Paal Wilson & Company A/S v Partenreederei Hannah Blumenthal
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE GRIFFITHS,LORD JUSTICE KERR |
| Judgment Date | 26 March 1982 |
| Judgment citation (vLex) | [1982] EWCA Civ J0326-3 |
| Docket Number | 82/0145 |
| Court | Court of Appeal (Civil Division) |
| Date | 26 March 1982 |
[1982] EWCA Civ J0326-3
The Master of the Rolls
(Lord Denning)
Lord Justice Griffiths
and
Lord Justice Kerr
82/0145
1980 P. No. 1542
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
(MR. JUSTICE STAUGHTON)
Royal Courts of Justice.
MR. DAVID JOHNSON, Q.C. and MR. JONATHAN SUMPTION (instructed by Messrs. Sinclair Roche & Temperley) appeared on behalf of the Respondents.
MR. JOHN HOBHOUSE, Q.C. and MR. T. WORMINGTON (instructed by Messrs. Holman Fenwick & Willan) appeared on behalf of the Appellants.
The "Pinto" was built in 1965 in Spain. She was a small ship of 3,700 gross tons. In 1969 she was owned by Norwegian sellers. After lengthy negotiations through brokers the Norwegian sellers agreed to sell her to German buyers for 4,600,000 German marks. The agreement was in writing, dated the 23rd September, 1969. It was on the Norwegian sale form and contained a clause for arbitration in London. There was also this express provision:
"The vessel with everything belonging to her shall be at Sellers' risk and expense until she is delivered to the Buyers,…the vessel with everything belonging to her shall be delivered and taken over as she is at the time of delivery, after which the Sellers shall have no responsibility for possible faults or deficiencies of any description".
The vessel was inspected by the German buyers before delivery. They had competent engineers who thoroughly examined her. On her last voyage before delivery—from Huelva in Spain on the Gulf of Cadiz to Rotterdam in Holland -the marine superintendent of the buyers sailed with the ship together with the marine superintendent of the sellers. So the buyers knew all about her performance. The buyers took delivery of her in Rotterdam on the 9th December, 1969. They changed her name from "Pinto" to "Hannah Blumenthal". She was operated by the German buyers, but let back on time charter to the Norwegian sellers. In 1970 and 1971 the German buyers had extensive repairs done to her engines at much expense, but they made no complaint that it was due to any fault of the Norwegian sellers.
If they had any genuine cause for complaint, you would have thought they would have made it at once—but they did nothing for over two years.
PERIOD A—Two Years and Two Months
Then on the 28th January, 1972—that is, two years and two months after the delivery—the German buyers wrote saying they had a number of complaints about the vessel. Their solicitors wrote:
"' Hannah Blumenthal'
"We are acting for Messrs. Partenreederei Hannah Blumenthal of Hamburg in connection with their purchase of the m.s. 'Pinto' from yourselves under sale contract dated 23rd September, 1979.
"Under line 72 of the sale contract it is provided that the sellers shall at the time of delivery hand to the buyers the vessel's log books, unless otherwise agreed. Our clients have a number of complaints about the vessel and in order for us to investigate these complaints fully it is necessary for us to sight the deck and engine log books for the period during which the vessel was in your ownership.
"As these should apparently have been handed over on delivery of the vessel under the sale contract, we hereby call upon you to now produce these documents…"
Two arbitrators are appointed
In August 1972 the German buyers appointed Mr. R.E. Kingsley as their arbitrator. In December 1972 the Norwegian sellers appointed Mr. Cedric Barclay as their arbitrator. Nothing more was done by either side in the arbitration. Under the arbitration clause a third arbitrator should have been appointed. But this was never done. So the arbitration never got under way. No application was made by either side to the arbitrators for directions. Neither side sought to get a third arbitrator appointed. But each side was represented by experienced solicitors in the City of London. They seem to have assumed that pleadings could be delivered and discovery given without asking anyone for directions. Even so, the German buyers took an undue time to prepare their points of claim.
PERIOD B—One Year and Two Months
Then on the 23rd February, 1974—that is, one year and two months after the arbitrators were appointed—the German buyers delivered their points of claim. They alleged that in August 1969 (4 1/2 years before):
"Prior to the execution of the contract of sale the Norwegian sellers represented to the German buyers that the vessel had a service speed of 12.5 knots and that the vessel's engine had a service speed of 230 r.p.m."
The German company alleged that, relying on the said representations they entered into the contract of sale, that the representations were untrue and that they had suffered damages of over 1,000,000 German marks.
Alternatively, they relied on the representations as a collateral warranty.
