Fairclough, Dodd & Jones Ltd v J. H. Vantol Ltd (Mentor.)
| Jurisdiction | England & Wales |
| Judge | Viscount Simonds,Lord Goddard,Lord Tucker,Lord Morton of Henryton,Lord Somervell of Harrow |
| Judgment Date | 05 December 1956 |
| Judgment citation (vLex) | [1956] UKHL J1205-2 |
| Date | 05 December 1956 |
| Court | House of Lords |
[1956] UKHL J1205-2
House of Lords
Viscount Simonds
Lord Goddard
Lord Morton of Henryton
Lord Tucker
Lord Somervell of Harrow
Upon Report from the Appellate Committee, to whom was referred the Cause Fairclough Dodd & Jones Limited against J. H. Vantol Limited, that the Committee had heard Counsel, as well on Wednesday the 31st day of October last, as on Thursday the 1st day of November last, upon the Petition and Appeal of Fairclough Dodd & Jones Limited, whose registered office is situate at 46 St. Mary Axe, in the City of London, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 24th of November 1955, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, and that the Petitioners might have the relief prayed for in the Appeal, or such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the printed case of J. H. Vantol Limited, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal, of the 24th day of November 1955, complained of in the said Appeal, be, and the same is hereby, Reversed, and that the Judgment of the Honourable Mr. Justice McNair, of the 5th day of May 1955 thereby Set Aside, be, and the same is hereby, Restored: And it is further Ordered, That the Respondents do pay, or cause to be paid, to the said Appellants the Costs incurred by them in the Court of Appeal, and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Queen's Bench Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.
My Lords,
I have had the privilege of reading the Opinion which my noble and learned friend, Lord Tucker, is about to deliver, and agree so fully with his reasoning and conclusions that I do not find it necessary to add to it. I would, however, express in particular my concurrence in his final observations. Where the substantial issue between the parties raises a question of law of general importance such as the construction of a commercial instrument in common use, which must to the knowledge of the parties ultimately be determined by a Court of Law, it is difficult to see what advantage is to be gained by pursuing the tortuous and expensive course of arbitration and then a statement of a Special Case. The comments of the learned Judge who tried the case will, I hope, receive the attention that they deserve. In accordance with the Opinion of my noble and learned friend, I would allow the appeal with costs here and below.
My Lords,
The facts relating to this appeal are set out in the Opinion about to be read by my noble and learned friend. Lord Tucker, and I need not recapitulate them. The question that falls for decision depends, in my opinion, entirely on the true construction of the opening sentence of clause 11.B of the contract under consideration. While this is a matter on which opinions may well differ, I prefer the construction placed on it by McNair J. to that which the Court of Appeal adopted. It is, I think, most material that clause 11.A, which deals with the event of war, uses the words "preventing the shipment", while 11.B enumerates events which may "delay the shipment". Effect must be given to this difference, and clause B should be regarded as dealing with matters which it is contemplated will cause a temporary hindrance but are unlikely to frustrate the contract. In my opinion the true construction of the clause is that on one of the enumerated events happening during the period prescribed for shipment that period is automatically extended by two months and the shipper can avail himself of that extension or as much of it as he requires. Like McNair J., I see nothing unreasonable in this. The Association which provides this form of contract for common use in the trade presumably knows the time that would or at least might be required to make alternative arrangements once the shipment is delayed by one of the enumerated causes. Commercial men may well prefer that the contract should provide for a definite period of extension rather than leave it to be decided in each case as it occurs what extension should be allowed. I would allow the appeal. I am glad that the learned Judge pointed out that the lengthy period it has taken to reach a final decision in this matter is in no way the fault of the Courts.
My Lords,
The only question in the present appeal is the meaning of the words "Should the shipment be delayed by … prohibition of export … the time of shipment shall be extended by two months" appearing in a c.i.f. contract for sale of Egyptian washed cottonseed oil.
The contract in question was dated 27th November, 1950, and made between the Appellants (hereinafter called "the Sellers") and the Respondents (hereinafter called "the Buyers") for the sale of 100 tons washed cottonseed oil to be shipped during the months of December, 1950/ January, 1951 from Alexandria at £146 10s. 0d. per ton of 2,240 lbs. c.i.f. to Rotterdam.
The contract was in the standard form of the London Oil and Tallow Trades Association for oriental oils c.i.f. terms continental. This form has been in use for a number of years during which time the Courts do not appear to have been called upon to pronounce on the meaning of the words now in question.
The contract contained the following clauses which must be set out in full:—
"2. Particulars of shipment, with date of Bill or Bills of Lading, marks and numbers of drums (if any) to be duly declared by the original Seller in writing with due dispatch, but not later than 42 days from the date of the Bill of Lading".
"11.A. In the event of war, hostilities or blockade preventing Shipment this contract or any unfulfilled part thereof shall be cancelled. If required Sellers must produce proof to justify cancellation."
"11.B. Should the shipment be delayed by fire, strikes, lock-outs, prohibition of export, riots, or revolution, or any other cause comprehended in the term Force Majeure other than war, hostilities, blockade, the time of shipment shall be extended by two months. Should the delay exceed two months, Buyers shall have the option of cancelling the contract forthwith or accepting the goods for shipment as soon as possible, but should the shipment not be possible within eight months from the date of shipment originally stipulated, contract to be void. The option to be declared as soon as shippers announce their inability to ship within the extended period of two months, a reasonable time being allowed for passing on such announcements. Should Buyers fail to exercise their option in due time, contract to be void. If required Sellers must produce proof to justify their claim for cancellation or extension."
The facts so far as now material are set out in the Award in the form of a Special Case of the Appeals Committee of the London Oil and Tallow Trades Association and are as follows. On 27th September, 1950, the Egyptian Salt and Soda Company Limited (hereinafter called "the Suppliers") obtained a licence from the Egyptian authorities to export at least 200 tons of cottonseed oil. The licence was valid until 26th December, 1950, subject to withdrawal at any time. On 10th November, 1950, the Sellers purchased 200 tons of cottonseed oil from the Suppliers. This contract provided for 100 tons to be shipped during December and 100 tons during December/January. The terms were for shipment f.o.b. Alexandria, freight to be provided by the buyer for shipment to Rotterdam. On the same day the Sellers sold or agreed to sell 100 tons to the Irish Oil and Cake Mills Limited c.i.f. Rotterdam, to be ready for shipment the first half of December and to be shipped by the first available steamer. On 27th November the Sellers entered into the contract now in question. On 12th December the Egyptian Government imposed a ban on export of cottonseed oil which extended to include holders of existing licences. On 14th December the Suppliers informed the Sellers of their present inability to ship. The Suppliers had previously arranged to ship these 200 tons by the s.s. "Mentor" due to load on 20th December. On 3rd January, 1951, the Suppliers succeeded in getting their licence renewed for a period of three months. The Suppliers intended shipping the first 100 tons by the end of January and the balance during February, and on 30th January they shipped 100 tons under their contract with the Sellers and the Sellers appropriated that 100 tons to their contract with the Irish Oil and Cake Mills Limited. On 17th February the ban on export was re-imposed and remained in force until the end of April. The Award further found that goods of the contract description and quantity were available for shipment between 4th and 31st January, 1951.
By letter dated 2nd March, 1951, the Buyers repudiated the contract on the ground of non-delivery by 31st January, 1951.
The position, therefore, was that the ban was in force from 12th December to 3rd January, during which period the shipment intended to be made by the s.s. "Mentor" was not possible, and accordingly the Sellers contended that the shipment had been delayed with the result that they were entitled to the two months' extension provided by clause 11.B and...
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