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ΠΑΓΚΥΠΡΙΟΣ ΔΙΚΗΓΟΡΙΚΟΣ ΣΥΛΛΟΓΟΣ
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(1987) 1 CLR 523
[A. LOIZOU. J.]
AHILLEAS ELIADES TRADING AS
SOPHOCLES ELIADES (SUCCESSORS),
Plaintiffs,
v.
1. ADRIATICA Dl NAVIGAZIONE SOC. PER AZIONE,
THROUGH THEIR AGENTS A.L. MANTOVANI AND SONS LTD.,
2. THE VESSEL «SERENISSIMA EXPRESS»,
Defendants.
(Admiralty Action No. 72/81).
Damages — Breach of contract — Short delivery of goods — Measure of damages — The Contract Law, Cap. 149, section 73 — In the circumstances of this case the carrier is not liable for the plaintiff's loss of profit.
In this Admiralty Action the plaintiffs claim the amount of £412.- Cyprus pounds, damages for breach of contract in respect of short delivery of goods the property of the plaintiffs.
The sum of C£412. - consists of (a) £300. - actual cost of the cargo, and (b) £ 112. - clear profit thereon.
The question that arose for consideration was whether the plaintiff is entitled to «clear profit».
Held, (1) The law governing the question of damages is contained in section 73 of our Contract Law, Cap. 149, and had extensively been considered by this Court in the case of Thunder Shipping Co. Ltd. v. Lloyds Triestino Di Nav. S.P.A. (1984) 1 C.L.R. 135. Generally whether one is entitled to recover for loss of profits depends entirely on the circumstances.
(2) In the present case there was no evidence of any special circumstances, nor of any contract of immediate resale, nor any evidence that the goods short landed could not be obtained later. To the contrary, such goods which were ordinary goods were readily available as there was an available market to obtain them and one must not loose sight of the plaintiff's duty to mitigate his loss. Of course though they would be obtained at a later date, there has been no allegation that there would not be a market for such goods at such later date.
Judgment for plaintiffs for
£300.-with 3/4ths of their costs.
Cases referred to:
Anglo - Saxon Petroleum v. Adamastos Shipping Co. [1968] 1 Lloyds Rep. 73.
THE ARPAD, 49 Lloyds Rep. 313;
Hadley v. Baxendale [1854] 9 Exch. 341;
Thunder Shipping Co. Ltd. v. Lloyds Triestino Di Navigosione S.P.A. (1984) 1 C.L.R. 135;
Victoria Laundry v. Newman Industries Ltd., [1042] 2 KB 528.
Admiralty action.
Admiralty action for £412. = damages for breach of contract in respect of short delivery of goods.
St. Mc Bride, for the plaintiffs.
Chr. Mitsides, for the defendants.
Cur. adv. vult
A. LOIZOU J. read the following judgment. In this Admiralty Action the plaintiffs claim the amount of £412.- Cyprus pounds, damages for breach of contract in respect of short delivery of goods the property of the plaintiffs.
The facts, as they appear in the petition and which are not disputed are briefly as follows:
The plaintiffs were at all material times, the owners of goods shipped on board the vessel «Serenissima Express» at the port of Venice, Italy, and/or holders and/or indorsees of bill of lading No. 50 dated 30th September 1979.
Defendants 1, a company incorporated in Italy, were at all material times the owners and/or charterers of the defendant 2 ship, and carried on inter alia, the business of carriers for reward.
Pursuant to a contract of affreightment contained in the aforesaid bill of lading, defendants 1, received on board the defendant 2 ship «Serenissima Express» at Venice, Italy, two pallets containing 24 boxes of household articles which they agreed to carry and deliver to the plaintiffs upon the terms and conditions stated therein.
It is alleged by the plaintiffs that the defendants failed to deliver to them goods the market price of which amounted to £412.- in view of which the plaintiffs claim:
(a) C£412.- damages for breach of contract and/or breach of duty and/or fault and/or negligence of the defendants and/ or their servants and/or agents and/or
(b) the same amount by way of damages sustained by the plaintiffs by reason of the conversion of the non-delivered goods by the Defendants and/or their servants and/or their agents.
(c) Interest on the above amount at 9% per annum as from 17th October, 1979.
(d) Costs.
It was stated by the plaintiff, in evidence that the sum of C£412.-consists of
(a) £300 actual cost of the cargo, and
(b) £112 clear profit thereon.
It was contended by the plaintiff that they were entitled to recover damages for the loss of «clear profit» which they would have made on the goods, «clear profit» being a profit unaffected by any special considerations such as a further contract of sale within the knowledge of the seller/carrier, since it was submitted in cases of short delivery the measure of damages is the value of the goods they would have had at the time and place at which they ought to have been delivered and not the invoice or CIF value.
