Francis v Lyon

[1907] HCA 12

4 CLR 1023

CHARLES DECIMUS FRANCIS

JOHN LYON

RESPONDENT. DEFENDANT,

ON APPEAL FROM THE SUPREME COURT OF

QUEENSLAND. Contract of sale - Sale of sheep-Right of purchaser to refuse to accept sheep

" unfit to travel Refusal to accept others which were fit to travel-Provisional - refusal - Measure of damages - Repudiation by vendor - Sale of Goods Act (Q.) 1896 (60 Vict. No. 6), secs. 14 (2), 39, 52.

By a contract for the sale of a specific flock of sheep of a specified number at 30 May 1, 4. a certain price per head of those delivered and accepted, it was provided that the sheep should be delivered at a place between 200 and 300 miles from where the sheep then were, and to which the sheep would have to travel on foot, and that the purchaser should have the option of rejecting all sheep untit to travel. By the law of Queensland travelling sheep are required to travel at the rate of six miles per day. The destination of the sheep was unknown to the vendor, but it was within the contemplation of the parties

4 CLR 1024

that they would have to travel a considerable distance. The purchaser paid a deposit of £250. In an action by the purchaser for return of the deposit and for damages for non-delivery of the sheep, it appeared that the vendor refused to deliver any of the sheep unless the purchaser would agree to accept and pay for sheep which were in fact unfit to travel more than one day's stage.

Held, that this amounted to a breach of contract by the vendor entitling the purchaser to a return of the deposit.

Held, also, that a refusal by the purchaser to accept some of the sheep which he should have accepted, which refusal the jury found the purchaser was willing to reconsider, did not entitle the vendor to refuse to deliver the sheep which the purchaser was willing to accept.

Held, also, that, even had the refusal been absolute and unjustifiable, provided that it was not of such a number as to go to the foundation of the contract, the vendor would not have been entitled to refuse to deliver those sheep which the purchaser was willing to accept, his remedy being under sec. 39 of the Sale of Goods Act 1896 (Q.).

The jury having found that there was no available market for the sheep at the place of delivery, but that the value of the sheep at that place was not more than the price agreed to be paid for them: Held (Griffith C.J. dissent- ing), that the purchaser was only entitled to nominal damages.

It appeared that the defendant had made a large profit by the re-sale of the sheep: Held by Griffith C.J., that this latter finding was not conclusive as to the estimated loss directly or actually resulting in the ordinary course of events from the sale in breach of contract (Sale of Goods Act, sec. 52 (2) ), and that the defendant was entitled to a re-assessment of damages.

Decision of Supreme Court, Francis v. Lyon, (1906) St. R. Qd., 306,

PLAINTIFF (the appellant) agreed in July 1905, to buy from defendant (the respondent) 6,600 specific wether hoggets, to be delivered at Barcaldine in October 1905, at 6s. per head, with right to reject all sheep lame, diseased, or unfit to travel: £250 was to be paid at once by the plaintiff into the defendant's bank account, the balance of the purchase money to be paid when the sheep were delivered, and delivery to be treated as "conditional" delivery until full payment. The place of delivery was altered by agreement to Ilfracombe, and the £250 was duly paid. On the date for delivery 6,183 sheep were mustered at Ilfracombe, and a sample draft of 663 submitted for the plaintiff's inspection. He proposed to reject 78 as being "unfit to travel" but the

4 CLR 1025

defendant insisted that the plaintiff was bound to accept and pay for all sheep that were "fit to travel" for one day's stage, and absolutely refused to deliver any of the sheep except on that condition. The plaintiff refused to accede to this interpretation of the meaning of the contract, whereupon the defendant declared the contract at an end, and no inspection was made of any more of the sheep. Shortly afterwards he resold the sheep at a con- siderable profit. The plaintiff brought an action for damages for non-delivery of the sheep and for recovery of his deposit.

The defendant paid £250 into Court, with a denial of liability. In answer to 46 questions submitted to them by Power J., the jury found, inter alia, that the plaintiff rejected more of the sample draft of sheep than he was properly entitled to reject, on the interpretation of "unfit to travel" most favourable to him- self; but that this rejection was only provisional. The value of the sheep refused was found to be the same as the contract price. The jury were also asked to find what profit or loss the plaintiff would have made if he had obtained delivery and travelled the sheep and sold them at Charleville in March 1906 but answered that there was no evidence upon which to make an estimate. Judgment was then entered for the defendant on both of plain- tiff's claims, and this decision was sustained by the Full Court

4 CLR 1026

the appellant was willing to accept of the sheep offered to him all

that were reasonably fit to travel"; they were only asked this question as to sheep fit to travel' for one day; this was a mis- direction which resulted in no proper trial of the question at issue. If the appellant rejected sheep "fit to travel," this would be ground for a counter-claim or action, not for total repudiation by the vendor. The appellant on his part never repudiated the agreement; the jury found that he was "ready and willing to accept 5,455 sheep," which was theirproportionate estimate of the number which would have been accepted from the whole flock, after rejection of such as were in his judgment " unfit to travel," in the terms of the agreement. The rejection that he in fact made was only provi- sional, and could not amount to a repudiation: Mersey Steel and Iron Co. v. Naylor, Benzon &Co. 1; Rhymney Railway V. Brecon and Merthyr Tydfil Junction Railway 2. This rule does not only apply to contracts where delivery is made by instal- ments: Howes Bros. v. Queensland Milling Co. 3; Johnstone V. Milling 4. The appellant's claim to reject certain doubtful sheep did not go to the root of the contract; the vendor's refusal to deliver any sheep unless the appellant submitted to take them all amounted to a wrongful repudiation: Prendergast v. Lee 5; Bradley &Son v. Bertoumieux 6; Oxford v. Provand 7; Freeth v. Burr 8.

