SIRWAY ASIA PACIFIC PTY LTD V COMMONWEALTH OF AUSTRALIA  FCA
Federal Court of Australia – 18 September 2002
Sirway submitted a tender to the Department of Defence to supply chinaware under a standing offer agreement for a three year period. The chinaware was to meet a Specification, which involved testing the chinaware for water absorption, chipping and thermal shock.
Sirway’s tendered samples did not meet the specification and the Department of Defence held meetings with a director of Sirway, Mr Giammario (Giammario) regarding the failure. Despite the nonconforming samples, Sirway was the successfultenderer and signed a Standing Offer Agreement (SOA) in August 1997.
The Department of Defence raised two purchase orders. Several meeting were held over the next year regarding Sirway’s inability to provide the chinaware according to Specification. Eventually, Giammario wrote to the Department of Defence informing them the manufacturer was unable to meet the Specifications. The Specifications were reviewed by the Department and a testing laboratory, which concluded the Specifications were not too extreme.
The SOA was cancelled at a meeting in December 1998, as Sirway was unable to meet the Specifications. Sirway alleged, among other claims, that the Department had represented that it would accept chinaware that did not meet the specified standard.
Was the Commonwealth carrying on a business for the purposes of the Trade Practices Act 1974?
If so, was the Commonwealth liable for misleading and deceptive conduct under the Trade Practices Act 1974?