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{\*\generator Microsoft Word 11.0.5604;}{\info{\title EMPEROR GOLD MINING COMPANY LIMITED v FLIT INDUSTRIES LIMITED}{\author maltungtung_l}{\operator maltungtung_l}{\creatim\yr2009\mo10\dy15\hr9\min30}{\revtim\yr2010\mo2\dy19\hr15\min59}{\version17}
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{\pntxtb (}{\pntxta )}}\pard\plain \qr \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid9853078 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid8717845 [2000] 1 FLR 311
\par }\pard \qc \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8717845 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid9853078 IN THE }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid8717845\charrsid8717845 COURT OF APPEAL OF FIJI
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid13182070 {\fs24\lang2057\langfe1033\langnp2057\insrsid8717845 
\par }\pard \qc \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8717845 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845 EMPEROR GOLD MI}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid8717845\charrsid8717845 
NING COMPANY LIMITED
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8717845 {\fs24\lang2057\langfe1033\langnp2057\insrsid8717845 
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\par }\pard \qc \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8717845 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid5524574 F}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845 I}{
\b\fs24\lang2057\langfe1033\langnp2057\insrsid5524574 JI}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845  INDUSTRIES LIMITED
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid13182070 {\fs24\lang2057\langfe1033\langnp2057\insrsid8717845 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 Court o}{\fs24\lang2057\langfe1033\langnp2057\insrsid11821975 f Appeal}{\fs24\lang2057\langfe1033\langnp2057\insrsid10158138  }{\fs24\lang2057\langfe1033\langnp2057\insrsid8717845 
Appellate Jurisdiction}{\fs24\lang2057\langfe1033\langnp2057\insrsid2970376 
\par Casey, Ward and Byr}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 ne, JJ
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid8717845 1 December, 2000}{\fs24\lang2057\langfe1033\langnp2057\insrsid2970376 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14841211 ABU}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 0001}{\fs24\lang2057\langfe1033\langnp2057\insrsid10158138 /}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 99
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2970376 
\par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845 
Contract - whether contract was of supply only with no obligation to purchase quicklime - whether contract frustrated due to withdrawal of joint venture - whether contract discharged - business efficacy rules
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2970376 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 The High Court awarded judgment for damages plus interest in favour of the respondent for the respondent}{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 s breach of a contract to purchase quicklime. It held that a letter and local purchase order together constituted an agreement for sale and purchase and rejected the appellant}{
\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 s submissions that it
 was a contract for supply only. The appellant appealed on the grounds of the certainty of contract, uncertainty of terms and frustration du}{\fs24\lang2057\langfe1033\langnp2057\insrsid8717845 e to the withdrawal of a joint }{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 venture partner Ranger. The court found that the parties intended to assume commercia
l risks of unexpected events affecting performance of the contract, and arising out of its own business activities and relationships.
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2970376 
\par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid2970376 Held}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
 - (1) Written contract consisted of letter and purchase order by mutual reference to each other and was intended to be red together as a single document setting out the terms between the parties.}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070 

\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid8717845\charrsid13182070 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 (2) The court must consider the terms of the contract in light of the surrounding circumstances known to the parties at the time it was made.
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid8717845 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
(3) The test of an implied condition is whether parties, assuming them to be reasonable business-people, would necessarily have agreed to such a condition as appropriate to put into their contract if the point had been raised with them at the time it was 
made. In other words, is the term so obvious it goes without saying. Here, there was no implied condition that Ranger withdrawal from the joint venture would end contract, or lead to frustration.}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070 

\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid8717845\charrsid13182070 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9853078 (4) The use of }{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 estimate}{
\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070  is common in commercial contracts and the parties understood boundaries for the expression.
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid8717845 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2823960 (5)}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070  Ranger}{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 s withdrawal from the joint venture was not something that made the continued obligation to}{\fs24\lang2057\langfe1033\langnp2057\insrsid9853078  purchase the stated quantity }{
\fs24\lang2057\langfe1033\langnp2057\insrsid2823960 s}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 omething radically different from the obligation undertaken in the contract, thus appeal on the grounds of frustration fails.

\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2823960 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 Judgment of the High Court upheld and appeal dismissed with costs.
