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IN THE SUPERIOR COURT OF
JUDICATURE
IN THE SUPREME COURT
ACCRA – A.D. 2015
GLENCORE A.G VRS VOLTA ALUMINUM
COMPANY LIMITED CIVIL APPEAL NO.
J4/40/2013 28TH
JANUARY 2015
CORAM
WOOD (MRS)CJ (PRESIDING) ANSAH
JSC DOTSE JSC BAFFOE-BONNIE JSC
AKAMBA JSC
Contract - Sale of Goods
Act (Act 137) - General damages
- Electronic communication -
Documentary evidence. Whether or
not , the conduct of the
Plaintiff and Defendant, a valid
and binding contract existed -
Whether or not refusal to accept
delivery of alumina from the
Plaintiff was a breached of
contract - Whether or not the
Court of Appeal erred when it
affirmed the High Court’s award
of general damages -
HEADNOTES
On the 19th
August 2008 The Plaintiff made
an offer of the Alumina to the
Defendant valid till 4 pm New
York time on the next day The
Defendant, acting through its
Chief Finance Officer, Felix
Gaisie, accepted the Plaintiff’s
offer, with further instructions
to “go ahead and secure it for
us”. On 20th August 2008 The
Defendant’s Felix Gaisie wrote
to his colleague, Dela Agbo, to
take steps to establish letters
of credit in favour of the
Plaintiff. on 25th August 2008
The Plaintiff emailed the
defendant, nominating the “MV
Pan Leader or sub” to ship the
Alumina. on 26th August 2008 The
Defendant emailed the Plaintiff
approving the “MV Pan Leader or
sub”. on 29th August 2008 The
Defendant assured the Plaintiff
that it needed the Alumina
despite its attitude and said
“you will get the signed
contract”. on 1st
September 2008 The Defendant
wrote to the Plaintiff with the
assurance that it was not
contemplating breaching the
contract, saying they were “not
going back on our acceptance
of your offer and apologize if
that is the impression
created.” on 10th September 2008
The Defendant emailed the
plaintiff that it was no longer
interested in the Alumina, as it
intended to take delivery of
alumina from “one of its
shareholders”. on 19th
September 2008 Plaintiff
nominates MV Ellicon as the new
vessel for the carriage of the
cargo, but there is no
confirmation from the Defendant.
on 19th September 2008 The
plaintiff wrote to the defendant
to accept the Defendant’s
repudiation. 17th October 2008
This is an appeal by the
Plaintiff/ Appellant/ Appellant,
hereafter referred to as the
Plaintiff against the decision
of the Court of Appeal rendered
on 7th day of July,
2011 which also affirmed the
decision of the High Court,
dated 13th November
2009 by which the Defendants/
Respondents/ Respondents
hereafter referred to as the
Defendants were directed to pay
the Plaintiff’s, general damages
of GH¢25,000.00. Dissatisfied
with the decision of the High
Court, the Plaintiff
unsuccessfully appealed against
the Judgment to the Court of
Appeal.
HELD :-
Under the
circumstances, what the
Plaintiffs are entitled to are
general damages using the first
limb of the Hadley v Baxendale
principle.However, since the
Plaintiff’s did not lead
sufficient evidence with any
degree of clarity and certainty
to merit the computation of
damages therein, we are of the
view that the award of nominal
damages by the trial court and
confirmed by the Court of Appeal
in favour of the Plaintiffs are
considered adequate. We will
therefore dismiss the appeal
herein.
DISSENTING OPINION
STATUTES REFERRED TO IN JUDGMENT
Sale of Goods Act
(Act 137)
Bill of Lading Act,
1961 (Act 42)
CASES REFERRED TO IN JUDGMENT
In
Royal Dutch Airlines (KLM) &
Another v Farmex Limited
[1989-90] GLR 266
Yungdong
Industries Limited v Roro
Services [2005-06] SCGLR 819
Delmas
Agency Ghana Limited v Food
Distributor International
Limited [2007-2008] SCGLR 748.
Mensah v
Mensah [2012]1 SCGLR 391
Gregory v
Tandoh IV & Anr. [2010] SCGLR
971
Obeng v
Assemblies of God [2010] SCGLR
300
Hadley v
Baxendale (1854) 9 Exch 341 156.
E.R.145.
Tema Oil Refinery v African
Automobile Ltd. [2011] 2 SCGLR
907
Victoria Laundry (Windsor)
Ltd v Newman Industries Ltd.
[1949] 2 KB 528
Koufos v
C. Czarnikow Ltd (The Heron II)
[1969] 1 AC 350.”
Glencore
Energy UK Ltd v Cirrus Oil
Services Ltd. No. [2014]
EWHC87
Oloffson
v Coomer 1973 II III App. 3d.
918, 296 N.E. 2D 871
BOOKS REFERRED TO IN JUDGMENT
DELIVERING THE LEADING JUDGMENT
JONES
DOTSE JSC:-
COUNSEL
DAVID
ATTA ASIEDU ESQ. WITH HIM DAVID
ADU-TUTU JNR. JOSEPH KWADWO
KONADU AND NELSON AKONDOR FOR
THE PLAINTIFF
/APPELLANT/APPELLANT.
RAYMOND
CODJOE ESQ. WITH HIM BARBARA
HOLM-FLEISCHER FOR THE
DEFENDANT/RESPONDENT/
RESPONDENT.
JUDGMENT
JONES DOTSE JSC:-
It is
provided in sections 1 (1), 47,
48 (1) and (2) of the Sale of
Goods Act, 1962 (Act 137) as
follows:
“1(1) a contract for
the sale of goods is a contract
by which the seller
agrees to transfer the property
in the goods to the buyer for a
consideration called the
price, consisting wholly or
partly of money.”
47. Damages for
non-acceptance
(1) Where the buyer
wrongfully neglects or refuses
to accept and pay for the
goods in accordance with the
terms of the contract, the
seller may maintain an
action against the buyer for
damages for non-acceptance.
(2) In a contract
for the sale of goods to be
delivered by instalments,
(a) if each
instalment is to be separately
paid for, subsection (1) shall
apply to
each instalment separately,
but where the buyer has by
words or conduct shown an
intention to repudiate the
contract the seller may, if
the seller accepts the
repudiation, maintain an
action for damages
for non-acceptance in respect of
the goods;
(b) in any other
case, a breach in respect of one
or more instalments shall
be treated for the
purposes of subsection (1) as
though it were a breach in
respect of the whole contract or
of the remaining part of the
contract.
48. Assessment
of damages
(1) The measure
of damages in an action for
damages is the loss
which could reasonably have been
foreseen by the buyer at
the time when the
contract was made as likely to
arise from the breach of
contract.
(2) Where there is
an available market for the
goods, the measure of
damages is prima facie to be
ascertained by the
differences between the contract
price and the market or current
price.
(a) If a time has been fixed for
acceptance, or if the buyer
repudiates the
contract before the time of
performance, and the seller does
not accept the
repudiation, at the time or
times when the goods ought
to have been accepted.
(b) In any other
case, at the time or times of
the refusal to accept
the goods.” Emphasis
supplied.
BRIEF FACTS
This is
an appeal by the
Plaintiff/Appellant/Appellant,
hereafter referred to as the
Plaintiff against the decision
of the Court of Appeal rendered
on 7th day of July,
2011 which also affirmed the
decision of the High Court,
dated 13th November
2009 by which the
Defendants/Respondents/Respondents
hereafter referred to as the
Defendants were directed to pay
the Plaintiff’s, general damages
of GH¢25,000.00.
