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COURT OF APPEAL (CIVIL DIVISION) [1991] 2 Lloyd's Rep 23 HEARING-DATES: 11, 13 March, 12 April 1991 12 April 1991 CATCHWORDS: Sale of goods (fob) -- Loading obligation -- Demurrage -- Cargo of maize to be shipped fob Rosario -- Vessel delayed due to congestion and documents not being in order -- Whether sellers in breach of obligation to load -- Whether buyers entitled to demurrage. HEADNOTE: The sellers (Tradax) sold to the buyers (Roplak) 30,000 tonnes of maize fob Rosario in three instalments. The third instalment of 10,000 tonnes was due for shipment in June. Roplak sold that 10,000 tonnes together with 2000 tonnes from another source to the buyers (Becher). The maize was sold on the terms of two standard sets of conditions, GAFTA 64 and the Argentine Centro conditions. The Argentine Centro conditions provided inter alia: Loading Rate: Once vessel is berthed alongside berth suitable to sellers . . . sellers guarantee provided vessel is able to receive, a minimum average loading rate of 500 tonnes per weather working day . . . but sellers shall not be responsible for any time lost due to . . . any other cause of Force Majeure . . . Pre-advice: Buyers to give sellers at least fifteen days notice of readiness of vessel to load . . . GAFTA 64 provided inter alia: 7. Delivery. Buyers shall tender vessel in readiness to load between -- both dates inclusive. Sellers shall be entitled to receive at least -- consecutive days notice of probable readiness of vessel . . . Vessel to load in accordance with the custom of the port of loading . . . By telex of May 24, 1985, the buyers nominated the vessel World Navigator to load the June shipment of 12,000 tonnes. The vessel arrived at Zona Comun on June 13, 1985, and tendered notice of readiness. Because of congestion at Rosario roads the vessel was instructed to remain at Zona Comun. Owing to the fact that the shipper's documentation was not in order, World Navigator lost her place in the loading schedule and was overtaken by other vessels. She eventually arrived at Rosario on July 11, 1985, and was moored at unit 6 on July 18, loaded a total of 24,000 tonnes and completed loading on July 22, 1985. The buyers claimed from the sellers damages for wrongfully detaining the vessel World Navigator at the port prior to commencing loading. The buyers contended that the sellers had the obligation to deliver the goods by loading them when the vessel was ready to receive them. The delay in loading the 12,000 tonnes was on the sellers and they were liable for the additional demurrage incurred. The disputes were referred to arbitration. The Board of Appeal of GAFTA rejected the buyers' claim stating that the load rate was 500 tonnes per weather working day as per Centro terms. Laytime commenced earlier on June 26, 1985, and the vessel completed loading 24,000 tonnes on July 22, 1985. The vessel used less than 18 days (allowing for time not counting) of laytime while under the contract 24 days were allowed. The buyers appealed. -- Held, by QB (Com Ct) (PHILLIPS, J), that (1) the loading rate in the Centro form did, on its true construction set out a comprehensive statement of the sellers' obligations in relation to loading; the obvious object of a clause dealing with loading rates was to define the rights and obligations of the parties in relation to loading in a manner that produced certainty; where a loading rate was specified it was implicit that the rate in question was a minimum rate; and the clause was concerned with a comprehensive definition of the sellers' loading obligation and not merely a guarantee that the performance required by some alternative obligation would not fall below the specified rate; cl 7 of GAFTA 64 primarily contemplated those aspects of customary procedure which affected the speed of loading such as work at weekends; the Centro form loading rate clause constituted an alternative stipulation governing such matters and its displaced the GAFTA provision; (2) the evidence demonstrated that World Navigator could not berth without the co-operation of the sellers in providing appropriate loading documentation and it was common ground that it was necessary to imply into the fob contract a term requiring the sellers to provide that co-operation; there was an implied obligation on the sellers to act with reasonable despatch and in accordance with ordinary practice in doing those acts which were necessary to enable the buyers to present their vessel for loading at the berth; if availability of goods sold was necessary to enable the buyers' vessel to berth there was an absolute obligation on the sellers to have the goods available when the vessel arrived provided 15 days' notice had been given; it might be that this obligation could be extended to cover the procurement of documentation if this was something solely within the control of the sellers; (3) if the sellers were in breach of the duty that they were under, the immediate consequence of their breach was that World Navigator was detained for a period which on the board's findings was about 17 days before being permitted to berth; when assessing the damages the board should not have proceeded on the premise that had the vessel berthed promptly the sellers would have loaded so slowly that they would have used all the available laytime; the board's task was to ask how long loading would have taken had World Navigator berthed promptly without losing her place in the queue; if the sellers were in a position to influence the loading rate then the board ought to have considered how they would have done so and that question fell to be answered by considering all the factors that would have been likely to influence their conduct; both appeals would be allowed and the awards remitted to the board for reconsideration of the buyers' claim for damages for detention. The sellers appealed the issued for decision being: (1) What was the sellers' obligation, if any, with regard to enabling the vessel to reach loading berth after having received a valid notice of readiness? (2) What was the sellers' obligation with regard to the rate of loading once the vessel had berthed and was able to receive the cargo? (3) On what basis should damages be assessed if the sellers were in breach of an obligation under (1) above. -- Held, by CA (PARKER and STAUGHTON, LJJ and SIR DAVID CROOM-JOHNSON), that (1) there was an obligation to do all that was necessary to enable the vessel to berth on the expiry of the 15 days' notice; it was probably impossible and undesirable to define the precise ambit of the obligation for in all cases what was to be implied would or might be dependent both on the terms of the contract and the surrounding circumstances. -- Mackay v Dick, (1881) 6 App Cas 251, considered; (2) the GAFTA provision was that the vessel was to load in accordance with the custom of the port unless otherwise stipulated; the Centro clause did otherwise stipulate and under that clause the sellers would not be in breach if they maintained an average of at least 500 tonnes a day; the clause was intended to be a comprehensive clause providing as it did for exceptions from laytime; and the sellers were entitled once the vessel was in berth to take up to 48 counting days to load the complete cargo or 24 counting days to load the contracts in question; (3) if the breach had not occurred laytime would have begun to run on June 26 and the sellers' obligation would have been to load in the number of counting days arrived at by the application of the Centro terms but no more; a defendant in performing his contractual obligations was assumed to have chosen to perform them in the way least beneficial to the plaintiff; there was no question of looking at the extraneous events and therefore no question of it being permissible to look at the probabilities; the rate at which the sellers had chosen to load was not in any sense an event extraneous to the contract; it was expressly provided that they should load at a minimum average rate of 500 