Category: Contract

Hall v Fox: QBD 19 Jul 2012

A security company had become insolvent. One shareholder, the claimant, re-established a business with a third party. His former co-shareholder then secured a consultancy agreement, assigning the benefit of that agreement to the defendant. The claimant now complained of harassment by the defendant. The defendant had an historic conviction for a serious offence, and was said to have used this to re-inforce his threats. The defendant denied the behaviour alleged.
Held: The defendant’s statements were consistent and credible. Not all those of the claimant were. The action failed, and the interim injunctions were set aside.

Judges:

Richard Seymour QC J

Citations:

[2012] EWHC 2210 (QB)

Links:

Bailii

Statutes:

Protection from Harassment Act 1997 3(1) 7(3)

Contract, Torts – Other

Updated: 04 November 2022; Ref: scu.463640

FBME Bank Ltd v Elwes and Another: QBD 25 Jul 2012

The claimant alleged that the two defendants had entered into guarantees in its favour. The court had found that the debt was only due by instalments commencing one year after the initial demand. The second defendant now argued that he was not liable at all. The company whose credit had been guaranteed had been placed in creditors’ voluntary liquidation. The second defendant argued that no default had yet arisen.
Held: The defendant’s arguments failed. Certain amendments suggested had not been incorporated, and the contract terms were clear and not allowing of further interpretation as requested. Judgment accordingly.

Judges:

Richard Seymour QC J

Citations:

[2012] EWHC 2209 (QB)

Links:

Bailii

Statutes:

Insolvency Act 1986 84(2)

Contract, Banking

Updated: 04 November 2022; Ref: scu.463639

British Gas Trading Limited v Eastern Electricity Plc and others: CA 18 Dec 1996

Citations:

[1996] EWCA Civ 1239

Jurisdiction:

England and Wales

Citing:

Appeal from – British Gas Trading Ltd v Eastern Electricity and Others QBD 29-Nov-1996
It was not unreasonable to refuse an assignment of a contract where there was a new purpose. . .

Cited by:

Appealed to – British Gas Trading Ltd v Eastern Electricity and Others QBD 29-Nov-1996
It was not unreasonable to refuse an assignment of a contract where there was a new purpose. . .
Lists of cited by and citing cases may be incomplete.

Contract

Updated: 04 November 2022; Ref: scu.141107

Godden v Merthyr Tydfil Housing Association: CA 15 Jan 1997

The Plaintiff was a building contractor; the Defendant a housing association engaged in developing suitable sites for residential accommodation for letting to tenants. Before the contract the parties had successfully completed what was been called the Trelewis Development which followed, it is said, an oral arrangement. The plaintiff appealed a striking out of his claim on the basis that there was no enforceable contract under the 1989 Act.
Held: The argument propounded would vitiate the 1989 Act. An estoppel should not be allowed to prevent the defendants arguing that no contract existed. In this case it would be inappropriate to allow an amendment to the pleadings in mid-appeal. Where all the obligations between the parties were integral to each other, part and parcel of a single scheme, section 2 applied to the transaction.
Discussing the Tootal Clothing case, Simon Brown LJ said: ‘However, nothing in that case – not even in Scott LJ’s judgment, which went further than those of the other members of the Court and further indeed than was necessary to the decision- to my mind support the Appellant’s claim to enforce any aspect of the present transaction, given (a) that no part of it whatsoever was in writing, and (b) central to the entire scheme was the ultimate transference of land from the Plaintiff to the Defendants.’

Judges:

Simon Brown LJ

Citations:

[1997] EWCA Civ 780, (1997) 74 P and CR D1

Links:

Bailii

Statutes:

Law of Property (Miscellaneous Provisions) Act 1989 2

Jurisdiction:

England and Wales

Citing:

Cited – Tootal Clothing Ltd v Guinea Properties Ltd CA 1992
By a single commercial transaction the parties agreed to the grant of a lease, on terms that Tootal (the intending lessee), would carry out shop-fitting works, have the benefit of a three months rent-free period during the which the works were to be . .
Cited – Daulia Ltd v Four Millbank Nominees Ltd 1978
In a contract the Defendants promised certain properties to whoever first arrived with the requisite draft contract and bankers drafts. The Plaintiffs did.
Held: They failed in their claim. It involved a unilateral contract and the Defendants’ . .
Cited – Amalgamated Investment and Property Co Ltd (in Liq) v Texas Commerce International Bank Ltd CA 1982
The court explained the nature of an estoppel by convention.
Lord Denning MR said: ‘The doctrine of estoppel is one of the most flexible and useful in the armoury of the law. But it has become overloaded with cases. That is why I have not gone . .

Cited by:

Cited – Evans v James (Administratrix of the Estate of Thomas Hopkin Deceased) CA 5-Jul-1999
Before the parties called evidence, and having read the papers, the court considered that there was no real defence shown, and invited submissions. Negotiations for the grant of a tenancy had been terminated by the sudden illness of the proposed . .
Cited – Yaxley v Gotts and Another CA 24-Jun-1999
Oral Agreement Creating Proprietory Estoppel
The defendant offered to give to the Plaintiff, a builder, the ground floor of a property in return for converting the house, and then managing it. They were friends, and the oral offer was accepted. The property was then actually bought in the name . .
Cited – Bankers Trust Company v Namdar and Namdar CA 14-Feb-1997
The bank sought repayment of its loan and possession of the defendants’ property. The second defendant said that the charge had only her forged signature.
Held: Non-compliance with section 2 of the 1989 Act does not make a bargain illegal, and . .
Cited – Kilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd, Targetfollow Group Ltd ChD 9-Nov-2004
The defendant entered into an agreement for lease, incurring substantial obligations. When it could not meet them it sought assistance from the claimant, who now claimed to have an interest in a joint venture. The draft documentation originally . .
Cited – North Eastern Properties Ltd v Coleman and Another CA 19-Mar-2010
The appellants challenged specific performance orders obliging them to complete the purchase of apartments, saying that the contracts had not complied with the 1989 Act, and that their repudiation of the contracts had been accepted. The contracts . .
Cited – Iesini and Others v Westrip Holdings Ltd and Others ChD 16-Oct-2009
The claimants were shareholders in Westrip, accusing the Defendant directors of deliberately engaging in a course of conduct which has led to Westrip losing ownership and control of a very valuable mining licence and which, but for their . .
Lists of cited by and citing cases may be incomplete.

Land, Contract, Estoppel

Updated: 04 November 2022; Ref: scu.141176

Digital Integration Limited v Software 2000: CA 16 Jan 1997

The parties had entered into a contract for the distribution of software by the plaintiff. The contract was terminated by the plaintiff and the defendant argued that this was in breach of the agreement, and that a sub-clause which apparently gave that right had to be read in context of neighbouring clauses which suggested that it could be terminated only on an anniversary of the contract.
Held: The clauses were to be read together,

Judges:

Butler-Sloss LJ, Peter Gibson LJ, Potter LJ

Citations:

[1997] EWCA Civ 787

Jurisdiction:

England and Wales

Citing:

Cited – Torvald Klaveness A/S v Arni Maritime Corporation (The Gregos) HL 28-Oct-1994
In a continuing charter when it was clear that the time of the charter will be exceeded, the contract allows an action for an anticipatory breach. Any new redelivery order was to be obtained after after it first became impossible to meet the charter . .
Cited – The Peonia CA 1991
The ship had been returned beyond the charter date. The court was asked whether, when the vessel was sent on a legitimate last voyage but, through no fault of the charterers, was then redelivered after the final terminal date, the owners were . .
Lists of cited by and citing cases may be incomplete.

