clr/1987/1987_1_523.pdf

(1)Thelaw governing thequestionof damages iscontainedinsection 73 of our ContractLaw, Cap 149, andhadextensively been considered by thisCourtinthecaseof ThunderShipping Co Ltd ν UoydsTnestinoDiNav SPA

(1984)1 C L R 135 Generally whetheroneis entitledtorecover for lossof profits depends entirely onthe circumstances 20 (2] Inthepresent case therewas noevidence of anyspecial circumstances, norofanycontractofimmediateresale,noranyevidencethatthegoodsshort landed could notbe obtained later Tothecontrary,such goods which were ordinary goods were readily available as there was an available market to obtainthemandone mustnotloose sight of theplaintiffs dutytomitigate his toss Ofcourse thoughtheywouldbe obtainedatalaterdate,therehasbeen 523 Eliades v. Adriatica

(1987)no allegation that there would not be a market for such goods at such later date. Judgment forplaintiffsfor €300 -with3/4ths oftheircosts, Casesreferredto. 5 Anglo -Saxon Petroleum ν Adamastn*Shinning Co Π96811 LloydsRep 73 THEARPAD, 49 LloydsRep 313. Hadleyv. Baxendale [1854]9Exch 341 Thunder Shipping Co Ltd ν Lloyds Tnestmo Di Navigosione SPA

(1984)1 C L R 135 10 Victoria Laundry ν Newman Indi.*;-: -/"·.' , , ° ' T > i 9 K B 528 Admiraltyaction. Admiralty actionfor £412.= damages for breach of contractin respectof shortdelivery of goods. 15 St. Mc Bride, for the plaintiffs. Chr. Mitsides,for thedefendants Cur. adv. vult A. LOIZOUJ. read the following judgment. In this Admiralty Action the plaintiffs claim the amountof £412.- Cyprus pounds, 20 damages for breach of contract in respect of short delivery of goods theproperty of the plaintiffs. The facts, as they appear in the petition and which are not disputed are briefly as followsThe plaintiffs were at all material times, the owners of goods 25 shipped on board the vessel «Serenissima Express»at theportof Venice, Italy,and/orholdersand/orindorseesof bill of lading No. 50 dated 30th September

1. Defendants 1, a company incorporated in Italy, were at all material times the owners and/orcharterers of the defendant 2 30 ship, and carried on interalia, thebusiness of carriersfor reward. Pursuant to a contract of affreightment contained in the aforesaid bill of lading, defendants 1, received on board the defendant 2 ship «Serenissima Express» at Venice, Italy, two pallets containing 24 boxes of household articles which they 35 524 1 C.L.R. Eliadee v.Adriatica A.Lolzou J. agreed to carry and deliver to the plaintiffs upon the terms and conditionsstated therein. Itisalleged by the plaintiffs that the defendants failed to deliver to them goods the market price of which amounted to £412.- in 5 view of which the plaintiffs claim: (a) C£412.- damages forbreach of contract and/or breach ofdutyand/orfaultand/ornegligenceofthedefendants and/ ortheir servantsand/or agents and/or 10 (b)the same amount by way of damages sustained by the plaintiffs by reason of the conversion of the non-delivered goods by the Defendants and/or their servants and/or their agents. (c)Interest on the above amount at9% per annum as from 17th October,
2. 15 (d)Costs. Itwasstatedbytheplaintiff, inevidence thatthesumofC£412.consistsof (a)£300 actual cost of the cargo, and (b)£112 clearprofit thereon. 20 It was contended by the plaintiff that they were entitled to recover damages for the loss of «clear profit» which they would have made on the goods, «clear profit» being a profit unaffected by any special considerations such as a further contract of sale withintheknowledgeoftheseller/carrier, sinceitwassubmittedin 25 casesof short delivery the measure of damages isthevalue ofthe goods they would have had at the time and place at which they ought tohave been delivered and notthe invoice or O F value. As authority for the above proposition Carver «Carriage of Goods by Sea» Vol. 2 [13th] Ed. para 2189, Anglo-Saxon 30 Petroleum v. Adamastos Shipping Co., [1968] Lloyds Rep. 73, and TheARPAD, 49LloydsRep.313werecited.Imayaswellsay here that neither of them helpthe caseof theplaintiff onthe issue of the lossofprofits bythe consignee. On the other hand counsel for the defendants submitted that 35 lossofprofit canberecovered bythebuyerofthegoodsonlyifhis loss of profit was within the contemplation of both parties andif 525 A. Lolzou J. EUadeav.Adriatica