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2823960 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid9853078 Cases referred to in judgment
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9966749 A}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845 ppr }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid14841211 Codelfa Construction Pty Limited v S}{
\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid150894 t}{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid14841211 ate Railway Authority of NSW}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845  [1982] 149 CLR 337

\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9966749 A}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845 ppr }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid14841211 Davis Contractors Ltd v F}{
\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid9966749 a}{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid14841211 reham Urban District Council}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845  [1956] AC 696
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9966749 F}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845 oll }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid14841211 Pioneer Shipping Ltd v BT.P Tioxide Ltd}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845  [1982] AC 742}{\fs24\lang2057\langfe1033\langnp2057\insrsid15802371 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9966749 F}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845 oll }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid14841211 Hirji Mulji v Cheong Yue SS Co}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845  [1926] AC 497
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9966749 F}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845 oll }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid14841211 
Joseph Constantine SS Line Ltd v Imperial Smelting Corp Ltd}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845  [1942] AC 154
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9966749 F}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845 oll }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid14841211 
British Movietone News Ltd v London and District Cinemas Ltd}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845  [1952] AC 166
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
\par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid9966749 Dr Mohammed Shams}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid9966749 ud-Dean Sahu Khan and Sa}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid2823960\charrsid9966749 manunu Vaniq}
{\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid9966749 i for the appellant
\par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid2823960\charrsid9966749 Rt}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid9966749  Joni Madraiwiwi for the respondent}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 

\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2823960 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 1 December, 2000.}{\fs24\lang2057\langfe1033\langnp2057\insrsid8717845 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid15802371 
\par }\pard \qc \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8717845 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845 JUDGMENT
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid13182070 {\fs24\lang2057\langfe1033\langnp2057\insrsid2823960 
\par }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid9966749 Casey}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid2823960 , Ward and Byrne, JJ
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid8717845 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
On 13 November 1998, Scott J gave judgment in the High Court at Suva in favour of the respondent Fiji Industries Ltd (FIL) against the appellant (Emperor) for $590,477.65 damages plus interest in respect of the latter}{
\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 s breach of a contract to purchase quicklime from it. Emperor appeals.
\par 
\par FIL operated a lime kiln and in its statement of claim alleged that by written agreement dated 22 April 1992, (which it called "the Supply Agreement") Emperor agreed to purchase and it }{\fs24\lang2057\langfe1033\langnp2057\insrsid9966749 
agreed to supply an estimated 6000}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070  tonnes of quicklime per annum (supply guaranteed plus or minus a variation of 25%) o}{\fs24\lang2057\langfe1033\langnp2057\insrsid2823960 
ver a period of two years from 1}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070  May 1992 to 30 April 1994, the price of $257 per tonne being subject to adjustment according to a formula. Individual deliveries were to b
e called for by Emperor}{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
s supply services supervisor. FIL alleged that in breach of this agreement Emperor failed to order and purchase}{\fs24\lang2057\langfe1033\langnp2057\insrsid2823960  the estimated quantity of 12,00}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 0 tonnes over the two years, the shortfall being 7,192.84 tonnes, in respect of which a l
oss of profit of $140.83 per tonne was claimed, totalling $1,012,967. The quicklime is used to process tailings in gold-mining operations.
\par 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid15802371 FI}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 L produced as evidence of the agreement, a letter dated 22 April 1992 to it from Emperor containing the foregoing 
and other provisions which was signed on behalf of both parties. Also produced was a Local Purchase Or}{\fs24\lang2057\langfe1033\langnp2057\insrsid2182605 der 30925 of the same date for 6}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 000 tonnes p.a. (approx) of bulk quicklime with}{\fs24\lang2057\langfe1033\langnp2057\insrsid8717845  }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 the no}{
\fs24\lang2057\langfe1033\langnp2057\insrsid2182605 te "Our contract document of 22/04/}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
92 refers as the key document of commitment" Although this order form was headed "Koula Mining Co Ltd",}{\fs24\lang2057\langfe1033\langnp2057\insrsid8717845  }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
it was acknowledged as Emperor}{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 s in the opening sentence of its let}{\fs24\lang2057\langfe1033\langnp2057\insrsid2182605 
ter reading "Our order Number 30}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 295 follows for the supply of lime for 2 years against the following estimates}{\fs24\lang2057\langfe1033\langnp2057\insrsid8717845 ,}{
\fs24\lang2057\langfe1033\langnp2057\insrsid1186648  terms and conditions.}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 "
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2182605 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
Emperor maintained that the contract was one for supply only, as and when needed by the joint venture it operated with a company called Ranger, with no obligation to buy, and that the annual estimate of 60
00 tonnes was merely an indication of their combined usage. It says that FIL was aware of this at the time the agreement was made, and knew that when Ranger ceased operations shortly afterwards the estimated amount would be substantially reduced, and it h
ad no claim for any shortfall.
