England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(Mr Justice Eady)

		Royal Courts of Justice Strand London WC2
		Wednesday, 28th February 2001

1. LORD JUSTICE HENRY:I will ask Lord Justice Buxton to give the first judgment.
2. LORD JUSTICE BUXTON:This is an appeal from a judgment of Mr Justice Eady, delivered on 12th April 2000, on various preliminary points ordered to be decided in a case between Albright & Wilson UK Limited, the claimant, and the first defendant, Biachem Limited. The second, third and fourth defendants are various emanations of Berk Chemicals Limited (to whom I will refer generally as "Berk"). The fifth defendant, which is not concerned as a party to this appeal but which plays a large part in it, is a company incorporated in Belgium called Huktra. The sixth defendant was apparently deleted. The seventh defendant is a company or partnership called A T Stevens Transport, which again plays some role in the background facts.
3. The dispute with which we are concerned is between Albright & Wilson and, on the one part, Biachem and, on the other part, Berk. I cannot express the background facts better than they were stated by the judge in paragraphs 1 to 4 of his judgment - a statement that rightly attracted no criticism before us:

"1.The claimants (`A & W' [Albright & Wilson]) operate a chemical works at Avonmouth where an explosion occurred on 3 October 1996. This led to extensive damage to property and some personal injuries. The circumstances of the explosion and its immediate cause are reasonably clear. There are, however, a number of issues as to liability arising between the parties to these proceedings.

2.On 16 September 1996 A & W placed an order (Reference No. 404569) with one or more of the second to fourth defendants (`Berk') for 23 metric tonnes of Sodium Chlorite for delivery at the Fluids Plant at Avonmouth. It was ultimately agreed that delivery was to take place on 3 October. On 20 September A & W placed an order (Reference No. 404588) with the first defendants (`Biachem') for 23 metric tonnes of Epichlorohydrin (`EPI') to be delivered to their Phosphates Plant on 3 October. They also ordered a further 23 metric tonnes to be delivered on 4 October (with a further 46 tonnes to be delivered at a later date).

3.All three consignments were to be delivered, as it happened, by the fifth defendants (`Huktra'). The Sodium Chlorite was ordered from Caffaro in Italy, and it was they who gave instructions for it to be delivered by Huktra to Avonmouth. Huktra assigned tank number HUKU 302012-8. In respect of the two consignments of EPI, it was Biachem who instructed Huktra. The tank numbers assigned were HUKU 302014-9 and HUKU 30041-0 respectively. Huktra sub-contracted to the seventh defendants (`Stevens').

4.Through a mistake made at Huktra, the tanker driver of tank HUKU 302012-8 (containing the Sodium Chlorite) upon delivery presented Biachem's delivery note 8190. Unfortunately, this related to the EPI intended for the Phosphates Plant (although it is true that the tanker number written on that delivery note did in fact correspond to the tanker he was driving). In consequence, the contents were discharged into existing stocks of EPI. The Sodium Chlorite reacted with them causing the explosion. Hence these proceedings (begun by writ in October 1997)."

4. In order to illuminate the argument that follows, it is necessary to say something more about what the judge described in paragraph 4 of his judgment as "a mistake made at Huktra". That mistake was twofold. The gentleman who was dealing with the matter at Huktra appears to have thought (though, as Biachem strongly urged to us, to have thought incorrectly) that Biachem did not wish the source of the goods that it was providing to Albright & Wilson to be apparent on the face of the documentation. As a result of that belief, Huktra instructed the driver, who was provided by Stevens, to tender on delivery only the Biachem delivery note. That instruction is clear from various documents before us. Secondly, over and above that, in relation to the particular consignment which was the cause of the explosion on 3rd October, that instruction to the carrier was reinforced by a fax sent by Huktra which said, in part:

"Delivery to Avonmouth 3rd October. Please remove all documents and use this delivery note only."