There was no proper trial on the question of damages. The appellant was not bound to realize the sheep at once if he had taken delivery; his purpose was to hold these sheep to sell after- wards, and he is entitled to substantial damages for the profits he would have made, of which there was sufficient evidence: Sale of Goods Act 1896 (60 Vict. No. 6), secs. 39,52(2); Greaves v. Ashlin 9; Buckland &Co. v. Crombie &Co. 10. The £250 was not a deposit but a part payment, and the respondent was not entitled to retain it except on an absolute repudiation by the appellant: Palmer v. Temple 11; Ex parte Barrell In re Parnell 12;

19 App. Cas., 434. 269 L.J. Ch., 813. 38 Q. .L.J., 83. 416 Q.B.D., 460. 56 V.L.R. (L.), 411. 617 V.L.R., 144. 75 Moo. P.C.C. (N.S.), 150. 8L.R. 9 C.P., 208. 93 Camp., 426. 10Q.L.J., 151. 119 A. &E., 508. 12L.R. 10 Ch., 512. 4 CLR 1027

Howe v. Smith 1; Levy v. Stogdon 2; Cornwall v. Henson 3; H. C. Benjamin on Sales, 5th ed., pp. 954, 955; Sale of Goods Act 1896 (60 Vict. No. 6), secs. 54, 55.

Lukin and E. A. Douglas, for the respondent. This appeal is merely a fight as to whether the appellant is entitled to 1s. damages or nothing; he could have taken out the £250 paid into Court: Order XXVI., r. 6; Wilson and Grahame's Practice of Supreme Court of Queensland. p. 113.

[ISAACS J.-The breach of this contract entitles the plaintiff to claim two things, damages and return of deposit are not these two causes of action ?]

The appellant was not ready and willing to take delivery of the full number of sheep which he was bound to take, when offered in accordance with the terms of the agreement. The jury found that only 90 were "unfit to travel " by rail, and only 400 unfit to travel" by road for one day's journey but the appellant rejected a much greater proportion. The respondent was right in treating this arbitrary refusal as a repudiation of the agree- ment. The contract was indivisible; it was no fulfilment of the contract on the part of the appellant to accept only such sheep as it suited him to take: Kingdom v. Cox 4; Chalmers on Sale of Goods Act, sec. 30 (1), 6th ed., p. 72; Reuter v. Sala 5; Logan V. Mesurier 6; Benjamin on Sales. 5th ed., pp. 323, 698.

[ISAACS J.-If, as you say, the contract is indivisible, the wrongful rejection of one sheep goes to the root of the contract. There must be some margin where a right of rejection is given.]

The contract required the appellant to perform two concurrent acts, namely to take the full number of sheep offered to him in the stipulated condition, and to be ready and willing to pay for that number: Bishop v. Shillito 7; Loeschman v. Williams 8; Forrestt &Son Ltd. v. Aramayo 9; Calcutta and Burmah Steam Navigation Co. v. De Mattos 10. The right to reject does not affect the essence of the contract if it is unfairly restricted by the

127 Ch. D., 89. 2(1898) 1 Ch., 478. 3(1900) 2 Ch., 298. 45 C.B., 522, at p. 525. 54 C.P.D., 239, at p. 247. 66 Moo. P.C.C., 116. 72 B. &A., n., 329. 84 Camp., 181. 983 L.T., 335. 1032 L.J.Q.B., 322, at p. 335. 4 CLR 1028

OF A. respondent; it amounts only to a breach of warranty: Sale of

Goods Act, Eng. (56 &57 Vict. C. 71), sec. 11, and did not entitle the appellant to throw up the contract as he did; he should have accepted all the sheep offered, and sued for breach of warranty: Davis v. Hedges 1.

[GRIFFITH C.J. referred to Mondel v. Steel 2.] If this case depends entirely on the Sale of Goods Act 1896 (60 Vict. No. 6), the only question is whether there was repudiation on either side. The respondent never repudiated the contract; he insisted upon its complete fulfilment: Mersey Steel and Iron Co. v. Naylor, Benzon &Co. 3; Whitcher v. Hall 4; Romberg V. Gilbert 5.

Fit to travel" means fit to travel by any reasonable means; and on the evidence the intention of the parties was apparent that the sheep were brought to Ilfracombe, a railway station, in order to be travelled by train. The jury found that all but about 100 of the whole 6,183 were fit to travel by rail to agistment country.

