clr/1984/1984_1_135.pdf

(1984)He specifically informed defendants 3 that the^e goods had to be shipped on or before the 30th September. 1980 for ihc reason that he was committed with their buyer under a penalty to the effect that if these good were not so shipped he had to pay 2" u on their C.l.F. value as per the agreement between him and their buyers. The goods were not shipped on the above date but on the next trip of the ship and arrived in Cyprus with 15 days delay. Hence this action against Ihe defendants for: 5 (

1. a)damages by way of 2% on the C.I.F. value ofthe goods as above stated. 10 (
2. b)£1,147 loss in difference of exchange rale. (
3. c)£21.810 difference of freight. (
4. d)£8.415 interest. Regarding (
5. b)above plaintiffs had to pay for the value ofthe goods in Engl:sh pounds and on accounl ofthe dclav 15 in[their arrival they had to pay a higher rate of exchange. Defendants contended that they were exonarated from liability in view of Article 23* of the bill of lading. After finding that the plaintiffs have concluded an agreement iiith defendants 2 for the booking of shipping space. 20 Held, (I) that the bill of lading is not the contract, for that has been made before the bill of lading was signed and delivered. but it is excellent evidence of the terms of the contract, and in the hands of an indorsee isthe only evidence; and that it is open to the shipper to adduce oral evidence to show that the true 25 terms of the contract are not those contained in the bill of lading; that since plaintiffs have concluded an agreement with defendants 2 for the booking of shipping space, they proved their case as against defendants I, 2, and 4 on whose behalf defendants 3 were acting as agents; and that the action against 30 defendants 3 must be dismissed as the prerequisites that are prescribed in section 190 of the Contract Law, Cap. 149 do not ex:st to render them personally liable by the said agreement and therefore liable in damages for that. Article 23 is quoted at pp. (44-145 post. 136 1 C.L.R. 5 JO 15 20 25 30 Thunder Shipping v. Lloyd Triestino

(2)That the defendants would be liable for damage resulting from special circumstances when those special circumstances have been brought home to them in such a way as to show that he has accepted or is taken to have accepted risk of payment of 2% by way of damages; that this amount will be allowed as not only the parties contemplated that the damages resulting from the special circumstances might occur, but they further contemplated that the defendant was taking the risk of being liable for such consequences should it occur (see s. 73 of Cap. 149).

(3)That losses resulting from revaluation of currencies arc always too remote in law to be recoverable; and that, further, it is not clear that the parties actually contemplated the possibility of revaluation during the period between the date of the contract and the date of payment for the goods as being a sufficiently serious possiblity or real danger to justify their making express provision for that eventuality; that in the absence of such an express provision and bearing in mind the other circumstances of this case this Court cannot assume that the parlies have contemplated that late delivery was liable to result in the buyers suffering the loss by the payment of an enhanced price; and that, accordingly, the loss resulting from the difference in exchange cannot be allowed as damages recoverable.

(4)That as regards the interest claimed, in the absence of any provisions of the law and on the facts of this case, this item cannot be recovered by the plaintiffs as it is generally presumed not to be within the contemplation of the parties at the time of making the contract and there isnothing to point out to the contrary.

(5)That the difference in the freight is recoverable. Judgment againstdefendants 1,2 and 4. Action against defendants 3 dismissed. Cases referred to: 35 Attorney-General (Owner of Cargo) v. The Ardennes {Owners} [1950] 2 All E.R. 517 at pp. 519-520; Hadlev v. Baxendale, 9 Ex. 341; 137 Thunder Shipping \. I.loyd ΓΓΚΜΙΙΙΟ

(1984)Robophone Faolitiesv. Black[1966] 1 W.L.R. 1428 at p. 1448; D. rerdinando v. Simons Smits & Co. Ltd. [1920] 3 KB. 409, S.S. Celia v. SS. Volturno [1921] 2 App. Cas.

