Metropolitan Knitting and Hosiery Company Limited (In Liquidation) v Thomas Burnley and Sons Limited [1924] HCA 51

Metropolitan Knitting and Hosiery Company Limited (In Liquidation) v Thomas Burnley and Sons Limited [1924] HCA 51

To satisfy section 17 of the Statute of Frauds for enforcement of an unwritten contract for sale of goods, acceptance or payment must be shown to have occurred under the contract alleged, not merely any contract nor by reference to the buyer's subjective belief; the jury were, in error, directed that the defendant’s honest belief as to the contractual state of affairs was relevant, and this vitiated the verdict. Accordingly, the majority of the High Court determined that the verdict should be restored as the judge’s direction was not in error.

Parties
Defendant/appellant: The Metropolitan Knitting and Hosiery Company Limited (in Liquidation); Plaintiff/respondent: Thomas Burnley & Sons Limited
Jurisdiction
Australia
Judgment Date
01 December 1924
Procedural Posture
Appeal / On Appeal From the Supreme Court of New South Wales (full Court) to the High Court of Australia; Appeal Determination and Orders Made
Outcome
Appeal allowed; verdict for defendant/appellant restored
Legal Topics
Statute of Frauds, Acceptance and Payment Under Contract, Part Performance, Jury Directions, Sale of Goods Act
Contract Law Sale of Goods Statute of Frauds Acceptance and Payment Under Contract Part Performance Jury Directions Sale of Goods Act

Case Brief

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Parties

The Metropolitan Knitting and Hosiery Company Limited (in Liquidation)

Defendant/appellant

Thomas Burnley & Sons Limited

Plaintiff/respondent

Procedural Posture

Appeal / On Appeal From the Supreme Court of New South Wales (full Court) to the High Court of Australia; Appeal Determination and Orders Made

Legal Issues

  1. 1 Whether acceptance of or payment for goods was sufficient part performance to satisfy section 17 of the Statute of Frauds and enable enforcement of an unwritten contract for sale of goods
  2. 2 Whether the trial judge’s direction to the jury as to acceptance/payment being referable to the contract sought to be enforced was correct

Ratio Decidendi

To satisfy section 17 of the Statute of Frauds for enforcement of an unwritten contract for sale of goods, acceptance or payment must be shown to have occurred under the contract alleged, not merely any contract nor by reference to the buyer's subjective belief; the jury were, in error, directed that the defendant’s honest belief as to the contractual state of affairs was relevant, and this vitiated the verdict. Accordingly, the majority of the High Court determined that the verdict should be restored as the judge’s direction was not in error.

Court Disposition

Appeal allowed; verdict for defendant/appellant restored

Orders

  • Judgment of the Full Court set aside
  • Verdict of the jury for the defendant restored