Contract

Updated: 04 November 2022; Ref: scu.141183

Sharab v Salfiti: CA 12 Dec 1996

No amendment was to be allowed to a claim introducing an allegation of a foreign criminal offence. The claim in contract failed for insufficient certainty or on some other ground, but a claim nonetheless succeeded as a quantum meruit.

Citations:

Times 13-Feb-1997, [1996] EWCA Civ 1189

Jurisdiction:

England and Wales

Cited by:

Cited – Hunt and Another v McLaren and others ChD 4-Oct-2006
Land had been given to a football club under a trust for its exclusive use as such. That land was sold and a new ground acquired and a stadium built, but the land was subject to restrictive covenenats limiting its use to sports, which considerably . .
Lists of cited by and citing cases may be incomplete.

International, Contract

Updated: 04 November 2022; Ref: scu.89194

Flood v Shand Construction Limited; Morrison Shand Construction Limited and Morrison Construction Limited: CA 18 Dec 1996

A clause limiting an assignment to sums due and payable did not include the costs of investigation.

Citations:

Times 08-Jan-1997, [1996] EWCA Civ 1241

Jurisdiction:

England and Wales

Cited by:

See Also – Floods of Queensferry Limited v Shand Construction Limited, Morrison Shand Limited, Morrison Construction Limited QBD 13-Feb-1997
. .
Lists of cited by and citing cases may be incomplete.

Construction, Contract

Updated: 04 November 2022; Ref: scu.80610

Preece v Edwards: CA 12 Jul 2012

The claimant houseowner appealed against rejection of his claim for damages against the defendant alleging he had failed to undertake the planning tasks agreed for. The defendant said that his role had been more limited.

Judges:

Longmore, Richards, David LJJ

Citations:

[2012] EWCA Civ 902

Links:

Bailii

Jurisdiction:

England and Wales

Contract

Updated: 03 November 2022; Ref: scu.462537

Park Promotion Ltd (T/A Pontypool Rugby Football Club) v The Welsh Rugby Union Ltd: QBD 11 Jul 2012

The Pontypool rugby club challenged the defendant’s decision to relegate it from the Premier Division on re-organisation of the leagues in which they played. Clubs which remained in the division did not meet the licensing requirements for membership.

Judges:

Sir Raymond Jack

Citations:

[2012] EWHC 1919 (QB)

Links:

Bailii

Contract

Updated: 03 November 2022; Ref: scu.462545

Hydra Plc and others v Anastasi and others: QBD 20 Jul 2005

Judges:

Royce J

Citations:

[2005] EWHC 1559 (QB)

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – G D Searle and Co Ltd v Celltech Ltd CA 1982
The court was asked as to an employee’s covenant now said to be in restraint of trade.
Held: In disputes between employers and ex-employees courts will usually seek to protect the rights of employees to advance their chosen trade and . .
Lists of cited by and citing cases may be incomplete.

Employment, Contract

Updated: 03 November 2022; Ref: scu.229284

Middlesborough Football and Athletic Company (1986) Ltd v Liverpool Football and Athletic Grounds Plc: CA 25 Nov 2002

The claimants alleged that the defendant having bought from them the football player Christian Ziege, the defendant had in breach of that contract sold on the player to Tottenham Hotspurs.
Held: Even if the defendants had broken the League’s rules, the damages would be nominal.

Citations:

[2002] EWCA Civ 1929

Links:

Bailii

Jurisdiction:

England and Wales

Contract

Updated: 03 November 2022; Ref: scu.188967

Mitchem and Edmunds v Magnus Homes South West Limited: CA 5 Dec 1996

The defendant company appealed orders for the discharge of its class C(iv) charges against the plaintiff’s land, which it said represented a contract for the purchase of the land. An option had been given to the appellant, but it had expired.

Citations:

[1996] EWCA Civ 1111

Jurisdiction:

England and Wales

Contract, Land

Updated: 03 November 2022; Ref: scu.140978

Mount Eden Land Ltd v Prudential Assurance Co Ltd: CA 12 Nov 1996

The Court warned against extending the ‘magic’ of the ‘subject to contract’ label into the realm of unilateral licences. The question was whether a landlord had granted licence to the tenant to carry out alterations. The letter relied on as constituting the licence was headed ‘subject to licence’ and the text of the letter gave consent subject to various conditions, including entry into a formal licence.
Held: A licence had been granted. The purpose of the suspensory condition ‘subject to contract’ in the context of negotiations is to avoid the other side seeking prematurely to conclude a contract by the acceptance of an offer so as to give rise to unintended legal consequences. In cases requiring a unilateral act the only question is whether that act has occurred.
Morritt LJ said: ‘I do not accept that it is legitimate to extend the principle . . from the field of bilateral negotiations to that of a unilateral act . . In cases requiring a unilateral act the only question is whether that act occurred . . In truth the heading ‘subject to licence’ added little to the condition expressed in the body of the letter and could not qualify the unambiguous expression of consent it contained. If it be necessary to attribute some meaning to the heading then it might serve to emphasise the degree of formality required so that the express condition for a formal licence should not be satisfied in correspondence or by some less formal method than a licence strictly so-called. But no such document was required by the terms of the leases . . ‘
and ‘The purpose of the suspensory condition ‘subject to contract’ in the context of negotiations is to avoid the other side seeking prematurely to conclude a contract by the acceptance of an offer so as to give rise to unintended legal consequences. In cases requiring a unilateral act the only question is whether that act has occurred. So in this case the only question is whether the letter of May 18th, 1993 was a consent as required by the lease. That is a question of the construction of the letter in the light of all of the surrounding circumstances. So regarded I have no doubt that the letter does express the consent required by the leases. It will be remembered that such consent may be temporary or revocable or qualified. This letter expresses consent in the clearest terms. The consent was qualified by the stipulation for a formal licence as stated in the body of the letter. For that document it would be necessary to have the drawing numbers referred to in the concluding passage. In truth the heading ‘Subject to Licence’ added little to the condition expressed in the body of the letter and could not qualify the unambiguous expression of consent it contained. If it be necessary to attribute some meaning to the heading then it might serve to emphasise the degree of formality required so that the express condition for a formal licence should not be satisfied in correspondence or by some less formal method than licence strictly so called. But no such document was required by the terms of the leases.’

Judges:

Morritt LJ, Sir John Balcombe and Beldam LJ

Citations:

[1996] EWCA Civ 933, [1997] 1 EGLR 37, (1997) 74 P and CR 377

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Confetti Records (A Firm), Fundamental Records, Andrew Alcee v Warner Music UK Ltd (Trading As East West Records) ChD 23-May-2003
An agreement was made for the assignment of the copyright in a music track, but it remained ‘subject to contract’. The assignor later sought to resile from the assignment.
Held: It is standard practice in the music licensing business for a . .
Cited – Aubergine Enterprises Limited v Lakewood International Limited CA 26-Feb-2002
A sought confirmation that it had successfully rescinded a contract for the purchase of a leasehold property from L. Either party was to be able to rescind, if consent to the assignment had not obtained before three days before completion. There . .
Lists of cited by and citing cases may be incomplete.

