United Kingdom House of Lords Decisions

Lord Chancellor—I do not think any question of law really arises upon this appeal. The respondent, when on his way from Hastings to Glasgow to take delivery, was detained in London, and did not arrive in Glasgow till the morning of 17th July. The shipowner and his brother did not receive any communication from him till shortly after mid-day on the 17th. He had gone to the vessel, and attempted to telephone from there, but was unable to get into communication with the office. He sent a telegram shortly after one o'clock. Meantime, about an hour and a-half earlier, the shipowner had entered into a charter-party with other persons, and refused to carry out the arrangements with the pursuer, on the ground that the charter was at an end by reason of the pursuer having failed to implement his obligations. The charter-party did not stipulate any time for the vessel being ready; it stipulated for the payment of the money in advance, but the first payment was only to be made before the vessel left the Clyde. The charter-party did not contain any provision enabling the shipowners to put an end to the charter-party in case the banker's guarantee was not delivered at any particular time, or indeed if it was not delivered at all. There was an express stipulation entitling the shipowner to put an end to the charter-party if any of the instalments were not paid at the time provided for. It was quite clear there was not any breach relating to the payment of those instalments, and therefore there was no power to put an end to the charter. No doubt it was true that if the charterer was not ready and willing to carry out his contract, then the shipowner was entitled to refuse to carry out the contract on his part. But it could not be contended that in this case the charterer was not ready and willing to carry out his part of the contract. The only question really raised was whether he had, by his conduct, precluded himself from insisting that he was ready and willing to carry out the charter, and had therefore justified the other party in acting on the assumption that he was not. I do not think that the defender did really act upon a conclusion derived merely from the conduct of the pursuer after he received notice that the vessel was ready for delivery. It was rather upon his conduct in that respect, coupled with his conduct prior to that date, that the defender really acted. Of course, the question was not what actually influenced the defender, but what effect the conduct of the pursuer would be reasonably calculated to have upon a reasonable person. The defender thought from the outset that the pursuer was not willing to be the bankers' guarantee, and that led to his regarding the pursuer as a person likely to back out of his obligations. Therefore when the pursuer did not arrive on the morning of the 16th, the defender jumped somewhat readily to the conclusion that the pursuer was not in a position to carry out the contract, and the sooner he entered into a contract with somebody else the better. But was there enough in the conduct of the pursuer to justify the course? I can find nothing more in the pursuer's conduct than this, that having announced he was intending to arrive on the morning of the 16th, he did not arrive till the morning of the 17th, and he gave during the interval no explanation of why he did not arrive. To my mind it would be a very dangerous thing to say that those circumstances were sufficient to justify a party to a contract to say—“I have therefore come to the conclusion that the other party to the contract does not intend to carry it out. The contract is at an end, and I will deal with anyone else.” It would not be safe, looking at matters of business from a business point of view, to draw any such conclusions. It might lead to contracts being got rid of under circumstances where really there was on the part of the other party to them a thoroughly honest intention of carrying them into effect. I move that the judgment appealed from be affirmed, and the appeal dismissed.

Lord Morris said he was inclined to the view that the appellant was justified in the course he had taken.

Lord Watson, Lord Ashbourne, Lord Macnaghten,

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