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 accepted as a hazard of late redelivery that the vessel would miss her cancellation date for the next fixture. This was the kind of result which the parties would have had in mind. Rapid variations in market rates in either direction were market knowledge and the kind of loss, the need, on account of delay in redelivery, to adjust the dates for the subsequent employment of the vessel with a reduction in the previously agreed rate of hire, was within the contemplation of the parties as a not unlikely result of the breach.
Judges:
Christopher Clarke J
Citations:
[2006] EWHC 3030 (Comm), [2007] 1 Lloyd’s Rep 19, [2007] 1 All ER (Comm) 379, [2006] 2 CLC 1069
Links:
Citing:
Cited – Hadley v Baxendale Exc 23-Feb-1854
Contract Damages; What follows the Breach Naturaly
The plaintiffs had sent a part of their milling machinery for repair. The defendants contracted to carry it, but delayed in breach of contract. The plaintiffs claimed damages for the earnings lost through the delay. The defendants appealed, saying . .
Cited – Meyer v Sanderson 1913
The charterer had sent out the vessel on a further voyage even on the day when the charter was to come to an end. The owner sought damages.
Held: The charterers were ordered to ‘pay for the use of the steamer on that last voyage at the rate . .
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 . .
Cited – Watson Steamship Co v Merryweather and Co 1913
The vessel owners sought damages when the ship was redelivered 20 days late by the charterers. The special case as pleaded was ‘A claim was made by the owners for damages for dislocation of business and other special damage, but there was no . .
Cited – Christopher Hill Ltd v Ashington Piggeries Ltd CA 1969
The buyer suppied a food formula to a food mixer and claimed damages when the food mix injured his mink. The defendant argued that the level of damages sought exceeded that expectations of the parties when the contract was entered into.
Held: . .
Cited – London and Overseas Freighters v Timber Shipping Co SA ‘The London Explorer’ HL 1972
The London Explorer was under a charter where the hire was ‘to continue until the hour of the day of her redelivery’. The charterers redelivered the ship about 3 months late because, although she had set out on a legitimate last voyage, she had been . .
Cited – Christopher Hill Ltd v Ashington Piggeries Ltd HL 1972
Mink farmers had asked a compounder of animal foods to make up mink food to a supplied formula.
Held: There was reliance as to the suitability of the ingredients only.
Lord Diplock said: ‘Unless the Sale of Goods Act 1893 is to be allowed . .
Cited – The Black Falcon 1991
The ship under charter was returned late. The arbitrators had awarded the market rate of hire from the date when the vessel would have been delivered if she had not undertaken her last (illegitimate) voyage rather than from the last date when she . .
Cited – The Dione 1975
Charterers should have redelivered the vessel by a certain date but failed to do so.
Held: They were held liable in damages for the difference between the market and charterparty rate for the overrun period. Lord Denning said that where the . .
Cited – The Johnny 1977
Where a charterer had overrun his time, and faced a claim for damages, under the provisions of the amended Baltime form, the market rate should be assessed by reference to the market rate for 11-13 month charters (the period of the charterparty) as . .
Cited – Torvald Klaveness A/S v Arni Maritime Corporation (The Gregos) ChD 1991
The ship was returned late from a charter. The court was asked whether or not the legitimacy of the last voyage fell to be established at the date when the order was given or at the time when the last voyage began.
Held: It was the second: . .
Cited – Torvald Klaveness A/S v Arni Maritime Corporation (The Gregos) CA 4-Jun-1993
The ship was returned by the charterer after the expiry of the time charter. The court was asked as to when the validity of the last order was to be tested.
Held: The legitimacy of the charterer’s final order was to be tested at the date it . .
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 – Victoria Laundry (Windsor) Ltd v Newman Industries CA 1949
The plaintiffs claimed for loss of the profits from their laundry business because of late delivery of a boiler.
Held: The Court did not regard ‘loss of profits from the laundry business’ as a single type of loss. They distinguished losses . .
