Arbitration-Authority-Arbitrators can answer only questions referred to
them-e-Courts cannot alter findings as to questions referred to arbitration-
Whether findings of fact by arbitrators binding although these findings af-
fect certain matters not referred to the arbitrators

Contract-Breach-Negligence not necessary when issue is breach of contract
Damages-Remoteness-When-·damages are recoverable and when too remote-
Special circumstances

Appellants contracted in writing to sell to respondent, and install, an
engine and pump to irrigate cotton fields. The plant was unsatisfactory,
and a further agreement was made by which. appellants undertook to put
the plant into an efficient state by April 15, 1927. Before that date, a fuel
pump bracket, which was an integral part of the engine, broke, and it be-
came impossible for appellants to carry out its undertaking. On April 5,
1927, respondent refused to accept the plant, and sued for damages. In
his complaint the respondent alleged both negligence and breach of con-
tract. The issues, excluding liability for damages to respondent's crops,
were referred to arbitration. Judgement was given by the court below for
the amount claimed, which included an item of £E.7,684 for loss of crops.

Held: (i) The damage to respondent's crops arose naturally from the
breach, and was not too remote, since the whole object of the contract was
the irrigation of cotton lands. The loss of the crop as a result of failure
of the plant must have been in the contemplation of both parties when
contracting. However, where, owing to special circumstances, breach might
result in damage such as would not normally attend the breach of a con"
tract of the particular kind, the plaintiff must show not merely that the de-
fendant knew of the circumstances, but that he accepted liability for loss

* Court: Davidson L.S., Bell C.J. and Owen J.

.due thereto. In this 'case any factors preventing respondent from using a
subsidiary plant (which he possessed) in order to mitigate damages were
such special circumstances, and must affect the quantum of damages.

(ii) The procedure under the Civil Justice Ordinance 1929 differs
from the English' procedure, in that the issues are not settled by the
pleadings of the parties (as in England), but by the judge himself, after
hearing the parties or perusing their pleadings or both.

(iii) Where the issues referred by the court to arbitrators included
the issue of what were the terms of the contract, and specifically excluded
the issue of liability for damage to crops, evidence going to the existence of
a particular term of the contract is not receivable by the court after award.

(iv). Where findings of fact are made by arbitrators which affect an
issue not before the arbitrators, as well as issues which are, the finding is
binding on the parties for all issues in the case.

British Columbia Saw Mill Co. v. Nettleship (1868) L.R. 3 C.P. 499.
Chaplin v. Hicks [1911] 2 K.B. 786.

Cory and Co. v. Thames Ironworks Co. (1868) L.R. 3 Q.B.D. 181.
Elbinger v. Armstrong (1874) L.R.9 Q.B. 473.

Grebert-Borgnis v. Nugent (1885)- 15 Q.B.D. 85.

, Hadley v. Baxendale (185.4) 9 Ex.D. 341.

Hammond and Co. v. Bussey (1887) 20 Q.B.D. 79. ,

iHobbs v. London and South Western Ry. (187,5) L.R. 10 Q.B. 111.
Horne v. Midland Railway Co. (1872) L.R: 8 C.P. 131.
Humphries v. Humphries [1910] 1 K.B. 796.

Hydraulic Engineering Co. v. McHaffie (1878) 4 Q.B.D. 670.
Smeed v. Foord (1859) 28 L.J. Q.B. 178.

Civil Justice Ordinance 1929, s. 172 (1) (c).

Sale of Goods Act, 88. 51 and 54.

Appeal

January 21, 1930. Davidson L.S.: I will ask Bell C.J. to read
the first judgement.

Bell C.J.: The facts of this case are briefly as follows: By a
written contract dated March 17, 1925 the defendants agreed to sell
to the plaintiff a C.R.2 engine and a pump, the plant to be erected
within a period of four and a half months. At the end of Mayor
beginning of June, 1925 this contract was modified by the consent
of the parties by the substitution of an engine of the V.N.2 type for
one of the C.R.2 type. The engine and pump were erected within
the period prescribed by the contract, and began working at the end
of July. The plant did not work satisfactorily from the start, and
the plaintiff refused to sign the certificate of acceptance or to pay the
balance of the purchase price. The first written complaint of the
inefficiency of the plant was made on March 5, 1926, but since,