Accurate advice allows confident defence of claim

Prior to engaging Jack Lindgren

The client, a company, had engaged a subcontractor to provide goods to enable it to comply with its obligations under a head contract. The terms of its contract with the subcontractor provided the client: –

  1. was entitled to inspect the goods prior to their delivery; and,
  2. was only required to make payment for goods supplied by the subcontractor once it had accepted the relevant goods.

The subcontractor subsequently (and contrary to the terms of the contract) refused to permit an inspection of the goods until it had received payment in full for them. The subcontractor’s refusal to allow an inspection of the goods caused the client to breach the contract with its own head contractor, which subsequently terminated that contract.

The subcontractor commenced proceedings against the client seeking payment for the goods, asserting that there had been a “deemed acceptance” of the goods for the purposes of the Sale of Goods Act 1923 (NSW). The client subsequently sought legal advice.

Our role

A comprehensive letter was sent to the subcontractor plaintiff’s lawyers, stating that there had been no “deemed acceptance”, that the plaintiff’s claim could not succeed and providing detailed reasons as to why this was the case. The plaintiff nevertheless proceeded to pursue its claim to hearing.

Outcome

Our advice and thorough investigation enabled the client to be confident of its position which resulted in successfully defending the claim whilst minimising legal costs .  Because of the evidence we presented at the hearing, the Magistrate found that the plaintiff’s claim could not succeed for exactly the reasons stated in the initial letter provided to the plaintiff subcontractor’s lawyers. The subcontractor plaintiff was ordered to pay the client’s costs of the proceedings.