SAINT LINE, LTD. v. RICHARDSONS, WESTGARTH & CO., LTD.

(1940) 67 Ll.L.Rep. 62

KING'S BENCH DIVISION.

Before Mr. Justice Atkinson.

Contract-Breach-Measure of damages- Sale by respondents of marine engines to be fitted in claimants' steamship- Installation of engines - Engines found after trials to be unsuitable- Contract terminated by claimants- Engines bought elsewhere, vessel being finally completed about three years after date of contract - Claim by shipowners (a) for loss of profit; (b) for wages, stores, etc.; (c) for superintendents' fees; (d) for cost of engines in excess of contract price-"(4) Should any defect in the material or workmanship be discovered during construction or within twelve months of the trial trip and unconnected with wear and tear or inefficiency, carelessness, neglect or default of engineers, such parts in which the defects are discovered will be replaced, or the defects remedied by the engine builders at their own works or at a cost equivalent thereto, but their liability does not extend to any loss or damage direct or indirect caused by the failure of such defective part or by the detention of ship, but only to the cost of the actual replacement or remedy of the part; and on and after the expiry of such twelve months, all claims upon, and all liability of the engine builders whatsoever, whether in respect of any breach of any part of this contract or of any failure to remedy defects, shall be absolutely unenforceable and at an end, nor shall their liability ever or in any case either before, during or subsequent to the expiration of the said period of twelve months extend to any indirect or consequential damages or claims whatsoever" - Arbitration - Consultative case stated by umpire at request of parties - Questions for opinion of Court: "(1) Whether the respondents are exempted from liability for any and if so which of the classes of damage claimed in Items 1, 2 and 3 . . . by reason of the terms of Clause 4 of the

contract . . . (2) Whether the respondents are exempted from liability for all or any of the heads of expense comprised [under the heads "wages, stores, &c.," and "superintendents' fees"] by reason of the terms of Clause 4 of the said contract . . . on the assumption that such heads of expense were (i) necessarily or (ii) not necessarily but reasonably incurred as a result of the respondents' admitted breaches of contract"-Meaning of "indirect" and "consequential" damages.