FREDERICK LEYLAND & CO., LTD. (J. RUSSELL & CO.) v. COMPANIA PANAMENA EUROPEA NAVEGACION, LIMITADA.

(1946) 80 Ll.L.Rep. 205

HOUSE OF LORDS.

Before Lord Thankerton, Lord Porter, Lord Uthwatt and Lord du Parcq.

Contract - Repairs to ship - Claim by repairers for balance of amount due from shipowners - Supervision of work by shipowners' surveyor - Surveyor to certify that work satisfactorily carried out - Refusal to certify - Construction of contract - Purchase of damaged ship by T. on behalf of C. - Ship registered under ownership of Panamanian company, of which T. and wife were sole directors - Power of attorney executed by company giving full control to C. - Repairs to ship in London authorized under licence from Ministry of War Transport - Requisition of ship - Agreement between Ministry, repairers and C. (shipowners), transferring all rights in vessel to shipowners, who were to be responsible for cost of repairs. 6. . . . During the execution of the repairs the owners shall have the right to send their superintending surveyor to inspect the said vessel at all reasonable times and to examine all the materials intended for the execution of the repairs and all parts of the vessel so far as then repaired and generally to exercise reasonable supervision of the repairs during the progress thereof any reasonable expense incurred by the repairers in complying with the wishes of the owners on such inspections and examinations to be charged to the owners in accordance with the provisions herein contained. 7. . . . 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 - Whether T. entitled to refuse certificate if, although repairs were satisfactory in quality, the cost was in his opinion excessive - Function of T. - Contention by shipowners that the issuing of a certificate by their surveyor was a condition precedent to the repairers' right to receive payment - Whether T. acted unreasonably in refusing to issue certificate - Amendment of pleadings by repairers during trial, alleging that T. was acting in collusion with, or under influence of, shipowners - Dual capacity of T. under contract.