Hillas & Company Ltd v Arcos Ltd

JurisdictionEngland & Wales
JudgeLord Tomlin,Lord Thankerton,Lord Wright,.
Judgment Date05 July 1932
Judgment citation (vLex)[1932] UKHL J0705-2
Date05 July 1932
CourtHouse of Lords
W. N. Hillas & Co., Ltd.
Arcos, Ltd.

[1932] UKHL J0705-2

Lord Tomlin.

Lord Warrington of Clyffe.

Lord Thankerton.

Lord Macmillan.

Lord Wright.

House of Lords

After hearing Counsel, as well on Tuesday the 3d, as on Thursday the 5th and Friday the 6th, days of May last, upon the Petition and Appeal of W. N. Hillas and Company, Limited, whose Registered Office is situate at Mail Buildings, Jameson Street, Hull, praying. That the matter of the Order set forth in the Schedule thereto, namely an Order of His Majesty's Court of Appeal, of the 28th of July 1931, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be reversed, varied, or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of Arcos, 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 His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 28th day of July 1931, complained of in the said Appeal, be, and the same is hereby, Reversed, and that the Judgment of the Honourable Mr. Justice MacKinnon, of the 12th day of June 1931, 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 King's Bench Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.

Lord Tomlin .

My Lords,


On the 28th July, 1931, the Court of Appeal ordered a judgment in the Appellants' favour against the Respondents for £30,000 damages with costs to be set aside and directed judgment to be entered for the Respondents.


The action was one in which the Appellants sought to make the Respondents liable in damages for breach of a contract for the sale and purchase of Russian softwood timber for delivery in 1931 alleged to have been constituted by a document in writing signed by the representatives of the parties on the 21st May, 1930, and a letter dated the 22nd December, 1930, written by the Appellants to the Respondents and purporting to exercise an option expressed to be conferred by Clause 9 of such document.


The writ was issued on the 30th January, 1931. The case was set down in the Commercial List. The breach alleged in the heads of claim was that the Respondents had on the 20th December, 1930, contracted to sell to a third party the whole of the softwood timber which the Respondents should import into the United Kingdom during the Russian timber season of 1931 and by letter dated the 24th December, 1931, had repudiated the option.


The only defence set up by the Points of Defence was that the agreement contained in the document of the 21st May, 1930, had been cancelled by mutual consent in the month of July, 1930, and that there was therefore no option open to the Appellants when the letter of the 24th December, 1931, was written.


The action was tried in May, 1931, by Mr. Justice Roche with a City of London special jury. The question left to the jury was whether the option contained in Clause 9 of the document of the 21st May, 1930, was subsisting in the month of December, 1930, or whether it had been cancelled. The jury found for the Appellants.


It was agreed that the question of the amount of the damages should be left to be determined by Mr. Justice Mackinnon at a future date as Mr. Justice Roche was about to go on circuit, and after hearing argument on some points of law not material for the present purpose Mr. Justice Roche gave judgment for the Appellants for an amount to be assessed with costs and directed that if the Respondents desired to appeal their time should be extended until one month after the amount of damages had been ascertained and the judgment containing the amount so ascertained drawn up.


The jury was then discharged.


No formal judgment embodying the conclusions of Mr. Justice Roche was drawn up.


In June, 1931, the matter was proceeded with before Mr. Justice MacKinnon for the purpose of having the damages assessed.


At this hearing before Mr. Justice MacKinnon the Respondents for the first time raised the point that there was no contract at all, contending that the document of the 21st May, 1930, did not contain a sufficient description of the goods to be sold to enable them to be identified, and that it in fact contemplated in the future some further agreement upon essential terms. No amendment was made in the pleadings putting the plea into a definite form.


The Appellants objected that it was too late for the Respondents to take the point and that in any case the point was not good.


The learned Judge held that the point was not well founded and that therefore it was not necessary to consider whether the Respondents were too late in taking it. He further assessed the damages at £30,000 and gave judgment for the Appellants for that amount with costs. A formal judgment was drawn up, the preamble of which stated that the hearing of the action had been resumed before Mr. Justice MacKinnon for assessment of damages.


The Respondents appealed. The Appellants cross-appealed upon the amount of the damages, which they regarded as insufficient. This cross-appeal was dismissed by the Court of Appeal and in that dismissal the Appellants have acquiesced.


The Respondents' appeal succeeded before the Court of Appeal, the Court being unanimously of opinion that there was no contract and that the Respondents were not too late in taking the point. Accordingly, by the formal order of the Court of Appeal, the judgment in the Appellants' favour was set aside and judgment was directed to be entered for the Respondents with costs, other than the costs of the issue of cancellation, which were given to the Appellants.


It is of this order that the Appellants complain before your Lordships' House.


Before examining the relevant documents it will be convenient to explain the respective positions of the parties and the circumstances of the Russian softwood timber trade as appearing from the evidence.


The Appellants are an English company carrying on in this country the business of timber merchants, the governing director being Mr. William Newland Hillas.


The Respondents are an English limited company through which the Russian Soviet Government conducts its trading operations in this country.


Russian softwood timber is of at least two kinds, viz., whitewood and redwood. Of these kinds there are various qualities. Quality is to some extent dependent upon the districts in which the timber is grown.


Some timber is sold sorted into qualities, other timber is sold unsorted.


Again, the timber is prepared for market in a great number of different sizes.


The kinds, qualities and sizes which a purchaser requires must to some extent determine the port from which any consignment to him is shipped.


The timber is cut in the winter for the following season, and in January the Respondents first prepare stock notes giving estimates of the quantities which will be available at the various ports of shipment of the different kinds, qualities and sizes of timber. From time to time supplementary stock notes are prepared during the season as further or better information becomes available.


The shipments begin as soon as there is open water at the ports of shipment, that is about May from Leningrad and about June from the White Sea. The shipments continue through the season. The first open water shipments are generally the most sought after.


In each year prior to 1931 an official price list was issued by the Respondents showing the prices for the different kinds, qualities and sizes of Russian softwood timber for the current season.


As, however, on November 20th, 1930, the Respondents sold the whole of the output of the 1931 season to the Central Softwood Buying Corporation the only list issued for 1931 was the list (referred to in the proceedings as the yellow list) of the c.i.f. prices at which the Central Softwood Buying Corporation as sole selling agents were free to sell the 1931 output to the public.


The document of the 21st May, 1930, is in the following terms:—

"Heads for the Purchase of Russian Goods.

We agree to buy 22,000 standards of Softwood Goods of fair specification over the season 1930 under the following conditions:—

(1) On all purchases made under this present contract buyers to receive a bonus of 7 per cent. on the f.o.b. value, and a similar allowance on all previous contracts made by buyers for 1930 shipment.

If, however, buyers increase their purchase up to 30,000 standards the bonus to be 7½ per cent. on the f.o.b. value.

(2) All 1930 purchases to be invoiced as per new revised schedule on the usual c.i.f. terms, less 2½ per cent. discount for cash, or four months acceptances, at buyers option; except 50 per cent. of the purchases prior to 20th May, 1930, on which buyers are only entitled to a 70 per cent. reduction between the old official prices and the new revised prices.

(3) No extras to be charged on account of size of steamer for goods ordered to ports where 900 standard steamers can be shipped if ordered before 15th September.

Goods to be shipped together with goods for other receivers. Small outports usual extras.

(4) Payment: Buyers undertake to pay on the...

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