THE REPUBLIC
CYPRUS, 2. THE MINISTER
COMMERCE AND INDUSTRY, Appellants-Defendants, v. GRECA SHOE INDUSTRY LTD., Respondents-Plaintills. (Cinl Appeal No. 5997). lindings
trial Court—Guarantee—Under export cndit insurance service—Court
Appeal not satisjud that the finding
trial Court that respondents not in breach
the guarantee as to he disentitled to recove their claim was wrong. This litigation arose out
a guarantee given by appellant 2 to the respondents under an export credit insurance service scheme for payment
90 per cent
any loss that the respondents would have to sustain in connection with the export
shoes from Cyprus. The respondents as members
the scheme claimed certain amounts from the appellants as compensation under the said guarantee. These amounts were not disputed by the appellants and their only defence wasthat the respondents were not entitled to any compensation as they were in breach
the terms
the guarantee. The trial Court came to the conclusion that on the facts
the case and the evidence before it, the respondents were not in breach
any conditions
the Comprehensive Guarantee which would disentitle them from claiming compensation. Hence this appeal which turned mainly on the above finding
the trial Court. Held, that this Court has not been satisfied that the finding
the trial Court that the respondents were not in breach
the guarantee as to be disentitled to recover their claim was wrong; accordingly the appeal must fail. Appeal dismissed. 791 Attorney-General v. Creca Shoe Industry
the District Court
Nicosia (Papadopoulos, S.D.J, and Stavrinides, Ag. D.J.) dated the 30th June, 1979 (Action No. 709/78) whereby they were adjudged" to'pay to the plaintiffs the sum
£9,211.- 5 due as a guarantee under an export credit insurance scheme. A. Frangos, Senior Counsel
the Republic, for the appellants. R. Stavrakis, for the respondents. Cur. adv. vult. 10 MALACHTOS, J.: Thejudgment
the Court will be delivered by Mr. Justice Savvides. SAVVIDES, J.: This is an appeal against the judgment
the Full District Court
Nicosia, whereby the appellants were adjudged to pay to the respondents the sum
£9,211.-, plus 15 interest on £8,700.- at 8 per cent per annum as from 16.12.1977 and costs. Appellant 1isthe Attorney-General
the Republic
Cyprus, representing the Government
the Republic
Cyprus and appellant 2 is the Minister
Commerce and Industry. The respondents are a shoe manufacturing industry 20
Nicosia. The cause
action arose out
a guarantee given by appellant 2 to the respondents under an export credit insurance service scheme for payment
90 per cent
any loss that the respondents would have to sustain in connection with the export
shoes from Cyprus. 25 The facts
the case are briefly as follows: Appellant 2 for the purpose
encouraging and assisting manufacturers
goods in Cyprus to export their goods abroad, established in 1975 an export credit insurance service whereby in consideration
a premium paid on the value
30 goods exported, a guarantee was given to an exporter joining the scheme for any ioss up to 90 per cent which such exporter might have sustained by the failure
the buyer to pay the value
the goods supplied to him. The respondents on the 8th December, 1975, submitted their 35 proposal for joining the scheme as from the 1st January, 1976. An
fer was made by appellant 2 on the 13th December, 1975, which v/as accepted by the respondents and as a result
the payment
the agreed premium by the respondents, appellant 792 1 C.L.R. Attorney-General v. Greca Shoe Industry Savvides J. gave to the respondents a guarantee whereby he agreed and undertook to pay to respondents 90 per cent
any loss being not less than £ 2 5 - with a maximum liability
£75,000-, which respondents might sustain in connection with the export 5 from Cyprus
shoes manufactured by them in Cyprus. The agreed premium was as follows: Initial premium £150.-. Premium rate per hundred Pounds: In case
cash against documents, 300 mils, in case
credit not exceeding 90 days, 500 mils and in case
credit not 10 exceeding 180 days 700 mils. The said guarantee was subject to the terms set out in a comprehensive guarantee leaflet which formed part and parcel with the guarantee. After the said guarantee became effective, the respondents exported to their customers, namely Dical 15 B.V.
