Westbrook Resources Ltd v Globe Metallurgical Inc

A party entitled to contractual performance by a stipulated date may waive punctual performance by clearly representing that later performance will be accepted. Reliance on a representation made before the due date gives rise to equitable estoppel; a representation made afterwards may also constitute an election to affirm the contract.

A contractual requirement that variations be in writing does not prevent the parties from varying that requirement orally. Evidence which appears to express an opinion may be admissible as a compendious statement of facts derived from the witness’s practical experience. A court may also act on evidence admitted without objection, leaving its weight to the trial judge.

Westbrook Resources Ltd agreed to sell Globe Metallurgical Inc 30,000 tons of screened manganese ore. Bad weather prevented the first shipment from being loaded by the contractual date. Globe initially acquiesced in the delay but later refused the first shipment and treated the contract as discharged. Westbrook accepted that conduct as a repudiation and claimed damages.

Tomlinson J gave judgment for Westbrook in the Commercial Court, [2007] EWHC 2353 (Comm), and subsequently assessed damages at US$1,541,897.66. Globe appealed against both orders. It contended principally that Westbrook had missed the shipment deadline, had disabled itself from performing by disposing of ore, and had obtained damages on an incorrect assessment of the available material. Globe also sought to rely on a late survey report as fresh evidence.

The central issues were whether Globe had waived punctual shipment, whether sufficient conforming ore remained available, and whether the judge’s evidential and damages decisions could be disturbed.

1. The appeal was dismissed unanimously. Globe had clearly and unequivocally represented, both before and after the contractual shipment date, that it would not treat late shipment of the first instalment as discharging the contract. Westbrook relied on that assurance by continuing to screen the ore and loading the first barge. Globe could therefore no longer insist on shipment by the original date. A representation made before the time for performance operated by equitable estoppel; after that time it could also operate as an election to affirm the contract.

2. The absence of a pleaded waiver did not make it unjust for the trial judge to decide the issue. The overriding objective was to do justice, without permitting form to override substance. Globe had not objected, requested an adjournment or sought to adduce further evidence. The judge possessed detailed evidence concerning the parties’ dealings, and Globe had a sufficient opportunity to address the issue.

3. Waiver did not depend upon a formal contractual variation. In any event, the contract, including its term requiring variations to be in writing, was capable of oral variation.

4. The judge properly refused to admit the Stagg survey report at the damages hearing. The application was made very late, admission would have seriously prejudiced Westbrook without an adjournment, and reasonable diligence could have produced the report earlier. The Court of Appeal also refused to admit it as fresh evidence. Although credible, it was insufficiently significant to justify a partial retrial and covered substantially the same ground as survey evidence already rejected.

5. The evidence of the site operator concerning the recoverable quantity of ore was admissible. An apparent statement of opinion may constitute a compendious way of giving factual evidence based on practical knowledge, as recognised by section 3(2) of the Civil Evidence Act 1972. Even if inadmissible, the judge could accept and act upon it because no objection had been made. Its weight was for the trial judge.

6. The judge was entitled to prefer practical, substantially unchallenged evidence over laboratory analyses based on samples of doubtful representativeness. His findings that sufficient ore remained, that approximately half the raw material would satisfy the contract after screening, and that Westbrook had not disabled itself from performing were sustainable. The challenges to the damages assessment consequently failed.

1. Court of Appeal (Civil Division): The appeal in [2009] EWCA Civ 310 was dismissed unanimously. The liability judgment and damages assessment were upheld.
2. High Court, Queen’s Bench Division (Commercial Court): Tomlinson J, in [2007] EWHC 2353 (Comm), gave judgment for Westbrook on liability, with damages to be assessed. He subsequently assessed damages at US$1,541,897.66.