Ocean Chemical Transport Inc. v Exnor Craggs Ltd (Julius Hammer)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE EVANS,LORD JUSTICE HENRY,LORD JUSTICE WALLER |
| Judgment Date | 15 December 1999 |
| Neutral Citation | [1999] EWCA Civ J1215-17,[1999] EWCA Civ J1215-8 |
| Judgment citation (vLex) | [1999] EWCA Civ J1215-1 |
| Docket Number | QBCMI 1999/1033/A3 |
| Court | Court of Appeal (Civil Division) |
| Date | 15 December 1999 |
[1999] EWCA Civ J1215-1
Lord Justice Evans
Lord Justice Henry
Lord Justice Waller
QBCMI 1999/1033/A3
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
(HIS HONOUR JUDGE HALLGARTEN)
ON APPEAL FROM THE QUEEN'S BENCH COMMERCIAL COURT
Royal Courts of Justice
Strand
London WC2
MR G CHARKHAM (Instructed by More Fisher Brown, 1 Norton Folgate, London E1) appeared on behalf of the Appellant
MR M DAVEY (Instructed by Andrew M Jackson & Co, Essex House, Manor Street, Hull) appeared on behalf of the Respondent
Wednesday 15th December 1999
LORD JUSTICE EVANS: This is an appeal from a judgment given by His Honour Judge Hallgarten QC in the Commercial Court on 26th July 1999. He decided three preliminary issues, which had been ordered to be tried by Rix J on 6th November 1998.
The issue as ordered was "whether or not the claim is time barred as alleged in paragraph 10 of the amended points of defence served 21st April 1998". As the learned judge indicated, the issue gave rise to three sub-issues, which he defined as follows:
"1.If the time-bar was incorporated in the contract of sale, does it serve to extinguish any liability which the defendants may otherwise owe?
Was the time-bar in fact incorporated into the contract of sale?
If the time-bar would serve to extinguish liability, and was incorporated, was the contract of sale subject to the Unfair Contract Terms Act 1977 (' UCTA'), whereby the claimants are precluded from relying on such time-bar?"
The three issues all arose out of paragraph 10 of the defence, which alleged:
"In any event, the Plaintiff's claims are time-barred as follows:
(i)[as amended] The Defendants' General Terms and Conditions were incorporated into the contract or, in the alternative, the Agreement.
(ii)Section 10 of such Terms and Conditions provided inter alia as follows:
'… All liability whatsoever on [the defendants'] part shall cease unless suit is brought within six months after a delivery of the goods… '
(iii) The goods (scil The Fuels) were
delivered on or about the 22nd February 1995.
(iv)The action herein was commenced on 25th July 1996.
In reliance on the aforesaid Section 10, the Defendants deny liability."
The contract was for the supply of bunkers, the claimants being a United States company which owned or operated a number of ships. They arranged for bunker liftings through a United States brokerage company, Bunkerfuels Corporation of Cranbury, New Jersey. In the present case the sale was broked by the United Kingdom company, Bunkerfuels UK Ltd. The person concerned at Bunkerfuels UK was a Mr Jack Varela. He arranged a purchase from the respondent, Exnor Craggs Ltd, who were represented by Mr Mark Paul. The respondents are an English company which is based in Grimsby.
The bunkers were supplied to a vessel, the Julius Hammer, at Suez on 22nd February 1995. On 24th March 1995 the appellants paid the respondents for them. Pursuant to the contractual terms, title in the fuel passed to the appellants then if not before.
It was not until July 1996 (that is to say, some seventeen months later) that the claimants' vessel was arrested in Egypt by the company which had supplied the bunkers. That was a company called Societe Cooperative des Petroles. When the vessel was arrested by those suppliers, it was apparently because the suppliers were claiming that they had not been paid for the bunkers in question by whoever had placed the order with them.
Little is known about the exact basis of the suppliers' claim. The points of claim read as follows:
"9The Supplier has commenced legal proceedings in Egypt against the Vessel and/or her Owners and/or Disponent Owners and/or Managing Owners and/or Master and/or Charterers alleging that it has not received payment as aforesaid… "
The reference to "as aforesaid" is a little unclear. There is no allegation in the pleading of any contract between the suppliers and any other party.