1. Admiralty action. Admiralty action for C£2,128.986 mils by way of damages and/or compensation and/or otherwise for breach by the defend­ ants of a contract to transport and/or carry from Trieste to Limassol 324 units of Hoover automatic washing machines. s A.P. Anastassiades, for the plaintiffs. Chr. Mitsides, for thu defendants. 10 Car. adv. vult A. Loiznu J. read the following judgment. The plaintiffs are a private company registered in Cyprus with limited liability. Defendants I and 2 are Italian companies engaged in sea trans­ port and/or shipping. Defendants 3 arc a Company registered \ in Cyprus and they are the Cyprus agents of defendants i and
2. Defendant 4 is the ship "EGIZIA", which as the evidence goes, was a regular line vessel sailing at the material time from Trieste to Cyprus, via Piraeus, being an optional port of call, taking weather permitting, about seven to eight days to do the 2v trip each way. The plaintiffs claim against thedefendants jointly and severally and/or otherwise as follows:

(1)C£2,128.986 mils by way of damages and/orcompensation and/or otherwise for the breach by the defendants and/or 25 anyone of them of a contract entered into by the said Company on the one part and the defendants and/or anyone of them on the other part under which contract the defendants and/or anyone of them undertook the obligation to ship and/or take on board and/or transport 39 and/or carry from Trieste to Limassol and/or duly deliver there on or before thu 30th September 1980 a cargo of 324 units of Hoover automatic washing machines packed in containers marked 'FOR NASRALLAH' 1-108, 138 1 C.1..R. 5 Thunder Shipping v. Lloyd Trieslino A. Loizou J. 109-216, 217-324 and/or in respect of which although the defendants and/oreach and/or anyone of them issued at Trieste on the 27.9.1980 a bill of lading No. 43, they failed to honour their relative obligation as aforesaid to ship and/or take on board and/or transport and/or carry and/or duly deliver the said cargo thus causing damage to the plaintiffs.

(2)Legal interest.

(3)Costs. ΊΟ The plaintiffs have called only one witness, namely Mr. George Hourry, their Managing Director and main shareholder. He testified thatin August 1980 hecalled at theoffices of Defendants 3 and saw a certain Mr. Napoleon, a senior official and who was dealing with him all along. The purpose of his visit was j5 for booking shipping space from Trieste to Limassol for the carriage of 324 washing machines manufactured by Hoover. He specifically informed Mr. Napoleon that these goods had to be shipped on or before the 30th September 1980, for the reason that he was committed with their buyer under a penalty 20 to the effect that if these goods were not so shipped he had to pay 2% on their C.I.F. value as per the agreement between him and their buyers. This agreement has been produced (exh. 5) at the instance of thedefendants and reference to it will be made in due course. 25 30 The value of the goods in question as stipulated therein was U.S. $110,160.-. Having impressed on Mr. Napoleon the importance of the timeof shipment of the said goods and making everything clear regarding the contents of the aforesaid agree­ ment, this witness claimed that an agreement was concluded between him and defendants 3 for the carriage of the goods in question on the defendants' vessel "EGIZIA 1 ' and a receipt dated 21st August 1980, exhibit 1, was issued to him upon pay­ ing the sum of £2,250.-. This receipt reads: "A. L. MANTOVANI & SONS, Ltd. 35 No. 0274 Limassol, 21.8.1980, 139 Λ. Loizou J. Thunder Shipping \. Lloyd Triestino

(1984)Received from Messrs. Thunder Shipping the sum of C£2,250.- (two-thousand two-hundred and fifty pounds only) as deposit on freight for 6X20' containers TriesteLimassoP. This receipt was issued by defendants 3 and signed by their cashier on their behalf. On the 14th August, 1980, the plaintiffs addressed the following telex (No. 3 in the bundle of documents, exhibit 3): '•URGENT ATTN: MR. NAPOLEON RE:

(6)SIX 20 FT FCC TRIEST / LIMASSOL REFERENCE RECENT PLEASANT ARRANGEMENT REGARDING SEAFREIGHT IN CONNECTION WITH ABOVE, PLEASE NOTE: FULL ADDRESS NAME SHIPPERS IN TRIESTE: •FRANCESCO PARISI, P.O.Box 577, TRIESTE TLX TS4617I TEL No. 7359' PLEASE INSTRUCT ADRIATICA LINE CONTACT THEM IMMEDIATELY TO CO-ORDINATE LOADING (SHIPMENT) THUS DELAYS BE AVOIDED MANY THANKS FOR YOUR KIND CO-OPERATION SINCEREST RGDS*\ On the 22nd August, 1980, telex No. 4 in the same bundle was sent: "REFERENCE TO-DAYS PHONE CONVERSATION MR. NAPOLEON/HOURY RE: 6 X 20 FT. CONTAINERS—TRIESTE/LIMASSOL FOR GOOD ORDERS SAKE WE CONFIRM HEREWITH THAT THE 6 X 20 FT. CONTAINERS ARE CHANGED TO 3 X 40 FT. CONTAINERS. PLS ADVISE FORTHWITH YOUR PRINCIPALS OF THIS CHANGE SO THAT MISUNDERSTANDINGS BE AVOIDED. HAVING RELIED ON YOUR SAYSO THAT NO PROBLEM WILL ARISE IN THIS RESPECT, WE CONFIRMED SHIPPERS OUR OK. SINCEREST RGDS** THUNDER SHIPPING (G.E. HOURY)". On the30th September theplaintiffs received a telex from their correspondence in Trieste (Telex No. 5), that the goods were 140 1 C.L.K. Thunder Shipping \. Lloyd Triestinu Λ. Loizou J. to be shipped on that date on S/S EGIZIA sailing the same night from Trieste to Limassol where it was expected to arrive on the 8th October

