Hasell v Bagot, Shakes & Lewis Ltd - [1911] HCA 62

BAGOT, SHAKES &LEWIS, LTD. AND

RESPONDENTS. OTHERS

DEFENDANTS. ADELAIDE, Nov. 6, 7.

ON APPEAL FROM THE SUPREME COURT OF SYDNEY,

SOUTH AUSTRALIA. Contract - Breach - Purchase of goods- Measure of damages-Non-delivery- -

Quantity to be delivered-Purchase of other goods by purchaser No market in place of delivery-Reasonable conduct of purchaser.

13 CLR 375

By a written contract dated 2nd June 1909 made in Adelaide between appellant and respondents, who both carried on business there, the appellant agreed to sell to the respondents and they agreed to purchase from him " 5000 tons of Japanese superphosphates ten per cent. more or less of speci- fied quality at the price of 71/6 per ton gross weight, if delivered in double sacks, and 72/- per ton if in single sacks. The delivery was to be from ship's SHAKES &slings at Port Adelaide. The shipment was to be made by steamer or steamers from Japan during late in December 1909 and/or January 1910 as freight opportunities might offer and the quantity of each shipment was to beadvised by cable to the purchaser on shipment. Up to the end of January the appel- lant had not notified to the respondents the shipment of any superphosphates and had not in fact procured any in Japan. The respondents thereupon, after notifying their intention to the appellant, bought from D., an agent in Australia of a Japanese firm, 3000 tons of Japanese superphosphates of the quality specified in the agreement of 2nd June at the price of 78/- per ton delivered in Port Adelaide. It appeared that at that time superphosphates could have been bought in Japan for delivery at Port Adelaide at about 72/10 per ton. The respondents also agreed to purchase 2000 tons of British super- phosphates from the appellant in part performance of his contract, without prejudice to their rights "for non-shipment and delivery of the other 3000 tons contracted to be delivered." The 2000 tons were duly delivered, but the respondents retained from the price the sum of £975 for damages alleged to have been sustained from the appellant's breach of the contract of 2nd June. In an action by the appellant to recover from the respondents that sum of £975, the respondents counterclaimed for damages for breach of the

Held, that the damages were properly assessed as upon a failure to deliver Held, also, there being uo market in Port Adelaide at which the goods might be bought, that the measure of damages was the amount that a reason- able man, acting sensibly and on his own behalf and at his own risk, would be willing to pay in order to get the goods at the place and time stipulated; that that amount should be ascertained by taking the price at the place of manufacture or other source, the cost of carriage and a reasonable sum for the risk and profit of the importer; and, therefore, no contest having been raised as to the amount of the importer's profit,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read Hasell v Bagot, Shakes & Lewis Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [1911] HCA 62
Decision Date: 24 November 1911

CaseChat Overview and Summary

The case of *Hasell v Bagot, Shakes & Lewis Ltd* concerned a contract for the sale of 5,000 tons of Japanese superphosphates. The appellant, Hasell, agreed to sell this quantity to the respondents, Bagot, Shakes & Lewis Ltd, for delivery in Port Adelaide. The contract stipulated shipment from Japan during late December 1909 and/or January 1910. By the end of January 1910, Hasell had not shipped any goods, nor had he notified the respondents of any shipment. The respondents, after notifying Hasell of their intention, purchased 3,000 tons of similar superphosphates from an Australian agent of a Japanese firm at a higher price. They also accepted 2,000 tons of British superphosphates from Hasell in part performance of the original contract, expressly reserving their rights regarding the remaining 3,000 tons. Hasell sued for the balance of the purchase price for the British superphosphates, and the respondents counterclaimed for damages for breach of the original contract. The Supreme Court of South Australia found in favour of the respondents on their counterclaim. Hasell appealed to the High Court of Australia.

The High Court was required to determine two principal legal issues. Firstly, whether the damages awarded on the counterclaim were correctly assessed based on a failure to deliver 3,000 tons, or if the quantity should have been less due to the "ten per cent. more or less" clause in the contract. Secondly, the Court had to consider whether the measure of damages applied by the lower court was appropriate, particularly in relation to the price paid by the respondents for the substitute goods, and whether this price represented a reasonable amount a prudent buyer would pay in the absence of a local market.

The High Court affirmed the decision of the Supreme Court. On the first issue, the Court held that the respondents were entitled to claim damages for the non-delivery of 3,000 tons. Despite the "ten per cent. more or less" clause, the appellant's complete failure to perform the contract meant the respondents were justified in purchasing 3,000 tons to mitigate their loss. The subsequent agreement to accept 2,000 tons of British superphosphates was made without prejudice to their rights concerning the remaining 3,000 tons. On the second issue, the Court applied the principle that in the absence of a market at the place of delivery, damages are assessed by determining what a reasonable person, acting sensibly and at their own risk, would pay to obtain the goods at the stipulated time and place. This amount is calculated by considering the price at the source of manufacture, the cost of carriage, and a reasonable profit for the importer. The Court found that the price paid by the respondents to the agent, which included a profit of approximately 6 per cent, was not shown to be unreasonable, especially given the lack of a local market and the respondents' need to secure the goods for their business. The Court deferred to the trial judge's assessment of reasonableness in the absence of specific evidence to the contrary.

The appeal was dismissed, with the High Court upholding the judgment of the Supreme Court of South Australia. The respondents were entitled to recover damages based on the difference in price for 3,000 tons of superphosphates, as the amount paid was deemed to be a reasonable measure of their loss in the circumstances.

Orders