Tradax (Ir.) Ltd v Irish Grain Board

• Jurisdiction: Ireland
• Judge: O'HIGGINS C.J.,Henchy J.,GRIFFIN J.,McCARTHY J.
• Judgment Date: 01 January 1984
• Neutral Citation: 1984 WJSC-SC 881
• Court: Supreme Court
• Docket Number: [S.C. No. 323 of 1981]
• Date: 01 January 1984

TRADAX IRL LTD v IRISH GRAIN BOARD

TRADAX IRELAND LIMITED

Plaintiffs

and

IRISH GRAIN BOARD LIMITED

Defendants

1984 WJSC-SC 881

O'Higgins C.J.

Henchy J.

Griffin J.

Hederman J.

McCarthy J.

(323/81)

THE SUPREME COURT

Subject Headings:

CONTRACT: implied term

SALE OF GOODS: price

1 JUDGMENT delivered the 18th day of November 1983by O'HIGGINS C.J.

2 This appeal has been brought by the Defendants against the judgment given in the High Court by Mr. Justice Gannon that they are liable to the Plaintiffs in damages for breach of contract. The damages awarded amounted to £215,000, and, on the basis that the Defendants are so liable, as found in the High Court, the amount of such damages is not in issue on this appeal. In asserting the Defendants" liability, the Plaintiffs alleged that a binding oral contract had been concluded between the two Companies on the 23rd March 1978, whereby the Defendants agreed to sell to the Plaintiffs a total of 25,000 metric tonnes of Irish feed barley for the total sum of £2,472,500 whichcontract, while in course of performance, was wrongfully cancelled and repudiated by the Defendants. The negotiations, which the Plaintiffs allege resulted in the conclusion of this contract, took place by telephone on the 23rd March 1978 between the Plaintiffs" Managing Director, Mr. Ronan Fitzpatrick, and Mr. Timothy Kyne, the General Manager of the Defendants. It is not in issue that such telephone conversations took place nor that they related to the proposed purchase by the Plaintiffs of the stated metric tonnage of Irish feeding barley for the total price mentioned. It is also not in issue that the tonnage involved was in two lots, one of 20,000 tonnes to be sold F.O.B., New Ross, at £99.50 per metric tonne and the other of 5,000 tonnes to be sold ex store at £96.50 per metric tonne. The Plaintiffs invited the Court to regard the transaction as one relating to the sale of the stated tonnage in two lots and at two prices because of the varying delivery conditions which attached, while the Defendants contended that two separate transactions were involvedwhich if concluded would have resulted in two separate and distinct contracts. The existence of these two varying points of view is only of relevance in relation to that part of the Defence filed by the Defendants, in which reliance is placed on Section 4 of the Sale of Goods Act 1893 and, in my view, is of minimal importance in thiscase.

Evidence at trial

3 The trial of this action proceeded over 12 days in the High Court and the detailed oral evidence of the many witnesses heard by the learned trial Judge has been transcribed in eleven books of evidence which, with three separate books of exhibits and documents, represented the vast amount of material which he had to consider. In his judgment he has summarised the surrounding facts, the details of the evidence as to the negotiations on the 23rd March 1978 and the various events which ensued thereafter. I do not find it necessary in this judgment to go over ground which has already been adequately convered by him. I will,however, refer to particular aspects of the facts and evidence when I consider such reference to be helpful.