Holland, shoes during the whole
1976. Though the buyer was paying more or less regularly for exports to him, with the exception
some delay on certain occasions, he failed to pay the value in respect
goods shipped on the last six •occasions out
more than thirty shipments, and the value 20
which was payable between the 16th December, 1976 and the 12th February, 1977. The value
goods which remained unpaid amounted to 103.345,97 D.M. but the balance
the amount which was claimed from the appellants, as appearing in the particulars
account attached to the Statement
Claim 25 as exhibit 1, is as follows: Unpaid Drafts by DICAL Less: 1.Amount in respect
complaints 30 35 103.345,97 D.M. 11.357,58 D.M. 2. Difference
3 styles 3.620
such balance payable by the defendant ' C£ 9,211.PIus interest at £ per cent on C£8,700.- as from 16.12.77 to date
payment. 5 Declarations, that payment
the bills issued by the buyer in respect
such goods, was overdue, were submitted to the Ministry
Commerce and Industry on 26th January, 1978, 10 informing them at the sametime that they had asked thebuyer by telex, for the reason
such delay. The amounts claimed by the respondents were not disputed by the appellants, their onlydefence being that the respondents were not entitled to any compensation as they were in breach 15
the terms
the guarantee. The trial Court having heard the evidence called by both sides, came to the conclusion that on the facts
the case and the evidence before it, the respondents were not in breach
any conditions
the Comprehensive Guarantee which would 20 disentitle them from claiming compensation. We shall refer to certain parts
the judgment concerning fundings
fact and inferences drawn by the trial Court against which most
the grounds
appeal are directed. The trial Court said the following concerning delays in the 25 payments
bills. "It is clear that 24 Bills
Exchange were honoured by the buyers and there was little if any delay in payment
at least 24
these Bills
Exchange. They were settled between 5 and 30 days after the due date. For the Bill 30
Exchange due on the 5th June, 1976 and 23.10.1976 therewasadelayof65and66daysinpaymentrespectively. Onemustnoticehoweverthatafter theBillofthe5.6.1976 four Billswerepaidpromptly. Weusetheword'promptly' allowing a few days delay which is apparently customary 35 in the trade and after the Bill
the 23.10.1976 another eight Bills
Exchange were promptly paid. 794 I C.I..R. Attorney-General v. Greca Shoe Industry Savvides J. One other fact which is not also disputed is that whilst some
these Bills were due two shipments were sent to Dical to Holland. 5 10 15 20 25 30 Now we are asked to say whether in view
this behaviour
the purchaser and the non-disclosure
these facts by the plaintiff to the defendants amounts to a breach
article 4
the Guarantee or any other articles
the Guarantee which Mr. Frangos has suggested. Before we arrive at our conclusion we bear in mind two other facts:- One is that the Ministry
Commerce and Industry has supplied the insured with the form to be submitted to the Ministry in the end
each month stating therein all Bills which are overdue for over 30 days. Reasonably one may"infer that the Ministry would allow or would not be concerned or would not consider it as a risk to allow a purchaser a delay
payment
upto 59 days. The other fact which wehave in mind isthe evidence
Mr. Anatolitis who seems to bevery well conversant with the trading practices and who on being asked
his opinion about Dical and how he would consider him, a good or a bad client he said that having in mind the payments, he would consider him as a good client. We have given careful consideration to all the facts
the case. We have gone through all the evidence repeatedly and all the documents before us and we have in mind the restrictions and conditions imposed by the "Guarantee and the Proposal Form. On the facts
this case we are
the opinion that the plaintiff is not in breach
any conditions which would disentitle him from compensation". The above findings
the trial Court were contested by the appellants and the following grounds
appeal have been advanced and argued by learned counsel on their behalf in 35 his effort to prove that the trial Court was wrong in finding that the respondents were not in breach
any condition which would disentitle them to recover: 795 Savvides J. Attorney-General v. Greca Shoe Industry
the trial Court is wrong in law in that it ignored and/or overlooked and/or did not take into 5 consideration and/or did not give due weight to substantial provisions
the Comprehensive Guarantee and/or the Proposal for Comprehensive Guarantee. 3(a) The approach to and the principle followed by the trial Court on the issue