PLAINTIFF’S CLAIMS IN THE TRIAL
HIGH COURT
The
Plaintiff claimed the following
reliefs against the defendants:
a. A declaration that,
on the basis of the
correspondence between, the
conduct of the
Plaintiff and Defendant, a valid
and binding contract existed
between them for the sale of
26,250 metric tons of alumina by
the Plaintiff to the
Defendant.
b. A declaration that in
as much as the Defendant
indicated its refusal and/or
refused to accept
delivery of the 26, 250
metric tons of alumina from
the Plaintiff, the Defendant
breached the contract between it
and Plaintiff.
c. General damages for
breach of contract.
d. Special damages in
the sum of US$6,918,750, which
the Plaintiff has lost
as a result of the
Defendant’s breach, and the
subsequent fall in the price
of alumina.
e. Costs, including
solicitors’ fee.”
Even
though the parties in this case
testified and were
cross-examined, the material
evidence upon which their
contractual relationship was
founded and established had been
based mainly on electronic
communication and documentary
evidence. As a result, we deem
it appropriate, at this stage to
refer to some of the salient
features of the core
correspondence and or
transactions between the parties
with the relevant dates to
support them. These are as
follows:-
19th
August 2008
The Plaintiff made
an offer of the Alumina to the
Defendant valid till 4 pm
New York time on the
next day
20th
August 2008
The Defendant,
acting through its Chief Finance
Officer, Felix Gaisie,
accepted the Plaintiff’s offer,
with further instructions to
“go ahead and secure it
for us”.
20th August 2008
The Defendant’s
Felix Gaisie wrote to his
colleague, Dela Agbo, to take
steps to establish letters
of credit in favour of the
Plaintiff.
25th August 2008
The Plaintiff
emailed the defendant,
nominating the “MV Pan Leader or
sub” to ship the Alumina.
26th August 2008
The Defendant
emailed the Plaintiff approving
the “MV Pan Leader or sub”.
29th August 2008
The Defendant
assured the Plaintiff that it
needed the Alumina despite its
attitude and said
“you will get the signed
contract”.
1st September 2008
The Defendant wrote
to the Plaintiff with the
assurance that it was not
contemplating breaching the
contract, saying they were “not
going back on our
acceptance of your offer and
apologize if that is the
impression created.”
10th September 2008
The Defendant
emailed the plaintiff that it
was no longer interested in
the Alumina, as it intended to
take delivery of alumina
from “one of its shareholders”.
19th
September 2008
Plaintiff nominates MV Ellicon
as the new vessel for the
carriage of the cargo, but
there is no confirmation from
the Defendant.
19th September 2008
The plaintiff wrote
to the defendant to accept the
Defendant’s repudiation.
17th October 2008
On this date, M.V.
Marine Bulker set sail from a
port in Brazil to Nikolayev-
Ukraine with alumina for Talco.
See Exhibit U. The Plaintiff
claimed it took this action to
mitigate it’s losses.
24th October 2008
The Defendant
(showing renewed interest after
its breach) emailed the
Plaintiff that it expected the
Alumina to arrive in Tema no
later than mid
November 2008.
28th – 31st October
2008
The Plaintiff held
the Alumina in transit in
Gibraltar for possible shipment
to the Defendant, as
the Defendant showed renewed
interest.
28th October 2008
The Defendant
wrote to the Plaintiff to state
that its letters of credit
had failed, compelling the
Plaintiff to continue its steps
in mitigation.”
It has to
be noted and observed that, the
vessel which finally lifted the
Brazilian cargo which the
Defendants contracted to buy,
was MV Marine Bulker. The
evidence on record indicates
that there was no prior
notification to the Defendants
by the Plaintiffs on this new
vessel.
There is
also no indication that there
was prior approval by the
Defendants before the Brazilian
alumina was loaded onto this
vessel.
There is
however indication that, the
Defendants were notified by a
later correspondence after the
cargo had already been lifted by
the vessel MV Marine Bulker.
It is
also necessary to state the
following facts and chain of
events in the contractual
relationships between the
parties.
From the
evidence on record, the
Plaintiff contractually agreed
to lift 26,250 metric tons of
Brazilian alumina for the
Defendant and an Australian
alumina for another company
called TALCO in one of the
former Soviet Republics.
Following
the Defendants breach to accept
the Brazilian alumina, the
Plaintiff diverted this cargo to
TALCO in a bid to mitigate their
losses. Having delivered the
Brazilian cargo that was meant
for the Defendants to TALCO, the
plaintiff had to consign the
Australian cargo originally
meant for TALCO to China and
deposited them in three
warehouses until they found
markets for them.
Indeed
the Plaintiff, in paragraph 55
(f) of their statement of claim
averred as follows:-
“By shipping the
goods to TALCO, the Plaintiff
was left with an unsold
Australian cargo that was
originally meant for TALCO.”
It is
therefore clear that,
contractually, it is the
Brazilian cargo contract that
the Defendants had repudiated
and it is to that contract that
damages must be looked at and
assessed.
What is
of interest here is that, whilst
the plaintiff failed to give any
details about the prices at
which it sold the Brazilian
cargo to TALCO, which was the
original cargo meant for the
Defendants, it rather sought to
give some indicative prices at
which it sold the Australian
cargo.
The above
constitute a brief summary of
the material dealings between
the parties herein.
DECISION BY THE HIGH COURT
Thereafter, the case proceeded
to trial, and the High Court
after an evaluation of the
merits of the case delivered
judgment in the following terms:
“In conclusion, I
declare that on the basis of the
correspondence between
and conduct of the
Plaintiff and Defendant, a valid
and binding contract
existedbetween them for the sale
of 26,250 metric tons of alumina
by the defendant.
I also declare that
in as much as the defendant
indicated its refusal and/or
refused to accept
delivery of the 26,250 metric
tons of alumina from the
plaintiff, the
defendant breached the contract
between it and plaintiff.
I will hold that
plaintiff is entitled to general
damages and award
damages of GH¢25,000 in
favour of Plaintiff. I will
however hold that
plaintiff is not entitled to the
special damages being
claimed.”
APPEAL TO COURT OF APPEAL AND
JUDGMENT
Dissatisfied with the decision
of the High Court, the Plaintiff
unsuccessfully appealed against
the Judgment to the Court of
Appeal. In it’s judgment of even
date already referred to supra,
the Court of appeal in a
unanimous decision dismissed the
appeal in the following terms:-
“Having
closely looked at all the
relevant evidence in the Record
of Appeal including the exhibits
tendered, I am of the view that
the plaintiff’s case is not
founded on any loss or damages
it incurred on the price of mid
November Australian alumina it
contracted with Talco and the
actual sale price of the
Australian cargo sold to Chinese
companies.
The plaintiff did not tender any
evidence in respect of the
agreed price of the November
Australian alumina between the
plaintiff and Talco. Nor did the
plaintiff also tender the agreed
price of the Brazilian alumina
the subject matter of the
contract which defendant
repudiated, which plaintiff
conveyed to Nikolayev, Ukraine
or Tipo, Georgia. I am
referring particularly to the
agreed sale price between the
plaintiff and buyers in the
Ukraine or Georgia, because that
specifically is the cargo in
respect of which the
plaintiff had a claim against
the defendant. The evidence was
entirely silent on this. The
plaintiff’s claim is based on a
perceived loss comparing 20th
August 2008 Brazilian alumina
price with an entirely different
cargo, the subject matter of a
contract between the plaintiff
and Talco negotiated on the
basis of November 2008 and not
August 2008 alumina prices.
The
plaintiff admitted that the
November 2008 consignment was
contractually assigned to Talco
and had nothing to do with
Defendant and as the trial judge
stated, whatever arrangement
made after the repudiation of
the contract by the defendant
from the late September 2008 up
to October 2008 represented a
separate set of events.
How much
did the plaintiff sell the
Brazilian cargo to Talco when it
was conveyed to Ukraine or
Georgia after the repudiation of
10th September 2008
and acceptance of the breach of
plaintiff on September 19, 2008?
There was nothing in the
evidence on this to enable a
clinical statutory
assessment to be made by the
trial court or in this court.