On the question of damages, the appellant cannot claim what he might have made by a sale of the sheep in March, when they sold for 10s. 6d. a head. At the time, and under the circumstances surrounding the breach of the contract, the appellant would have lost money on the sheep; the evidence was that he would have been lucky to get rid of them at a loss: Mayne on Damages, 7th ed., p. 19; Thompson v. Marshall 6; Roth &Co. v. Taysen, Townsend &Co. 7. The appellant in fact did not prove any damages to the satisfaction of the jury, and no new trial can be ordered where he is only entitled at most to nominal damages: Macfarlune v. Leclaire 8; Rich v. Strelitz Bros. &Moss 9; Allan v. Pratt 10. In any case, having caused the breach of contract, the appellant is not entitled to recover the £250 Fitt V. Cassanet 11; Levy v. Stogdon 12. The appellant cannot succeed either in trover or breach of contract: Benjamin on Sales, 5th ed., p. 932; the property and right to possession were

1L.R. 6 Q.B., 687. 28 M. &W., 858. 39 App. Cas., 434, at p. 439. 45 B. &C., 269. 511 Q.L.J., 96, at p. 101. 63 W.W. &àB. (L.), 150. 773 L.T., 628. 815 Moo. P.C.C., 181. 94 C.L.R., 601. 1013 App. Cas.. 780. 1112 L.J.C.P., 70. 12(1898) 1 Ch., 478, at p. 485. 4 CLR 1029

not to pass until complete payment: Blackburn on Sale, 2nd ed., H. pp. 143, 493. The contract was clearly framed to reserve the right of disposition in the vendor: Sale of Goods Act, Eng. (56 &57 Vict. c. 71), sec. 19; the contract being at an end, neither side had any claim: Atkinson v. Smith 1; Ex parte Chalmers; In re Edwards 2; Sale of Goods Act (Qd.) 1896 (60 Vict. No. 6), sec. 41 (2); Ogg v. Shuter 3; Mirabita v. Imperial Ottoman Bank 4. It does not matter that the appellant bona fide claimed a certain rejection; the rejection he exercised was SO extensive as to go to the root of the contract: Ebbw Vale Steel, Iron and Coal Co. v. Blaina Iron Co. 5.

As to costs: The appellant should have taken out, when he could, the £250 paid into Court by respondent, and is not entitled to costs on that count, nor to interest, as the jury did not give it: Williams v. Ward 6.

[ISAACS J. referred to Forster v. Farquhar 7.]. Nominal damages on the other count do not entitle the appellant to costs: Beaumont v. Greathead (8); Tettey v. Wanless 9.

[ISAACS J. referred to London, Chatham and Dover Railway Co. v. South Eastern Railway Co. 10.]

The £250 in any case swallows up the 1s. for nominal damages, and no separate costs should be awarded in such a case: Order

XXVI, r. 6; Order XCI., r. 3 of Queensland Supreme Court Practice.

Ryan in reply. There has been no serious contention by the respondent that the appellant's claim of rejection went to the root of the contract: Sale of Goods Act 1896 (60 Vict. No. 7), secs. 13; 14. The property in the goods passed when the sale was made: Calcutta and Burmah Steam Navigation Co. v. De Mattos 11. The appellant's claim for damages is for what he might reason- ably have made from the sale of these sheep. The jury were wrongly limited by being asked to find what profits could have been made by sale at Charleville six months later.

114 M. &W., 695. 2L.R. 8 Ch., 289. 31 C.P.D., 47. 43 Ex. D., 164. 56 Com. Cas., 33. 655 L.J.Q.B., 566. 7(1893) 1 Q.B., 564. 9L.R. 2 Ex., 275. 10(1893) A.C., 429. 1132 L.J.Q.B., 322, ar p. 328. 4 CLR 1030

[GRIFFITH C.J. referred to Greaves v. Ashlin 1.

ISAACS J. referred to Mayne on Damages, p. 218; Engell V. FRANCIS

Fitch 2; Robinson v. Harman (3).] LYON.

The appellant suffered substantial damage from the fact that these were specific sheep of a particular class he could not go into the market and obtain similar sheep when refused these There should be a new trial for reassessment of damages, The jury never found that appellant was entitled only to nominal damages, and that cannot be inferred from their finding.

[HIGGINS J.-There was, upon the evidence, no difference between the market price of these sheep, on or about the day for delivery, and the price the appellant had to pay.]

The appellant is at least entitled to the extra price he would have to pay to obtain similar sheep at the place of delivery. Sale of Goods Act 1896 (60 Vict. No. 7) lays down a broader principle than that the current value is the measure of damages: Benjamin on Sales, 5th ed., pp. 986 (note 3), 987.

[Lukin mentioned Thol v. Henderson 4.] That case is only a decision that the appellant would not be entitled to special damages for loss of profits on a contemplated resale known to both parties if the jury found he is only entitled to nominal damages on the market value; also it is of no authority in face of Hammond v. Bussey 5.

The appellant is entitled to the full costs in the Court below, having obtained £250 and 1s. damages: Baylis v. Lintott 6 Powell v. Vickers, Sons &Maxim Ltd. 7; Tipping v. Jepson 8; Wood v. Cox 9; Brilliant G. M. Co. v. Craven 10; O'Con- nor v. Star Newspaper Co. 11 Queensland Supreme Court Practice, Order XXVI., r. 6.

Cur. adv. vult.