tonnes per day and they were entitled to load faster; there was nothing in the award to show that loading in the customary manner at Rosario would have prevented the sellers using all the time which the contract allowed; the buyers were not entitled to damages and the appeal would be allowed. -- Lavarack v Woods of Colchester Ltd, [1967] 1 QB 278, considered. CASES-REF-TO: Abrahams v Herbert Reiach Ltd (CA) [1922] 1 KB 477; Aello, The (HL) [1960] 1 Lloyd's Rep 623; [1961] AC 135; Beach v Reed Corrugated Cases Ltd, [1956] 1 WLR 807; Bold v Brough Nicholson & Hall, [1964] 1 WLR 201; Kaye Steam Navigation Co Ltd v Barnett Ltd, (1931) 41 Ll L Rep 231; Lavarack v Woods of Colchester Ltd, (CA) [1967] 1 QB 278; Lee (Paula) Ltd v Robert Zehil & Co Ltd, [1983] 2 All ER 390; Love and Stewart Ltd v Rowtor Steamship Co Ltd, (HL) [1916] 2 AC 527; Mackay v Dick, (HL) (1881) 6 App Cas 251; Maredelanto Compania Naviera SA v Bergbau-Handel GmbH (The Mihalis Angelos) (CA) [1970] 2 Lloyd's Rep 43; [1971] 1 QB 164; Margaronis Navigation Agency Ltd v Henry W Peabody & Co Ltd of London, [1964] 1 Lloyd's Rep 173; [1965] 1 QB 300; Nolisement (Owners) v Bunge & Born, [1917] 1 KB 160; Petraco (Bermuda) Ltd v Petromed International SA, (CA) [1988] 2 Lloyd's Rep 357; [1988] 1 WLR 896; Sociedad Financiera de Bienes Raices v Agrimpex (The Aello), (HL) [1960] 1 Lloyd's Rep 623; [1961] AC 135; Sunbeam Shipping Co Ltd v President of India (The Atlantic Sunbeam), [1973] 1 Lloyd's Rep 482; Tradax Export SA v Italgrani de Francesco Ambrosia, (CA) [1986] 2 Lloyd's Rep 112. INTRODUCTION: These were appeals by the sellers, Roplak Enterprises SA and Tradax Ocean Transportation SA from the decision of Mr Justice Phillips ([1991] 1 Lloyd's Rep 277) allowing the appeal of the buyers, Kurt A Becher GmbH & Co KG and Roplak Enterprises SA against two arbitration awards made by the Board of Appeal of GAFTA in two linked arbitrations, the disputes arising out of contracts in string for the purchase and sale of Plate maize fob Rosario. In each arbitration the buyers, Roplak Enterprises and Kurt A Becher GmbH claimed from the sellers Tradax Ocean Transportation SA and Roplak Enterprises damages for wrongfully detaining the carrying vessel World Navigator at the load port prior to commencement of loading. COUNSEL: Mr Martin Moore-Bick, QC and Miss G Clark for the plaintiff buyers Kurt A Becher in the first action; Mr David Johnson, QC and Mr AMD Havelock-Allan for the defendant sellers Tradax Ocean in the second action; the defendants Roplak in the first action and the plaintiffs Roplak in the second action were not represented. JUDGMENT-READ: Judgment was reserved. Friday Apr 12, 1991 PANEL: PARKER, STAUGHTON LJJ, SIR DAVID CROOM-JOHNSON JUDGMENTBY-1: PARKER LJ JUDGMENT-1: PARKER LJ: In this judgment I shall refer to the respondents, Kurt A Becher GmbH & Co KG, as "the buyers" and to the appellants, Roplak Enterprises Panama, as "the sellers". By contracts dated respectively Dec 7, 1984, Feb 11, 1985 and Feb 14, 1985, the sellers agreed to sell and the buyers agreed to buy 9000 tonnes, 18,000 tonnes and 9000 tonnes of Plate maize fob, Rosario. Each contract provided for shipment by equal instalments in April, May and June, 1985. The total quantity to be shipped in June was accordingly 12,000 tonnes. Each contract was upon the terms of two standard sets of conditions, GAFTA 64 and Argentine Centro terms. The only material term of GAFTA 64 is cl 7 which provides: DELIVERY -- Buyers shall tender vessel(s) in readiness to load between . . . both dates inclusive. Sellers shall be entitled to receive at least . . . consecutive days notice of . . . probable readiness of the vessel and of the estimated tonnage required. Vessel(s) to load in accordance with the custom at port of loading unless otherwise stipulated . . . The relevant Centro clauses are: Pre-advice. Buyers to give sellers at least fifteen days notice of readiness to load. Vessel to be loaded in berth suitable to sellers. Loading Rate. Once vessel is berthed alongside berth suitable to sellers and ready to load this parcel, sellers guarantee, provided that the vessel is able to receive, a minimum average loading rate of 500 tonnes per weather working day, Sundays, Holidays and Saturday afternoons excluded, according Centrocon, but sellers shall not be responsible for any time lost due to act of God, strikes, lockouts, riots, civil commotions, labour stoppages, breakdown of machinery and/or winches, failure of power, fire or any other cause of Force Majeure. No despatch is due by buyers to sellers. The relevant facts fall within a narrow compass and are not disputed. On May 24, 1985, the buyers nominated the vessel World Navigator to load the 12,000 tonnes representing the June portion of the three contracts with which we are directly concerned. She reached Zona Comun on June 13, 1985 and on that date tendered notice of readiness to load. On June 25, 1985 she would have berthed had the shippers' necessary documentaiton for loading been in order. It was not, and as a result she was by-passed by the vessel next in turn and five other vessels and did not in fact berth until July 18. Between then and July 22 she loaded a total of 24,000 tonnes including the 12,000 tonnes, the June portion of the three contracts. The buyers claimed that the sellers were in breach of their obligations under the contracts in effect in not having the goods ready to load at the time the vessel was ready to receive them. They contended that the damages recoverable for such breach consisted in the demurrage which they, the buyers, under the charter-party pursuant to which they had provided the vessel, had to pay for the period between June 25 and July 18. I leave out the specific timings in the foregoing account for they are not relevant to the issues arising on this appeal. The sellers disputed the buyers' claim on the basis, inter alia, that they were not in breach of any obligation and that even if they were the buyers had suffered no damage and would therefore be entitled to no more than nominal damages. This was on the basis that, if the vessel had kept her turn on June 25, they would have had 48 days in which to load the entire cargo of 24,000 tonnes and that, albeit loading had not begun until July 18, it had been completed within that time. As an alternative, it was said that to load the 12,000 tonnes under the three contracts they had 24 days and had completed that amount within that time. The dispute went to arbitration. The arbitrators upheld the buyers' claim. The sellers appealed to the Board of Appeal of GAFTA, who allowed the appeal and awarded that the buyers' claim failed. The last paragraph of their award is in the following terms: Laytime commenced earliest on 26th June 1985, and the vessel finished loading 24,000 metric tonnes on 22nd July 1985. Taking the two facts into account and on the evidence before us, it is clear the vessel used less than 18 days of laytime (allowing for time not counting), whilst under this contract alone, 24 days were allowed. By leave of Mr Justice Hirst the buyers appealed to the High Court. The appeal was heard by Mr Justice Phillips who allowed the appeal and remitted the award to the Board of Appeal for reconsideration in the light of his judgment (see [1991] 1 Lloyd's Rep 277). The sellers now appeal to this Court by leave of the Judge. The following principal issues arise on this appeal: (1) What was the sellers' obligation, if any, with regard to enabling the vessel to reach loading berth after having received valid notice of readiness? (2) What was the sellers' obligation with regard to rate of loading once the vessel had berthed and was able to receive cargo? (3) On what basis should damages be assessed if the sellers were in breach of any obligation under (1) above? I shall consider first issues (2) and (3) above on the assumption that the sellers were in breach of contract in not having the necessary documentation to enable the vessel to keep her turn on June 25 and that it was that breach which caused her to