Cases for Remedies

NON-COMPENSATORY MEASURES

AG v. Blake [2001] AC 268 @ 283 - Lord Nicholls of Birkenhead

Remedies available for breach of contract – the basic remedy is an award of damages. Where a party sustains loss by
reason of a breach of contract, he is, so far as money can do it, to be placed in the same position as if the contract had
been performed. Damages are compensatory. Specific remedies are discretionary. The court may decline to grant
specific relief on the ground that this would be oppressive. Likewise, the court will compel the observance of negative
obligations by granting injunctions.
- Property rights are superior to contractual rights in that, unlike contractual rights, property rights may survive
against an indefinite class of persons.
- However, it is not easy to see why, as b/w the parties to a contract, a violation of a party’s contractual rights
should attract a lesser degree of remedy than a violation of his property rights.
The Wortham Park case still shines, rather as a solitary beacon, showing that in contract as well as tort damages are not
always narrowly confined to recoupment of financial loss. In a suitable case damages for breach of contract may be
measured by the benefit gained by the wrongdoer of the breach. The defendant must make a reasonable payment in
respect of the benefit he has gained. Circumstances do arise when the just response to a breach of contract is that the
wrongdoer should not be permitted to retain any profit from the breach. My conclusion is that there seems to be no
reason, in principle, why the court must in all circumstances rule out an account of profits as a remedy for breach of
contract. Remedies are the law’s response to a wrong (or, more precisely to a cause of action). When, exceptionally, a
just response to a breach of contract so requires, the court should be able to grant the discretionary remedy of requiring
a defendant to account to the plaintiff for the benefits he has received from his breach of contract.
- Damages are not always a sufficient remedy for breach of contract.
- This is the foundation of the court’s jurisdiction to grant the remedies of specific performance and injunction.
- Damages are measured by reference to the benefit obtained by the wrongdoer.
- An account of profits is ordered in preference to an award of damages.
- Sometimes the injured party is given the choice: either compensatory damages or an account of the
wrongdoer’s profits. Breach of confidence is an instance of this.
Normally the remedies of damages, specific performance and injunction, coupled with the characterisation of some
contractual obligations as fiduciary, will provide an adequate response to a breach of contract. It will be only in
exceptional cases, where those remedies are inadequate, that any question of accounting for profits will arise.
- No fixed rules can be prescribed.
- The court will have regard to all the circumstances, including the subject matter of the contract, the purpose of
the contractual provision which has been breached, the circumstances in which the breach occurred, the
consequences of the breach and the circumstances in which relief is being sought.
- A useful general guide, though not exhaustive, is whether the plaintiff had a legitimate interest in preventing
the defendant’s profit-making activity and, hence, in depriving him of his profit.

Rookes v. Barnard [1964] AC 1129

The tort of intimidation was an established tort. It comprehended not only threats of criminal or tortious acts, but
threats of breaches of contract.
If persons combined to do acts which they knew would cause loss to a plaintiff by threat to commit a tort against a
third person if he did not comply with their demands that was using unlawful means to achieve their object. (Per Lord
Reid)

Exemplary damages could be awarded in cases:

(i) Of oppressive, arbitrary or unconstitutional acts by government servants
(ii) Where the defendant’s conduct had been calculated by him to make a profit for himself which might well
exceed the compensation payable to the plaintiff
(iii) Where expressly authorised by statute.
In a case in which exemplary damages were appropriate a jury should be directed that only if the sum which they had
in mind to award as compensation (which might of course be aggravated by the defendant’s behaviour to the plaintiff)
was inadequate to punish and deter him, could it award some larger sum.
The plaintiff, could, w/o any departure from the compensatory principle, invite the jury to look at all the surrounding
circumstances and award a round sum based on the pecuniary loss proved.

Drane v. Evangelou [1978] 2 All ER 437

Plaintiff was the tenant of a furnished flat owned by defendant and let to plaintiff at a rent of £25 per week. In July
1975 plaintiff applied to a rent officer to fix the rent. Before the rent was fixed defendant served a notice to quit on
plaintiff which was ineffective because of the statutory protection from eviction afforded to plaintiff. On October 8 the
rent officer fixed the rent of the flat at £16 per week. On October 14, while plaintiff was out, three associates of
defendant entered the premises, put plaintiff’s belongings outside in the back yard and prevented him from entering the
flat. Defendant’s parents-in-law moved into the flat while plaintiff was forced to reside with friends and store his
belongings in a garage. On October 28 plaintiff issued a claim in the county court alleging that ‘defendant had
interfered with the right of plaintiff . . . to quiet enjoyment of the . . . premises by unlawfully evicting [him] from the . .
. premises’ and seeking (i) an order for delivery up of possession to plaintiff, (ii) injunctions to restrain defendant from
preventing plaintiff gaining readmittance to the flat, from interfering with plaintiff’s right to quiet enjoyment of the
premises, and from harassing plaintiff, and ordering defendant’s parents-in-law to quit the flat, and (iii) damages
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limited to £1,000. On October 31 plaintiff obtained an injunction compelling defendant to restore him to the property.
Defendant refused to comply with it or with a further injunction until plaintiff instituted committal proceedings for
breach of the injunction. On January 1, 1976 plaintiff regained possession of the flat having been kept out of
occupation for a period of 10 weeks. On September 14, 1976 plaintiff’s action was heard in the county court. At the
end of the evidence defendant submitted that the claim was for breach of a covenant for quiet enjoyment and that
exemplary damages could not be awarded. The judge stated that the facts were sufficient to found a claim in trespass
and awarded damages of £1,000 to plaintiff. Defendant appealed, contending, inter alia, that plaintiff was not entitled
to exemplary damages because the particulars of claim had not pleaded a claim in trespass and had not expressly
claimed exemplary damages:
Held the appeal would be dismissed because (1) the judge was entitled of his own motion to raise the issue of trespass
even though it had not been pleaded, because the facts were sufficient to warrant a claim for trespass and as they were
set out in the particulars of claim defendant could not claim that he had been taken by surprise when the judge raised
the issue; (2) a claim for exemplary damages did not have to be specifically pleaded in the county court because there
was no rule in the county court rules equivalent to RSC Order 18 rule 8 (3), which required a claim in the High Court
for exemplary damages to be specifically pleaded. Furthermore, in the county court defendant had not raised the
defence that exemplary damages should be specifically pleaded and therefore would not be permitted to raise it on
appeal; (3) defendant’s conduct in unlawfully evicting plaintiff in the manner in which he did was a grave wrong which
justified an award of £1,000 damages either as exemplary damages because defendant had acted with a cynical
disregard of plaintiff’s rights in seeking to gain, at the expense of plaintiff, property which he coveted and which he
could not otherwise obtain and because it was a case in which it was necessary to teach defendant that tort did not pay,
or as aggravated damages. Although the judge had not approached the award of exemplary damages in the same way
as a jury should be directed to approach such an award, the award was not excessive in the circumstances.

AG for St. Christopher v. Reynolds [1979] 3 All ER 129

When exemplary damages were awarded, the amount of such damages was not required to be specified separately
from the amount of compensatory damages awarded. The Board would not therefore interfere with the award of
damages to the plaintiff on that ground and there were no other grounds on which the Board was justified in interfering
with it.

Marshall v. Semper
The plaintiff M was a shop detective. S. was a sergeant and the two other defendants were corporals in the Special
Reserve Police. In the course of his duty the plaintiff apprehended the wife of S for shop-lifting and took her before a
director of the shop. She was not prosecuted. Less than a week after this incident S accosted M on a street and
threatened to cause him to lose his employment for accusing his wife of theft. Upon being challenged to carry out the
threat S collared M, cuffed him and, alleging that M had insulted and molested a woman who was passing by, called
upon J and C to arrest him. M. was taken to a police station where he was detained for a short while before being
released, without being charged, on the directions of an NCO of police. In an action for damages for assault, wrongful
arrest and false imprisonment against S, J and C.
Held: (i) compensatory damages against joint tortfeasors should not be assessed according to the act of the most guilty
or the most innocent, but must relate to the aggregate of the plaintiff's injury.
(ii) exemplary damages should never be awarded against a defendant whose conduct has not been such as to call for
punishment or deterrence merely because a co-defendant has been found to be within one of the categories of persons
who should be punished or deterred.

Judgment for the plaintiff.

, I am satisfied he was not acting as such and that, however misguided Jardine and Carmichael were in submitting
to his supposed authority, they knew (and so did the plaintiff) that he was merely pretending to exercise authority as an
SRP when in fact he was acting in his private capacity. Consequently, I accept Lord Devlin’s guidance that while there
is something repugnant about a big man bullying a small man, and very likely the bullying will be a source of
humiliation that makes the case one for aggravated damages, it is not punishable by exemplary damages.
I come next to assessment. The assault was unprovoked and deliberate. At the same time, it caused no particular
hurt. I think therefore that an award of $50 will meet the justice of the case. The wrongful arrest and false
imprisonment constitute a far more serious injury. The plaintiff was well known in San Fernando and the arrest was
calculated not only to lower his esteem in the community but also to prejudice him in his employment as a shop
detective. The incident took place at a very busy corner where quite a number of people were assembled and where a
still larger crowd was likely to be attracted by the excitement caused. In the result, the plaintiff was deprived of his
liberty for some forty-five minutes and was humiliated in the eyes of the public. Moreover, the malevolence and spite
on the part of Semper and the readiness with which the other defendants sprang to carry out his bidding would
undoubtedly have aggravated his injury. At the same time, I must be careful lest in compensating him for the
aggravated injury to which he was subjected I should cross the frontier into the punitive area of exemplary damages

Valentine v. Rampersad 17 WIR 12 Fraser JA (COA TT)

There were aggravating circumstances. This was a clear case of harassment and ruthless disregard for the rights of the
tenant.
Lord Devlin in Rookes v. Barnard:
The first category is oppressive, arbitrary or unconstitutional action by the servants of the government. I
should not extend this category – I say this with particular reference to the facts of the case – to oppressive
action by private corporations or individuals. Where one man is more powerful than another, it is inevitable
that he will try to use his power to gain his ends; and if his power is much greater than the other’s, he might
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 perhaps be said to be using it oppressively. If he uses his power illegally, he must of course pay for his
illegality in the ordinary way; but he is not to be punished simply b/c he is more powerful. In the case of the
government it is different, for the servants of the government are also the servants of the people and use of
their power must always be subordinate to their duty of service. It is true that there is something repugnant
about a big man bullying a small man and, very likely, the bullying will be a source of humiliation that makes
the case one for aggravated damages, but it is not, in my, opinion, punishable by exemplary damages.

Lord Devlin did not exclude the possibility of oppressive action by private individuals being visited by an award of
exemplary damages. It seems that Lord Devlin purposely introduced the qualification b/c of the facts in Rookes’ case
and accepted the possibility of the category being extended to include private corporations and individuals providing
the conduct was oppressive in a real sense and not mere bullying or an illegal use of power. It is my opinion therefore
that the question is still open whether exemplary damages may be awarded against a private corporation or an
individual for oppressive conduct.

de la Bastide JA – agreed with the increase in the award of damages to include exemplary damages.

Douglas v. Bowen 22 WIR 333 – JA

The categories to which exemplary damages might be awarded as set out in Rookes v. Barnard should be adopted in
Jamaica. The respondent Marjorie Bowen was unlawfully evicted by the appellant Brinkman Douglas from a building.
At the time of her eviction she was in occupation of those premises as a monthly tenant under an oral agreement
entered into by her as tenant and the appellant as landlord on 17 July 1967. As a result of the manner of her eviction
she suffered the loss of or damage to a number of her personal belongings and articles used in connection with her
business as well as loss of business. The appellant did not seek to deny liability. The appellant seeks to have the award
of compensatory damages reduced as being much too great. He seeks to have the award of exemplary damages set
aside on the ground that this is not a case for the award of exemplary damages
HELD: It appears to be common ground that in Jamaica the award of damages as a remedy in all civil wrongs is as in
England the creature of the common law. Jamaica being regarded as a settled colony would have inherited the English
common law in this regard. However, as LORD DIPLOCK observed in Cassell & Co, Ltd v Broome
'Despite the unifying effect of that inheritance on the concept of man's legal duty to his neighbour, it does not
follow that the development of the social norms in each of the inheritor countries has been identical or will
become so.'
It may be observed that in Trinidad and Tobago LORD DEVLIN's categorisation has been accepted and applied without
any detailed or critical analysis by that country's Court of Appeal in Marshall v Semper (a case of assault, wrongful
arrest and false imprisonment) and Valentine v Rampersad (a case of harassment of a tenant).
It is important to observe that LORD DEVLIN's first premise is that the object of damages in the usual sense of the term
is to compensate. Next LORD DEVLIN said that as far as he knew the idea of exemplary damages is peculiar to English
law. Consequently, he argued, such an award is an anomaly in the law of England. So LORD DEVLIN suggested that in
future a clear distinction ought to be made between compensatory (or aggravate) and punitive (or exemplary) damages
the former reflecting what the plaintiff has suffered materially or in wounded feelings, the latter the jury's (or judge's)
view of the defendant's motive and conduct where they aggravate the injury done to the plaintiff.
Then LORD DEVLIN stated two categories of cases to which he added another category in which exemplary damages
are authorised by statute. The first of these categories he said “is oppressive, arbitrary or unconstitutional action by
servants of the government.” He excluded from this category inter alia individuals. In Cassell & Co, Ltd v Broome it
was held that this category should not be limited to servants of government in the strict sense of the word but should be
extended to others, such as local government officials and the police.
Cases in the second of these categories “are those in which the defendant's conduct has been calculated to make a
profit for himself which may well exceed the compensation payable to the plaintiff… This category is not confined to
moneymaking in the strict sense but extends to cases in which the defendant is seeking to gain at the expense of the
plaintiff some object–perhaps some property which he covets, which either he could not obtain at all or not obtain
except at a price greater than he wants to put down.”
This category is, as LORD DIPLOCK has stated in Cassell & Co, Ltd v Broome, of cases “where an act known to be
tortious was committed in the belief that the material advantages to be gained by doing so would out-weigh any
compensatory damages which the defendant would be likely to have to pay to the plaintiff.” In respect to what he
designated as the third category LORD DIPLOCK said:
'I see no reason for restoring to English law the anomaly of rewarding exemplary damages in the third category
of cases. If malice with which a wrongful act is done or insolence or arrogance with which it is accompanied
renders it more distressing to the plaintiff, his injured feelings can still be soothed by aggravated damages
which are compensatory there is little doubt that the overruled case of Louden v Ryder stands alone as one in
which exemplary damages were awarded against a private bully or oppressor. There can be no question of
there being any settled practice to award exemplary damages in a case of that kind.
The instant case being one of a private bully would therefore be excluded from the first category. The trial judge's
finding that the appellant appeared to want the respondent out of the house for no particular reason, and this finding is
supported by the evidence, would in my view mean that the respondent has failed to show in the words of LORD
DIPLOCK that the appellant “did direct his mind to the material advantages to be gained by committing the tort and
came to the conclusion that they were worth the risk of having to compensate” the plaintiff (respondent) if she did
bring an action.
Beckles v. Chandler
The plaintiff became the owner of a parcel of land by a conveyance from the court. At the time of purchase the
defendants were in possession but were subsequently ejected by warrant of the court. After being ejected the
defendants again entered on the land and took possession and were again ejected by warrant of the court. The
defendants trespassed again and depastured stock on the land for which damages were recovered by the plaintiff.
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Subsequently the defendants started to demolish a building on the land and on two occasions erected a chattel house
thereon. The defendants further threatened to continue their trespass.
Held: (i) the actions of the defendants went beyond simple trespass for which the award of damages would not be an
adequate remedy, and a perpetual injunction restraining the defendants from trespassing should be granted;
(ii) the erection of the chattel house constituted a nuisance for which a mandatory injunction should issue against the
male defendant, the owner of the house, ordering him to remove it; and that the damages should include a sum as
exemplary damages for the wilful persistence of the defendants in continuing the trespass. In fixing the damages the
court took into account the fact that the plaintiff suffered the defendants to be on the land from 1950 to 1954 before
bringing the action.

Kuddus v. Chief Constable of Leicestershire Constabulary

Whether exemplary damages could be awarded on the ground of oppressive, arbitrary or unconstitutional action by a
public officer depended on the features of the officer's behaviour rather than on the precise cause of action sued on and
the fact that misfeasance in public office was not a cause of action that had been accepted before 1964 as justifying an
award of exemplary damages did not preclude the plaintiff's claim.

DAMAGES AGREED BY CONTRACT

Dunlop Pneumatic Tyre Co Ltd v. New Garage & Motor Co Ltd [1915] AC 79
This case laid down several principles that are relevant in deciding whether in addition laid down several principles
that are relevant in deciding whether a sum is liquidated damages or a penalty:
(i) The parties’ use of the words ‘penalty’ or ‘liquidated damages’ does not conclusively decide the issue;
(ii) One must judge the issue according to the circumstances at the time the contract was made and not at the
time of the breach;
(iii) The sum will be held to be a penalty if it is ‘extravagant and unconscionable in amount in comparison with
the greatest loss that could conceivably be proved to have followed from the breach.’
(iv) ‘It will be held to be a penalty if the breach consists only in not paying a sum of money, and the sum
stipulated is a sum greater than the sum which ought to have been paid.’
(v) ‘There is a presumption (but no more) that it is a penalty when ‘a single lump sum is made payable by way
of compensation, on the occurrence of one or more or all of several events, some of which may occasion
serious and others but trifling damage’.’
(vi) ‘It is no obstacle to the sum stipulated being a genuine pre-estimate of damage that the consequences of
the breach are such as to make precise pre-estimation almost an impossibility. On the contrary, that is just
the situation when it is probable that the pre-estimate damage was the true bargain b/w the parties.’