GRIFFITH C.J. This is an action brought by a purchaser against a vendor, claiming damages for non-delivery of sheep in

13 Camp., 426. 2L.R. 4 Q.B., 659. 48 Q.B.D., 457. 520 Q.B.D., 79. 6L.R. 8 C.P., 345. 7(1907) 1 K.B., 71. 822 T.L.R., 743. 95 T.L.R., 272. 109 Q.L.J., 144. 1168 L.T., 146. 4 CLR 1031

accordance with the contract of sale. The contract, which was dated 8th July 1905, described the subject matter of it as 6600 wether weaners, 8 to 10 months old, then depasturing on defend- ant's run, Glenlyon, and lately inspected by the purchaser. The sale was, therefore, of specific chattels. The sheep were to be shorn at Richmond in Northern Queensland, and were to be delivered in the following October at Barcaldine, which is a town upon the Central Railway, distant from Richmond by ordinary roads available for travelling stock between 200 and 300 miles. The contract contained the following words Rejections: lame, diseased, and sheep unfit to travel." A sum of £250 was to be and was, paid to the vendor at once as part of the price, and the balance was to be paid immediately after delivery, which was to be considered as conditional delivery" until actual payment of the balance. The price was 6s. per head, i.e. of all sheep delivered and accepted. The place of delivery was afterwards altered by mutual consent to Ilfracombe, another town on the Central Railway. The flock, then consisting of 6183 sheep, arrived at Ilfracombe in October, and it was arranged that delivery should be given on the 15th of that month. It appeared that at this time grass and water were scarce in that part of Queensland, and in consequence some of the sheep were in weak condition on arrival at Ilfracombe. By the law of Queensland travelling sheep are required to travel at the rate of at least six miles a day.

The vendor claimed that the purchaser was bound to accept and pay for all sheep in such a condition as to be able to travel one day's stage of six miles, although they would then be unable to go any further. Having regard to the condition of that part of Queensland, it must, I think, be taken that the contract was made in contemplation of the fact that the sheep could not remain at the place of delivery, but would have to be removed to some distance. The plaintiff's residence was near Charleville, between 200 and 300 miles further south, but there was nothing in the facts to show that the vendor had any reason to suppose that that particular locality was to be their destination. It must, therefore, I think, be taken to have been in the contempla-

4 CLR 1032

tion of both parties that the sheep would have to travel for a

considerable, though indefinite, distance.

The whole flock was not examined by the plaintiff. About 663 of them were first submitted for his inspection, of which he proposed to reject 78. The jury found that, of these 78, 10 were unfit to travel even 6 miles, 26 were unfit to travel for three days, and 48 were unfit to travel 100 miles. The residue, they thought, were fit to travel 100 miles or more. These upon any construction of the words "fit to travel" were within the contract. It appears, therefore, that the plaintiff claimed to reject more sheep than he was entitled to do out of the first batch of 663. The jury, however, found that this rejection was provisional only, and that the plaintiff was willing to review his decision. The defendant's agent, on the other hand, insisted that the plaintiff was bound to accept and pay for all sheep fit to travel for one day's stage, and absolutely refused to deliver any sheep unless the plaintiff would accept this interpretation of the contract. The plaintiff would not accept it, whereupon the defendant refused to deliver the sheep.

The first question for determination is whether the defendant was justified in this refusal. This depends upon the meaning of the words " fit to travel." In my opinion these words mean fit at the time and place of delivery to travel on foot at the rate of six miles a day for a reasonable distance under ordinary conditions of country. Sheep only able to walk six miles and then unable to move further do not, in my opinion, answer this description. I think, therefore, that the defendant's refusal was a breach of the contract. It was argued that the right of rejection was to be exercised at the place from which the sheep were to start for delivery. But, as the amount of the price to be paid depended upon the number of sheep delivered and accepted, and as that number could not be ascertained until the right of rejection had been exercised, I think that this construction is untenable.

The defendant, however, contends that, even if this be so, the plaintiff cannot maintain the action, because he was not ready and willing to perform the contract on his part, i.e., to accept and pay for all the sheep which were fit to travel within the meaning of the contract. In fact, the plaintiff insisted on performance of

4 CLR 1033

the contract as he understood it, but it appears, as already said, H. that he had made a mistake as to the fitness of some of the sheep.

The defendant having taken up the position already stated, no further examination of the rest of the flock was made by the plaintiff. The jury, apparently on the assumption that the 663 sheep examined were a fair average of the whole flock, found that 243 of the 6,183 sheep were not fit to travel for three days, that 205 more were not fit to travel for 100 miles, while the sheep which the plaintiff provisionally refused to accept would on the same assumption have been 728 in number, as compared with 448. It is contended for the defendant that this pro- visional refusal affords a defence to the action. I am disposed to think that the refusal, being provisional only, was irrelevant, and that the defendant's wrongful and absolute refusal to per- form the contract at that stage of the proceedings dispensed with any further obligation on the part of the plaintiff to show his willingness to perform the contract on his part. But I will deal with the case on the assumption that the plaintiff's refusal to accept some sheep which, as it now turns out, he ought to have accepted was definite.

The defendant's contention is not only that the plaintiff was bound to accept and pay for every individual sheep which was in fact fit to travel," but that his doing SO was a condition of the contract, a breach of which entitled the vendor to treat the con- tract as repudiated, and not a mere breach of an incidental term of the contract, to be compensated in damages.

Sec. 14, sub-sec. (2), of the (Queensland) Sale of Goods Act 1896 expressly provides that:- Whether a stipulation in a contract of sale is a condition the breach of which may give rise to a right to treat the contract as repudiated, or a warranty the breach of which may give rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated, depends in each case on the construction of the contract: a stipulation may be a condition, though called a warranty in the contract."