be unable to berth thereafter until July 18. Put in its shortest form the buyers' contention on issue (2) is that, although the Centro loading rate clause provided for a minimum average rate of 500 tonnes per weather working day etc, the obligation to load according to the custom of the port to be found in cl 7 of GAFTA remained, except for the loading rate specified in the Centro clause. The custom of the port might for example be to load by a method which would produce a faster rate than that specified in the Centro clause. If this was so, the sellers would be obliged to comply with it, notwithstanding that it would put upon them a higher obligation than that specified in the Centro clause. Mr Justice Phillips rejected this contention. He concluded that: . . . the loading rate in the Centro Form does, on its true construction, set out a comprehensive statement of the sellers' obligations in relation to loading. I agree. The GAFTA provision is that the vessel is to load in accordance with the custom of the port unless otherwise stipulated. The Centro clause does, in my judgment, otherwise stipulate. Under that clause the buyer will not be in breach if he maintains an average of at least 500 tonnes a day. Mr Moore-Bick, QC for the buyers accepted that if the custom of the port was to load at a higher rate per se, the buyers could not contend that such rate was applicable. He submitted however that, if the custom of the port was such that compliance with it would result in a faster rate, that rate would be applicable. I cannot accept this. As Mr Justice Phillips held, the clause is on its face intended to be a comprehensive clause providing as it does for exceptions from laytime time for Sundays, holidays and Saturday afternoons, for the sellers not to be responsible for any time lost due to a number of specific events "or any other cause of Force Majeure", and even for the exclusion of despatch money. The point is a short one and I do not find any assistance from authority. Accordingly the sellers were, in my judgment, entitled once the vessel was in berth to take up to 48 counting days to load the complete cargo or 24 counting days to load the three contracts in question. I turn now to consider, on the assumptions which I have mentioned, the question of: Damages The buyers' contention is that, given that the vessel was delayed by the breach, the proper course is to consider what would probably have happened had there been no breach. If it would probably have resulted, had the vessel berthed on June 25 or 26, in her loading at the same rate as she actually loaded when she did berth, then they are entitled to damages because, but for the breach, the vessel would have been free and demurrage under the charter-party would have ceased to accrue by July 1. Their damage is therefore the demurrage incurred between that date and July 22 when she was finally free. The buyers, it is said, lost the chance of freeing the vessel earlier and the value of the lost chance is that which they claim. For the sellers the contention is that since, had the vessel berthed on June 26, they would not have been obliged to complete loading and free the vessel any earlier than they in fact did, no damage has been suffered. On this issue we were referred to a considerable number of authorities but in my judgment it is only necessary to refer to two of them. I begin with Lavarack v Woods of Colchester Ltd, [1967] 1 QB 278 and I do so because Mr Moore-Bick's submissions appear to be advancing propositions in the judgment of Lord Denning, MR in that case which were rejected by the majority. The majority held that damages for wrongful dismissal could not confer on the employee extra benefits which he might reasonably have expected to receive from his employer had the contract continued but which the employer would have been under no obligation to confer. Lord Denning took the contrary view. He said: . . . Item 3 is disputed. It concerns the future bonuses for the years 1965-66 and 1966-67. Is the plaintiff entitled to compensation for loss of these bonuses or their equivalent? The plaintiff had no legal right to receive a bonus every year. It was entirely in the discretion of the directors. Hence it was suggested to us that he was not entitled to receive compensation for loss of future bonuses. I cannot accept this contention. When a servant is wrongfully dismissed from his employment, he is entitled to compensation for the full amount of all the emoluments and allowances which he would have earned but for the breach of contract: see Addis v Gramaphone Co Ltd and this includes not only salary and commission to which he is entitled by law, but also bonuses which he might reasonably expect to receive from his employer. For the simple reason that by the wrongful dismissal the employer has deprived him of the chance of receiving such bonuses and he is entitled to compensation for the loss of the chance, even though he had no legal right to receive them: see Best CJ in Richardson v Mellish and Erle CJ and Keating J in Inchbald v Western Neilgherry Coffee, Tea and Cinchona Plantation Co Ltd, Chaplin v Hicks. This loss of a chance is a regular head of compensation. The majority (Lords Justices Diplock and Russell) would however have none of this and reached the result which I have already stated. In his judgment Lord Justice Diplock said: . . . The general rule as stated by Scrutton LJ in Abrahams v Reiach (Herbert) Ltd that in an action for breach of contract a defendant is not liable for not doing that which he is not bound to do, had been generally accepted as correct, and in my experience at the Bar and on the Bench has been repeatedly applied in subsequent cases. The law is concerned with legal obligations only and the law of contract only with legal obligations created by mutual agreement between contractors -- not with the expectations, however reasonable, of one contractor that the other will do something that he has assumed no legal obligation to do. And so if the contract is broken or wrongly repudiated, the first task of the assessor of damages is to estimate as best he can what the plaintiff would have gained in money or money's worth if the defendant had fulfilled his legal obligations and had done no more. Where there is an anticipatory breach by wrongful repudiation, this can at best be an estimate, whatever the date of the hearing. It involves assuming that what has not occurred and never will occur has occurred or will occur, ie that the defendant has since the breach performed his legal obligations under the contract, and if the estimate is made before the contract would otherwise have come to an end, that he will continue to perform his legal obligations thereunder until the due date of its termination. But the assumption to be made is that the defendant has performed or will perform his legal obligations under his contract with the plaintiff and nothing more. What these legal obligations are and what is their value to the plaintiff may depend upon the occurrence of events extraneous to the contract itself and, where there is so, the probability of their occurrence is relevant to the estimate . . . The events extraneous to the contract, upon the occurrence of which the legal obligations of the defendant to the plaintiff thereunder are dependent, may include events which are within the control of the defendant: for instance, his continuing to carry on business even though he has not assumed by his contract a direct legal obligation to the plaintiff to do so. Where this is so, one must not assume that he will cut off his nose to spite his face and so control these events as to reduce his legal obligations to the plaintiff by incurring greater loss in other respects. That would not be the mode of performing the contract which is "the least burdensome to the defendant." The decision of Phillimore J in Bold v Brough, Nicholson & Hall Ltd is an example of this and does not involve any departure from the principle that the injured party is only entitled to be compensated for