Contract, Landlord and Tenant

Updated: 03 November 2022; Ref: scu.140800

Bayoumi v Protim Services Limited: CA 6 Nov 1996

The county court judge had allowed damages to the claimant, who owned a property which suffered from persistent water penetration, general damages for breach of the 1972 Act, the sum of andpound;1,500 a year for the four years during which the problems lasted, making a total of andpound;6,000 in all. The judge made it clear that this was an award of general damages for loss of use and enjoyment.
Held: The contractor’s appeal failed. Swinton Thomas LJ held that such damages were recoverable for breach of Section 1. The loss of use claims had been properly pleaded and: ‘The Judge allowed a figure of andpound;1,500 per year for four years making a total of andpound;6,000. In my view that item of damages is clearly allowable under the provisions of the Defective Premises Act, and I do not myself think that it has been shown that his assessment, either in terms of the annual value or the period of time, was excessive.’

Judges:

Swinton Thomas LJ

Citations:

[1996] EWCA Civ 885, (1996) 30 HLR 785, [1996] EG 187, [1997] PNLR 189

Links:

Bailii

Statutes:

Defective Premises Act 1972 81

Jurisdiction:

England and Wales

Cited by:

Cited – Bella Casa Ltd v Vinestone Ltd and others TCC 9-Dec-2005
. .
Lists of cited by and citing cases may be incomplete.

Contract, Damages

Updated: 03 November 2022; Ref: scu.140752

Investors Compensation Scheme Ltd v West Bromwich Building Society and Others: CA 1 Nov 1996

Public policy rendered an assignment of a remedy void, where the assignment was an attempt to split it from another remedy. For the purpose of construing a contract the law excludes from the admissible factual background the previous negotiations of the parties. This is due to ‘reasons of practical policy’. What is said in the course of negotiations provides too uncertain a guide as to what is the position between contracting parties when later they commit themselves finally by their contract.

Judges:

Leggatt LJ, Swinton Thomas LJ, Mummery LJ

Citations:

Times 08-Nov-1996, [1996] EWCA Civ 862

Jurisdiction:

England and Wales

Citing:

Appeal from – Investors Compensation Scheme Ltd v West Bromwich Building Society; Etc ChD 10-Oct-1996
Part of a chose in action is not capable of being validly separately assigned in order to stop a court action. . .

Cited by:

Cited – P and S Platt Ltd v Crouch and Another CA 25-Jul-2003
The claimant sought a declaration that certain easements had been included by implication in a conveyance of part of land to him.
Held: Since the easements were capable of subsisting at law, and existed as quasi-easements at the time, and did . .
Appeal from – Investors Compensation Scheme Ltd v West Bromwich Building Society HL 19-Jun-1997
Account taken of circumstances wihout ambiguity
The respondent gave advice on home income plans. The individual claimants had assigned their initial claims to the scheme, but later sought also to have their mortgages in favour of the respondent set aside.
Held: Investors having once . .
Cited – Kay, Gorman, etc v London Borough of Lambeth, London and Quadrant Housing Trust CA 20-Jul-2004
The defendant local authority had licenced houses to a housing trust, which in turn granted sub-licences to the claimants who were applicants for housing under homelessness provisions, and who now asserted that they became secure tenants of the . .
Lists of cited by and citing cases may be incomplete.

Financial Services, Contract

Updated: 03 November 2022; Ref: scu.82414

Pappadakis v Pappadakis: ChD 19 Jan 2000

Where a party sought rectification of a contract to supply into the contract an element without which the contract was intrinsically invalid, that application could only succeed if there was clear and convincing evidence that the parties had intended another effect, and precisely what that effect was. Here an assignment to unidentified trustees which was ineffective because of the uncertainty could not be repaired since the evidence required was not available.

Citations:

Times 19-Jan-2000

Jurisdiction:

England and Wales

Equity, Contract

Updated: 03 November 2022; Ref: scu.84560

Tael One Partners Ltd v Morgan Stanley and Co International Plc: ComC 9 Jul 2012

Each party sought summary judgment.
Held: Popplewell J granted Tael’s application and dismissed Morgan Stanley’s. The payment premium was similar to interest and performed an analogous function. The cost of the borrowing was more than the interest of 11.25% per annum, but only that amount required to be paid out of cash flow three monthly in arrears. The remainder of the cost of borrowing was deferred and became payable, in the form of the payment premium, whenever the loan was repaid to a particular lender or all the lenders. The payment premium was therefore part of the consideration for the loan, and was calculated by reference to the period for which the borrower had the use of the money in just the same way as was the entitlement to ‘interest’ described as such.

Judges:

Popplewell J

Citations:

[2012] EWHC 1858 (Comm)

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

At first instance – Tael One Partners Ltd v Morgan Stanley and Co International Plc SC 11-Mar-2015
This appeal raises a question of contractual interpretation. Its significance lies in the fact that the contractual condition in question forms part of the Loan Market Association standard terms and conditions for par trade transactions which are a . .
At First Instance – Tael One Partners Ltd v Morgan Stanley and Co International Plc CA 1-May-2013
Morgan Stanley appealed against summary judgment given against it in respect of the application of the terms of a standard form assignment of a Loan agreement.
Held: The words ‘which are expressed to accrue by reference to the lapse of time’, . .
Lists of cited by and citing cases may be incomplete.

Contract, Financial Services

Updated: 03 November 2022; Ref: scu.462428

Pittack v Naviede: ChD 24 Jun 2010

Question of construction on the Standard Conditions of Sale (4th edition), namely whether a clause excluding the transfer of the benefit of the contract operates to exclude sub-sales.

Judges:

Mark Herbert QC

Citations:

[2010] EWHC 1509 (Ch), [2010] 26 EG 91 (CS), [2011] 1 WLR 1666, [2010] 43 EG 100

Links:

Bailii

Jurisdiction:

England and Wales

Land, Contract

Updated: 01 November 2022; Ref: scu.423808

Manchester City Football Club Plc v Royle: CA 8 Mar 2005

The club had dismissed its manager, paying the compensation it thought due. The claimant disagreed and sued for more. The compensation varied according to the division in which the club was playing at the time of the dismissal. At the end of the season the club was relegated. The club calculated the sum due on the basis that the club was in the lower division, the manager on the basis that the club was still in the Premier League. The rules said that the season ended on completion of the last game. The relegation involved the surrender of a share in the Premier league. At the time of the dismissal the company share had not been transferred.
Held: The clause intended to reproduce the effect at common law, which would have looked forward to future earnings. The league rules also distinguished between relegation and the share transfer: ‘Whether the Club was about to be or had just been relegated, it was ineluctably going to play in the First Division in the next season, and the manager would have received the lower rate of pay. That is what he lost by his dismissal. Seen in that way, the precise date on which the Club moves from the Premier Division to the First Division becomes of less significance.’ The club’s appeal was allowed.

Judges:

Lord Justice Sedley, Lady Justice Smith, And Lord Justice Gage

Citations:

[2005] EWCA Civ 195, Times 14-Mar-2005

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Investors Compensation Scheme Ltd v West Bromwich Building Society HL 19-Jun-1997
Account taken of circumstances wihout ambiguity
The respondent gave advice on home income plans. The individual claimants had assigned their initial claims to the scheme, but later sought also to have their mortgages in favour of the respondent set aside.
Held: Investors having once . .
Lists of cited by and citing cases may be incomplete.

