White and Carter (Councils) Ltd v McGregor
| Jurisdiction | UK Non-devolved |
| Judge | Lord Reid,Lord Morton of Henryton,,Lord Tucker,Lord Keith of Avonholm,Lord Hodson |
| Judgment Date | 06 December 1961 |
| Judgment citation (vLex) | [1961] UKHL J1206-3 |
| Court | House of Lords |
| Docket Number | No. 1. |
| Date | 06 December 1961 |
[1961] UKHL J1206-3
Lord Reid
Lord Morton of Henryton
Lord Tucker
Lord Keith of Avonholm
Lord Hodson
House of Lords
Upon Report from the Appellate Committee, to whom was referred the Cause White & Carter (Councils) Limited against McGregor, that the Committee had heard Counsel, as well on Monday the 17th, as on Tuesday the 18th and Wednesday the 19th, days of July last, upon the Petition and Appeal of White & Carter (Councils) Limited, a company incorporated under the Companies Acts and carrying on business at 49 Wellington Street, Strand, London, W.C.2, praying, That the matter of the Interlocutors set forth in the Schedule thereto, namely, an Interlocutor of the Sheriff Substitute of Stirling, Dumbarton and Clackmannan at Dumbarton (J. Martin Mackay) of the 15th of March 1960 and also an Interlocutor of the Lords of Session there of the Second Division of the 29th of November 1960, so far as therein stated to be appealed against, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Interlocutors, so far as aforesaid, might be reversed, varied or altered, or that the Petitioners might have 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 William McGregor, 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 Interlocutors of the 15th day of March 1960 and of the 29th day of November 1960, complained of in the said Appeal, be, and the same are hereby, Recalled except as to expenses: And it is further Ordered, That the said Cause be, and the same is hereby, remitted back to the Court of Session in Scotland with a Direction that the case be remitted to the Sheriff Substitute to grant Decree against the Respondent, as craved in the initial writ, for payment to the Appellants of the sum of One hundred and ninety-six pounds, four shillings sterling (£196 4s. 0d.) with interest thereon at five per centum per annum from the 6th day of October 1958 until payment: And it is further Ordered, That the said Interlocutors complained of in the Appeal, be, and the same are hereby, Affirmed so far as regards Expenses: And it is also further Ordered, That there be no Order as to Costs in this House.
My Lords,
The pursuers supply to local authorities litter bins which are placed in the streets. They are allowed to attach to these receptacles plates carrying advertisements and they make their profit from payments made to them by the advertisers. The defender carried on a garage in Clydebank and in 1954 he made an agreement with the pursuers under which they displayed advertisements of his business on a number of these bins. In June, 1957, his sales manager made a further contract with the pursuers for the display of these advertisements for a further period of three years. The sales manager had been given no specific authority to make this contract and when the defender heard of it later on the same day he at once wrote to the pursuers to cancel the contract. The pursuers refused to accept this cancellation. They prepared the necessary plates for attachment to the bins and exhibited them on the bins from 2nd November, 1957, onwards.
The defender refused to pay any sums due under the contract and the pursuers raised the present action in the Sheriff Court craving payment of £196 4s. 0d. the full sum due under the contract for the period of three years. After sundry procedure the Sheriff-Substitute on 15th March, 1960, dismissed the. action. He held that the sales manager's action in renewing the contract was within his apparent or ostensible authority and that is not now disputed. The ground on which he dismissed the action was that in the circumstances an action for implement of the contract was inappropriate. He relied on the decision in Langford & Co., Ltd. v. Dutch 1952 S.C. 15, and cannot be criticised for having done so.
The pursuers appealed to the Court of Session and on 2nd November, 1960, the Second Division refused the appeal. The present appeal is taken against their Interlocutor of that date. That Interlocutor sets out detailed findings of fact and, as this case began in the Sheriff Court, we cannot look beyond those findings. The pursuers must show that on those findings they are entitled to the remedy which they seek.
