#6679 - Bronx Engineering - Commercial Remedies BCL

Bronx Engineering

Facts

The plaintiff company carries on business in Tunis. The defendants are an engineering company whose registered office is at Stourbridge. The case for the plaintiffs is that on Sept. 7, 1973, the defendants contracted to sell certain machinery which they were to manufacture at the "ex-works" figure of 270,400, to which were to be added charges totalling 17,100 for transport to and loading on board ship, the final figure being thus 287,500. The defendants' term for delivery was as follows: Completion at our works ready for despatch nine months after receipt of order and after settlement of all technical and commercial details.

On Jan. 23, 1974, the plaintiffs paid the defendants the first 10 per cent. instalment of 28,750 and on Apr. 2 the instalment of 35 per cent. or 100,625, the payments made thus amounting to 129,375 or some 45 per cent. of the total purchase price. The balance of the 287,500 remains unpaid owing to the dispute which thereafter arose between the parties and led to the defendants intimating on Dec. 20, 1974, that the plaintiffs had repudiated the contract and that they were accepting such repudiation. They also intimated that they had found a Canadian buyer for the machinery at what appears to be a substantially enhanced price and that they were proposing to have it removed out of the jurisdiction to fulfil his contractual requirements. In the light of that information the plaintiffs issued a writ on Jan. 10, 1975, claiming (1) specific performance of the contract, (2) an injunction restraining the defendants from disposing of the machinery otherwise than for the plaintiffs and (3) damages.

Issue

But the plaintiffs cannot complain, I think, if this Court now starts by making the assumption in their favour that they will succeed in establishing at the trial a breach of contract by the defendants and if we thereafter proceed to consider whether, that being so, there would be any likelihood of the Court of trial decreeing specific performance of the contract of sale. If it appears to us that there would not be any likelihood, I think it follows that the interlocutory injunction sought ought not to be granted, for its object is to protect the plaintiff against such injury by the alleged violation of his contractual rights as he could not adequately be compensated for in damages were the issue of repudiation decided in his favour at the trial.

Holding

Adequacy of damages reasoning applies even under the Sale of Goods Act

But such difficulties frequently and unfortunately arise in litigation and, of themselves, do not justify the granting of such an injunction as is sought in the present case, which is governed by s. 52 of the Sale of Goods Act, 1893. That section enables the Court "if it thinks fit" to order specific performance of a contract to deliver "specific or ascertained goods". For present purposes I understand the parties to accept that the machinery in question was "ascertained goods" within the meaning of the section. But it is established law that such an order will not be made if damages would fully compensate the party wronged: Whiteley Ltd. v. Hilt, [1918] 2 K.B. 808 at p. 819. The crux of the present application accordingly, as I see it, is whether it is proper to draw the conclusion that damages would not or might well not duly compensate the plaintiffs if they establish a contractual breach by the defendants.

The machinery in this case is not a unique commodity

That the subject-matter was not "an ordinary article of commerce" is not open to doubt. That if they succeed the plaintiffs might well recover very substantial damages is certainly on the cards. But the defendants are not the only manufacturers of such machinery, and it lacks, in my judgment, the unique quality of such articles as that which was the subject-matter of the specific performance decree made in, for example, Behnke v. Bede Shipping Co. Ltd., [1927] 1 K.B. 649; (1927) 27 Ll.L.Rep. 24. That case is commonly cited in the textbooks as supporting the proposition that specific performance will be ordered of a contract for the sale of a ship, but merely to say that is to put the matter too broadly.

Commercial Uniqueness reasoning rejected

By way of contrast with that case, the real substance of the plaintiffs' claim here is that were they now obliged to go to another manufacturer they would probably have to wait another 9-12 months before they could get delivery of such new machinery and that, by reason of that delay and other factors, they would stand to lose a substantial sum. There has been no suggestion of financial inability in the defendants to satisfy such a money judgment (whatever its dimensions) as might be awarded against them to cover all such items of damages as the plaintiffs could legitimately rely upon. While sympathizing with the dilemma in which the plaintiffs find themselves, I see nothing which removes this case from the ordinary run of cases arising out of commercial contracts where damages are claimed. Of course, if the plaintiffs are right, the delay that has arisen by reason of the assumed breach of the defendants will go to inflate their damages; the greater the delay the plaintiffs experience...