Australian Woollen Mills Pty Ltd v Commonwealth

Australian Woollen Mills Pty Ltd v Commonwealth,[1] is a leading Australian case regarding what is an offer that, when accepted, gives rise to a legally binding contract.[2]

Australian Woollen Mills Pty Ltd v Commonwealth
Coat of Arms of Australia.svg
CourtHigh Court of Australia
Full case nameAustralian Woollen Mills Pty Ltd v Commonwealth
Decided4 May 1954
Citation(s)[1954] HCA 20; (1954) 92 CLR 424
Case history
Appealed toPrivy Council
Court membership
Judge(s) sittingDixon CJ, Williams, Webb, Fullagar, and Kitto JJ

BackgroundEdit

From 1939 and for the duration of the war, the Australian government had in place a system of price control which governed both the price of wool and the sale price in Australia of woollen garments. The first step in resuming normal practice after the war was the resumption of selling wool by auction and private sale after 30 June 1946. The price at which Australian Woollen Mills could sell its goods were fixed by the Commonwealth Prices Commissioner until 20 September 1948. From 30 June 1946, the Australian government introduced a subsidy for the purchase of wool to be manufactured into garments in Australia and sold for local consumption. In 1948, the Australian government discontinued paying the subsidy, leaving Australian Woolen Mills with a substantial amount of wool on hand, for which the subsidy had not been paid.

As a result, Australian Woolen Mills sued for breach of contract, whilst the government denied liability on the grounds that there was no legally binding contract between the parties.

HeldEdit

The High Court ruled that there was no legally binding contract between the parties, as all the government had done was merely to make a statement on government policy (i.e. the subsidy), which alone was not an offer capable of acceptance.

The Court stated "what is alleged to be an offer should have been intended to give rise, on the doing of the act, to an obligation ... in the absence of such an intention, actual or imputed, and alleged "offer" cannot lead to a contract: there is, indeed, in such a case no true "offer"."[1]:p 457

Privy CouncilEdit

The Privy Council gave Australian Woolen Mills special leave to appeal, however dismissed the appeal, agreeing with the High Court that there was no contract to pay a subsidy.[3]

ReferencesEdit

  1. ^ a b Australian Woollen Mills Pty Ltd v Commonwealth [1954] HCA 20, (1954) 92 CLR 424 (4 May 1954), High Court.
  2. ^ Chetwin, Maree; Graw, Stephen; Tiong, Raymond (2006). An introduction to the Law of Contract in New Zealand (4th ed.). Thomson Brookers. p. 22. ISBN 0-86472-555-8.
  3. ^ Australian Woollen Mills Pty Ltd v Commonwealth [1955] UKPCHCA 3, 93 CLR 456; [1955] UKPC 34, Privy Council (on appeal from Australia)