5. The delivery note which was referred to and which was attached to that fax was the Biachem delivery note for EPI; but, by mistake, there had been endorsed on it by Huktra the tanker number relevant to the delivery on behalf of Berk of sodium chlorite: that is to say, HUKU 302012-8. That is clear from the copy of the delivery note that we have in the bundle. That is how it came to pass that, when that driver was carrying out Huktra's instructions, he was driving a tanker full of sodium chlorite, but it had associated with it Biachem's delivery note -the only document that he was under instructions to tender - saying that the load was EPI.
6. Against those background facts there might, at first sight, seem to be a simple approach to this problem. The question would first arise as to whether the delivery company made a misrepresentation to Albright & Wilson about the nature of the contents of the tanker. If the facts were analysed in that way, the question would then follow as to whether that misrepresentation was made on behalf of Biachem or of Berk or of either of them; and, if it was, whether it was negligent and actionable, because those specialist chemical companies should have known that Albright & Wilson would rely on the statement as to what the contents were, and that danger would ensue if (as happened) a dangerous chemical was wrongly categorised.
7. Those, however, are not the questions that we are asked or that the judge was asked. Albright & Wilson's complaints, at least so far as we are concerned, are pursued, not in tort, but in contract. Albright & Wilson were well within their legal rights to take that course. In a case where there might be potential remedies either in contract or in tort, a party in normal circumstances is not restricted to one or other of those remedies. That was made plain by Lord Goff of Chieveley in his speech in Henderson v Merrett [1995] 2 AC 145, in particular at p.193. I make that point, not merely as a piece of jurisprudence, but because I shall have in due course to deal with a complaint made in this appeal that the contractual analysis upon which the judge was invited to proceed was fundamentally inept, or not open to Albright & Wilson as a matter of law.
8. The questions that the judge was asked were agreed as preliminary questions, having been ordered by the master by consent, and have to be set out in their full terms. They are conveniently to be found in paragraph 5 of the judge's judgment, which reads:

"I am required to resolve certain preliminary issues pursuant to an order made on 12 January this year. Those are defined as follows:

(1)Did the events of 3rd October 1996 when the Sodium Chlorite which A & W had ordered from Berk was delivered to A & W with a delivery note from Biachem representing it to be EPI which A & W had ordered from Biachem constitute:

(a)performance or purposed performance of both Berk's and Biachem's respective contracts with A & W (or neither); or

(b)performance or purported performance of only one of those contracts, and;

(c)if one, which one?

(2)If it is found in response to (1) above that Biachem were performing their contract, whether Biachem were in breach in any of the following respects:

(a)in that they delivered Sodium Chlorite when they should have delivered EPI; or

(b)in that they delivered goods which did not correspond to the description in A & W's order number 405488 and Biachem's certificate of analysis; or

(c)in that they supplied Sodium Chlorite instead of EPI and thus supplied goods that were not of satisfactory quality or fit for their purpose?

(3)If it is found in response to (1) that Berk was performing its contract with A & W:

(a)whether the following were terms of Berk's contract with A & W:

(i)the express term pleaded in paragraph 3 of the Re-amended Statement of Claim;

(ii)the implied term pleaded in paragraph 3A of the Re-amended Statement of Claim;

(iii)in the alternative to (ii) the implied term pleaded in paragraph 3A of Berk's Amended Defence;

(b)whether Berk was in breach of its contract with A & W in that what was delivered was not of a satisfactory quality or fit for its purpose in that the Sodium Chlorite was accompanied by documentation wrongly identifying it as EPI;

(c)whether Berk was in breach of its contract with A & W in that delivery of the Sodium Chlorite was made not to the Fluids Plant at Avonmouth but to the Phosphate Plant;

(d)whether Berk was in breach of the implied term of its contract with A & W referred to in (a)(ii) or (iii) above (as appropriate) in light of the answer to issue (3)(a), in that the delivery did not include nor was accompanied by documents correctly identifying the substance being delivered but did include and/or was accompanied by documents representing Sodium Chlorite to be some other substance.

(4)Was A & W's contract with Biachem (Order No. 404588) made upon Biachem's conditions of sale or upon A & W's conditions of order or upon neither party's conditions?"

9. It will also be convenient at this point to set out the replies that the judge gave to the questions, of some of which complaint is made in this appeal. They are conveniently summarised in paragraph 18 of the skeleton argument presented on behalf of Albright & Wilson, which also illuminates the otherwise opaque references in the questions to parts of the pleadings: "The issues may conveniently be summarised as follows, with the Judge's answers given in bold type:

1Who was delivering - Biachem or Berk or both?Both

2If it was Biachem's delivery, were Biachem in breach because

2(a) they delivered sodium chlorite instead of EPI,Yes

2(b) they delivered goods which did not correspond with the contractual description, Yes

2(c) by supplying sodium chlorite instead of EPI they supplied goods not of satisfactory quality or fit for their purpose?Yes

