Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424 PDF

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Name of Case

Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424

Citation and Court

High Court of Australia Dixon CJ, Williams, Webb, Fullagar, Kitto JJ

Material Facts 

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Commonwealth introduced a government subsidy scheme, in which purchase of domestic wool would be subsidized at a certain rate so as to allow manufacturers to supply products at low prices Australian Woolen Mill (AWM) purchased large quantities of domestic wool Scheme was discontinued 2 years later  however, commonwealth announced that it would ensure each manufacturer would have stated amount of wool in stock till a certain date AWM exceeded the statement stockpile of wool therefore were required to pay the subsidiary fee AWM paid AWM now seeking to compensate that amount

Legal Issue The legal issue to be determined was whether Australian Woolen Mill’s purchase of wool was consideration for a promise by the government to pay the subsides? Relevant Law Consideration must be bargained for? (?) Application of Contract put forward is said to be constituted by an offer of a promise for Law to the Facts an act (offer accepted by the doing of the act) in a contractual obligation e.g. Carlill v Carbolic Smoke Ball Co. The relation of quid pro quo ( a favour or advantage granted in return for something.: technical doctrine of consideration  No request to purchase wool could be implied statement of policy rather than implied request  prevence of request usually indicate contract however, not in this case  considerations (benefit contravened on the promiser) or the determinant (purchase of wool by AWM) suffered by promise must be given in return for the promise  AWM’s purchased wool was not good consideration for Cth’s promise to pay subsides, as it satisfied benefit/detriment test and not quid pro quo relationship/change (this for that) between the promise and the act relied on as a consideration for that promise Conclusion

“It is necessary… that it should be made to appear that the statement or announced which is relied on as a promise [here the subsidy statement] was really offered as consideration for the doing of the act, and the act [buying and using wool as directed] was really done in consideration of a potential promise inherent in the statement or announced. The appeal was dismissed....