KEKKOS JOANN IDES v. EL SHEIKH MUSTAFA EL AMIN

(HIGH COURT)

KEKKOS JOANN IDES v. EL SHEIKH MUSTAFA EL AMIN

HC-CS-180-1959

Principles

· Sale of Goods—Non-delivery—Damages—Difference between contract price and market price at time of breach

· Sale of Goods—Non.delivery—Special damages—Not recoverable unless special circumstances known to both parties at time of contract

· Sale of Goods—Damages—Non-delivery—Difference between contract price and market price at time of breach

· Sale of Goods—Damages—Special—Special circumstances must be known to both parties at time of contract

In an action for breach of Contract for the sale of goods by the seller's non-delivery of the goods, the buyer is entitled to general damages.representing the difference between the contract price and market price at the date of the breach. specia1 damages, resulting from losses sustained in a contract of resale, are only recoverable if plaintiff can prove that at the time he entered into the contract both parties contemplated the special circumstances of resale.

Judgment

T. S. Cotran D.J. May 10, 1960:—By a contract in writing dated. Deccmber 8, I958 made at Khartoum the plaintiff agreed to buy and the defendant agreed to sell too tons of durra “fatarita at £S.16.500m/ms. per ton delivery at Port Sudan in “December 1958 and January 1959. The defendant did not deliver the goods at all.

By another contract in writing dated January 15, I959 made at Khartoum the plaintiff agreed to buy and the defendant agreed to sell 500 tons of durra “fatarita” at £17.00m/ms per ton delivery Port Sudan in february and by March 7, 1959.” The defendant did not deliver the goods at all.

This is an action lodged by the plaintiff to recover damages from the defendant for the breach of the two contracts. The plaintiff had paid the defendant "araboon" under both contracts. The defendant admits the breach. The only issue between the parties relates to damages.

Under the first contract (dated December 8, 1958) the plaintiff claims the difference between the contract price and the market price as at January 31, 1959 The plaintiff alleges that the market price on January 31,1959 was £S.19.000m/ms per ton; thus calculating his damages at £S.2.500m/ms per ton making a total of £S.250 .000m/ms on 100 tons.

Under the second contract (dated January 15, 1959 the plaintiff claims special damages which he calculated as follows:

On January 22, 1959, he sold the 500 tons of messrs Mitchell Cotts & Co. Ltd., through Messrs. Pitsiladis for £s.17.600m/ms per ton, delivery as to 200 tons on March 10, 1959, and as to 300 tons on March 31, 1959. As the defendant failed to deliver the goods (500 tons), he, the plaintiff (in order to fulfil his contract with Mitchell Cotts), bought 218 tons of durra on March 7, 1959, at £S.22 per ton. The plaintiff says that he failed to deliver to Mitchell Cotts the balance of the goods and Mitchell Cotts sued his agent for damages claiming the difference between the contract price (£s.17.600) and the market price as on March 31, 1959 (£s.22.500) The plaintiff therefore claims:

(1) £S.300 calculated on the assumption that had defendant fulfilled the contract he would have made a profit of £S.300 on the deal, i.e., 600 milliems per ton.

(2) £S.1,090 being plaintiff’s losses because he bought in the market 218 tons at £S.22 per ton instead of £S.17.000m/ms thus losing £S.5 per ton.

(3) £s.1.551 (made up from £S.726 and £S.825) being the claim which Messrs. Mitchell Cotts are claiming against him as the difference between the market price and the contract price. (The figures relating to this item in the statement of claim are ambiguous)

Under the first contract (apart from the dispute as to the market price of the durra on January 31, 1959), the general rule of damages apply. This is the rule embodied in Sale of Goods Act, s. 51. Plaintiff has not alleged that there were any special damages. The only point to determine is whether the market price was £S.19.000m/ms per ton as alleged by plaintiff or it was £5.17 per ton as alleged by the defendant. There has been some variation in the evidence of the witnesses but I have formed the conclusion that the plaintiff is slightly inflating the market price, whilst the defendant is trying to slightly deflate them. Apart from the general fact that prices started to go up after January 31, the exact increase in the price at a fixed date is difficult to find out especially in the durra market where most of the dealings are in future goods. I can quite appreciate the difficulty of the brokers who appeared before me. I prefer, however, the evidence of Mr. Pitsiladis who struck me as a very honest man. He is broker of repute and is au courant with the durra market. I accept his statement that the market price of durra on January 31, 1959, was £S18 per ton. That being the case the difference between the market price and the contract price was £S.1.00m/ms per ton. The damages to which the plaintiff is entitled on the 100 tons are therefore £S.150

Undcr the second contract the plaintiff is claiming in effect special damages. He is claiming more than the difference between the contract price and the market price, on March 7, 1960. Apart from the dispute as to what was the market price at the date of breach (March 7, 1959) the plaintiff is claiming loss of profit and is also bringing in the loss which he will sustain in the sub-contract with Mitchell Cotts which he was partially unable to fulfil.

