Montebianco Industrie Tessili S.p.A. v Carlyle Mills (London) Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE STEPHENSON,LORD JUSTICE ACKNER,SIR STANLEY REES |
| Judgment Date | 11 February 1981 |
| Judgment citation (vLex) | [1981] EWCA Civ J0211-2 |
| Court | Court of Appeal (Civil Division) |
| Date | 11 February 1981 |
| Docket Number | 81/0599 |
[1981] EWCA Civ J0211-2
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(Mr. Justice Park)
Royal Courts of Justice
Lord Justice Stephenson
Lord Justice Ackner
and
Sir Stanley Rees
81/0599
1980 M 4263
MR. JOHN A. SPEED (instructed by Arturo Barone, Esq. solicitor, London) appeared on behalf of the Respondents (Plaintiffs).
MR. R. P. CROXON (instructed by Messrs. Michael Goldstone & Company, solicitors, Ilford) appeared on behalf of the Appellants (Defendants).
This is a plaintiffs' appeal from an order of Mr. Justice Park on 12th December 1980 whereby he dismissed an appeal from an order of Master Bickford Smith who had given summary judgment for the plaintiffs for the sum of £49,495.01 with interest, on a number of bills of exchange which had been dishonoured on presentation by the defendants. He refused to stay that order so the plaintiffs come before us asking us to reverse the order of the learned judge and to give the defendants unconditional leave to defend.
The case is one which is not unparalleled. It is a case where English merchants have ordered goods from Italian manufacturers and have been dissatisfied with the quality of the goods which have been supplied to them under contracts with those Italian manufacturers. They have therefore argued that they have an arguable defence and counterclaim, and should not do what those who issue bills of exchange are by a rule of practice almost amounting to a rule of law required to do in this country, namely, honour the bills of exchange. There is no question here of fraud or illegality but there is a serious question—I think it would have to be admitted—of failure of consideration, and unless what appears to be an entire contract can be severed into separate contracts so that different considerations can be ascribed to different parts of it, the failure of consideration cannot be said to have been total but can be said to have been substantial.
On an interlocutory appeal of this kind this court cannot possibly decide the question how far the allegations made in affidavit evidence, and in a defence and counterclaim which have been served on the plaintiffs, are true. But it is because the defendants think that they are true, and there does not seem much ground for saying that the defence is in any shape or form an afterthought, let alone a sham, more especially in the absence of any answering affidavit from the plaintiffs, that they are disputing payment on the bills of exchange.
The plaintiffs are yarn spinners in Italy, as I have said, and they are a company which, unless it is given a sum of money by the court as the fruits of summary judgment, has no assets in this country. But it is a company which, according to the solicitor who verified the cause of action in support of the summons for summary judgment, is well established and is a well-known textile manufacturer operating in Italy.
The defendants are manufacturers, merchants and converters in the rag trade. They order cloth that has to be made up or knitted, so that it is converted into what is called ladies fashion wear, and that is something that they do mostly, if not entirely, through a subcontractor in this country. The plaintiffs have an agent in this country.
We have not been shown any documents creating the mercantile contract, which is at the back of the bills of exchange, but it is pleaded in paragraph 3 of the Defence as a contract to supply 50 tonnes of yarn between June and September of last year. Delivery began on 18th July of last year, and it is plain from the telexes we have seen, particularly the telex at page 59 and the answering telex at page 60, that as early as 29th August last the appellants were making serious complaints to the plaintiffs about the goods being delivered under their contract with the plaintiffs. They had had serious complaints from their customers about shade differences in the cloth which was delivered, about the failure of the colours of the cloth to match the samples previously looked at, and about the existence of what are called 'barres', which are apparently lines which should not appear in cloth of the kind ordered by the defendants from the plaintiffs.
The defendants have altogether ordered 26,000 kilos of different coloured cloth, and rather more than that number of kilos have in fact, over those months in 1980, been delivered to them. Of those 26,000 kilos they complain that no fewer than 17,200 kilos are unsatisfactory and not in accordance with the contract. Put those amounts into pounds and the figures put forward in the defence and in the evidence by the defendants is that £70,710 worth of the 26,000 kilos delivered, at a total cost price of £107,947, is the amount payable for the defective goods. The defendants say that all they are prepared to pay for, and that is subject to their counterclaim, is kilos valued at £15,494.64.
They claim that they were entitled to reject the goods that were delivered and that, by their telex of 29th August, they notified the plaintiffs that they were rejecting the goods because they called on them to collect them. Unfortunately, and it is very...
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