Cited – Czarnikow (C ) Ltd v Koufos; The Heron II HL 17-Oct-1967
The vessel had arrived late at Basrah in breach of the terms of the charterparty. The House was asked as to the measure of damages. The charterers had intended to sell the cargo of sugar promptly upon arrival, and now claimed for the fall in the . .
Cited – H Parsons (Livestock) Limited v Uttley Ingham and C. Limited CA 1978
The defendants had installed a pig nut hopper for the plaintiffs, but failed to provide adequate ventilation, causing the nuts to go sour, and the pigs to be poisoned.
Held: Remoteness of damage is a question of law. The death of the pigs . .
Cited – Kpohraror v Woolwich Building Society CA 1996
The Society, acting as a bank, had at first failed to pay its customer’s cheque for andpound;4,550, even though there were sufficient funds. The bank said that it had been reported lost. The customer sought damages to his business reputation.
Cited – Brown v KMR Services Ltd CA 26-Jul-1995
Allied Maples had made a corporate takeover of assets and businesses within the Gillow group of companies, during which it was negligently advised by the defendant solicitors in relation to seeking protection against contingent liabilities of . .
Cited – The Rio Claro 1987
For a loss arising from a breach of contract to be recoverable, Staughton J said: ‘It must be such as the contract breaker should reasonably have contemplated as not unlikely to result. To that direction must be added the point that the precise . .
Cited – The ‘Pegase’ 1981
The court considered the measure of damages for breach of contract in the light of the cases in the Heron II and Victoria Laundry: ‘the principle in Hadley v Baxendale is now no longer stated in terms of two rules, but rather in terms of a single . .
Cited – British Columbia, etc. Saw Mills Co. Ltd v Nettleship 1868
Willes J said: ‘the mere fact of knowledge cannot increase the liability. The knowledge must be brought home to the party sought to be charged under such circumstances that he must know that the person he contracts with reasonably believes that he . .
Cited – Atlantic Shipping and Trading Co v Louis Dreyfus and Co HL 1921
Lord Dunedin said: ‘My Lords in these commercial cases it is I think of the highest importance that authorities should not be disturbed and if your lordships find that a certain doctrine has been laid down in former cases and presumably acted upon . .
Cited – The ‘Nukila’ CA 1987
Hobhouse LJ said: ‘Turning to the authorities it must at the outset be recognised that, whether or not they are strictly binding on us, they must, insofar as they represent the existing authoritative statements of the law only be departed from if . .
Cited – R and H Hall Ltd v WH Pim Junr and Co Ltd HL 1928
Pim sold a cargo of wheat to Hall at 51s 9d a quarter. Hall had agreed to sell a similar cargo to Williams at 56s 9d a quarter, and Williams to sell again Suzuki at 59s 3d a quarter. Pim bought a cargo of wheat on board the ‘S.S. Indianic’ at 60s a . .
Cited – 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 – 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 . .
Cited – Koch Marine Inc v D’Amica Societa Di Navigazione ARL (The Elena d’Amico) QBD 1980
The ship owners wrongfully repudiated a charterparty in March 1973, 14 months after its inception. The charterers did not hire a substitute but claimed damages for the loss of profits they would have made between January and April 1974, during which . .
Cited – Louis Dreyfus Trading Ltd v Reliance Trading Ltd 2004
LD sold 7kmt sugar to R, C and FFO Banjul at $257.43 per mt. Shipment was ‘per m.v. Dawn currently discharging at Banjul’. An associate of R had already sold 5kmt to B at $290 per mt, for which the sugar was bought. LD knew of the resale and . .
Cited by:
Appeal from – Transfield Shipping Inc of Panama v Mercator Shipping Inc of Monrovia (the ‘Achilleas’) CA 6-Sep-2007
The court considered damages for late redelivery of a time-chartered vessel. . .
At first instance – Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) HL 9-Jul-2008
The parties contracted to charter the Achileas. The charterer gave notice to terminate the hire, and the owner found a new charterer. Until the termination the charterers sub-chartered. That charter was not completed, delaying the ship for the . .
Lists of cited by and citing cases may be incomplete.
Transport, Contract, Damages
Updated: 08 July 2022; Ref: scu.246737