1. On the 27th September 1980, the Bill of Lading No. 43 (exhibit 2) was issued with Hoover Ltd. of Perivale, Greenford, Middlesex, described as shipper and to"Order of Bank of Cyprus Ltd., Limassol Main Branch and Thunder Shipping Co. Ltd.", as consignees for the shipment of the goods described therein on the vessel "EGIZIA" for their transport from Trieste to 10 Limassol. It is signed by defendants 2 as agents of defendants
2. 5 The aforesaid witness inquired by telexes to defendants 2 in Trieste and their agent in Larnaca when the ship was going to arrive at Limassol and eventually he found out that the ship 15 arrived at Larnaca on the 8th October. He immediately asked the agent to give him a delivery order so that he could get the three containers mentioned in the said Bill of Lading but he was informed that there was a note in the ship's manifest that these three containers were short-shipped, (see telex No. 6— 20 exhibit 3). Thereupon he protested to defendants 3 by sending telex No. 1 in exhibit
3. He was holding them and their "principals fully responsible for heavy damages caused to us due toyour/their misleadment, failure, and negligence, by leaving behind our cargo in above containers handed to them and 25 received by them,prior to above dates,and intimeas demanded by them. We will submit our losses account very soon". They replied thereto by telex No. 7 which reads: 30 35 "RE: M/V "EGIZIA" 28-30.9.80TRIETSE/LIMASSOL 3 X 40 FT. CONTAINERS—NOS:CTIU 418926/9, 415721/4, 422399/6 THANKS YOUR TELEX OF 9/10/80 AND AS EXPLAINED TO YOU OVER THE PHONE YESTERDAY THE CARGO WAS UNFORTUNATELY LEFT BEHIND DUE TO TECHNICAL REASONS HOWEVER WE CAN ASSURE YOU THAT THE THREE CONTAINERS WILL BE SHIPPED ON M/V "EGIZIA" NEXT SUNDAY OR LATEST MONDAY WHICH ARRANGEMENT YOU CONFIRMED YES141 λ. Ι,ΟΪΤΌΙΙ ,
4. Thunder Shipping \. Lloyd Triestino (I9K4) TERDAY IS SATISFACTORY TO YOU BECAUSE YOU WILL BE WITHIN THE VALIDITY OF THE LETTER OF CREDIT WE TRUST THAT THIS NOW SOLVES YOUR PROBLEM BEST REGARDS". The plaintiffs then replied to it by telex No. 8 which is as follows: "CONTENTS STATED THEREIN INACCURATE AND UNACCEPTABLE.
5. CARGO BOOKED BY F. PARISI WITH ADRIATICA SINCE 15.9.80
6. FREIGHT PAID THROUGH YOU SINCE 21.8.80
7. F. PARISI DELIVERED TO ADRIATICA THE THREE CONTAINERS AS THEY WANTED THEM. AND ADRIATICA ISSUED THE RELEVANT B/LADING.
8. ACCORDING CONCRETE EVIDENCE TECHNICAL REASONS YOU ALLEGED NEVER EXISTED. ADRIATICA ACTED IN CHILDISH AND IRRESPONSIBLE MANNER. THEY OVER­ BOOKED CARGOES, AND THEY LEFT THEM BEHIND. BUT THEY SHOULDNT LEAVE BEHIND OURS, FOR WHICH FREIGHT WAS PAID SINCE 21.8.
10. IT IS A FACT THAT WE CONSENTED WITHOUT PREJUDICE, AND WITH RESERVATION OUR RIGHTS FOR GOODS TO BE SHIPPEDON 12-13.
13. WE FLATLY DECLINE THAT SUCH ARRANGE­ MENT WAS EVER SATISFACTORY TO US.
14. WE NEVER SAID WE WERE WITHIN VALIDITY OF L/C. IN FACT WE WERE NOT. L/C EXPIRED AND WE HAD TO OBTAIN AND GIVE EXTENSION AT A DISCOUNT OF $1800:142 I C.L.H.
15. 5 Ihundcr Shipping \. Liowl Triettitio \ . I.oi/uu . 1 . HENCL WE CLAIM FROM YOU AND YOUR PRINCIPALS THE SUM OF $1800:·- PLUS $150: FOR ADDITIONAL BANK CHARGES. TLXS. PHONE CALLS ETC. ORDER AVOID UNPLEASANT CONSEQUENCES. A N D M A I N T A I N OUR RELATIONSHIP. SUGGEST YOU PAY ABOVE SUMS UNQUESTIONABLY. BEST RGRDS—HOURY**". There followed a number of telexes and exchanges anc It) eventually an identical to No. 43 Bill of Lading No. 42 wasissued on the 14th October
16. and the goods were shipped on "EGIZiA" from Trieste on 15.10.1980 and arrived in Limassol before the end of October. I do not consider it necessary that I should reproduce here 15 the rest of the telexes exchanged. What transpires, however, is that right from the start the plaintiffs insisted on their claim against the defendants, which is based on the agreement stated by th.j witness to have been concluded between him and the said Napolis. on their behalf. 20 The defendants, in addition to relying on the document:· adduced called only one witness, namely Andreas Michael. who is in charge of the office of defendants 3 in Nicosia in order to produce bill of lading No. 42, exhibit 3 and to be asked regarding their office practice as regards the acceptance of the 25 cargo and the issue of a bill of lading. There was an objection to this question and the matter was not pursued any further. Asked, however, if there had been any agreement between the plaintiff Company and the late Napolis regarding this shipment and if it would be expected, according to their office practice 30 to have a record of such an oral agreement and his answer was that "1 find no oral agreement between the late Mr. Napolis and Mr. Hourris in our file". It is unfortunate that Napolis died some time before the hearing of the case. What is, however, very characteristic is 3>5 that the plaintiffs put forward and insisted on their claim before his death. In fact a number of the telexes addressed to defendants 2 were marked "For the attention of Mr. Napolis" who was the 143 \. l.mzou .
17. Thunder Shippin» \. 1 iojd Γπε&Ιϊηο