the loss of those benefits which he would have been legally entitled to claim if his contract had been performed. He then considered Bold v Brough Nicholson & Hall Ltd, [1964] 1 WLR 201 and the contrasting decision in Beach v Reed Corrugated Cases Ltd, [1956] 1 WLR 807. Thus far it appears to me that Mr Moore-Bick's submissions are unsustainable. He places however considerable reliance on the decision of Mr Justice Mustill in Paula Lee Ltd v Robert Zehill & Co Ltd, [1983] 2 All ER 390. The facts in that case are of some importance. The plaintiffs, dress manufacturers, entered into an agreement with the defendants that the defendants should purchase from them 16,000 garments each season. A specific term of the agreement gave the defendants a complete discretion as to marketing and selling policy. The defendants wrongfully repudiated the contract when there were two seasons left to run. The defendants contended that they could have fulfilled their obligation by ordering 32,000 of the cheapest garments and therefore that the plaintiffs were only entitled as damages to the loss of the profits they would have made on such orders. The plaintiffs contended that damages should be assessed on the average of all garments in their range which were suitable for sale in the territory since the defendants would have ordered the 32,000 garments of varying style, prices and quality from throughout the range. Mr Justice Mustill's final conclusion on the point appears at p 397 of the report where he said: Accordingly I consider that the agreement must be construed as subject to an implied term that the garments would be selected in a reasonable manner. Since selection would be a matter of judgment, this leaves open the very strong possibility that there would not be a unique reasonable selection, but a range of such selections, some yielding a greater total price than others for the 16,000 chosen garments. On this basis, the damages should, as I have already suggested, be assessed in terms of that reasonable selection which would yield the lowest price. From this it appears to me that whatever he may have said earlier he was in truth applying the ordinary principle and seeking to find what was the minimum obligation so that damages might be assessed by reference to that obligation. He was not therefore considering what the defendants would probably have done but what would be the minimum which they could have been obliged to do had the contract continued. At p 393 however, having expressed the view by reference to earlier authorities that the law was not as clear as it might have been thought to be, he said: I believe that some at least of the difficulties which arise in this branch of the law can be minimised if it is kept in mind that inquiry always involves a comparison between the plaintiff's actual position in face of the breach, and the position which he would have occupied if the contract had been performed. This must involve an identification of the promise, followed by a valuation of its promised worth to the promise. Each part of the inquiry may involve considering a choice which would have been open to the promisor. Thus: 1. The promisor may have a right of election which fixes the content of his obligation. This can take more than one form. It may, for example, give the vendor the option to deliver 1,500 to 2,000 tons of goods. Here, in accordance with the dictum of Scrutton LJ the damages are assessed on the basis that the quantity delivered would have been 1,500 tonnes, for the seller could not have been compelled to deliver more than this amount. Where the obligation is to deliver at A or B, the dictum does not always work so well, for it cannot necessarily be said that A represents more of an obligation than B. So here the presumption is explained in different terms, by looking for the obligation which would have been least detrimental to perform. 2. Even where the obligation has been fixed in advance, or determined by election, the value of it to the promisee, and hence the amount which he has lost through non-performance, may be determined by contingencies. Sometimes, it is possible to be sure what would have happened if the contract had been performed, and (if so) this finding is used to estimate the worth of the promise. More often, the fact that the repudiation has prevented the time for performance from arising means that the best that can be done is to make an estimate of the likelihood that the contingent event would occur, and adjust the damages accordingly. For this purpose it makes no difference that the contingency is one which is under the control of the defendant. Although it is not legitimate to look at what the promisor would have done, but only what he could have done, when identifying the promise, the position is different when, as in The Mihalis Angelos and Bold v Brough Nicholson & Hall Ltd the inquiry concerns the valuation of the promise itself: See especially per Diplock LJ in Laverack v Woods of Colchester Ltd [1966] 3 All ER 683 at 691, [1967] 1 QB 278 at 295-296. Mr Justice Phillips having considered the earlier authorities said: . . . I would respectfully adopt this analysis by Mr Justice Mustill which does indeed reduce the difficulties in this confusing branch of the law. It also, I think, calls into question whether the approach adopted in Kaye Steam Navigation Company v Barnett and Spiliada Maritime Corporation v Louis Dreyfus Corporation was correct. I respectfully question whether it is realistic to equate demurrage and despatch provisions with the option given in a contract for the sale of goods by the provision: 5 per cent more or less. Those cases were, it seems to me, at least arguably concerned with valuation of the promise rather than identification of the promise. I turn then to consider whether the principle can be applied to the facts of the present case. The obligation broken, assuming breach to be established, was a single discrete obligation to procure the appropriate loading documents. No question of alternative obligations arises. No question of rendering the sellers liable for not doing that which they were not bound to do arises. The question is not: what was the least burdensome method of performing the obligation which the sellers failed to perform? The inquiry is concerned, not with the identification of the promise (Mr Justice Mustill's first stage) but with the valuation of the promise (Mr Justice Mustill's second stage). It follows that the principle relied upon by the sellers does not apply to the facts of this case. When assessing damages, the board should not have proceeded on the premise that, had the vessel berthed promptly, the sellers would have loaded so slowly that they would have used all the available laytime. The board's task was to ask how long loading would have taken, had World Navigator berthed promptly without losing her place in the queue. If the sellers were in a position to influence the loading rate, then the board should have considered how they would have done so. That question fell to be answered, not by assuming that the sellers would have loaded at the slowest permissible rate, but by considering all the factors that would have been likely to influence their conduct. Prima facie one would not expect the sellers to take any action to prevent loading from taking place in accordance with the normal practice at Rosario. But such considerations are a matter for the board, not for the Court. I agree with the learned Judge that the breach which he was, and we are, considering was a single discrete obligation to which there was no optional alternative. One must however, consider what are the consequences to the plaintiff of that breach and what is required to put him in the same position as if the breach had not occurred. In that event laytime would have begun to run on June 26. That being so the sellers' obligation would have been to load in the number of counting days arrived at by the application of the Centro terms but no more. They did in fact do so. Despite the breach, the