By Ashleigh Best, University of Technology Sydney

This case note was originally published in the Animal Law Case Book, ed Sophie Riley (1st ed, 2015) and has been republished with minor edits by Voiceless with permission from the editor.   

Citation: Elder Smith Goldsbrough Mort Ltd v McBride [1976] 2 NSWLR 631  

Court – Supreme Court of New South Wales
Judge – Sheppard J

FACTS OF THE CASE

The vendors reared cattle studs, selling them both privately and at auction. At the 1970 Royal Easter Show, they displayed a bull named Midgeon Supreme. Elder Smith the plaintiff and auctioneer employed by the vendors, informed McBride, the ultimate purchaser and defendant, that he believed Midgeon Supreme to be the best bull at the show. On the 24 March 1970, McBride purchased Midgeon Supreme for $21,000. The contract for sale included an exclusion clause: it stated that the bulls, having been made available for inspection, would be purchased with all faults, and the vendors would not be liable in this respect.

The circumstances surrounding the purchase made it clear that Elder Smith and the vendors intended to sell a stud bull, that the bull would be used for breeding and that McBride purchased the bull with the intention of using it for breeding. On 15 April 1970, the bull serviced three cows, but failed to impregnate any of them. The following month, a veterinary surgeon assessed the bull’s semen, discovering that it was of poor quality. Another veterinary surgeon was consulted and noted that the bull had suffered severe testicular degeneration since April or May 1970 and that it was likely to be permanently sterile.

The catalogue contained an exclusion clause that stated that as the bulls had been made available for inspection, they were to be purchased with any defects. The exclusion clause operated to prevent the vendors from being liable for any faults in the bulls they sold which had been inspected by purchasers.

Elder Smith brought an action against McBride to recover the amount to which he was entitled from the sale of the bull. McBride then brought third party proceedings against the vendors, seeking indemnity in the form of compensation for any losses to be incurred from Elder Smith’s claim.

THE ISSUES

  • Whether Elder Smith was entitled to claim the purchase price of the bull in accordance with the contract. This was to be decided in light of McBride’s arguments that: McBride did not receive the value in the bull provided for in the contract; Elder Smith was negligent in advising McBride that the bull was suitable for the purposes of reproduction; and that the unsuitability of the bull for such purposes amounted to a breach of contract.
  • Whether the sale of an infertile bull to McBride amounted to a breach of contract between McBride and the vendors.
  • Whether the exclusion clause included in the contract prevented the vendors from being liable for the defect.

THE DECISION

The Court held that Elder Smith was entitled to assume the Bull’s fertility.

However, Sheppard J also held that as a matter of fact, based on the evidence, the bull was infertile at the time of sale and the purchaser had bought a “breeding bull”.

Whether the plaintiff was entitled to claim the purchase price of the bull

With respect to the first issue, Sheppard J found that Elder Smith was entitled to assume the Bull’s fertility and to treat him as a breeding bull.

Whether the sale of an infertile bull to the defendant amounted to a breach of contract

With respect to the second issue, Sheppard J held that the vendors had breached the contract. Sheppard J established that each of the parties intended to contract for a “stud breeding bull.” The fact that any inspection of the bull would not have exposed its infertility, combined with the circumstances which suggested that the bulls for sale were suitable for breeding purposes, satisfied Sheppard J that the bull had been sold by the description that he was a breeding bull. Therefore, by the operation of s 18 of the Sale of Goods Act 1923 (NSW), the contract contained an implied condition that the goods would correspond with their description, and as such, delivery of a sterile bull rather than a breeding bull amounted to a breach of this condition.

The effect of the exclusion clause

In relation to the third issue, Sheppard J interpreted the exclusion clause contained in the catalogue so as to release the vendors from liability only in respect of faults which could be detected upon inspection. As the bull’s infertility could not be detected on a visual inspection, the vendors remained in breach of contract. Sheppard J consequently ordered that McBride was entitled to receive the sum paid for the bull as a breeding bull, less his actual value for the purposes of slaughter; the award of damages amounted to $20,500.

COMMENTARY

This case provides another example of how the law considers animals to be items of personal property. Consumer protection legislation, such as the Sale of Goods Act 1923 (NSW), accordingly applies to transactions involving animals. In this way, the case also demonstrates the law’s recognition that animals can be valued in monetary terms. Such value may be determined by the animals’ innate capabilities, or by the income they are able to generate.

Additionally, the case highlights the breadth of rights attaching to animal ownership. Although the bull was bought for breeding purposes, it was permissible for him to be sent to slaughter.

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