clr/1983/1983_1_553.pdf

(1983)After an exchange of cables between the plaintiff and the defendant an agreement was reached for the supply by the defendant to the plaintiff of 100,000 gross of safety matches. The plaintiff found a purchaser in Saudi Arabia and entered intoanagreementfor thesupply tohimofsafety matches; and, 5 as a result, the said purchaser made the necessary banking arrangements for an irrevocable letter of credit in fa\our of the defendant for the amount of 10,000 English pounds (£10,000). Then, the defendant issued a "requisition" for 50,000gross of safety matches addressed to the appellant and sent, also, a JQ letter to the Bank of Cyprus Ltd. by which such bank wasirrevocably authorized, in relation to the said letter of credit, topay to the appellant the sum of 221 mils per gross of safety matches on the strength of documentsto bepresented to the Bank bythe defendant. On the sameday the Bank of Cyprus Ltd. acknow- j5 ledged receipt of the authorization in question and undertook to act according to the defendant's instructions; and copies of all this correspondence were sent to the appellant. The appellant failed to supply the safety matches which were ordered bymeansoftheaforementioned requisition,oranyother 20 quantity of safety matches at all, and whenthe plaintiff sued the defendant for breach of contract the appellant wasmade a third party to the proceedings. The trial Court sustained the action and held that the defendant was entitled to receive, by way of indemnity, from the appellant the equivalent in Cyprus currency 25 of £1,500 English pounds which the defendant was ordered to pay to the plaintiff. Hence this appeal by the appellant-third party. Thetrial Court rejected the evidenceadduced bythe appellant and accepted the version of the defendant who stated that the 3Q appellant had accepted the requisition. Counsel for theappellant mainly contended that therewasnot concluded in law and in fact by way of offer and acceptance a valid agreement for the sale of 100,000 gross of safety matches by the appellant to the defendant and the finding of the trial 35 Court about the existence of such an agreement waserroneous. Held, that when the legal effect of any transaction is to be ascertained from a number of documents the meaning and effect 554 1 C.L.R. 5 10 Aphrodite Matches v. Ioannides Ltd. of such documents are matters of law, but where it is, also. necessary to take into consideration the conduct, the course of business or oralcommunications oftheparties,theoralevidence hasto beweighed and therehas to bedecided what wasthereal intention and meaning of the parties (see, inter alia, Halsbury's Laws of England, 4th ed., vol.17, p.20, para. 25); and that in the light of the foregoing there was, indeed, entered into a valid and binding agreement, as alleged by the defendant and found bythetrial Court, for thesupply of safety matches bytheappellant to the defendant; accordingly the appeal must fail. Appeal dismissed. Appeal. Appeal by the third party against thejudgment of the District Court ofNicosia (Stavrinakis, P.D.C.) dated the 16th September, 15 1974 (Action No. 4796/71) whereby it was decided that the defendant company was entitled to receive by way of indemnity from the third party the equivalent in Cyprus currency of £1,500.- (English pounds). T. Papadopoulos with P. Ioannides, for the appellant. 20 L. Papaphilippou, for the respondent-defendant. E. Lemonaris, for respondent plaintiff. Cur. adv. vult. TRIANTAFYLLIDESP. read the followingjudgment of the Court. The appellant company, which was a third party at the trial, has 25 challenged by means of this appeal that part of the judgment of the trial Court by whichit was decided that the respondentdefendant company (to be referred to hereinafter as the "defendant") was entitled to receive, by way of indemnity, from the appellant the equivalent in Cyprus currency of 1,500 30 English pounds (£1,500), legal interest and costs, which the defendant was ordered to pay to the respondent-plaintiff company (to be referred to hereinafter as the "plaintiff"). The salient facts of this case, as found by the trial Court, are briefly as follows: 35 One of the directors of the plaintiff, Andreas Ellinas, met a director of the defendant, Andreas Ioannides, and informed 555 Trtantafyllides P. Aphrodite Matches v. Ioannides Ltd.

