Toepfer v Lenersan-Poortman N.v
| Jurisdiction | England & Wales |
| Judgment Date | 25 May 1979 |
| Judgment citation (vLex) | [1979] EWCA Civ J0525-7 |
| Court | Court of Appeal (Civil Division) |
| Date | 25 May 1979 |
[1979] EWCA Civ J0525-7
In The Supreme Court of Judicature
Court of Appeal
(Civil Division)
(On Appeal from Orders of Mr. Justice Donaldson - Commercial Court)
Lord Justice Megaw
Lord Justice Eveleigh and
Lord Justice Brandon
In the Matter of the Arbitration Act, 1950
And In the Matter of an Arbitration
Mr. ANDREW LONGKORE (instructed by Messrs. Richards Butler & Co., London, E.C.2) appeared on behalf of the Appellants (Claimants, Sellers).
Mr. MARTIN MOORE-BICK (instructed by Messrs. Thomas Cooper & Stibbard, London, E.C.2) appeared on behalf of the Respondents (Respondents, Buyers)
MR JUSTICE MEGAW: The judgment which lord Justice Brandon is about to read is the judgment of the Court.
MR JUSTICE BRANDON: These are appeals from two orders of Mr. Justice Donaldson dated 24th April, 1978. The orders were made the hearing of two Special Cases stated by the Appeal Committee of the Federation of Oils Seeds and Fats Association ltd. (FCSFA arising out of contracts for the sale of rape-seed c.i.f. Rotterdam, which had been referred to arbitration under the rules of that Association.
Two disputes are involved. The first dispute arises out of two contracts of sale made between Alfred C. Toepfer, of Hamburg,1 as sellers and Lenersan - Poortman N.Y., of Rotterdam, as buyers. One of those contracts was dated 10th December, 1974, and was for the sale of 150 tons, and the other was dated 11th December, 1974, and was for the sale of 200 ton. The second dispute arises out of two contracts of sale made between the same sellers and Verheijdens Veervoeder Commissiehandel, also of Rotterdam, as buyers. One of those contracts was dated 18th November, 1974, and was for the sale of 250 tons, and the other was dated 22nd November, 1974, and was for the sale of 150 tons. The goods were described in each of the four contracts as No. I Canadian Rapeseed.
The sellers are the appellants and the buyers the respondents in both the appeals.
All the four contracts of sale out of which the disputes arise contained a clause ("the payment clause") in these or similar terms "Payment: net cash against documents andor delivery order en arrival of vessel at port of discharge but not later that 20 days after date of B/1 by telegraphic transfer to New York, cable charges for buyers account".
The contracts contained a further clause reading: "Contract
shall on demand make good the loss, if any, on such sale or purchase. …"
Although different buyers are concerned in the two disputes, what happened with regard to the performance of the relevant contracts was, for the purposes of the questions raised by the sellers notices of appeal and argued before us, the same in either case. In the account of what happened which follows, therefore, we shall use the expression "buyers" to mean both the buyers concerned.
The sellers, in order to perform their obligations under the four contracts of sale, entered into a head contract for the purchase of about 1,000 tons of rapeseed from Canadian shippers c.i.f. Rotterdam. The shippers shipped the rapeseed under that head contract on board the vessel "Grand Justice" at Thunder Bay in Canada on 11th December, 1974. Seven bills of lading were issued in respect of the shipment bearing that date.
The shippers gave notice of appropriation to the sellers on 17th December, 1974, and the sellers passed on such notices of appropriation to the buyers under the four contracts referred to above in accordance with their terms. On 20th December the ship went aground in the St. Lawrence River and was subsequently taken to Mew York for repairs. The repairs took so long that in March, 1975, the cargo was transshipped to another vessel at New York. The substituted vessel arrived in Europe eventually in April, 1975.
Meanwhile the bills of lading did not reach the shippers London agents until 8th January, 1975. It was then realised by such agents that the bills of lading were not made out to the correct parties; so they were sent back to the shippers. Fresh bills of lading, dated 11th December, 1974, as before, were provided. These, with other documents, were tendered to the buyers at a Rotterdam bank on or about 7th February, 1975. The buyers on that date, and again afterwards on further tender, rejected thedocuments. The two disputes referred to earlier then arose as to whether the buyers were entitled to reject, the buyers contending that they were so entitled and the sellers that they were not.
The buyers relied on various grounds for rejecting the documents. One of those grounds, on which Mr. Justice Donaldson founded his judgment and on which alone we have heard argument in this Court, was that the tender of documents by the sellers was made too late. The validity of this ground depends on two questions. First, did the contracts oblige the sellers to tender the documents earlier than they did? Second, if so, did their failure to do so entitle the buyers to reject the documents when tendered late? Mr. Justice Donaldson decided both these questions in favour of the buyers. Having done so he answered in the negative the question of law stated in the Special Cases, namely whether, on the facts found and on the true construction of the relevant contracts, the sellers were entitled to damages. By so answering that question he reversed, in effect, the decisions of the Appeal Committee in the two appeal arbitrations, and restored the decisions of the umpire in the two arbitrations at first instance. The sellers now appeal against the judge's judgment, seeking to restore the decisions of the Appeal Committee under which they were awarded substantial sums by way of damages.
The first question for consideration is whether the judge was right in holding that the contracts obliged the sellers to tender the documents earlier than they did. This depends on the true construction of the payment clause in the contracts of sale set out earlier.
It was common ground that the payment clause imposed an obligation on the buyers to pay cash against documents, if tendered to them by the sellers, on arrival of the vessel or twenty days after the date of bills of lading, whichever should be earlier. Thequestion in dispute, however, was whether the clause imposed a corresponding obligation on the sellers to tender documents in time A for the buyers to perform their obligation with regard to payment by the date so prescribed.
For the sellers it was said that, vhere a c.i.f. contract contained no express terms with regard to the time for the tender of shipping documents, the obligation of the sellers was an obligation implied at common law to tender them with all reasonable dispatch; that the contracts here concerned contained no express terms with regard to the time for such tender; and that the common law obligation accordingly applied. with regard to the nature of the implied obligation at common law, reference can be made to Sanders v. Maclean (1883) 11 Queen1s Bench Division 327, Landauer & Co. v. Craven & Speeding Bros. (1912) 2 King's Bench 94 and Johnson v. Taylor Bros. & Co. Ltd. (1920) Appeal Cases 144.
For the buyers it was said that the payment referred to in the payment clause was expressed to be a payment against documents; that the obligation expressly imposed on the buyers to pay against documents by the earlier of the two prescribed dates could only be performed if the sellers tendered documents in time for such performance; and that there must therefore be implied in the clause an obligation on the sellers to make such tender.
We examine the question of the sellers obligation under the payment clause first apart from any authority upon it. In doing so we shall look at two aspects of the matter, the aspect of co- operation and the aspect of certainty.
First, the aspect of co-operation. It is a general principle of the law of contract that, where the parties have agreed that something shall be done, which cannot effectively be done unless both co-operate in doing it, the construction of the contract is what each agrees to do all that is necessary to be done on his partfor the carrying out of that thing, though there be no express words to that effect. See...
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