(1984)person claimed to have been informed of the needs of the plaintiffs regarding this shipment, their relations with thebuyers of the said cargo andthecondition asto the timeofshipment. in respect of which they insisted as being of the essence ofthe contract. The death of the late Napolis has left entirely un- 5 contradicted by anyother evidence thetestimony of Mr. Hourrt and it is in the light of that evidence that I have toapproach the case, which is set outin thepetition in paragraphs 4, 5 and 6 thereof: "

1. Inor about August 1980thePlaintiff Company through 10 its Director and Manager approached DefendantsNo. 3 at their Limassol office andinformed thelatter and/or through them Defendants 1 and/or 2 that the Plaintiffs required tobook shipping space from Trieste to Limassol for the carriage by sea of a cargo of Hoover Washing 15 Machines which it was imperative that they should be shipped at Trieste on or before the 30th of September 1980, this being one of the conditions of the sale agreement concluded between the Plaintiffs and theperson who was the ultimate buyer from the Plaintiffs of the 20 said cargo, breach of which term would give to the said buyer the right either to cancel the said agreement of saleortoclaim damages atthe latter's option, the relevant terms of the said agreement andespecially thoseconcern­ ing date of shipment andexchange arrangements having 25 been brought tothe knowledge of the Defendants and/or each of them and being known to them and/or each of them at the time when the agreement hereinbelow set out was entered into.
2. As a result of the above information and the negotiations 30 which ensued it was agreed between the Plaintiff and the Defendants and/oreach oneof them that they and/or each one of them should secure and/or book for the Plaintiff shipping space as aforesaid for the said cargo of thePlaintiffs from Trieste to Limassol it being 35 also agreed for the reasons hereinabove set out which the Defendants and/or each one knew at the time of the said agreement that the said shipment of the said cargo should be effected on or before the 30.9.
4. Upon the conclusion of the aforesaid negotiations and 40 144 I C.I .U. 1humlcr ^hippm^ \ I Imd· Incstino \. Ιοι/υιι .1 agreement Defendants No 3 demanded and icceivex on or about the 21.8.1980 Horn the Plaintiffs tht suiv ofC£2250 as deposit on thefieight foi theabove canuige of the said goods'". It has been argued on bthalf t>f the defendants that ihev aie exonerated fiom liability in view of Aiticle 23 of the bill of lading which reads as follows "In the event of damage, or los^. and generally in cvei> case for which the Company arc answerable the> shal· only be liable for the payment of (he teal and intrinsic value of the goods loaded, as proved by proper invoice^ of ougm and ascertained by a statement ol a swum sur­ veyor. excluding any compensation in respect of damau> ior lost profits or for increase of commeicial value Should the value declared on the bill of lading be lowei than that ascertained from the invoice οι by the suivo the Company shall be liable foi payment only on the basi*· of the lower value declaied Indemnity for goods whose value has not been declaied and foi which the appropriate extia Height has not hem charged, may in no case exceed the amount of Lit. 200.000 per package. Goods foi which the tantl docs not provide also for value tax, will have the same nevertheless imposed when the Shippei declaies the value of the goods in the shipping order, if each package exceeds the minimum value of Lit 200
5. For the carriage of small packages, the responsibility of theCompany is limited to a maximum of Lit. 750 (seven hundred and fifty) for packages up to 25 kg., to Lit. 1,500 (one thousand five hundred) for those over 2.5 kg. and up to 50 kg., to Lit. 2.500 (two thousand five hundred) foi those over 60 kg. For the carnage of trunks of cases containing personal effects, luggage or similar, for which a bill of lading has been issued, the responsibility of the Company is limited to a maximum of Lit. 5,000 (five thousand)for every trunk 145 \ . I.oi/on .). Thunder Shipping v. IJoyd Triestino