The case for the defender (now the Respondent) is that, as he repudiated the contract before anything had been done under it, the Appellants were not entitled to go on and carry out the contract and sue for the contract price: he maintains that in the circumstances the Appellants' only remedy was damages, and that, as they do not sue for damages, this action was rightly dismissed.
The contract was for the display of advertisements for a period of 156 weeks from the date when the display began. This date was not specified but admittedly the display began on 2nd November, 1957, which seems to have been the date when the former contract came to an end. The payment stipulated was 2s. per week per plate together with 5s. per annum per plate both payable annually in advance, the first payment being due seven days after the first display. The reason why the Appellants sued for the whole sum due for the three years is to be found in Clause 8 of the Conditions: —
"8. In the event of an instalment or part thereof being due for payment, and remaining unpaid for a period of four weeks or in the event of the Advertiser being in any way in breach of this contract then the whole amount due for the 156 weeks or such part of the said 156 weeks as the Advertiser shall not yet have paid shall immediately become due and payable."
A question was debated whether this clause provides a penalty or liquidated damages but on the view which I take of the case it need not be pursued. The clause merely provides for acceleration of payment of the stipulated price if the advertiser fails to pay an instalment timeously. As the Respondent maintained that he was not bound by the contract he did not pay the first instalment within the time allowed. Accordingly, if the Appellants were entitled to carry out their part of the contract notwithstanding the Respondent's repudiation, it was hardly disputed that this clause entitled them to sue immediately for the whole price and not merely for the first instalment.
The general rule cannot be in doubt. It was settled in Scotland at least as early as 1848 and it has been authoritatively stated time and again in both Scotland and England. If one party to a contract repudiates it in the sense of making it clear to the other party that he refuses or will refuse to carry out his part of the contract, the other party, the innocent party, has an option. He may accept that repudiation and sue for damages for breach of contract whether or not the time for performance has come; or he may if he chooses disregard or refuse to accept it and then the contract remains in full effect.
In Howie v. Anderson (1848) 10 D. 355, Anderson sold shares to be delivered on 8th January, 1847: on 31st October, 1846, his agent intimated to Howie that he refused to go on with the transaction. Howie refused to accept this repudiation. Anderson pleaded that Howie ought to have gone into the market and bought other shares on 31st October but it was held that damages must be awarded on the price ruling on 8th January. Lord Justice-Clerk Hope said (p. 357):
"I do not understand exactly what is meant by the plea that the contract was broken and at an end on the 31st October, merely because the defender, in pursuance of his scheme of acting wrongfully, gave notice that he would not fulfil the contract. … He had no power to alter the date of the fulfilment of the contract: He had no power to affect the extent of the rights and claims of the pursuer, as on the day when the contract was to be fulfilled. That very intimation was a wrongful act,—the commencement of the wrong which was consummated by the actual failure of delivery on the 8th of January. The bargain continued to subsist as a binding contract to be fulfilled at the proper time by the defender, after his intimation of the 31st October, exactly as if that intimation had not been made."
Lord Medwyn said (p. 359):
"…the defender cannot plead that the buyer was bound to go into the market to make a new time-bargain, merely because this might have lessened the damages to him if he acted improperly in refusing to implement the bargain. The breach of bargain was properly on the 8th January, because that was the day on which it was to be fulfilled by delivery of the stock."
I need not refer to the numerous authorities. They are not disputed by the Respondent but he points out that in all of them the party who refused to accept the repudiation had no active duties under the contract. The innocent party's option is generally said to be to wait until the date of performance and then to claim damages estimated as at that date. There is no case in which it is said that he may, in face of the repudiation, go on and incur useless expense in performing the contract and then claim the contract price. The option, it is argued, is merely as to the date as at which damages are to be assessed.
Developing this argument, the Respondent points out that in most cases the innocent party cannot complete the contract himself without the other party doing, allowing or accepting something, and that it is purely fortuitous that the Appellants can do so in this case. In most cases by refusing co-operation the party in breach can compel the innocent party to restrict his claim to damages. Then it was said that...
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