3(a) Were there terms in Berk's contract:

(i) for delivery to be made to the Fluids Plant,Admitted by Berk

(ii)-(iii) for delivery to be accompanied by correct documentation, or merely for reasonable steps to be taken to provide correct documentation?The former

3 If it was Berk's delivery, were Berk in breach because

3(b) what was delivered was not of satisfactory quality or fit for purpose in that the sodium chlorite was accompanied by documentation wrongly identifying it as EPI, Yes

3(c) delivery was made to the Phosphates Plant instead of to the Fluids Plant, Yes

3(d) the delivery documents incorrectly identified the substance being delivered?Yes

4 Was the Purchasers' contract with Biachem made on Biachem's conditions or the Purchasers' conditions or neither?On the Purchasers' conditions."

10. The main question in this appeal has been the correct answer to be given to the first question that was before the judge: that is to say, was there performance or purported performance of both of the contracts; or of only one of those contracts and (if so) which one; or, indeed, of neither? The judge held that there had been performance or purported performance - and he did not distinguish, nor was he required to distinguish, between those two concepts - by both Biachem and Berk.
11. The answers that he should have given, according to the appellants in this case, were as follows. On the part of Berk it was contended that there was indeed performance or purported performance by somebody, but that had been by Biachem and not by Berk. The answer contended for by Biachem was, on its preferred view, that neither Biachem nor Berk had performed the contract, nor purported to perform it; but that, if that was wrong and anyone did perform or purport to perform, that was Berk and not Biachem. Biachem's preferred position that neither party performed was based in the first instance on the argument that the whole of the case should be analysed in terms of the law of tort and not of the law of contract. For the reasons that I have already indicated, that is not a valid contention.
12. There was, however, a further aspect of the argument which it will be convenient to take at this stage because it potentially affects other parts of the case. Biachem contended in broad terms that it was a feature of the transaction that Albright & Wilson had been negligent or at fault in the way in which they had dealt with the paperwork and with the deliveries or purported deliveries. That, it seems to me, is a contention that it is difficult to raise - and certainly difficult to resolve - on a preliminary issue. For reasons that I will indicate, it does not, in my judgement, help in deciding the questions that the court has to decide. But I think that it would be right for me to say that in any event - and, should this matter go further, it can be accepted that this passage of my judgment is, for the reasons that I have just indicated, obiter - it is clear to me that that complaint is not made out.
13. The complaint was based upon a number of contentions: first, that it should have been obvious that the tanker did not have EPI in it, as the delivery note suggested; second, that the inspecting chemist should have checked previous documentations showing the right tanker number; or thirdly, that she or the staff of Albright & Wilson receiving the tanker should have looked at the back of the tanker, where safety warnings appropriate to sodium chlorite, but not appropriate to EPI, were to be found. It seems to me that those criticisms, in the circumstances of this case, are not reasonable ones. It is not only a matter of common sense but also a matter of law that in the ordinary course of business one is entitled to assume that contractual documents that are presented are correct and are relevant to the load that they purport to relate to. There is ample authority to support that approach. If a recent case is needed, it is that which Mr Bartlett QC drew to our attention, Barclays Bank plc v Fairclough Building Ltd [1995] QB 214, in the judgment of Beldam LJ at pp.229-230. However, the point does not matter. It does not matter because it is not relevant to an issue in contract. Contractual liability is strict and contributory negligence on the part of the other party cannot (and certainly cannot on the facts of this case) be deployed in order to avoid a contractual solution.
14. There was, however, another aspect of Biachem's arguments to which this point is potentially relevant. This arises in connection with the law of agency. The case, of course, turns on the contention that Huktra and the driver, doing what they did, were acting as agents both for Berk and for Biachem. We were taken to article 75 of the current edition of Bowstead and Reynolds on Agency. The article (which, as far as I know, has stood in that work for many years) says this:

"No act done by an agent in excess of his actual authority is binding on the principal with respect to persons having notice that in doing the act the agent is exceeding his authority."