delay and the length thereof 10 was wrong and/or contrary to and/or inconsistent with plaintiffs' obligations under the Comprehensive Guarantee and/or the Proposal for Comprehensive Guarantee. (b) The trial Court failed to assess and/or calculate the 15 delay before plaintiff came to know about the payment
the bills, the crux
the matter being the delay to the knowledge
the plaintiff. 4. The trial Court wrongly inferred that the Ministry would allow or would not be concerned or would not 20 consider it as a risk to allow a purchaser a delay
payment
up to 59 days. 5(a)The trial Court wrongly found that after the bill
the 5.6.1976 four bills were paid promptly. (b) Even if the said four bills were paid promptly, a fact 25 which was denied, it is immaterial to the delay in the payment
the aforesaid bill
the 5.6.1976 and its non-disclosure viewing the provisions
the Comprehensive Guarantee and/or the Proposal for Comprehensive Guarantee". The judgment
the trial Court then goes on as follows: "We do not agree with Mr. Frangos that there was a duty imposed on the plaintiff
immediate notification to the Ministry
any delay in the Bills nor do we agree that in the prevailing circumstances the plaintiff has taken 35 unreasonable risks. 796 30 1 C.L.R. 5 10 15 20 Attorney-General v. Greca Shoe Industry Savvides J. It appears that there is in the trade business a custom
leaving some Billsdelayed for short times and it appears that it was the policy
the Ministry
Commerce and Industry to let things in the customary course with the sole aim
promoting and encouraging sales. What in our opinion would be a demand by the Ministry
the exporters would be"reasonable diligence and care in the exportation
their goods without taking too many risks but apparently export has certain risks and these risks are exactly those which the Ministry wanted to abolish in order to encourage exports by providing the Export Insurance Scheme. Weare surethat it would not bethepolicy
the Ministry to order stoppage
further shipments to Dical nor could we say that the Ministry would immediately cancel the insurance
the plaintiff. It is not so much the letter
the insurance policy which must be examined but the spirit coupled with the custom. In fact we dare say that there is no strict literally prohibition
any
the acts which the plaintiff did in his export business. On reading article 4
the Comprehensive Guarantee or article 13
the Proposal Forms one may see that there is a reasonable latitude given to the insured in complying with the terms
the insurance". 25 30 Counsel for appellants contests the above findings, contending under grounds 6, 7 and 8
this appeal that: "6(a) The trial Court was wrongly influenced bythe evidence
witness 2for plaintiff, wrongly relied on his evidence, and/or wrongly found that he was well conversant with trading practices. (
any custom in the trade in which the trial Court could safely rely. (d) In any event the Comprehensive Guarantee and/or the Proposal for Comprehensive Guarantee leave no 797 Simidev J. Attorney-General v. Greta Shoe Industry (1983» room for custom or trade practice, the issue thereunder being strict performance and observance
the stipulations contained therein. 7. The trial Court totally disregarded the contents
exhibit 7 in which the plaintiff himself speaks about Dicai and
his delays
which he never informed defendant. 8. The trial Court wrongly look certain matters for granted, e.g. 'that there is in the trade business a custom
leaving some bilis delayed for short times', that it was the policy
the defendant 'to let things in the customary course with the sole aim
promotion and encouraging sales', that 'it would not be the policy
defendant to order stoppage
further shipments or immediately cancel the insurance
the plaintiff ". Learned counsel for the appellants in his long and able address before us, tried to base his case on the terms
the comprehensive guarantee contending that the respondents were in breach
the terms
such guarantee which terms were a condition precedent to the contract
suretyship and as a result the respondents were disentitled to raise any claim for loss. VVcwish to point cut that nothing is mentioned in the statement
defence that the appellants "have as a result
such breach been discharged from the said guarantee" but we shall consider such matter being in issue though alleged in an indirect way that the "respondents are disentitled to recover under the guarantee". Further, there is no allegation in the defence that as a result
thealleged breach
the terms
the guarantee appellant 2had, at any time after he became aware
the alleged breach, given "a written notice to the INSURED terminating the guarantee" and indicating his intention "to retain any premium paid". The terms
the Comprehensive Guarantee which are alleged as having been breached by the respondents, are Articles 4, 5, 6, 7 and 13 and, also, para. 13(a) and 15
