Sale of goods test applied to bus body contracts: completion on delivery, not a works contract.

Construction and fitting of bus bodies on customer-supplied chassis was treated as a sale of goods, not a mere contract for work and labour, because the agreement showed an intention that the completed bus body would pass only on delivery as a distinct chattel. The billing terms, delivery clauses, warranty and risk provisions, and absence of any vesting of materials or unfinished bodies in the customer during construction supported that characterisation. Building to specification and the involvement of labour and skill did not change the legal nature of the transaction. Sales tax was therefore leviable.

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Issues: Whether the construction and fitting of bus bodies on chassis supplied by customers amounted to a sale of goods chargeable to sales tax, or a contract for work and labour.

Analysis: The decisive test was whether the contract, read as a whole, showed an intention to transfer a chattel as a chattel for consideration. The Court treated the agreed descriptions, the billing structure, the clauses dealing with delivery of the complete bus, the warranty and risk provisions, and the absence of any stipulation vesting the materials or unfinished bodies in the customer during construction as indicating that the completed bus body remained the builder's property until delivery. The circumstance that the bodies were made to specification, or that labour and skill were involved, did not alter the legal character of the transaction. Applying the principle earlier recognised in the bus-body and other sale-of-goods cases, the Court distinguished contracts where the materials were to vest in the customer during construction or where the work remained essentially a composite works contract.

Conclusion: The supply of bus bodies fitted to customer-supplied chassis was a sale of goods and not merely a works contract, so sales tax was leviable.

Ratio Decidendi: Where, on a true construction of the agreement, the completed bus body is intended to pass to the customer only on delivery as a distinct chattel, the transaction is a sale of goods notwithstanding that the body is built to specification and fitted to chassis supplied by the customer.

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