\par 
\par }{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid5711331 Evidence summary
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2182605 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
FIL had an earlier contract with the appellant for the supply of quicklime for another joint venture with Western Mining, according to Mr Lindsay, then its managing director. This was for a two year period f
rom 1990-92 and he said it had a three-month termination clause, but it continued for the full term without any problems. The amount required was only 5000 tonne}{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 s. Emperor wanted a much large}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 r supply of 12,000 tonnes for the next two years for its joint venture with Ranger, but had reservations about FIL}{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
s ability to produce it from their kiln which was virtually at the end of its useful life. For this reason, Mr Lindsay stated that Emperor insisted on the supply guarantee which went into the agreement, and
 that it was not prepared to give FIL the contract unless it agreed to upgrade the factory, which it committed itself to do and set the work in train for a new kiln, completed in June 1993 at a cost of $3.5m. By contrast with the earlier agreement, the ne
w one did not contain a termination clause.
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2182605 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 The mana}{\fs24\lang2057\langfe1033\langnp2057\insrsid2182605 gement of FIL knew about the jo}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
int venture, and the contractual letter of 22 April stated that the estimated 6000 tonnes p.a. was the total combined usage of the two companies, and stipulated that delivery dockets would be signed by the mill managers of both. Emperor}{
\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
s Assistant Supply Manager (Mr Chandra) said the joint venture had been terminated in late October or November of 1992 and that he became aware of thi}{\fs24\lang2057\langfe1033\langnp2057\insrsid2182605 s four weeks later and told FIL}{
\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid11949941 s Production}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070  }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
Manager (Mr Krishna), but he acknowledged that his subordinate had sent that company a letter on 10 November stating there would be no change from present consumption, namely 3 truck}{\fs24\lang2057\langfe1033\langnp2057\insrsid2182605 
loads per week for Ranger and 2/}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 3 for Emperor.
\par 
\par FIL}{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 s chief executive, 
Mr Cridland, said that lime sales had begun to diminish in about January 1993, and in March of that year he discovered the joint venture had ended, and thereafter deliveries fell off sharply. By January 1994 he was so concerned with this that he met Mr Ba
rclay, Emperor}{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
s General Manager, to find out whether Emperor could meet its total commitment to take 12,000 tonnes by the end of April, and said Mr Barclay was non-committal. He heard nothing back after sending him a copy of the agreement. In March, there 
was a meeting with Mr Patterson, Emperor}{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
s Managing Director, and two other officers, at which Mr Cridland said they discussed the fact that the company had not met its commitment, and Mr Patterson suggested they could buy some cement instead, but this wou
ld not meet the shortfall. No settlement was reached and these proceedings were issued after expiry of the contract period.
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13308725 
\par }{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid5711331 High Court Judgment
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13308725 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid12412972 Scott J, after reviewing the evidence, held that the letter of 22 April 1992 and the purchase order of the sam
e date constituted an agreement for sale and purchase and rejected the appellant}{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid12412972 
s submission that there was a contract of supply only. He saw no problem with the fact that the quantity was merely estimated, pointing to the allowance of plus or minus 25% a
s removing any element of uncertainty in the contract. He said the agreement was solely with Emperor, and dismissed a submission by Dr Sahu Khan that it was dependent on}{\fs24\lang2057\langfe1033\langnp2057\insrsid12412972  }{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 the}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070  }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 continued}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070  }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 existence of the joint}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070  }{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 venture, holding also that Ranger}{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
s withdrawal could not affect the continuance of Emperor}{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
s obligations. He did not deal specifically with the defence of frustration of the contract due to that withdrawal, which was one of the main planks of Dr Sahu Khan}{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 s submission to this Court. He rightly rejected his arguments based o}{\fs24\lang2057\langfe1033\langnp2057\insrsid11949941 n estoppel, acquiescence and lac}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 hes. Finally he assessed damages by applying the 25% tolerance to the annual estimate of 6,000 t}{\fs24\lang2057\langfe1033\langnp2057\insrsid12412972 onnes to calculate the shortfall}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070  over two years, producing a loss of profits comprising the figure of $590,477.65 which he awarded along}{\fs24\lang2057\langfe1033\langnp2057\insrsid8864006  with interest at 11.5%}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 .
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8864006 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid8864006 
\par }{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid8864006\charrsid5711331 Issues on appeal
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid13182070 {\fs24\lang2057\langfe1033\langnp2057\insrsid8864006 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 Although numerous grounds of appeal were raised by Dr Sahu Khan and elaborated on in his written submissions which we have read and considered, he concentrated in his ar
gument before us on the proposition that the contract was one of supply only, with no obligation on Emperor to buy quicklime. Alternatively, if the documents amounted to an agreement for sale and purchase as found by the Judge, then it ceased to have effe
ct on termination of the joint venture and in particular had been frustrated by Ranger}{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 s withdrawal.
