Principles

·  SALE OF GOODS — Damrzges — difference between contract price and market price at time of delivery.

·  SALE OF GOODS — Damages — “Available market’.

The damages for failure to deliver in a contract for the sale of goods is the difference between contract price and market price at time of delivery where there is an available market. Sale of Goods Act 1893, s. 51(3). Where good.s are to be delivered in Port Sudan. the “available market” includes Gedaref

The damages for failure to deliver in a contract for the sale of goods is the difference between contract price and market price at time of delivery where there is an available market. Sale of Goods Act 1893, s. 51(3). Where good.s are to be delivered in Port Sudan. the “available market” includes Gedaref

Judgment

M. Y. Mudawi, P.], August 31, 1963:— On May 12, 1960 plaintiff, Sarkis Izmerlian, instituted these proceedings against defendant,Dhanjee Bhanjee Patel, for the recovery of the amount of £S. 7,339,737m/ms being money paid to defendant in pursuance of a contract of sale and damages for the breach of such contract. The Court framed the following issues:

1. Did plaintiff pay to defendant in addition to the above the sum of £S.545?

(Plaintiff)

(2) Was it agreed that the delisery of the promissory notes should be at the same time of delivery of the remaining dura before the end of April?

(Defendant)

(3) If so, did plaintiff commit breach of a condition entitling defendant to Withhold delivery of dura ‘

(Defendant)

(4) If so, is defendant further entitled to damages and to what amount?

(Defendant)

 (5) If so, was it agreed that the delivery of the Promissory notes should be after the presentation of the Railways Invoices, truck numbers and cleaning certificates ?

(Plaintiff)

(6) If so, did defendant fail to present same?

(Plaintiff)

(7) If so, did the failure of defendant to deliver the dura Constitute breach of contract ?

(Plaintiff)

(8) If so, what is the quantum of damages to which he is entitled?

(Defendant)

Issue No. 1: Did Plaintiff pay to defendant in addition to the above the sum of £S.545?

Defendant admitted that witness Hassouna, agent of plaintiff at Gedaref paid him £S.5 on behalf of plaintiff Defendant had some confused notions that because the amount was paid by I-fassouna “out of }Lissouna’s Own money”, the plaintiff cannot therefore be assumed to ha paid same. However, defendant denied that he received the balance of the £S. 545, i £S.45 But the evidence of Hassouna is clear on the point and we feel that he was telling no lies when he asserted that he paid defendant £S. 500 by cheque and £S. 45 in cash. In siew of this, we are of opinion that plaintiff did pay defendant the amount of IS. 545 agreed upon in the contract of sale.

Issue No, 2: Was it agreed that the delivery of the promissory notes should be at the same time of delivery of the remaining dura before the end of April?

The mode of payment is provided for in the Clause headed “method of payment” in the admitted translation of the contract of sale. The Clause reads as follows:

1. Meth of payment. the buyer has paid the sum of 3920 pounds in advance ... and upon the presentation of the Railway consignment notes duly approved by the Sudan Railways, buyers will pay the sum of 3375 pounds when the Railway policy showing

truck numbers and cerfica uf clcanin ! nit are pre I

. rc the hai of 566C) pounds ment of t il he eifccted aeainst pre’entation the hu to the sellc of the follow ng rrorn1s notec

Tic conu act then goes on to record the particulars of the notes in question.

This pros ision. in ms opinion. speaks for itcel. It gi\e us one and only one meaning that the promissOry no!eS are to be paid ,fter presenta io 1 by the sendor to the purchaser of the “radway policy showing truck uinbers and certificate of cleaning plant.”

Issue No 3 If so did plaintiff commit a breach of a conditt enti tling defendant to withhold delivery of dura ?

Piaintitt did not commit any breach. According to the contract defendant ought to ha delivered w them the railway policies stlOWlng the number of trucks, etc , before he balance of the price has been paid. Defcndà failed to do this and he made no bones about it either. In his testimony defendant told us. ‘1 did snot deliser the policies to Sarkis lzmirlian because I sas afraid that they would refuse payment” It is this statement that this issue is r ol in favour of plaintiff Indeed it is the defendant who committed ij c breach.

issues Nos. 4 5, 6 and 7: These issues are rendered unnecessary by the decision gise on the issues above.

issue No. 8 : What is the quantum of damages to which plaintiff is entitled?

