Panchaud Frères S.A. v Etablissements General Grain Company (African Night.)

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
Judgment Date06 Nov 1969
Judgment citation (vLex)[1969] EWCA Civ J1106-2

[1969] EWCA Civ J1106-2

In The Supreme Court of Judicature

Court of Appeal

Appeal (by leave) by the sellers, Panchaud Freres S.A., from order of Mr. Justice Roskill dated 13th May, 1969.


The Master of The Rolls (Lord Denning)

Lord Justice Winn and

Lord Justice Cross

In the Matter of The Arbitration Act 1950


In the Matter of An Appeal Arbitration

Panchaud Freres S.A.
Sellers Appellants
Establissements General Grain Company
Buyers Respondents

Mr. ANTHONY LLOYD, Q.C., and Mr. J. COOKE (Instructed by Messrs. Constant and Constant) appeared on behalf of Panchaud Freres S.A., Appellants.

Mr. ANTHONY EVANS and Mr. S.C. BOYD (instructed by Messrs. Richards Butler & Co.) appeared on behalf of the buyers, Respondents.


On 14th May 1965, a contract was made between the sellers, Panchaud Freres S.A., and the buyers, Establishments Grain Co. It was for the sale of 5,500 tons of Brazilian yellow maize with a maximum of 15% of moisture on shipment and a basic 2% admixture on shipment, guaranteed free from castorseed and/or Husk on shipment. Then, an important certificate was required: "Certificate on Sociodade Brasileira de Superintendencia Ltda final on shipment as to moisture, admixture, castorseed and/or husk".


Another important clause was: "Shipment to take place from (a) Brazilian Port/s not North of Santos during the period of June/July 1965".


The price was to be 65 dollars per 1000 kilos gross for nett delivered weight, cif Antwerp. Payment was to be by telegraphic transfer nett cash against documents on first presentation. In addition, there was incorporated the terms of the London Corn Trade Association contract No. 77, which contained this clause: "BILL OF LADING to be considered proof of date of shipment in the absence of evidence to the contrary. Bach shipment appropriated in whole or part fulfilment of this contract to be considered a separate contract".


There was also an Arbitration Clause: "A party claiming arbitration (otherwise than in respect of condition and/or quality) must appoint his arbitrator and must make his claim for arbitration and give notice of appointment of his arbitrator in writing to the other party within six calendar months of the expiry of the contract time of shipment or of the date of completion of final discharge of the ship at port of destination under this Contract, whichever period shall last expire".


The greater part of the maize was shipped at Paranagua on 15th, 19th, 22nd July, 1965. No question arises on those shipments. The question only arises on a subsequent shipment of 200 metric tons. It was the last parcel to complete the con-tract. It was shipped late. The latest day under the contract was 31st July, 1965. This last parcel was not shipped till twelve days later. It was shipped on a vessel called the "African Night". She arrived at Rio Grande, Brazil, on 25th July, 1965. This last parcel of maize was not shipped until 11th and 12th August, 1965. It consisted of 3477 bags of maize with no marks on them.


Now comes the point. The Master issued a false bill of lading for that shipment. It was false in that it gave the wrong date. The date of actual shipment was 11th and 12th August. This bill of lading had on it "the 31st July, 1965", as the date of shipment. That date was inserted, no doubt, so as to make it appear that the parcel was shipped within the contract time. But it was a false date. The Bill of Lading had also these particulars which were incorrect. It stated the mark "Alfredinho" when there were no marks: and the number of bags as 3321 when they were 3477.


About the same time, on 11th or 12th August, when the maize was shipped, the Sociedade Brasileira de Superintendence Ltda. gave a certificate as to quality. That Company had drawn samples concurrently with the loading. The certificate said: "We have drawn samples concurrently with loading and checked the quality and condition of the following shipment of Brazilian maize", describing the bags. It said: "Shipped per steamer 'African Night'. Samples were drawn on August 10 to 12" note the date "free from castorseed and/or husks and/or other poisonous seed". It gave the moisture content as 14.40%, and admixture as 0.50% and then said: "Loaded on August 10 to 12, 1965". So the certificate of quality gave the true dates of loading, whereas the bill of lading gave a false date.


