Lubricants (Distributors) Ltd v Perry Gayle and Merrick Gayle
| Jurisdiction | Jamaica |
| Judge | HARRISON J |
| Judgment Date | 02 November 1999 |
| Judgment citation (vLex) | [1999] 11 JJC 0202 |
| Court | Supreme Court (Jamaica) |
| Date | 02 November 1999 |
IN THE SUPPREME COURT OF JUDICATURE OF JAMAICA
IN COMMON LAW
CONTRACT - Oral contract - Breach - Whether defendants' cancellation of purchase order without notice amounted to breach of contract
Trial of this matter commenced in September of 1998 but had to be adjourned on several occasions for a number of reasons. Finally, on the 4t th March 1999 I completed hearing the evidence and reserved judgment. I must apologize however, for the delay in handing down the judgment but this could not be avoided as I was on vacation leave during the Easter term.
Introduction
The plaintiff company is a distributor of petroleum products but it was not until 1991 that it began distributing fuel. In that year, the plaintiff was associated with at least five (5) National Service Stations and a supply agreement was executed between Petroleum Corporation of Jamaica ("Petro Jam") and itself in order to gain access to the refinery. Subsequent to the grant of the licence, National Fuels and Lubricants was incorporated and the plaintiff assigned its access to this company.
On the 1 st July 1991, National Fuels and Lubricants Ltd placed an advertisement in the "Daily Gleaner (Exhibit 9) inviting "operators of all dealer owned service stations Island-wide" to purchase their fuel and lubricants from "National". This invitation was also open to persons who were interested in establishing service stations.
The evidence given on behalf of the plaintiff reveal that the first defendant responded to the advertisement. Roy D' Cambre, managing director of the plaintiff company had discussions with him and after several meetings they eventually finalised an oral agreement for the establishment of a "National Service Station" at Southfield, St. Elizabeth.
The defendants on the other hand, claimed that no agreement was made between the parties and on May 2 nd , 1992, a service station was opened by the first defendant at Southfield under the trade name of Petro South with "Pet Com" being the suppliers of fuel.
>As a consequence, the plaintiff brought this action against the defendants for breach of contract and is seeking to have damages awarded for the breach.
The Statement of Claim
The plaintiff alleges inter alia:
.......
3. In or about the month of July, 1991 the Plaintiff and the Defendants entered into an oral contract whereby it was agreed that in consideration of the Plaintiff:
(a) assisting the defendants in obtaining the necessary permits from the then Petroleum Filling Board to operate a Petroleum Filling Station at Southfield in the Parish of St. Elizabeth;
(b) at its own expense, providing the necessary legal representation at the hearing of all necessary applications and appearances before the Petroleum Filling Board;
(c) procuring all the equipment (e.g. Pumps, underground storage tanks and a compressor) necessary for the operation of a retail petroleum outlet;
(d) furnishing technical, supervisory and practical services in respect of the establishment of the plant;
(e) furnishing an agreement between the plaintiff and themselves that the said defendants would procure all their stocks of petroleum products from an established distributor, to wit, the Plaintiff, which is a condition precedent to Petroleum Filling Board considering and granting the permit;
the defendants would purchase all their stock i.e fuels, tyres and lubricants from the plaintiff for a minimum of three years in the first instance.
4. The plaintiff in pursuance of the performance of its obligations to the defendants under the aforesaid agreement, provided legal representation for the defendants to apply for and procure the necessary permits from the Petroleum Filling Board, identified and procured the necessary equipment, entered into an agreement with the defendants to supply petroleum products as a Distributor of such products, and furnished technical and professional services as regards the lay-out and installation of equipment on the site.
5. In breach of their agreement, the defendants on or about the 23 rd November, 1991, cancelled the order placed by the plaintiff with a supplier for petrol pumps without notice to the plaintiff. (The underlined words were deleted by virtue of an amendment to the pleadings on the 21 st September, 1998.)
6. In further breach of their contract, the defendants wrongfully failed to purchase supplies of petroleum products from the plaintiff as agreed or at all, as a consequence whereof the plaintiff has suffered loss and damages.
The Defence
The defence alleges inter alia:
"2. The defendants deny that they both purported to trade under the name and style of Petro South and aver that the 2 nd Defendant at all material times, acted as the agent of the first defendant.
