FREDERICK LEYLAND & CO., LTD. (J. RUSSELL & CO.) v. COMPANIA PANAMENA EUROPEA NAVIGACION, LIMITADA.
(1942) 74 Ll.L.Rep. 108
KING'S BENCH DIVISION.
Before Mr. Justice Atkinson.
Contract - Repairs to ship - Claim by repairers for balance of amount due from shipowners - Purchase of damaged ship by T. on behalf of C. - Ship registered as in ownership of Panamanian company, of which T. and wife were sole directors - Power of attorney executed by company giving full powers to C. - Repairs to ship in London authorised under licence from Ministry of War Transport - Estimate requested from plaintiffs - Tender of £40,000 as an approximate figure rejected by C. - Requisition by Government - Work commenced by order of Ministry under supervision of Ministry surveyors, of British Corporation surveyor, and of T., also a ship surveyor, on behalf of C. - Subsequent agreement between Ministry, repairers and shipowners (C.), transferring all rights in vessel to shipowners, who were to be responsible for cost of repairs - Right of shipowners' surveyor to inspect and exercise reasonable supervision of repairs - "7. The owners shall pay for the repairs upon the ordinary commercial basis . . . Payment shall be effected as required by the repairers on the basis of cash against expenditure during the progress of the work and the ascertained balance on the completion of the repairs and every such payment shall be effected promptly by the owners after the issue of a certificate by the owners' surveyor that the work has been satisfactorily carried out and on receipt of a certificate of the amount due issued by the Costs Investigation Branch of the Ministry of War Transport and certifying that same has been checked and found correct (and the Minister agrees to procure that the said Costs Investigation Branch shall so certify and issue certificates). . . . Such last - mentioned certificates shall be accepted by the parties hereto as final and conclusive and shall not be questioned except as regards any error appearing on the face thereof and of which due notice shall forthwith be given to the said Costs Investigation Branch" - Certificate issued by Costs Investigation Branch certifying expenditure by repairers - Refusal by T. to issue certificate that work had been satisfactorily carried out - Construction of Clause 7 - Whether T. was entitled to refuse to issue certificate if, although repairs were satisfactory in quality, the
cost was in his opinion excessive - Repairers' tender not a firm offer - Position of T. considered - Contention by shipowners that the issuing of a certificate by their surveyor was a condition precedent to the repairers' right to receive payment; further, that cost of repairs was excessive - Whether T. acted unreasonably in refusing to issue certificate.