(1983)him that the plaintiff was interested to buy safety matches for a customer in Saudi Arabia. As a result the defendant supplied the plaintiff with samples of matches manufactured by the appellant. Thedefendant thencontactedtheappellantandmadeinquiries about the supply of 100,000grossofmatches;and theappellant furnished the defendant with a document worded as follows: 5 "OFFER OF SAFETY MATCHES 100,000 GROSS F.O.B. Famagusta 4/6 per Gross. DELIVERY: 20,000 GROSS monthly. FIRST LOT JULY 1970 PAYMENT: LETTER OF CREDIT". 10 After an exchange of cables between the plaintiff and the defendant an agreement was reached for the supply by the defendant to the plaintiff of 100,000 gross of safety matches. 15 The plaintiff found a purchaser in Saudi Arabia and entered into an agreement .for the supply to him of safety matches; and, as a result, the said purchaser made the necessary banking arrangements for an irrevocable letter of credit in favour of thedefendant fortheamountof 10,000Englishpounds(£10,000). 20 Then, the defendant issued a "requisition" for 50,000 gross of safety matches addressed to the appellant and sent, also, a letter to the Bank of Cyprus Ltd. by which such bank was irrevocably authorized, in relation to the said letter of credit, to pay to the appellant the sum of 221 mils per gross of safety 25 matches on the strength of documents to be presented to the Bank by thedefendant. On the sameday the Bank of Cyprus Ltd. acknowledged receipt of the authorization in question and undertook to act according to the defendant's instructions; and copiesofallthiscorrespondence weresent tothe appellant. 30 The appellant failed to supply the safety matcheswhichwere ordered by means of the aforementioned requisition, or any other quantity of safety matches at all, and when the plaintiff sued the defendant for breach of contract the appellant was made a third party to the proceedings. The first main submission of counsel for the appellant has been that there was not concluded in law and in fact by way 556 35 1 C.L.R. Aphrodite Matches ?. Ioannides Ltd. TriantafylUdes P. ofoffer and acceptance avalid agreementfor thesaleof 100,000 gross of safety matches by the appellant to the defendant and that thefindingof the trial Court about the existence of such an agreement is erroneous. 5 As it is clearly pointed out by the trial Court initsjudgment the evidence which was placed before it in this respect was not only documentary, namely the aforementioned "offer of safety matches" by the appellant" and "requisition" by the defendant, but, also, oral; and, in this respect, the trial Court, 10 rightly in our view, did not treat as reliable the denial of the managing director of the appellant, Takis Scarparis, that there was ever concluded a binding agreement, as aforesaid, between the appellant and the defendant. ThetrialCourt found to be "more probably and down to earth" the opposite version of 15 the defendant. One of the directors of the defendant, Costas Seferis, whose evidence appears to have been believed by the trial Court,statedthat Scarparis had accepted the "requisition"; and this witness went on to state that he had discussed on the telephone with Scarparis a price discount which Scarparis 20 accepted. When the legal effect of any transaction is to be ascertained from a number of documents the meaning and effect of such documents are matters of law, but where it is, also, necessary to take into consideration the conduct, the course of business 25 or oral communications of the parties, the oral evidence has to be weighed and there has to be decided what was the real intention and meaning of the parties (see, in this respect, inter aha, Halsbury's Laws of England, 4th ed., vol. 17,p. 20,para. 25). 30 In the light of the foregoing weare of the opinion that there was, indeed, entered into a valid and binding agreement, as alleged by the defendant and found by the trial Court,forthe supply of safety matches by the appellant to the defendant. The other main submission of counsel for the appellant has 35 been that the defendant failed to comply with theprerequisite of securingaletterof credit infavour of theappellant andthat thefindingtothecontrary of the trial Court onthis point is wrong. 557 Tri anlaf>Hides P. Aphrodite Matches τ. Ioannides Ltd.

(1983)Theevents which relate totheopeningof theletteris credit— which was what is known in banking practice as a "revolving" one—have already been referred to in this judgment and need not be repeated. As has already been stated copies of all the relevant corre- 5 spondence between the defendant and the Bank of Cyprus Ltd. were sent to the appellant and so there was, as was found by the trial Court, at least tacit acceptance by the appellant of what had been arranged as regards the letter of credit by means of such correspondence. 10 Furthermore, there was evidence which was accepted by the trialCourtand which showsthattheappellant's consent regard­ ing the arrangements in relation to the letter of credit was not merely tacit but, also, express: Seferis, who, as stated earlier, was one of thedirectors of the defendant, testified that thesaid 15 arrangements were agreed to between him and Scarparis, the managing director of the appellant; and the version of Seferis is confirmed, in this connection,by Andreas Ioannides,another one of the directors*of the defendant; and moreover support for such version is found in theevidence of Sotiris Christofides, 20 who at the material time was in charge of the Bank of Cyprus documentary credit department. In the circumstances, we are of the opinion that there was correctly found by the trial Courtthat there was substantial compliance by the defendant with the requirement regarding 25 the letter of credit and thattheappellant was satisfied with such compliance; and, actually, there was never relied on by the appellant, as thereason for thefailure of the appellant to supply the matches in question, any alleged default in connection with the•arrangements for a letter of credit. 30 All along the appellant's attitude has been to deny the existence of the relevant contract, which, however, was rightly found by the trial Court to have been concluded between the defendant and the appellant. For all the reasons which have been set out in thisjudgment 35 this appeal fails and is, therefore, dismissed with costs. Appealdismissed with costs. 558