This subsection does not in terms apply to the rights of sellers, but the rules as to the construction of contracts are the same as

4 CLR 1034

regards both buyer and seller. This is, indeed, assumed by sec. 39 which provides that: When the seller is ready and willing to deliver the goods, and requests the buyer to take delivery, and the buyer does not within a reasonable time after such request take delivery of the goods, he is liable to the seller for any loss occasioned by his neglect or refusal to take delivery, and also for a reasonable charge for the care and custody of the goods This section does not affect the rights of the seller if the neglect or refusal of the buyer to take delivery amounts to a repudiation of the contract."

The question, then, is whether upon a proper construction of this contract it was the intention of the parties that the right of the purchaser to delivery of any sheep should depend upon his not making the mistake of erroneously rejecting one or more sheep which a jury might afterwards think he should have accepted. In Bentsen v. Taylor, Sons &Co. 1, Bowen L.J. referring to this question said :- Of course it is often very difficult to decide as a matter of construction whether a repre- sentation which contains a promise, and which can only be explained on the ground that it is in itself a substantive part of the contract, amounts to a condition precedent, or is only a warranty. There is no way of deciding that question except by looking at the contract in the light of the surrounding circum- stances, and then making up one's mind whether the intention of the parties, as gathered from the instrument itself, will best be carried out by treating the promise as a warranty sounding only in damages, or as a condition precedent by the failure to perform which the other party is relieved of his liability. In order to decide this question of construction, one of the first things you would look to is, to what extent the accuracy of the statement- the truth of which is promised-would be likely to affect the substance and foundation of the adventure which the contract is intended to carry out."

In the present case it was, no doubt, an implied term of the contract that the purchaser should accept every sheep fit to travel," and that he would not exercise his right of rejection in respect of any such sheep. But did a breach of this stipulation

1(1893) 2 Q.B., 274, at p. 281. 4 CLR 1035

" affect the substance and foundation of the adventure which the contract is intended to carry out ?" The sale was of a specific flock of sheep. The stipulation as to rejection was to be observed at a future time, and at a distant place, when the vicissitudes of climate might render it very difficult to ascertain exactly whether a particular animal was or was not fit to travel, which is in any case more or less a matter of opinion. I think it is impossible to say, after looking at the contract by the light of the surrounding circumstances, that the intention of the parties would best be carried out by treating this promise as a condition precedent by the failure to perform which the other party was to be relieved of his liability. I adopt what Lord Blackburn said in Mersey Steel and Iron Co. v. Naylor, Benzon &Co. 1 The rule of law, as I always understood it, is that where there is a contract in which there are two parties, each side having to do something (it is SO laid down in the notes to Pordage v. Cole 2 if you see that the failure to perform one part of it goes to the root of the contract, goes to the foundation of the whole, it is a good defence to say, I am not going on to perform my part of it when that which is the root of the whole and the substantial consideration for my performance is defeated by your misconduct''

I am therefore of opinion that, even if the plaintiff absolutely and unjustifiably refused to accept some sheep (not being of such a number as to go to the foundation of the contract), the defendant was not entitled to refuse to deliver the sheep which the plaintiff was willing to accept. Complete redress for the breach of this stipulation would have been afforded by the rule laid down in sec. 39 of the Sale of Goods Act. The case falls, I think, within the third of the well-known rules formulated in the notes to Pordage v. Cole 3. When a covenant goes only to part of the consideration on both sides, and a breach of such covenant may be paid for in damages, it is an independent covenant, and an action may be maintained for the breach of the covenant on the part of the defendant, without averring performance in the declaration."

I am therefore of opinion that the defence that the plain-

19 App. Cas., 434, at p. 443. 21 Wms. Sannd., 548 (ed. 1871). 31 Wms. Saund., 548 (ed. 1871), 4 CLR 1036

tiff was not ready and willing to perform the contract on his

part was not established, and the plaintiff was entitled to judg ment upon the findings of the jury.

The defendant, as to his deposit of £250, paid £250 into Court with a denial of liability, and the plaintiff went on with the action claiming substantial damages in addition. The question of damages remains to be determined.

The plaintiff is, of course, entitled to repayment of the £250 and probably with interest, if the jury had thought fit to give it. He contends that he is also entitled to substantial damages for loss of the bargain. The rule of damages prescribed by sec. 52 of the Sale of Goods Act in the case of wrongful refusal to deliver is as follows :-

(2.) The measure of damages is the estimated loss directly

and naturally resulting, in the ordinary course of events, from the seller's breach of contract. " (3.) When there is an available market for the goods in

question the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or current price of the goods at the time or times when they ought to have been delivered, or, if no time was fixed, then at the time of the refusal to deliver."

I understand the term "available market" to mean that the circumstances, including conditions of time and place, are such that a purchaser having the purchase money in his hands can, then and there, if he SO desires, buy other goods of the same quality. In the case of a specific flock of sheep, of particular age and quality, and to be delivered in a particular spot in the vast pastoral districts of Western Queensland, it must often, I should think generally, happen that these conditions do not exist. The jury found in effect that there was no such available market at which the plaintiff could have bought other sheep of the same quality at that time. Recourse must therefore be had to the general rule of sub-sec. (2).

The jury found in answer to a specific question that the value of the sheep which the defendant refused to deliver was not on 15th October more than the agreed price, It appeared that in

4 CLR 1037

the following March the defendant himself sold the identical flock, SO far as it had not been reduced by death, at a price which, if the plaintiff had had the sheep and sold them at the same price, would have left him a considerable profit.