We think, in the circumstances,
it was within the discretion of
the learned trial judge to award
nominal damages, even if she did
not advert her mind to
the issue of statutory damages
as defined in
section 48 of Act 137 in her
judgment.
The appeal in the
circumstances is dismissed and
the judgment of the trial
court, awarding
nominal damages affirmed.”
APPEAL TO SUPREME COURT
As the
Plaintiffs’ were still
dissatisfied with the decision
of the Court of Appeal, they
appealed to this court, because
the Court of Appeal:-
a. awarded a low figure
as general damages; and
b. declined to award
special damages
GROUNDS OF APPEAL
The
following then constituted the
grounds of appeal by the
Plaintiff to this court:
a.“The Court of Appeal erred when it
affirmed the High Court’s award
of general damages on the basis
that there were no multipliers
in the evidence to guide the
assessment of general damages.
b. The
Court of Appeal came to the
wrong conclusion when it found
that the consequential loss
claimed by the Appellant was too
remote to warrant the award of
special damages.
c.The
decision of the Court of Appeal
was against the weight of the
evidence.”
RELIEFS SOUGHT FROM THE COURT OF
APPEAL
The
reliefs which the plaintiff
seeks from this court are:-
a. “An upward variation
of the general damages affirmed
by the Court of Appeal;
and
b. A reversal of the
decision of Court of Appeal
declining the grant of special
damages.”
It is to
be noted and observed that, in
their submissions in their
statement of case, learned
Counsel for the plaintiffs,
submitted as follows:-
“For reasons to
be given near the end of this
statement of case, the appellant
will abandon grounds B & C and
focus on Ground A. “
Indeed,
learned Counsel for the
Plaintiff only extensively
argued ground A of the appeal,
and did not profer any arguments
in respect of grounds B & C.
These are therefore to be
considered as having been
abandoned.
It is
again interesting to note and
observe that, learned counsel
for the Plaintiffs in their
statement of case stated as
follows:-
“It is admitted
that no evidence was provided of
how much the appellant
sold the rejected alumina to
Talco for. However, we
submit (and will demonstrate)
that this was no reason not to
assess damages
properly and in accordance with
the Sale of Goods Act, 1962
(Act 137).”
We have
indeed verified the above
statement and found it to be
correct in the sense that, the
plaintiffs did not provide any
evidence of the said particulars
of sale of this Brazilian Cargo
to TALCO.
At the
trial court, the plaintiff’s did
not anchor their case on the
Sale of Goods Act, 1962, Act 137
specifically, although the facts
stated therein fitted into a
contract under the Sale of Goods
Act.
In view
of the fact that the appeal has
been narrowed down to the Court
of Appeal’s affirmation of the
High Court’s award of general
damages on the basis that there
were no multipliers in the
evidence to guide the assessment
of general damages, it is
considered worthwhile to quote
in extenso portions of the High
Court judgment on this issue.
This is to fully understand why
the learned trial Judge
dismissed the special damages
and also awarded only nominal
damages by way of general
damages.
REASONS FOR THE HIGH COURT
DECISION
“From the totality
of the evidence adduced, it is
my opinion that P.W1 did not
lead sufficient evidence to
convince the court that the
cargo on board the vessel M/V
Maren Bulker was originally
meant for Defendant. Indeed,
that the conditions
required for the delivery of the
goods pursuant to the contract
of sale had not been satisfied.
Defendant has also
made a case that the vessel M/V
Maren Bulker had never been
nominated by the Plaintiff and
approved by the Defendant as
was required. The
Plaintiff relied on a draft
commercial invoice attached to
the Plaintiff’s draft contract
of sale dated 24th
October 2008 and tendered in
evidence as exhibit “AA”, in
support of shipment. This email
was sent to Defendant
after the M/V Maren Bulker had
set sail on October 17, 2008.
For a start, notice
cannot be retroactive; notice
was required to be given in
advance. This is
because prior approval of
Defendant was required before
any loading or dispatch of
any cargo, the subject matter of
the contract between the
parties. It is in line with this
that in August 2008, the vessel
Pan Leader was
nominated and approved by the
parties, subsequently,
Plaintiff nominated M/V Elikon.
According to D.W.I the essence
of giving Defendant prior
notice of the vessel nominated
by Plaintiff is to ensure
that the vessel would fit into
the dock of the buyer and
secondly to vet the
last five cargo carried by the
vessel to ensure that the
current cargo would not be
contaminated by the previous
cargo. Plaintiff did not
challenge this evidence.
D.W.1 also stated
that Defendant had to be
notified of Plaintiff’s
intention to load a
vessel so that Defendant could
exercise its option of either
choosing to be there to
supervise the loading or
nominate an agent to do it.
Also, Defendant had not notified
Plaintiff of the establishment
of Letters of credit, which
was the mode of payment.
The evidence led is
that the first time Defendant
became aware of the
vessel was an invoice. So on
October 25, 2008 Defendant wrote
to P.W.1 that it had
noticed an error on the face of
the commercial invoice.
Plaintiff did not provide any
satisfactory explanation as to
why it did not give Defendant
prior official notification of
the nomination of the vessel M/V
Maren Bulker.
It is Plaintiff’s
further case that it secured the
vessel on 28th August
2008 under a Charter Party
Agreement which is referred to
in the Bill of Lading dated
17th October 2008,
and covering the goods consigned
to Talco. P.W.1
tendered in evidence a copy of
the said Charter Party (exhibit
“AD”) and Bill of Lading
(exhibit “U”). The Defendant
called as a witness,
Mr. Kofi Mbiah, Chief Executive
Officer of Shippers Council. His
evidence, which I accept, was
that the Bill of Lading in
question did not make reference
to the Charter Party dated 28th
August 2008, but rather to a
Charter Party dated 23rd
September 2008. Furthermore, the
Bill of Lading is not
transferable on its face and
thus could not have passed title
to Defendant.
The damage that
Plaintiff is contending it
suffered is, in my opinion
therefore, too remote, and I
will so find. In the
circumstances Plaintiff cannot
claim to have mitigated its loss
by sending the cargo to Talco.
Also the basis for
the claim for demurrage against
the Defendant has not been
proved. The decision to send the
vessel for maintenance was a
decision, which the Plaintiff
admits it took on its own; the
same applies to the decision
to hold the vessel for up to 31st
December 2008.”
Concluding her delivery, the
learned trial Judge also gave
the following explanation for
the award of the nominal
damages.
“It is trite
learning that the measure of
damages is a computation of how
much money must be paid by
the party in breach to the
innocent party. The
purpose is to put the innocent
party in nearly the same
position that he would have been
had the other party not breached
the contract. In Royal Dutch
Airlines (KLM) & Another v
Farmex Limited [1989-90] GLR
266, the Supreme Court held
that on the measure of damages
in breach of contract, the
principle adopted by the Courts
was restitution in
integrum i.e. if the Plaintiff
has suffered damages – not too
remote- he must, as far as
money could do it, be restored
to the position he would
have been in had that
particular damage not occurred.
Plaintiff therefore ought
to be compensated for the
expenses incurred in
instituting the instant action.
The plaintiff has
not made any other claim for
special damages. For the
plaintiff to be awarded special
damages it has to establish what
loss it has suffered by
reason of the breach by leading
evidence as to the quantifiable
loss. In the absence of
evidence as to any quantifiable
loss suffered, Plaintiff will
only be entitled to the award of
general damages. See
Yungdong Industries Limited v
Roro Services [2005-06] SCGLR
819.
In the case of
Delmas Agency Ghana Limited v
Food Distributor
International Limited
[2007-2008] SCGLR 748; the
general principle
relating to damages was
expatiated on. It was held
that general damages are
as the law will presume to be
the natural or probable
consequence of the
Defendant’s act. It arises
by inference of the law and
therefore need not be proved by
evidence. The law implies
general damages in every
infringement of an absolute
right. The catch, it was
further stated, is that only
nominal damages are
awarded; where the Plaintiff
has suffered a properly
quantifiable loss; he must plead
specifically his loss and prove
it strictly. If he does not,
he is not entitled to anything
unless general damages are also
appropriate. In the instant
case, on the evidence
adduced by
Plaintiff, I am of the opinion
that Plaintiff is entitled to
general damages.”
