WESTBROOK RESOURCES LTD V GLOBE METALLURGICAL INC

[2009] EWCA Civ 310, Court of Appeal, Lord Justice Pill, Lord Justice Wall and Lord Justice Moore-Bick, 8 April 2009

Sale of goods – Contract for sale of manganese ore – Whether goods complied with contract – Repudiation by buyer – Measure of damages – Impact of the fact that sellers had to purchase manages ore at market price to cover their contract –Sale of Goods Act 1979, sections 50(2) and 50(3)

Westbrook were the sellers under a contract of sale FOB of 30,000 tons of manganese ore. Globe Metallurgical were the buyers. The ore to be delivered was to be “Screened over plus ½ inches screen at [Defence Logistics Agency]”. Globe refused to accept the first consignment of tendered goods which were less than half-an-inch in size, and Westbrook treated this as a repudiation of the entire contract. Tomlinson J, [2007] Lloyd’s Rep Plus 105, ruled that Westbook had complied with its screening obligations and that Globe had repudiated the contract. He further held that Globe had waived its right to require shipment of the first parcel by the contract date, and he also rejected the argument that Westbrook did not have a sufficient quantity of ore to meet its obligations. In a second judgment, [2007] EWHC 2353, QBD (Comm), Tomlinson J awarded damages of US$1,541,897.66. This was an appeal against both judgments. The Court of Appeal upheld Tomlinson J’s rulings, and it also upheld the award of damages based on the loss directly and naturally resulting from Globe’s breach of contract, namely the difference between the price payable by Globe and that payable by the buyers to whom the goods were instead sold.