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid8864006 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 The first matter is to determine what constituted the written contract between these parties. We are satisfied that the mutual references in the letter and
 the purchase order in the extracts we have quoted above make it clear that}{\fs24\lang2057\langfe1033\langnp2057\insrsid8864006  }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
they were intended to be read together as a single document setting out the terms agreed between the parties; and that this is how any reasonable businessman would have understood them. That was also His Lordship}{
\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 s conclusion. Together they constituted a sale and purchase agreement for the quicklime, and this disposes of Dr Sahu Khan}{
\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 s first point that this was no more than a contract to supply. Nor are we persuaded that it was unce
rtain in its content or operation. The use of the word "estimate" is common in commercial contracts and here, as the Judge accepted, the parties pointed to the boundaries they considered should be applied to that expression by a}{
\fs24\lang2057\langfe1033\langnp2057\insrsid8864006 dopting the "plus or minus 25%}{\fs24\lang2057\langfe1033\langnp2057\insrsid2236904 " provision in FI}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 L}{
\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 s guarantee clause. Dr Sahu Khan complained ab}{\fs24\lang2057\langfe1033\langnp2057\insrsid2236904 
out the failure to plead the LPO}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070  as part of the agreement, but we see no substance in this point.
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2236904 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 There was nothing in the agreement to cover the possibility and effect of Ranger}{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 s withdrawal. The appellant}{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
s contention that it then ceased to have effect, raises the question of whether there was an implied condition along those}{\fs24\lang2057\langfe1033\langnp2057\insrsid1781155  }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
lines. The law on this topic (and on the allied one of frustration) was extensively discussed in }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid14841211 Codelfa Construction Pty Ltd v State Railway Authority of NSW}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
 [1982] 149 CLR 337. For the purposes of this appeal it is sufficient to ask whether the parties, assuming them to be reasonable business-people, would necessarily have agreed on such a conditi
on as appropriate to put into their contract if the point had been raised with them at the time it was made. In other word}{\fs24\lang2057\langfe1033\langnp2057\insrsid150894 s, is the term to be implied (i }{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 e that the agreement would cease to have effect if Ranger withdrew) so obvious that it "goes without saying?" Having regard to the resources }{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070 F}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 IL was committing to ensure full production, it is}{\fs24\lang2057\langfe1033\langnp2057\insrsid5839600  }{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 impossible to answer this in the affirmative. Accordingly there was no implied condition.
\par 
\par This leaves the issue of frustration which was forcefully put to us by Dr Sahu Khan. As good a definition as any from the mass of reported decisions on the topic is that of Lord Radcliffe in }{
\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid14841211 Davis Contractors Ltd v Fareham Urban District Council}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
 [1956] AC 696 at 727 to 729 quoted by Aickin J at p 377 of }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid14841211 Codelfa}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 :
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8717845 {\fs24\lang2057\langfe1033\langnp2057\insrsid3754043 
\par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid3754043 {\fs24\lang2057\langfe1033\langnp2057\insrsid4143448 "...... }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
frustration occurs whenever the law r}{\fs24\lang2057\langfe1033\langnp2057\insrsid1926634 ecognizes that without default}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070  }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
of either party a contractual obligation has become incapable of being performed because the circumstances in which performan}{\fs24\lang2057\langfe1033\langnp2057\insrsid1926634 ce is called for would render it}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070  a thing radically different from that which was undertaken by the contract.... "It was not this that I promised to do"
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid13182070 {\fs24\lang2057\langfe1033\langnp2057\insrsid3754043 
\par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid3754043 {\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 ........}{\fs24\lang2057\langfe1033\langnp2057\insrsid4143448  }{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 special importance is necessarily attached to the occurrence of any unexpected event that, as it were, changes the face of things. But, even so, it is not ha
rdship or inconvenience or material loss its}{\fs24\lang2057\langfe1033\langnp2057\insrsid1926634 elf which calls the principle of}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070  frustration in}{
\fs24\lang2057\langfe1033\langnp2057\insrsid1926634 to play.}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
 There must be as well such a change in the significance of the obligation that the thing undertaken would, if performed, be a different thing from that contracted for."