These
quotations are necessary because
they explain why the Court of
Appeal did not disturb those
findings of fact.
REASONS WHY THE COURT OF APPEAL
DID NOT DISTURB THE FINDINGS OF
FACT BY THE TRIAL COURT
The
following constitute the main
reasons why the Court of Appeal
did not disturb the findings
made by the trial court:
“I have closely
considered the findings of the
trial judge in respect of the
cargo carried on the MV Maren
Bulker and I find no cause to
disturb those findings as the
plaintiff insisted at all times
that its conduct with regard to
the goods on the vessel were
intended to mitigate its loss.
As acts done in mitigation occur
after a breach or anticipated
breach, there is no reason to
conclude that there was a
subsisting contract between the
Plaintiff and Defendant in
relation to the Brazilian cargo
carried on the MV Maren Bulker
given that the plaintiff
concedes in its reply to the
Defendant’s written
submission that the appeal
herein is not targeted at the
decision of the
trial court as to whether there
was a valid contract between the
plaintiff and the Defendant
which was breached, but the
appeal is targeted only at
the treatment of damages, both
general and special,
by the trial court.”
ANALYSIS OF THE STATEMENTS OF
CASE FILED FOR AND ON BEHALF OF
THE PARTIES
We have
perused the erudite and well
researched statements of case
filed for and on behalf of the
parties by their learned
counsel. We take this
opportunity to congratulate them
for assisting this court with
the detailed submissions
contained in their statements of
case.
FOR THE PLAINTIFF’S
Learned
Counsel for the Plaintiff,
anchored his submission on the
following core issues:-
1. That the Court of
Appeal failed to consider the
CRU monitor which
according to Counsel ought to
have been considered.
2. That, section 48 (2)
of the Sale of Goods Act 1962
(Act 137) is relevant in the
computation of the damages
flowing from the breach of
contract by the
Defendants.
In this
respect, learned Counsel for the
Plaintiff’s submitted that in
the assessment of damages
arising from the Brazilian
alumina cargo that was sold by
Plaintiff’s to TALCO, the said
section 48 (2) of the Act had to
be applied.
The
position was stated by the
Plaintiffs as follows:-
“The position of the
law on assessment of damages
where a buyer
breaches a sale of goods
contract is that the court must
calculate the damages by
subtracting the market value of
the goods at the time the
goods ought to have
been accepted (or at the time of
the breach, where
applicable) from the value of
the goods at the time the
contract was
formed.”
In
discussions and analysis which
will soon follow, it will be
examined whether the plaintiff
provided the material evidence
upon which the said computation
could have been applied. Even
so, the court will have to
consider whether taking all the
facts into context, Plaintiff’s
are entitled to the statutory
damages under the Sale of Goods
Act, or not.
3.The
Plaintiff also argued that, the
re-sale of the rejected cargo is
irrelevant in the
assessment of damages as is
stated in section 48 (2) of Sale
of Goods Act 1962 (Act 137).
4.Finally, learned Counsel for
the Plaintiff argued that, even
though the first appellate
court, (the Court of Appeal)
confirmed and affirmed the
findings of fact made by the
trial High Court, this second
appellate Court (Supreme Court)
can for good reasons especially
where the said findings are
perverse, depart from them and
make new findings of fact
provided they can be supported
by the record of appeal.(ROA)
See cases
such as the following:-
1. Mensah v Mensah
[2012]1 SCGLR 391
2. Gregory v Tandoh IV &
Anr. [2010] SCGLR 971
3. Obeng v Assemblies of
God [2010] SCGLR 300
Just to
mention a few.
However,
we wish to state that having
evaluated the findings of fact
made by the trial court and same
affirmed by the Court of Appeal,
this Court does not see anything
perverse to merit a reversal of
the said findings of fact.
STATEMENT OF CASE BY DEFENDANTS
Even
though learned counsel for the
Defendants argued many points in
response to that of the
plaintiff, in substance, the
issues considered germane to
this appeal are the following:-
i. That
the Plaintiff’s case has been
anchored on a non-existent
contract. This preposition has
been based on the fact that,
even though conclusive findings
of fact have been made to
establish the fact that the
agreement between the parties
was entered into on 20th
August 2008, the fact remains
that, there were some loose ends
of this agreement, which needed
to be tidied up.
For
example, the nomination and
acceptance of the vessel to lift
the cargo, the request by
Defendants to vary the price,
the establishment of a valid
L/C, etc all remained to
be resolved. It is this which
stretched the agreement to
October 2008 on the basis that
it had not been finalized. Can
those factors be taken into
consideration in looking at the
20th August
2008 contract?
ii.That
the Plaintiff failed to prove
the actual loss it has suffered
by reason of the
Defendant’s breach of contract,
and whether these must be taken
into consideration.
A perusal
of the above submission gives an
indication that the defendant’s
have not appreciated the total
abandonment of the grounds of
appeal on special damages. Since
this ground of appeal has been
abandoned, there is no
justification for holding on to
it. It is therefore of no
consequence.
iii.That
the Plaintiff’s case in the
Supreme Court constitutes a
departure from its pleadings and
arguments in the lower courts.
For that reason, they cannot
argue a fresh point of law on
appeal.
This
argument has been anchored on
the basis that, the plaintiff’s
claim in this court for
statutory damages under the Sale
of Goods Act, 1962 (Act 137) not
having been the case it argued
in the trial court, constitutes
a departure from its pleadings
and the set up of an entirely
new case.
The
resolution of this issue like
the previous one poses no
problems. We will therefore deal
with it peremptorily. It has to
be noted that, the facts upon
which the plaintiff’s based
their claims throughout from the
trial court, through to the 1st
appellate court and this court
have basically been the same,
save for semantics in the
submissions of learned counsel.
The
reference and reliance on the
Sale of Goods Act, is a question
of law. The Law is presumed to
be in the bosom of the Judge,
and it does not really matter
whether the parties specifically
made reference to the sale of
Goods Act or not. The Court is
presumed to apply any applicable
law to a given set of facts.
For
example, the transaction in the
instant case between the parties
even though not specifically
mentioned, is one under section
1(1) of the Sale of Goods Act,
which states that “Contract for
the sale of goods is a contract
by which the seller agrees to
transfer the property in the
goods to the buyer for a
consideration called the price,
consisting wholly or partly of
money.”
Applying
the above definition to the
contract that was deemed to have
been entered into between the
parties herein in or about 20th
August, 2008 is one covered by
the definition in section 1 (1)
of the Sale of Goods Act.
Thus,
once the facts of the case
support the legal position
stated in the Sale of Goods Act,
it is incumbent and imperative
for the courts to apply such a
law. As a matter of fact, being
an issue, regulated by
substantive law, means that it
cannot be ignored once the facts
relate to the given situation.
However,
the issues of whether the losses
of the Plaintiff have been
caused by the proximate or
remote acts of the Defendants to
make them liable for the damages
therein under the rule in
Hadley V Baxendale (1854) 9 Exch
341 will be considered under
a separate and detailed
discussion.
iv.Learned Counsel for the
Defendant, ended his submissions
in the statement of case to the
effect that the Plaintiff’s case
cannot be brought under section
48 of the Sale of Goods Act,
(Act 137).
This is
one of the core and
contentious issues to be
determined in this appeal. For
now, it is safe to conclude
that, once the Plaintiff’s have
pleaded certain facts which give
rise to a specific situation in
which some provisions of the
Sale of Goods Act, 1962, (Act
137) can be said to be
applicable, it cannot be said
that, the Plaintiff’s case does
not come under section 48 of Act
137.