the proposal. Their respective provisions read as follows: "Article 4. DISCLOSURE
FACTS AND MINIMISING LOSS Without prejudice to any rule
law, it is declared that this Guarantee is given on condition that— 798 1 C.L.R. Attorney-General v. Greca Shoe Industry' Savvides J. a. the INSURED has at the date
this Guarantee disclosed and will at all times during the operation
this Guarantee promptly disclose all facts in any way affecting the risks guaranteed; and 5 10 b. the INSURED shall use all reasonable and usual care, skill and forethought and take all practicable measures, including any measures which may be required by the Minister (including if so required the institution
legal proceedings); to prevent or minimise loss; and c. the INSURED shall notify the Minister in writing
the occurrence
any event likely to cause a loss within 30 days
becoming aware
any such occurrence; and 15 d. the INSURED shall upon request provide all such other information as the Minister may require. Article 5. STATEMENTS DECLARATION 20 25 IN PROPOSAL AND The Proposal (including the Declaration therein) shall be incorporated with this Guarantee as its basis. If any
the statements contained in the Proposal is untrue or incorrect in any respect, this Guarantee shall, unless the Minister otherwiseelectsin writing, bevoidbut the Minister may retain any premium that has been paid. Article 6. OBSERVANCE
STIPULATIONS Due performance and observance
each and every stipulation contained in this Guarantee and in the Proposal shallbe acondition precedent to any liability
the Minister hereunder. 30 35 Article 7. FAILURE TO COMPLY WITH CONDITIONS No failure by the INSURED to comply with any
the conditions
this Guarantee shall be deemed to have been excused or accepted by the Minister unless the same is expressly so excused or accepted by the Minister in writing. Article 13. DECLARATION a. The INSURED shall make declarations to the 799 Savvides J. Attorney-General v. Greca Shoe Industry
all contracts to which this Guarantee applies and all amounts overdue for payment; such declarations shall be made by completing such forms as may be required by the Minister for that purpose and byreturning the forms to the Minister 5 by the time stated therein. b. If the INSURED has no contract in respect
which a declaration is required to be made for any period stated in the declaration form, the INSURED shall make a declaration to that effect by completing 10 such form as may be required by the Minister for that purpose and by returning the form to the Minister by the time stated therein. c. Failure by the INSURED to make any declaration required by this Article within a period
60 days 15 from the time stated in the declaration form shall be deemed to be a breach
this Guarantee and the Minister shall after the expiry
that period be entitled to give written notice to the INSURED terminating this Guarantee and to retain any premium paid". 20 Para. 13
the Proposal reads: "We further agree that, unless otherwise agreed by you in writing, you will be under no liability in respect
a particular buyer in connection with— a. any contract with that buyer having a Date
25 Contract after the date on which we have learnt that that buyer is in financial difficulties, or b. any amount owing by that buyer for goods despatched to him after the date on which we have learnt 30 that the position
that buyer appears to be such as to make the despatch
goods to him undesirable". Para. 15
the Proposal; "We undertake to carry on our business with due care in the making
contracts and the despatch (and delivery) 35
goods thereunder and in regard to the conditions
the contract and the trustworthiness
the buyer". 800 1 C.L.R. Attorney-General v. Greca Shoe Industry Savvides J. Counsel for appellants contended that the finding
the trial Court that the Ministry would allow or would not consider it as a risk to allow a delay
payment
upto 59days is wrong as such finding is contrary to paragraph (c)
-the 5 Guarantee. For the purpose
construing a provision
the Comprehensive Guarantee, we have to consider the Guarantee as a whole and, in particular, such provisions as are interrelated. Article 4(c) speaks
"events likely to cause a loss". What 10 such events are? In answering this question, one has to look whether there is any provision in the Guarantee defining such events. Article 12of the Guarantee under the heading "causes
loss" the events which shall be considered as constituting causes
loss for the purpose
the guarantee, are given as 15 ten and are enumerated in Anicle 12 under paragraphs R.01 to R.10. The use
the letter "R" isnot explained anywhere in the Guarantee, but, presumably, it may stand for the word "Risk". The material part
for the purposes
this appeal, reads as follows: 20 "For the purposes