buyers therfore got that to which they would have been entitled had there been no breach. There is here, as it seems to me, no question of looking at extraneous events, whether or not in the control of the sellers and therefore no question of it being permissible to look at probabilities. To accept the buyers' contention would in my judgment be making the sellers pay damages for failing to do that which they were not obliged to do. For the assumed breach damages would no doubt have been recoverable if loading had taken longer than the end of the period of laytime allowed by the contract if the vessel had berthed on June 26, but it did not. The truth of the matter is that by their assumed breach the sellers had in effect deprived themselves of the ability, if they were to escape a liability to pay damages to load only at the minimum rate prescribed, and put on themselves the necessity of loading at a higher rate in order to prevent such a liability occurring. Before leaving this aspect of the case I should mention that although I agree that the assumed obligation and breach was single the sellers were left, in effect, with the option of alternative modes of performing their obligation. They could load when berthed at the minimum rate prescribed by the formula, in which case damages would occur, or they could load at whatever minimum rate was necessary in order just to use up the laytime available under the formula but no more, or they could, as in fact they did, load at such a rate that the vessel was free before the time when they would have been obliged to make her available had there been no breach. In the second and third case no damage is suffered. I turn finally to the first issue, namely the extent of the sellers' obligation to enable the vessel to reach her berth, although in the light of the foregoing it is unnecesary finally to decide the matter. It follows from Mackay v Dick, (1881) 6 App Cas 25, that there was an obligation to do all that was necessary to enable the vessel to berth, as I think, on the expiry of the 15 days' notice. That period was specified in order to enable them to fulfil that obligation. The argument has however ranged as to the extent of the obligation, various versions of the implied term being canvassed in argument. It is in my view undesirable, and probably impossible, to define the precise ambit of the obligation for in all cases what is to be implied will or may depend both on the terms of the contract and the surrounding circumstances. I incline however to the view that it follows from The Aello [1960] 1 Lloyd's Rep 623 that the obligaation is an absolute one. It may be that the sellers' failure to fulfil it is due to no fault of his, eg bureaucratic delay in dealing with the documents, but in the absence of an exempting provision I see no reason why he should not be answerable for the delay, just as he would if one of his suppliers failed to produce the goods or some part of them in time. There may however be cases in which some qualification to the absolute obligation might arise, for example where an export licence was required and the seller had taken all possible steps to obtain it timeously. I therefore refrain from further consideration of the point. I would allow the appeal, set aside the judgment of Mr Justice Phillips and affirm the award of the Board of Appeal. It follows that I would take the same course with regard to the second appeal which is before us but which it has been unnecessary thus far to mention because it is common ground that the result in one must follow the other. JUDGMENTBY-2: STAUGHTON LJ JUDGMENT-2: STAUGHTON LJ: These two appeals arise from transactions in which Tradax agreed to sell maize to Roplak, and Roplak agreed to sell maize to Becher. The contract in each case incorporated the GAFTA arbitration rules. There is, as it turns out, no material difference between the issues under each of the two contracts. In those circumstances it should not be a matter for surprise that the appeals in this Court have in effect been consolidated, as were the proceedings in the Court below; we have been addressed by Mr Johnson on behalf of the first sellers (Tradax) and by Mr Moore-Bick on behalf of the last buyers (Becher); the intermediate party (Roplak) have not been represented, and are deemed to have adopted in turn the arguments of the other two. However, it is a matter for surprise. Although it is by no means uncommon in some commodity trades for two or more disputes to raise identical or similar issues, and the same situation occasionally arises in shipping cases, there is no compulsory method of consolidating arbitrations or allowing third party proceedings, either by statute or otherwise. I understand that changes in the law in this respect have ben under consideration for some years. It is to be hoped that the deliberations will one day reach a conclusion. Meanwhile the parties to these disputes are to be congratulated on achieving by agreement a sensible solution which could not presently have been reached by compulsion. With that introduction I turn to consider the issues in the case. (1) The implied term It seems a fair inference from the award that the ship nominated by the buyers could not proceed to a berth until some documentation required by the sellers was in order. In those circumstances there was to my mind plainly an implied obligation of some kind upon the sellers. The general nature of such an obligation was described by Lord Blackburn in Mackay v Dick, (1881) 6 App Cas 251 at p 263: I think I may safely say, as a general rule, that where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectively be done unless both concur in doing it, the construction of the contract is that each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect. That seems to me to be exactly applicable to this case. The buyers cannot arrange for their ship to be available for loading until the sellers' documention is in order. It is therefore implied that the sellers will do all that is necessary to secure that it is in order. As to the time for performance of this obligation, I can see no difficulty. By the Centro terms the buyers were to give at least 15 days pre-advice of the vessel's readiness to load. That was evidently considered a reasonable time for the sellers to make the necessary arrangements. Having received such a notice, they were obliged to do so within such time as would enable the vessel to be ready to load after fifteen days. What does give rise to difficulty is the question whether the implied obligation is to use reasonable diligence (or best endeavours), or is absolute. There is ostensibly some conflict here between the decision of the House of Lords in Sociedad Financiera de Bienes Raices v Agrimpex (The Aello), [1960] 1 Lloyd's Rep, 623; [1961] AC 135, and that of Mr Justice Kerr in Sunbeam Shipping Co Ltd v President of India (The Atlantic Sunbeam), [1973] 1 Lloyd's Rep 482. In the first case it was held in terms, by the majority, that the obligation was absolute. But in the second Mr Justice Kerr held (at p 488) that -- The term to be implied in this case is to the effect that the charterers were bound to act with reasonable despatch and in accordance with the ordinary practice of the Port of Calcutta in doing those acts which had to be done by them as consignees to enable the ship to become an arrived ship. It may well be that the cases can be reconciled if one has regard to the precise task which remained unperformed in each. In The Aello the charterers had not obtained a giro permit, because they did not have cargo available ready to be loaded. That was held to be solely their concern, and they must bear the responsibility for lack of a cargo even though their best endeavours had failed to find one. In The Atlantic Sunbeam, on the other hand, the obstacle was delay in obtaining a jetty challan, which required the co-operation not only of the consignees or receivers but also of the port authority and the customs. It was at least possible that the port authority