(1984)or case and Lit. 1.500 (one thousand five hundred) for every piece of hand luggage. For the special object indicated in the second paragraph of Article 2of this bill of lading the Company shall beliable. to pay the declared value on the basis of which the relative 5 freight was collected". A very relevant case as far as the law governing factual situations as the present one isconcerned, isthat of The Attorney -General (Owner of the Cargo) v. The Ardennes (Owners) [I950J 2 All E.R.

1. in which Lord Goddard, C.J., at 10 pp. 519-520: "It is. I think, well settled that a bill of lading is not, in itself, the contract between the shipowner and the shipper of goods, though it has been said to be excellent evidence of its terms: Sewell v. Burdick per Lord Bramwell (10 15 App. Cas. 105), and Crooks v. Allan. The contract has come into existence before the bill of lading is signed. The bill of lading is signed by one party enly and handed by him to the shipper, usually after the goods have been put on board. No doubt, if the shipper finds that it 20 contains terms with which he is not content or that it does not contain some term for which he has stipulated, he might, if there were time, demand his goods back, but he is not, in my opinion, thereby prevented from giving evidence that there was a contract which was made before the bill 25 of lading was signed, and that it was different from that which is found in the document or contained some additional term. He is not a party to the preparation of the bill of lading, nor docs he sign it. It is unnecessary to cite further authority than the two cases which I have 30 already mentioned for the proposition that the bill of lading is net itself the contract, and, therefore, in my opinion, evidence as to the true contract is admissible". A statement of the law on the same lines and by reference to decided cases is to be found in Scrutton on Charterparties, 18th Ed., at p. 53, Article
2. which is as follows:"The bill of lading is not the contract, for that has been made before the bill of lading was signed and delivered, 146 35 I C.L.K. 5 Thunder Shipping *. Uo>d Triestino Λ. Loizou J . but it is excellent evidence of the terms of the contract. and in the hands of an indorsee is the only evidence. But it is open to the shipper to adduce oral evidence to show that the true terms of the contract are not those contained in the bill of lading, but are to be gathered from the mate's receipt, shipping-cards, placards, handbills announcing the sailing of the ship, advice-notes, freight-notes, or undertakings or warranties by the broker, or other agent of the carrier". 10 Guided by the authoritative statements of the law and having accepted the evidence regarding the conclusion of an agreement between the plaintiffs and defendants 2 on the terms and condi­ tions hereinabove set out and that the bills of lading issued do not contain the true terms of the contract, I find that the 15 plaintiffs have proved their case as against defendants I, 2 and 4, on whose behalf defendants 3 were acting as agents and against which defendants 3 the action has to be dismissed as the prerequisites that are prescribed in section 190 of our Contract Law, Cap. 149, do not exist to render them personally 20 bound by the said agreement and therefore liable in damages for that. It remains, therefore, to consider the consequences of such damages. The plaintiffs' claim as set out in the Petition is as follows :25 "Calculation of claim based on 15 days delay 30 L/C documents value Stg., £35,154.Loss in difference of exchange rate: On 24.10.80—Stg. £35,154 & C£l.15.20...C£30,515.625 mils On 8.10.80-Stg. £35,154 @C£1.19.70...C£29,368.421 mils C£ 1,147.204 mils Freight paid on 21.8.80 C£2,250.On 23.10.80 $6,600.On 23.10.80 $6,600 : $2.84.50 toC£l On 8.10.80$6,600 :$2.87.20 to C£I 35 ...C£2,3I9.860 mils ...C£2,298.050 mils 21.810 mils INTEREST: 15days, on Stg. £35,154 @ 9 % . ..Stg. £131.820:C£1.15.20... 114.427 mils 15days, on C£2,250@ 9% 8.415 mils 147 \ Ι οι/nil I lluirukr Sltipnin^ \ I Io\<l Inistmo

