Fielding & Platt Ltd v Najjar
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE DAVIES,LORD JUSTICE WIDGERY |
| Judgment Date | 17 January 1969 |
| Judgment citation (vLex) | [1969] EWCA Civ J0117-1 |
| Court | Court of Appeal (Civil Division) |
| Date | 17 January 1969 |
[1969] EWCA Civ J0117-1
The Master of the Rolls (Lord Denning),
Lord Justice Davies and
Lord Justice Widgery.
In The Supreme Court of Judicature
Court of Appeal
Appeal by defendant from Order of Mr. Justice Roskill on 5th November 1968 under Order XIV.
The Honourable CHRISTOPHER BATHURST (instructed by Messrs. Ashurst Morris Crisp & Co.) appeared on behalf of the Respondent Plaintiffs.
Mr. JOHN WILMERS, Q.C., and Mr. PETER ROUNTREE (instructed by Messrs. Fox & Gibbons) appeared on behalf of the Appellant Defendant.
Fielding & Platt Ltd. are manufacturers of machinery. Their business is in Gloucester. In the middle of 1965 they entered into a contract with a Lebanese company called S.C.I.A.L.E., Aluminium of Lebanon. They agreed to make and sell tothe Lebanese company an aluminium extrusion-press for a total sum of £235,000. The plant and equipment was to be delivered free on board a British port. The time for delivery was 10 ½ months from 19th June, 1965. Payment was to be made by six promissory notes given by the Managing Director of the Lebanese Company, Mr. Selim Najjar personally; and he deposited shares, of his own, as security for the due payment of the promissory notes. The promissory notes were payable at intervals during the progress of the work. The first four were payable whilst the English Company were making the machinery in England. Thus the first note was payable on 4th October, 1965, for £23,500; the second on 4th December, 1965, for £47,000; the third on 4th February, 1966, for £47,000; and the fourth on 4th April, 1966, for another £47,000. The fifth note was payable on 4th June, 1966, for £47,000, which was just about the time when the machinery was to be delivered to the port. The sixth note, the final one, for £23,500, was payable on 4th August, 1966.
On 4th October, 1965, the first promissory note, for £23,500, fell due. It was not paid. Mr. Najjar apologised for not paying it. He asked for a few: days' grace. He said that had been agreed. So be it. He was given a few days - indeed more than a few days. Still he did not pay. When the note was a fortnight overdue he wrote on 18th October, 1965: "It is my estimate that by the middle of next month all will be arranged and I will be able to proceed with the payments." He realized that his non-payment might result in delays on the English side, for he added: "Please remember that any delays on your part due to delayed payments will be acceptable". When the note was more than three weeks overdue, the English company decided to suspend work on the contract. On 27th October, 1965, they cabled to the Lebanese company: "We have today suspended all work on your contract with us and this includes notificationto all our material suppliers that they must do no further work on this contract. We have been forced to take this action to comply with the requirements of our authorities. Our current financial commitment to material and equipment suppliers plus design and stock material and labour charges, is extremely heavy. We trust you appreciate that this is your liability. As a result of suspending all work you will appreciate that our delivery date will be considerably extended and the amount of the delay will depend on the time taken for you to resolve your difficulties.
Mr. Najjar never paid the first promissory note or any of the others. He never paid anything. In consequence, the English company suspended work on the contract, and it remained suspended. No further work was done on it. There were negotiations for a revival of the contract, but they came to nothing.
Stopping there, it is quite plain to me that Mr. Najjar was liable to pay the first of the promissory notes. We have repeatedly said in this Court that a bill of exchange or a promissory note is to be treated as cash. It is to be honoured unless there is some good reason to the contrary. It is suggested that, on the first note, there was a failure of consideration. That suggestion is quite unfounded. The English company were getting on with their part of the contract. They were, they say, ordering goods from their suppliers and getting on with the work. At any rate, there is no evidence to the contrary; and, unless they were themselves in default, they were clearly entitled to payment of the first note. The position as to the second note is different. Before it fell due, the defendant, Mr. Najjar, said: "I canot pay"; and the English company replied: "We, therefore, suspend work." Seeing that the English company had suspended work, they could not claim payment in full, but at most damages. They could not sue on each note as it fell due - each of the six - when they had suspended all work on the contract. So there is an available defence on the second note. But not on the first note.
This brings me to the second point. In answer to the claim in both notes, the defendant Mr. Najjar raises a defence of illegality. He says that it was his intention to break the laws of the Lebanon and that the English company were parties to it. In order to import the extrusion press into the Lebanon, he had to get an import licence from the Lebanese Authorities. He had already got a licence to import a two-million rolling-mill, but he had not got a licence to bring in an extrusion press. His intention was to import it without a licence, and he says that the English company agreed to help him to do so. The English company agreed, he says, to put in a false invoice. He says: "I asked you to invoice the press as part of a rolling-mill, and you agreed to it, and, therefore, you cannot recover anything". That defence does not commend itself to me. Here is a man who prays in aid his own illegality - he admits he was trying to evade the laws of his own country - and he seeks to implicate the English company in it.
In order for this to be any kind of defence, he must show first of all that the contract contained a term that the English company were to give a false invoice: so that it could not lawfully be performed" For if it would be lawfully performed (by giving a correct invoice) the English company can certainly sue upon it. I do not think there was any such term. During the negotiations...
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