or the customs had caused the delay. Having explored the problem thus far, I agree with Lord Justice Parker that it need not be decided in this case, having regard to our conclusion as to damages if there was any breach of an implied term. Furthermore it is not clear from the facts found in the award why the sellers' documentation was not in order, or whether this resulted for example from their not having a cargo available, or from the caprice or indolence of some local authority. So it would in any event remain to be determined whether the sellers were in breach of any implied term. (2) Damage If there was a breach of the implied term, a layman uninstructed in the minutiae of commercial law would perhaps assume that the time allowed for loading should be deemed to commence when the vessel would have obtained a berth but for the sellers' breach. There would then be no damages, for even on that hypothesis not all the time allowed was used. That simple solution, although possibly supported by a dictum of Lord Justice Kerr in Tradax Export SA v Italgrani di Francesco Ambrosio, [1986] 1 Lloyd's Rep 112 at p 118, is not in my opinion correct. The Centro terms make it clear that the time allowed for loading commences only "once vessel is berthed". It is true that in Mackay v Dick, (1881) 6 App Cas 251 there was judgment for the price of the goods sold, on the ground that performance of the antecedent condition had been prevented by the seller's breach of contract. But the House of Lords in The Aello declined to apply that principle where a breach of contract prevented the vessel from reaching the place where laytime would start to count. Lord Morris of Berthy-y-Gest said (at p 668): The claim for the shipowners was, I think, properly framed as one for damages. Their ship ought not to be deemed to have arrived in a place at which it had not in fact arrived. Similarly it cannot be held that the ship in this case should be deemed to have arrived earlier than in fact she did. What Mr Johnson for the sellers next argues is that, if there had been no delay caused by them, all that would have happened was that the vessel would have berthed on June 25, 1985; there is no need to assume that anything different would have happened thereafter; discharge would still have been completed on July 22; and no demurrage would have been payable, since not all the time allowed would have been used. Mr Moore-Bick for the buyers says that if the ship had berthed on June 25, the course of events would have been different: discharging would have started immediately; it would have been completed far more quickly than the contractual rate of 500 tonnes per day; so the buyers have suffered loss by reason of the seller's breach. Or at least those things might have happened, and further facts must be found. In reply the sellers rely on the well-known principle that, where the defendant to a claim for damages for breach of contract might have performed his obligation in more than one way, he is to be presumed for the purpose of calculating damages to have performed it in the way which is least beneficial to the plaintiff. Thus it is to be assumed that, even if the vessel had berthed on June 25, the sellers would have loaded at no greater rate than 500 tonnes per day -- for that was their minimum obligation -- and would have used all the laytime. There would have been no disadvantage to the sellers, for the Centro terms exclude any right to despatch money. On that view, no damages are payable by the sellers. The principle itself is beyond dispute, although its precise formulation and rationale have varied: see the judgment of Mr Justice Mustill in Paula Lee Ltd v Robert Zehil & Co Ltd, [1983] 2 All ER 390. We have not been referred to any case where (i) the term broken by the defendant did not itself contain any choice or option, but was followed by another term which contained a choice or option for subsequent performance, or (ii) it is known how that subsequent term was in fact performed, because breach of the prior term was not treated as a repudiation, and performance continued. But I see no reason why the principle should not apply equally in those circumstances. Thus the sellers may say in this case: "True we broke our contract in failing to facilitate the entry of the vessel into a berth; but once she did reach a berth we loaded much faster than the minimum contract rate. If we had not broken our contract we might still have used just as much time, overall, in loading. So the buyers have suffered no loss". Two cases are said to detract from that general principle; but in my opinion, so far as their ratio is concerned, they do not do so. In Abrahams v Herbert Reiach Ltd, [1922] 1 KB 477 there was an agreement to publish a book, which was wholly unperformed by default of the defendants. It was argued that the plaintiffs could recover damages only on the basis of the smallest number of copies that could be described as a publication of the book. The Court of Appeal rejected this argument, because (in the words of Lord Justice Scrutton at p 481) the defendants "were bound to make such a publication as could be considered reasonable in the circumstances". So too in the Paula Lee case the defendants were obliged to order 32,000 of the plaintiffs' garments, and they ordered none. It was argued that the damages should be calculated on the basis that the defendants would have ordered 32,000 of the plaintiffs' cheapest garments. That argument also failed, because (per Mr Justice Mustill at p 397) -- . . . the agreement must be construed as subject to an implied term that the garments would be selected in a reasonable manner. Neither case is inconsistent with the general principle. In each the defendants were held to have, not an unfettered choice or option as to how they would perform their obligation, but a duty to perform it in a reasonable manner. Once the contracts were thus construed, the damages had to be calculated on the basis of such performance. Indeed the Paula Lee case reinforces the general principle instead of contradicting it, for Mr Justice Mustill held that many different selections of garments might be reasonable, and that within that range the damage must be based on the selection which would have been least profitable for the plaintiffs. The Abrahams and Paula Lee doctrine cannot be applied here. It is well established that a shipper of goods may use all the laytime in loading if he pleases, even though he could easily have loaded more rapidly. He is under no obligation to act reasonably in that respect: Margaronis Navigation Agency Ltd v Henry W Peabody Ltd, [1964] 1 Lloyd's Rep 173; [1965] 1 QB 300, Nolisement (Owners) v Bunge & Born, [1917] 1 KB 160. There is, however, a passage in the judgment of Mr Justice Mustill in the Paula Lee case (at p 393) which suggests another limitation on the general principle: Although it is not legitimate to look at what the promisor would have done, but only what he could have done, when identifying the promise, the position is different when, as in the Mihalis Angelos and Bold v Brough Nicholson & Hall Ltd the inquiry concerns the valuation of the promise itself: see especially per Diplock LJ in Lavarack v Woods of Colchester Ltd [1967] 1 QB 278 at 295-6. I am afraid that I find it hard to grasp the effect of a distinction between identification of the promise and valuation of the promise, for this purpose. Nor can I find support for the distinction in the cases which Mr Justice Mustill mentions. In Maredelanto Compania Naviera SA v Bergbau-Handel GmbH (The Mihalis Angelos), [1970] 2 Lloyd's Rep 43; [1971] 1 QB 164 there was a finding that the charterers -- . . . would beyond doubt . . . have cancelled the charter, on the ground that the ship had missed her cancelling date . . . if they had not purported to cancel earlier on other grounds. It was held that the owners were only entitled to nominal damages. No doubt it was a necessary step to that conclusion that the ship would beyond doubt have missed her cancelling date. But