this Guarantee (and to the extent to which they are applied by the relevant sections) the following shall constitute cause
loss— R.01. The Insolvency
the buyer; 25 R.02. Thefailure
thebuyer to pay to the INSURED within four months after the Due Date
Payment the amount owing in connection with goods delivered to and accepted by the buyer; Reading Article 4(c) in conjunction with Article 12, the inference we can draw is that "the occurrence
any event 30 likely to cause a loss" under para, (c)
must be such as to fall within the express provisions
. The duty, therefore, cast on the insured under para, (c)
is as expressly stated therein to notify the Minister
such event within 30days
becoming aware
it, that is, insolvency 35
the buyer, his failure to pay the insured within four months after theDue Date
Payment etc. Asto what shallbe deemed as amounting to "Insolvency" in the Interpretation clause
the Guarantee Article 9 it is stated under (j): 801 Savvides J. Attorney-General v. Greca Shoe Industry
the buyer's affairs has been made by a Court for the benefit
his creditors; or iv. in the course
execution
ajudgment, thelevy
execution has not satisfied the debt either in full 10 or in part; or v. the buyer has made a valid assignment, composition or other arrangement for the benefit
his creditors generally; or vi. the INSURED shows, to the satisfaction
the 15 Minister, that thefinancialstate
the buyer is such thatevenpartialpaymentisunlikelyandthatto enforce judgment or to request that the buyer be declared bankrupt or wound up would have no other foreseeable result than one out
proportion to the costs 20
the proceedings; or vii. such conditions exist as are by any other system
law substantially equivalent in effect to any
the foregoing conditions". In the present case, there is no allegation that any
the 25 events set out in Article 12has occurred casting upon the respondents theduty
notifying theMinister within 30days from its occurrence, as contemplated by Article 4(c). Counsel for appellant made also reference to paragraph (a)
concerning the duty
the respondents to make 30 declarations as to amounts overdue for payment. Such declarations,counsel said, aredeclarationsonforms EC 137provided bytheExport CreditInsuranceSection(E.C.I.S.)
the Ministry
Commerce and Industry which had to be submitted to such Ministry at theend
eachmonth. Copiesofsuchdeclarations 35 areattached totheletterexhibit 2
such form as follows: 802 5 1 C.L.R. Attorney-General v. Greca Shoe Industry Savvides J. "DECLARATIONS
PAYMENT MORE THAN 30 DAYS OVERDUE to be despatched to ECIS at the end
each month. 5 If the amount remains overdue should be made each month. A separate form should be used for each buyer. In cash against documents transactions due date is regarded as the date
arrival
the goods". and under a foot note: 10 "Failure to declare may excuse the Minister from liability". It is clear from the contents
such form that if at the end
the month a payment
a bill remained overdue for less that 30 days the insured need not make any declaration in 15 respect
such overdue bill at the end
that particular month but at the end
thefollowing month when such payment would have remained overdue for more than 30 days. Therefore the inferences
the trial Court that the Ministry would allow or would not consider it as a risk to allow a purchaser a delay 20
payment
upto 59 days, was correct and warranted by the evidence before it. Counsel' for the appellants further argued at some length that even a delay
payment
less than 30days from the date when a bill was due for payment, and he enumerated a number 25
instances when this happened, was a fact which had to be brought to the knowledge
the Minister and that in any event the respondents should have discontinued sending goods after a bill remained unpaid beyond its due date for payment till payment
the overdue bill was settled. Such course would 30 have been not only undesirable but also extremely dangerous and in breach
paragraph 13
the Proposal resulting to the release
the Minister
any liability in respect
contracts entered after the respondents have learned that the buyer was in financial difficulties or in respect
goods despatched to the 35 buyer after respondents have learned that the position
the buyer wassuch astomakedespatch
goods to him undesirable, a fortiori, counsel contended that such duty existed in the case
two bills due for payment on the 5th June, 1976 and 23rd 803 Savvides J. Attorney-General v. Greca Shoe Industry
65 and 66 days respectively without the respondents having informed the Minister about such delay and without having discontinued to despatch goods to the buyer, In concluding on this point, counsel contended that the Court was wrong in finding that there was a trade custom justifying a delay
a few days and in any event such practice would not be applicable in the circumstances