The rules as to special damages have always given rise to some difficulty. Sale of Goods Act, 1893, S. 54, preserves the right of the buyer or the seller to recover “interest or special damages in any case where by law interest or special damages may be recoverable.” But in order to get special damages the plaintiff must, apart from the necessity of giving notice thereof in his pleadings (which was given in this case), prove that at the time when he entered into contract with the defendants they both contemplated the special circumstances which may lead to special damages. The contract itself is the best guide on whether there were special circumstances or not. At the bottom of the contract it is provided that the ‘buyer may without reference to the seller assign his rights under the contract, and the seller will be responsible for all damages resulting from the breach.” Is this term enough to make the defendant liable, for the damages which the plaintiff incur to Mitchell Cotts & Co. for his failure to supply the 288 tons on March 31, 1959? In my opinion that term in the contract is not wide enough to make the defendant liable for the plaintiff’s sub-contracts with third parties. The plaintiff did not say nor did he call evidence to prove that he is not himself an exporter of durra. The term in the contract regarding assignment is vague and I find myself unable to import into it words to the effect the defendant will guarantee to indemnify the plaintiff in case purchasers from the plaintiff make a claim against him. There should be a clear term to such effect similar to the term in Clause 14 of the contract between Messrs. Mitchell Cotts and Messrs. Pitsiladis. Of course the defendant must have, or ought to have thought, of the possibility that plaintiff may resell the goods, and loss of profit by the plaintiff is a loss resulting directly and naturally from the breach of contract by the defendant.

But this is all that I could imply from the term. I do not imply that the plaintiff is entitled to be indemnified in case claims were made against him by those to whom he sold goods for his inability to fulfil. For this reason I am of opinion that the plaintiff is entitled only to damages under the general rule, i.e., the difference between the contract price and the market price as on March 7, 1959, plus loss of profit on his resale.

I have stated that there is a dispute between the parties as to the market price of durra on March 7, 1959. I have also stated when discussing the first contract that the plaintiff is slightly inflating the price whilst the defendant is slightly deflating it. I observe the same thing with regard to this contract. The plaintiff says the market price on March 7’ 1959, was £S.22 per ton. He produced to me a contract of sale to this effect. This is alleged to be the contract whereby the plaintiff bought 218 tons from a third party in an attempt to fulfil his contract with Mitchell Cotts. The third party was not, however, called as a witness, and for reasons which I will presently state, I do not place much reliance on this document. This document is dated March 7, 1959 The purchase price of durra is stated therein to be £S.22 per ton. On March 9, 1959, the plaintiff cabled the defendant that if he did not deliver the durra within 48 hours he shall buy from the market at the current market price and claim the difference. The plaintiff then went to his lawyer, who on March 12, 1959, wrote to the defendant a letter claiming from him damages for non-delivery. After citing the details of the contract and its breach, the plaintiff, through his advocate, wrote in paragraph 4 of the letter, as follows: “The market price per ton of the goods in question at the time of the agreed date of delivery was £S.19.500m/ms My client lost £S.2.500m/ms in every ton which you failed to deliver.”

It must be repeated that this letter is dated March 12, I959 In it the plaintiff clearly states that the market price was £S.19.500 In the witness box he told me that the price was £S.22. To corroborate his evidence he also produced to me a contract which states that he bought at this price. I said that I do not accept this contract as evidence of the price of the durra on the date in question. The reason is not difficult to see. If Exhibit P. 6 was genuine and the plaintiff bought the durra at £S.22 per ton on March 7, I959 then surely he would have stated this fact to the defendant, through his advocate, in his letter to him of the 12th. I do not and cannot believe that if it is true that the plaintiff already bought durra at £S.22 per ton, he would state in his claim to the defendant that the market price was £S.19.500 m/ms. The explanation of the plaintiff in the witness-box is lame. My view is reirforced by the plaintiffs own witness, Mr. Pitsiladis, whose evidence as to price I have accepted in- the previous contract. Mr. Pitsiladis stated that the market price on or about March 7 ‘1959, was £S.19.500m/ms I accept this figure. For this reason I assess the damages on 500 tons at £S.1.250 i.e., £S.2.500m/ms per ton, plus £S.300 loss of profit which plaintiff would have made if the defendant had fulfilled his Contract.

The plaintiff paid defendant “ araboon” of £S.800 on December 8, 1958.

He also paid him £S.3,000.000m/ms on January 15, 1959. These are still in defendant’s possession. I do not see that the defendant had made any genuine tender either of the sums received or for damages. I do not regard Exhibit D. 2 as tender. I therefore award the plaintiff the following sums: £S.800.000m/m unpaid “araboon” on first contract, £S.3,000.000m/ms unpaid “araboon” on second contract, plus £S.150.000m/ms damages on first contract, plus £S.1,550.000m/ms damages on second contract, plus interests of 9 per cent. on £S.3,800.000m/ms only from January 15, 1959, until settlement, plus costs.