I cannot find any suggestion in the judgments of the Court of Appeal that it was also an essential step to prove that the charterers would beyond doubt have exercised the right to cancel, rather than that they could have exercised it. On the contrary Lord Denning, MR said (at p 49, col 1; p 196): If the defendant has under the contract an option which would reduce or extinguish the loss, it will be assumed that he would exercise it. Lord Justice Davies (at p 53, col 1; p 203) said: The assumption has to be made that, had there been no anticipatory breach, the defendant would have performed his legal obligation and no more. The case of Bold v Brough Nicholson & Hall Ltd, [1964] 1 WLR 201 was concerned with wrongful dismissal of an employee. He would have been entitled to future benefits under a pension scheme, if his employers continued to operate the scheme for their employees as a whole. Mr Justice Phillimore (at pp 211-212) assessed the damages on the basis that the employers were not likely to discontinue the whole scheme. That decision is explained by Lord Justice Diplock in Lavarack v Woods of Colchester Ltd, [1967] 1 QB 278 at p 294: The assumption to be made is that the defendant has performed or will perform his legal obligations under his contract with the plaintiff and nothing more. What these legal obligations are and what is their value to the plaintiff may depend upon the occurrence of events extraneous to the contract itself and, where this is so, the probability of their occurrence is relevant to the estimate. And at p 295: The events extraneous to the contract, upon the occurrence of which the legal obligations of the defendant to the plaintiff thereunder are dependent, may include events which are within the control of the defendant: for instance, his continuing to carry on business even though he has not assumed by his contract a direct legal obligation to the plaintiff to do so. Where this is so, one must not assume that he will cut off his nose to spite his face and so control these events as to reduce his obligations to the plaintiff by incurring greater loss in other respects. Hence it was not to be assumed in Bold's case that the employers would have discontinued their entire pension scheme. That does not in my opinion impinge in any way on the general principle that a defendant, in performing his contractual obligations, is assumed to have chosen to perform them in the way least beneficial to the plaintiff where the contract gave him that choice. It is only in connection with the possible occurrence of events extraneous to the contract, whether in the control of the defendant or of anyone else, that probability has to be considered. But the rate at which the sellers in this case would have chosen to load the ship was not in any sense an event extraneous to the contract; it was expressly provided that they should load at a minimum average rate of 500 tonnes per day, and they were entitled (but not bound) to load faster. In my judgment one must assume that they would have loaded at the minimum rate and no more. There is one remaining argument under this head. It is said on behalf of the buyers that the minimum rate of 500 tonnes per day in the Centro terms does not displace the obligation in cl 7 of GAFTA 64 to load "in accordance with the custom at port of trading", in relation either to the time allowed or to the manner of loading. As regards the time allowed, this submission seems to me unarguable even by the standard of appeals from GAFTA. As Lord Sumner said in Love & Stewart Ltd v Rowtor Steamship Co Ltd, [1916] 2 AC 527 at p 535, provisions for loading based on a time which is reasonable under all the circumstances -- . . . stand in antithesis to lay days based on a number of days fixed or capable of being fixed . . . [see also Scrutton on Charterparties, 19th ed, p 317]. It may be, as Lord Sumner also said, that a reference to the custom of the port has nevertheless some effect in relation to the manner of discharge. But there is nothing whatever in the award here to show that loading in the customary manner at Rosario would have prevented the sellers using all the time which the contract allowed them. Nor has any other evidence been put before us to suggest that. Indeed the very fact that the contract provided for loading at 500 tonnes per day, and named Rosario as the only loading port, suggests the contrary. Mr Moore-Bick asks that the award be remitted to the Board of Appeal, for a finding whether it would have been possible for the sellers to use all the time which they were allowed for loading had they wished to do so. Seeing that this topic was not raised when the case was argued before the board, and that there is nothing more than mere speculation that it might have been impossible, I do not think that we should accede to that request now: see Petraco (Bermuda) Ltd v Petromed International SA, [1988] 2 Lloyd's Rep 357; [1988] 1 WLR 896. I do not see that we are precluded from reaching this conclusion by the fact that leave to appeal was given from the Board of Appeal by Mr Justice Hirst, no doubt on a fairly summary consideration of the dispute, even if this point was foreshadowed at the time. Accordingly I would hold that, even if the sellers were in breach of an implied term as to facilitating the entry of the vessel into a loading berth (which I have not decided and could not decide on the facts found), the damages would have been nil or nominal. I would allow these appeals and restore the awards of the Board of Appeal. JUDGMENTBY-3: SIR DAVID CROOM-JOHNSON JUDGMENT-3: SIR DAVID CROOM-JOHNSON: The Board of Appeal found that -- 1.6 The vessel "World Navigator" arrived at Zona Comun on 13th June 1985 . . . when she tendered her Notice of Readiness. According to the agents the vessel was instructed by the Port Authorities to remain anchored at Zona Comun due to congestion at Rosario Roads. 1.7 . . . Owing to the fact that shippers documentation for loading was not in order, the vessel could not take pier and therefore the Junta ordered the vessel following her, which was the DILETTA F to moor, which she did . . . on 25th June 1985. World Navigator arrived at the Rosario Roads on July 11 and was moored at unit 6 on July 18. She loaded a total of 24,000 tonnes including the 12,000 tonnes of the June shipment the subject of the relevant contract by July 22, 1985. This means that the actual rate of loading was about 6000 tonnes a day. So far as the contractual rate of loading is concerned, the contract of sale was subject to both GAFTA 64 and Centro terms. GAFTA 64 cl 7 included the sentence: . . . vessel to load in accordance with the custom at port of loading unless otherwise stipulated. The custom at port of loading may include various things, and is certainly apt to include the rate of loading. But in this contract it was otherwise stipulated by the Centro terms, which stated: Once vessel is berthed alongside berth suitable to sellers and ready to load this parcel, sellers guarantee, provided that the vessel is able to receive, a minimum average loading rate of 500 tonnes per weather working day . . . No despatch is due by buyers to sellers. It is clear that the loading rate was the Centro rate. I agree with the finding of Mr Justice Phillips on this. The sellers were entitled to calculate laytime on that basis. The buyers put forward various dates on which they said loading time should be regarded as having begun. In this Court it has really come to June 26, when the vessel had missed her turn because "shippers documentation for loading was not in order". But the Board of Appeal found that whichever date was taken, the loading was completed in the time allowed. That was so whether one counted the time on the 12,000 tonnes or the 24,000 tonnes. The buyers' argument is that there was a breach by the sellers of a term to be implied in the contract whereby the sellers were obliged to co-operate in getting the ship into her loading berth by providing the necessary documents in order, at least by the end of the 15 