What this court is therefore
called upon to consider in this
appeal is whether the
application of section 48 of Act
137 and the computation of
damages, so copiously relied
upon by the plaintiff is
applicable to the circumstances
of this case if at all.
In
resolving the issues raised in
this appeal, we are of the view
that, this court must consider
whether the application and
interpretation urged upon this
court by the Plaintiff’s
reliance on section 48 of the
Sale of Goods Act, considering
the evidence led by them in
support, including the CRU
monitor is sufficient to have
enabled the trial court and any
other court make a finding for
them in terms urged upon this
court in respect of the award of
general damages.
Whenever
it has been ascertained by a
court of law, that a buyer has
wrongfully neglected or refused
to accept goods which it had
contracted to buy from the
seller, pursuant to section 47
(1) of the Sale of Goods Act,
1962 (Act 137) the seller may
maintain an action against the
buyer for damages for the
non-acceptance.
In this
case, it would therefore mean
that the Plaintiff’s may take an
action against the Defendant’s
for this breach of contract. The
facts in this case are very well
known and the Plaintiff’s have
exercised the options available
to them under the law and that
is why they are in this court.
Furthermore, section 48 (1) of
Act 137 has circumscribed the
measure of damages that is
available to be proven by the
seller in case it institutes an
action. This is defined as “the
measure of damages in an action
for damages is the loss which
could reasonably have been
foreseen by the buyer at the
time when the contract was made
as likely to arise from the
breach of contract.”
The above
provisions are the exact
re-statement of the locus
classicus principle in the case
of Hadley v Baxendale (1854)
9 Exch 341 156. E.R.145.
The
Supreme Court, speaking with
unanimity in the case of Tema
Oil Refinery v African
Automobile Ltd. [2011] 2 SCGLR
907, at pages 929 to 930
explained in detail this case of
Hadley v Baxendale in the
following terms:-
“The
locus classicus on the rule
regarding remoteness of damage
in contract which is applicable
when the damages being claimed
are general or unliquidated is
to be found in the decision in
Hadley v Baxendale [1854] 9
Exch 341 earlier referred to. In
this case, the plaintiff’s mill
was brought to a standstill by
the breakage of its only
crankshaft. The defendant
carriers failed to deliver the
broken shaft to the manufacturer
at the time it had promised
to do, and the plaintiff sued to
recover the profits it
would have made had
the mill been started again
without the delay. The Court
rejected the claim on the ground
that the facts known to the
defendant were
insufficient to show reasonably
that the profits of the mill
must be stopped by an
unreasonable delay in the
delivery of the broken
shaft by the carriers to the
third person. Expatiating on the
judgment of the court,
Baron Alderson, explained the
rationale for its judgment thus:
“Where
two parties have made a contract
which one of them has broken,
the damages which the other
party ought to receive in
respect of such breach of
contract should be such as may
fairly and reasonably be
considered either as arising
naturally, i.e. according to the
usual course of things, from
such breach of contract itself,
or such as may reasonably be
supposed to have been in the
contemplation of both parties,
at the time they made the
contract as the probable result
of the breach of it.
Now, if
the special circumstances under
which the contract was actually
made were communicated by the
plaintiff’s to the defendants,
and thus known to both parties,
the damages resulting from the
breach of such a contract, which
they would reasonably
contemplate, would be the
amount of injury which
would ordinarily follow from a
breach of contract under these
special circumstances so known
and communicated. But, on the
other hand, if these special
circumstances were wholly
unknown to the party
breaking the contract, he, at
the most, could only be supposed
to have had in his contemplation
the amount of injury which would
arise generally, and in the
great multitude of cases not
affected by any special
circumstances, from, such a
breach of contract”.
The
statement of Baron Alderson in
the Hadley v Baxendale
case continued thus:-
“For had
the special circumstances been
known, the parties might have
specially provided for the
breach of contract by special
terms as to the damages in that
case, and of this advantage it
would be very unjust to deprive
them. Now the above principles
are those by which we think the
jury ought to be guided in
estimating the damages arising
out of any breach of contract
But it is obvious that in the
great multitude of cases of
millers sending off broken
shaft’s to third persons by a
carrier under ordinary
circumstances, such consequences
would not, in all probability,
have occurred, and these special
circumstances were never
communicated by the plaintiffs
to the defendants. It follows,
therefore, that the loss of
profits here cannot reasonably
be considered such a consequence
of the breach of
contract as would have been
fairly and reasonably
contemplated by both the parties
when they made this contract.”
It can
therefore be stated with some
degree of emphasis that Hadley v
Baxendale establishes two limbs
of foreseeability; and these
are; (i) damages which are
foreseeable from the nature of
the breach itself and (ii)
damages which are foreseeable by
the parties at the time of
contracting because special
circumstances have been brought
to their attention which make
the damages within the
reasonable contemplation of the
parties.
Chitty on
Contracts, General Principles,
(25th ed) paragraph
1692 states on this principle
thus:
“The principle laid
down in Hadley v Baxendale
have been interpreted and
restated by the Court of Appeal
in 1949 in Victoria Laundry
(Windsor) Ltd v Newman
Industries Ltd. [1949] 2 KB 528
and by the House of Lords in
1967, in Koufos v C.
Czarnikow Ltd (The Heron II)
[1969] 1 AC 350.”
The
learned Authors of Chitty on
Contracts then summarized the
effect of these decisions and
its import on the rule in
Hadley v Baxendale as
follows:-
“A type or kind of
loss is not too remote or
consequence of a breach of
contract if, at the time of
contracting (and on the
assumption that the parties
actually foresaw the breach in
question) it was within their
reasonable contemplation as a
not unlikely result of that
breach.”
Under the
circumstances of this case, and
considering the information
available to the defendants,
what would a reasonable man in
their position have expected a
repudiation of the Brazilian
alumina cargo to be?
Is it
reasonable under the
circumstances to foresee that
such a breach would lead to the
defendants being saddled with
the difference in money value in
respect of an Australian alumina
cargo in respect of which they
had never been aware off?
Similarly, even in respect of
the Brazilian Cargo, can the
losses be said to be
sufficiently likely to result
from the breach of the contract
and to make it proper for them
to be held liable for the losses
as if they flowed naturally from
the breach or that the loss
should have been within their
contemplation? From the settled
findings of the trial court and
confirmed by the first appellate
court, it appears there is no
such proximate or remote cause
to enable the Defendants to be
liable for the exemplary damages
being urged on this court by the
plaintiffs.
We have
referred to portions of the
findings by the learned trial
Judge on how the Plaintiff
claimed to have secured the
vessel on 28th
August, 2008 under a Charter
Party Agreement dated 17th
October 2008 marked in the ROA
as Exhibit AD. The bill of
lading supposedly in proof of
this is marked as exhibit U in
the ROA.
We have
verified all the said findings
and found them to be correct.
For example, the Bill of lading,
exhibit U, is consigned to the
“Order of TALCO management” and
is non negotiable.
The port
of discharge is NIKOLAYEV,
Ukraine or Poti, Georgia, and
the vessel named is MV Maren
Bulker, and the cargo therein is
stated to be “Sandy
metalluigical Grade Alumina”
with a gross weight of 26,
249.79 MT.
This Bill
of lading was dated 17th
October 2008 in Brazil. Exhibit
AD, the Charter Party on the
other hand was dated 28th
August, 2008 and it is the
instrument by which the vessel
was secured.
However,
it is worth noting that, the
bill of lading exhibit U did not
make any reference to the
Charter Party dated 28th
August 2008, exhibit AD, but
rather to another Charter Party
dated 23rd September
2008 which is of no relevance to
the Defendants. Plaintiff’s
representative testified in
court that on 17th
October 2008 the MV Marine
Bulker set sail from Villa Do
Conde Port in Brazil to
Nikolayev, Ukraine.
