Helicopter Sales Pty Ltd v Rotor-Work Pty Ltd
132 CLR 14 ALR 77
(Judgment by: MENZIES J)
Between: HELICOPTER SALES PTY LTD
And: ROTOR-WORK PTY LTD
Judges:
Barwick CJ
Menzies JStephen J
Mason J
Jacobs J
Subject References:
Contract
Implied warranty
Repair
Whether warranties excluded
Practice and procedure
Third party
Leave to defend
Legislative References:
Rules of the Supreme Court (Qld) - O 17, r 4
Judgment date: 17 September 1974
ADELAIDE
Judgment by:
MENZIES J
In his judgment, which I have had the advantage of reading, Stephen J. has set out the question of law which has to be decided here and the facts which give rise to it.
Were it not for the decision of the House of Lords in Young & Marten Ltd v McManus Childs Ltd, [F1] I would have thought it beyond question that the installation of the defective bolt by the defendant was not in breach of any implied term of its contract with the plaintiff to do the work and provide the parts necessary for the servicing of the plaintiff's Bell helicopter. The bolt, as it had to be before it could be installed, was manufactured by the Bell Helicopter Co of Fort Worth, Texas, for the purpose for which the defendant used it, and certified on behalf of the Bell Helicopter Co to have been manufactured in accordance with the "applicable design and process specification requirements" and to have been "found by inspection to be air-worthy". To add to this, by implication, a term that the defendant - which gave the certificate that the bolt had been so manufactured and inspected - itself impliedly warranted the bolt to be of merchantable quality and reasonably fit for the purpose for which it was being used would not, in the circumstances, have been reasonable. The defendant, as the plaintiff well knew, was in no position to give such a warranty. It did not have the specifications according to which the bolt was made; it had no means of testing the bolt; it had no expertise to determine whether or not it was suitable for the purpose for which it was being used. Both the plaintiff and the defendant plainly enough were relying upon the manufacturer to have made a bolt suitable for the purpose for which it was to be used and of airworthy quality.
It was argued, however, that the decision of the House of Lords in Young & Marten Ltd v McManus Childs Ltd [F2] required the implication in the contract between the plaintiff and the defendant of a warranty, by the defendant, that the bolt was of merchantable quality. The House of Lords, however, did no more than decide that the fact that a builder had specified tiles made by one manufacturer only did not exclude the ordinary implied warranty of quality on the part of the sub-contractor who supplied the tiles which it used in roofing houses under sub-contract with the builder. There can be no doubt about this as a general proposition. If, for instance, the sub-contractor used cracked tiles made by the specified manufacturer, there would clearly enough have been a breach of contract on the part of the sub-contractor. The hardship of the particular case lay in the fact that the tiles which the sub-contractor used had an undetectable defect which made them liable to crack in frosty weather. All the House decided was that the fact that the defect in the quality of the tiles was latent did not of itself exclude the implication of the warranty of quality. What their Lordships did was to apply what du Parcq J. had said in G. H. Myers & Co v Brent Cross Service Co [F3] that "a person contracting to do work and supply materials warrants that the materials which he uses will be of good quality and reasonably fit for the purpose for which he is using them, unless the circumstances of the contract are such as to exclude any such warranty". The House decided that the circumstances did exclude any warranty that the tiles were reasonably fit for use but did not exclude a warranty that they were of good quality. It is not without significance that, at the same time, their Lordships decided, in different circumstances, that such a warranty was excluded: Gloucestershire County Council v Richardson. [F4] Each case must depend upon its own circumstances and upon what is found to be the intention of the parties. The statement approved expressly recognizes that there can be circumstances that exclude the implication of such a warranty. Indeed, in Young & Marten Ltd v McManus Childs Ltd [F5] it was said that, had the parties been aware that the tile manufacturer would only sell on terms which excluded a warranty of quality on its part, that would be sufficient to exclude the implications of a warranty between the builder and the sub-contractor. The reason for this must be that the builder would understand that, in such circumstances, the sub-contractor would not itself give a warranty of quality. No warranty would therefore be implied notwithstanding that the attitude of the manufacturer would of itself make the builder the more anxious to obtain the warranty of his sub-contractor. Here it is clear that the defendant could not reasonably give a warranty of quality, and this was known to the plaintiff. The plaintiff knew that a new certified bolt, made by the Bell Helicopter Company to a particular specification and imported into Australia, would be used by the defendant. In my opinion both the parties contracted on this basis and no further warranty was intended.
The facts stated in greater detail by Stephen J. do, I think, establish circumstances which exclude the implication of a warranty of quality by the defendant.
I would allow the appeal and adopt the course proposed by Stephen J. to dispose of the matter.