this case. 5 Leaving aside, however, for a moment the existence or not
a trade custom and whether such custom is applicable where 10 there is express provision in a guarantee to the contrary, we are going to examine whether it was within the contemplation
the parties that when bills were overdue for 30 days, such delay would haveamounted to suchanevent asto lead the respondents to infer that the buyer was in financial difficulties as would 15 render the further despatch
goods to him undesirable or dangerous and that they had to inform the Minister accordingly. That such delay was not to be treated as amounting to such a risk can be clearly inferred from the terms
the Guarantee and the conditions set out in the declaration forms supplied 20 by the Ministry
Commerce to the respondents and which had to be submitted at the end
each month in respect
payments overdue for morethan 30days. Therefore, as already explained, if a payment was due on the 1st or 2nd day
a particular month it need not be declared at the end
such 25 month, as not being overdue for more than 30 days, but at the end
the following month that is whilst overdue for 58 or 59 days and this was tolerable and in fact was in compliance with the conditions
the Guarantee and thewritten instructions on the declaration form provided by the Ministry. 30 The finding, therefore,
the trial Court that it was customary in the trade to allow a delay
a few days is not in conflict with the provisions
the guarantee which as found above, allow more laxity than a few days delay. It was in evidence before the Court coming from the Managing Director
the 35 respondents and corroborated by a responsible
ficer
the Central Bank
Cyprus that it is customary in the trade that bills may be paid with a delay
one month or more, without 804 1 C.L.R. Attorney-General v. Greca Shoe Industry Savvides J. this being an indication that the creditor is a bad one or in financial difficulties to face his responsibilities. Such evidence has not been contradicted by the witness called by the appellants who was the
ficer in charge
the scheme
insurance 5
exports. The finding, therefore,
the trial Court that there was a trade custom was open to it and warranted by the evidence. Counsel for the appellants, when arguing the case before us, conceded that even if payment
a bill by the buyer is effected on the date when the bill becomes due for payment, 10 by the time the money comes to Cyprus and the respondents arenotified, aperiod
up to 15days and sometimeseven longer may lapse. 15 20 25 30 35 40 We shall next come to consider whether the respondents were in breach
the Guarantee by despatching goods to the buyer after the two bills due for payment on 5th June, 1976 and 23rd October, 1976 remained overdue for 65 and 66 days respectively. The Managing Director
respondents gave evidence and explained the reasons why the despatch
goods was not considered by them as undesirable after such bills were overdue for such time and for their failure to make a declaration that they were overdue for more than 30 days. It is in evidence, and the trial Court so found, that after the bill
5.6.1976 four bills were paid and after the bill
23.10.1976 another eight bills were paid, facts which could reasonably lead the respondents to believe that there was no intention on the part
the buyer to refuse the payment
the said two bills, and that it was likely that payment was made and there was a delay in the transfer
the money by one Bank to the other. But having already found that a delay
upto 59 days was tolerable, was a delay
a few more days a fact that would have disentitled the respondents from collecting anything on their claim? Before answering this question, wehaveto examine , what would have been the effect
failure
the insured tp submit a declaration
overdue bills, at the end
a month. Under Article 13(c) such failure would have amounted to a breach
the Guarantee entitling the Minister to terminate the Guarantee by notice in writing if the insured failed "to make any declaration required by this Article within a period
60 days from the time stated in the declaration form". According to the contents
the declaration form such declaration had to be made at the end
the month and only in case where a 805 Savvides J. Attorney-General v. Greca Shoe Industry
the Guarantee if within a period
60 days from the end
the month for which the declaration had to be made he failed to make such declation. This, however, was not the case in either 5
the two instances, because in the case
the first bill which was due for payment on the 5th
June, 1976 and for which a declaration that it was overdue for more than thirty days had to be made at the end
July, tht bill was paid about the middle
August which was not outside the period
60 days contem- 10 plated by Article 13(c)
