Chaieb v. Carter & Ors [1987] IESC 5 (3 June 1987)

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By Order of the High Court dated the 1^st February 1985 the Plaintiff obtained judgment against the three Defendants for a total sum of £293,597.14. This represented a sum for principal and interest being commission at 60 US dollars per metric ton in respect of about 7,500 beef cattle exported for slaughter by the Defendants to the Egyptian Government. Against that judgment the Defendants have appealed.

The Plaintiff in his proceedings claimed in addition to the commission at 60 US dollars per metric ton in respect of the beef cattle, also a sum of 110 US dollars per metric ton in respect of feeding cattle about 15,000 head of feeder calves for fattening giving credit for a sum of 20 US dollars per metric ton commission on these feeder calves already paid. That part of the Plaintiff's claim was dismissed in the High Court and the Plaintiff has cross appealed against that dismiss. The Plaintiff is a native of Tunisia, who is married to an Irish woman and who has lived for some considerable period in Ireland, carrying on business. He was, prior to April 1981, acquainted with the Defendants Carter and Connery and had done business with them.

By a document dated the 1st April 1981 but probably not executed until well after that date and purporting to be witnessed by a Commissioner for Oaths on the 29th June 1981, the first and second named Defendants appointed over their signatures the Plaintiff as their agent in connection with the export of cattle to Egypt in the following terms:

The supply of 30,000 heads of cattle referred to in this document was the subject matter of an "I agreement made between the Egyptian Company for Meat and Milk Production, situated in Cairo and the Defendants Carter and Connery which is dated the 15th June 1981. The breakdown of the cattle to be supplied under that agreement is as follows:

(1) About 7,500 bullocks of mixed breed for slaughter, ^ with a weight from 450 to 600 kgs. live weight and an age of two to four permanent teeth.

(2) About 7,500 heifers of mixed breed with a weight from 400 to 600 kgs. live weight and an age of two to four permanent teeth.

(3) About 7,500 heifers of mixed breed for fattening with a weight from 300 to 380 kgs. live weight and an age with two permanent teeth.

(4) About 7,500 bullocks of mixed breed with a weight from 300 to 400 kgs. live weight and an age 75 per cent milk teeth, 25 per cent two permanent teeth.

The Contract was subject, even after its execution, to the approval of the Egyptian Government. An obligation was created in it to deal through an Egyptian national as the final agent in dealing with the Contract.

The Plaintiff decided to deal with a firm of agents named Devco who were represented by an Egyptian national named Kassim. They were accordingly appointed by the Defendants as their Egyptian agent for the purpose of the Contract and a Power of Attorney was apparently granted to them. In order to comply with Egyptian law the Contract recited the existence, and consideration by a committee, of a number of other tenders for the supply of cattle prior to the execution of the Contract.

On the evidence, it would appear that although certain difficulties were encountered in getting ready to perform this Contract after it had been executed matters were proceeding normally up to some time in August of 1981. The Defendants had had difficulty in obtaining shipping but were by then approaching a situation in which they had shipping and were in a position to execute performance and bid bonds which were part of the Contract. A letter of credit which the purchasers were obliged under the Contract to make available had not yet been made available.

At that stage the Government of Egypt refused to n approve of so much of the Contract as provided for the supply of heifers. This apparently on the evidence arose from an experience which they had undergone in purchasing from other Irish exporters heifer cattle which proved to be affected by brucellosis. The Defendants did not inform the Plaintiff of this fact but instead entered into direct communication and negotiation with Kassim and eventually, on the 6^th September 1981 the Defendant Carter visited Cairo and entered into negotiations with representatives of the Meat and Milk Company together with Kassim. As a result of those negotiations a Contract which is substantially in the same general terms as the Contract of the 15th June 1981, was entered into between a company known as Carter Connery & Co. Ltd. (which had been formed at the end of August 1981 for this specific purpose and the Meat and Milk Company of Egypt for the supply of 22,500 cattle in the following categories:

(1) About 7,500 bullocks ready for slaughter with a weight from 450 to 600 kgs. live weight and an age of two to four permanent teeth.