Contract

Updated: 01 November 2022; Ref: scu.223271

Nisshin Shipping Co Ltd v Cleaves and Company Ltd and others: ComC 7 Nov 2003

One party sought a declaration that arbitrators should have no jurisdiction to determine claims for commission said to be due to the Respondent chartering brokers.
Held: Because he has in effect become a statutory assignee of the promisee’s right of action against the promisor and because, by reason of the underlying policy of section 1(4), he is confined to the means of enforcement provided by the contract to the promisee, namely arbitration. He is to be treated as standing in the shoes of that promisee for the purpose only of the enforcement of the substantive term. In this case, the scope of the disputes covered by the arbitration agreements was wide enough to embrace a dispute between owners and charterers about payment of the brokers’ commission, and they fell to be resolved by arbitration.

Judges:

The Honourable Mr Justice Colman

Citations:

[2003] EWHC 2602 (Comm), [2004] 1 All ER (Comm) 481, [2004] 1 Lloyd’s Rep 38

Links:

Bailii

Statutes:

Contracts (Rights of Third Parties) Act 1999 1(4), Arbitration Act 1996 67

Jurisdiction:

England and Wales

Citing:

Cited – Robertson v Wait 1853
. .
Cited – Les Affreteurs Reunis SA v Leopold Walford (London) Ltd HL 1919
With regard to Robertson -v- Wait: ‘My Lords, so far as I am aware, that case has not before engaged the attention of this House, and I think it right to say plainly that I agree with that decision and I agree with the reasoning, shortly as it is . .
Cited – The Jordan Nicholev 1990
The court was asked as to the position resulting from the assignment of a contract including an arbitration clause: ‘Where the assignment is the assignment of the cause of action, it will, in the absence of some agreement to the contrary include as . .
Cited – The Padre Island 1984
The 1930 Act creates a statutory assignment of any rights of action in a case where the assured has become bankrupt or been wound up, the party to whom the benefit of a right of action under the liability insurance contract has been transferred may . .
Cited – T W Thomas and Co Ltd v Portsea Steamship Co Ltd PC 1912
The board discussed the approach to the incorporation of arbitration clauses and jurisdiction clauses from one contract into another such as a bill of lading. . .
Cited – The Mahkutai PC 24-Apr-1996
(Hong Kong) The question was whether shipowners, who were not parties to the bill of lading contract between the charterers and carriers on the one part, and the cargo-owners, the bill of lading being a charterer’s bill, could enforce against the . .
Cited – Schiffahrtsgesellschaft Detlev von Appen GmbH v Voest Alpine Intertrading GmbH (‘The Jay Bola’) CA 1997
The insurance company claimant had insured a cargo under a voyage charter made by the defendant as charterer with the claimant as time charterer and disponent owner of the vessel. The charter had an arbitration clause. The cargo was damaged in a . .
Lists of cited by and citing cases may be incomplete.

Contract, Transport, Arbitration

Updated: 01 November 2022; Ref: scu.187699

Enterprise Plus Limited v Dr Wagenmann: QBD 23 Jul 2003

Claim for fees said to have been charged at a daily rate by the Claimant for the services of its sole professional employee, namely Dr Peter Muth, in respect of work done at the end of 1997 in connection with proposals for certain privatisation projects in contemplation in Pakistan.

Judges:

The Honourable Mr Justice Eady

Citations:

[2003] EWHC 1827 (QB)

Links:

Bailii

Jurisdiction:

England and Wales

Contract

Updated: 01 November 2022; Ref: scu.184873

Bence Graphics International Ltd v Fasson UK Ltd: CA 24 Oct 1996

Bench sold vinyl film to Fasson for decals to identify sea-borne bulk containers. A term required the film to be legible condition for at least five years. Fasson sold them to container manufacturers who supplied the containers marked with the decals to shipping lines. Some became illegible. Fasson brought an action for breach of warranty. The trial judge held that the prima facie measure of damages under section 53(3) had not been displaced and awarded pounds 564,328 damages based on the difference between the value of the goods (measured by the purchase price) at the time of delivery and the value they would have had if the warranty been fulfilled.
Held: (Majority) The Bence’s appeal succeeded. The loss for a latent defect discovered after a sale on, was the Plaintiff’s actual loss. Damages for breach of warranty on sale of goods are to be assessed by the court. The parties had contemplated when the warranty was given (a) that the goods sold would only be used in making a product which would be sold on to customers requiring five year durability; (b) that any defect in the film would not have been detected on delivery or in the process of manufacture; and (c) that, if there was a defect, the end users would claim damages against the container owners, who would claim against the manufacturers, who would claim against the plaintiffs. The damages should be based on the buyer’s liability to the subsequent or ultimate users. The judgment was reduced to pounds 22,000, being the cost of unused and defective material returned to the plaintiffs. The defendants had compensated the plaintiffs for the only claim that had been made on them; and there were no others in prospect.
Otton LJ distinguished Slater because there the sub-sale was of the same goods and the seller did not know of the contemplated sub-sale; In this case the goods were substantially converted or processed by the buyer and the sellers were aware of the precise use to which the film was to be put when the contract was made. He rejected the submission that a conclusion that required the sellers to indemnify the buyers in respect of their liability to sub-purchasers was too ‘nebulous’. Such difficulties of calculation as might arise were irrelevant to the issue that the judge had to decide.
Auld LJ: ‘As to section 53 (3) there is, in my view, a danger of giving it a primacy in the code of section 53 that it does not deserve. The starting point in a claim for breach of warranty of quality is not to determine whether one or other party has ‘displaced’ the prima facie test in that subsection. The starting point is the Hadley v Baxendale principle reproduced in section 53 (2) applicable to a breach of any warranty, namely an estimation on the evidence of ‘the . . loss directly and naturally resulting in the ordinary course of events from the breach of warranty’. The evidence may be such that the prima facie test in section 53 (3) never comes in to play at all.
The Hadley v Baxendale principle is recovery of true loss and no more (or less), namely to put the complaining party, so far as a money can do it, in the position he would have been if the contract had been performed. Where there is evidence showing the nature of the loss that the parties must be taken to have contemplated in the event of breach, it is not to be set aside by applying the prima facie test in section 53 (3) simply because calculation of such contemplated loss would be difficult. Equally, it should not be set aside in that way so as to produce a result where the claimant will clearly recover more than his true loss.
. . Put shortly, and drawing on the analysis of Scarman L.J. in H Parsons (Livestock) Ltd v Uttley Ingham and Co. Ltd (1978) Q.B. 791,807, the sort of question the judge should have asked is: ‘What would the parties have thought about the probable loss to the buyer in the event of a latent defect in film at the time of delivery later causing trouble?’

Judges:

Otton LJ, Auld LJ

Citations:

Gazette 30-Oct-1996, Times 24-Oct-1996, [1996] EWCA Civ 748, [1998] QB 87, [1997] 3 WLR 205, [1997] CLC 373

Links:

Bailii

Statutes:

Sale of Goods Act 1979 53(3)

Jurisdiction:

England and Wales

Citing:

Distinguished – Slater v Hoyle and Smith Ltd 1920
Cotton cloth was sold. The buyer was to use it to fulfil his own contract with a sub-buyer. The cloth was not of the contractual quality but the buyer was able to perform the sub-contract by delivering the same cloth. The sub-buyers paid the full . .

Cited by:

Cited – Transfield Shipping Inc of Panama v Mercator Shipping Inc of Monrovia ComC 1-Dec-2006
The owners made substantial losses after the charterers breached the contract by failing to redliver the ship on time as agreed.
Held: On the facts found the Owners’ primary claim is not too remote. To the knowledge of the Charterers, it was . .
Lists of cited by and citing cases may be incomplete.