(1984)On (> 10 SO damages pud b> the plamtil s m ordei to pie\cnt •.aiicdiaOon ol the relative sale agieonicnt to person to whom the plaintillsagrcuho sell the said Hoovers $2 203 20 $2 87 20 767 Π 0 mils Moves Amendments to L'C Ληύ ph.me calls 70 000 mtK Total r i a u n C i 2 I2S986 mils Ihe question ol uam.iges undci om Comract Law Cap 149 > goNcincd by section 73 thereat which as stattd in Pollock md Mulla Indian Contiact and Spccihc Relief Acts, 9th Edition ι ρ *ΐ0 embodies the «same principle as suction 50 1 the English S ile of Goods Act according to which the measine I d a m a g e is to be estimated s; ]ij Section 71 leads as follows 7^

(1)When a euiitract has been btoken. the pait> who suilcis by suJi bieach is entitled to icceivc from the paity 15 who has broken the contract, compensation for any loss of damage caused to him thereby, which naturally arose in the usual course of things from such breach, oi which the parties knew, when they made the contract to be hkelv to icsult from the breach of it -IQ Such compensation is not to be given foi any icmolc and induce! loss οι damage sustained by reason of the breach (2} When an obligation icscmblmg those created by contract has been mcuired and has not been discharged, -55 any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such peison had contracted to discharge it and has hiokeii his contract

(3)In estimating the loss or damage arising from a breach ^0 of contract, the means which existed of remedying the incoiuenicnce caused by the non-performance of the contiact must be taken into account" The notice of special circumstances brings the facts within the principles laid down in Hadle\ \ Baxendale. 9 Ex 341 where 35 ihe defendants did not know that the plaintiff "s mill was stopped 148 I C.l.R. Thunder Shipping \. I.lojd Triesliiio Λ. l.oi7(ni .

1. for want of part of the machinery which they were to supply. They were therefore held not liable for loss of profit but as pointed out in Pollock and Mulla (supra) p.
2. "It may be collected from thejudgment that with knowledge they would have been liable. As to the general rule there laid down see the commentary below. The loss of profit*on a contract of which the defendant had not notice i> clearly too remote. But where the defendant failed to supply an essential part of a machine which the plaintiff. to his knowledge, was under contract to supply to a third person, and the plaintiff, by the defendant's default, lost the benefit of that contract, the defendant was held liable both for the loss of profit and for the plaintiff's chargc> in making other parts of the machine: Hydraulic Engineer­ ing Co. v. McHaffn- [I878J 4 Q.B.D. 670". The intention o( the drafters οΐ the Indian ContractAct was to affirm the Rule of the Common Law, laid down by the Court of Exchequer in the leading case of Hadlev v. Baxendale {suprai as pointed out in Pollock and Mulla, The Indian Contract Acts (supra) at pp. 548-549: the rule laid down by it is in harmony with man\ other rules in our law which fixed the measure of liability by the standard of what was known to the defendant, or ought to have been then and there known to a reasonable man in his circumstances. As formulated, the rule has two branches. First, the party breaking a contract is liable for damages arising "according to the usual course of things'; secondly, he is liable, or also liable, for 'such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of the breach of it'. But. as Lord Birkenhead, when a junior at the Bar, correctly pointed out, the first branch is in truth only a specification of the simpler cases under the second; for the natural and ordinary consequences of an event—namely, such as can be foreseen without any special information—are always assumed to be in the contemplation of reasonable men. and it is no excuse for a man to say that he failed to think reasonably or did not think at all. [1900] L.Q.R. XVI 149 \. l.ouou ,
3. Thunder Shipping \. l.knd Irieslino

(1984)275, 399; Cory v. Thames Ironworks [1868] L.R. 3 Q.B.

