GLYNWED DISTRIBUTION Ltd v S. KORONKA & Company
| Jurisdiction | Scotland |
| Judgment Date | 29 October 1976 |
| Docket Number | No. 1. |
| Date | 29 October 1976 |
| Court | Court of Session (Inner House - Second Division) |
SECOND DIVISION.
Sale of moveablesSale of goodsAscertainment of priceMeaning of reasonable priceFactors to be taken into account in fixing a reasonable priceWhether evidence on which Sheriff could fix a reasonable priceSale of Goods Act 1893 (56 & 57 Vict., cap. 71), sec. 8 (2).1
ContractSubject-matter of contractConsensusWhether consensus in idem between parties as to subject-matter.
A company offered to sell and subsequently delivered a quantity of hot rolled steel to a firm which manufactured agricultural implements. The firm agreed to buy and accepted the steel. The purchasers had wanted to buy and thought they had bought "British steel" with an extended delivery period for 103.50 per tonne, though they had not stipulated British steel. The sellers thought they had sold "foreign steel" for immediate delivery at 149 per tonne. The purchasers refused to pay 149 per tonne and the sellers raised an action for payment of the balance of the greater price unpaid. After a proof the Sheriff found that it had not been proved that there was a concluded agreement to sell the steel at either price. It was agreed by the parties' procurators that in that event a "reasonable price" would have to be fixed by the Sheriff. The Sheriff then fixed a reasonable price at 135 after stating that the evidence fell far short of providing him with enough information to fix a reasonable price. On appeal to the Sheriff Principal, the decision of the Sheriff was reversed and the action dismissed on the ground that the sellers had not proved a contract of sale at 149 per tonne, and there was no alternative case for sale without
a price being fixed; and, in any event there was no consensus in idem on the subjects for saleHeld (rev. judgment of Sheriff Principal) (1) that there was agreement on the subjects of sale, namely hot rolled steel, though not on the price, and accordingly there was consensus in idem. Wilson v. Marquis of BreadalbaneUNK (1859) 21 D. 957; Stuart & Co. v. KennedyUNK (1885) 13 R. 221; and Mathieson Gee (Ayrshire) Ltd. v. QuigleySC1952 S.C. (H.L.) 38, 1952 S.L.T. 239, referred to; (2) that a "reasonable price" means something different from the market price or market value, and there was a basis in fact upon which the Sheriff could reach a determination as to what was a reasonable price.Acebal v. LevyENR (1834) 10 Bing 376 referred to.
Observed by Lords Kissen and Leechman that a "reasonable price" must be fair and just to both parties.
Observed by Lord Kissen that circumstances may require a balancing of advantages and disadvantages to the seller and buyer which arise from the sale, and consideration to be given to the parties' actings in regard to the sale before the "reasonable price" can be fixed.
Glynwed Distribution (Cashmore Division) raised an action in the Sheriff Court at Cupar against S. Koronka & Company for payment of the price of a quantity of steel.
The following narrative is taken from the Opinion of Lord Kissen:"The pursuers originally sued the defenders in the Sheriff Court at Cupar for payment of the sum of 12,113.00 as the price of a quantity of hot rolled steel sold by them to the defenders. This sum was later amended to the sum of 3,597.70, after the defenders had paid the sum of 8,515.30, which they claimed was based on the agreed price of the hot rolled steel. In their pleadings the pursuers aver that the agreed price per ton was 149.00, whereas the defenders aver that the agreed price per ton was 103.50. The sum of 3,597.70 represents the difference in the tonnage prices and the value added tax of 10 per cent.
"After a proof, the Sheriff held that it had not been proved that there was a concluded agreement to sell the steel at 149 per tonne nor at 103.50 per tonne. It was agreed by the solicitors for both parties that if I reached such a conclusion I would have to fix a "reasonable price" for the steel. Reference was made to section 8 (2) of the Sale of Goods Act 1893. He decided that a reasonable price for the steel was 135 per ton exclusive of value added tax and, on that basis, awarded the pursuers decree for the sum of 2,459.58. I propose to use ton as that has been used in the pleadings and the correspondence. It does not affect the sums involved.