The jury were also asked What amount (if any) would the plaintiff have made or lost over and above his expenses and probable losses if the sheep had been travelled by him to Charle- ville and sold during the month of March 1906 ?" to which they replied :- No evidence of the market price of similar sheep to the Glenlyon sheep in the month of March 1906 being offered, we are unable to estimate the profit or loss that the plaintiff would have made had he travelled such sheep to Charleville."

There was evidence that in October the plaintiff could have bought a flock of sheep of quality not very different from the Glenlyon sheep, but not for less than 6s. 6d. per head. I think that in the application of the statutory rule regard must be had to the subject matter of the contract and the purpose to which, according to the conditions of time and place and the usual course of business in such matters, the sheep would probably be put.

It is suggested that the value of the goods at the time of breach involves all these elements. No doubt, in estimating the economic value of a thing at any particular time all these things may and should be taken into consideration. But I think that the statutory measure of damages is not synonymous with the difference between the contract price and the value at the time of breach as that term is ordinarily understood. That is the measure of damages prescribed by the third sub-section, but only applies in its entirety when there is an available market. In my opinion the jury would understand the question "what was the value of the sheep," &. as meaning 'What was the price at which the plaintiff could on that day have sold them ?" But he was not under any obligation to sell them on that day. It appears to me that, if the Court treats the answer to this question as an answer to the question involved in the rule in sub-sec. (2), it is substituting for the rule prescribed by the legis- lature a rule which is not the same, although its application may in many cases give the same answer. See Bank of England V.

4 CLR 1038

A. Vagliano Brothers 1. There is no suggestion that the jury

received any direction as to the measure of damages except such as was implied in the questions themselves. If the jury had been properly directed, they might, in my opinion, upon the evidence to which I have referred, have awarded a substantial sum for damages. I think, therefore, that he is entitled to a fresh assess- ment of damages.

I understand, however, that my learned brothers are of a different opinion. In this view the plaintiff is entitled to judgment for £250 and perhaps 1s. in addition. He is also entitled to the costs of the action up to payment into Court, and to the costs of the issues as to breach of contract.

I think that under the circumstances of this case, and having regard to the form of the pleadings, the claim for damages in addition to the return of the deposit should be regarded as a separate cause of action from that to which payment into Court was pleaded, and that the plaintiff is therefore entitled to such costs as he would be entitled to on receiving 1s. upon a distinct cause of action, unless the Court for good cause shown thinks fit to deprive him of them. In my opinion, even if the plaintiff would otherwise be entitled to the general costs of the action, having only recovered 1s. on his separate claim for damages, that fact affords good cause for depriving him of costs except such costs as he is entitled to in respect of the claim for the deposit.

I think, therefore, that the judgment appealed from should be reversed, and that judgment should be entered for the plaintiff for £250 1s. with costs up to payment into Court, and the costs of the trial of the issues as to breach of contract decided in his favour (but not the general costs of the action), and also the costs of the motion for judgment after verdict, and the costs of the motion to the Full Court. The respondent must pay the costs of the appeal.

ISAACS J. By sec. 29 of the Sale of Goods Act 1896 it is pro- vided :- It is the duty of the seller to deliver the goods, and of the buyer to accept and pay for them, in accordance with the terms of the contract of sale."

1(1891) A.C., 107. 4 CLR 1039

The plaintiff sues the defendant for damages for breach of the defendant's obligation to deliver in accordance with his contract. The defendant's answer is that he was ready and willing to deliver, but that the plaintiff was not ready and willing to accept and pay for the sheep, that he refused to accept delivery of them and wholly exonerated the defendant from his obligation of delivering.

Sec. 39 of the code provides as follows :- When the seller is ready and willing to deliver the goods, and requests the buyer to take delivery, and the buyer does not within a reasonable time after such request take delivery of the goods, he is liable to the seller for any loss occasioned by his neglect or refusal to take delivery, and also for a reasonable charge for the care and custody of the goods: This section does not affect the rights of the seller if the neglect or refusal of the buyer to take delivery amounts to a repudiation of the contract."

Assuming, therefore, that the plaintiff committed a breach of his obligation to accept sheep, it is plain that unless the defendant can show that the plaintiff's conduct amounted to a repudiation of the contract, the defendant was not entitled to rescind it by wholly refusing to deliver any of the sheep at all, and there- upon taking them away, selling them as his own, and retaining the proceeds. The seller by sec. 49, sub-sec. 3, is invested with all necessary power to protect himself by re-sale after notice of intention to re-sell if a buyer does not within a reasonable time pay or tender the price. But this is not the provision acted upon by the defendant here. In Rhymney Railway Co. v. Brecon and Merthyr Tydfil Junction Railway Co. 1 the Court of Appeal laid down the tests for determining when a party to a contract is at liberty to treat it as at an end. Lord Alverstone M.R. said :- " It will be well to consider in the first instance what conduct on the part of one party to a contract justifies the other party in treating it as at an end. If there is a distinct refusal by one party to be bound by the terms of a contract in the future, the other party may, in our opinion, treat the contract as at an end.- See Withers v. Reynolds 2 Hochster v. De la Tour (3); and

322 L.J.Q.B., 455 2 El. &Bl., 169 L.J. Ch., 813, at p. 818. 21 L.J.K.B., 30 : 2 B. &Ad., 882. 4 CLR 1040

the judgment of Lord Blackburn in Mersey Steel and Iron Co. V.