Contract, Damages

Updated: 01 November 2022; Ref: scu.78330

BP Oil International Ltd v Target Shipping Ltd: ComC 14 Jun 2012

Difference about how much was payable by the charterers under a charterparty by which BP Oil International Limited (‘BP’) hired the oil tanker ‘Target’ from her owners, Target Shipping Limited (the ‘Owners’), and in particular about whether BP are entitled to recover some $1 million that the Owners charged them by way of overage freight and that, as BP claim, they paid by mistake.

Judges:

Andrew Smith J

Citations:

[2012] EWHC 1590 (Comm)

Links:

Bailii

Jurisdiction:

England and Wales

Contract, Transport

Updated: 01 November 2022; Ref: scu.460508

Lloyds TSB Foundation for Scotland v Lloyds Banking Group Plc: SCS 29 Dec 2011

(Inner House) The bank had created a trust deed providing for a share of realised profits to be paid each year to the pursuer charitable foundation. The bank had acquired another bank leading to a substantial but unrealised gain. Regulations on accounting practice changed requiring the unrealised gain to be moved into the profit and loss accounts. The Foundation appealed against rejection of its claim to a payment based on the published accounts.
Held: The appeal succeeded. Though the deed was charitable, its commercial context required that it be construed as a commercial document. Though the particular change in standards could not have been foreseen, changes had been, and indeed the parties had already executed one deed of variation to cater for such.
The deed referred to the group profit as shown in the audited accounts: ‘the relevant reasonable person would address how the parties had chosen to formulate the obligation in question. He would see that they had selected in clause 2(1)(a) a precise percentage of ‘Pre-Tax Profits’ as the amount to be paid for each Accounting Reference Period. He would also see that ‘Pre-Tax Profit’ was defined as ‘group profit before taxation’ (that expression appearing in the definition in inverted commas) shown in the Audited Accounts’ and would not be expected then to carry outfurther adjustments.

Judges:

Lord President, Lord Carloway, Lord Kingarth

Citations:

[2011] ScotCS CSIH – 87, 2012 GWD 5-81

Links:

Bailii

Jurisdiction:

Scotland

Citing:

At Outer House – Lloyds TSB Foundation for Scotland v Lloyds Banking Group Plc SCS 17-Jun-2011
(Outer House) The bank had covenanted to provide a certain proportion of its profits to the pursuer charitable foundation. The bank had acquired another at an accounting loss, but in 2005, a change in accounting standards turned that substantial . .

Cited by:

At Inner House – Lloyds TSB Foundation for Scotland v Lloyds Banking Group Plc SC 23-Jan-2013
A predecessor bank had created a trust into which it paid a small proportion of its profits. The parties now disputed the calculation of profits when the Bank declared a loss which allowed for an unrealised gain on the acquisition of HBOS. . .
Lists of cited by and citing cases may be incomplete.

Contract, Company

Updated: 01 November 2022; Ref: scu.460296

Graves v Graves and others: CA 3 Jul 2007

The parties had divorced and settled financial provision, but the former wife and her children came to need a house and one of the claimant’s properties became vacant, and she was allowed to occupy it as a tenant, with the majority of the rent being paid through housing benefit. The council refused to pay housing benefit because one of the occupants was the claimant’s child. The claimant sought possession. The court was asked whether the mistake as to the payment of benefit made the tenancy contract void.
Held: The husband’s appeal succeeded. Neither party had appropriated the risk of what would happen if housing benefit was not payable. The payment of benefits was fundamental to both parties before the shorthold tenancy was created. A condition was to be implied into the agreement on the basis of the strict approach to the implication of terms; the term was an implied condition that if housing benefit was not payable, the tenancy would come to an end. Neither party had been prepared for te judge’s variation of the existing maintenance arrangements, and he was wrong to proceed with a variation.

Judges:

Thomas LJ, Hughes LJ, Coleridge J

Citations:

[2007] EWCA Civ 660

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Bell v Lever Brothers Ltd HL 15-Dec-1931
Contract – Mutual Mistake Test
Bell was director and chairman of Niger, a subsidiary of Lever Brothers Ltd who dismissed him, offering and paying pounds 30,000 compensation. Lever then discovered that Mr Bell had made secret profits at the expense of Niger for which he could have . .
Cited – Great Peace Shipping Ltd v Tsavliris (International) Ltd CA 14-Oct-2002
The parties contracted for the hire of a ship. They were each under a mistaken impression as to its position, and a penalty became payable. The hirer claimed that the equitable doctrine of mutual mistake should forgive him liability.
Held: . .
Cited – Cricklewood Property and Investment Trust Ltd v Leighton’s Investment Trust Ltd HL 1945
Wartime regulations were implemented which prohibited the building on land which was already subject to a building lease which required the lessees to erect several shops.
Held: Even if the doctrine of frustration could apply to a lease, the . .
Cited – National Carriers Ltd v Panalpina (Northern) Ltd HL 11-Dec-1980
No Frustration of Lease through loss of access
The tenant’s access to the premises was closed by the local authority because it passed by a derelict and dangerous building. The tenant argued that its tenancy was frustrated.
Held: The lease was not frustrated. The lease had a term of ten . .
Approved – Associated Japanese Bank (International) Ltd v Credit du Nord SA 1988
A contract of guarantee was made, but based upon a term of fundamental importance which was mistaken as to the existence of certain machines.
Held: The court must first look to the nature of the purported agreement. Steyn J said: ‘Logically, . .
Cited – William Sindall Plc v Cambridgeshire County Council CA 21-May-1993
Land was bought for development, but the purchaser later discovered a sewage pipe which very substantially limited its development potential. The existence of the pipe had not been disclosed on the sale, being unknown to the seller.
Held: . .
Cited – Krell v Henry CA 1903
Mr Henry contracted to rent a flat located on Pall Mall from the plaintiff, Paul Krell for the daytime and on the days of the forthcoming cornation procession.. He was told that he would have an excellent view of, but this was not written down. He . .
Cited – Brennan v Bolt Burdon and Others, London Borough of Islington, Leigh Day and Co CA 29-Jul-2004
The claimant sought damages for injury alleged to have been suffered as tenant of a house after being subjected to carbon monoxide poisoning, and also from her former solicitors for their delay in her claim. The effective question was whether the . .

Cited by:

Cited – Butters and Others v BBC Worldwide Ltd and Others ChD 20-Aug-2009
In the insolvency of Woolworths plc, a subsidiary sought to have valued its shareholding in a company in which the defendants were co-shareholders. It was argued that an earlier agreement between them had not be fully superceded by a subsequent one. . .
Lists of cited by and citing cases may be incomplete.

Landlord and Tenant, Contract

Updated: 31 October 2022; Ref: scu.254366

Turkey v Awadh and Another: CA 8 Mar 2005

Citations:

[2005] EWCA Civ 382, [2005] 2 P and CR 29

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

See Also – Khalid Ali Ismail Turkey v Adnan Mohammed Awadh, Aziza Khalid Ali Ismail Turki CA 26-Oct-2004
The claimant asserted that he had taken a transfer of the house from his daughter and son in law. They said the transfer had been procured by misrepresentation and undue influence. The claimant now sought a stay of an order for payment of costs . .