However,
per exhibit AA, dated 24th
October 2008, the Plaintiff’s
per an email also of even date,
exhibit Z communicated thus:-
“Charles/Felix,
Pls. see attached
for the new contract and invoice
covering our latest
agreement. To reiterate our
position – please be advised in
the event that VALCO
fails to open a letter of credit
from a bank acceptable to
Glencore by the close of
business on October 31, we well
revert to the existing terms of
our agreement (namely $465/ton
price). Regards Matt”
Exhibit
AA is the Alumina Supply
Agreement between the Plaintiff
and Defendant, dated 24th
October 2008.
The
question that begs for an answer
is this:-
If the Brazilian cargo, meant
for the Defendants, had already
been consigned and shipped to
TALCO on board MV. Maren Bulker
on the 17th October
2008, what was there for the
Plaintiff’s to enter into an
agreement with the Defendants to
buy a Brazilian Cargo of 26, 250
metric tones of alumina as per
exhibit AA dated 24th
October 2008?
Quite
clearly it is apparent that the
cargo on board the MV Maren
Bulker was not meant for the
defendants as is clearly
depicted by the Bill of lading,
exhibit U.
Indeed
the following explanation by the
Plaintiff’s representative in
his testimony exposes the lack
of candour on the part of
Plaintiffs. He explained thus:
“On August 28th
when defendant asked us to
secure the cargo, we did.
However, in the alumina industry
you need to take your cargoes.
So when that cargo secured
we needed to move it. It was
clear at that time that
defendant was not performing, so
we needed to make a decision on
where to send the
cargo.
After reviewing our
options, our shipping department
decided the best place to
send the cargo was to Talco, an
alumina smelter in Tajikistan”.
From all
the above analysis, it is quite
certain that the findings of
fact made by the learned trial
Judge on very key material
issues have been supported by
the evidence in the appeal
record.
This is
because, exhibit U, did not make
reference to the Charter Party
of relevance to the Defendants,
which is dated 28th
August 2008, but rather as
exhibit AD indicates to a
charter party dated 23rd
September 2008.
In view
of the legal position that such
documents are not transferable,
on its face value, title to the
cargo could not in any case have
been passed onto the Defendants.
As a
matter of fact, having
considered the merits of the
plaintiff’s case in detail we
are inclined to accept the
conclusions of the learned trial
Judge, which were accepted and
confirmed by the Court of Appeal
that the damages the plaintiff
contended it suffered are
neither proximate nor within
permissible remote limits to
entitle them to any meaningful
award of damages. See also the
case of Delmas America Line v
Kisko [2003-2005] 2 GLR 544,
holding 3 where the Supreme
Court expatiated on computation
of damages in similar
circumstances:
“The measure of damages
for the undelivered portion of
the goods was the
difference between the cost of
the goods and their market price
at the contracted place
of destination.
Since the goods had not been
delivered an adjustment could
not be made for freight and
other allowances because freight
was a separate item of cost from
the cost of goods even in C & F
shipment term. Thus, the trial
judge was right in excluding
freight from the calculation of
damages for non-delivery. In any
case, the list of lost goods
presented by the plaintiffs
themselves, exhibit K, provided
only the cost of the goods and
made no reference to freight
cost. However, since the court
awarded exactly the figure
provided by the plaintiffs as
damages, no provision had
been made for the
element of damages that was to
be used to compensate the
aggrieved plaintiffs. On the
evidence, however, the figures
in exhibit K were certainly
inflated because they were
higher than those in
exhibit B, the pre-litigation
invoice submitted by the
suppliers from which they were
extracted. Unfortunately, the
plaintiffs did not
indicate the actual quantum of
damages they had suffered.
The court would therefore use the
more credible figures extracted
from exhibit B in
respect of the undelivered or
lost goods, adjust them by a
margin of ten per cent and grant
that sum as general damages.
Since they did not plead a
higher profit margin as special
damages no such award would be
made.”
Speaking
generally on the issue of the
proximate and or remoteness of
damage in the Plaintiff’s case,
we believe it is the several
weaknesses in the formulation of
the Plaintiff’s case as had been
enumerated in the judgments of
the two lower courts, and
further explained herein that
had completely eroded any
strength that the plaintiff’s
had in their quest for enhanced
award of damages.
What must
be noted is that, if the
Brazilian Cargo was even not
meant for the defendants, then
the Australian cargo, which was
not what they even contracted
for would be too remote to merit
any discussion on whether to
consider the award of the
statutory damages as is
stipulated in section 48 (2) of
the Sale of Goods Act, 1962 (Act
137).
Section
48 (2) of the Sale of Goods Act,
connotes that, where a market is
available for the repudiated
goods the measure of damages is
difference money, and
that means, the difference
between the contract price and
the market price.
This then
would imply application of
general contract law principles
to sale of goods contracts.
Difference money as stipulated
under section 48 (2) constitutes
the foreseeable loss
where there is an available
market.
In
considering the application of
this section 48 (2) of the Sale
of Goods Act, it has been very
difficult to find local decided
cases on the issue.
We have
been persuaded by the decision
of the England and Wales High
Court (Commercial Court) in the
case of Glencore Energy UK
Ltd v Cirrus Oil Services Ltd.
No. [2014] EWHC87 Comm. Case
No. 2012 Folio 936 dated 24th
January 2014, Coram Justice
Cooke, and the American
appellate Court of Illinois in
the case of Oloffson v Coomer
1973 II III App. 3d. 918, 296
N.E. 2D 871, coram: Alloy J.
Since we
would want to draw some
parallels from the above English
and American cases, we will set
out the facts in extenso and
also the relevant statutory
provisions which are in pari
materia to our own section 48 of
the Sale of Goods Act, and
finally the decisions of the
courts.
FACTS OF THE CASE – GLENCORE V
CIRRUS
In this action the
claimant (Glencore) sought
damages from the defendant
(Cirrus Oil) for repudiation of
a contract alleged to have been
made on 4th April 2012 for the
sale of 630,000 barrels of Ebok
oil.
Glencore's case is that the
contract was concluded when a
"firm offer" made in an email of
3rd April 2012 was accepted by a
"good news" email from Cirrus
Oil on the morning of 4th April
2012 in the context of
negotiations which had been
conducted between Mr Anthony
Stimler for Glencore and Mrs Ivy
Owusu for Cirrus Oil.
Ebok is a
young oil field in Nigeria with
several different wells and
reservoirs. Commercial
production commenced only in
December 2010. It was agreed
between the parties that Ebok
crude oil is invariably produced
and sold as a blend of oil from
various wells or reservoirs
within the Ebok field. The field
is subject to a joint venture
between Oriental Energy
Resources and Afren Plc, with
production controlled by Afren.
The oil produced was sold on
behalf of the joint venture by
Socar Trading SA, which is the
international trading arm of the
Azerbaijan state oil company.
It
appears that the nature of the
arrangement between Afren and
Socar involved Socar purchasing
the crude oil from Afren and
selling it at the same price to
its purchasers but receiving a
marketing fee for doing so of
something in excess of $0.25 per
barrel.
Following
the alleged email acceptance of
Cirrus Oil on 4th April 2012
Glencore purchased the relevant
cargo from Socar, specifically
for sale into Ghana, as the
cargo was intended to be sold by
Cirrus Oil to Tema Oil Refinery
("TOR").
Very
shortly after the email of 4th
April 2012, it became apparent
that TOR would not accept a
blend of Ebok crude oil,
insisting that the cargo should
comprise oil from only one well,
– well 16 – an assay of which
had been produced to it
(together with two other
assays).
Even though, many issues were
set down for trial, only the
following is germane to our
circumstance in this case. The
High Court, settled the issue
thus:-
i) “If there was a binding agreement
not induced by
misrepresentation, as it is
common ground that Cirrus Oil
refused to proceed with the
contract, what damages are
recoverable by Glencore? The
issue between the parties here,
on the basis that the loss falls
to be assessed as the difference
between the contract and market
value of the oil, is the true
open market value at the time it
would have been delivered at the
end of May 2012.”
