(Nova Scotia En Banco) The parties contracted for a charter of a fishing ship. It then became unlawful for a ship to use otter trawl, the only equipment available to the ship, without a licence, but the number of licences was restricted and did not include this ship. The charterers claimed that the contract was frustrated. The Supreme Court of Canada had said that the contract remaned binding since the charterers had selected other ships to be licensed.
Held: The decision to opt to licence other ships determined the appeal in favour of the owners. The loss of the St. Cuthbert’s licence was correctly described, quoad the appellants as ‘a self induced frustration.’
Lord Wright, referred to criticism of Krell v. Henry and said: ‘The authority is certainly not one to be extended: it is particularly difficult to apply where, as in the present case, the possibility of the event relied on as constituting a frustration of the adventure (here the failure to obtain a licence) was known to both parties when the contract was made, but the contract entered into was absolute in terms so far as concerned that known possibility. It may be asked whether in such cases there is any reason to throw the loss on those who have undertaken to place the thing or service for which the contract provides at the other party’s disposal and are able and willing to do so.’
Atkin, Tomlin, MacMillan, Wright LL
[1935] UKPC 1, [1935] AC 524, [1935] UKPC 20
Bailii, Bailii
Citing:
Cited – Bank Line Ltd v Arthur Capel and Co HL 12-Dec-1918
The defendant ship-owners contracted to lease the ship on charter to the plaintiffs. Before the term, the ship was requisitioned for the war effort. The plaintiffs did not exercise the contractual right given to them to cancel the charterparty. The . .
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 – Hirji Mulji v Cheong Yue Steamship Co PC 1926
Lord Sumner described the doctrine of frustration as ‘a device by which the rule as to absolute contracts are reconciled with a special exception which justice demands.’ . .
Cited – Bank Line Ltd v Arthur Capel and Co HL 12-Dec-1918
The defendant ship-owners contracted to lease the ship on charter to the plaintiffs. Before the term, the ship was requisitioned for the war effort. The plaintiffs did not exercise the contractual right given to them to cancel the charterparty. The . .
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 . .
Cited – North Shore Ventures Ltd v Anstead Holdings Inc and Others ChD 21-Jun-2010
Claim was made under a substantial loan where payments had not been made after assets were sequestered and only released after four years. . .
Cited – Gamerco Sa v ICM Fair Warning (Agency) Ltd and Another QBD 31-Mar-1995
The plaintiff Spanish concert promoter, and the defendant rock group, Guns ‘n’ Roses, agreed to provide a concert at the stadium of Atetico Madrid, but shortly before it was due to take place, the stadium was deemed unfit, and its licence withdrawn. . .
Lists of cited by and citing cases may be incomplete.
Commonwealth, Contract
Leading Case
Updated: 31 October 2021; Ref: scu.245727