Cited by:

Cited – Thompson v Foy ChD 20-May-2009
Lewison J discussed the decision in Etridge: ‘In the light of the arguments before me, there are some additional observations I should make. First, although in Etridge Lord Nicholls of Birkenhead described the paradigm case of a relationship where . .
Lists of cited by and citing cases may be incomplete.

Contract, Land

Updated: 31 October 2022; Ref: scu.224250

Clegg and Another v Andersson (Trading As Nordic Marine): QBD 21 May 2002

Judges:

His Honour Judge Richard Seymour Q.C.

Citations:

[2002] EWHC 943 (QB)

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Bernstein v Pamson Motors (Golders Green) Ltd QBD 1987
A car had been delivered to the buyer three weeks before the purported rejection. In the interval the purchaser had driven it 140 miles.
Held: The nature of the particular defect, discovered ex post facto, and the speed with which it might . .

Cited by:

Appeal from – Clegg v Olle Andersson (T/A Nordic Marine) CA 11-Mar-2003
Right oReject Survived Attempted Repair
The claimant agreed to purchase a yacht from the defendants with a keel to the manufacturer’s standard specifications. The keel actually installed was rather heavier. After correspondence, the claimant rejected the yacht and required the return of . .
Lists of cited by and citing cases may be incomplete.

Contract

Updated: 31 October 2022; Ref: scu.175310

National Power Plc v United Gas Company and Anr: CA 15 Oct 1996

Citations:

[1996] EWCA Civ 733

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Appeal from – National Power Plc v United Gas Company Ltd and Anr ComC 5-Oct-1995
cw Sales of natural gas. Whether gas of contractual description delivered. Seller’s reliance on thermal purchase contracts to effect delivery under volumetric contract. Clause permitting termination on failure to . .

Cited by:

Appealed to – National Power Plc v United Gas Company Ltd and Anr ComC 5-Oct-1995
cw Sales of natural gas. Whether gas of contractual description delivered. Seller’s reliance on thermal purchase contracts to effect delivery under volumetric contract. Clause permitting termination on failure to . .
Lists of cited by and citing cases may be incomplete.

Contract

Updated: 31 October 2022; Ref: scu.140600

St Albans City and District Council v International Computers Ltd: CA 14 Aug 1996

The council purchased software from the defendants to calculate council taxes. Mistakes in the software undercalculated the amounts required to be recovered causing the council substantial losses. The company sought to rely upon a clause in the contract limiting the extent of their liability.
Held: The clause was unreasonable in the light of the very substantial nature of the defendant’s business, the availabiliity to them of insurance in sums far greater than the limit of liability, and inequality of bargaining power. However, the damages payable for revenue lost because of faulty software were reduced to allow for the recovery of the losses in subsequent tax years.
Nourse LJ: ‘Parties who agree respectively to supply and acquire a system recognizing that it is still in the course of development cannot be taken, merely by virtue of that recognition, to intend that the supplier shall be at liberty to supply software which cannot perform the function expected of it at the stage of development at which it is supplied’.

Judges:

Sir Ian Glidewell, Nourse LJ

Citations:

Times 14-Aug-1996, [1996] 4 All ER 481, [1996] EWCA Civ 1296

Statutes:

Unfair Contract Terms Act 1977

Jurisdiction:

England and Wales

Citing:

Appeal from – St Albans City and District Council v International Computers Ltd QBD 11-Nov-1994
A liability limitation in a computer contract was an unfair contract term since it was a standard term, and it restricted liability when there had been no attempt to justify the amount chosen for the limit by reference, for example, to a . .

Cited by:

Cited – Sam Business Systems Ltd v Hedley and Company TCC 19-Dec-2002
. .
Lists of cited by and citing cases may be incomplete.

Damages, Contract

Updated: 31 October 2022; Ref: scu.89464

Edwinton Commercial Corporation and Another v Tsavliris Russ (Worldwide Salvage and Towage) Ltd (the Sea Angel): CA 12 Jun 2007

The court considered whether a delay of some three or so months towards the end of a short (20 day) time charter, caused by reason of the unlawful detention of the vessel by port authorities, in a salvage context, has frustrated that charter.

Citations:

[2007] EWCA Civ 547, [2007] 2 Lloyd’s Rep 517

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Gold Group Properties Ltd v BDW Trading Ltd TCC 3-Mar-2010
The parties had contracted for the construction of an estate of houses and flats to be followed by the interim purchase by the defendants. The defendants argued that the slump in land prices frustrated the contract and that they should not be called . .
Lists of cited by and citing cases may be incomplete.

Contract

Updated: 31 October 2022; Ref: scu.254532

London Bus Services Ltd v Tramtrack Croydon Ltd: CA 19 Dec 2006

Citations:

[2006] EWCA Civ 1743

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Appeal from – London Bus Services Ltd v Tramtrack Croydon Ltd ComC 17-Mar-2006
A dispute concerning the question upon whom, if anyone, the responsibility lies to deal with overcrowding on the tram system. . .
Lists of cited by and citing cases may be incomplete.

Contract

Updated: 31 October 2022; Ref: scu.247436

Peregrine Systems Ltd v Steria Ltd: CA 14 Mar 2005

The claimant provided computer software to the defendants. The defendants appealed dismissal of their defences arguing that the system had failed.
Held: No repudiatory breach was established, and moreover Steria had elected to affirm the contract. The appeal was dismissed.

Citations:

[2005] EWCA Civ 239

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Hick v Raymond and Reid HL 1893
The House was asked whether the consignee of a cargo was in breach of a contractual obligation to discharge the relevant vessel within a reasonable time, that is to say, a single obligation to do something within a reasonable time, rather than an . .
Appeal from – Peregrine Systems Ltd v Steria Ltd TCC 26-Feb-2004
Failed computer system . .
Cited – Astea (UK) Ltd v Time Group Ltd TCC 9-Apr-2003
The question of whether a reasonable time has been exceeded in performance of a contract is ‘a broad consideration, with the benefit of hindsight, and viewed from the time at which one party contends that a reasonable time for performance has been . .
Cited – Hong Kong Fir Shipping Co v Kawasaki Kisen Kaisha Ltd CA 20-Dec-1961
The plaintiffs had recently acquired the ship the ‘Hong Kong Fir’ and contracted to charter it to the defendants, but being late in delivering it, the defendants cancelled the charterparty contract. The plaintiffs said the repudiation was wrongful, . .
Cited – Sotiros Shipping Inc v Sameiet; The Solholt CA 1983
The seller had failed to deliver the vessel he had sold by the delivery date. The buyer cancelled and requested return of his deposit, also claiming damages because the vessel was worth $500,000 more on the delivery date than she had been when the . .
Cited – Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) HL 1990
A ship was caught in harbour when an air raid broke out. The master took the ship to sea where it suffered damage.
Held: The shipowners were protected by a war risks clause in the charterparty agreement. As to waiver by election, Lord Goff of . .
Lists of cited by and citing cases may be incomplete.

Contract

Updated: 31 October 2022; Ref: scu.223488

Daily Telegraph v Colla: CA 18 Jun 1996

The claimant appealed the strike out of his claim that the defendant newspaper was liable to the claimant after he entered a promotion in the newspaper. The competitions provided for resolution if there was a tie, and that the decision of the judges would be final.
Held: The claim was arguable and should proceed.