Plaintiff proved i lat he paid defendant the following amounts:

£S. 3,920 atboon (deposit)      ding to contract

545 second payment accor

1,200 on par: delivery

£S. 5,665 total

Plaintiff admits that he recovered 386.19 tons of dura worth £S.5251. In view of this he claims the following aniounts

1. IS. 5.665. 000 rn/ms. value of notes which defendant refused tO receive.

2.         £S.      rn/ms. difference between money paid and the value

of the goods delivered.

3.         £S. 38 619      rn/ms. off-loading charges of the goods received.

4. £S. 1 228. 000 rn/ms. loss of profits on the undelivered 614 tons of dura t the rate of £S.2 per ton.

Later plaintiffs reduced their claim under (2) above stating that they collected £S.2,844.789m/ms. from the value of the promissory notes and hence the claim is reduced to £S.2.815,21l m/ms.

Now we take these items by turn. The second item involving the difference between the money paid by the plaintiff and the value of the goods delivered, i.e. £S. 413.118 m/ms is, in my view, acceptable to this Court. It is money paid to plaintiff for no recompense.

The first item. i.e., £S.5,665. is supposed to be the value of promissory notes to be delivered to defendant after he handed over the policies. Defendant handed over no policies and the notes were not delivered to him. The position of these notes is a bit peculiar. It is agreed in the contract that these notes be delivered to defendant without recource to the .buyer. This means that defendant undertook to release the plaintiff from the consequences of non-payment by the promisors. In effect the defendant said to plaintiff I am prepared to take from you these notes and deliver to you the equivalent of their promisors value in dura. I undertake to bear the loss if the promisors fail to .pay me and that means I will not come hack to you and claim the value of the unpaid notes.” In ‘.view of this I feel that the defendant must be responsible according to his own word, for any unpaid note. It does not lie on his mouth to say that the plaintiff should bear the loss and that he (defendant) should go unhurt. This will be putting a premium on default. The plaintiff in fact failed to collect the amount of £S.2,85l.21 I m/ms. This loss must be borne by defendant. Defendant can at any time take delisevy of the unpaid notes if he so desires.

With regard to item (3), i.e., IS.38.619 m/ms.. this amount was spent on the goods delivered by defendant in Port Sudan. It was spent on transporting same to the stores. According to the contract this is to be charged against defendant.

With regard to the last item, loss of profits on the undelivered 614 tons the normal measure of damages can be found in Sale of Goods Act 1893, s. 51(3) which sub-section reads as follows:

“Where there is an available market for the goods in question the measure of damages is prima facie to be ascertained by the difference between the contract price and the market price or current price of the goods at the time or times when they ought to have been deliseved or if no time was fixed then at the time of refusal to deliver.”

This measure as the Act specifically states. applies only when there is an “available market” to which the buyer can go and choose the goods for the purchase of which he contracted. This is indeed a simple and nearly mechanical yard stick gisen the ideal circumstances for its exercise. The price at which the purchaser resold the goods to a third party is irreles ant unless at the time of the contract the seller knew that the sub - sale could not be carried out unless delivery of the goods was effected.

In the opinion of this Court there was in this case “an available market” at least at El Gedaref during the months of March and April which market was in fact going down. The purchaser could have indeed gone to Gedaref and bought dura to his heart’s content. He did not do so. Indeed he made his search in Port Sudan and it was an abortive attempt. This Court construes an “available market” in the circumstances to embrace at least the whole northern parts of the Sudan. There is no reason to con fine the market to Port Sudan. That would be an unrealistic and narrow interpretation. It is true that in Lester Leather and Skin Co. v. Home and Overseas Brokers, (1948), 64 T.L.R. 569, CA., the Court refused to accept the contention that the whole world was “an available market” and if the snake skins were available in India there was “an available market” But of course there is all the difference in the world between this case and the snakeskins’ case. Here our interpretation confines the availability to some parts of the Sudan. This being the case we see no reason -why we should depart from the provisions of Sale of Goods Act, s. 51(3). As there was no difference between the contract price the market price at time of delivery then this head of damages is rejected

In the result the following’ decree is passed:

Defendant should pay to plaintiff the following:

£S.       413.118m/ms

        2,815.211m/ms

                 38.619m/ms

            _____________

            3,266.948m/ms in principel

                 82.370m/ms in court fees and petition

                  20.000m/ms in advocate costs

            _______________

£S.       3,369.318m/ms in all.