3. The defendants deny that they entered into a contract as alleged in paragraph 3 of the Statement of Claim or at all and further deny that there was any agreement on the matters mentioned in the said paragraph 3. The defendants aver as follows:
(A) that they had discussions with a Mr. Roy D'Cambre, the Managing Director of the Plaintiff company about the establishment of a petrol station and the supply of petroleum products to the said station.
(B) that such discussions were conducted with Mr. D'Cambre in his capacity as Managing Director of National Fuels & Lubricants Limited.
(C) that no agreement was reached or derived from the said discussions or at all.
4. The defendants deny the entire contents of paragraph 4 of the Statement of Claim.
5. The defendants deny paragraph 5 of the statement of claim and will say that the l st defendant ordered three petrol pumps from the plaintiff on or about the 26t h September, 1991 and on or about the 23 rd November 1991 when the plaintiff had failed to supply the said pumps in keeping with the order, the 1 st defendant cancelled the order and the plaintiff refunded the money paid by the 1 st defendant to the 1 51 defendant on or about the 6 lh December, 1991.
6. The defendants deny that they breached any contract as alleged in paragraph 6 of the statement of claim and while they did not purchase any petroleum products from the plaintiff, they deny that that was wrongful or contrary to any agreement.
7. If which is not admitted, the plaintiff suffered the alleged or any loss and damage, the same was not due to any breach of contract by the defendants as alleged in paragraph 6 of the statement of claim or at all.
8. The defendants will say that the only agreements which either of them had with the plaintiff was:
(i) that the 1 st defendant requested the plaintiff to order and supply two (2) fuel storage tanks and in pursuance of this agreement paid the total price of $82,420.00 to the Plaintiff. The Plaintiff in breach of that agreement failed to deliver the said tanks to the 1 st defendant and the l st defendant had to collect said tanks directly from the supplier; and
(ii) the transaction relating to the petrol pumps referred to in paragraph 5 hereof.
9. In the premises, the defendants deny that they are liable to the plaintiff for and that the plaintiff is entitled to damages for breach of contract as alleged or at all."
Reply to the Defence
"2. Paragraph 3 of the Defence is specifically denied and the Plaintiff in reply says that the defendants and the Plaintiff's Managing Director Mr. Roy D'Cambre on behalf of the Plaintiff arrived at a firm agreement in the terms set out in paragraph 3 of the Statement of Claim. The ordering of the pumps by the plaintiff on behalf of the Defendants constituted a part performance of the said Agreement.
3. In reply to paragraph 5 of the Defence, the Plaintiff says that the Defendant cancelled their order for the three (3) pumps on the 23 rd November 1991, well within the period of three (3) months, which was the period of time that the Plaintiff had advised the Defendants would be the estimated time for delivery. The cancellation of the said order was in breach of the agreement that the defendants had with the Plaintiff.
4. In reply to paragraph 7 of the Defence, the Plaintiff says that pursuant to the agreement between the parties the plaintiff gave the defendants a letter of undertaking to supply them with petroleum. This letter of undertaking was a pre-requisite to the Defendants being granted a Petroleum Filling Station Permit by the relevant authorities. Then in breach of their said agreement with the Plaintiff the Defendants failed and/or refused and/or neglected to purchase petroleum or petroleum products from the Plaintiff."
Meetings
There is evidence led on behalf of the plaintiff which reveal that the parties met on several occasions in order to discuss the setting up of the service station at Southfield, St. Elizabeth. D'Cambre testified that he had his first meeting with the first defendant at the plaintiff's registered office in Kingston. The first defendant made the appointment to see him about the advertisement in the newspaper and said that he was interested in operating the service station under the brand name of "National". D'Cambre said he told him that the plaintiff company would assist him in obtaining a licence from the Petroleum Filling Station Board. D'Cambre also testified that he told the first defendant that the plaintiff would supply the storage tanks, fuel pumps and provide him with standard drawings for the structure and layout of the service station. D'Cambre said this meeting was a preliminary one and he had agreed to visit the proposed site in order to advise the defendants on the viability of the service station. D'Cambre said he did a traffic count in the area and also looked at competition in the area in order to determine the buying...
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