Judges:

Beldam LJ, Henry LJ, Hutchison LJ

Citations:

[1996] EWCA Civ 508

Jurisdiction:

England and Wales

Contract

Updated: 31 October 2022; Ref: scu.140375

National Westminster Bank Plc v Kitch: CA 14 May 1996

An action to recover an overdraft debt which was secured by a mortgage is not itself a mortgage action. A claim based on a simple contract debt does not cease to be so simply because it is also secured by a charge.

Citations:

Gazette 15-May-1996, Times 14-May-1996, [1996] 1 WLR 1316

Statutes:

Rules of the Supreme Court Order 88 1

Jurisdiction:

England and Wales

Cited by:

Cited – Hopkinson and Others and Birmingham Mid-Shires Building Society v Tupper CA 30-Jan-1997
The plaintiffs appealed from an order striking out their claim for want of prosecution. The defendant’s property had been sold by the mortgagees, and the plaintiffs as assignees of their debt sought to recover the balance outstanding from the . .
Lists of cited by and citing cases may be incomplete.

Banking, Litigation Practice, Contract

Updated: 31 October 2022; Ref: scu.84218

Coca-Cola Financial Corporation v Finsat International Ltd and Others: CA 1 May 1996

Party may contract out of right of set-off. Issue justiciable under Order 14.

Citations:

Times 01-May-1996, [1996] CLC 1564

Jurisdiction:

England and Wales

Cited by:

Cited – WRM Group Limited (Formerly Known As WRM Logistics Limited) v Wood; Burcher; Wood; Chick and Irving CA 21-Nov-1997
Breach of share sale agreement. . .
Cited – BOC Group Plc v Centeon Llc and Centeon Bio-Services Inc CA 29-Apr-1999
The court was asked whether a clause in a share sale agreement setting out the payment obligation worked to preclude the purchaser from exercising a right of set-off when the time comes to pay a later instalment of the price.
Held: The appeal . .
Lists of cited by and citing cases may be incomplete.

Contract

Updated: 31 October 2022; Ref: scu.79254

Integral Petroleum SA v SCU-Finanz Ag: ComC 14 Mar 2014

Application to set aside judgment entered in default.

Judges:

Popplewell J

Citations:

[2014] EWHC 702 (Comm)

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Integral Petroleum SA v ScuFinanz Ag CA 26-Feb-2015
Conflict of laws in the context of an oil trading agreement. . .
Lists of cited by and citing cases may be incomplete.

Contract

Updated: 31 October 2022; Ref: scu.523437

Integral Petroleum SA v ScuFinanz Ag: CA 26 Feb 2015

Conflict of laws in the context of an oil trading agreement.

Judges:

Jackson, Kitchin, Floyd LJJ

Citations:

[2015] EWCA Civ 144, [2015] 1 Lloyd’s Rep 545, [2015] Bus LR 640, [2015] WLR(D) 97

Links:

Bailii, WLRD

Jurisdiction:

England and Wales

Citing:

Cited – Integral Petroleum SA v SCU-Finanz Ag ComC 14-Mar-2014
Application to set aside judgment entered in default. . .
Lists of cited by and citing cases may be incomplete.

Contract, International

Updated: 31 October 2022; Ref: scu.543489

MacSteel Commercial Holdings (Pty) Ltd v Thermasteel V (Canada) Inc: CA 1996

The South African and Canadian parties had contracted subject to the law of England. The Canadian company said that England remained inappropriate as the choice of forum.
Held: Jurisdiction was declined.
The distinction between the choice of English law and a contractual choice of an English forum was a distinction of major importance when choosing a jurisdiction. Millett LJ said that the judge had made a fundamental error in equating choice of law with choice of forum.

Judges:

Sir Thomas Bingham MR, Millett LJ

Citations:

[1996] CLC 1403

Jurisdiction:

England and Wales

Cited by:

Cited – Sawyer v Atari Interactive Inc ChD 1-Nov-2005
The claimant owned the copyright in several successful computer games. He had granted licenses for the use of the software, which licences were assigned to the defendants. Disputes arose as to the calculation of royalty payments, and the claimant . .
Cited – Novus Aviation Ltd v Onur Air Tasimacilik As CA 27-Feb-2009
The defendant appealed against a refusal to set aside the grant of leave to serve outside the jurisdiction granted to the claimant. Neither party conducted and business in England, and the contract was made in Switzerland, but was expressed to be . .
Lists of cited by and citing cases may be incomplete.

Jurisdiction, Contract

Updated: 27 October 2022; Ref: scu.237269

Burrell and Son v Russell and Co: HL 26 Mar 1900

By a written contract for the construction of certain ships the plans were expressly incorporated with the contract. These plans showed the vessels with straight keels, but as actually constructed the keels were cambered or arched so as to have a curve inwards. The effect of the camber was to increase the carrying capacity of the vessel, but it gave rise at the same time to inconvenience and expense when the vessel required to be docked, and was generally regarded as a serious defect unless it was of such slight amount that the keel would become straight when the vessel was loaded with cargo owing to the extra weight amidships.
A claim of damages by the shipowners on account of the camber, which had not disappeared in the manner indicated, was met by the defence that it had been resorted to in compliance with oral instructions given by the pursuers subsequent to the date of the written contract, and a proof in regard to this averment was, without objection, led before the Lord Ordinary. Evidence upon which held ( rev. the judgment of the Lord Ordinary and of the First Division) that the defenders had failed to prove the alleged verbal modification of the contract.

Judges:

Lord Chancellor (Halsbury), and Lords Macnaghten, Morris, and Davey

Citations:

[1900] UKHL 641, Lord Chancellor (Halsbury), and Lords Macnaghten, Morris, and Davey

Links:

Bailii

Jurisdiction:

Scotland

Contract

Updated: 27 October 2022; Ref: scu.631497

Kaines (UK) Ltd v Osterreichische Warrenhandelsgesellschaft Austrowaren Gesellschaft mbH: CA 1993

In June 1987 the defendants repudiated a contract to sell the claimant’s crude oil for lifting in September 1987 and for payment in October 1987. The claimants thereupon contracted to buy the oil at a higher price, again for lifting in September 1987 and for payment in October 1987; and in August 1987 they issued their claim against the defendants.
Held: The trial judge had erred in awarding interest from as far back as the date of the issue of the claim in that it was only in October 1987, when they had paid the higher price, that the claimants had sustained the loss. The injured party may, and if there is a market generally will, be required to make a substitute contract; and his damages will be assessed by reference to the time when the contract should have been made. This will usually be the time of acceptance of the breach. The judge’s finding on the date when the buyers should have bought in a substitute cargo ‘fixes the level of the plaintiffs’ damages on the facts of this case irrespective of what the plaintiffs did or failed to do at the time’ and ‘crystallises the position so far as the basis of a capital award of damages is concerned’.

Citations:

[1993] 2 LL Rep 1

Jurisdiction:

England and Wales

Cited by:

Cited – Aerospace Publishing Ltd and Another v Thames Water Utilities Ltd CA 11-Jan-2007
A substantial private archive of valuable books had been damaged when the defendant’s water mains burst. The court was asked to assess the value.
Held: The water company’s appeal failed save to a small extent. The articles were of substantial . .
Cited – Golden Strait Corporation v Nippon Yusen Kubishka Kaisha (‘The Golden Victory’) HL 28-Mar-2007
The claimant sought damages for repudiation of a charterparty. The charterpary had been intended to continue until 2005. The charterer repudiated the contract and that repudiation was accepted, but before the arbitrator could set his award, the Iraq . .
Lists of cited by and citing cases may be incomplete.