A day or two later the "African Night" sailed from Rio Grande. She arrived in Antwerp in the middle of September. Whilst she was at sea, the documents for these goods were takenup by the buyers. They included the bill of lading, the insurance policy and the certificate of inspection of quality. The buyers paid up the price and took up the documents. They made no objection at that time as to the date of shipment.


Later on, when the ship arrived at Antwerp, the buyers refused the goods. I do not know what had happened to the market price. Perhaps it had fallen. Anyway, the buyers rejected the goods. They did not reject them on the ground of late shipment but on the ground of their quality and description. I will read the grounds of rejection as stated in the case. "In a latter dated 20th September, 1965, to the Captain of the s. s. 'African Night' and her owners, Delvaux complained that in relation to Bill of Lading No. 3 (i.e. the Rio Grande Bill of Lading) covering 3.321 bags, 200,000 kilos, marks 'Alfredinho', they had been offered another consignment in which the number of bags did not tally (3,477 bags) against the Bill of Lading number (3,321 bags); the bags were without marks and/or with different marks, and the analysis which the agents had carried out proved that they were not the goods purchased, since the Certificate of Moisture covering the parcel showed 14.40%, whilst the parcel offered showed moistures of up to 22%".


So the buyers rejected the goods. I suppose the sellers or their agents took them off and sold them. The sellers claimed damages from the buyers. The dispute went to arbitration. The arbitrators did not agree. It went before an umpire. On 17th February 1966, the umpire upheld the buyers' claim to reject on the grounds that the goods did not correspond to the description in the bill of lading and awarded that the buyers should have their money back. The sellers appealed to the Committee of Appeal. (In the Arbitration Clause it is rather confusingly called a "Court" of Appeal), when the matter got to the Committee of Appeal, the legal advisers realised that the buyers' ground of rejection (being that the goods did not correspond to the description in the bill of lading) was a ground for complaintagainst the shipowners rather than against the sellers. So the buyers did not pursue that ground of rejection. But then at some stage in the hearing before the Committee of Appeal the sellers got to know that the shipment was made late. They quite frankly told the buyers. Thereupon the buyers for the first time -this was in 1968 - three years after the shipment - claimed to reject on the ground of late shipment and also on the ground of the false date in the bill of lading. The sellers made this answer to the buyers: "By your conduct you have waived any complaint on those grounds". They also said: "Your claim to reject on those grounds ought to have been made within six months and you are out of time".


The Committee of Appeal of the London Corn Trade Association upheld both those contentions. They threw out the buyers' claim. A Case was stated to the High Court. Mr. Justice Roskill reversed the Committee of Appeal. He held that the buyers were entitled to reject and have their money back. Now the sellers appeal to this Court.


The reasoning of the Committee of Appeal is to be found in two important sub-paragraphs 19(a) and (b) of their award. "19. In so far as they are questions of fact we further find, and in so far as they are questions of law we hold, subject to the decision of the Court, as follows:


(a) Whilst neither the buyers nor their agents had appreciated until the later stages of the hearing before us that the Rio Grande cargo had been shipped in August 1965, theycannot be deemed to have been unaware, from the contents of the Certificate of Quality which formed part of the shipping documents, for which they paid without com plaint, that the maize in bags shipped at Rio Grande was loaded between 10th and 12th August, 1965, and that the date of the Rio Grande Bill of Lading was incorrect.


(b) The buyers by their conduct impliedly waived the irregularity in the date of the Rio Grande Bill of Lading"and were not entitled, on that ground, to reject the goods thereby covered or purported to be covered or to claim damages therefor, or the return of the purchase price".


It is well settled that if a buyer rejects and gives one ground for it, he is not confined to that ground. If he after wards finds out another ground on which he was entitled to reject, then in the ordinary way he can rely on that ground also. That is clear from ( Taylor v. Oakes 1922 38 Times Law Reports, 349). It is similar to the rule that if a man dismisses a servant on one ground, he is not confined to that ground. If he afterwards finds another ground justifying his dismissal, he can rely on that too. But this rule is subject to the qualification that a man may by his conduct preclude himself from setting up the later ground. Vie had, a little while ago, a case where a man was dismissed for one particular piece of dishonesty. At the trial the employer realised that he would not succeed in proving that particular dishonesty. So, during an adjournment, he got evidence of another piece of dishonesty and tried to raise it. But vie did not allow it. He had fought the case on the earlier ground, and it would not be fair to allow him to rake up another ground at that stage. It is not, strictly...

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