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid13182070 {\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
\par However, "....}{\fs24\lang2057\langfe1033\langnp2057\insrsid4143448  }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
the doctrine is not lightly to be invoked to relieve contracting parties of the normal consequences of imprudent commercial bargains" per Lord Roskill in }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid14841211 
Pioneer Shipping Ltd v B.T.P.}{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid8717845\charrsid14841211  }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid14841211 Tioxide Ltd}{\fs24\lang2057\langfe1033\langnp2057\insrsid8717845  [}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 1982] AC 724 at 751-752.
\par 
\par Discharge of a contract occurs automatically on the happening of the frustrating event, regardless of the intention, opinions or even the knowledge of the parties - see }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid14841211 
Hirji Mulji v Cheong Yue SS Co}{\fs24\lang2057\langfe1033\langnp2057\insrsid1926634  [1926] AC 497 at 510}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 . It should not be due to the act or ele
ction of the party relying on it and proof of such "fault" is on the party alleging it (}{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid14841211 Joseph Constantine SS Line Ltd v Imperial Smelting Corp Ltd}{
\b\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid10832716  }{\fs24\lang2057\langfe1033\langnp2057\insrsid8717845 [}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 1942] AC 154).
\par 
\par In }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid14841211 British Movietone News Ltd v London and District Cinemas Ltd}{\fs24\lang2057\langfe1033\langnp2057\insrsid1722717  [1952]}{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070  AC 166 at 185 Lord Simon said
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid8717845 {\fs24\lang2057\langfe1033\langnp2057\insrsid1722717 
\par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid1722717 {\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
"The parties to an executory contract are often faced in the course of carrying it out, with a turn of events which they did not at all anticipate - a wholly abnormal rise or fall in prices, a sudden depreciation of currency
, an unexpected obstacle in execution, or the like. Yet this does not affect the bargain they have made. If, on the other hand, a consideration of the terms of the contract, in the light of the circumstances existing at the time it was made, shows that th
ey never agreed to be bound in a fundamentally different situation which has now unexpectedly emerged, the contract ceases to bind at that point}{\fs24\lang2057\langfe1033\langnp2057\insrsid4143448  }{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 ..."
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid13182070 {\fs24\lang2057\langfe1033\langnp2057\insrsid1722717 
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 This passage brings out the important point that at the outset, the Court must consider the terms of the c
ontract in the light of the surrounding circumstances known to the parties at the time it was made. Emperor was putting itself forward as being solely responsible for buying the estimated}{\fs24\lang2057\langfe1033\langnp2057\insrsid1722717  }{
\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 quantity of quicklime for use in the joint venture conducted with it
s associate and, in the absence of any provision for earlier dissolution in the sale agreement, the inference is that it was intended to last for the stipulated two years, whatever might be the success or failure of the joint venture or the stability of t
hat relationship, which was of its own choosing. After all, those risks were similar to those run by any businessman with }{\fs24\lang2057\langfe1033\langnp2057\insrsid1722717 a}{\fs24\lang2057\langfe1033\langnp2057\insrsid9846996 
ssociates entering into a long-}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 term contract with a third person. Furthermore, the resources FIL was putting into new plant made a sta
ble commitment by Emperor essential, a factor strengthening the inference that the parties intended their agreement should take effect according to its tenor, with each assuming the risks of unexpected events affecting its own performance, and arising out
 of its own business activities and relationships.
\par 
\par Looked at in this light, Ranger}{\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
s withdrawal was a risk it was intended Emperor should carry, as reflected in the unequivocal terms of the agreement. It was not something that made the continued obligation
 to purchase the stated quantity something radically different from the obligation undertaken therein. Accordingly it does not qualify as frustration, and this ground of appeal fails.
\par 
\par There were complaints about the assessment of damages, but we can see n
othing to criticise in the way His Lordship decided this issue, and we are unclear about the extent to which it is alleged he "came down into the arena" by asking questions about them. At the point where counsel}{
\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 s objection is noted in the record at p 209,
 he seemed to be exploring how the figures put forward by the respondent were arrived at, and mitigation. We see nothing significant in this. Nor do we find any substance in other grounds advanced in the appellant}{
\fs24\lang2057\langfe1033\langnp2057\insrsid5711331 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 s submissions and not specifically dealt with in this judgment.
\par 
\par }{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid9846996 Result
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid13182070 
\par The appeal is dismissed with costs of $2000 to the respondent together with disbursements to be fixed by the Registrar if not agreed.
\par }{\fs24\lang2057\langfe1033\langnp2057\insrsid1722717 
\par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid8717845 Appeal dismissed.
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid9853078 {\fs24\lang2057\langfe1033\langnp2057\insrsid9853078\charrsid9853078 
\par }\pard \qc \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid3625148 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13182070\charrsid3625148 Marie Chan
\par }}