4 At the trial of the action and on this appeal the Defendants disputed the Plaintiffs" claim on three grounds. In the first place it was contended that the telephone conversations of the 23rd March 1978 did not result in the conclusion of a contract because the two negotiating persons were not, as it was put, ad idem. It was submitted on behalf of the Defendants that while each of the two negotiators involved thought that a contract had been concluded, each thought it to have been so concluded on different terms and accordingly there was no true concensus. Needless to say if this ground were established it would constitute a complete answer to the Plaintiffs" claim and it would be unnecessary to consider any other issue. The second ground relied on by the Defendants was to the effect that if oral contracts were entered into for the sale to the Plaintiffs of the feeding barley in question, the same were unenforceable because of non-compliance with Section4 of the Sale of Goods Act 1893. As to this ground, the learned trial Judge held that a telex and a letter, each dated the 21st April 1978, which were sent by the Defendants with the object of cancelling the contracts, constituted a sufficient note or memorandum for the purposes of Section 4. In my view, the learned trial Judge was correct in so holding and it surprises me that this ground should again have been argued on this appeal. It is sufficient to say that I regard it as unarguable and for this reason it is no longer necessary to consider this ground of appeal. The third ground upon which the Defendants have contested the Plaintiffs" claim relates to the date upon which letters or a letter of credit required by the contracts or contract as a method of payment should have been established or opened by the Plaintiffs in their bank in favour of the Defendants. In this regard the Defendants in their Defence allege that "in relation to any barley for export or removal out of the Twenty-Six Counties, letters of credit should have been established and credit opened before any delivery was sought" and go on to say:"In relation to the amount of barley taken from the Edenderry stores for dispatch to Northern Ireland, that same was taken before any letters of credit had been established and credit opened and was wrongfully taken without the authority and consent of the Defendants." The issue raised by this plea falls to be considered in a somewhat different form by reason of the submissions made on this appeal. Mr. Johnson of the English Bar, who appeared with Mr. Gogarty and his colleagues for the Defendants, and whose clear and concise arguments I found to be of considerable assistance, submitted that the letter or letters of credit should have been opened or established, at the latest, by the first day of the contractual delivery period, which in this case was the 1st April 1978. Mr. Johnson, no doubt, felt obliged to put his submission in this form, rather than as pleaded in the Defence, by reason of the authorities upon which he relied. He conceded that having regard to the facts of this case this submission, if correct, had the effect that the contract had been broken by the Plaintiffs before thefirst deliveries had in fact been made.

Was a contract concluded?

5 In relation to the submission that no binding contract had been entered into the Defendants submit that from the beginning to the end of the exchanges between the parties there continued to be disagreement on three essential elements of the contract which was under negotiation. These three essential elements were:

6 (1) The description of the goods to be sold,

7 (2) The rate per working day at which the goods were to be loaded at Rosslare by the Defendants, and

8 (3) The nature of the documents upon which the letter or letters of credit would operate.

9 This submission and issue was, of course, very clearly presented at the trial, and it is certain that the trial Judge heard and considered the evidence with it very much in mind. However, on this appeal, the Defendants maintain that he erred in concluding, as he did, that the existence of the alleged differences was not supported by the evidence and that in fact a valid binding contract hadbeen considered. It is necessary, therefore, to consider the conclusions reached by the learned trial Judge and to see whether such were supported by the evidence.

10 With regard to the description of the goods, Mr. Fitzpatrick, who was negotiating on behalf of the Plaintiffs, used the description "62/63-16-2" in relation to the quality of the feeding barley which he was seeking to buy. Mr. Kyne on behalf of the Defendants, while not rejecting this description, used the term "F.A.Q." which meant "fair average quality". The trial Judge dealt with this apparent disparity in the following passage in his judgment: (I quote)

"However, without any discussion about F.A.Q., Mr. Kyne accepted that Mr. Fitzpatrick wanted the standards described as 62/63-16-2 and, although he did not expressly assent to this, he knew that the 1977 season barley crop in Ireland yielded 64/65 kilogrammes per hectolitre on average. From his knowledge of the regular inspection for moisture content in all the Defendants" stores, he was prepared to send Irish feed barley from that season's crop into Common Market intervention at a standard of 15% maximum moisture. Mr. Kyne said nothing to Mr. Fitzpatrick to indicate that he wouldnot agree to the requested standard 62/63-16-2 or to suggest that there would be any difficulty - as he knew there would not be - in conforming to such standards, not did he suggest that his initial reference to f.a.q. signified anything different from 62/63-16-2 which he knew Mr. Fitzpatrick required."

11 The Judge went on, in effect, to conclude that the description specified by Mr. Fitzpatrick was accepted by Mr. Kyne. I have read with care the books of transcript and in particular the evidence of Mr. Fitzpatrick and Mr. Kyne, and that of other relevent witnesses. I have no hesitation in concluding that this assessment by the Judge of the effect of all that evidence, and the finding of fact which it involves, is fully and amply justified. I have, therefore, come to the conclusion that the submission that the Judge erred in his finding that the negotiating parties had agreed on the description of the goods is unsustainable. I would, therefore, hold against the Appellants in this regard.

12 It is further submitted that the learned trial Judge erred in his finding that the parties had reachedagreement as to a loading rate in respect of the 20,000 tonnes to be delivered F.O.B. Rosslare. The evidence in this regard was given by Mr. Fitzpatrick, Mr. Gleeson and...