Tsakiroglou & Company Ltd v Noblee Thorl, G.m.b.H.; sub nom Albert D Gaon & Company v Société, Interprofessionelle Des Oleagineux Fluides Alimentaires
| Jurisdiction | UK Non-devolved |
| Judge | Viscount Simonds,Lord Reid,Lord Radcliffe,Lord Hodson,Lord Guest |
| Judgment Date | 28 March 1961 |
| Judgment citation (vLex) | [1961] UKHL J0328-2 |
| Date | 28 March 1961 |
| Court | House of Lords |
[1961] UKHL J0328-2
Viscount Simonds
Lord Reid
Lord Radcliffe
Lord Hodson
Lord Guest
House of Lords
Upon Report from the Appellate Committee, to whom was referred the Cause Tsakiroglou & Co. Ltd. against Noblee Thorl G.m.b.H., that the Committee had heard Counsel, as well on Wednesday the 15th, as on Thursday the 16th, Monday the 20th and Tuesday the 21st, days of February last, upon the Petition and Appeal of Tsakiroglou & Co. Ltd. of Khartoum, in the Republic of Sudan, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 28th of March 1960, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, and that the Petitioners might have the relief prayed for in the Appeal, or such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the Case of Noblee Thorl G.m.b.H., lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal, of the 28th day of March 1960, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be. and the same is hereby, dismissed this House: And it is further Ordered, That the sum of £5,625 paid into Court pursuant to the said Order of Her Majesty's Court of Appeal, of the 28th day of March 1960, be paid out to the Respondents: And it is also further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
On the 21st April, 1958, the Board of Appeal of the Incorporated Oil Seed Association made an award by which they upheld the award of an Umpire in an arbitration between the Appellants and the Respondents awarding the latter the sum of £5,625 against the former as damages for breach of contract. Upon Case Stated Mr. Justice Diplock upheld the award. His decision was affirmed by the Court of Appeal. The matter now comes before this House. Not for the first time I venture to point out that the two first stages in proceedings which will ultimately be resolved in the highest court could conveniently be omitted.
The contract, for breach of which damages were awarded to the Respondents, was made on the 4th October, 1956. It incorporated the terms of contract form No. 38 of the Incorporated Oil Seed Association and by it the Appellants agreed to sell to the Respondents 300 tons of Sudanese groundnuts at £ 50 per 1,000 kilos including bags c.i.f. Hamburg, shipment during November/December, 1956. No goods were shipped by the Appellants in fulfilment of this contract in the circumstances stated in the Special Case which I summarise
All groundnuts exported from the Sudan to Europe are shipped from Port Sudan, which is the only suitable port. At the date of the contract (October 4th, 1956) the usual and normal route for the shipment of Sudanese groundnuts from Port Sudan to Hamburg was via the Suez Canal. Both parties then contemplated that shipment would be made by that route. It would have been unusual and rare for any substantial parcel of Sudanese groundnuts from Port Sudan to Europe to be shipped via the Cape of Good Hope. Before the closure of the Suez Canal the Appellants acquired 300 tons of Sudanese groundnuts in shell which were held to their order in warehouses at Port Sudan as from the 1st November, 1956. They also, before the closure, booked space for 300 tons of nuts in one or other of four vessels scheduled to call at Port Sudan between the 10th November and the 26th December, 1956. The shipping company cancelled these bookings on the 4th November, 1956. British and French armed forces began military operations against Egypt on the 29th October. 1956. The Suez Canal was blocked on the 2nd November and remained closed for effective purposes until at least the 9th April, 1957. But the Appellants could have transported the goods from Port Sudan to Hamburg via the Cape of Good Hope during November and December, 1956.
The distance from Port Sudan to Hamburg via the Suez Canal is about 4,386 and via the Cape about 11,137 miles. The freight ruling at the time of the contract for the shipment of groundnuts from Port Sudan to Hamburg via the Canal was about £7 10s. 0d. per ton. After the closure of the Canal the Port Sudan United Kingdom Conference imposed the following surcharges for goods supplied on vessels proceeding via the Cape, namely, as from the 10th November, 1956, 25 per cent., and as from the 13th December, 1956. 100 per cent. The market price of Sudanese nuts in shell shipped from Port Sudan c.i.f. Hamburg was £68 15s. 0d. per ton between the 1st and 15th January, 1957. As has been already said, the Appellants did not ship any nuts. They claimed that they were entitled to consider the contract as cancelled, and to this view they adhered.