Naylor 1. Short of such refusal, we think the true principle to be deduced from all the cases is that you must ascertain whether the conduct of the party who has broken the contract is such that the other party is entitled to conclude that the party breaking the contract no longer intends to be bound by its provisions. This part of the rule was laid down by Lord Blackburn in the same judgment, where he says that the rule of law is that where there is a contract between two parties, each side having to do something, if you see that the failure to perform one part of it goes to the root of the contract, goes to the foundation of the whole, it is a good defence to say, I am not going to perform my part of it when that which is the root of the whole and the substantial consideration for my performance is defeated by your misconduct.'" The same view has been recently acted upon by the Privy Council in George D. Emery Co. v. Wells 2 where Sir Andrew Wilson in delivering the judgment of the Judicial Committee, said :- Then it was contended that the learned Judge was not justified in himself deciding that the breach of the contract on the part of the company went to the root of the contract, SO as to entitle Wells to treat the contract as repudiated, and that a finding of the jury on the point was necessary. No doubt, in many cases which can be imagined, such a question would probably be left to the jury. But where the question depends, as it does here, upon the construction of a written contract, their Lordships can see no reason why the Judge should not decide it as he would any other question SO arising. In the familiar case of Withers v. Reynolds 3, always cited when this class of question arises, the point was made the ground of a nonsuit." In case of conduct amounting to a refusal to accept according to the contract but not amounting to repudia- tion by the plaintiff, the defendant could, if he thought fit, have continued to hold such sheep as were wrongfully rejected at the risk and expense of the plaintiff, or he could as to them have taken the plaintiff at his word and retained them for himself. But in the absence of conduct going to the root of the contract,

153 L.J.Q.B., at p. 501 ; 9 App. 2(1906) A.C., 515, at p. 524. Cas., 434, at p. 442. 32 B. &Ad., 882. 4 CLR 1041

in other words in repudiation of the agreement, he could not of his own will rescind it for a mere refusal to accept some of the sheep.

There has been no finding that the plaintiff's conduct amounted to repudiation, nor would the facts, in my opinion, warrant such a finding or conclusion. It is clear upon the evidence that the plaintiff did not at any time refuse to accept sheep that were fit to travel. The utmost he did was to provisionally reject 78 from a lot of 663, but according to the jury's tenth finding, which is unehallenged, he was willing to reconsider even these. That was, in the words of Lord Campbell in Hochster v. De la Tour 1, a passing intention on the part of the (plaintiff) which he may repent of."

What he did insist on, and very properly in my opinion, was that he would not accept the defendant's erroneous definition of the expression " fit to travel," and merely because he would not accept that definition as the standard of rejection, the defendant by his drover acting under the direct instructions of the defend- ant himself definitely and finally broke off all business relations, took away the sheep, and refused to deliver any of them.

Although the jury by a process of proportional calculation arrived at a finding that the plaintiff was willing to accept only 5,455 sheep, that cannot be relied on, because, in the first place, the rejection of the 78 was not final, and that was the basis of the whole calculation; and next they have assumed that the plaintiff's judgment and estimate of the balance of the sheep would necessarily have been the same as their own. Assuming, contrary to the fact, that the rejection of the 78 was final, the rejection of the rest of the 5,735 or 6,090 which the jury thought ought to have been accepted is purely problematical and imaginary. The plaintiff had no opportunity of deciding how many he would reject because the defendant's representative would not allow him to further inspect. The result is that the defendant did fail to deliver, and the plaintiff was entitled to recover whatever damages he sustained see sec. 52 (1).

The Act by section 52 (2) gives him as damages the estimated loss directly and naturally resulting in the ordinary course of

12 El. &BI., 678. 4 CLR 1042

A. events from the seller's breach of contract. This and the next

sub-section are substantially the first part of the rule in Hadley V. Baxendale 1 (see Agius v. Great Western Colliery Company 2. I do not understand that the Statute has in any way altered the law as to damages. Special damages are provided for in sec. 55 of the Act. Prima facie, this is the difference between the contract price and the market or current price on the day when the sheep might have been delivered if there was an avail- able market, sec. 52 3, but as the jury have found that, assuming that such a market existed, and the sheep were procurable, their market price was less than the contract price, he cannot recover substantial damages on the basis of an available market. In the absence of a market he is entitled to recover as general damages the difference between the contract price and the value of the sheep on the day when and at the place where they should have been delivered. See Elbinger Action-Gesellschaff v. Armstrong (3) Hinde v. Liddell 4.

The value of the sheep there and then depends on the whole of the surrounding circumstances. They are to be assumed to be on the day of delivery at Ilfracombe with the country as to feed and water and otherwise as it then actually existed. Future prospects as to condition, market, wool and SO forth, including the chances of sale in the ordinary course of business as they would then present themselves to a reasonable man, are proper elements for consideration in arriving at the then value of the sheep; but, after all these factors have been duly weighed, the net result as to general damages must be a sum representing that value.

The jury have fixed the value of the sheep as follows:-6,183 were worth 5s. 4d., 5,455 worth 6s., and they have shown their appreciation of the various elements to be considered by stating how they arrived at their values in the following terms - Hav- ing regard to the condition of the sheep, the condition of the district and the roads, and the circumstances in which the sheep were then placed."

