)HIGH COURT(

SALIH YAHIA v. AHMED MAHMOUD BARAKAT

HC-CS-506-1958

 Principles

·  Sole of Goods—Non-delivery of goods—Reasonable time

·  Sale of Goods—Damages—Non-delivery—Difference between contract price and market price at time of breach—Forward resale not material

In a contract for sale of goods, even if no delivery date is mentioned, delivery must be within a reasonable time, and failure to deliver within a reasonable time is a breach of contract. The buyer is entitled to  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 delivered A price obtained in a forward resale by the buyer to a third party is not to be taken into account

In a contract for sale of goods, even if no delivery date is mentioned, delivery must be within a reasonable time, and failure to deliver within a reasonable time is a breach of contract. The buyer is entitled to  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 delivered A price obtained in a forward resale by the buyer to a third party is not to be taken into account

Judgment

T. S. Cotran D.J. March 21, 1960 :—The plaintiff is suing the defendant for breach of contract for the non-delivery of 100 tons of beans which the latter agreed to ship during May 1958.

The plaintiff and defendant conducted their business orally, and later confirmed the deal by correspondence or by cable. The plaintiff and defendant have been dealing with each other for many years, and at the time the contract relating to the 100 tons of beans was made there were

other contracts still subsisting. On April 11. 1958, defendant cabled plaintiff confirming “the purchase of 100 tons of beans at £S.33 1/4 per ton delivery Halfa.” Defendant asked plaintiff to send the earnest money. It is quite true that the cable does not mention any date for shipping the beans, but in my opinion it is clear that the shipment of the beans was to be effected during May as alleged by the plaintiff. The reasons for this opinion are clear. On April 15, 1958, the plaintiff wrote to the defendant as follows:

“We have before us your cable of the 11th. We took note of its contents. We confirm our purchase of 100 tons of beans.our total purchases of beans are now  150 tons, 50 tons shipment in April and 100 tons shipment in May. at a price  of £S.33.250m/ms per ton delivery Haifa . . . , etc.” If shipment was not to have been effected in May (as alleged by defendant), then surely upon his receipt of the very clear letter of April 15 he could have written back to plaintiff that this was not a term in the contract or that there was a misunderstanding about the shipping date. The defendant, on the contrary, wrote back that he would ship the fifty tons immediately after the Ed (in April) and as to the rest of the goods, i.e., the beans, “he is doing his best.” If the defendant were under a misapprehension as to the shipping date, he would have said so. He would have said so when he shipped the first fifty tons on April 27. In none of the defendant’s correspondence did he contest plaintiff’s claim that the shipping date was in May. The defendant is relying on a sentence written by the plaintiff in his letter to the effect that “as to the 100 tons of beans, shipping May, whenever any amount is available, in your hands, ship it.” The defendant. or rather his learned advocate, interprets this sentence as meaning that “shipping will be effected when and as the goods become available, irrespective of a date in May.” In my opinion, no such meaning could be attributed to this phrase. It means simply that it would not be necessary for the defendant to ship the whole 100 tons at once but to ship gradually the amounts that came into his hands. Shipment still had to be in May.

During the beginning of May, the price of beans started to go up considerably and the plaintiff started to have apprehensions, hence this letter of May 7 wherein, for the first time, he sent defendant a written contract to sign. Defendant did not deliver the beans in May or at all. This is very clear. The defendant failed completely to deliver the goods. Advocate Suliman has referred me to the statement of defence in which he stated that his client was always ready and willing to deliver. In my opinion this is a sham defence, for it was written on November 24, 1958, and even if no date is mentioned delivery must be within a reasonable time. The offer, at this time, is not reasonable. Sale of Goods Act, s. 51 (i), “where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the latter may maintain an action against the seller for non- delivery,” and by subsection (2), “The measure of damages is the estimated

 loss directly and naturally resulting, in the ordinary course of events, from the seller’s breach of contract.” By subsection (3), “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 delivered, or, if no time was fixed, then at the time of the refusal to deliver.” Here, there was a fixed time of shipment, in May. Delivery must be shortly after, i.e., the time it usually takes for the goods to be dispatched from Shendi to Haifa. In this case I accept in toto the plaintiff’s evidence that at the end of May the price of -beans shot up to between £S.38 and £S.39 a ton. The conduct of the defendant is consistent only with this fact. His demeanour in the witness-box was most unsatisfactory and he was trying deliberately to mislead the court and especially when plaintiff’s advocate asked him about whether he sold beans to Messrs. Salih Osman Salih and Abu Ela for £5.38 a ton, he then shielded himself with “I do not remember.” The impression I got is that he did sell to those two gentlemen at £S.38 a ton; but his dishonesty prevailed over his oath. -

The plaintiff is entitled, according to the rules above enunciated to recover the difference between the contract price ( and the market price (£S.38 i.e., £S.4.750m/ms per ton. There is evidence that the plaintiff has sold the goods to a firm in Egypt and I thought at one time that the measure of damages was the difference between the market price at the date of due delivery and the price at which he sold to the third party. But this is not so. In William Bros. v. Agius Ltd. [ A.C. 510 “A contracted to sell to W a cargo to be shipped in November and failed to deliver the cargo; in October W agreed to sell the cargo to G. In an action by W against A, it was held that the true measure of damages was the difference between the contracted price and the market price at the time of the breach and in the circumstances of the case the sub-contract between W and G must be disregarded.” This case is the same; it is a case of non-delivery, not delayed delivery. The buyer, to use Lord Dunedin’s words in the above case, “is entitled to be put in the position in which he would have stood if he had got them at the due date. That position is the position of a man who has goods at the market price of the day—and barring special circumstances the defaulting seller is mulct in damages for extra profit which the buyer would have got owing to a forward resale at over the market price, nor can he take the benefit of the fact that the buyer has made a forward resale at under the market price.”

For all these reasons judgment is entered in plaintiff’s favour for the amount prayed with costs.