Bridge v. Campbell Discount Co Ltd [1961] 2 All ER 97

There was a minimum payment clause in the hire purchase agreement whereby if the debtor was in breach of contract
(or chose to terminate lawfully the contract) he should return the goods to the creditor and make up the payments
already paid to two-thirds of the hire purchase price. This sum was expressed to be compensation for depreciation.
The debtor, having made several payments, refused to pay any more and returned the car. The HL having held that he
was in breach of contract, decided that the sum payable under the minimum payment clause was penal and
irrecoverable b/c it did not represent a genuine pre-estimate of loss. In particular, the amount stated could not be
regarded as compensation for depreciation b/c, in Lord Radcliffe’s words, the clause:
‘…produces the result, absurd in its own terms, that the estimated amount of depreciation becomes
progressively less the longer the vehicle is used under the hire. This is b/c the sum agreed upon diminishes as
the total of cash payments increases. It is a sliding scale of compensation but a scale that slides in the wrong
direction…’

What is doubtful is whether equity will intervene and give relief otherwise than by extending the time allowed for
payment.

Stockloser v. Johnson [1954] 1 QB 476

COA agreed that intervention was not warranted, but its members differed as to the principle upon which such relief
might be granted. Romer LJ concluded that ‘in the absence of some special circumstances such as fraud, sharp
practice or other unconscionable conduct of the vendor’ no intervention by the court is permissible after the contract
has been rescinded, except to allow an extension of time for payment. Sommervell and Denning LJJ thought that the
province of equity was not so circumscribed and that it may permit more general relief whenever the forfeiture clause
is of a penal nature – where, that is, the sum forfeited is wholly disproportionate to the damage suffered – provided that
in the circumstances it is unconscionable for the money to be retained.
- Galbraith v. Mitchenall Estates Ltd favours Romer LJ
- Starside Properties v. Mustapha favours Sommervell and Denning LJJ

Galbraith v. Mitchenhall Estates Ltd [1965] 2 QB 473

By a contract for the hire of a caravan the hirer was to make an initial payment of £550 10s, followed by sixty rentals
of £12 10s. The retail price of the caravan was £1,050. The contract of hire was a long document in small print. The
hirer signed it without reading it. When he signed the contract the hirer assumed that it was a contract of hire-purchase,
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but there was no sharp practice or unconscionable conduct on the part of the finance company, with which the contract
was made, in obtaining the agreement. The hirer paid the initial payment, and had delivery of the caravan. After he had
lived in it with his family for some four months, the owners (the finance company) re-possessed the caravan under the
terms of the contract, the hirer having failed to pay rentals. At the date of re-possession the caravan was worth £800.
The position created by the contract was that the owners could both retain the initial payment and have re-possession
of the caravan. The caravan was sold subsequently by the owners for £775, having been somewhat damaged by the re-
possession agents. The contract also entitled the owners to enforce payment of a proportion of the outstanding rentals,
but they took no action under these provisions. In an action by the hirer for recovery of the initial payment,
Held – Although the contractual position enabling the owners to retain both the initial payment and the caravan was
one of undue harshness yet there was no equity to re-model a contract freely negotiated and entered into without either
fraudulent or unconscionable conduct by the other party thereto; accordingly, the £550 10s being money paid under the
contract that the owners were entitled to retain, the court would not intervene, and the action must be dismissed.

Steedman v. Drinkle [1916] AC 275

By an agreement in writing dated 9 December 1909, land in the province of S was sold for 16,000 dollars, of which
1,000 dollars were paid on signing the agreement and the balance was payable by six annual instalments on 1
December of each year. The agreement provided that, if the purchaser should make default in any of the payments, the
vendor should be at liberty to cancel the agreement and to retain, as liquidated damages, the payments already made,
and that time was to be considered as of the essence of the agreement. Default having been made in the payment of the
first instalment, the vendor cancelled the agreement; assignees of the purchaser sued for specific performance:
Held the parties having made time of the essence of the agreement, specific performance could not be decreed; but the
forfeiture of the money paid was a penalty from which relief should be granted on proper terms.

Kilmer v. British Columbia Orchard [1913] AC 319

An agreement for sale by respondent company of lands in British Columbia for a price to be paid in instalments at
specified dates contained a clause of forfeiture both of the agreement and of all payments of past instalments of
purchase-money in case of default of punctual payment of any one instalment; and time was declared to be of the
essence of the agreement. Default having been made, the company sued to enforce the forfeiture; appellant paid into
court the instalment due and counterclaimed for specific performance:
Held by the law of British Columbia as well as by English law the condition of forfeiture was in the nature of a penalty
from which appellant was entitled to be relieved on payment of the purchase-money due.

Workers Trust and Merchant Bank Ltd v. Dojap Investments Ltd [1993] AC 573
The PC decided that a clause allowing the forfeiture of money paid could be and, on the facts would be struck down as
a penalty; and in this context, given that deposits are generally not concerned to pre-estimate loss, the test applied to
decide whether the sum to be forfeited was penal or not was one of reasonableness.

Export Credit Guarantee Department v. Universal Oil [1983] 2 All ER 205

The HL held that the penalty rules only apply where the money is payable on an event which is a breach of contract as
b/w the plaintiff and the defendant. (This case is puzzling since it appears that the sum agreed to be paid, though very
large, was exactly the same as the plaintiff’s loss and therefore not penal).

Starsaide Properties v. Mustapha [1974] 2 All ER 567

The court had jurisdiction to grant relief against forfeiture when the provision for forfeiture was penal in character.
Relief would be granted in such circumstances as justice required and on such terms as were equitable in those
circumstances. Where it later appeared that relief granted by way of an extension of time ought to be extended, and
that in fairness to the other party it could be done, the court had jurisdiction to grant a further extension. No distinction
could be drawn between cases of relief for non-payment of rent and other cases where relief against forfeiture was
sought. It followed that the judge had jurisdiction to grant the relief asked for by the defendant.

Phillips Hong Kong Ltd v. AG of Hong Kong (1993) 61 BLR 41

Lord Woolf giving the judgement of the PC upholding as liquidated damages a clause in a road construction contract,
considered that the courts should not be too zealous in knocking down clauses as penal. ‘What the parties have agreed
should normally be upheld.’ More specifically it was stressed that a clause can be a genuine pre-estimate of loss even
though hypothetical situations could be presented in which the claimant’s actual loss would be substantially lower. To
hold otherwise would be to render it very difficult to draw up valid liquidated damages clauses in complex commercial
contracts. Although the matter must be judged as at the date the contract was made, what actually happened ‘can
provide valuable evidence as to what could reasonably be expected to be the loss at the time the contract was made.’

AWARDING OF DAMAGES IN FOREIGN CURRENCY

Where a foreign element appears in a case, bringing with it questions involving payments in a foreign currency, the
problems to which changes in the value of money gives rise become both more acute and more common b/c of the
frequent large fluctuations in the rates of exchange, together with wholesale devaluations of one currency in relation to
another.
The general rule for a while was that the damages fell to be assessed in [sterling] according to the rate of exchange at
the date of breach in the case of contract, and in the case of tort at the date that the loss was determined.
If the action was based solely upon the failure to pay money, so that, had the defendant contracted to pay the money in
sterling, the action would be in debt and no longer for damages, the general rule applied.

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United Railways of Havana v. Regla Warehouses
A railway company in 1921 in raising money in the USA to finance the acquisition of rolling stock for its railway in
Cuba, entered into an elaborate scheme whereby it assigned the rolling stocks to trustees for the lenders who leased it
back to the company, the rentals being payable in dollars and being fixed so as to cover repayment of the loan with
interest over the 15 years of the lease, after which time the company would become owner of the rolling stock. From
1931 the company ceased to pay the dollar rentals to the trustees, but it was not until 1954 that the matter came before
the English courts when the trustees sought to prove in the company’s voluntary liquidation following upon the
acquisition of the railway by the Cuban Government.
HL held that the provable sum in dollar rentals was to be converted into sterling rates of exchange prevailing at the
dates when the several sums fell due and were not paid.

Miliangos v. George Frank (Textiles) Ltd

The HL disposed the assumption that an English court had always to confine itself in its judgments to sterling and
could never give judgment in a foreign currency.
The P, a Swiss national, sold goods to the Ds, an English company, at a price expressed to be payable in Swiss Francs
to a Swiss Bank within 30 days of the date of invoice, the proper law of the contract being Swiss. The goods and
invoices were delivered, but no part of the price was paid and two bills of exchange drawn in Switzerland and accepted
by the Ds were dishonoured on presentation. The P brought a claim for the price or, alternatively, for the amount due
on the bills of exchange expressed, in each case, in the sterling equivalent of the sum due in Swiss francs as at the
dates when payment should have been made, but later applied to amend his statement of claim so as to claim the sums
due to him in Swiss francs.
Lord Wilberforce said: “The situation as regards currency stability has substantially changed even since 1961…the
main world currencies…many of them are now ‘floating’ i.e. they have no fixed exchange value even from day to day…
The new formula which was adopted was, to depart from the former “adherence to the ‘breach date’” by “awarding
delivery in specie rather than by giving damages.” The relevant date is the date of payment in the sense of the date
when the court authorises the P to enforce the judgement by levying execution for a sum expressed in sterling.

CAUSATION AND REMOTENESS

Causation in Contract:
London & Joint Stock Bank
The relation between banker and customer is that of debtor and creditor. A banker is under an obligation to honour the
customer’s cheques if the account is in credit. A cheque drawn by a customer is a mandate to the banker to pay the
payee an amount according to the tenor of the cheque. The customer is bound to exercise reasonable care in drawing
the cheque to prevent the banker being misled. If he draws the cheque in a manner which facilitates fraud or forgery of
the body of the cheque, he is guilty of a breach of duty as between himself and the banker, and he will be responsible
to the banker for any loss sustained by the banker as a natural and direct consequence of this breach of duty. The fact
that the interposition of the commission of a crime was necessary to bring about the loss does not prevent the loss
being the natural consequence of the customer’s negligence. A banker from whom the customer seeks to recover the
amount of a cheque the body of which, the cheque having been signed by the customer, has been falsified by a third
person who has cashed the cheque, can rely in defence on the negligence of the customer if he has failed to exercise
proper care in drawing the cheque, or on the plea that, as the negligence of the customer enabled the third person to
insert in the cheque the amount which the banker paid, the customer is estopped from disputing the authority of the
banker to pay that sum, In either case the negligence relied on must be in or immediately connected with the
transaction, ie, in the manner in which the cheque is drawn. It would be no defence to the ba nker if, eg, the forgery
or falsification had been that of a clerk whom the customer had taken into his employment without sufficient
inquiry as to his character.

A partner in a firm which was the customer of a bank signed a bearer cheque which was put before him by a clerk
employed by the firm and which at that time had no sum of money specified in the space provided for indicating in
words the amount for which the cheque was drawn, while the space provided for figures contained the figures “2 0 0”,
placed there by the clerk, there being a apace left between the “2” and the sign “pounds” printed on the cheque. The
clerk made out the cheque to “Ourselves”, inserted the words “One hundred and twenty pounds” in the space provided
for the amount of the cheque in words, and placed a “1” and a “0” on either side of the “2”. He then took the cheque to
the bank and cashed it, receiving.8120 which the bank debited to the firm’s account. In an action by the firm for a
declaration that the bank were not entitled to do so,

Held: the drawer of the cheque was in breach of his duty to the bank, and the action failed.

Weld-Blundel v Stephens
The appellant employed the respondent, a chartered accountant, to investigate the financial position of a company in
which he was financially interested. In a letter of instructions to the respondent, the appellant referred to a former
manager and an auditor of the company in defamatory terms. The respondent handed the letter to his partner to carry
out the investigation requested by the appellant, and the partner negligently left it at the company's office. The manager
of the company found it, read it, and communicated its contents to the two persons defamed, who sued the appellant
for libel and recovered damages against him on the ground that, while the occasion on which the letter was written was
privileged, he had been actuated by malice. The appellant then sued the respondent for breach of duty in failing to use
6
reasonable care to keep the contents of the letter secret, claiming as special damages the damages and costs which he
had had to pay in the libel actions.

Held (by LORD DUNEDIN, LORD SUMNER and LORD WRENBURY, VISCOUNT FINLAY and LORD
PARMOOR dissentiente): the appellant could not recover more than nominal damages because (i) the wrongful act for
which he had had to make reparation was committed by himself independently of the breach by the respondent of the
duty of care which he owed to the appellant; (ii) the actions for libel and the damages recovered from the appellant
were not the natural and probable consequence of the respondent's negligence, but resulted from the voluntary act of
the manager of the company, a free agent over whom the respondent had no control and for whose acts he was not
responsible.

Decision of the Court of Appeal, [1919] 1 KB 520, affirmed.

Quinn v Burch Bros.

The plaintiff was engaged in carrying out certain building work as a subcontractor of the defendants. It was an implied
term of the contract between them that the defendants should supply any equipment reasonably necessary for the work
within a reasonable time of being requested to do so. The defendants were in breach of that term in that they failed to
provide a stepladder which the plaintiff had requested. To prevent loss of time the plaintiff used a trestle, which he
knew to be unsuitable unless it was footed by another workman. The trestle was not footed by another workman; it
slipped while the plaintiff was on it and he suffered injury.
The defendants’ foreman admitted that it was foreseeable that in the absence of a step-ladder the plaintiff might use
an unfooted trestle. In an action by the plaintiff for the defendants’ breach of contract in failing to supply a step-ladder
the plaintiff claimed damages in respect of this injury.

Held – The defendants’ breach of contract provided the occasion for the plaintiff to injure himself but was not the
cause of his injury, which was caused by his own voluntary act in using the trestle; accordingly the defendants were
not liable to pay damages for the plaintiff’s injury, for his damage was not a natural and probable consequence of the
breach of contract even if, as was in fact doubtful, it was a foreseeable consequence of that breach (see p 286, letters c
and h, p 287, letters f and i, p 288, letter i, and p 289

Monarch Steamship Co. Ltd V Karlshamms

On 4 April 1939, the M company chartered a steamship, belonging to the S company, a British company, which sailed
to Rashin in fulfilment of the charter and there loaded a cargo of soya beans, purchased from the M company by the K
company of Sweden. On 6 May 1939, sixteen bills of lading were issued and on 12 May the ship sailed from Rashin.
Under the terms of the charterparty the S company contracted to supply a seaworthy ship, but, owing to bad bunker
coal having been used in her and to other causes, the ship was unseaworthy on sailing from Rashin and considerable
delay was caused owing to deviations from route for repairs. On 7 June in conformity with the charterparty and bills of
lading, the M company nominated Karlshamnas as the port of discharge, but the S company was not told until the
middle of August that delivery was intended to be made to the K company. On the outbreak of war on 3 September
1939, the voyage, which would have taken only 63 days but for the ship’s unseaworthiness, was still not completed,
and the ship was ordered by the Admiralty to proceed to Glasgow which she reached on 21 October. On her arrival the
M company paid the freight and took delivery of the cargo, and on 23 October transferred the bills of lading to the K
company, who had chartered three neutral ships to carry on the cargo to Karlshamn. The cost of transhipment was
£21,634 7s 4d which the K company now claimed from the S company as damages for breach of contract. It was found
as a fact that the S company was unaware of the unseaworthiness of the ship. The charterparty contained a war risks
clause, relied on by the S company, under which the ship was to have liberty to comply with orders of (inter alia) the
British government and delivery under such orders was to be fulfilment of the contract.

Held – (i) the diversion to Glasgow, brought about through the delay in carrying out the contract of carriage, was
attributable to the default of the S company, because in the conditions existing in April, 1939, it 1 ought to have
foreseen that war might shortly break out and that any prolongation of the voyage might cause the loss of or diversion
of the ship.
The Malcolm Baxter, Jr, (1928) (31 Ll L Rep 200), distinguished.
The Wilhelm (1865) (14 LT 636) and Associated Portland Cement Manufacturers (1900), Ltd v Houlder Bros & Co
Ltd (1917) (118 LT 94), explained.
(ii) the cost of transhipment was due to the S company’s failure to carry out its bargain and was damage arising as a
direct and natural consequence of the breach of contract, for which the S company was liable.

Heskell v Continental Express Ltd

In October, 1946, H, an export and shipping merchant, agreed to sell goods to a Persian buyer. The price agreed on was
not inclusive of insurance and freight, and the total amount shown on the invoice, which was ultimately rendered, set
out the cost of packing, insurance and freight separately. On 8 November 1946, H, without entering into a contract of
carriage, registered cargo space for them through his forwarding agents in a ship in a dock in Manchester port and
received a permit from the shipowners’ loading brokers, S Ltd, to send the goods to the dock. On 19 November 1946,
having received shipping instructions from his forwarding agents, H instructed C E Ltd, the company warehousing the
goods, to pack them and despatch them to the ship. C E Ltd negligently failed to despatch them or to inform H of their
failure. In ignorance of this failure, H applied through his forwarding agents for, and received from S Ltd, a bill of
lading which was negligently issued, the goods never having been received. On 2 January 1947, H forwarded it to the
Persian buyer, and received payment. On 23 February 1948, C E Ltd, wrote to H notifying their failure to despatch the
goods, and in November, 1949, H paid £1,319 damages to the Persian buyer, covering loss of profit resulting from

7
non-delivery. The fall in value of the goods from December, 1946, to February, 1948, the date of their ultimate delivery
to H, with other small amounts, was £175. H claimed damages from S Ltd and C E Ltd

Held – (i) whether or not the contract with the Persian buyer could properly be called cif, it was an essential term
thereof that H should procure the shipment of the goods to Teheran.
(ii) H could not recover from S Ltd (a) for breach of a contractual duty because neither in issuing the bill of lading
nor in notifying the reservation of shipping space were S Ltd acting or offering to act in contractual relationship with H
so as to give rise to any particular duty owing to him; (b) for breach of any duty owed to the public because the issue
of the bill of lading seemed to amount to no more than a negligent misstatement, and, in any event, such issue was not
itself the subject of any general duty (Le Lievre v Gould ([1893] 1 QB 491) and Scholfield v Londesborough (Earl)
([1896] AC 514), applied); (c) for breach of warranty of authority because in the absence of a contract of carriage the
bill of lading was a nullity, and the fact that it was issued without the authority of the shipowners robbed it of no virtue.

