Read the full judgment text of HCA 006449/1989 on BabelCite. This High Court CFI judgment was delivered on 29 May 1991 before Master Woolley.
Commercial law – sale of goods – contract for sale of liquid latex – payment by irrevocable confirmed letter of credit at sight – buyer's bank's refusal to pay under letter of credit on ground of minor discrepancies – buyer's failure to authorise payment and to take delivery – seller's acceptance of repudiation – assessment of damages – whether sale of goods – mitigation of loss – whether resale price and timing reasonable – whether storage charges recoverable in full – whether bank interest charges recoverable – Sale of Goods Ordinance (Cap 26) s.52(3) – contract dated 4 May 1988 for delivery in May 1989 extended to June 1989 – latex shipped 11 June 1989 – buyer's bank refused payment 30 June 1989 citing minor discrepancies – seller continued to press for payment through July and August 1989 – acceptance of repudiation communicated by seller's solicitors on 27 September 1989 – documents of title returned 12 October 1989 – resale effected 29 November 1989 at US$0.55 per kilo against contract price of US$1.493 per kilo – whether duty to mitigate arose from 28 June 1989 or 27 September 1989 – held, acceptance of repudiation occurred on 27 September 1989 because no time was fixed for acceptance of goods and buyer's refusal was initially only refusal to accept documents communicated through banks – seller entitled to continue pressing for performance – duty to mitigate arose from 27 September 1989 – held, time taken to effect resale not unreasonable in falling and volatile latex market where spot seller under pressure is at disadvantage against forward-contract buyers – resale price of 55 US cents per kilo reasonable in light of comparable contract prices of 58.9 to 61.1 US cents per kilo less freight of about 4 US cents per kilo – seller adequately mitigated – full difference between contract price and resale price of US$60,314.28 recoverable – held, storage charges reducible because once documents of title were returned on 12 October 1989 there was no reason containers could not be moved to cheaper outside storage next day – higher rate of $220 per day per container for 7 days disallowed – storage and handling award HK$112,350.00 – held, bank interest of S$3,843.92 on amount advanced under letter of credit recoverable as direct consequence of buyer's breach – interest awarded on the principal sums as per Schedule of Damages and further at judgment rate from 9 May 1991 to payment – order nisi for costs to be taxed with certificate for counsel against 2nd Defendant.
Legal issues: Date of acceptance of repudiation and commencement of duty to mitigate · Whether Plaintiff adequately mitigated loss on resale · Reduction of storage charges for delay in moving containers to cheaper storage · Recovery of bank interest charges under letter of credit
Outcome: Assessment of damages in favour of the Plaintiff against the 2nd Defendant; judgment for US$60,314.28 in resale loss, HK$112,350.00 in storage and handling charges, and S$3,843.92 in bank interest, plus interest.