days' notice period. It is alleged that if that breach had not happened the cargo would have been loaded some 23 days earlier and less demurrage would have been payable by the buyers to the shipowners. There is also a claim for damages with which the Board of Appeal did not expressly deal and which does not seem to have been formulated. It has been expressed as damages for delay based upon a calculation of the demurrage. It does not appear to have been alleged that the vessel would then have been profitably employed in some other way. The claim for damages is really the demurrage claim under a different label. The sellers' contention, which succeed before the board, was that the ship was loaded within the laytime however calculated, and accordingly there was no liability for damages. There really can be no doubt that in accordance with what was said by Lord Blackburn in Mackay v Dick, (1881) 6 App Cas 251 at p 263 that some term must be implied that the sellers would cooperate in the execution of the contract by getting the vessel to the loading berth by obtaining or furnishing "the documents" in time. There is no finding by the board what the documents were, or how they needed to be obtained. But the nature of the term depends on the facts of each individual case, and it is not possible on the facts found to determine what the term was. It is not possible here to say whether the sellers' duty was absolute or one to use their best endeavours. We are asked to send the case back to the board to find further facts, but the need to do so depends on the validity of the claim for damages. The sellers say that even if they were in breach of an implied term then the buyers suffered no loss because in any event the cargo was loaded in time. They contended that there is a general rule that where the wrongdoer has a choice as to how to perform his obligations it is to be presumed for the purpose of calculating damages that he would have chosen the way which would have brought least benefit to the promisee. They cited Kaye Steam Navigation Co Ltd v Barnett Ltd, (1931) 41 Ll L Rep 231. That was a decision of Mr Justice Branson which has stood for many years. It was a charter-party case where the usual despatch at the port of loading was 12 days but the charter-party allowed for laytime of 33 days. The Judge applied -- . . . the principle that in assessing the damages to be paid by a person who has broken his contract you must see that you do not impose upon him more than the minimum which he has contracted to give the plaintiff . . . and applied the 33 day period. The authorities on this point, and those relied upon by Mr Justice Branson, have been much concerned with whether the defendant had an option of how he would carry out the contract, resulting in damages being based on whichever option was less burdensome to him. The buyers in the present case have relied on Abrahams v Herbert Reiach Ltd, [1922] 1 KB 477, where there was strictly speaking no option, and where an author sued publishers who had contracted to publish a book but failed to do so. The award of damages depended on the finding of how many copies could have been expected to be printed and sold. The Court had to assess that number as a matter of probability, but what the Court was investigating was not what profit the author would probably have made if the publishers had carried out their bargain but what was the extent of the obligation which the publishers had undertaken. The amount of damages recoverable depended on the extent of the bargain. The general rule as stated by Lord Justice Scrutton was referred to in Lavarack v Woods of Colchester Ltd, [1967] 1 QB 278 at p 294 by Lord Justice Diplock: The general rule as stated by Scrutton LJ in Abrahams v Reiach that in an action for breach of contract a defendant is not liable for not doing that which he is not bound to do, has been generally accepted as correct, and in my experience at the Bar and on the Bench has been repeatedly applied in subsequent cases. The law is concerned with legal obligations only and the law of contract only with legal obligations created by mutual agreement between contractors -- not with expectations, however reasonable, of one contractor that the other will do something that he has assumed no legal obligation to do. And so if the contract is broken or wrongly repudiated, the first task of the assessor of damages is to estimate as best he can what the plaintiff would have gained in money or money's worth if the defendant had fulfilled his legal obligations and had done no more. The application of the general rule is not dependent on there being an option. Where there is an option as to the mode of performance, the presumption applied in Kaye Steam Navigation v Barnett is an instance of the application of that rule. The authorities followed by Mr Justice Branson were examples of the enforcement of the lesser obligation, so as to restrict the liability of the defendant to what he had to do and not to what he might have done but had not bound himself to do. Counsel for the buyers has submitted to us that that case was wrongly decided, but I do not think so. It is consistent with the rule which was stated by Lord Justice Scrutton and was applied by the majority of the Court of Appeal in Lavarack. In the present case the buyers have sought to rely on the assumed breach of the implied term and then to have damages assessed by asking what would probably have happened if the term had been performed. This was the dissenting approach of Lord Denning, MR in Lavarack. The result of such an approach would be effectively to write into the contract a term providing for a different rate of loading alternative to that laid down by the Centro term. It would be to include both the Centro rate and the GAFTA 64 rate resulting not only in great uncertainty but also in a contradiction of the actual wording in the GAFTA clause "unless otherwise stipulated". It is better to put on one side the observation that such an approach appears to be similar to the assessment of damages for breach of duty in tort, and to concentrate on the question of damages in contract. If the sellers' contentions as to the law are correct, as I think they are, it may be that this is an example of what must happen from time to time, namely that there has been a breach of a term in a contract which does not make any difference to the damages in the end. The buyers have also sought to rely on that passage in the judgment of Lord Justice Diplock in Lavarack where he said (p 294) that there may be extraneous events (or contingencies) upon which the defendant's legal obligations may depend and must be taken into account. They put forward the faster rate of loading at Rosario as such a contingency which the sellers would not have disregarded if the ship had berthed on June 25. What Lord Justice Diplock said was that the probability of an extraneous event happening might be relevant to the assumption by the defendant of his legal obligations. Naturally one would not assess the damages in a case of wrongful dismissal by assuming that the employer might possibly have put his business into liquidation, so as to reduce the damages awardable to the employees. But there is nothing in the facts found here to suggest that the higher rate of loading practised at Rosario influenced the inclusion in this contract of the 500 tonnes per day rate, other than, perhaps, to establish the length of laytime upon which the sellers were able to rely. The obligation of the sellers (and the corresponding right of the buyers) was for loading to be at that rate and was in no way dependent on the contingency that loading might be quicker. In the result, I conclude that the sellers' arguments are correct and that the buyers are not entitled to damages. Accordingly, I agree that this appeal should be allowed. DISPOSITION: Appeals allowed. Costs to be subject to an agreed order. Application for leave to appeal to the House of Lords refused. SOLICITORS: Richards Butler; Sinclair Roche & Temperley. |