(iii) the instructions to C E Ltd to despatch the goods were not a demand for delivery up of the goods, and,
therefore,a claim in detinue against C E Ltd could not be maintained.
(iv) the detention of the goods by C E Ltd and their failure to inform H of the whereabouts of the goods was a
continuing breach of duty by C E Ltd, and while it was true that the issue of the bill of lading was a cause contributing
equally to H’s loss up to the time of the final delivery to him, the breach of contract by C E Ltd was sufficient to carry
judgment for damages in respect of the loss in that period.
Ranson v Platt ([1911] 2 KB 291), Coldman v Hill ([1919] 1 KB 443) and Reischer v Borwick ([1894] 2 QB 548),
applied.
Yorkshire Dale S S Co Ltd v Minister of War Transport ([1942] 2 All ER 6), considered.
(v) although a carrier should recognise the serious possibility of sub-sales by a consignor or consignee, in order to
recover from C E Ltd more than the value of the goods at the place of delivery, H must show that C E Ltd had
knowledge, actual or imputed, of something that made the ordinary measure of damages inadequate, and, as H had not
shown such knowledge, it was unnecessary to consider whether the fact that the claim for additional damages was in
respect of damages paid to a sub-buyer and not loss of profit would affect the question of the liability of C E Ltd.
The Arpad ([1934] P 189) and Horne v Midland Railway Co (1873) (L R 8 C P 131), applied.

Remoteness in Contract
Hadley v Baxley
Where two parties have made a contract which one of them has broken the damages which the other party ought to
receive in respect of such breach of contract should be such as may fairly and reasonably be considered as either
arising naturally, ie, according to the usual course of things, from such breach of contract itself, or such as may
reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as the
probable result of the breach of it. If special circumstances under which the contract was made were communicated by
the plaintiff to the defendant, and thus known to both parties, the damages resulting from the breach of such a contract
which they would reasonably contemplate would be the amount of injury which would ordinarily follow from a breach
of contract under the special circumstances so known and communicated. But if the special circumstances were wholly
unknown to the party breaking the contract, he, at the most, could only be supposed to have had in his contemplation
the amount of injury which would arise generally, and in the great multitude of cases not affected by any special
circumstances, from such a breach of contract.

Victoria Laundry (Windsor)v Newman Industries

The defendants, an engineering company, agreed to sell a boiler to the plaintiffs, a company of launderers and dyers.
The defendants knew at the time of the contract of the type of business carried on by the plaintiffs, that the boiler was
required for that business, and that the plaintiffs wanted the boiler for immediate use. They did not know that it was
required to extend the business. The boiler was damaged while being dismantled by the third party, sub-contractors
employed by the defendants to load it on the plaintiffs’ transport vehicle, and delay in delivery resulted:

Held – (i) damages for loss of profit were recoverable if it was apparent to the defendants as reasonable persons that
the delay in delivery was liable to lead to such loss by the plaintiffs, and it was not necessary for the defendants to be
specifically informed of the particular purpose for which the boiler was required; on the facts, the defendants had
means of knowledge that some loss was likely to result; and they were, therefore, liable to the plaintiffs.

Held – Further: the fact that the boiler only constituted a part of a profit-making machine was only significant in so far
as it bore on the capacity of the defendants to foresee the consequences of non-delivery.

Diamond v Campbell-Jones and Others

In July, 1956, the defendants agreed to sell to the plaintiff for £6,000 a leasehold interest for a term expiring in the year
2003 in property in Mayfair comprising a basement and ground floor and four upper floors. The agreement was
expressed to be subject to and with the benefit of a contract for the grant of a new lease, which contract required works
of conversion of the property into ground floor office accommodation and residential maisonettes above to be carried
out by the lessee. The agreement also stated that the permitted use for the purposes of the Town and Country Planning
Act, 1947, was that stated in a letter by which permission was given for office use of the ground floor until a date in
1970 and from which it appeared that permission for multiple residential use of the rest of the premises would
probably be given if requested. The defendants repudiated the contract and an inquiry as to damages was ordered. The

8
plaintiff contended that the proper measure of damages was the profit that he would have realised if he had converted
the upper floors into maisonettes and the ground floor into offices, and if he had disposed of the premises when so
converted. The plaintiff was a dealer in real property, but it was neither pleaded nor shown in evidence that the
defendants knew what his occupation was or that he intended to carry out a conversion of the premises. The market
value of the property at the date of the breach of contract, without having been converted, substantially exceeded
£6,000.

Held – (i) the plaintiff was not entitled to damages measured by reference to the profit obtainable by converting the
property, because special circumstances were necessary to justify imputing to a vendor of land knowledge that the
purchaser intended to use it in a particular manner, and the mere facts that the property was ripe for conversion and
that everyone recognised this were not sufficient to impute to the defendants knowledge that the plaintiff intended to
convert the property for profit; therefore, the damages should be assessed by reference to the difference between the
purchase price and the market value at the date of the breach of contract.
Dictum of Lord Wright in Monarch SS Co Ltd v Karlshamns Oljefabriker (AB) ([1949] 1 All ER at p 14) considered.
Dictum of the Court of Appeal in Victoria Laundry (Windsor) Ltd v Newman Industries ([1949] 1 All ER at p 1003)
explained.
(ii) since the damages recovered by the plaintiff were liable to attract income tax as part of the profits or gains of his
business, he should be awarded a gross sum in damages (equal to the excess of the market value 583 over the
purchase price at the relevant date), not merely a net sum equivalent to the profit remaining after deduction of income
tax.

Causation in Tort

Knightly v Johns
The first defendant was involved in a serious road accident near the exit of a tunnel carrying one-way traffic and which
had a sharp bend in the middle thus obscuring the exit and the site of the defendant’s accident to drivers entering the
tunnel. The police inspector in charge at the scene of the accident, realising that he had forgotten to close the tunnel to
oncoming traffic, ordered two police officers on motor cycles, one of whom was the plaintiff, to go back and close the
tunnel. The two officers then rode back through the tunnel against the oncoming traffic. Near the entrance of the tunnel
the plaintiff collided with an oncoming motorist and was injured. The motorist was found on the facts not to have been
negligent. Both the inspector in ordering the plaintiff to ride back through the tunnel in the face of oncoming traffic
and the plaintiff in carrying out that order acted contrary to, and in breach of, their police force’s standing orders for
road accidents in the tunnel. The plaintiff claimed damages from, inter alios, the first defendant, the police inspector
and the chief constable as being vicariously liable for the inspector’s negligence. The first defendant conceded that he
had been negligent but claimed that the negligence of the other defendants and/or of the plaintiff had caused or
contributed to the accident. The trial judge found that neither the plaintiff nor the police inspector had been negligent
and that their actions had not broken the chain of causation between the first defendant’s accident and the plaintiff’s
accident. The trial judge accordingly found the first defendant wholly liable for the plaintiff’s injuries. The first
defendant appealed. At the hearing of the appeal it was found that, although the plaintiff had added to the danger
involved in riding against the oncoming traffic in the way he did, he had not been negligent and was not responsible
for his own injuries. On the issue of whether the inspector had been negligent and whether his negligence constituted a
novus actus interveniens,

Held – (1) The inspector was negligent in not closing the tunnel before he gave orders for that to be done and also in
ordering or allowing his subordinates, including the plaintiff, to carry out the dangerous manoeuvre of riding back
along the tunnel contrary to the standing orders for road accidents in the tunnel (see p 857 j to p 858 b and p 866h j,
post).
(2) In considering whether the chain of causation between a tort and subsequent damage had been broken by a novus
actus interveniens, the test to be applied was whether the damage was natural and probable and therefore reasonably
foreseeable, in the sense that something similar to what happened was likely to happen, rather than what happened
being a mere possibility which would not occur to the mind of a reasonable man or, if it did, would be discounted by
him as being too remote to require precautions against it happening. Thus, if the whole sequence of events was a
natural and probable consequence of the negligence and therefore a reasonably foreseeable result of it, none of the
events in the sequence were to be taken as being a novus actus interveniens. Furthermore, what was to be considered
probable and foreseeable, 851 including mistakes and mischances occurring in the sequence of events, was to be
decided by applying common sense rather than logic to the facts and circumstances of each case (see p 860 j, p 864 a,
p 865 e to j and p 866 c and h j, post); dicta of Greer LJ in Haynes v Harwood [1934] All ER Rep at 107 and of Lord
Wright in The Oropesa [1943] 1 All ER at 215 applied; Brandon v Osborne Garrett & Co [1924] All ER Rep 703,
Hyett v Great Western Rly Co [1947] 2 All ER 264, Ward v TE Hopkins & Son Ltd [1959] 3 All ER 225,
Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co Ltd, The Wagon Mound (No 1) [1961] 1 All ER
404, Videan v British Transport Commission [1963] 2 All ER 860, Chadwick v British Transport Commission
[1967] 2 All ER 945 and Home Office v Dorset Yacht Co Ltd [1970] 2 All ER 294 considered.
(3) Applying the test of what was probable and foreseeable to the facts, the inspector’s negligence in not closing the
tunnel to traffic and in ordering the plaintiff to remedy that negligence by a dangerous manoeuvre had been the real
cause of the plaintiff’s injuries and was a new cause which disturbed and interrupted the sequence of events between
the first defendant’s accident and the plaintiff’s accident. The inspector’s negligence therefore made the plaintiff’s
injuries too remote from the first defendant’s wrongdoing to be a consequence of it. The inspector and the chief
constable were therefore liable to the plaintiff and the first defendant was not. The appeal would accordingly be
allowed (see p 858 c d and p 866 a to j, post).
9
 Per curiam. In deciding whether the whole sequence of events which emanated from a negligent act was a natural
and probable consequence and a reasonably foreseeable result or whether an event or events in the sequence was or
were a novus actus interveniens, it is helpful, but not decisive, to consider which events were deliberate choices to do
positive acts, which events were omissions or failures to act, which acts and omissions were innocent mistakes or
miscalculations and which acts and omissions were negligent, since negligent conduct is more likely to break the chain
of causation than conduct which is not, positive acts will more easily constitute new causes than inaction, and mistakes
and mischances are to be expected of human beings in a crisis (see p 865 g h and p 866 h j, post).

Home Office v Dorset Yatcht Co. Ltd

Ten borstal trainees were working on an island in a harbour in the custody and under the control of three officers.
During the night seven of them escaped. It was claimed that at the time of the escape the officers had retired to bed,
leaving the trainees to their own devices. The seven got on board a yacht moored off the island and set it in motion.
They collided with another yacht, the property of the respondents, and damaged it. The respondents sued the Home
Office for the amount of the damage. A preliminary issue was ordered to be tried whether on the facts pleaded in the
statement of claim the Home Office, its servants or agents owed any duty of care to the respondents capable of giving
rise to a liability in damages with respect to the detention of persons undergoing sentences of borstal training, or with
respect to the manner in which such persons were treated, employed, disciplined, controlled or supervised whilst
undergoing such sentences. It was admitted that the Home Office would be vicariously liable if an action would lie
against any of the borstal officers. On appeal against the decision of the preliminary point in favour of the respondents,

Held – (Viscount Dilhorne dissenting) The appeal would be dismissed because—

(i) (per Lord Reid, Lord Morris of Borth-y-Gest and Lord Pearson)
(a) the taking by the trainees of the nearby yacht and the causing of damage to the other yacht which belonged to the
respondents ought to have been foreseen by the borstal officers as likely to occur if they failed to exercise proper
control or supervision; in the particular circumstances the officers prima facie owed a duty of care to the respondents
(see p 297 c, p 298 a, p 303 j to p 304 a, p 304 g and p 321 b, post); dictum of Lord Atkin in Donoghue (or M’Alister)
v Stevenson [1932] All ER Rep at 11 applied;
(b) the fact that the immediate damage to the property of the respondents was caused by the acts of third persons, the
trainees, did not prevent the existence of a duty on the part of the officers towards the respondents because (per Lord
Reid) the taking of the yacht and the damage to the other was the very kind of thing which the officers ought to have
seen to be likely, or (per Lord Morris of Borth-y-Gest and Lord Pearson) the right of the officers to control the trainees
constituted a special relation which gave rise to an exception to the general rule that one person is under no duty to
control another to prevent his doing damage to a third (see p 300 f and h, p 307 g and p 321 j, post); dictum of Dixon J
in Smith v Leurs (1945) 70 CLR at 261, 262, applied;
(c) the fact that something was done in pursuance of statutory authority did not warrant its being done unreasonably
so that avoidable damage was negligently caused (see p 301, b, p 305 c and p 322 c and g, post); dictum of Lord
Blackburn in Geddis v Proprietors of Bann Reservoir (1878) 3 App Cas at 455 applied;
(d) there was no ground in public policy for granting complete immunity from liability in negligence to the Home
Office or its officers (see p 302 j, p 309 f and p 323 b, post).
(ii) (per Lord Diplock) there was material, fit for consideration at the trial, for 294 holding both that the
officers were acting in breach of instructions and ultra vires and that they owed a duty of care to the respondents (see p
333 g and & p 334 j to p 335 a, post).
Decision of the Court of Appeal sub nom Dorset Yacht Co Ltd v Home Office [1969] 2 All ER 564 affirmed.

Haynes v Harwood
To give a cause of an action for negligence an act must be the neglect of some duty owed to the plaintiff. The duty
need not be expressly directed to the plaintiff; if it includes him. as one of the class affected by the want of care, that is
negligence of which he can avail himself as a cause of action. A person is guilty of a want of reasonable care if he
leaves horses unattended in a crowded street in which many people, especially children, are likely to be at that time. If
the horses bolt owing to the act of a mischievous child, that is, on the part of the driver, a failure to use reasonable care
for the safety of persons lawfully using the highway. Any person, and a fortiori a police officer, trying to stop the
runaway horses would fall within the category of lawful users of the highway.

The defence of novus actus interveniens is not available to a defendant in an action for negligence if what is relied on
as novus actus (eg, the act of a mischievous child) is the very thing which is likely to happen as a result of the
negligent act - in other words, if the damage suffered by the plaintiff might well be anticipated as a natural and
probable result of the negligence.

Where the plaintiff has, under an exigency caused by the defendant's wrongful misconduct, consciously and
deliberately faced a risk, even of death, to rescue another from imminent danger of personal injury or death, whether
the person endangered is one to whom he owes a duty of protection, as a member of his family, or is a mere stranger to
whom lie owes no such special duty, and the plaintiff has thereby suffered injury, the defence of volenti non fit injuria
is not available to the defendant.

Dictum of SCRUTTON, LJ, in Cutler v United Dairies (London) Ltd (1) [1933] 2 KB 297, not applied.

A police constable sustained personal injuries while stopping runaway horses, which had bolted owing to the
negligence of the defendants' servant. In an action by him against the defendants for negligence,

10
Held: that as the plaintiff had a moral, if not a legal, duty to prevent injury to persons lawfully using the highway, the
principle of volenti non fit injuria did not apply, and he was entitled to recover damages from the def endants.