15. It was contended that notice of lack of authority might be, not merely actual notice (such as is not suggested to apply here), but also constructive or implied notice, based upon circumstances of which the party dealing with the agent should have been aware, even if in fact he was not: that is to say, the circumstances relevant to the alleged negligence by Albright & Wilson that I have already set out.
16. That contention fails on a number of points. First of all, it is by no means clear that it represents the law at all. The commentary to article 75 in Bowstead goes no further than to suggest that presumptions that constructive or presumed notice do not apply in commercial transactions may need to be reviewed. So they may; but this is not the case in which to do it. Secondly, and in any event, the question of whether there is notice of lack of authority is an objective one to be considered in the light of all the circumstances. That is made quite plain in a passage from a judgment of Neill J (as he then was) in Feuer Leather Corp v Frank Johnston & Sons Ltd [1981] Com L Rep 251, which is set out in the commentary to Bowstead and, indeed, which was read to us by Mr Norris QC on behalf of Biachem. I do not set out the extract from Neill J's judgment that is there deployed, but he ended by saying:

"... the question becomes, looking objectively at the circumstances which are alleged to constitute notice, do those circumstances constitute notice? This must be a matter of fact and degree to be determined in the particular circumstances of the case."

17. That statement is, in my judgement, cogent generally as an indication of how the court ought to proceed. The threshold problem in this case is accordingly that this allegation about Albright & Wilson's knowledge was not pleaded and does not appear to have formed any part of the case before the judge below. Therefore if, as Neill J held, and I hold, this is an issue of fact, this court has no findings on the part of the judge below on which it can proceed. That is fatal to this point in any event. But for fear that that might be thought to be a somewhat pedantic way of approaching the matter, I go further and say two things. First of all, we were helpfully taken by Mr Bartlett QC to paragraph 8-055 of Bowstead, that, where an agent is acting within the usual authority of a person doing the job that he does, those dealing with him are prima facie entitled to think that he has authority. In this case that aptly described the ordinary work of delivery that this ordinary and commonplace transaction involved on the part of the driver. Secondly, on the facts of this case one only has to go back to the account that I ventured to set out earlier of what Huktra actually did and how the accident arose. The objective view of all that is that Huktra were plainly acting for both Berk and Biachem, but getting it wrong. Even if the errors that had occurred had come to the attention of the employees of Albright & Wilson, they would not have drawn the conclusion that the driver or Huktra were exceeding their authority: they would have drawn the conclusion that I have just drawn - that Huktra and the driver were making mistakes. So there is no possibility in this case of saying that the first question posed to the judge does not arise at all because the people actually acting were not acting as agents for either of the appellants; or that it should have been appreciated by the appellants that they did not have that authority.
18. I therefore turn, with those preliminary observations, to deal with question 1. It appeared to be agreed, and if it was not agreed, it is the case, that that question should be addressed on the basis of an objective view of what occurred in the light of all the circumstances. Two of the most important circumstances are, first, that there were pre-existing contractual arrangements between Albright & Wilson on the one hand and both Berk and Biachem on the other; and secondly, that Huktra and the driver provided by Stevens had been throughout the transaction acting as agent for both Berk and Biachem, as I have already found.
19. So far as the particular arguments that are deployed by the two appellants are concerned, I first of all deal with Biachem. I have already considered the argument that neither party could be performing because either this was a matter not of contract at all or, alternatively, the acts were not done on behalf of either of them. Biachem's short argument was that what occurred could not be delivery or performance by Biachem because the goods involved were not their goods. The goods that were delivered, and intended to be delivered, were those of Berk, to which, either by accident or by misfortune (for which Biachem was not responsible), Biachem's delivery note had been attached. I could quite see that that would be a powerful argument if the only question in this case was actual performance by Biachem, in the sense - and it is important to understand this - of the party making a complete performance in accordance with the contract, on the basis of which he could validly sue for the contract price. But the question includes "purported" performance. That, in my judgement, is not a term of art. Nor was it suggested that the parties, when using it, intended the judge to attach any particular technical meaning to it. It is rather a convenient expression to refer generally to the range of cases that may arise when a party appears to be performing a contract and is acting in such a way as to associate his acts with his contract, but in fact he is not carrying it out, or not carrying it out in its full terms.
20. This very expression is used in a case in this court which is well-known for its somewhat striking facts, Wilson v Rickett Cockerell & Co Ltd [1954] 1 QB 598. The facts were, of course, significantly different from this case; the court in that case did not have to wrestle, as we have had to do, with the problem of two contracting parties. However, put briefly, what happened was this. The defendants, well-known coal merchants, delivered a ton of Coalite, a manufactured fuel, to the plaintiffs. When the coalite was put on the plaintiffs' fire an explosion occurred. That was caused by some of the coal having contained an explosive detonator in error. The purchasers sued, relying, amongst other things, on section 14 of the Sale of Goods Act, saying that the goods had not been reasonably fit for their purpose. In a short passage dealing with one argument, Denning LJ said this at p.607:

"The principal point made before us was that section 14 does not apply to this case, because both subsections (1) and (2), it was said, only refer to the contract goods, that is, to the goods which are the subject of the contract of sale: and, so here, it refers only to the Coalite proper and not to the explosive piece which was in it.