The
judgment of the English High
Court, continued it’s analysis
by expatiating on section 50 (2)
and (3) of the English Sale of
Goods Act, 1979, which
provisions are in pari materia
to our own sections 47 and 48 of
the Sale of Goods Act.
“Section 50 (2) and
(3) of the Sale of Goods Act
1979 provides for damages for
non-acceptance, on the basis of
the prima facie rule that the
loss is to be ascertained as
"the difference between the
contract price and the market or
current price at the time or
times when the goods ought to
have been accepted or (if no
time was fixed for acceptance at
the time of the refusal to
accept)", is a claim for lost
profits.”
The judgment then continued by
explaining the rationale for the
computation of damages provided
under the said sections 50 (2) &
(3) of the English Sale of Goods
Act. It is to be noted that,
this rational is applicable to
our own circumstances and would
have been deemed to be
applicable to this case if the
plaintiff’s had pleaded and led
evidence on the multipliers to
entitle them to claims under
special damages, using the
second limb to the Hadley v
Baxendale principle. This is
what the learned trial
Commercial Judge said:
“The measure of damage
constituted by section 50(2) and
(3) of the Sale of Goods Act
was designed to compensate the
seller for the loss of the
bargain with the buyer by
computing how much worse off the
seller would be, if at the
time of the breach, he had sold
the goods to a substitute buyer.
The measure constitutes both a
ceiling and a floor to the loss
claim on the assumption that the
seller had gone out into the
market and sold at the date of
breach. Movement in the market
thereafter is then excluded from
the calculation on the basis
that any change in the figures
affected thereby is the result
of the seller's own decision to
play the market.”
OLOFFSON V COOMER CASE
The facts
and the decision of the
Appellate court of Illinois, in
the case of Oloffson v Coomer,
already referred to supra
supports the decision we have
come to in this case. In the
Oloffson v Coomer case, it
is to be noted that, the
judgment from which Oloffson
appealed awarded him as
plaintiff damages, which was the
difference between the contract
and the market prices in June,
1970, the day upon which Coomer,
the defendant first advised
Oloffson he would not deliver.
Facts and
decision in the said case are as
follows:-
“Oloffson
was a grain dealer. Coomer was a
farmer. Oloffson was in the
business of merchandising grain.
Consequently, he was a
“merchant” within the meaning of
section 2-1-4 of the Uniform
Commercial Code. (III.Rev. Stat.
1969, ch 26, $2-104). Coomer,
however, was simply in the
business of growing rather than
merchandising grain.
On April
16, 1970, Coomer agreed to sell
to Oloffson, for delivery in
October and December of 1970,
40,000 bushels of corn. Oloffson
testified at the trial that the
entire agreement was embodied in
two separate contracts, each
covering 20,000 bushels and that
the first 20,000 bushels were
to be delivered on or before
October 30 at a price of $1.12 ¾
per bushel and the second 20,000
bushels were to be delivered on
or before December 15, at a
price of $1.12 ¼ per bushel.
Coomer, in his testimony agreed
that the 40,000 bushels were to
be delivered but stated that he
was to deliver all he could by
October 30 and the balance by
December 15.
On June
3, 1970, Coomer informed
Oloffson that he was not going
to plant corn because the season
had been too wet. He told
Oloffson to arrange elsewhere to
obtain the corn if Oloffson had
obligated himself to deliver to
any third party. The price for a
bushel of corn on June 3, 1970,
for future delivery, was $1.16.
In September of 1970, Oloffson
asked Coomer about delivery of
the corn and Coomer repeated
that he would not be able to
deliver. Oloffson, however,
persisted. He mailed Coomer
confirmations of the April 16
agreement. Coomer ignored these.
Oloffson’s attorney then
requested that Coomer perform.
Coomer ignored this request
likewise.
The
scheduled delivery dates
referred to passed with no corn
delivered. Oloffson then covered
his obligation to his own vendee
by purchasing 20,000 bushels at
$1.35 per bushel and 20,000
bushels at $1.49 per bushel. The
judgment from which Oloffson
appeals awarded Oloffson as
damages, the difference between
the contract and the market
prices on June 3, 1970, the day
upon which Coomer first advised
Oloffson he would not deliver.
Oloffson
argues on this appeal that the
proper measure of his damages
was the difference between the
contract price and the market
price on the dates the corn
should have been delivered in
accordance with the April 16
agreement. Plaintiff does
not seek any other damages. The
trial court prior to entry of
judgment, in an opinion finding
the facts and reviewing the law,
found that plaintiff was
entitled to recover judgment
only for the sum of $1,500 plus
costs as we have indicated which
is equal to the amount of the
difference between the minimum
contract price and the price on
June 3, 1970, of $1.16 per
bushel (taking the greatest
differential from $1.12 ¼ per
bushel multiplied by 40,000
bushels). We believe the
findings and the judgment of the
trial court were proper and
should be affirmed.” Emphasis
supplied.
It should
be noted that, in the above
cited Illinois appellate court
case, the Plaintiff indeed
pleaded and led evidence on the
difference between the contract
price and the market price on
the due dates that the grain
should have been delivered.
However,
since the Plaintiffs have
abandoned their special damages,
and have admitted that no
evidence was led on how they
sold the rejected alumina to
Talco, they should be deemed not
to be entitled to any measure of
damages therein because they are
special in nature.
We have
derived some guidance in the
decision we have arrived at from
the combined effect of the
decisions in the Delmas
America Africa Line v Kisko
Products, Glencore Energy
v Cirrus Oil and Oloffson
v Coomer cases all already
referred to supra.
In view
of the above observations we
deem it expedient to set out the
facts in extenso in the said
Delmas America Africa Line Inc.
v Kisko Products (Ghana) Ltd,
as follows:-
“The
Plaintiff, a Ghanaian company
that dealt in used car spare
parts and
accessories, purchased a
consignment of those goods in
Canada. Ocean marine
shipping, the freight forwarders
engaged by the Plaintiffs,
contracted the defendants, a
shipping company based in the
United States, to transship
the goods to Ghana. When the
container arrived in
New York from Canada, the
defendants on the ground
observed that it
exceeded the maximum allowable
weight, engaged a stevedoring
company which reworked
the cargo and removed the
excess.
However,
when the cargo arrived in Ghana,
the Plaintiffs found that a
number of the items were
damaged and some of the goods
taken off the container in New
York were missing. The
defendants however ignored the
Plaintiffs’ requests
to address the problem. The
Plaintiffs, therefore
brought an action at
the High Court as owners or
consignees for general
and special damages
against the defendants for
breach of contract by
failing to provide adequate
protection for the goods in the
container. In their defence, the
defendants contended, inter
alia, that there was no privity
of contract between them and the
plaintiffs because the contract
for the shipping of the goods
was with Ocean Marine Shipping
and the consignees of the goods
were Ocean Lane Shipping and
since the Plaintiffs were
neither the consignees nor the
indorsees of the bill of lading,
they lacked capacity under
section 7 (1) of the Bill of
Lading Act, 1961 (Act 42) to
bring the action. Moreover, they
the defendants, were exempted
from liability under section 4
(2) (1) of Act 42. The
plaintiffs however submitted
that they had brought the
action not under Act 42 but at
common law as the undisclosed
principals of the consignors,
Ocean Marine Shipping. The court
found on the evidence, inter
alia that:
i. the consignors had
acted merely as agents of the
plaintiffs .
ii. the defendants were
aware that the plaintiffs were
the owners of the
goods.
iii. the defendants were
responsible for the reworking of
the goods and
iv the surveyor’s report
supported the claim of the
plaintiffs that the stowage
of the goods after
the reworking was
unsatisfactory.