"The defenders appealed to the Sheriff Principal. The notes of evidence were not extended and he was asked to decide the appeal on the basis of the facts found by the Sheriff and his Note. He sustained the appeal and dismissed the action. The basis of his decision was that the only case made by the pursuers on record was that there was a contract for the sale of steel at 149 per ton, that this had not been proved, that there was no alternative case for a sale without a price being fixed, that there were no averments about a reasonable price, that the evidence did not enable a reasonable price to be fixed and that, therefore, the pursuers' action failed. In his Note he further stated that, in any event, the pursuers' case must fail because, briefly, there was no consensus in idem on the subjects of the sale and therefore no concluded contract of sale, the lack ofconsensus arising from the pursuers thinking that they were selling foreign steel for immediate delivery at 149 per ton and the defenders thinking that they were buying British steel with an extended delivery period at 103.50 per ton. The result was that, in his opinion, they were never at one in regard to the subjects of sale."
On 20th February 1975 the Sheriff of Fife and Kinross at Cupar (M'Innes) found the following facts proved:"(1) The pursuers carry on a business in which, inter alia, they sell steel sheet and plate. The defenders carry on business as manufacturers of agricultural implements. (2) On about 25th January 1974 Ian Goddard, an employee of the pursuers, telephoned to Mr Stanislaw Koronka the principal partner of the defenders and offered to sell him steel. There was a discussion as to quantity and price. Mr Koronka said that he wanted to buy British steel. It was eventually agreed that the defenders would buy from the pursuers: about 40 tonnes 6 48 12 gauge; about 20 tonnes 4 48 12 gauge; and about 20 tonnes 10 48 3/16. (3) Mr Koronka entered in his purchase book (No. 11/1 of process) this purchase of steel at the price at which he considered that he had purchased it, namely 103.50 per tonne. Mr Goddard entered the sale of said steel in his day sales book (No. 12/1 of process) at the price at which he considered that he had sold it, namely 149 per tonne. (4) The amendments to the relevant entry in 11/1 of process were made at a later date by Mr Koronka following upon discussion with Mr Goddard. (5) Steel in fulfilment of said contract was delivered to the defenders. Invoices were sent by the pursuers for payment therefor at the rate of 149 per tonne for said steel. The total sum claimed was 12,113.00. (6) The defenders replied by letter dated 22nd February 1974 (of which 8/4 of process is a copy) that the price said steel was bought for was 103.50 per tonne. (7) Upon receipt of said letter Mr Goddard telephoned Mr S. Koronka and later went to see Mr Koronka. Both of them maintained their respective positions as to the price of said steel. (8) Correspondence between the parties ensued. 8/5 to 8/8 of process inclusive are letters or copy letters sent in the course of such correspondence. (9) In about January 1974 British-made steel was selling at about 100 per tonne. Foreign-made, i.e., imported, steel was selling at about 140 to 150 per tonne. (10) The price of British-made steel was then controlled by the British government. (11) At that time and for some time previously the British steel industry had been incapable of meeting demand within the United Kingdom for certain types of steel including steel sheet and steel plate. (12) Because of the shortage British companies large and small had been prepared to pay the price of imported steel in order to meet their requirements. (13) At about 25th January 1974 the pursuers, who were then the second or third largest steel stockholders in the United Kingdom, held stocks composed to the extent of about 92 per cent of imported foreign-made steel. (14) At about said date some British-made steel was available on the market, but intending purchasers of British steel were likely to experience difficulty in obtaining firm delivery dates. (15) It was the practice of the pursuers to strike average prices for steel sheet and plate regardless of origin but having regard to the price they paid for it plus their costs and a margin for profit. They did not then sell British steel separately from foreign steel. (16) The prices charged by the pursuers for comparable steel sheet to their other customers at about 25th January 1974 were...
To continue reading
Request your trial
-
Action
...same evidence taken all over again. See: Lediju v. Odulaja (l943) 17 N.L.R. 15. See also Nasr v. Complete Home Enterprises (Nig.) Ltd. (1977) S.C. 1 at 11.” - Per Ikongbeh, J.C.A. in Alaribe v. Nwankpa Suit No. CA/PH/EP/64/99; (1999) 4 N.W.L.R. (Pt. 600) 551 at 560. 157 Paras. 304-306 Conso......