The answer to that argument lies in the opening words of section 14, which show that the section refers to the `goods supplied under a contract of sale'. In my opinion that means the goods delivered in purported pursuance of the contract. The section applies to all goods so delivered, whether they conform to the contract or not: that is, in this case, to the whole consignment, including the offending piece, and not merely to the Coalite alone."

21. I do not suggest, any more than it was suggested in argument, that that case is directly relevant to our concerns, save in this way: that it demonstrates that the concept of purported performance that the judge was asked to pass on extends to cases where there is objectively an attempt to perform a contract, but that attempt goes wrong.
22. In this case what was tendered was the delivery note. That delivery note (for reasons that, as a matter of law, I shall return to in some more detail later) was, in my judgement, essential in defining what the physical facts of the contract meant as a matter of law. It was a representation that the goods were EPI and thus, in the context of Biachem's existing contract with Albright & Wilson, there was a performance, or at least a purported performance, by Biachem.
23. In the case of Berk, the appellant, indeed, adopts the view that the delivery note was the crucial factor in this case. To quote from Mr ter Haar QC's oral submissions before us:

"Our primary submission is that the driver, through the delivery note, presented himself to Albright & Wilson ostensibly as agent for Biachem, having mistakenly picked up someone else's goods."

24. That would be a potentially convincing way of looking at what objectively occurred if the goods involved had been those of a completely outside party and had been picked up entirely by accident. But they were not. These goods were "picked up" because the driver was obliged under his contract to take those goods on behalf of Berk to Albright & Wilson. Berk were obliged under their contract with Albright & Wilson to deliver them; and Huktra were acting for Berk in Berk's attempt to perform that obligation. As a matter of common sense and of objective analysis it seems unavoidable that, when the driver arrived with the very load of Berk's sodium chlorite that Albright & Wilson had ordered from Berk and which it was expecting from Berk, he was in fact purporting to act in performance of that contract between Albright & Wilson and Berk. That commonsense analysis is supported by the fact that the instruction to the driver from Huktra - the reason why he was on the road - was to carry Berk's sodium chlorite.
25. Whose agent was Huktra when it gave those instructions and when it mistakenly associated with them the Biachem note? It is, it seems to me, unavoidable (as, indeed, I have already held) that in those transactions Huktra was acting generally both for Biachem and for Berk. The gentleman at Huktra who dealt with the matter associated the instructions about the Biachem documents with the load he was handling for Berk. It was not an accident or a coincidence that these two things came together. They came together because he was agent for both parties. He was not just acting as Biachem's agent. Further, when the goods were delivered (that is to say, when the sodium chlorite was delivered), it was accepted by Albright & Wilson's agent. That is shown by the customer's receipt signature on the copy of the Biachem delivery note. In my judgement, Mr Bartlett was justified in saying that, whatever the arguments about where the delivery ought to have taken place and so on, that was a deemed acceptance under section 35 of the Sale of Goods Act. And what was accepted was the Berk material.
26. In looking at all these arguments, it is important to repeat that, as Mr Bartlett put it, his clients' complaint is that there was attempted performance, but it was a failed performance or a mis-performance on the part of both parties. That is important in the context of reminding ourselves again that the question is whether purported performance had taken place. That is to be judged objectively; and when one remembers that many of the other arguments adduced by both Biachem and Berk fall away. I will mention some of those.
27. First, it was argued that the delivery of one load cannot be the performance of two contracts each for one load. Certainly it cannot, in the sense of being a successful or completed performance. But that does not impede the proper analysis of what happened being that both parties were either trying to perform or representing that they could perform, each of which latter qualifies as purported performance.
28. Secondly, Biachem argued that a rejection of the goods by Albright & Wilson (if it had occurred) would mean that they became the property of the seller under section 36 of the Sale of Goods Act. It cannot therefore be Biachem's contract because that would transfer Berk's goods to Biachem. But even leaving aside issues as to title (which I am not satisfied section 36 addresses in the way that Biachem would have it), if Albright & Wilson had rejected the goods on delivery by the driver - either because they identified them as being sodium chlorite or for some other reason - so far as Biachem are concerned, that would simply have meant that goods tendered in support of Biachem's delivery note would not have been accepted. That does not stop the acts before the rejection being the purported performance of the contract.
29. Thirdly, Berk argued that one cannot operate the Sale of Goods regime for delivery and acceptance on the basis that the contract is Berk's because the goods are Berk's. Acceptance, on the documents, was of Biachem's purported tender. Nevertheless, the fact that goods are dealt with, on the documents, as if the tender was by Biachem does not stop the objective analysis of the events also being that the actual physical delivery was on behalf of Berk. Mr ter Haar, however, reinforced his argument by taking us to sections 27 and 34, amongst others, of the Sale of Goods Act. He said that, for instance, under section 34 the question was whether the seller had tendered delivery of goods to the buyer in order to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they conformed to the contract. Tender of delivery entailed a representation that the goods were in conformity with the contract. Indeed it does. But that is what Berk, in my judgement, purported to do through its driver. It purported to tender these very goods. In so doing, it did not perform the contract; but again I repeat that it purported to perform the contract. Wilson v Rickett Cockerell, in the passage from Denning LJ that I have quoted, tells us that in that situation the rules as to implied term and liability of the Sale of Goods Act are to be applied.
30. I would, therefore, answer question 1 as did the judge. In paragraph 18 of his judgment he said:

"I hold that the events of 3 October 1996 (as there described) constituted performance or purported performance of both Berk's and Biachem's contracts with A & W."

31. Having determined that, that leaves comparatively little to argue about in relation to issues 2 and 3. As both counsel said, the answer to question 1 largely (not entirely) dictates the answers to questions 2 and 3. In so arguing, both Mr Norris and Mr ter Haar said that the answers to questions 2 and 3 that followed from the judge's answer to question 1 showed his answer to question 1 to be wrong. In the course of reviewing what the judge said about issues 2 and 3, I will advert to that criticism as well.
32. I take, first of all, issue 2, which deals with Biachem. I understood Mr Norris QC to concede that the judge's answer that Biachem had been in breach in respect of the implied term as to description followed from his finding that Biachem had been performing the contract. I would also hold that it necessarily follows also that there was a breach of the implied term of quality and fitness, as the judge so found. Mr Norris, as I have said, argued that that showed how odd the judge's initial conclusion as to question 1 was. I am unable to agree. The conclusion follows inevitably from the rule that one looks at what occurred objectively in the light of the existing contractual obligations. The subjective view of the driver or of the officials at Huktra as to what was going on is irrelevant. They were more or less mechanically performing obligations which made no sense, and which, indeed, would not have been within Huktra's drivers' powers to do unless they had been acting on behalf of Biachem. Because of the importance of documents, the tender of the delivery note was the offer of performance on behalf of Biachem and a representation by Biachem that the goods in the tanker were as stated on the delivery note. The judge was plainly right to hold Biachem in breach of those contractual terms, however much it is argued on behalf of Biachem that the moral, as opposed to the legal, fault was not that of Biachem but of its agents.
33. The position with regard to Berk is rather more complex, and we had the benefit of a careful argument on it from Mr ter Haar. Question 3(a) was a preliminary one as to the terms that were to be implied into Berk's contract with regard to documents. Were they (i) that correct documentation should be associated with the goods, or (ii) that reasonable steps should be taken to provide the correct documentation? Mr ter Haar argued that there was no need for the former and more extensive implied term, first, because the Sale of Goods Act already contained implied terms to cover the situation; and, secondly and more thoroughly, the term as to fitness for purpose included requirements as to warnings of danger in respect of notifications concerning the goods.
34. In my judgement, however, those arguments are not in point. The first need for the documents to be present is in order to identify the goods: not, in the usual case, to give warnings as to what they are or, rather, as to what they are not. That point is not affected by the terms of section 14(1) of the Sale of Goods Act: an issue about which Mr Bartlett expressed some nervousness, even though I was not certain that Mr ter Haar had in fact taken the point. However, Mr Bartlett pointed out that section 14(1) says that there should be no implied term about quality or fitness, except as provided by that section and by section 15. The short answer to that difficulty (if it is one) is that the term contended for by Albright & Wilson is not a term about quality and fitness, or at least not exclusively so. In my judgement, it is rarely (if ever) going to be satisfactory or possible to limit a term such as this (that is to say, in respect of documents identifying the goods) to the taking of reasonable steps to satisfy such a requirement. That simply seems to be inappropriate, when one is looking at a contractual term of some importance. The judge was correct in the answer that he gave to question 3(a), both for the reasons that he gave in paragraphs 26 and 27 of his judgment and because of the further reasons that I have endeavoured to set out. That being that term, there is no doubt that it was broken: all this, of course, being on the assumption that we are dealing with performance by Berk.
35. The rest of the questions, questions 3(b), (c) and (d), deal with breaches or potential breaches by Berk. That was dealt with, if I may respectfully say so, in short but extremely clear terms by the learned judge in paragraphs 29 to 34 of his judgment. I agree with what he says there and I can deal with the questions quite shortly by setting out those paragraphs:

"29.I need next to answer the questions whether Berk was in breach of the (statutory) implied term as to quality and fitness by reason of the fact that the Sodium Chlorite was accompanied by documentation inaccurately describing it as EPI. This depends on whether, especially in the context of this industry, the documentation can be linked to the quality or fitness of the goods. Free of authority, and construing the relevant wording of the statute literally, one might be inclined to give a negative answer. The matter is, however, by no means free of authority.

30.My attention was drawn to a number of cases, of which the most pertinent are perhaps Niblett v Confectioners' Materials Co Ltd [1921] 3 KB 387, 395 (per Bankes LJ) and Hardwick Game Farm v Suffolk Agricultural Poultry Producers Assn, Kendall & Sons v Lillico & Sons [1969] 2 AC 31, 119 (Lord Pearce). In the former case, a decision of the Court of Appeal, Bankes LJ (with whom Atkin LJ agreed) expressed the view, in the context of condensed milk, that "The labels were as much part of the state or condition of the goods as the tins were. The state of the packing affected the merchantable quality of the goods." I am persuaded, in the present context, that the delivery note gave in effect a misleading description of the Sodium Chlorite and was such as to constitute a breach of the statutory terms relied upon.

31.I therefore answer Issue (3)(b) also in the affirmative.

32.It being accepted that the Sodium Chlorite was to be delivered to the Fluids Plant, my earlier ruling on Issue (1) really determines the next matter I have to address. I do consider that Berk was in breach in effecting actual delivery of the consignment to the Phosphates Plant. Accordingly, I answer Issue 3(c) in the affirmative too.

33.My approach to the next matter is naturally conditioned by my answer to Issue (3)(a)(ii). I have already decided that it was an implied term that the delivery pursuant to the contract:

(a)would include and/or be accompanied by documents correctly identifying the substance being delivered;

(b)would not include and/or be accompanied by documents representing the Sodium Chlorite to be some other substance.

34.In the light of the content of the Biachem delivery note, and my earlier ruling as to Issue (1), it is clear that I must logically hold that Berk was indeed in breach of each of these two implied terms. I correspondingly answer Issue 3(d) in the affirmative."

36. A short point was taken on this issue by Mr ter Haar. He agreed that, given all the assumptions against him (that is to say, assuming that his client had been performing the contract), he would be bound by section 14 of the Sale of Goods Act. He, however, said this. A breach of section 14 was to be determined as to what happened at the place of delivery. That was required to be at the Fluids Plant. No delivery was made there: the goods were sent to the Phosphates Plant. So the time for performance by Berk had not yet arisen, and the only fault on Berk's part was not to deliver at all. As a result, the damages would be somewhat less than might accrue if, indeed, there had been the breaches found by the judge in answer to questions 3(b), (c) and (d).
37. If I may respectfully say so, at first sight that was a logical and persuasive argument, but I fear that it is wrong. It assumes, as other arguments in this case have assumed, that breaches of terms can only arise when there is actual and total performance of the contract. That is not so: I revert again to Denning LJ in Wilson v Rickett Cockerell. Here, performance was tendered at the wrong place, but it was purported performance nonetheless. Mr Bartlett also pointed out that there had been delivery and that delivery had been accepted in the way that I have already set out earlier in this judgment; the breach, therefore, was one of mis-delivery, but that did not mean that there was no purported performance of the contract. I agree with that analysis. For those reasons, therefore, I would respectfully agree with the judge in the answers that he gave, both under issue 2 and under issue 3.
38. Issue 4 is something rather different. It arises only between Biachem and Albright & Wilson. Originally there was a "battle of the forms", in which Biachem contended for its terms to have been those governing this contract, Albright & Wilson saying that its terms would so govern. The judge found that Biachem's terms had not governed the contract, but confirmed that Albright & Wilson's had. The first of those findings is not now complained of by Biachem. But the second is, and I must, therefore, review it.
39. The order that caused the trouble, if I may put it in those terms, was the fifth in a series of orders. That series was started by a Biachem quotation of 24th May 1996, which said, amongst other things:

"Further to your recent enquiry we have pleasure in confirming our current prices. ...

Prices subject to final confirmation at time of order. Quotation subject to our general terms and conditions of sale."

40. That was met by a document from Albright & Wilson dated 31st May, which was described on its face as a "blanket order". It set out an order for EPI and had this inscribed on its face:

"Please supply the undermentioned goods on the terms specified on this document and such supply shall at all times be subject to A & W's Conditions of Order already notified to you."

41. In fact, as the judge found, the terms were never notified to Biachem.
42. There was then a series of telephone orders - for instance, one load on 16th July 1996 - and they would be followed by a standard form purchase order from Albright & Wilson which would set out the order and say, in the following terms:

"Please supply the undermentioned goods on the terms and conditions set out in Albright & Wilson UK Limited's conditions of order. Please advise us if you wish to see a copy and one will be supplied."

43. That document was described as "Confirmation, as arranged by telephone".
44. Such a procedure was followed and such a document was produced in respect of the 3rd October delivery. Biachem, having delivered on these occasions, subsequently furnished an invoice which referred to its own terms. Those terms, as I say, are not now relied on. The judge found that they had been proffered too late to be effective, and I respectfully agree.
45. The judge concluded, having looked at this history in detail, as follows:

"43.It is accepted that the proper test is to be found in the Hardwick case (at p.113 D-E, per Lord Pearce). That is to say, whether a reasonable person standing in the shoes of Biachem would conclude that A & W had assented to be bound by the Biachem terms and conditions. ...

44.My answer to Issue (4) is that a reasonable person in Biachem's shoes in September 1996 would not have come to the conclusion that A & W had agreed to be bound by the Biachem conditions. In so far as it is necessary to decide the matter, I would myself find that the sequence of events I have described was such as to lead a reasonable onlooker to determine that the contracts were governed in each case by the A & W conditions."

46. This was really a question of fact and assessment for the judge, he having directed himself in terms that not only were not contested but, in my respectful judgement, were correct. As Sir Swinton Thomas pointed out in the course of argument, in such circumstances this court would only intervene if the judge had clearly made a mistake or had reached a conclusion that could not be reasonably reached on the facts. As I understood it, Mr Norris felt constrained to agree with Sir Swinton that that was the limit of the court's jurisdiction.
47. In my judgement, it is impossible to say here that the judge was plainly wrong. I would go on to say that it is not possible to say that he was even wrong at all in finding, as he did, that the blanket order from Albright & Wilson that dominated the transactions thereafter imposed on the transactions the reliance on Albright & Wilson's terms that were reiterated in subsequent contract notes, albeit that these were confirmations of particular orders sent by telephone. Albright & Wilson's terms were not sent to Biachem, but they were available and Biachem could have asked for them.
48. This was a transaction between competent and well-informed businessmen. It was not an oral consumer contract, as was the case in two cases referred to us, McCutcheon v David MacBrayne Ltd [1964] 1 WLR 125 and Hollier v Rambler Motors (AMC Ltd) [1972] 2 QB 71. The principles, contractually, are the same whatever the type of contract; but the judge's assessment of the facts and of the reasonable beliefs of the parties has to be against the particular commercial background. Against the commercial background of these two parties and the way they dealt with each other, I have no doubt at all that the judge was right in the conclusion he came to that Albright & Wilson's conditions governed this contract. I would, therefore, also uphold the judge on issue 4.
49. For those reasons, I would dismiss the appeals of both parties.
50. SIR SWINTON THOMAS: I agree.
51. LORD JUSTICE HENRY: I also agree.
Order: appeals of both parties dismissed with costs; applications of both parties for permission to appeal to the House of Lords refused. (Order does not form part of approved Judgment)