Damages, Contract

Updated: 27 October 2022; Ref: scu.247682

CTN Cash and Carry v Gallaher: CA 15 Feb 1993

The buyer paid a sum demanded by the seller who threatened otherwise to withdraw the credit facilities it provided to the buyer. The sum was not in fact due, but the demand had been made honestly. The buyer said the agreement was voidable for duress.
Held: Duress was not available when the action threatened was lawful. The common law does not recognise the doctrine of inequality of bargaining power in commercial dealings. It was necessary to focus on the distinctive features of the individual case and then to ask whether it amounted to a case of duress. Three characteristics here assisted the court in its decision. First, the dispute did not concern a protected relationship and did not arise in the context of dealings between a supplier and a customer. It arose in the context of arms length commercial dealings between two trading companies. Secondly, the defendants were in law entitled to refuse to enter into any future contracts with the plaintiffs for any reason whatsoever, or for no reason at all. Because a decision not to deal with the plaintiffs in the future would have been lawful, it was also lawful for them to threaten the plaintiffs that they would no longer grant them credit, when demanding payment of an invoice which was alleged to be due. The third, and critically important characteristic was that the defendant bona fide thought that the sum was owed and that therefore, when exerting commercial pressure in order to obtain payment, were not motivated by malice or anything which could be described as ‘bad faith’.
Steyn LJ approved the dicta of Professor Birk: ‘It is tolerably clear that, at least where they [the judges] can be confident of a general consensus in favour of their evaluation, the courts are willing to apply a standard of impropriety rather than technical unlawfulness’.

Judges:

Steyn LJ

Citations:

[1993] EWCA Civ 19, [1994] 4 All ER 714

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Thorne v Motor Trade Association HL 1937
The House confirmed a declaration granted as to validity of a rule of association notwithstanding the absence of any dispute. The House considered the nature of the threat required to establish a defence of duress.
Lord Wright observed that the . .
Cited – Mutual Finance Ltd v John Wetton and Sons Ltd 1937
A relative of a forger gave a guarantee in circumstances where the forger had been threatened with prosecution. He now pleaded economic duress.
Held: The guarantee should be set aside. The court considered the distinction between dures and . .
Cited – Pao On and Others v Lau Yiu Long and Others PC 9-Apr-1979
(Hong Kong) The board was asked whether a contract of guarantee had been obtained by duress.
Held: Lord Scarman said: ‘Duress, whatever form it takes, is a coercion of the will so as to vitiate consent. Their Lordships agree with the . .
Cited – Universe Tankships Inc of Monrovia v International Transport Workers Federation HL 1-Apr-1981
A ship belonging to the appellants had been blacked by the defendant union. Negotiations to clear the threat resulted in payment by the appellants to a welfare fund of the defendant. The company sought its refund saying that it had been paid under . .

Cited by:

Cited – Jones v Morgan CA 28-Jun-2001
The claimant appealed against an order refusing him enforcement an agreement for the purchase of a one half share in a property. The judge had found the agreement to be unconscionable.
Held: The appeal was dismissed. The judge had wrongly . .
Cited – Progress Bulk Carriers Ltd v Tube City IMS Llc ComC 17-Feb-2012
The claimant sought to set aside an arbitration saying that the arbitrator had misapplied the test for economic duress. . .
Lists of cited by and citing cases may be incomplete.

Contract

Updated: 27 October 2022; Ref: scu.262596

Toomey v Eagle Star Insurance Co Ltd: CA 1994

The word ‘reinsurance’ is often used loosely simply to describe any contract of insurance which is placed by or for the benefit of an insurer, but it should be construed more properly to require the insurance of an insurable interest in the subject matter of an original insurance. ‘The Court must ask itself whether the contractual intention was that the exclusion should cover both the possible negligent grounds of liability as well as the non-negligent grounds.’
Liability insurance is a species of original insurance whereby an assured insures the risk of his becoming liable to others: ‘The element of ‘liability’ was effectively introduced into this branch of insurance by the attempts of insurers, through the use of special clauses, to get round the need to prove their loss by proving an insured loss of the original subject matter. The history of this part of the law is reviewed in the judgments of the Court of Appeal in Insurance Company of Africa -v- Scor (UK) Reinsurance Co Limited [1985] 1 Lloyd’s Rep.312. The original form of the relevant clause required reinsurers ‘to pay as may be paid thereon’ a wording which Mr Justice Matthew in Chippendale -v- Holt (1895) 1 Com Cas 157 held only went to the quantum of any payment that had been made by the reinsured, not to the question whether a loss covered by the original insurance had ever taken place. The market then introduced the clause which required the reinsurers to ‘follow the settlement’ of the reassured. This clause was successful in requiring the reassured to accept any bona fide settlements made by the reassured with the original assured. The position was summarised by Lord Justice Robert Goff in Scor at [1985] 1 Lloyd’s rep at p.330 .. the effect of a clause binding reinsurers to follow settlements of the insurers, is that the reinsurers agree to indemnify insurers in the event that they settle any claim by their assured .. provided that the claim as so recognised by them falls within the risks covered by the policy of reinsurance as a matter of law and provided also that in settling the claim the insurers have acted honestly and have taken all proper and business like steps in making the settlement . . . Over the years, Judges have on a number of occasions, when dealing with reinsurance policies containing various types of settlement or payment clauses used the language of indemnification in respect of liabilities . . . In my judgment these references to liability must not be read out of context. They derive in part from particular reinsurance clauses which have been included in policies and from the basic proposition that a reinsured must prove a loss and must give the reinsurer the benefit of all rights of subrogation. These, and similar, statements do not alter the character of reinsurance or make it into something which is a mere liability insurance.’
Hobhouse LJ referred to the principle in Hooley Hill Rubber and said: ‘It is also necessary that the court should have regard to previous decisions of the courts upon the same or similar wording. Parties to a commercial contract are to be taken to have contracted against a background which includes the previous decisions upon the construction of similar contracts.’

Judges:

Hobhouse LJ

Citations:

[1994] 2 Lloyd’s Rep 516

Jurisdiction:

England and Wales

Citing:

Cited – Re Hooley Hill Rubber and Royal Insurance Co CA 1920
When interprting a contract, it is assumed that the draftsman works with a view to certainty of sense and standardisation of terms. Bankes LJ said: ‘Courts should be chary in interfering with the interpretation given to a well-known document and . .
Cited – Phoenix General Insurance Co of Greece SA v Halvanon Insurance Co Ltd ChD 1985
The court was asked to consider preliminary issues concerning facultative obligatory (fac. oblig.) reinsurances of a variety of business. The issues included whether the reinsured was obliged to keep a retention and whether the writing of its . .

Cited by:

Cited – HIH Casualty and General Insurance Limited and others v Chase Manhattan Bank and others HL 20-Feb-2003
The insurance company had paid claims on policies used to underwrite the production of TV films. The re-insurers resisted the claims against them by the insurers on the grounds of non-disclosure by the insured, or in the alternative damages for . .
Cited – Bedfordshire Police Authority v Constable and others ComC 20-Jun-2008
The authority insured its primary liability for compensation under the 1886 Act through the claimants and the excess of liability through re-insurers. The parties sought clarification from the court of the respective liabilities of the insurance . .
Lists of cited by and citing cases may be incomplete.

Insurance, Contract

Updated: 27 October 2022; Ref: scu.219306