They gave particulars of the representations. They were all oral—save for a telex on the 18th August, 1969. They were all in the preliminary stages in the negotiations long before the contract of sale was concluded on the 23rd September, 1969.
THE DEMERITS OF THE CLAIM
If this claim had rested on the old common law of England, it would have been bound to fail. The contract was in writing and contained all the terms including the term excluding any liability of the sellers. The representations, if made, were all innocent and would not give rise to any claim for damages. They were not collateral warranties being made so long before the contract was signed, see the principles decided in Howard Marine v. Ogden & Sons (C.A.) (1978) Queen's Bench 574. If the claim was to have any warrant at all, it could only be by reason of section 2 of the Misrepresentation Act 1967: and that would have been very difficult to maintain, seeing that the Norwegian sellers could rely on the exclusion clause as being fair and reasonable in the circumstances of the case, see section 3 of the Act.
I cannot think that the German buyers had much confidence in their claim. That is, I suspect, why they proved to be so dilatory about it. It makes one feel that it was a "try on".
The Norwegian sellers delivered their defence in June 1974. They denied that the representations were made. They said that the man who sent the telex on the 18th August, 1969 was not their agent.
Then there came from the German buyers this letter of the 25th September, 1974:
"We are considering whether a reply to the defence is required, but in the meanwhile perhaps you could ensure that you are in a position to effect discovery of documents within the near future".
PERIOD C—Two Years and Nine Months
From that time onward—from the 25th September, 1974 to the 8th July, 1977 (two years and nine months) nothing happened at all. The German buyers sold the vessel to someone else. They forgot all about their claim. The file must have been left in the bottom drawer. The buyers' arbitrator, Mr. R.E. Kingsley, thought the matter might have died. He wrote to the buyers' solicitors in January 1975 and February 1977 asking if he should keep the file open. They asked him to do so. Then the solicitors for the German buyers wrote this apologetic letter on the 8th July, 1977 to the solicitors for the Norwegian sellers:
"' Hannah Blumenthal'
"As you will be aware, this matter has, to say the least, not progressed very rapidly since we were last in contact. The reason for this is that we have been obtaining further evidence and we have been obtaining a number of translations which has been very time-consuming. We have also been obtaining further Advice from Counsel which has proved to be a very protracted business.
"Having said the above, we are now in a position to make some progress in this matter and, from a review of our file, it seems as though the next step in the Reference will be for the parties to give mutual disclosure of documents. In view of the length of time which has elapsed since the last step in the Reference was taken, we would be glad to have your views as to the time within which you think that disclosure might take place…
"Counsel has advised that, in the light of your Points of Defence, it may be that we will need to amend our Points of Claim in respect of the contentions which have been made as to who the various brokers involved were acting for. We mention this only to put you on notice that we may be seeking to do so at some stage in the future…"
Thereafter there was over fifteen months some fitful attempts at discovery. These were much hampered by the length of time since the sale of the ship in 1969—eight years earlier. In October 1978, however, the Norwegian sellers made available the log books of the vessel for the period preceding the selling. If the German buyers had been really serious, you would have thought they would have had them examined at once. But no.
PERIOD D—One Year and Eight Months
There then followed a period from December 1978 to July 1980 (twenty months) in which the buyers' solicitors appointed an expert to examine the log books. Then on the 30th July, 1980 they wrote, strangely enough, from their Hong Kong office:
"' Hannah Blumenthal'
"…We enclose a copy of a detailed analysis of the performance of the ship over the period covered by the Deck and Engine Logs disclosed by your clients.
"The claims made by our clients have been fully detailed in the pleadings.
"The enclosed analysis entirely supports the contentions which have been made by our clients:...
To continue reading
Request your trial
-
Tullett Prebon Plc and Others v BGC Brokers LP and Others
...the contract to end, citing Bremer Vulcan Schiffbau Und Maschinenfabrik v South India Shipping Corp [1981] AC 909 and Paal Wilson v Partenreederei Hannah Blumenthal [1983] 1 AC 854. Those cases were concerned with the very different and difficult situation which arises where no progress has......
- Minories Finance Ltd v Afribank Nigeria Ltd
-
Cold Storage Holdings Plc and Others v Overseas Assurance Corporation Ltd and Another
... ... v Nissen [1970] 2 QB 86 (folld) Paal Wilson & Co A/S v Partenreederei Hannah ... market through the services of another company of brokers, Heath Langeveldt Rollins Pte Ltd ... & Co A/S v Partenreederei Hannah Blumenthal [1983] 1 AC 854 where what Lord Diplock said at ... ...
- Thai-Europe Tapioca Service Ltd v Seine Navigation Company Inc. (Maritime Winner)