What rights does a Vendor have to reclaim goods sold after delivery where the Purchaser becomes insolvent and is unable to pay?
In a recent Supreme Court decision of Gilgandra Marketing Co-Operative Limited v Australian Commodities and Merchandise Pty Limited and Others the parties entered into Contracts for the sale of a large quantity of wheat which was supplied from the Narrabri area to the Sydney container terminal and then shipped to Bangladesh.
At the time of litigation, the wheat was at the port in Bangladesh but the purchaser had not taken physical delivery.
The seller instituted proceedings seeking among other things a right to take possession of the wheat based on a claim that the title to the goods had not passed to the Purchaser because the Purchaser had not taken actual delivery of the wheat from the carrier.
The Judge held that under the specific Contract terms, title in the wheat passed to the purchaser on the delivery of the wheat to the Sydney terminal and that was deemed to be delivery to the Buyer at that time.
The Vendor also argued that under Section 42(1)(b) and (c) of the Sale of Goods Act (NSW) that where the Purchaser becomes insolvent, the unpaid vendor has a right of stopping the goods in transit even if the title in the goods may have passed to the purchaser.
The Court agreed with this argument and the Vendor was entitled to re-take possession of the goods because they were still in the course of transit.
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