Computer 2000 Distribution Ltd & Ors v ICM Computer Solutions Plc

Contractual delivery is assessed by the terms on which the supplier agreed to supply the goods. Where the buyer’s purchase order directs delivery to a named company at premises and identifies a person for whose attention the goods are to be shipped, delivery to that person can satisfy the contract even though he has no authority from the named company.

More generally, delivery at the purchaser’s premises is effective where the goods are delivered without negligence to a person whom the deliveror would reasonably expect to have authority to receive them there. The buyer bears the resulting loss where the goods are then misappropriated.

Three suppliers sued ICM Computer Solutions Plc for the price of goods ordered under purchase orders directing delivery to AMEC Plc at South Bank House, marked for the attention of Richard Cole. The goods were received at the premises by a security guard and collected by a fraudster. The suppliers were unpaid because AMEC Plc had neither ordered nor received the goods.

His Honour Judge Catlin rejected ICM’s defence that the suppliers had failed to deliver in accordance with the contracts and gave judgment for the suppliers. The three appeals were heard together. The central issue was whether delivery to the designated premises and the person identified in the purchase orders constituted contractual delivery.

1. Appeals dismissed. The purchase orders were the starting point for determining the contractual delivery obligation. The relevant question was not whether a person receiving the goods had actual, implied or ostensible authority from AMEC Plc. The dispute was between the suppliers and ICM, so the question was whom ICM had held out to the suppliers as authorised to receive goods sent to AMEC Plc at South Bank House.
2. The shipment instruction, “Ship FAO: Richard Cole”, identified the person to whom ICM intended the goods to be delivered. The goods reached the person answering that description. Delivery was therefore made to the person whom ICM had held out as having authority to accept the goods on behalf of AMEC Plc. His lack of authority from AMEC Plc was immaterial.
3. For completeness, Lord Justice Chadwick explained that the judge had used “apparent authority” in the practical sense applied in Galbraith and Grant Ltd v Block [1922] 2 KB 155, rather than the technical sense of ostensible authority explained in Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480. The relevant inquiry was whether the person receiving the goods at the designated premises was someone whom the courier or other deliveror would expect to have authority to receive goods for the addressee there. On the facts, the security guard satisfied that practical description.
4. The court did not need to decide whether the supplier’s own standard terms had been incorporated by a prior course of dealing, because the appeals failed even on the basis that ICM’s standard terms applied.
5. Each appeal was dismissed with costs. The costs judge was invited to prevent duplication. Imago’s costs from 18 June were payable on an indemnity basis, with interest at 9%, and specified payments on account were ordered.

• Court of Appeal (Civil Division): Appeals from orders made by His Honour Judge Catlin at Reading County Court in March 2004. Permission to appeal was granted on 23 April 2004. The appeals were dismissed with costs.