A hire clause was in bespoke terms providing for withdrawal ‘in default of payment’. The payment of hire for the final instalment was deficient because, as the umpire held, the charterers’ deductions for the length of the final voyage and bunkers on board at redelivery were unreasonable. There was no dispute that there was a default in payment of hire and the argument was addressed to whether owners had waived the right to withdraw in reliance on the withdrawal clause.
Held: The House considered the doctrines of election between different courses of action, and affirmation of a contract.
Lord Salmon criticised said: ‘My Lords, it would seem that there are some members of the Court of Appeal who do not approve of the Baltime form of charter and other forms of charter such as the New York Produce Exchange and the Shelltime forms which closely resemble it. These forms of charter are undoubtedly very strict in relation to the due payment of hire: their meaning, however, is perfectly clear and it is not permissible to put a construction upon them which would depart from that meaning. Unless the full amount of hire is paid by its due date the owners have the undoubted right to withdraw their vessel providing they do so within a reasonable time of the charterers’ default. The only exception is when the parties by their course of conduct (a) have as in the present case accepted that disbursements made by the charterers in respect of the owners’ liabilities may be deducted from the hire subject to vouchers being produced, or e.g., (b) have accepted as in Tankexpress A/S v. Compagnie Financiere Belge des Petroles S.A. [1949] A.C. 76 that the amount of hire posted two days before it falls due shall be deemed to have been paid in time. Otherwise, unless the full hire is paid by the time it falls due the charterers are in default and the vessel may be withdrawn. On the appeal to your Lordships’ House in The Laconia [1977] A.C. 850 I ventured to point out that the law relating to the owners’ rights under a Baltime form of charter to withdraw their vessel should the charterers fail to pay the hire in time had been clearly stated by your Lordships’ House in the Tankexpress case; but that a great deal of doubt on the subject had since been generated by the Court of Appeal in The Georgios C [1971] 1 Q.B. 488 and had troubled the waters ever since. I expressed the hope that those doubts might finally be dispelled by your Lordships’ reversal of the Court of Appeal’s decision in The Laconia and overruling its decision in The Georgios C. These doubts were, however, temporarily revivified by the decision of the Court of Appeal in the present case but will now, I think, permanently be laid to rest by your Lordships’ decision allowing this appeal; Certainty of meaning is of primary importance in all commercial transactions. Commercial contracts all over the world, having nothing to do with the United Kingdom, have for generations provided that any dispute arising under the contract shall be decided in the English commercial court or by arbitration in London according to English law. This is because of the confidence which exists throughout the commercial world in the administration of English justice. I fear that this confidence will hardly be strengthened should there be any further decisions in the Court of Appeal similar to those in The Georgios C, The Laconia and the instant case.’
Judges:
Scarman L, Lord Salmon
Citations:
[1979] 1 WLR 1018
Jurisdiction:
England and Wales
Cited by:
Cited – Oliver Ashworth (Holdings) Limited v Ballard (Kent) Limited CA 18-Mar-1999
In order for the landlord to claim double rent where a tenant held over unlawfully after the tenancy was determined, the landlord must not do anything to indicate that the lease might be continuing, for example by denying the validity of break . .
Cited – Oliver Ashworth (Holdings) Limited v Ballard (Kent) Limited CA 18-Mar-1999
In order for the landlord to claim double rent where a tenant held over unlawfully after the tenancy was determined, the landlord must not do anything to indicate that the lease might be continuing, for example by denying the validity of break . .
Cited – Peyman v Lanjani CA 1985
Application was made for consent to assign a lease. The court was asked whether or not the purchaser of a leasehold interest in a property, who had elected to affirm the contract despite a repudiatory breach by the vendor, could be held to his . .
Cited – Bolton Metropolitan Borough Council v Municipal Mutual Insurance Ltd CA 6-Feb-2006
The deceased had come into contact with asbestos when working on building sites for more than one contractor. The claimant here sought contribution from the defendants for the damages it had paid to his estate. The issue was as to liability on . .
Lists of cited by and citing cases may be incomplete.
Equity, Contract, Transport
Updated: 29 April 2022; Ref: scu.188151