)
1. Estoppel
2. › Estoppel by omission
3. › Duty to speak or act
4. › Whether owner owed duty to buyer to make claim to goods known or discoverable
5. › Whether silence or inaction constituted conduct sufficient to give rise to estoppel
6. › Requirement of equivalence of factual knowledge between parties
7. › Sale of Goods Act 1923 (NSW), s 26(1)
1. Sale of Goods
2. › Nemo dat quod non habet
3. › Exception where owner precluded by conduct from denying seller's authority
4. › Whether exception depends on principles of common law estoppel
5. › Whether statutory language operates independently of estoppel principles
6. › Sale of Goods Act 1923 (NSW), s 26(1)
1. Estoppel
2. › Estoppel by omission
3. › Causation
4. › Whether owner's silence was real and proximate cause of buyer's decision to purchase
5. › Whether buyer relied on owner's inaction or on independent observations and assumptions

Quick Take

The defence under s 26(1) of the Sale of Goods Act 1923 (NSW) requires the buyer to establish common law estoppel, including a duty owed by the owner to the buyer. That duty can only arise where there is shared knowledge between owner and buyer of the situation in which the transaction occurred. An owner's mere knowledge that a dishonest person has possession of goods and could make unauthorised sales does not give rise to such a duty; the owner must also know that the person is holding himself out to a particular buyer as authorised to sell. Where the owner's inaction results from duress rather than negligence, and the buyer relies on independent observations rather than the owner's silence, the s 26(1) defence will fail.