Videan v BTC
The infant plaintiff, the youngest son of the stationmaster of a small railway station who lived in the station house with
his wife and four children, made his way on to the railway line not far from the barrow crossing for porters with
barrows. To be on the railway line was prohibited to everyone except railway employees on their lawful occasions. At
the same moment as the infant plaintiff was seen on the line by his father, the stationmaster, and a porter, they saw a
motor trolley driven by an employee of the defendants, approaching him along the railway line. The stationmaster and
the porter signalled the trolley driver to stop, but he only slowed down and only at the last moment did he see the
infant plaintiff. In an effort to save his son, the stationmaster leaped from the platform on to the line and saved the
infant plaintiff, who was badly injured, but was himself killed instantaneously. In an action for damages by the infant
plaintiff for his injuries, and under the Fatal Accidents Acts, 1846 to 1959, and the Law Reform (Miscellaneous
Provisions) Act, 1934, by the plaintiff widow in respect of the death of her husband, the trial judge found that the
trolley driver was negligent in not keeping a proper look-out, in travelling too fast, and in not applying his brakes hard
enough and soon enough, and dismissed both claims, the infant plaintiff’s on the ground that he was a trespasser and
the widow’s on the ground that a rescuer could be in no better position than the rescued. On appeal,

Held – (i) the infant plaintiff was not entitled to recover damages because, on the facts, he was a trespasser on the
railway line (see p 864, letter d, p 868, letter i, and p 872, letter h, post) and the trolley driver owed him no duty since
his presence on the line was not reasonably foreseeable (see p 871, letter h, p 876, letter d, and p 867, letter f, post),
(ii) the widow was entitled to recover compensation in respect of the death of her husband, the stationmaster, because
—
(a) (per Lord Denning, MR), the occurrence of an emergency (not necessarily the emergency that in fact happened)
was foreseeable by the driver of the trolley, who should have realised that someone might be put in peril if the trolley
approached too fast and without a proper look-out being kept, and accordingly the trolley driver owed a duty to any
person who attempted to rescue another from a danger thus created (see p 868, letters a and b, post).
(b) (per Harman and Pearson, LJJ), the presence of the stationmaster, an employee of the defendants, on the track
was something that was reasonably foreseeable by the driver of the trolley, and accordingly he owed a duty to the
stationmaster, who was not a trespasser on the line (see p 872, letters b and c, and p 876, letters g and h, post).
Semble: if the presence of trespassers on land is known, or reasonably foreseeable, some duty of care is owed by an
occupier of the land or contractor or other person lawfully on the land (see p 866, letter a, p 870, letter i, and p 874,
letter h, post); that duty is (per Lord Denning, MR), a duty to use reasonable care, or (per Pearson, LJ), a duty,
substantially less than the duty owed to a lawful visitor, to treat the trespasser with common 860 humanity (see p
866, letter a, and p 875, letter f, post), but (per Lord Denning MR, Pearson LJ, differing) this principle applies only
where the person alleged to owe the duty conducts operations on the land (see p 867, letter b, post; cf, p 873, letter g,
and p 830, letter e, post).
Robert Addie & Sons (Collieries), Ltd v Dumbreck ([1929] All ER Rep 1); Buckland v Guildford Gas Light &
Coke Co ([1948] 2 All ER 1086); Hardy v Central London Ry Co ([1920] All ER Rep 205), and Mourton v
Poulter ([1930] All ER Rep 6) considered.
Per Lord Denning MR, the right of the rescuer to maintain an action for negligence is an independent right, not
derived from that of the victim (see p 867, letter i, post).
Haynes v G Harwood & Son ([1934] All ER Rep 103) and Baker v T E Hopkins & Son, Ltd ([1958] 3 All ER
147) considered.

The Carslogie
On 26 November 1941, the respondents’ vessel, Heimgar, while under time charter to the Ministry of War Transport,
suffered damage in a collision with the appellants’ vessel, Carslogie, for which, it was admitted, the Carslogie was
solely to blame. After temporary repairs to the Heimgar had been effected in England the ship proceed to a port in the
United States where permanent repairs could be carried out. During her voyage across the Atlantic the vessel sustained
heavy weather damage which necessitated immediate repair. The vessel remained in dry dock for fifty days during
which time the repairs due to the collision and those due to the weather were carried out concurrently, it being agreed
that ten days should be allocated to the repair of the collision damage and thirty days to that of the weather damage.
The respondents claimed damages for loss of charter hire during the ten days attributable to the collision damage.

Held – The appellants were only liable for such loss of profit suffered by the respondents as resulted from the
appellants’ wrongful act; during the time that the Heimgar was detained in dock she had ceased to be a profit-earning
machine because the heavy weather damage had rendered her unseaworthy; and, therefore, the respondents had
sustained no damage by reason of the fact that for ten days the vessel was undergoing repairs in respect of the collision
damage.

Vitruvia SS Co v Ropner Shipping Co (1925 SC (HL) 1), The Hauk (1927) (30 Lloyd, LR 32) and The Haversham
Grange ([1905] P 307), applied.
Per curiam: The decision in The Haversham Grange ([1905] P 307) with regard to the apportionment of dock
dues incurred in connection with the repair of collision damage was inconsistent with principle.

Baker v Willoughby

11
In September, 1964, the plaintiff suffered serious injuries to his left leg in an accident on the highway caused by the
negligent driving of a motorist, the defendant, but attributable as to one quarter to the plaintiff’s contributory
negligence. After prolonged hospital treatment the plaintiff re-entered employment. In May, 1966, he had good
functional movement in his left leg, but the medical view at that time was that degenerative changes would develop
and would eventually limit his activities. He was less well able as a result of the accident to compete in the labour
market, and his earning capacity was reduced. The court would have assessed, before 29 November 1967, the
plaintiff’s general damages as £1,200 (ie £1,600 less £400). On 29 November 1967, in the course of the plaintiff’s
employment he was an innocent victim of an armed robbery in which he received gunshot wounds necessitating the
immediate amputation of his defective left leg. On the question of the amount of damages for the pla intiff’s injuries
in the traffic accident of September, 1964, which came before the court for assessment in February, 1968.

Held – The plaintiff’s loss from the traffic accident in September, 1964, was in no way reduced by the amputation of
his leg consequent on the injury to him in the robbery on 29 November 1967, and accordingly the damages which
would have been recoverable from the defendant immediately prior to his injury in the robbery should not be reduced;
the plaintiff’s general damages, therefore, would be assessed at £1,200 (see p 240, letters a and g, post).
Principle in The Haversham Grange ([1905] P 307) applied.
The Carslogie ([1952] 1 All ER 20) considered.

Jobling v Associated Dairies

In 1973 the appellant slipped and fell in the course of his employment, the accident being caused by the employers’
breach of statutory duty. The plaintiff suffered a back injury and was thereafter able to do only light work. His earning
capacity was reduced by 50%. He brought an action against his employers, but before the action came on for trial he
was found in 1976 to be suffering from a spinal disease which was unrelated to the accident but which rendered him
wholly unfit to work. At the trial of the action against the employers in 1979 in respect of the 1973 accident the
employers were found to be liable. The trial judge refused to take into account the supervening disease and awarded
damages which included loss of earnings based on 50% earning capacity from the date of total incapacity (1976) to the
date of trial and for seven years thereafter. On appeal, the Court of Appeal ([1980] 3 All ER 769) held that where
an injury caused to a plaintiff by a tort was obliterated by and submerged in a greater injury caused by a supervening
illness or other non tortious event the liability of the tortfeaser ceased, and accordingly the employers were not liable
for the appellant’s loss of earnings from the time when the disease rendered him wholly unable to work. The appellant
appealed to the House of Lords, contending that where a disease or illness was not latent or dormant at the time of the
injury but was contracted after and independently of the injury it was irrelevant to the assessment of damages for the
injury, since the employers were required to take the appellant as they found him, namely as someone who was at the
time of the injury a healthy person who might or might not after the injury suffer a supervening and unconnected
illness.

Held – In the circumstances the damages awarded to the appellant for loss of earnings were to be assessed according to
the principles that the vicissitudes of life were to be allowed for and taken into account when assessing damages so that
the plaintiff was not over-compensated, and that a supervening illness apparent and known of before the trial was,
whether it was latent or not at the time of the prior injury, at the time of the trial a known vicissitude about which the
court ought not to speculate when it in fact knew. Accordingly, the employers were not liable for any loss of earnings
suffered by the appellant after the onset of the disease in 1976 and his appeal would be dismissed (see p 755 b h g, p
757 d g h, p 759 d h j, p 760 a to c and e f j, p 764 a b g, p 766 j to p 767 a and h to p 768 a h, post).
Baker v Willoughby [1969] 3 All ER 1528 not followed.
Per Curiam. When a plaintiff has suffered disabling injuries from two or more successive and independent tortious
acts the question whether the supervening disability caused by the second tort should be disregarded when assessing
the first tortfeasor’s liability for loss of earnings remains open (see p 754 f g, p 759 g, p 760 g to j, p 763 e to g and j to
p 764 d f g and p 768 b e to h, post); Baker v Willoughby [1963] 3 All ER 1528 doubted.
Per Lord Wilberforce. To attempt a solution of the problems arising where there are successive causes of incapacity
according to classical juristic principles and common law 752 rules is in many cases no longer possible because
other sources of compensation (eg criminal injuries compensation, sickness benefit etc) may, if not taken into account
in assessing damages, lead to the plaintiff being ultimately over-compensated (see p 755 c to e and j, post).
Decision of the Court of Appeal [1980] 3 All ER 769 affirmed.

The Wagon Mound No. 1

In the law of negligence the test whether the consequences were reasonably foreseeable is a criterion alike of
culpability and of compensation; and the dichotomy whereby culpability (viz, breach of duty to take reasonable care)
was regarded as depending on the foreseeability of consequences but compensation (viz, the remoteness of damage)
depended on whether the negligent act or omission was the “direct” cause of the damage, whether foreseeable or not,
was a false dichotomy (see p 415, letters f and g, p 412, letter g, and p 414, letter h, post).
Dictum of Lord Russell of Killowen in Hay (or Bourhill) v Young ([1942] 2 All ER at p 401) and dictum of Bovill CJ
in Sharp v Powell ((1872), LR 7 CP at p 258) approved.
Re Polemis and Furness, Withy & Co Ltd ([1921] All ER Rep 40) and dicta of Lord Sumner in Weld-Blundell v
Stephens ([1920] AC at p 984) and of Asquith LJ in Thorogood v Van Den Berghs & Jurgens Ltd ([1951] 1 All ER at
pp 690, 691) disapproved.
By the carelessness of the appellants’ servants furnace oil from a ship was split into a bay. The oil spread over the
water to the respondents’ wharf, which was some six hundred feet distant and at which the respondents were carrying
out repairing work to a ship, including the welding of metal. Molten metal from the respondents’ wharf fell on floating
cotton waste which, smouldering, ignited the furnace oil on the water. The respondents’ wharf sustained substantial
damage by fire. The oil itself, unignited, also caused slight damage to the respondents’ wharf, but no claim to
12
compensation was made for this damagea. In an action by the respondents for damages for negligence it was found as a
fact that the appellants did not know and could not reasonably have been expected to know that the furnace oil was
capable of being set alight when spread on water.
Held – The test of liability for the damage done by fire was the foreseeability of the injury by fire (see p 415, letter g,
post) and, as a reasonable man would not, on the facts of this case, have foreseen such injury, the appellants were not
liable in negligence for the damage, although their servants’ carelessness was the direct cause of the damage.
Per Curiam: it is a principle of civil liability, subject only to qualifications which have no present relevance, that a
man must be considered to be responsible for the probable consequences of his act. To demand more of him is too
harsh a rule (see p 413, letter e, post).
Appeal allowed.

Smith v Leech
S was employed by the defendants as a labourer and galvanizer. Part of his work consisted in lowering articles into a
tank of molten metal and flux and subsequently removing them. Whilst he was so engaged, a piece of molten metal
spattered out and burned his lip. He later contracted cancer, underwent operations, and died. It was found that the
defendants had been negligent, and that the burn was the promoting agency, promoting cancer in tissues which already
had a pre-malignant condition. His widow, suing as administratrix and on her own behalf and on behalf of dependent
children, claimed damages under the Law Reform (Miscellaneous Provisions) Act, 1934, for loss of expectation of life,
and under the Fatal Accidents Acts, 1846 to 1908, on the basis of the burn resulting in cancer causing S’s death.

Held – For the purpose of assessing damages a tortfeasor took his victim as he found him, and the decision in
Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd ([1961] 1 All ER 404) did not override this
principle; accordingly, since the type of injury which S suffered, was reasonably foreseeable, the defendants were
liable for the damages claimed, although they could not reasonably have foreseen the ultimate consequences of the
initial injury, viz, that the burn would cause cancer from which S would die.

Hughes v Lord Advocate

On 8 November 1958, the appellant, who was then aged eight, was in company with another boy aged ten in Russell
Road, Edinburgh. There, near the edge of the roadway, was a manhole, some nine feet deep, over which a shelter tent
had been erected, and four paraffin warning lamps were placed at its corners. Post office employees opened the
manhole for the purpose of getting access to a telephone cable. The time was about 5 pm, and the site was unattended,
the employees having left for a tea-break. They had removed the ladder from the manhole, leaving the ladder beside
the shelter; and they had pulled a tarpaulin cover over the entrance to the shelter, leaving a space of about two feet
between the lower edge of the tarpaulin and the ground. The lamps were left burning. The boys took one of the paraffin
lamps and the ladder into the tent to explore. Shortly thereafter the appellant tripped over the lamp, which fell into the
manhole. An explosion followed. The appellant was thrown into the manhole and suffered severe burns. On the
evidence the cause of the explosion was found to be that paraffin from the lamp escaped, formed vapour and was
ignited by the flame; this particular development of events was not reasonably foreseeable, according to the expert
evidence, but there was no other feasible explanation and this explanation was accepted as established.

Held – Although in the law of negligence the duty to take reasonable care was confined to reasonably foreseeable
dangers, the fact that the danger actually materialising was not identical with the danger reasonably foreseeable did not
necessarily result in liability not arising; in the present case the happening of an accident of the type that did occur, viz,
an accident to a child through burns, was reasonably foreseeable, and the further fact that the development of the
accident as it actually happened (viz, the occurrence of the explosion) could not reasonably have been foreseen did not
absolve the defendants from liability, and accordingly the plaintiff was entitled to recover damages for negligence (see
p 710, letter e, p 712, letter e, p 714, letter g, p 706, letter f, p 708, letter c, and p 715, letters g and i, post).
Glasgow Corpn v Muir ([1943] 2 All ER 44) distinguished.
Donoghue v Stevenson ([1932] All ER Rep 1) considered.
Appeal allowed.

SCM (UK) ltd Whittal

The plaintiffs were manufacturers of typewriters and copying machines. The defendants, who were building
contractors, were carrying out construction works in the vicinity of the plaintiffs’ factory when they damaged a high
voltage cable supplying the factory with electricity required for the operation of manufacturing machinery. The
plaintiffs did not own or have any possessory or proprietary rights in the damaged cable. The damage to the cable
caused a power failure at the factory. The plaintiffs alleged that the defendants knew or ought to have known of the
presence and position of the cable and that it carried electric current to supply factories such as the plaintiffs’ with
power for their plant and machinery; and that it was reasonably foreseeable by the defendants that if they damaged the
cable the supply of electric current to the factories supplied by it would be likely to be interfered with and fail, and
that, in that event, occupiers of premises such as the plaintiffs would be likely to suffer loss and damage including
injury to their property. Paragraph 5 of the plaintiffs’ statement of claim stated: ‘In the circumstances the Defendants
owed a duty to the Plaintiffs to take reasonable care when carrying out the said operations not to damage the said
cable.’ The plaintiffs claimed, inter alia, damages for loss of one day’s production of typewriters and copying
machines, together with the value of certain items which were damaged by the solidification of raw material in the
machines at the time of the power failure. Counsel for the plaintiffs gave an assurance to the court that he confined the
claim to the material damage to the machines and to the loss of production consequent on that damage.

Held – The defendants were in breach of the duty of care which they owed to the plaintiffs not to damage the cable
because they knew that the cable supplied electricity to the plaintiffs’ factory and that if they damaged the cable the

13
electricity would be cut off, which would cause damage to the plaintiffs; accordingly, the defendants were liable to the
plaintiffs for all the material damage suffered by them and any loss of profit consequent thereon (see p 249 h to p 250
a, p 252 h, p 258 e and p 262 c, post).
Dictum of Lord Atkin in Donoghue v Stevenson [1932] All ER Rep at 11 applied.
Seaway Hotels Ltd v Cragg (Canada) Ltd and Consumers’ Gas Co (1959) 17 DLR (2d) 292(so far as it concerned
the spoiling of the food), on appeal (1960) 21 DLR (2d) 264 and British Celanese Ltd v A H Hunt (Capacitors) Ltd
[1969] 2 All ER 1252 approved.
Per Lord Denning MR. In actions of negligence, when the plaintiff has suffered no damage to his person or property,
but has only sustained economic loss, the law does not usually permit him to recover that loss. Although the defendants
owed the plaintiffs a duty of care, that did not mean that additional economic loss which was not consequent on the
material damage suffered by the plaintiffs would also be recoverable; in cases such as Weller & Co v Foot and Mouth
Disease Research Institute ([1965] 3 All ER 560) and Electrochrome Ltd v Welsh Plastics Ltd ([1968] 2 All ER
205), the plaintiffs did not recover for 245 economic loss because it was too remote to be a head of damage, not
because there was no duty owed to the plaintiffs or because the loss suffered in each case was not caused by the
negligence of the defendants (see p 250 b, c and f, p 251 c and p 257 f, post).
Per Winn LJ. Apart from the special case of imposition of liability for negligently uttered false statements, there is no
liability for unintentional negligent infliction of any form of economic los which is not itself consequential on
foreseeable physical injury or damage to property (see p 258 b, post).
Decision of Thesiger J [1970] 2 All ER 417 affirmed.

Spartan Steel & Alloy v Martin & Co.

The plaintiffs manufactured stainless steel alloys at a factory which was directly supplied with electricity by a cable
from a power station. The factory worked 24 hours a day. Continuous power was required to maintain the temperature
in a furnace in which metal was melted. The defendants’ employees, who were working on a near-by road, damaged
the cable whilst using an excavating shovel. The electricity board shut off the power supply to the factory for 14 1/2
hours until the cable was mended. There was a danger that a ‘melt’ in the furnace might solidify and damage the
furnace’s lining, so the plaintiffs poured oxygen on to the ‘melt’ and removed it, thus reducing its value by £368. If the
supply had not been cut off, they would have made a profit of £400 on the ‘melt’, and £1,767 on another four ‘melts’,
which would have been put into the furnace. They claimed damages from the defendants in respect of all three sums.
The defendants admitted that their employees had been negligent, but disputed the amount of their liability.