19 Exch., 341. 2(1899) 1 B., 413, at p. 419. 3L.R. 9 Q.B., 473, at pp. 476-7. 4L.R., 10 Q.B., 265, at pp. 269, 4 CLR 1043

If this be taken as determining the value of the sheep, it is clear that, apart from the £250 handed in part payment, the plaintiff is not entitled to more than nominal damages.

There was, in my opinion, abundant evidence upon which the finding can rest.

It has been urged that question 44 ought to have been answered, namely as to the plaintiff's probable profit or loss if he had travelled the sheep to Charleville and sold them in March 1906. I think the question in that form is quite irrelevant. No foundation for any special damage is laid, and there is no more reason for selecting March than any other period. The prospects of a sale, whether in March or any other time, is only one of the elements to be taken into account in arriving at the value of the sheep.

There was considerable evidence both ways as to value. The only other sheep to consider as to value were Coxon's. The plaintiff said that the Glenlyon sheep were a good class of sheep, better than Coxon's, and that he offered Coxon 5s. 6d. for his sheep but the offer was refused. Coxon offered them a month later at 6s. but they were not taken. Coxon said he had a flock of about 3,600 sheep a long way better than the Glenlyon sheep, and about the middle of October he wanted 6s. 6d. for them and refused 6s. No one purchased them and the offer of 6s. was not renewed. He sold them on November 21st for 5s. 9d. after con- siderable expense because he felt forced to. He gave his opinion that the Glenlyon sheep were worth in October about 4s. unless somebody had good grass and water that they could get them to, and then they might give a little more for them. Under these circumstances it seems to me the jury were entitled, if they thought fit, to come to the conclusion they did.

If that finding stands the plaintiff is entitled to recover the sum of £250 which was part payment of the price, and perhaps 1s. more. It does not signify whether the £250 was a deposit or a part payment only, because in either view it is impossible in the circumstances of this case that the defendant should be allowed to keep it.

The defendant paid the £250 into Court without admitting liability. The plaintiff might have taken it out and had all his

4 CLR 1044

costs without the expense of a trial, which lasted about 20 days. The defendant has urged that there was good cause of depriving the plaintiff of costs. I think, acting upon the case of Forster V. Farquhar 1 there is good cause for making a special order as to costs, and I agree with the order as to costs pronounced by the learned Chief Justice.

HIGGINS J. I have come to the same conclusion-that the defen- dant is liable. I propose, however, not to commit myself to any precise definition of the meaning of the words "unfit to travel." It is not necessary to do so; inasmuch as, even if the plaintiff did reject some sheep that he was not entitled to reject, the defendant was not entitled to refuse to deliver the rest. My learned colleagues have amply shown in their judgments that a wrongful rejection of some of the sheep is not a matter going to the root of the contract. There was no repudiation of the contract by the plaintiff; and if the defendant thought that the plaintiff was rejecting sheep that he had no right to reject, he had his remedy in an action for non-acceptance (sec. 51 (1) ). On the question of damages, I concur in the view that the findings of the jury sufficiently establish that the plaintiff had suffered no substantial damage from the refusal of the defendant to deliver. By their answer to question 41, the jury have found that the value of the Glenlyon sheep was, on the 16th October 1905, 5s. 4d. per head, if you take the full number of 6,183 sheep, or 6s. if you take about 5,000 or more (the sheep which were fit to be delivered). There- fore, if the plaintiff lost these sheep, he lost an amount equivalent to not more than 6s. per head and as he would have had to pay 6s. per head for them, he lost nothing in the net result. The value must be based on what a purchaser would give on that date, at that place-having regard to the place, the time, the weather, the prospects, the distance from market or from probable repurchasers, the probable length of time before re-sale, the probable price, the probable profit-and all the circumstances. The probability of increased price, of profit, would be taken into account. I had thought that perhaps there was a mis- direction when the jury returned into Court to ask a question as

1(1893) 1 Q.B., 564. 4 CLR 1045

to issue 44. But on looking closely at the question, and at the H. answer of the learned Judge, I have come to the conclusion that there was no misdirection. The jury, in effect, asked :- We have heard the evidence as to the actual sale of the Glenlyon sheep in March 1906, and the evidence as to the transactions with regard to Coxon's sheep in October 1905; but is there any evidence aliunde as to the market price of similar sheep at these times ?" The Judge answered that there was no such evidence as to March 1906, but that there was evidence as to decrease in market values from August to October 1905.

As to the costs of the action, I agree with the proposed order. The action was owing to the wrongul act of defendant; the bulk of the evidence related to the issue, was the defendant guilty or not of this wrongful act. The plaintiff, it is true, has failed to show substantial damages; but the damages rested SO much on opinion, that the plaintiff cannot be treated as having brought this action wantonly or frivolously. For the proceedings subsequent to the trial the defendant is responsible.

Appeal allowed. Judgment for defendant

discharged. Judgment to be entered for plaintiff for £250 1s. with costs up to payment into Court, and the costs of the issues as to breach of contract (but not including the general costs of the action). Respondent to pay the costs of the motion for judgment after verdict, and costs of the motion to the Full Court. Respondent to pay costs of appeal. Solicitors, for appellant, I. E. Hobler, Rockhampton, for J.F. Lockett, Charleville.

Solicitors, for respondent, J. Pattison, Rockhampton, for O. R. Cusack, Richmond.