The trial
Judge then held, inter alia,
that, as the real owners of the
goods, the plaintiffs were
entitled to sue the defendants
in their capacity as an
undisclosed principal, and on
the basis of the values of
both the damaged and lost goods
the Plaintiffs had pleaded,
she awarded the plaintiffs
both general and special
damages denominated in US
dollars. An appeal by the
defendants to the Court of
Appeal was dismissed, but the
Court changed the currency of
the damages awarded against the
defendants to Canadian Dollars.
Both
parties felt aggrieved by this
judgment and therefore whilst
the defendants appealed, the
plaintiffs also cross-appealed
to the Supreme Court.
The
Supreme Court by a majority
decision of 4 – 1, dismissed
both appeals, and held inter
alia as follows:-
“The
proper measure of damages for
the goods that were delivered in
a damaged condition was the
difference between the actual
or potential value of
the relevant item as undamaged
goods, and what those goods
would have fetched as damaged
goods at Tema. However,
the courts below did not have
any credible figures, actual or
estimated before them on the
latter aspect because the
plaintiffs made no special
pleadings for them.
Accordingly, the court would
merely award general damages
based on exhibit figures,
adjusted upwards by ten percent
as general damages.”
In view
of the above it is quite clear
that, having abandoned the
relief of special damages, the
plaintiffs can only be entitled
to award of damages under the
first limb of the rule in
Hadley v Baxendale. As has
been demonstrated in this
judgment, the Plaintiff’s have
not led any credible evidence
that will entitle them to the
enhance measure of damages that
they are requesting for.
In the
same vein, we have observed
that, the parties in the
Glencore Energy v Cirrus Oil
cases already, referred to
supra, led expert evidence on
the movement of the Ebok Oil on
the markets to demonstrate how
sophisticated and developed it
was. Glencore Energy thus must
be deemed therein as being
forthright by coming out with
all the necessary evidence
capable of assisting the court
in arriving at the decision
given therein.
In any
case, from the way the learned
trial Judge analsyed the
judgment, it is clear that the
measure of damages in issue
therein was special damages. For
example, the learned trial Judge
observed thus:
“The overall
position which emerges therefore
is that of a crude oil which
traded in January – July 2012 at
prices between DTD - $4.40 and
DTD $ 5.50 per barrel.”
Elsewhere
in the judgment, the learned
trial Judge remarked as
follows:-
“In the light of these matters,
and doing the best I can with
the evidence available, I find
that the market value of the
Glencore/Cirrus Oil value on an
FOB Nigeria basis was DTD -$4.90
per barrel which equates to DTD
-$3.75 CFR Tema.
I find that, on the balance of
probabilities, the cargo
quantity would have been 661,500
barrels as Glencore would have
exercised its option to take the
additional 5% on top of the
630,000 barrel figure (since it
was making such a profit) and
there was oil available to take,
as shown by the contract
quantity sold to Exxon.”
The English High Court,
concluded the judgment thus:
“The difference between the net
contract price of DTD + $0.03
per barrel and the market value
of DTD -$3.75 per barrel is
therefore $3.78 per barrel. The
difference on a cargo quantity
of 661,500 barrels amounts to
$2,500,470. “
All these
are clear indications that it
was special damages that the
court considered and awarded.
Whilst we are not dealing with
special damages in the instant
case, this measure of damages
therefore becomes irrelevant and
superfluous.
CONCLUSION
We are persuaded by the rule in
Hadley v Baxendale and the
Glencore v Cirrus and the
other cases referred to and
state that, the computation of
damages under Section 48 of the
Sale of Good Act can either be
general or special depending on
the circumstances of each case.
The first limb of the principle in
Hadley v Baxendale applies
to general damages, that is
damages that are foreseeable
without proving that special
circumstances were brought to
the attention of the person in
breach. The second limb of the
principle applies to special
damages and this implies that
those special damages have been
proved, and are those damages
that are foreseeable by the
parties at the time of
contracting because special
circumstances have been brought
to their attention and this
makes the damages within the
reasonable contemplation of the
parties. Again, as the name
implies, being special damages
they have to be pleaded and
proven at the trial.
It will be recalled that, the
Plaintiff’s endorsed their writ
of summons with a relief of USD
6,918,750.00 as special damages
for the loss they suffered for
the breach of contract. However
as later events have proven, the
trial court dismissed the claims
of special damages as not having
been proven, and in this court,
the Plaintiffs have abandoned it
altogether.
What this therefore means is that, the
Plaintiffs must be deemed to be
entitled to only general damages
under the heads of claim under
section 48 of the Act.
See the case of Delmas America
Lines v Kisko already
referred to. Since the
plaintiffs have not led any
evidence on the multipliers
which will entitle the court to
use in the award of the general
damages on the lines suggested
in the Delmas America Line case,
the Plaintiffs must be deemed to
have not led credible evidence
to have entitled them to
enhanced general damages using
the first limb of the principle
in Hadley v Baxendale.
We have read the statement of case of
the Plaintiff’s and would want
to reiterate the fact that, the
contract price/market price
differential stipulated in
section 48 of the Act, is not a
computation of lost profits, as
was contended and sought to be
applied in the mathematical
computation by the plaintiff’s.
Lost profit is the difference between
the total net cost to the seller
of acquiring the goods and
bringing them to the market on
the one hand and the net sale
price that would have been
obtained on the other. In the
Glencore v Cirrus Oil case,
already referred to supra, the
court stated that, “The
difference between this measure
of damages and the section 50 of
the English Act computation is
illustrated by the different
claims originally put forward in
the particulars of claim by
Glencore.” See also Oloffson
v Coomer, already referred
to.
In expatiating further on the
applicability of the section 50
(2) and (3) of the English Sales
of Goods Act, which are in pari
materia with our own section 48,
the learned Justice Cooke stated
as follows in the Glencore v
Cirrus case as follows:-
“The alternative claim
which was the only one pursued
at the trial, was the
claim based on section 50 (2)
and (3) of the Sale of Goods
Act. The point is
illustrated by a simple
situation where the cost of the
goods to the seller is
£100, the on sale price is also
£100, and the market price at
the time of the breach by the on
sale buyer is £50. If the buyer
had accepted the goods, the
seller would in fact have made
no profit at all, but, in
accordance with section 50
(2) and (3) of the Sale of Goods
Act, the prima facie measure of
loss is £50 because the seller
is left with goods worth less
than the contract price.”
With the above explanation, we are of
the considered view that, the
Plaintiffs if they had succeeded
in proving their special damages
would have been entitled to
measure of damages using the
above formula or if they had
made alternative claims based on
proven damages for breach.
Under the circumstances, what the
Plaintiffs are entitled to are
general damages using the first
limb of the Hadley v Baxendale
principle.
However, since the Plaintiff’s did
not lead sufficient evidence
with any degree of clarity and
certainty to merit the
computation of damages therein,
we are of the view that the
award of nominal damages by the
trial court and confirmed by the
Court of Appeal in favour of the
Plaintiffs are considered
adequate.
We will therefore dismiss the appeal
herein.
(SGD)
V. J. M. DOTSE
JUSTICE OF THE SUPREME COURT
(SGD)
G. T. WOOD (MRS)
CHIEF JUSTICE
(SGD)
J. ANSAH
JUSTICE OF THE SUPREME COURT
(SGD) P. BAFFOE BONNIE
JUSTICE OF THE SUPREME COURT
(SGD) J. B. AKAMBA
JUSTICE OF THE SUPREME COURT
COUNSEL
DAVID
ATTA ASIEDU ESQ. WITH HIM DAVID
ADU-TUTU JNR. JOSEPH KWADWO
KONADU AND NELSON AKONDOR FOR
THE PLAINTIFF
/APPELLANT/APPELLANT.
RAYMOND CODJOE ESQ. WITH HIM
BARBARA HOLM-FLEISCHER FOR THE
DEFENDANT/RESPONDENT/ RESPONDENT |