Held – (i) The defendants were liable in respect of the physical damage to the ‘melt’ and for the loss of profit on it, for
that loss was consequential on the physical damage (see p 564 f, p 565 b and p 574 a, post); SCM (United Kingdom)
Ltd v W J Whittall & Son Ltd [1970] 3 All ER 245 followed.
(ii) (Edmund Davies LJ dissenting) the defendants were not liable for the loss of profit on the other four ‘melts’
because—
(a) no remedy was available in respect of economic loss unconnected with physical damage (see p 564 g and p 573 h
to p 574 a, post); Cattle v Stockton Waterworks Co [1874–80] All ER Rep 220 followed;
(b) there was no principle of ‘parasitic’ damages in English law to the effect that there were some heads of damage
which, if they stood alone, would not be recoverable, but would be if they could be annexed to some other claim for
damages, ie that the economic loss in respect of the four ‘melts’ was recoverable as a ‘parasite’ by being attached to the
claim in respect of the first ‘melt’ (see p 561 c d and g and p 573 h, post); Re London, Tilbury and Southend Railway
Co & Gower’s Walk Schools Trustees (1889) 24 QBD 326, Horton v Colwyn Bay and Colwyn Urban Council [1908] 1
KB 327 and Griffith v Richard Clay & Sons Ltd [1912] 2 Ch 291 explained.
Per Lord Denning MR. At bottom the question of recovering economic loss is one of policy. Whenever the courts
draw a line to mark out the bounds of duty, they do it as a matter of policy so as to limit the responsibility of the
defendant. Whenever the courts set bounds to the damages recoverable—saying that they are or are not, too remote—
they do it as a matter of policy so as to limit the liability of the defendants. The time has come to discard the tests
which have been propounded in the reported cases and which have proved so elusive. It is better to consider the
particular relationship in hand, and see whether or not, as a matter of policy, economic loss should be recoverable (see
p 561 j and p 562 g, post).
Per Lawton LJ. The differences which undoubtedly exist between what damage can be recovered in one type of case
and what in another cannot be reconciled on any logical basis. Such differences have arisen because of the policy of
the law and it may be that there should be one policy for all cases; but the enunciation of such a policy is not a task for
the court (see p 573 b, post).

Liesbosch Dredger v Edison

The plaintiffs' dredger, the L, was sunk in a collision with the defendants' steamship, for which the defendants admitted
liability. At the time of the loss the plaintiffs were performing certain works in the harbour at P, under contract with the
harbour commissioners, and the dredger was employed in essential dredging operations connected with the
performance of the contract. After the collision the plaintiffs were unable, owing to their lack of financial resources, to
purchase another dredger, and, in consequence, various delays involving loss and expense were incurred.
Subsequently, the plaintiffs hired another dredger, which they ultimately purchased. The registrar, in his report,
allowed a sum for the value of the dredger, and also sums for the losses and expenses incurred during the delay,
including the cost of hire of the substituted dredger, the extra cost of dredging with the substituted dredger as
compared with the lost dredger, and loss of profit and incident al losses, such as salaries, rent, and interest,
incurred during the period when the contract could not be performed owing to the loss of the dredger.

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Held: the plaintiffs were entitled to the value of the L at P as a going concern at the time and pla ce of the loss,
together with interest at 5 per cent. as from the date of the loss until payment, and that value must be
assessed by taking into account (i) the market price of a comparable dredger in substitution;

(ii) costs of its adaptation to make it fit for the performance of the contract work and of its transport to P, insurance,
&c; and (iii) compensation for disturbance and loss in carrying out the contract over the period of delay between the
loss of the L and the time at which the substituted dredger could reasonably have been available for use in P, including
in that loss such items as overhead charges, expenses of staff, and equipment thrown away, but excluding any loss due
to the appellants' financial position and their consequent inability at once to buy a substitute dredger and the resulting
delay in proceeding with the work as (a) being damage which did not flow from the defendants' tort, or (b) if it did,
was too remote.

INJURIES TO THE PERSON

Davies v. Powell Duffryn Associated Colliers (No.2)
The husbands of the appellants were fatally injured by an explosion in a coal mine belonging to the respondents. The
appellants, each of them suing as administratrix of her deceased husband, brought actions against the respondents for
breach of statutory duty and negligence. Each claimed damages (i) under the Fatal Accidents Acts 1846 to 1908, on
behalf of the deceased's dependants, and (ii) under the Law Reform (Miscellaneous Provisions) Act 1934, in respect of
the deceased's shortened expectation of life. The appellants contended that no allowance should be made in assessing
damages under the Fatal Accidents Acts in respect of any damages awarded under the 1934 Act:—
Held – in assessing damages under the Fatal Accidents Act 1846, damages awarded under the Law Reform
(Miscellaneous Provisions) Act 1934, must be taken into account in the case of dependants who will benefit under the
latter Act.

MATTERS TO BE TAKEN INTO ACCOUNT

Cornillac v. St. Louis 7 WIR 491
The considerations which ought properly to have been borne in mind in assessing the general damages were:
(a) the nature and extent of the injuries sustained;
(b) the nature and gravity of the resulting physical disability;
(c) pain and suffering;
(d) loss of amenities;
(e) the extent to which pecuniary prospects were affected.
Lord Goddard’s in British Transport Commission v Gourley said:
“In an action for personal injuries the damages are always divided into two main parts. First, there is what is
referred to as special damages, which has to be specially pleaded and proved. This consists of out-of-pocket
expenses and loss of earnings incurred down to the date of the trial, and is generally capable of substantially
exact calculation. Secondly, there is general damage which the law implies and is not specially pleaded. This
includes compensation for pain and suffering and the like, and, if the injuries suffered are such as to lead to
continuing or permanent disability, compensation for loss of earning power in the future.”
The loss of pecuniary prospects was not an item of special damage but one of the class of items to be taken into
account in the assessment of general damages.

Sarju v. Walker (No. 1) 21 WIR 86

There can be little dispute but that compensation for injuries should be fair. Perfect compensation is hardly possible,
and can be unjust in certain circumstances.
In awarding damages for injuries, a court must look at the overall figure at the end, and to arrive at the figure, awards
must be made under the well recognised heads; a court cannot award a plaintiff precise compensation, but he will be
awarded fair compensation in all the circumstances;
An award in respect of prospective earnings is intended to compensate an injured person for money he would have
earned during his normal working life but for the accident;
CUMMINGS JA, dissenting) that a court has a discretion to award, or not to award, costs and where a trial judge has
shown that he has exercised that discretion, the Court of Appeal will not interfere.

CAVEATS
Aziz Ahamed v. Raghubar (1967)
The respondent at age 40 suffered serious injury in a motor collision. He sustained a fractured dislocation of the 11th
and 12th dorsal vertebrae resulting in complete paralysis of the lower limbs from the waist downwards (paraplegia); he
was unable to walk except with the aid of crutches and double calipers, and he was incapable of controlling the action
of his bladder and bowels. He also suffered total sexual impotence. At the time of the collision the respondent was a
truck driver earning $7.20 per day and had a wife and six children. He played cricket and billiards. His injuries
rendered him almost useless and his wife had left him. A judge assessed damages at $48,263.80 of which $48,000 was
general.
On appeal,
Held: (i) that in this jurisdiction where assessments of general damages are made by judges without the aid of juries, it
is now an accepted principle that courts should strive for as high a measure of uniformity of awards as is reasonably
practicable;
(ii) that there is no warrant for maintaining an equiparation of the Trinidad dollar and the English pound.
(iii) that the judge's award was not inordinately high.

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Appeal dismissed. Award of damages varied to include an agreed sum of $2,750 for actual loss of earnings.

PAIN AND SUFFERING AND LOSS OF AMENITIES

DeSouza v. Trinidad Transport Ltd v. Nanair (No.1)
DND was 35 years old when the motor car he was driving on 7 November 1963, became involved in a collision with a
motor truck with trailer attached owned by the defendant company and driven by BN DND was a marine engineer; he
was well qualified for his employment as a senior jack operator by the Skinner Drilling Co, and his future prospects
were good. He was a happily married family man with two children; his hobbies included swimming, fishing, dancing,
cricket, and football, and he enjoyed reading, the cinema, and a social life. He was agreeable and of a pleasant
disposition. After the collision DND remained unconscious for 72 hours in a public hospital. He suffered severe shock
and loss of blood. He had sustained:
(a) a fracture at the base of the skull–with associated brain damage;
(b) a penetrating wound at the back of the right shoulder with severe damage to the brachial plexus;
(c) a fracture of the right elbow involving the elbow joint;
(d) a fracture of the right femur of the upper third of the shaft; and
(e) a crushed fracture of the body of the twelfth dorsal vertebra.
Early in March 1964, DND began to suffer from blackouts and clonic spasms of the arms and legs due to brain
damage. A few months later he developed paralysis of both legs from the hips down (spastic paraplegia) and his right
leg had to be amputated. He has no control over his bladder or bowels and he became sexually impotent. He will
remain an invalid in need of constant nursing for the rest of his life, and he will not be able to use either crutches or a
wheel chair. He is committed to a life in bed. His personality has deteriorated and his mental capacity is seriously
impaired; he has become selfish and suspicious and his residual disability was estimated at 100 per cent. The trial
judge found the driver of the defendant company's vehicle to be wholly responsible for the collision.
Held: (i) that the considerations to be borne in mind in assessing general damages were:
(a) the nature and extent of the injuries sustained;
(b) the nature and gravity of the resulting physical disability;
(c) the pain and suffering which had to be endured;
(d) the loss of amenities suffered; and
(e) the extent to which consequentially the plaintiff's pecuniary prospects have been materially affected.
Cornilliac v St Louis ((1965), 7 WIR 491) applied and followed.
(ii) that in ascertaining trends in awards in comparable cases attention need not be restricted to cases in which the
nature of the injuries and the gravity of the consequences suffered bear a close affinity to the claimant's.
Judgment for plaintiff. Damages awarded: $206,726.92.

Leonard (an infant) v. Forbes

Illustrates that pain and suffering is assessed subjectively so that if the claimant is not capable of experiencing the pain
or suffering no damages will be awarded for pain and suffering. In this case the claimant was aware of his condition
but experienced no pain and suffering.
The appellant, a youth aged 15, was injured as a result of the negligent driving of the first respondent an employee of
the second respondent. In the accident which occurred on 31 October 1966, the appellant’s skull and ribs were
fractured and his brain and nerve tracts were permanently damaged so that he is now a spastic. He has been a patient
in hospital ever since and was deeply unconscious for five months as a result of the accident.
Held: the award of general damages would be increased to $37,000 for the following reasons:
(i) a person in the position of the appellant is entitled to reasonable compensation not only for the severe physical
injuries he has sustained, but also in respect of “the grave and sombre deprivations” which he will suffer throughout
his life, and that as the trial judge has found he has suffered the loss of all the amenities of life substantial
compensation should be awarded, and more so as he has a long expectation of life and is able to appreciate his
condition;
(ii) an award must also be made to meet the special need to provide for continuous care for the appellant over a long
period of time;
(iii)the appellant, though a casual worker, has been forever deprived of the opportunity to earn his wages, however
small, and to improve his earning capacity in employment.
Lewis CJ said:
“Although the trial judge did not specifically mention the various heads as set out in Wooding CJ’s judgment, his
evaluation of the evidence indicates that he took account of them. He particularly states that the appellant was a casual
employee with a low income, that there is no chance of his leading a normal life, and that he would need constant care
as he could not look after himself. The conclusion to be drawn from these findings must be that for the rest of his life
he would be unable to work and that his loss of future earnings must be assessed on the basis of a low income.”
“Although the plaintiff according to the medical evidence did not suffer pain yet he was very seriously injured and has
suffered a loss of all the amenities of life.” I have already referred to the appellant’s spastic condition. No
regeneration of the nerves is expected. The appellant is aware that his prospects for the future are hopeless, for he said
in his evidence: “I am in the hospital for I was licked out of this world. I thought I was dead.” According to the
medical evidence he is mentally alert and willing but cannot do what he wants to do because of the brain damage. His
frustration must be well nigh intolerable. He has no sense of balance when standing. He was trained by his father, a
sea captain, to sail a boat, but will never be able to enjoy the pleasures of sailing. He used to play cricket and drive a
car, but now he cannot even walk without assistance.
The medical evidence establishes that the appellant’s expectation of life has not been shortened. At the age of 19 he
must therefore look forward to a broken barren life beset with frustrations. His utter dependence upon the care of
others must add to his distress and anxiety.

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A plaintiff in the position of the appellant is entitled to reasonable compensation not only for the severe physical
injuries he has sustained, but also in respect of “the grave and sombre deprivations” which he will suffer throughout
his life.

West (H) & Son Ltd v. Shephard

General damages for personal injuries are to compensate for results that have actually been caused, which may consist
both of physical loss (eg, loss of the use of a limb) which is an objective element of damages, and of pain and
suffering, of frustration and the affliction of awareness of the loss and of loss of expectation of life, which form a
subjective element, and in relation to both these elements, the period of probable duration (which may be the period of
expectation of life of the plaintiff) is relevant to be taken into; an injured person who is rendered continuously
unconscious is spared the subjective element, and thus cannot recover compensation for it, but a court is not required
to segregate and assess separately the objective and subjective elements, both of which may properly be covered by
one comprehensive sum.
(ii) In assessing general damages for personal injuries there may be items of need which should be taken into account
(eg, future needs for special treatment or for transport), but, apart from that, the consideration of what use a plaintiff
will thereafter make of the money recovered as damages is irrelevant.
Lord Morris said:
“An unconscious person will be spared pain and suffering and will not experience mental anguish which may
result from knowledge of what has in life been lost or from knowledge that life has been shortened.. The fact
of unconsciousness is therefore relevant in respect of and will eliminate those heads or elements of damages
which can only exist by being felt or thought or experienced. The fact of unconsciousness does not, however,
eliminate the actuality of the deprivations of the ordinary experiences and amenities of life which may be the
inevitable result of some physical injury.”

Wise v. Kaye
In assessing damages for negligence causing personal injuries—
(a) the fact that the injured person is unlikely to live to enjoy personally the damages awarded is not a ground for
reducing the amount of general damages awarded
(b) the injured person's lack of knowledge of his or her condition is no ground for reducing the amount of general
damages awarded to him or her, save in regard to the factor of pain and suffering which may be excluded
thereby.
The plaintiff, a girl aged twenty, was rendered unconscious and received serious injuries to her brain, which lessened
her expectation of life. She was still unconscious three and a half years after the accident, and was not expected ever to
recover consciousness. At the time of the accident she was in employment, and she was engaged to be married. The
trial judge awarded £879 8s 11d special damages, being loss of earnings to the date of trial, £2,000 general damages
for loss of probable future earnings, which was based on probable earnings during the period the plaintiff might have
been expected to live but for the accident, £400 damages for loss of expectation of life, and £15,000 general damages
for her physical injuries and the resultant loss of the amenities of life. It was unlikely that she would be able personally
to enjoy the damages awarded or that they would be used to maintain her.
Held –the award of £15,000 general damages, which in truth was an award for loss of amenity, since pain and
suffering and medical expenses and expenses for future care could be excluded and loss of earnings and of expectation
of life had been separately assessed should not be disturbed, for in relation to a living person it was not the court's duty
to measure the damages according to the loss of happiness occasioned by the injury but according to the physical
injury and consequent loss of amenity.
The award of £2,000 for loss of probable future earnings should be reduced to £1,500, because, in assessing damages
for loss of probable future earnings, the loss to be assessed was that during the curtailed period for which the plaintiff
was expected to live after the accident.

LOSS OF EXPECTATION OF LIFE

Benham v. Gambling
A boy of the age of two-and-a-half years was killed in a road accident. The damages for loss of expectation of life were
assessed at £1,200:—
Held – the proper assessment of such damages in this case, where the prospects of the boy were particularly
favourable, was £200. The assessment of such damages is not to be made upon an actuarial basis. It is not the
assessment of compensation for loss of years or for the loss of future pecuniary prospects, but it is the fixing upon
commonsense principles of a reasonable figure for the loss of prospective happiness.

THE LOST YEARS

(This topic needs to be taught before briefing cases)

Gammel v. Wilson
The plaintiffs in two separate actions were the parents of two young men who had been killed in accidents as the result
of the negligence of the respective defendants. Both deceased died intestate and the plaintiffs were therefore the
administrators of their estates. In both actions the plaintiffs claimed damages against the defendants under (i) the Fatal
Accidents Act 1976 (or in the second action, the Fatal Accidents Acts 1846 to 1959) on behalf of themselves as
dependants and (ii) the Law Reform (Miscellaneous Provisions) Act 1934 on behalf of the deceased’s estate.