(1987)the carrier was expected orcould be assumed tohave knowledge of the lossthatmight be caused tothe buyer by the delay ornon­ delivery (see Hadley ν Baxendale [1854] 9 Exch 341) Iwould consider thattheabove statement of the law is correct In the present case there was no evidence of any special 5 circumstances, nor of any contract of immediate resale, nor any evidence thatthegoods short landed could notbe obtained later To the contrary, such goods which were ordinary goods were readily available as there was an available market to obtain them and one must not loose sight of the plaintiffs duty to mitigate his 10 loss Of course though they would be obtained at a later date, there has been no allegation thatthere would notbe a market for such goods at such later date. The law governing the question of damages is contained in section 73 of our Contract Law, Cap 149, and has extensively 15 been considered by this Court in the case of Thunder Shipping Co, Ltd ν Lloyds Tnestmo Di Nav S PA

(1984)1CL.R 135 Inthiscase itwas held that «That the defendants would be liable for damage resulting from special circumstances when thosespecial circumstances 20 have been brought home to them in such a way as to show that he has accepted or is taken to have accepted nsk of payment of 2% by way of damages that this amountwill be allowed as not only the parties contemplated that the damages resulting from the special circumstances might 25 occur, but they further contemplated that the defendant was taking the nsk of being liable for such consequences should it occur (see s 73 of Cap 149) » Generally whether one is entitled to recover for loss of profits depends entirely on the circumstances; Victona Laundry ν Newman Industries Ltd, [1942] 2 K B 528, where itwas heldthat the carrier, on the facts known to him,as areasonable man could have foreseen the loss of profit but not the loss under a special contract of which he had no knowledge. 30 On the issue of damages for nondelivery of goods, reference 35 may be made to Pollock and Mulla,IndianContractand Specific Relief Acts once section 73 of our Contract Law, Cap 149 is identical tosection 73 of the IndianContractAct At pp. 615-616 the following statement of the Law istobe found. 526 1C.L.R. 5 10 15 20 25 30 EUadc·v.Adriatica A.LolzouJ. «Generally it is 'quite settled that on a contract to supply goods of a particular sort, which atthetimeofthebreach can be obtained in the market, the measure of damages is the difference between the contract price andthe marketpriceat thetimeofthebreach.Thecomputation ofdamagesbytaking the difference between the contract price and the lowest market price on the date of the breach isneither illegal nor unreasonable. Where the seller contracted to sell to another partyandwithoutnoticecancelledthecontract,thebuyerwas held entitledtodamages for breach ofcontract. Ifthe market rate on the due date isnot available,theCourt maytake into consideration the rateprevalent justbefore and justafter the date. But the subject-matter of the contract may not be marketable. In that case the value must be taken asfixedby thepricewhichactuallyhastobepaidforthebestand nearest availablesubstitute.Hinde v. Liddell(\875) L.R. 10Q.B.265, 269, ElbingerActien-Cesellschaft v.Armstrong

(1874)L.R. 9 Q.B. 573,476.Where no such substitute isavailable, thenif there hasbeen acontracttoresellthemthepriceatwhichthe contractwasmadewillbe evidence oftheirvalue,butifthere hasbeen nosuchcontract,themarketvaluemaybeestimated byaddingtotheirpriceattheplacewheretheypurchased the cost and chargesofgetting them totheirplaceof destination, and the usualimporter'sprofits:Borriesv.Hutchinson

(1865)18 C.B.N.S. 445; 44 R.R. 563; O'Hanlan v. G.W. Ry. Co.

(1865)6 B. & S. 484; Coovenee Bhoja v. Rajendra Nath

(1909)36. Cal. 617; Hajee Ismail& Sons v. Wilson & Co.

(1918)41Mad.709,715;451.C.942.Onabreachofcontract tosupplygoodsbythesellerthebuyerisentitledtorecoverall theexpensesofprocuringsame orsimilargoods.» In the present instance there is no evidence that no such substitute is available, on the contrary there is evidence by the plaintiff himself that similar goods could be obtained from the same source but with some, however, delay, in which case the 35 recoveryofprofitswouldmerelybedeferred untilthedisposal of such new consignment. Moreover there isno allegation and no evidence that there wasa contracttoresellthe goods in question and there being no substitute available the price at which the contractwasmadeincludingtheimporter'sprofitmighthavebeen 40 evidence of theirvalue. 527 '-. A.LobouJ. Eliades v.Adriatica (1 Q 87) In the premises the plaintiffs' claim for C£112.- profit is dismissed. There will therefore be judgment for the plaintiffs against thedefendants jointlyand severally forC£300.-with three fourths of theircostsonthat amount. Judgment and order forcostsas above. 528 5