The contract provided by clause 6 that "In case of prohibition of import "or export, blockade or war, epidemic or strike, and in all cases of force maieure preventing the shipment within the time fixed, or the delivery, the period allowed for shipment or delivery shall be extended by not exceeding two months. After that, if the case of force majeure be still operating, the contract shall be cancelled."
The award was in these terms:
"So far as it is a question of fact we find and as far as it is a question of law be hold:
(i) There were hostilities but not war in Egypt at the material time.
(ii) Neither war nor force majeure prevented shipment of the Contract goods during the Contract period if the word 'shipment' means placing the goods on board a vessel destined for the Port of Hamburg.
(iii) If the word 'shipment' includes not only the placing of the Contract goods on board a vessel but also their transportation to the Contract destination then shipment via the Suez Canal was prevented during the Contract period of shipment by reason of force majeure but shipment via the Cape was not so prevented.
(iv) It was not an implied term of the Contract that shipment or transportation should be made via the Suez Canal.
(v) The Contract was not frustrated by the closure of the Suez Canal.
(vi) The performance of the Contract by shipping the goods on a vessel routed via the Cape of Good Hope was not commercially or fundamentally different from its being performed by shipping the goods on a vessel routed via the Suez Canal."
The first three of these findings relate to the claim of the Appellants that the exceptions clause (clause 6 of the contract) absolved them from performance of the contract. I will deal with this at once and shortly.
Similar words to these in clause 6 fell to be construed in Comptoir Commercial Anversois v. Power, Son & Company [1920] 1 K.B. 868. At p. 878 Bailhache, J. said:
"Now, if I give to the word 'shipment' the widest meaning of which it is capable, it cannot mean more than bringing the goods to the shipping port and then loading them on board a ship prepared to carry them to their contractual destination."
His judgment on this point was affirmed in the Court of Appeal, see pages 885, 892 and 898. It has never been questioned nor do I see any reason for questioning it. In Fairclough, Dodd & Jones Ltd v. J. H. Vantol Ltd. [1957] 1 W.L.R. 136, the decision turned on the very particular words of the contract and is not in conflict with the earlier case.
I come then to the main issue, and as usual I find two questions interlocked: (1) What does the contract mean? In other words, is there an implied term that the goods shall be carried by a particular route? (2) Is the contract frustrated?
It is convenient to examine the first question first, though the answer may be inconclusive. For it appears to me that it does not automatically follow that, because one term of a contract, for example, that the goods shall be carried by a particular route, becomes impossible of performance, the whole contract is thereby abrogated. Nor does it follow, because as a matter of construction a term cannot be implied, that the contract may not be frustrated by events. In the instant case, for example, the impossibility of the route via Suez, if that were assumed to be the implied contractual obligation, would not necessarily spell the frustration of the contract.
It is put in the forefront of 'the Appellants' case that the contract was a contract for the shipment of goods via Suez. This contention can only prevail if a term is implied, for the contract does not say so. To say that that is nevertheless its meaning is to say in other words that the term must be implied. For this I see no ground. It has been rejected by the learned trial Judge and each of the members of the Court of Appeal and in two other cases, Carapanayoti & Co. Ltd. v. E. T. Green Ltd. [1959] 1 Q.B. 131, and Albert D. Gaon & Co. v. Société Interprofessionelle des Oleagineux Fluides Alimentaires [1959] 3 W.L.R 622 where the same question arose, it was rejected by Mr. Justice McNair and Mr. Justice Ashworth respectively. A variant of this contention was that there should be read into the contract by implication the words "by the usual and customary route'" and that, as the only usual and customary route at the date of the contract was via Suez, the contractual obligation was to carry the goods via Suez. Though this contention has been viewed somewhat differently, I see as little ground for the implication. In this I agree with Lord Justice Harman, for...
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