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 In the first case, the plaintiff’s 1year old son was killed in a road accident. He had started working and had a career
planned. The defendants admitted liability and the only issue was the quantum of damages. For the purpose of the
1976 Act, the trial judge assessed the dependencies of the plaintiff and his wife at £250 and £1,750 respectively and,
on the claim under the 1934 Act, awarded the plaintiff damages totalling £9,335, which included £1,750 for loss of
expectation of life, and £6,656 for the son’s loss of future earnings during the years of life lost to him because of the
defendants’ negligence (‘the lost years’), on the basis that the son would have earned £416 a year net after deduction of
living expenses to which the judge applied a multiplier of 16 years. An appeal by the defendants against the award
under the 1934 Act was dismissed by the Court of Appeal ([1980] 2 All ER 557). The defendants appealed to the
House of Lords.
In the second case, the plaintiffs’ 2year old son was killed in the course of his employment. The defendants, his
employers, admitted liability subject to contributory negligence of 10%. For the purposes of the fatal accident claim
the trial judge assessed the dependencies of the plaintiffs at £2,028 and, on the claim under the 1934 Act, awarded
damages which included £17,275 (less 10%) for loss of earnings during the lost years. The defendants appealed to the
House of Lords.
In each case, because the award to the estate under the 1934 Act exceeded that undr the Fatal Accidents Acts, no
award was made in respect of the fatal accident claim, in accordance with the rule that in assessing loss of dependency
under the Fatal Accidents Acts the court was required to take into account any benefit accruing to a dependant from the
deceased’s estate. At the hearing of the appeals the respective defendants contended that in a claim under the 1934 Act
a deceased’s estate was not entitled to recover damages for the deceased’s loss of earnings during the lost years
because the cause 578 of action for such earnings was a ‘gain to the estate’ while the loss of the earnings was a
‘loss to the estate’ and that therefore, in accordance with the requirement of s 1(2)(c)a of the 1934 Act that damages
under the Act were to be ‘calculated without reference to any loss or gain to [the] estate consequent on [the deceased’s]
death’, such damages were to be ignored in the assessment of damages awarded to the estate. The defendants further
contended that in any event, even if such damages could be awarded under the 1934 Act, the amounts awarded were
excessive.
Held – The appeals would be dismissed for the following reasons—
(1) On the true construction of s 1(2)(c) of the 1934 Act the restriction on an estate recovering or being deprived of a
‘loss or gain to [the] estate’ consequent on a person’s death applied only to a loss or gain directly consequent on the
death and not to a loss or gain resulting from a right to recover damages which vested in the deceased immediately
before his death and which then passed to the beneficiaries of his estate, whether they were his dependants or not. That
construction, coupled with the principle that a cause of action for loss of earnings in the lost years vested in the
deceased before he died (and in the case of instantaneous death vested in him immediately before he died) meant that
the estate was not precluded by s 1(2)(c) from recovering damages for the deceased’s loss of earnings during the lost
years in a claim under the 1934 Act. Accordingly, even though it produced a result which was neither sensible nor just,
the House was constrained to hold that the plaintiffs were entitled to the damages awarded for the lost years despite the
fact that those damages far exceeded the amount to which they were entitled under the 1976 Act as dependants (see p
581 c, p 584 d f g i, p 586 g h, p 588 c to j, p 590 f to j, p 592 c d f g and p 593 b c, post); Rose v Ford [1937] 3 All
ER 359 and Pickett v British Rail Engineering Ltd [1979] 1 All ER 774 applied.
(2) On the principle that damages for loss of earnings in the lost years should be fair compensation for the loss
suffered by the deceased in his lifetime, there was no room for conventional award. Accordingly, the court was
required to make the best estimate it could on the evidence available, which was what the trial judge in each case had
done. The awards would therefore not be disturbed (see p 581 c to f, p 587 j, p 588 b to e h j, p 590 h j, 593 d to g and p
594 f h, post.
Per Curiam. The law in England and Wales relating to damages for death recoverable by the estate of a deceased is
neither sensible nor just, but it is so well established that change can only be brought about by legislation, a good
model for which would be the Damages (Scotland) Act 1976 (see p 583 h, p 587 d to f, p 588 d h, p 590 g, p 592 b c
and p 595 d e, post).
Decision of the Court of Appeal in Gammell v Wilson [1980] 2 All ER 557 affirmed.

Pickett v. British R1 Engineering Ltd

The plaintiff developed a lung disease as a result of inhaling asbestos dust while working in the defendant’s workshops
from 1949 to 1974. The symptoms first manifested themselves in 1974, and in 1975 he brought an action against the
defendant claiming damages for personal injuries. The defendant admitted liability but contested the quantum of
damages. At the date of the trial in October 1976 the plaintiff was aged 53 and married with two chidren. He had an
excellent health record and but for his exposure to asbestos dust could have expected to have been employed until the
normal retiring age of 65. The plaintiff’s lung disease had, however, shortened his life expectancy to one year. The trial
judge awarded the plaintiff damages under various heads, including £7,000 general damages for pain and suffering and
loss of amenities, interest on that sum at 9% per annum from the date of service of the writ to the date of the trial
amounting to £787·50, and £1,502·88 for loss of earnings which he could have expected to earn during his shortened
life expectancy. The plaintiff appealed to the Court of Appeal, but before the appeal was heard he died and his widow
was substituted as plaintiff. The Court of Appeal increased the award of general damages to £10,000 but refused to
allow any interest on 774 that increased sum on the ground that as damages were now normally subject to
increase to take account of inflation there was no occasion to award interest as well. Following authority, the court left
undisturbed the award for loss of future earnings, holding that damages in respect of loss of earnings beyond the period
of likely survival were not recoverable. The plaintiff appealed to the House of Lords against the court’s refusal to
award any sum for loss of earnings beyond the survival period or to award interest on the general damages. The
defendant cross-appealed against the increase of the general damages to £10,000.

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Held – (i) (Lord Russell of Killowen dissenting) Where the plaintiff’s life expectancy was diminished as the result of
the defendant’s negligence, the plaintiff’s future earnings were an asset of value of which he had been deprived and
which could be assessed in money terms, and were not merely an intangible expectation or prospect to be disregarded
in the assessment of damages, since what he had been deprived of was the money over and above that which he would
have spent on himself and which he would have been free to dispose of as he wished, and not merely something which
was of no value to him if he was not there to use it. Thus, if the plaintiff brought an action in his own lifetime, then, on
the assumption that if he was successful his dependants would not in law have a cause of action under the Fatal
Accidents Act 1976 after his death, and in accordance with the principle that a plaintiff was entitled to be
compensated for the loss of anything having a money value, his loss of future earnings were to be assessed as a
separate head of damage and not merely included as an element in the assessment of damages for loss of expectation of
life. The damages awarded to a plaintiff whose life expectancy was diminished were therefore to include damages for
economic loss resulting from his diminished earning capacity for the whole period of the plaintiff’s pre-accident
expectancy of earning life and not merely the period of his likely survival. Those damages were to be assessed
objectively, disregarding loss of financial expectations which were too remote or unpredictable and speculative, and
after deducting the plaintiff’s own living expenses which he would have expended during the ‘lost years’, since they
would not have formed part of his estate. Because the trial judge and the Court of Appeal had both restricted damages
for loss of future earnings to the plaintiff’s period of likely survival the plaintiff’s appeal would be allowed on this
point (see p 780 f to h, p 781 d to f, p 782 a and h to p 783 a, p 784 a to f, p 791 f g, p 792 e to g, p 795 b, p 796 g, p
797 a to d and p 798 b and e f, post); Phillips v London and South Western Railway Co (1879) 5 QBD 78 and Skelton v
Collins (1966) 115 CLR 94 applied; Harris v Bright’s Asphalt Contractors Ltd [1953] 1 All ER 395 and Oliver v
Ashman [1961] 3 All ER 323 overruled; dictum of Viscount Simon LC in Benham v Gambling [1941] 1 All ER at
13 explained.
(ii) The trial judge’s assessment of the general damages at £7,000 was not so grossly insufficient as to lead to the
conclusion that some error must have taken place. On the contrary since he had correctly apprehended the facts and
adopted the correct approach in law his award ought not to have been interfered with by the Court of Appeal. The
defendant’s cross-appeal would therefore be allowed and the trial judge’s award restored (see p 782 e, p 788 e f, p 792
g to p 793 a, p 795 a b and p 799 e f, post).
(iii) An award of interest on general damages was given to compensate a plaintiff for being deprived of the use of the
damages until judgment, whereas the award of an increase in damages for inflation was designed to preserve the real
value of the damages to the plaintiff, and the Court of Appeal had been wrong to confuse the purpose of the two
awards and disallow the award of interest. The plaintiff’s appeal on this point would therefore be allowed and the trial
judge’s award of interest restored (see p 782 c d, p 788 e f, p 793 d to g, p 795 a b and p 800 b to g, post); dictum of
Lord Denning MR in Cookson v Knowles [1977] 2 All ER at 823 disapproved.

Oliver v. Ashman
In assessing damages for personal injuries involving loss of a period of expected life, loss of earnings during that
period should not be valued as a separate head of damage, but, whether the injured person is living or has died, the
damages for his loss of expectation of life should be assessed at the conventional sum (in the region £200) which
should be regarded as covering all the elements of the lost expectation, including the opportunity of enjoying what
would have been earned during the lost period (see p 332, letter d, p 338, letter g, and p 341, letter c, post).
Observations of Lord Roche in Rose v Ford ([1937] 3 All ER at pp 380, 381) and of Vicount Simon LC in Benham v
Gambling ([1941] 1 All ER at p 13) applied.
Harris v Bright’s Asphalt Contractors Ltd ([1953] 1 All ER 395) approved.
Pope v D Murphy & Son Ltd ([1960] 2 All ER 873) overruled.
Per Holroyd Pearce LJ: although there is no distinction between damages for loss of expectation of life awarded to a
living plaintiff and those awarded to the executors of a dead man, yet in the former case the plaintiff can obtain, in
addition to damages for loss of expectation of life, substantial damages for the constant pain and disappointment of
knowing that his life has been shortened (see p 332, letter e, post).
The infant plaintiff, a boy aged twenty months, sustained in February, 1958, severe injuries in a road accident for
which the defendants admitted liability. These injuries damages his brain and, as a result, he became mentally
defective, unable to talk or to understand what was said to him. He did not, apparently, have sustained feeling, and so
did not have prolonged pain and suffering in consequence of the accident. The medical evidence was that a slight
improvement in his condition might occur and that education of a very limited character might be possible, but that for
the rest of his life he would require constant care and attention. For some three or four years his parents might have to
employ a nanny to look after him. Though the infant plaintiff might go to a private institution in the first instance, yet
in a few years’ time he would probably have to go into a state institution for mental defectives. He would never be able
to earn his living. His expectation of life had been rendered by the accident a good deal less than normal; possibly
thirty rather than sixty years. He had a younger brother who was normal and who would progress in advance of him.
The father of the infant plaintiff was an executive earning £1,250 a year. The damages of the infant plaintiff were
assessed at £11,000. In assessing them the trial judge took into account loss of earnings during the period of loss of
expectation of life, and treated as irrelevant the prospect that the infant might not be able to use the money awarded as
damages, eg, while he might be maintained by the state in a health service institution.

Held – In the special circumstances of the case the award of £11,000 was not one with which the Court of Appeal
would interfere for the following reasons—
(i) although the trial judge had erred in taking into account the loss of earnings during the period for which
expectation of life was lost, yet that factor must have been small having regard to the remoteness of the period.
(ii) (per Holroyd Pearce and Willmer LJJ); there was no certainty that the infant would not both need and spend the
damages awarded (see p 328, letter c, and p 336, letter h, post).
Per Pearson LJ: the extent of the infant’s financial need arising from the accident was a relevant matter which could

19
properly be taken into consideration in assessing damages (see p 339, letter i, to p 340, letter a, post).
Decision of Lord Parker CJ ([1960] 3 All ER 677), affirmed for reasons partly different.

Harris v. Empress Motors Ltd

In assessing the damages recoverable by a deceased’s estate under s 1(1) a of the Law Reform (Miscellaneous
Provisions) Act 1934 for the deceased’s loss of earnings in the ‘lost years’, ie the years in which he would have
been earning had he lived, the following principles are to be applied in calculating the living expenses to be deducted
from his net earnings in the lost years in order to reach the amount of recoverable damages: (i) the ingredients that go
to make up ‘living expenses’ are the same whether the deceased was young or old, single or married, or with or
without dependants; (ii) the sum to be deducted as living expenses is the proportion of the deceased’s net earnings that
he would have spent exclusively on himself to maintain himself at the standard of life appropriate to his situation; (iii)
accordingly, any sums that he would have expended exclusively to maintain or benefit others will not form part of his
living expenses and will not be deductible from his net earnings for the purposes of the 1934 Act. However, where the
deceased expended the whole or part of his net earnings on living expenses (such as rent, mortgage interest, rates,
heating, electricity, gas, telephone etc and the cost of running a car) for the joint benefit of himself and his dependants,
a proportion of that expenditure (the exact proportion being dependent on the number of dependants) should be treated
as expenditure exclusively attributable to his living expenses and thus deductible from his net earnings in making the
assessment under the 1934 Act; for example, where the only dependant is the deceased’s wife one-half of the
expenditure for their joint benefit should be deducted from his net earnings, but where there is a wife and two
dependent children one-quarter of the expenditure for the family’s benefit should be deducted from his net earnings. It
follows that the calculation of the deceased’s deductible living expenses for the purpose of assessing damages is
different under the 1934 Act on the one hand and the Fatal Accidents Act 1976 on the other, because any part of
the estimated expenditure for the joint benefit of the deceased and his dependants is excluded from the calculation of
his living expenses under the 1976 Act. It also follows that the amount of living expenses deductible from the
deceased’s net earnings for the purposes of the 1934 Act will generally be greater than the amount of the living
expenses deductible under the 1976 Act, because under the latter Act the amount of his living expenses is
conventionally assessed at no more than one-third of his net earnings (see p 565 f g,p 575 c to p 576 b and p 577 e and
g h, post).
________________________________________
a
Section 1(1), so far as material, provides: ‘Subject to the provisions of this section, on the death of any person
after the commencement of this Act all causes of action … vested in him shall survive … for the benefit of, his
estate … ’
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
Skelton v Collins (1966) 115 CLR 94, Pickett v British Rail Engineering Ltd [1979] 1 All ER 561 774,
Gammell v Wilson [1981] 1 All ER 578 and White v London Transport Executive [1982] 1 All ER 410
considered.
The deduction for living expenses to be made in the case of a young unmarried man for the purpose of assessing the
recoverable damages for his loss of earnings in the lost years is likely to be higher than in the case of an older married
man because it is more easy to estimate the amount which should not be deducted from net earnings in the case of an
older married man than in the case of a young unmarried man whose future is speculative (see p 577 b to d, post).
Gammell v Wilson [1981] 1 All ER 578 and White v London Transport Executive [1982] 1 All ER 410
considered.
Decision of McCowan J in Harris v Empress Motors Ltd [1982] 3 All ER 306 varied.

QUANTIFICATION

The Basis for the granting of an Award of Damages for wrongful death in Jamaica is found on two Acts of Parliament,
namely the Fatal Accidents Act and the Law Reform (Miscellaneous Provisions) Act. The former gives a cause of
action to the deceased against the person who committed the offence for the benefit of his dependents or, as the Act
call them his “Near Relations”. The latter gives a separate cause of action to the deceased against the Offender for the
benefit f his estate.

s.3 Fatal Accidents Act

Whensoever the death of a person shall be caused by wrongful act, neglect or default, and the act, neglect or default is
such as would (if death had not ensued) have entitled the party injured to maintain an action, and recover damages in
respect thereof, then and in every such case the person who would have been liable, if death had not ensued, shall be
liable to an action for damages notwithstanding the death of the person injured and although the death shall have been
caused under such circumstances as amount in law to felony.

s.4 Fatal Accidents Act

(1) Any action brought in pursuance of the provisions of this Act shall be brought –
(a) by and in the name of the personal representative of the deceased person; or
(b) where the office of the personal representative of the deceased is vacant, or where no action has been instituted
by the personal representative within six months of the date of death of the deceased person, by or in the name
of all or any of the near relations of the deceased person, and in either case any such action shall be for the
benefit of the near relations of the deceased person.
(2) Any such action shall be commenced within, three years after the death of the deceased person or within such
longer period as a court may, if satisfied that the interests of justice so require, allow.
(3) Only such action shall e brought in respect of the same subject matter of complaint.

20
(4) If in any such action the court finds for the plaintiff, then, subject to the provisions of subsection (5), the court may
award such damages to each of the near relations of the deceased person as the court considers appropriate to the actual
or reasonably expected pecuniary loss caused to him or her by reason of the death of the deceased person and the
amount so recovered (after deducting the costs not recovered from the defendant) shall be divided accordingly among
the near relations.
(5) In the assessment of damage under subsection (4) the court—
(a) may take into account the funeral expenses in respect of the deceased person, if such expenses have been
incurred by the near relations of the deceased person;
(b) shall not take into account any insurance money, benefit, pension, or gratuity which has been or will or may be
paid as a result of the death;
(c) shall not take into account the remarriage or prospects of remarriage of the widow of the deceased person.

There are three heads of recoverable loss:

(1) Pecuniary loss attributable to the non-business relationship between deceased and dependent: this
refers to the loss of support from the deceased’s earnings as well as the loss of support from the deceased’s
future retirement pensions.
(2) Business pecuniary loss: this is not recoverable by the dependent if the loss flows from the business
relationship between the deceased and his dependent.
(3) Proof of loss: there will be no award if the loss is entirely speculative or if there is “no reasonable expectation
of pecuniary benefit as of right, or otherwise, from the continuance of life.”

Multiplier Method
The multiplier method is used to assess al pecuniary loss and not merely post-trial pecuniary loss. The actual method
of computing damages is found in Case Law. In the Landmark decision of the House of Lords in the English Case of
Cookson v. Knowles Lord Diplock stated: “as a general rule in Fatal Accident cases the damages should be assessed in
two parts, the first and less speculative component being an estimate of the loss sustained up to the date of trial and the
second component as estimate of the loss to be sustained thereafter.”
The starting point of the multiplier is the estimated number of years (taking into account e.g. the deceased’s and
dependent’s life expectancies) from the date of death that the dependent would have received the deceased’s pecuniary
support. When the deceased was unmarried and supporting his parents account must also be taken of the possibility of
the deceased’s marriage.
- The starting figure is then adjusted. There is a reduction b/c the C is receiving the capital sum now, which he
can invest, rather than periodic payments over the years.
- A further small reduction may be made for the contingencies of life, other than mortality, such as the
deceased’s possible unemployment.
The aim is to award a capital sum, which when invested will produce an income in terms of interest and withdrawals of
capital, equal to the dependent’s lost income over the period intended to be covered (period of dependency).
In the UK a rate of 2.5% is set and this applies to personal injuries and fatal accident cases. Example: applying a
discount rate of 2.5%, the multiplier (from death) for calculating loss of dependency in respect of a wife, who was 30
yrs old at the death of her 30 year old husband is about 23.