The vessel was released from arrest upon payment of a substantial sum by way of security bond for US$227,528.38 and it is that which forms the basis of the damages claim which the appellants now bring against the respondents from whom they contracted to buy the bunkers in question.
The claim is that the arrest came about because of a breach of contract by the respondents. The claimants rely upon the statutory implied terms in section 12 of the Sale of Goods Act 1979. Section 12(1) contains the term to the effect that the seller has a right to sell the goods. That may be sufficiently called the undertaking as to title. In section 12(2) there is specified a further implied term:
"(b)the buyer will enjoy quiet possession of the goods except so far as it may be disturbed by the owner or other person entitled to the benefit of any charge or encumbrance so disclosed or known."
Section 12(2)(a) provides for a further term to the effect that the goods were free from a charge or encumbrance at the time when the property passed.
The claimants allege breaches of both those terms. The allegations necessarily are in general terms because of the paucity of information regarding the precise nature of the proceedings which have been brought in Egypt. Broadly, however, Mr Charkham submits that there are grounds for alleging at least two breaches of contract. First, that there was some defect in the title to the goods which has resulted in the later arrest of the ship. The significance of that alleged breach is that it occurred, if at all, at the time when the bunkers were delivered in February 1995. Secondly, there was, he says, a breach of the term as to quiet enjoyment (that is section 12(2)(b)), the importance of that allegation being that the breach occurred only in July 1996 when the vessel was arrested. For that reason counsel has emphasised the alleged breach of the provision as to quiet possession rather than the further allegation of a breach of the term as to title.
It must be observed that the basis of the claim made in Egypt is not at all clear. The likelihood would seem to be that the bunkers in question were consumed by the vessel long before July 1996. There may well be room for considerable debate as to whether any residues of those bunkers remained in the vessel in July 1996. It may also be observed that any such debate would seem, on the face of it, to be highly artificial and likely to be unproductive. However, we must assume for present purposes that a ground or grounds for claiming damages from the defendants by reason of the subsequent arrest of the vessel may be made out.
The circumstances in which the contract was made were set out by the learned judge at pages 10–12 of his judgment. This account and these findings are not challenged by Mr Charkham on this appeal and they can therefore be accepted as follows:
"In consequence Mr Earnest Janssen of BUSA [the United States brokers] telephoned Mr Varela instructing him that BUK were to place the stem with the defendants. Mr Varela accordingly telephoned his counterparty at the defendants, Mr Mark Paul, and, agreement having been reached between them, Mr Varela sent the following to the defendants at 17.04 on 7th February 1995 addressed to 'Buyer and Seller':
'In accordance with instructions received from Ocean Ships Inc we confirm placing following nomination.'
Certain details were set out and the fax continued:
'The above details are the basis of the contract between buyer and seller which is governed by sellers terms and conditions of sale. Bunkerfuels UK Ltd is acting as brokers only.'
About half an hour later, at 17.34 Mr Paul sent to BUK a fax in slightly different terms which it is common ground contained or evidenced the contract. That fax identified the purchaser in somewhat wider terms, amplified the details, eg as to payment terms, and concluded:
'This nomination has been placed in accordance with our general terms and conditions of sale and delivery (copy available upon request).'
This fax was copied by BUK to BUSA but it is not clear whether BUSA passed it to the second claimants. They did, however, provide what might be called a resume which included the following provision:
'The terms and conditions of this sale, unless otherwise stipulated, are subject to the seller's general terms and conditions. Particular attention should be given to clauses concerning cancellation (which generally require a force majeure situation) and the price validity period. If the buyer is not in possession of same and wishes a copy, a written notice must be sent to Bunkerfuels Corporation, by facsimile or telex, within 24 hours of the date and time this confirmation is sent.'
The resume concluded:
We will assume that all parties agree to this confirmation unless we are notified in writing within 24 hours of the date and time that this message is sent.'
There is not evidence that the fax was sent otherwise than to the claimants.
The above narrative is sufficient to show that the contract purported to incorporate the defendants' general terms and conditions."
The terms and conditions in question are included in the bundles before us in two forms. The first is printed on a total of seven pages. It was in that form that the terms had, some time prior to the making of the contract, been supplied by the respondents to the United Kingdom brokers. We also have them in another form where they appear on four pages, each bearing two columns in rather smaller print.
The relevant term is the last, section 10, which is headed "Disputes" and which I should read in...
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