As authority for the above proposition Carver «Carriage of Goods by Sea» Vol. 2 [13th] Ed. para 2189, Anglo-Saxon Petroleum v. Adamastos Shipping Co., [1968] Lloyds Rep. 73, and The ARPAD, 49 Lloyds Rep. 313 were cited. I may as well say here that neither of them help the case of the plaintiff on the issue of the loss of profits by the consignee.
On the other hand counsel for the defendants submitted that loss of profit can be recovered by the buyer of the goods only if his loss of profit was within the contemplation of both parties and if the carrier was expected or could be assumed to have knowledge of the loss that might be caused to the buyer by the delay or non-delivery (see Hadley v. Baxendale [1854] 9 Exch. 341).
I would consider that the above statement of the law is correct. In the present case there was no evidence of any special circumstances, nor of any contract of immediate resale, nor any evidence that the goods short landed could not be obtained later. To the contrary, such goods which were ordinary goods were readily available as there was an available market to obtain them and one must not loose sight of the plaintiff's duty to mitigate his loss. Of course though they would be obtained at a later date, there has been no allegation that there would not be a market for such goods at such later date.
The law governing the question of damages is contained in section 73 of our Contract Law, Cap. 149, and has extensively been considered by this Court in the case of Thunder Shipping Co., Ltd. v. Lloyds Triestino. Di Nav S.P.A. (1984) 1 C.L.R 135. In this case it was held that:
«That the defendants would be liable for damage resulting from special circumstances when those special circumstances have been brought home to them in such a way as to show that he has accepted or is taken to have accepted risk of payment of 2% by way of damages: that this amount will be allowed as not only the parties contemplated that the damages resulting from the special circumstances might occur, but they further contemplated that the defendant was taking the risk of being liable for such consequences should it occur (see s. 73 of Cap. 149).»
Generally whether one is entitled to recover for loss of profits depends entirely on the circumstances; Victoria Laundry v. Newman Industries Ltd., [1942] 2 KB. 528, where it was held that the carrier, on the facts known to him, as a reasonable man could have foreseen the loss of profit but not the loss under a special contract of which he had no knowledge.
On the issue of damages for nondelivery of goods, reference may be made to Pollock and Mulla, Indian Contract and Specific Relief Acts once section 73 of our Contract Law, Cap. 149 is identical to section 73 of the Indian Contract Act. At pp. 615-616 the following statement of the Law is to be found.
«Generally it is 'quite settled that on a contract to supply goods of a particular sort, which at the time of the breach can be obtained in the market, the measure of damages is the difference between the contract price and the market price at the time of the breach. The computation of damages by taking the difference between the contract price and the lowest market price on the date of the breach is neither illegal nor unreasonable. Where the seller contracted to sell to another party and without notice cancelled the contract, the buyer was held entitled to damages for breach of contract. If the market rate on the due date is not available, the Court may take into consideration the rate prevalent just before and just after the date. But the subject-matter of the contract may not be marketable. In that case the value must be taken as fixed by the price which actually has to be paid for the best and nearest available substitute. Hinde v. Liddell (1875) L.R. 10Q.B. 265, 269, ElbingerActien-Gesellschaft v. Armstrong (1874) L.R. 9 Q.B. 573, 476. Where no such substitute is available, then if there has been a contract to resell them the price at which the contract was made will be evidence of their value, but if there has been no such contract, the market value may be estimated by adding to their price at the place where they purchased the cost and charges of getting them to their place of destination, and the usual importer's profits: Borries v. Hutchinson (1865) 18 C.B.N.S. 445; 44 R.R. 563; O'Hanlan v. G.W. Ry. Co. (1865) 6 B. & S. 484; Cooverjee Bhoja v. Rajendra Nath (1909) 36. Cal. 617; Hajee Ismail & Sons v. Wilson & Co. (1918) 41 Mad. 709, 715; 451.C. 942. On a breach of contract to supply goods by the seller the buyer is entitled to recover all the expenses of procuring same or similar goods.»
In the present instance there is no evidence that no such substitute is available, on the contrary there is evidence by the plaintiff himself that similar goods could be obtained from the same source but with some, however, delay, in which case the recovery of profits would merely be deferred until the disposal of such new consignment. Moreover there is no allegation and no evidence that there was a contract to resell the goods in question and there being no substitute available the price at which the contract was made including the importer's profit might have been evidence of their value.
In the premises the plaintiffs' claim for C£112.- profit is dismissed. There will therefore be judgment for the plaintiffs against the defendants jointly and severally for C£300.- with three fourths of their costs on that amount.
Judgment and order
for costs as above.