1. well illustrates the principle. Ρ claimed damages from D for non-delivery of a floating boom derrick, which he intended to use to work machinery in the discharge of coal, a novel and highly profitable use. D believed the hull 5 was wanted to store coal, the obvious use. Ρ claimed damages merely on the basis of the obvious uso, as D had no notice of the especially profitable use. Dcontendedno damages were payable as the parties were not ad idem regarding the use, but the Court held that in such a case 10 the measure of damages is the profit resulting from the ordinary use. Followed by the C.A. in Victoria Laundry v. Newman Industries [1949] 2 K.B. 528 (supra). See also Mason v. Bumingham [1949] 2 K.B. 545, C.A. (P buys from D a used typewriter which unknown to either party 15 is X's properly. Ρat once has it overhauled. Ρ later has to return it to Χ. Ρ can recover from D not merely the price paid, but also the cost of the overhaul, since the overhauling of the machine was reasonably foreseeable by D at the time of the contract))". 20 On the question of currency revaluation the following is stated in Pollock and Mulla at p. 534: "In Aruna Mills' case {Aruna Mills Ltd. v. Dhanrctjmal Gobindran [1968] 2 W.L.R. 101, 111) the parties actually contemplated the possibility of revaluation during the 25 period between the date of the contract and the date of payment for the goods as being a sufficiently serious possi­ bility or real danger tojustify their makingexpress provision for that eventuality. In the circumstances they must be assumed to have contemplated that late delivery was 'liable 30 to result' within the rule stated in Czamikow Ltd.v.Koufos. (See Koufos v. C. Czamikow Ltd. [1967] 3 W.L.R. 1491; [1967] 3 All E.R. 686 (H.L.)) in the buyers suffering a loss by the payment of an enhanced price. Relying on Di Fernando v. Simon Smits & Co. Ltd. [1920] 3 K..B. 35 409 (C.A.) and S.S. Ccllict v. S.S. Voltumo [1921] A.C. 544 it was argued in Aruna Mills' case that losses resulting from revaluation οι currencies are always too remote in law to be recoverable but this rule was not accepted by Donaldson J. who said 40 150 I C.I..Κ. Thunder Shipping \. Ι,ΙΟ.ΉΙ Triestino Λ. l.iutau .1 "The true rule as to losses resulting from revaluation of currencies is that changes in currencies are irrelevant if they occur after the dale as at which damages fall lo be assessed and are usually to be disregarded it they occur on or before that dale, either because tin loss Mowing from the revaluation has no causal con nection with the breach of contract or because sue! loss is not within the assured contemplation os parties' ". On the question of the interest again on Pollock and Mull: supra) at p. 545 it is stated: "Settled law, but treated as anomalous. Illustration (n to s. 73 'docs not confer upon a creditor a right to recovei interests upon a debt which is due to him, when he is no entitled lo such interest under any provision of the law As observed in Jama/ v. Moo/la Dawood. Sons & Co. (1915 43 I.A. 6) s. 73 is merely declaratory of the Common Lav as to damages': Bengal Nagpttr Rly Co. v. Ruttanji ((1937 65 LA. 66 at pp. 72-3) 'The law does not regard coilatera or consequential damages arising from delay in the receip of money": Per Cur. Graham v. Canipbell [1878] 7 Ch. D at p.
2. As to the liability to pay interest see p. 56' sqq., below. A gives an ijara patla of certain property to Β It is a condition of ihe patta that Βshould pay to the superioi landlord the rent which A was bound to pay to him. I fails to pay the rent. The superior landlord thereupon sue A for the rcnl, and, in execution of the decree obtained b; him in the suit, the tenure is sold. Β is not liable to A fo the loss of the property, for A could have paid the rent οι default by B, and saved the property from sale: Girtsi Chandra v. Kunja Behari

(1908)35 Cal. 683. The circumstances may, however, be such that the \o> is within the contemplation of the parties. In Genera. Securities, Ltd. v. Don Ingram, Ltd. (

(1940)S.C.R. 671' (Can.)) the S company had granted to Ρ an exclusive franchise to see S cars in Vancouver. D agreed to furnish Ρ with the necessary credit to finance the purchase of tlu cars, but later refused to make an advance, and S cancellec P's franchise. The Supreme Court of Canada held L" liable for the loss of franchise and loss of profits, as natura 151 V l.ui/ou J. Tliumler Shippiii» >. Mojd Trieslino