the Comprehensive Guarantee. The same applies to the bill which was due on 23.10.1976 and was paid on 29.12.1976. It may be observed that the footnote on each declaration form has a warning that if a declaration is not made for an 15 overdue bill, the Minister may refuse to pay in respect
such bill. This, however, cannot be deemed as affecting the provisions
(c)
the Guarantee but clearly its object is that in addition to the powers under Article 13(c) the Minister may refuse payment
that particular bill in respect
which 20 no declaration was made. This inference is supported by the evidence
the
ficer in charge
the scheme, who was called by the appellants and who in answering a question as to what would have happened if the insured did not submit form EC 137 at the end
a month in respect
bills overdue for more 25 than 30 days his answer was, "if at the end the buyer does not pay, the Ministry will have no responsibility for those exports". In the present case the respondents do not claim for instalments which were overdue for more than 60 days from the end
previous month as all six instances in respect
which 30 the declarations were made and the claims arose were for bills due between 16.12.1976 and 12.1.1977 default
payment
which had to be declared for some
them by the end
January, 1977 and for the rest by the end by February, 1977. The declarations were submitted by the respondents in respect 35
all on the 28th January, 1977. Under ground 7
the appeal, counsel for appellants complains that the trial Court totally disregarded the contents
exhibit 7 in which the respondents themselves speak about 806 I Cl-.R. Allorne>-General t. Greca Shoe Industry Sawides J. DICAL and all his delays
which he never informed thai appellants. Such letter which in fact is attached to exhibit 2
six bills was overdue and after they had discontinued despatching goodb to the buyer. Copy
such letter was sent to appellant 2 by letter dated 1st March. 1977,together with photocopies
other letters sent to the buyer at different periods with a request 10 that they contact the buyer and arrange a meeting in order to discuss the matter
paying money due. Counsel drew our attention to the respondents' admission in such letter that there were delays
payment on the part
the buyer and contended, that such delays should have been brought to the 15 notice
the appellants in time Some
such extracts read as follows: 20 25 "Another mam reason for not making all your orders and which you know, as we already told you, is that you were delaying and we needed the money to go on We have emphassized to you that drafts should bepaid on the exact dates, they were always delayed Every time we sent telexes or phoned you, you kept telling us that drafts were already paid to your Bank was giving a negative answer to our Bank „ During youi visit last August you promised that as soon as you go back to Holland, you would pay all the drafts All these extracts, counsel submitted, indicate that the buyer wasnot a good client and that from themoment the respondents 30 found out that he was a bad client, they should have notified the appellants accordingly. We find ourselves unable to agree with such contention. Neither by such letter nor in their evidence the respondents admitted that the buyer was a bad and unreliable client, a fact 35 about which the appellants themselves were more conversant than the respondents, according to the evidence. In his evidence, the main witness for the appellants, said that before giving the guarantee to the respondents, they had information from the Banks and other sources that the buyer had no capital 807 Savvides J. Attorney-General v. Greca Shoe Industry
his own and was
no goodfinancialstanding and had no good recommendations. Nevertheless, having taken into consideration the considerable dealings which he had with the respondents during the previous years without any loss suffered by the respondents, they overlooked such information and gave 5 the guarantee to the respondents. Once the respondents, as already explained, have not committed any breach
express provisions in the guarantee, we see no reason that an additional duty was cast upon them to mention about delays which were settled by the buyer or 10 infer from such delays that the buyer was insolvent in the sense contemplated by the comprehensive guarantee. Having carefully considered all arguments advanced by learned counsel for the appellants, we have not been satisfied that the finding
the trial Court that the respondents were 15 not in breach
the guarantee as to be disentitled to recover their claim, was wrong. In the result, the appeal fails and is hereby dismissed with costs in favour
the respondents. Appealdismissed withcosts. 20 808
AI explanation based on the official legal text. Indicative, not a substitute for legal advice.