Nigerian Sweet & Confectionary Co. Ltd V Tate & Lyle Nigeria Ltd (1965) LLJR-SC

Nigerian Sweet & Confectionary Co. Ltd V Tate & Lyle Nigeria Ltd (1965)

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BAIRAMIAN JSC

The plaintiffs have appealed against the High Court decision in Kano Suit 113/63 on the ground that although the judge found the defendants in breach of the contract between the parties, he did not award damages against them, and the defendants have cross-appealed on the ground that although the judge found the defendants in breach of contract between the parties, he did not award damages against them, and the defendants have cross-appealed on the ground that they had not been guilty of any such breach.

The plaintiffs wrote to Messrs, Tate and Lyle (Nigeria) Ltd. (the defendants) on the 7th February, 1963 as follows:-

‘With reference to our telephone conversation yesterday, we would like to confirm our order of 500 (five hundred) tons of granulated sugar.

Would you kindly arrange shipment as follows:

80 tons

February 63

70 tons

March

70 tons

April

70 tons

May

70 tons

June

70 tons

July

70 tons

August

500 tons’

The defendants answered on the 12th February, 1963:

‘I refer to your letter LET/SB/227 of the 7th of February and confirm that your order for 500 tons of granulated sugar will be available as stated in your letter at a price of 89s-6d per bag-cash on delivery.

Assuring you of our best attention at all times. ‘

It will be convenient to refer to the plaintiffs as the buyers, to the defendants as the sellers.

The sellers offered the February and March instalments together as one lot on or about April 2nd, and the buyers accepted the lot and took delivery. The sellers offered the April instalment, and the buyers took it up, on or about May 15th. The sellers offered the May and June instalments in one lot together on or about June 29th; the buyers accepted 2,000 bags (100 tons) on or about July 5th, and the remaining 800 bags on or about August 26th. The buyers said they had no room for the whole lot when taking 2,000 bags, and would take the remaining 800 bags in a few weeks time; in the meantime the sellers were asking the buyers to take delivery of the 800 bags, but that did not give rise to any dispute. The dispute relates to the last two instalments-those for July and August.

According to the trial judges finding, the sellers offered these instalments as one lot on September 2nd or 3rd, and the buyers said they had no room in their stores. Both sides kept silent thereafter, but about November 6th the buyers asked for these instalments of sugar, and the sellers refused to give delivery, so the buyers sued them for damages. The learned judge decided that the sellers were in breach of the contract, but did not believe the buyers’ story that they bought later from another firm at 115s and I 16s a bag, and refused to give them damages. Hence the appeal and cross-appeal. The cross appeal has to be dealt with first.

The sellers argue that the letters exchanged were so ambiguous that there was no enforceable contract. That does not come with good grace from them: they sold sugar to the buyers under the contract and asked them to take up the remaining 800 bags of the May-and-June lot. The time of delivery was not defined: delivery would be within a reasonable time.

Secondly, the sellers argue that when the buyers said in early September that they could not take the sugar as their stores were full, they were breaking the contract because the sellers could not make delivery, that the buyers did not say they would take the sugar within a certain time or keep the contract open, so the sellers could form the belief that the buyers were no longer minded to take the sugar; and they were very late in asking for it about November 6th. The sellers learned counsel puts the law in this way: that, in order to set the sellers free, the buyers must evince that they were not willing to perform the rest of the contract, and that the question is whether they set the sellers free by their conduct.

Mr Hoar, the sellers manager for the North, did not tell the buyers managing director in September that the sellers would regard the contract at an end if he did not take delivery. Mr Hoar wished to take instructions from his head office, and about September l8th his orders from Lagos were to treat the contract as being at an end; also not to communicate with the buyers. The price at the end of August was up to 105s or 110s: the contract price was 89s-6d. Mr Hoar also says that at that time of the year it is always difficult to sell sugar; the cane crop is not in, and until the state of the crop is known the market is uncertain; if the market price in November had been less than 89s-6d, the sellers might have delivered to the buyers if they had not needed the sugar for another purpose. On 9th November the Kana market price was 112s. When Mr Hoar saw the buyers managing director in November and the director asked for the sugar-we now quote from Mr Hoars evidence:-

‘I said we had offered it to the managing director in September, 1963 and since his Company had not then taken it they had broken the contract and we were no longer under any obligation to supply them with sugar.’

The director said he would put the matter in the hands of their solicitors, who began this suit on December 4th.

As to the principle of law involved Mr Grey for the sellers referred to Mersey Steel and Iron Co, v. Naylor. Benzon and Co. (1884) 9 A.C. 434, at 438, where Lord Selborne, L.C, gave his understanding of the rule laid down by Lord Coleridge in Freeth v. Burr (L.R. 9 CP 208, at 213). Mr Horn for the buyers referred- to James Shaffer Ltd. v. Findlay Durham and Brodie [1953] 1 W.L.R. 106. In this case, after citing various ways of stating the law, at p. 117, Singleton L.J. said as follows, at p. 120 of [1953] l W.L.R.:

“I go back to the words of Lord Coleridge in Freeth v. Burr: ‘… . the real matter for consideration is whether the acts or conduct of the one do, or do not, amount to an intimation of an intention to abandon and altogether to refuse performance of the contract. I say this in order to explain the ground upon which I think the decisions in these cases must rest. There has been some conflict amongst them. But I think it may be taken that the fair result of them is as I have stated, viz., that the true question is whether the acts and conduct of the party evince an intention no longer to be bound by the contract; or to the words of Atkin L.J. in the Spettabile case, (121 L.T. 628). After he had cited definitions of repudiation he added: They all come to the same thing, and they all amount at any rate to this, that it must be shown that the party to the contract made quite plain his own intention not to perform the contract’.

Thus the question is whether in the present case the buyers were evincing an intention no longer to be bound by the contract when they said in early September that they had no room in their store.

Mr Hoar says he took that to mean that they did not want the sugar; he did not believe it was true that there was no room; he thought there probably was room; but he did not know their stores. That is his evidence, and it does not justify his belief that the buyers did not want the sugar at all. The most that the sellers could reasonably understand was that the buyers did not want the sugar just then. The buyers received 800 bags, the balance of the May-and-June lot, towards the end of August. Either because they had no room in their stores, or because they had no money in hand, or because their trade was not brisk, in early September they wanted postponement of delivery, and that could not be taken as an intimation to abandon the contract and refuse performance of it see Tyers v. Rosedale and Ferryhill Iron Co. Ltd ., 10 Exch, 195, and by way of contrast Pearl Mill Co. Ltd. v.Ivy Tannery Co. Ltd. [1919]1 K.B. 78. Instead of telling the buyers in September that unless they took delivery by a certain date the sellers would treat the contract as being at an end, the sellers chose to keep silent and left things in a way which could be fairly understood as a tacit agreement to postpone delivery. The cross-appeal must fail.

As to the buyers appeal, the learned trial judge was not satisfied with the evidence that they bought at 115s and 116s, and took the view that as they did not prove pecuniary loss. they could have no special damages, and that the evidence did not justify any award of general damages either. With respect, he erre

Other Citation: (1965) LCN/1210(SC)