(1984)and probable results of the breach within the contemplation of the defendant." The evidence for the plaintiff Company in respect of the damage suffered turned first on the 2% by way of damages paid by them in order to prevent cancellation of the relevant >alc agreement to the person to whom they had agreed to sell the said Hoover which calculated at the rate of exchange o\' 287.20 per dollar, makes a total of C£767.I30 mils. 5 On the findings already made by me and in the light of the legal principle pertaining to such facts, namely, that the de- 10 lendant would be liable for damage resulting from special circumstances when those special circumstances have been brought home to him in such a way as to show that he has accepted or is taken to have accepted the risk, as it is in this case. 1 allow this amount as not only the parties contemplated that the damage 15 resulting from the special circumstances might occur, but they further contemplated that the defendant was taking the risk of being liable for such consequences should it occur. (See McGregor on Damages. 14th Ed., para, 201, p.144 and Robophone Facilities v. Blank [1966] I W.L.R. 1428 at p. 1448 (C.A.) 20 per Diplock L.J. The next item to which the plaintiffs' witnesses referred was that of telexes, amendments to L/C and phone calls to the total cost of C£70.- which obviously was too small an amount to have been questioned by the defendants. Another item is the diffe- 25 rencc in the freight paid amounting to C£2I.8I0 mils. As regards the interest claimed, in the absence of any provision of the law and on the facts of this case, Ifind that this item cannot be recovered by the plaintiffs as it is generally presumed not to be within the contemplation of the parties at the time of 30 making the contract and there is nothing to point out to the contrary. On the question of the difference jn the rate of exchange, as a result of which the plaintiffs claim to have suffered damage amounting to £1147.204 mils, plaintiffs' witness has stated that 35 this arose because had he paid the value of the goods on the 8th October 1980, when "Egizia" arrived in Cyprus and the letter of credit would have been made good, he would have paid the 152 1 C.I..K. Thunder Shipping \. l.lmd Tricslino Λ. I.oiiou .

1. figure appearing in the particulars of damage opposite that date, whereas on account of the delay of 16days in their arrival he had to pay the amount due in sterling but at a dilfcrent rate of exchange which compelled him to pay the figure opposite 5 that date and the difference between the two figures is the amount claimed. In other words the rate of exchange between the Cyprus and the English pound had changed unfavourably for the plaintiffs. He went further to say that he had informed Mr. Napoleon that the letter of credit would be opened in H) favour of the suppliers Hoover Ltd in English pounds which meant that there should be a conversion of Cyprus pounds into English pounds. As already pointedout in theArunaMills case (supra)Donald­ son J., dealt with the matter and I have briefly referred already 35 to the rule he has adopted in the case in answer to theargument of counsel in that case that there is a special rule that losses resulting from revaluation of currencies arc always loo remote in law to be recoverable, reliance placed for that proposition upon
2. Ferdinando v. Simons Smit's <£ Co. Ltd., [1920] 3 K.B. '20 409; and S.S. Cello v. S.S. I'olturno [1921] 2 App. Cases
3. In the present case it is not clear that the parties actualls contemplated the possibility of revaluation during the period between thedate of the contract and thedate of payment for the goods as being of sufficiently serious possibility or real danger to 25 justify their making express provision for that eventuality. In the absence of such an express provision and bearing in mind the other circumstances of this case. Icannot assume that the parties have contemplated that late delivery was liable to result in the buyers suffering the loss by the payment of an enhanced price. 30 The mere statement of the plaintiffs" witness that he had told the late"Napoleon that he was paying in sterling could not. to my mind be sufficient to bring this case within the rule as stated in the Aruna case (supra) whereby by adopting the test of "liable to result" within the rule stated in the Czamikow case (supra). 35 explaining Hadley v. Baxendale (supra), the loss resulting from therevaluation of currency was considered inthat case as not too remote to be recoverable. 40 Ishall not therefore allow this amount as damages recoverable in the light of the facts and circumstances of this case and the Law as above explained. Nodoubt thedifference in the freight 153 Λ. I.oizmi J . Thunder Shipping >. Ilo\d Irk-stino (IV84) paid to the defendants amounting to £21.810 mils is also reco­ verable. For all the above reasons there will be judgment for the plaintifis against defendants I, 2 and 4jointly and severally foi £85ίί.94() mils with legal interest and costs. Case agamsi defendants 3,dismissed with noord.eras to costs. Judgment against defendants I, 2 and 4 foi £858.940 mils. Case against defendant 3 dismissed Order foi costs as above. 154