(2) About 15,000 heads of feeder calves, being bullocks, for fattening, with a weight from 300 to 400 kgs. live weight per head and age 75 per cent milk teeth and 25 per cent two permanent teeth.

The prices agreed in this Contract for these different categories of cattle were identical to those in the Contract of the 15th June 1981. Further, the opening paragraphs of the Contract of the 9th September 1981 refer to instructions given to the purchasers by the Minister of Supply and Interior Trading in the Egyptian Government to secure the supply of 30,000 cattle to Egypt in precisely the same form as is contained at the commencement of the Contract of the 15th June 1981. A recital again occurs in the September Contract identical to that contained in the June Contract with regard to the examination and consideration by a committee of other tenders. The evidence established that no tenders other than those «j brought to the Egyptian Government prior to the ^ execution of the Contract in June of 1981 which in fact were organised by the Plaintiff were submitted prior to the execution of the Contract of the 9^th September 1981.

After this Contract had been entered into and the Contract of the 15th June 1981 had purported to have been cancelled by the Defendants, the learned trial Judge found that the Plaintiff learnt of it from a brother of his and on communicating with the Defendants his knowledge of it, had a series of interviews with the Defendants. Again, the Plaintiff asserted in evidence and it was accepted by the learned trial Judge that he was informed at these meetings not of any of the details of this Contract, but rather of the fact that an entirely new Contract had been entered into which had nothing to do with the Contract of the 15th June 1981. It was stated that he was not accordingly entitled to any commission on the cattle to be supplied under this new contract, but he was offered a figure of 20 US dollars per metric ton of feeding cattle on the cattle to be supplied under this Contract. This offer was apparently made at a meeting of the 22^nd September 1981, and it is agreed on the evidence that the Plaintiff said he would think about it. A further meeting took place on the 26th September 1981at which the Plaintiff tendered to the Defendants a document addressed to them personally and in the following terms:

On these facts it was contended on behalf of the Plaintiff, firstly, that the Contract of the 9^th September 1981 was not a new Contract, but rather was an alteration of the Contract of the 15th June 1981.

Secondly, that the meaning of the document executed by him on the 26th September 1981 was that his right to commission in the amounts set out in the document of the 1st April 1981 remained intact and that accordingly on the varied number of cattle being supplied under the agreement made by the Defendants on the 9th September 1981, he was entitled to the figures of 60 US dollars per metric ton for beef cattle and 110 US dollars per metric ton for fattening cattle, giving credit for the 20 US dollars per metric ton of fattening cattle already paid to him.

On behalf of the Defendants it was contended that the Contract dated the 9th September 1981 was indeed a new Contract and that accordingly the Plaintiff was not entitled as of right to any commission in respect of the cattle sold and delivered under it by virtue of the document of the 1st April 1981, that notwithstanding this and by reason of the good relations between the parties that they (the Defendants) had agreed to pay him 20 US dollars per metric ton for fattening cattle supplied under that Contract and that he accepted that and that that was the full amount of his entitlement. The reference to the Agreement being without prejudice to the Egyptian Contract on June 15th 1981 was stated to have no effect, since that Contract was cancelled.

In the High Court the learned trial Judge accepted neither of these contentions. He found that the Agreement of the 9th September 1981 was not a new Contract but was a variation of the old Contract. He also found that the Agreement entered into on the 26th September 1981 by the Plaintiff to accept 20 US dollars per metric ton for feeding cattle being stated to be without prejudice to the Egyptian Contract of the 15th June 1981 left intact the Plaintiff's right to remuneration at the rates set out in the Contract of the 1st April 1981, save that by his agreement to accept 20 US dollars per metric ton for feeding cattle he had waived his right to remuneration at the n rate of 110 US dollars per metric ton for feeding cattle contained in the Agreement of the 1st April 1981, and he gave judgment accordingly.

I am satisfied that the inference drawn by the learned trial Judge from the evidence accepted by him that the Contract of the 9th September 1981 was not despite its form an entirely new Contract is correct and that it must be construed as a variation on the Contract entered into on the 15th June 1981.