Rattray v. Muir & Ors

The deceased, a man 44 years of age in sound health, was fatally injured in a road accident on 3 September 1964. He
died leaving a widow 38 years of age and five children aged 11 years, 81/2 years, 51/2 years, 4 years, and 2 years 9
months. At the date of his death the deceased was in receipt of an annual income of $45,000 as president of a
publishing company which after deduction of $18,000 for income tax and $430 for insurance policy premiums left a
net income of over $26,500. The deceased's personal expenditure was about $2,500. It was anticipated that but for his
death the deceased would have continued in employment until the age of 65 years. There were certain benefits
accruing to the widow and children as a result of the deceased's death, namely $36,411 arising under certain policies of
insurance on the deceased's life, $9,541 the value of the deceased's estate and $25,000 the value of certain shares of the
widow. If all these benefits were taken into consideration the gross prima facie benefit would amount to $70,952. As to
the social security benefits, the children would receive a combined total of $50,089.56 at 21 years of age while the
widow would receive a total of $11,970 based on a dependency of 21 years.
Held: in assessing the damages the following factors should be taken into account:
(i) the reasonable expectation of the deceased's working life;
(ii) the life expectation of the deceased's widow and children;
(iii) the ordinary chances and uncertainties of life including the possibility of remarriage of the deceased's widow;
(iv) benefits accruing to the deceased's widow and children as a result of the deceased's death including social
security benefits payable to them. On the claim under the Law Reform Law awarded £750. The special damages have
been agreed at £1,235.

Deonarine v. Narine
Pursuant to a claim for damages for negligence arising from a fatal accident a judge awarded the respondent, inter alia,
as administratrix of the estate of the deceased, a sum of $517.17 for expenses in obtaining letters of administration in
his assessment of damages under the Supreme Court of Judicature Act 1962. In his assessment under the
Compensation for Injuries Ordinance he awarded damages in the sum of $4,000 and $4,272 respectively to the two
infant children of the deceased aged 5 and 3 years. The widow had remarried comfortably and the stepfather of the
children was generously inclined towards them.
On appeal,
Held: (i) administration expenses cannot be claimed as an item of loss or damage in actions for the benefit of a
deceased person's estate under the Supreme Court of Judicature Act 1962;

21
(ii) in computing the damages to be paid to the deceased's dependants under the Compensation for Injuries Ordinance
due account must be taken of (a) the extent of their dependency on him, (b) their respective entitlements to the
damages awarded under the Supreme Court of Judicature Act, (c) the insurance of his life under which benefits became
payable to them, and (d) the remarriage of a dependent spouse;
(iii) that the correct approach in a case of this kind is to ascertain the extent of the loss of the children, if any, up to the
date of the cesser of their dependency and then to evaluate the chance of the stepfather ceasing to be as he is at present
or of his not being so quite to the same extent.
Appeal allowed. Assessment of damages varied. Each child awarded $1,500.

Taylor v. O’Connor
In 1965 the respondent's husband was killed as a result of a car accident for which the appellant was wholly liable. The
respondent claimed damages under the Fatal Accidents Acts on behalf of herself (aged 52) and her daughter (aged 18).
The husband who was 53 at the time of his death had been a partner in a successful firm of architects. His life
expectation at the date of his death was 18 years and that of the respondent was 21 years. His income, after deduction
of tax, would have been £7,500 per annum up to the date of his retirement if he retired at 65 (although no provision as
to retirement was made in the partnership deed). Under the partnership deed, he was required to leave some part of his
income in the partnership as working capital; at the time of his death this amounted to £10,000 and during the rest of
his working life as a partner he would have left £1,500 per annum in the firm. In assessing damages, the trial judge,
holding that he might have continued as a full partner beyond the age of 65 or might have continued as a consultant,
ruled that the husband would have continued to enjoy a net spendable income of £6,000 per annum for the rest of his
life. The dependency of the respondent and the daughter was estimated at £4,000 from which £250 was deducted in
respect of the accelerated benefit from the savings of £10,000 (erroneously taken to be £13,000); the dependency for
the purposes of the award of damages being reckoned at £3,750 per annum. The judge increased the proposed
multiplier from ten to 12 to make allowance for inflation. To the resulting sum (£45,000) the judge added £9,000 as the
present value of £18,000 (the product of £1,500 left in the firm for each of 12 years). The Court of Appeal refused to
disturb the trial judge's award. On appeal against quantum:
Held – There were no grounds for interfering with the amount of damages awarded by the trial judge. The prospect of
inflation is not a valid reason for increasing a multiplier. In assessing the effect of the incidence of tax on an award of
damages, any private income of the recipient should be ignored.

Mitchell v. Mulholland (No.2)- COA (not HL)***

In respect of the post-trial financial loss the court should adopt the traditional method of multiplier and multiplicand;
the actuarial method was not sufficiently precise since it was based on the 'average' man and paid insufficient regard to
the particular plaintiff assuming that he must be considered as 'average' unless and until the defendant showed that he
was not; although actuarial calculations might well be used as a means of cross-checking calculations and arriving at
the appropriate multiplier to be used, they could not be used as the primary basis of assessment for the reason that of
necessity they treated future probabilities as certainties; the same reasoning also applied to the discount of 2 per cent
for contingencies; such contingencies could not be allowed for by ignoring the individual case and making an arbitrary
subtraction.
Evidence as to 'productivity inflation' was in principle admissible as a relevant factor in assessing damages for the loss
of ability to earn; evidence of an increase in productivity in future years which would have increased the defendant's
earning power must, however, be directed to the particular industry and the particular firm in which the defendant was
employed; the evidence in the present case, relating solely to projected increases in national prosperity, was much too
speculative and was accordingly inadmissible.

TAXATION
The question here is, in assessing damages for the gains that the C has been prevented from making by the defendant’s
tort or breach of contract, do the courts deduct income tax (incorporation tax for company) that the C would have paid
on those gains?

British Transport Commissioner v. Gourley

When assessing damages, in actions for personal injuries or wrongful dismissal, for the loss of actual or prospective
earnings, allowance must be made for any incidence of income tax (including surtax) on the earnings, where the
damages themselves are not taxable in the hands of the recipient.
The HL held that in an action for damages for personal injuries tortiously inflicted, the calculation of the P’s damages
in respect of his loss of earnings, both past and prospective at the time of the trial, must take into account the tax which
would have been payable upon them as if he had been working for those earnings.
In considering the assessment of damages for loss of earnings, the rate of tax to be taken must be the effective rate of
income tax and, if necessary, surtax, which would have been applicable to the sums in question if they had been
earned.
The principle decided in the present case, viz that allowance must be made for the plaintiff's tax liability when
assessing damages for loss of earnings, is decided only in relation to damages in actions for personal injuries or for
wrongful dismissal.
Yet the principle seems to be of general application where damages are assessed for loss of earnings which, if earned,
would have been taxable. The damages in the present case were themselves not taxable in the hands of the recipient.

The Gourley principle has seen been applied to actions for wrongful dismissal, for trepass and conversion and for libel,
and it can therefore be regarded as a general principle in assessing compensatory damages. It should be noted that
Gourley emphasised that the deduction should apply only if the damages themselves were not to be taxed – otherwise
the C would be taxed twice. This principle has been criticised and the Canadian Courts have refused to follow it.

Diamond v. Campbell Jones

22
In July, 1956, the defendants agreed to sell to the plaintiff for £6,000 a leasehold interest for a term expiring in the year
2003 in property in Mayfair comprising a basement and ground floor and four upper floors. The agreement was
expressed to be subject to and with the benefit of a contract for the grant of a new lease, which contract required works
of conversion of the property into ground floor office accommodation and residential maisonettes above to be carried
out by the lessee. The agreement also stated that the permitted use for the purposes of the Town and Country Planning
Act, 1947, was that stated in a letter by which permission was given for office use of the ground floor until a date in
1970 and from which it appeared that permission for multiple residential use of the rest of the premises would
probably be given if requested. The defendants repudiated the contract and an inquiry as to damages was ordered. The
plaintiff contended that the proper measure of damages was the profit that he would have realised if he had converted
the upper floors into maisonettes and the ground floor into offices, and if he had disposed of the premises when so
converted. The plaintiff was a dealer in real property, but it was neither pleaded nor shown in evidence that the
defendants knew what his occupation was or that he intended to carry out a conversion of the premises. The market
value of the property at the date of the breach of contract, without having been converted, substantially exceeded
£6,000.
Held – (i) the plaintiff was not entitled to damages measured by reference to the profit obtainable by converting the
property, because special circumstances were necessary to justify imputing to a vendor of land knowledge that the
purchaser intended to use it in a particular manner, and the mere facts that the property was ripe for conversion and
that everyone recognised this were not sufficient to impute to the defendants knowledge that the plaintiff intended to
convert the property for profit; therefore, the damages should be assessed by reference to the difference between the
purchase price and the market value at the date of the breach of contract.
(ii) since the damages recovered by the plaintiff were liable to attract income tax as part of the profits or gains of his
business, he should be awarded a gross sum in damages (equal to the excess of the market value over the purchase
price at the relevant date), not merely a net sum equivalent to the profit remaining after deduction of income tax.

Lyndale Fashion Manufacturers v. Rich

The employee was engaged by the employers as a travelling salesman on a commission basis and taxed under Sch D
on his profits. His employment was terminated and he was held to be entitled to damages for wrongful dismissal. In the
tax year in which the dismissal occurred the employee's total earnings amounted to £1,343. He was awarded damages
of £495 less tax against the employers in respect of loss of earnings. The employee contended that the tax to be
deducted was to be calculated by dividing the tax that would be payable on his total assumed income rateably between
the amount actually earned and the assumed additional income of £495.
Held – (i) The employee's method was incorrect. The amount of tax to be deducted from the damages was the
difference between the actual tax paid on the employee's earnings and the tax which he would have paid on the
assumed total income.
(ii) Any expenses which might have been incurred in earning the additional income and the earned income relief
exclusively referable to the assumed additional income should be set against that assumed income only and not against
the total income.

INTEREST
Part 8.72 (3) of the CPR set out that you are to plead interest.
Section 3. of the Law Reform (Miscellaneous Provisions) Act (1955)

In any proceedings tried in any Court of Record for Power of the recovery of any debt or damages, the Court may, if it
thinks fit, order that there shall be included in the sum for which judgment is given interest at such rate as it thinks fit
on the whole or any part of the debt or damage for the whole or any part of the period between the date when the cause
of action arose and the date of the judgment:
Provided that nothing in this section-
(a) shall authorize the giving of interest upon interest; or
(b) shall apply in relation to any debt upon which interest is payable as of right whether by virtue
of any agreement or otherwise; or
(c) shall affect the damages recoverable for the dishonor of a bill of exchange.

This section gives the court a discretion:

1) as to whether to award interest or not;
2) as to what rate;
3) on what part of the damages; and for what period between the date when the cause of action arose and the
judgment.

Section 51 of the Judicature (SC) Act provides that:

"Every judgement debt shall in the SC carry interest in the rate of six per centum or such other rate per annum as the
Minister may by Order from time to time prescribe in lieu thereof, from the time of entering up the judgement, until
the same shall be satisfied, and such interest may be levied under a writ of execution on such judgement."

London, Chatham and Dover Railway Co v Southeastern Railway Co

Lord Herschell LC, ruled to give interest from the date of the action. He stated the principle which he thought
should apply in a consideration of whether or not interest should be allowed thus:
‘I think that when money is owing from one party to another and that other is driven to have recourse to legal
proceedings in order to recover the amount due to him, the party who is wrongfully withholding the money from
23
 the other ought not in justice to benefit by having that money in his possession and enjoying the use of it, when
the money ought to be in the possession of the other party who is entitled to its use.’

Central Soya of Jamaica Ltd. V Freeman

This was an appeal against quantum of damages awarded on personal injuries claim for damages for negligence in the
Supreme Court. Damages were awarded to the respondent under various headings. Special damages amounting to
$12,739 consisted of inter alia:
(a) loss of earnings for 50 weeks $50 per week and
(b) loss of earnings for 41/2 years $40 per week.
An award of $4,000 was made for the respondent's handicap in the labour market. General damages were awarded for
pain, loss of amenities and temporary impotence in the global sum of $50,000.00. There followed an award of interest
at 4% per annum on the special damages from October 10, 1978 and at 8% on the general damages as from December
21, 1979.
One of the grounds for appeal was that the learned trial judge failed to properly exercise his discretion on the award of
interest. Held: No logical distinction can properly be drawn between the method of awarding interest on special
damages and on general damages.
(a) interest be awarded on special damages at the rate of 3% from the date of the accident to the date of
judgement;
(b) interest be awarded on general damages at the rate of 3% from the date of the service of the writ to the date
of judgement.
On the literal interpretation of section 3 of the Law Reform Act a trial judge has an unfettered discretion to determine
whether or not to grant any interest at all, and if he decide at what rate the interest should be, and on what part of the
judgement, and within the parameters of the section from what time the interest should run.
The question as to how the trial judge ought to exercise his discretion in the matter of the award of interest reached the
Court of Appeal in England in the case of Jefford and Another v Gee Following this case the Jamaican courts began to
apply the 6% on general damages and 3% on special damages formula for the award of interest in negligence cases.
This 6% rate of interest accorded with the rate applicable in Jamaica for interest on judgment debts (though this was
perhaps done unconsciously).
The objective of section 51 of The Judicature (SC) Act (which speaks to the award of 6% interest on judgment debts)
was to introduce a method into the law where the exercise for effecting a change in the interest rate would be rendered
much easier by obviating the necessity of having to resort to amending legislation on every occasion for this purpose.
Parliament in Jamaica as late as 1971 legislated a method for fixing interest rates for judgement debts and it must be
assumed that no recommendation or no sufficiently persuasive recommendation has been made to the Minister since
1971 to increase the 6% rate. Accordingly the Court said that 6% was a good starting point. However the defendant
should not have to pay a higher rate of interest than a successful plaintiff can get on a judgement debt (no justification
for a higher rate of interest before judgment than after judgment).

Where a plaintiff has been guilty of unreasonable delay in bringing his action to trial, it may be appropriate for the trial
judge to make a corresponding reduction in the period for which interest is given.

Jefford and Another v Gee

It was a case in negligence in assessing damages the trial judge awarded interest at 61/2% on the general damages from
the date of the accident but refused to order interest on the special damages. Both sides appealed. The defendants
contended that no interest at all should be awarded on the general damages and certainly not on the award for loss of
future earnings, and if indeed such interest were to be awarded, the rate of 61/2% was too high, and further the period
was too long. The successful plaintiff complained that the rate of interest was too low and that he was entitled to
interest on the special damages. Further, section 22 of the (UK) Administration of Justice Act 1969 had amended the
Law Reform Act of 1934 by making the award of interest compulsory unless there were special reasons for not
awarding it.
Held:
(a) general damages awarded for pain and suffering and loss of amenities should bear interest from the date of
the service of the writ to the date of trial;
(b) interest should be at the rate available for short-term investment for money in court [then 6%];
(c) general damages awarded for loss of future earnings should bear no interest;
(d) interest on special damages should be at one half the rate awarded for general damages [3%] and should run
from the date of the accident to trial.
Lord Denning said “Interest should not be awarded as compensation for the damage done. It should only be awarded to
a plaintiff for being kept out of the money which ought to have been paid to him.”
 Interest should be awarded to a plaintiff not as compensation but for being kept out of money which ought to
have been paid to him.

 On special damages interest should, ordinarily, be awarded on the total sum of the special damages from the
date of the accident until the date of trial, at half the appropriate rate of interest allowed on the general
damages. Any recoupment of special damage from some other quarter should be taken into account in
awarding the interest.

 On damages for loss of future earnings no interest should be awarded because a plaintiff will not have kept out
of any money but on the contrary will have received it in advance.

 On damages for pain and suffering and loss of amenities interest should be awarded, at the appropriate rate, from
the date of service of the writ to the date of trial.
24
  The appropriate rate of interest on general damages should be the rate allowed on money in court placed on
short term investment account under the Administration of Justice Act 1965, ss 6, 7, and the Supreme Court
Fund Rules 1927, as amended, and the rate should be taken as the average rate so allowed over the period for
which the interest is awarded.

 To carry out the 1934 Act as amended, the court should itemise the damages; and the judgment should state the
rate of interest and the period for which it is awarded. The interest should be stated as a gross sum without
deducting tax.

 Payment into court should be made as before without regard to interest. If a plaintiff recovers more than the
payment in, apart from interest, he will get his costs and if he recovers no more than the payment in, apart
from interest, he will not get his costs from the date of the payment in and will have to pay the defendant’s
costs. In either case a plaintiff will get the appropriate award of interest irrespective of the payment in; but if
he takes the money out of court in satisfaction of his claim, he will not be entitled to interest under the 1934
Act as there will have been no judgment.

 In exceptional cases, ie, of great delay, the court may diminish or increase the award of interest or alter the
period for which it is allowed.