The similarity in the terms of the two Contracts; the similarity between the types and descriptions of the cattle to be supplied and the recital in each contract of the selection by the Committee of the bid being made by the Defendants after consideration of other tenders, coupled with evidence that no tender was submitted between the 15th June 1981 and the purported new Contract of the 9th September 1981, lead, in my view, to this conclusion.

The learned trial Judge also found that while rejecting an allegation of fraud against the Defendants that the fact that they entered into the Contract of the 9th September 1981 through the agency of a limited liability company, formed at the end of August 1981, (that Company apparently representing the same persons who together with the Defendants were the suppliers of cattle in the Contract of the 15^th June 1981) did not disentitle the Plaintiff to commission. With that conclusion I also agree.

The uncontested evidence was that the exclusion of heifers from the cattle to be supplied put into effect by the Contract of the 9th September 1981 drastically altered the profitability of that Contract to the Defendants when compared with the Contract of the 15th June 1981 when heifers could be supplied to the extent of 50 per cent of the total of the cattle.

I have therefore come to the conclusion that it would be quite unjust and inequitable and would be outside the clear intention of the parties to apply to the transaction consisting of the Contract of the 9th September 1981 the rates of commission provided for in ,-,

Whilst the rate of remuneration payable to the Plaintiff does not depend on the profit outcome of the Contracts which he negotiated, it seems to me that had the parties sat down, as they should have done, after the refusal of the Egyptian authorities to accept heifers as part of the shipment of cattle, to renegotiate the terms of the commission, inevitably those terms must have been significantly less advantageous to the Plaintiff and less burdensome on the Defendants, having regard to the altered nature of the profitability in the revised Contract.

That such renegotiation of the terms of the commission did not take place on the findings of fact made by the learned trial Judge was entirely the fault of the Defendants who, it would appear, instead of informing the Plaintiff of the alterations which now had become necessary in the Contract and renegotiating his commission with him, sought to avoid the payment of any commission to him by dealing direct with the Egyptian authorities.

Notwithstanding this fact, it does not appear to me logical to impose upon the Defendants part only of the terms of commission contained in the Agreement of the 1st April 1981 and it would appear to me also that it would be inequitable notwithstanding their conduct, to impose on them the entire rates of the commission contained in the document of the 1st April 1981.

By the Agreement of the 1st April 1981 not only n were the terms of commission and the amounts per metric ton involved agreed for the purposes of the Contract of the 15th June 1981, but also the Plaintiff was appointed as the sole agent of the Defendants to deal with the Egyptian authorities for the shipment of cattle under any contract. Prom this the law must necessarily imply that he was to receive reasonable remuneration for the work so done.

On the findings made by the learned trial Judge with which I agree, that the securing of the Contract of the 9th September 1981 flowed directly to a great extent from the work carried out by the Plaintiff from^ ADril 1981 on, I am satisfied that he is entitled to reasonable remuneration having regard to the work carried out by him and having regard to expenditure which he clearly made on behalf of the Defendants over this entire period.

On the evidence adduced before the High Court, the material is not available upon which the Court could assess the proper figure on a quantum meruit basis by which the Plaintiff must be remunerated. It may well be that it is equal to the amount awarded by the learned High Court Judge on the basis on which he gave his decree. It may well be that it is more, or that it is less.

Although the Defendants in their appeal sought a discharge of the Order against them and the Plaintiff in his cross-appeal sought the substitution of the larger decree, and neither of the parties sought in the alternative a new trial, I am satisfied that the justice of the case requires that the matter be re-tried in the High Court to the extent only of assessing the amount due to the Plaintiff by way of quantum meruit as remuneration for the services rendered by him to the Defendants in connection with the obtaining of the Contract of the 15th June 1981 which resulted in the revised Contract of the 9th September 1981.

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You are here: BAILII >> Databases >> Supreme Court of Ireland Decisions >> Chaieb v. Carter & Ors [1987] IESC 5 (3 June 1987) URL: http://www.bailii.org/ie/cases/IESC/1987/1987_IESC_5.html Cite as: [1987] IESC 5

Supreme Court of Ireland Decisions