Wright v British Rly Board:

Lord Diplock
"My lords, claims for damages in respect of personal injuries constitute a high proportion of civil actions that are
started in the courts of this country. If all of them proceeded to trial, the administration of civil justice would break
down; what prevents this is that a high proportion of them are settled before they reach the expensive and time-
consuming stage of trial and an even higher proportion of claims, particularly the less serious ones, are settled before
the stage is reached of issuing and serving a writ. This is only possible if there is some reasonable degree of
predictability about the sum of money that would be likely to be recovered if the action proceeded to trial and the
plaintiff succeeded in establishing liability."

The COA in the Central Soya of Jamaica case made reference to this quote then said: “every word of that general
statement is an applicable in Jamaica as it is in England.”

Trinidad Transport Enterprises Ltd v DeSouza

Trial judge ordered interest on special damages but refused it on general damages.
Held: there was nothing to justify interference with the exercise of the learned judge’s discretion in awarding interest
as it was not established that he gave no weight or insufficient weight to considerations that ought to have weighed
with him, or that he was influenced by considerations which ought not to have weighed or weighed so much with him.
Heerlal v Hack Bros
One of the grounds of appeal was that the judge failed to exercise his discretion judicially by refusing to award the
appellant interest
Held: That this is not a fitting case for the award of interest on damages because the appellant is adequately
compensated by a substantial award of damages.
(The discretionary nature of the award of interest in seen in Jamaica) Telephone v

Barrymore Hill &Tisha Ann Daley.

The original trial judge had awarded interest on general damages at the interest rate of 5%. However on appeal counsel
argued that based upon judgment of Court of Appeal in Central Soya of Jamaica Limited v Freeman the rate of interest
should be 3%. Court accepted this and reduced the rate to 3% interest on Special Damages and General Damages. The
Court in its judgment though agreeing with the 3% illustrated the discretionary nature of the award of interest by
stating:
“ we are in agreement with counsel for the appellant that no specific circumstances are disclosed in the
transcript which called for an exercise of discretion by the learned judge to award interest in excess of the 3%
stated in the guidelines.”

Jamaican case of Marsha Page v Malcolm Campbell

Justice Sykes assessed special damages at 6% from February 21 st 2001 ( the date of the accident) to date of the
hearing of assessment of damages and general damages at 6% from April 8 th 2002 (date of the service of the writ) to
June 29th 2004.
Dyer & Dyer v Stone 27 JLR - Court of Appeal held trial judge erred in calculating interest on the award under the
Fatal Accidents Act from the date of the service of the writ, since in fatal accident damages, no interest is awarded on
the post-trial dependency amount. See from this case that the interest rate for fatal accidents is 3%.

INFLATION
Mohammed Ibrahim Hosein v. Camacho
The appellant was severely injured in a road accident for,which the deceased was responsible. The only issue to be
decided at the trial was the quantum of damages to which the appellant was entitled. The trial judge awarded the
appellant (inter alia) $5,000 general damages for his injuries, pain, loss of amenity and disability; he described this as
the 'conventional sum' for such an award. Also, he refused a claim for an item of special damages, namely the cost to
the appellant of legal representation at the inquest into the death of the deceased. The appellant appealed against the
amount of the award. On the questions of the proper award for general damages and the cost of legal representation at
the inquest,
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Held - It would be difficult to find a sufficient number of cases with similar characteristics to form the basis of a
'conventional sum' for damages for injuries, pain, loss of amenity and disability; however, the courts must strive to
follow the trend of judicial awards in similar cases and to take account of any fall in the value of money; in the
circumstances of the present case and with due regard to awards in other cases the award for general damages would
be increased to $8,000.

Johnson v. Sterling Products Ltd

In assessing the appropriate award for loss of amenities the court should properly consider awards in other cases and
also take into account the appellant's age and the effect of inflation.

Young v. Percival
In December 1970 the deceased, then aged 29 and married with two children, was killed in a motor accident for which
the defendant admitted liability. At the time of the accident the deceased was employed by a travel firm as area sales
manager at a salary of £2,000 per annum gross, £1,615 per annum net, with an expense allowance of £15 a week. In an
action for damages brought by his widow under the Fatal Accidents Acts 1846 to 1959 and the Law Reform
(Miscellaneous Provisions) Act 1934, evidence was given that in future years there would have been increases
in his remuneration had he continued with the same employer. That evidence took into account increases attributable
not only to the deceased's advancement in status and experience, but also to an anticipated decrease in the value of the
pound in consequence of inflation.
Held – Estimates or forecasts given in evidence of future earnings increases referable solely to the anticipation of
future inflation were to be excluded in assessing damages

Lim Poh Choo v. Camdem & Islington Health Authority

Although the risk of future inflation could be taken into account in exceptional cases, as a rule of practice damages
were to be assessed without regard to the risk of future inflation, and only if that assessment did not result in fair
compensation was the award to be increased. In particular, it was not unjust that a plaintiff was placed in the same
position as others who had to rely on capital for their future support, having regard to the fact that the plaintiff would
receive a capital sum available for investment, which, it was to be assumed, would cope with future inflation. Although
the judge ought not to have allowed for inflation in the multiplier, and ought to have fixed the multiplier by reference
to a pre-accident, rather than a post-accident, expectation of working life, the multiplier in fact used accorded with the
plaintiff's pre-accident expectation of working life, and his award would therefore not be disturbed on that account.
Mitchell v. Mulholland
Although it was proper to increase an award of damages to take account of a reduction in the value of money at the
date of the award, an award which was proper at the date when it was made was not to be increased merely because the
sum awarded might have decreased in real value in five or ten years time; once the award had been made the plaintiff
must protect himself from a subsequent fall in value of money by prudent investment.
Evidence as to 'productivity inflation' was in principle admissible as a relevant factor in assessing damages for the loss
of ability to earn; evidence of an increase in productivity in future years which would have increased the defendant's
earning power must, however, be directed to the particular industry and the particular firm in which the defendant was
employed; the evidence in the present case, relating solely to projected increases in national prosperity, was much too
speculative and was accordingly inadmissible.

MITIGATION
The principal meaning of the term ‘mitigation’ concerns the avoiding of consequences of a wrong whether tort or
breach of contract.
(i) The plaintiff must take all reasonable steps to mitigate the loss to him consequent upon the defendant’s
wrong and cannot recover damages for any such loss which he could thus have avoided but has failed,
through unreasonable action or inaction, to avoid, i.e. the plaintiff cannot recover for avoidable loss.

(ii) Where the plaintiff does take reasonable steps to mitigate the loss to him consequent upon the D’s wrong,
he can recover for loss incurred in so doing; this is so even though the resulting damage is in the event
greater than it would have been had the mitigating steps not been taken, i.e. the plaintiff can recover for
loss incurred in reasonable attempts to avoid loss.

(iii) Where the plaintiff does take steps to mitigate the loss to him consequent upon the D’s wrong and these
steps are successful, the D is entitled to the benefit accruing from the P’s action and is liable only for the
loss as lessened; this is so even though the P would not have been debarred under the first rule from
recovering the whole loss, which would have accrued in the absence of his successful mitigating steps, by
reason of these steps not being ones which were required by him under the first rule, i.e. the plaintiff
cannot recover for avoided loss.

The two subsidiary or residual meanings of ‘mitigation’

1. In certain torts, particularly those of defamation, false imprisonment and malicious prosecution, the measure
of damages may be affected by the conduct, character and circumstances of both P and D. These factors are
said to go in aggravation or in mitigation of the damage. Thus, the damage is most likely aggravated, and the
damages correspondingly increased by the D’s bad motives or wilfulness. This meaning of the term mitigation
simply deals with particular items which go to show the injury is not as great as would prima facie appear. It
is important to look and see what the actual injury is quite apart from subsequent steps taken by the P.

26
 2. Where the P suing the D in respect of his failure to perform a contract is also himself in breach of contract, the
loss thereby accruing to the D may in certain cases go in mitigation or reduction of the amount which the P can
recover in his action.

The rule as to avoidable loss

The damage resulting from a wrongful act, whether tort or breach of contract, may be lessened by well-advised action
on the part of the P. In such circumstances the law requires him to take all reasonable steps to mitigate the loss
consequent on the D’s wrong, and refuses to allow him damages in respect of any part of the loss which is due to his
neglect to take such steps.

British Westinghouse v. Underground Railway

Viscount Haldane LC said: “The fundamental basis is thus compensation for pecuniary loss naturally flowing from
the breach; but this first principle is qualified by a second, which imposes on a P the duty of taking all reasonable
steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due
to his neglect to take such steps.”

- The principle applies equally to non-pecuniary loss and to tort e.g. a P who is injured and fails to take
reasonable steps to obtain medical aid and thereby fails to cut down the pain and suffering resulting from the
injury.

- The ‘duty’ is not actionable or one which is owed to anyone by the P. He cannot owe a duty to himself; the
position is similar to that of a P whose damages are reduced b/c of contributory negligence. Pearson LJ in
Darbishire v. Warran said “…the P is not entitled to charge the D by way of damages with any sum than that
which he reasonably needs to expend for the purpose of making good the loss…he is fully entitled to be as
extravagant as he pleases but not at the expense of the defendant.”

- The onus of proof is on the D. If he fails to show that the P ought reasonably to have taken certain mitigating
steps, then the normal measure will apply.
Selvanayagam v. University of the West Indies
PC held that where a physically injured P had refused to undergo medical treatment to alleviate his injury, the burden
was on him to prove that he had acted reasonably, a burden which he was found to have discharged.
- This case seems to have gone against the established authorities and subsequent decisions of the COA
in England. McGregor in his book McGregor on Damages submit that this decision was reached per
incuriam.

Payzu v. Saunders: Bankes and Scrutton LJ said that the question of mitigation of damage is a question of fact. The
effect of this is that once a court of first instance has decided that there has been or has not been a failure to mitigate, it
is difficult to persuade an appellate court to come to a different view.

Geest plc v. Lansiquot (READ CASE)

On the assessment of damages for personal injuries, the onus of proof on the issue of mitigation falls on the defendant
and, if the defendant intends to contend that a plaintiff has failed to act reasonably to mitigate his or her damage, notice
of such contention should be clearly given to the plaintiff in sufficient time before the hearing to enable the plaintiff to
prepare to meet it (if there are no pleadings, notice should be given by letter).

Need to mitigate before contractual breach

A P need not take any steps to mitigate until a wrong has been committed against him. Where a party to a contract
repudiates it, if the other party does not accept it there is no breach of contract, and the contract subsists for the benefit
of both parties and no need to mitigate arises. H/v if the repudiation is accepted this results in an anticipatory breach
of contract in respect of which suit can be brought at once for damages and although the measure of damages is till
prima facie assessed as from the date when the D ought to have performed the contract, this amount is subject to being
cut down if the P fails to mitigate his acceptance of the repudiation. This is best illustrated by sale of goods cases. The
same principle applies mutatis mutandis where it is the buyer who has repudiated.

Shindler v. Northern Raincoat Co (law as it relates to employment contracts)

The D company in the course of the P employment by them under a ten-year agreement, wrongfully repudiated the
contract by informing the P that they would not continue to require his services as from an apparently unspecified later
date, but only removed him from offeice at an extraordinary general meeting of the company some months after this
repudiation. HELD:- the P had no duty to mitigate by accepting the alternative offers of employment b/s the D’s
wrongful repudiation and their removal of him from office b/c during this period there had been no breach; the P had
not accepted the repudiation and the “defendants had a locus poenitentiae.”

Need to mitigate by discontinuing contractual performance

A P need not take steps to mitigate loss even after the D’s performance of the contract which he has repudiated falls
due by accepting the repudiation and suing for damages. He may instead, where he can do so w/o the D’s assistance,
perform his side of the contract and claim in debt for the contract price.
27
 - Even if this involves incurring expense in the performance of the contract which, in face of the D’s
repudiation, is rendered useless, the P is not required to minimise the loss by accepting the repudiation and
suing for damages.

White and Carter v. McGregor

P, advertising agents, contracted with the sales manager of the D garage for 3 years. The D on hearing of the contract
wrote at once to the Ps to cancel it but the P refused, displayed the advertisements in accordance with the agreement
and sued for the contract price. HELD:- HL by a majority said that the Ps were entitled to carry out the contract and
claim in debt for the price, and were not obliged to accept the repudiation and sue for damages. H/v Lord Reid gave 2
qualifications, i.e.:
i. If it can be shown that a person has no legitimate interest, financial or otherwise, in performing the
contract rather than claiming damages he ought not be allowed to saddle the other party with the additional
burden with no benefit to himself;
ii. If a party has no interest to enforce a stipulation, he cannot in general enforce it.

These qualifications have been relied on and used to distinguish White and Carter in subsequent cases.

Standard of conduct P must attain when assessing what steps should have been taken by him

P must act reasonably and the standard of reasonableness is not high in view of the fact that the D is an admitted
wrongdoer. Whether the P has acted reasonably in every case is a question of fact and not law.

a) A P need not risk his money too far.

b) A P need not risk his person too far in the hands of surgeons (Selvanayagam case)
c) A P need not have an abortion to end an unwanted pregnancy.
d) A P need not destroy or sacrifice rights or property of his own.
e) A P need not take steps to recover compensation for his loss from parties who, in addition to the D, are liable
to him.
f) A P need not prejudice his commercial reputation.

g) A P will not be prejudiced by his financial inability to take steps in mitigation: Clippens Oil Co v. Edinburgh
& District Water Trustees per Lord Collins “In my opinion the wrongdoer must take his victim talem qualem,
and if the position of the latter is aggravated b/c he is w/o means of mitigating it, so much the worse for the
wrongdoer, who has got to be answerable for the consequences flowing from his tortuous act”.
In the famous case on remoteness of damage, Liesbosch Dredger v. Edison, Lord Wright cited this dictum of Lord
Collins and concluded that it was not in point since it was “dealing not with the measure of damage, but with the
victim’s duty to minimise damage, which is quite a different matter.”
- He casts no doubt on its correctness (accepted it) and it has been applied in subsequent decisions.

Lagden v. O’Connor [2004] HL

An impecunious innocent claimant could recover damages to cover higher rates charged by a credit hire company
where he had no alternative but to use its services to enable him to obtain a replacement car while his own vehicle was
being repaired. As elsewhere a negligent driver had to take his victim as he found him. Common fairness required that
if an innocent claimant could not afford to pay car hire charges, so that left to himself he would be unable to obtain a
replacement car to meet the need created by the negligent driver, then the damages payable under that head of loss
should include the reasonable costs of a credit hire company. It meant that in measuring the loss suffered by an
impecunious plaintiff by the loss of use of his own car the law would recognise that, because of his lack of financial
means, the timely provision of a replacement vehicle for him cost more than it would in the case of his more affluent
neighbour. When considering what was meant by impecunious, it had to be borne in mind that lack of financial means
was, almost always, a question of priorities. In the context of the instant case, what it signified was the inability to pay
car hire charges without making sacrifices the claimant could not reasonably be expected to make.

Where the P has taken precautions against injury by way of insurance, pension, or the like, and is then injured by the
wrong of the D, the damages recoverable will not be diminished by the amount of insurance, pension or other such
moneys. (Bradburn v. GWR)

Exceptions to the doctrine

- Where the cause of action is trespass and the facts are that D is in occupation of the P’s land and the P sues for
damages in trespass, P has no obligation to mitigate. At all times P will be asserting his or her right to the
recovery of the land. The law in that context attaches no obligation to mitigate.
- Equally if P sues in detinue and requires the recovery of the res , the P on the face of it has no obligation to
mitigate by obtaining another res. However, we may have to consider what the P uses the thing for eg if it’s to
get to work, we must consider the daily cost of his transport less the cost of operating the vehicle.

UNIFORMIATY OF AWARDS
Tyson v. Jugmohan
Both parties to a motor car collision denied liability, each alleging that the other was overtaking a car in front of him
and was on the incorrect side of the road, and each claiming to be either stationary or moving very slowly on the
extreme left of the road. Negligence was apparent on the part of the driver of the overtaking car. The plaintiff failed to

28
call any witnesses. Despite evidence given on the defendant's behalf, the court found in favour of the plaintiff on the
basis of the measurements and the other evidence.
The plaintiff was about fifty years of age at the time of the accident, and a barrister-at-law. He was rendered
unconscious by the collision, and fully regained consciousness about a half an hour after. He was discharged from the
General Hospital the same day after an X-ray had been taken. Two days later he was admitted to the Community
Hospital and some 5 days after that he was operated on to correct a fracture of the cup of his right pelvis, and
consequent dislocation of the thigh bone. Over a three-month period he progressed gradually from walking on crutches
to using a single stick, which he used for about 18 months. Medical opinion indicated fixed flexion deformity in the
right leg of some 45° with a 30 per cent permanent partial disability. Possible further deterioration could give rise to
arthritis.
Held: (i) that the defendant was negligent and wholly liable;
(ii) that general damages would be awarded in conformity with discernible trends of awards in Trinidad and Tobago
and other Caribbean countries, though in discerning such trends attention need not be restricted to cases in which the
nature of the injuries and gravity of the consequences suffered are closely similar to the claimant's. Consideration
would be given to the nature of the injury, which while not affecting the plaintiff's immediate future earnings but only
interrupting his practice, did curtail his enjoyment of life.

White v. Morris
In the early morning of 9 March 1962, as the plaintiff's car and the defendant's motor lorry passed each other, the right
sides of the vehicles came into contact with the result that the plaintiff's right arm which was resting on the sill of the
driver's window was severed six inches below the shoulder by an iron loop on the defendant's lorry. In an action
brought by the plaintiff to recover damages for personal injuries and damage to his car, he alleged that the defendant's
negligence was the sole cause of the accident. At the spot where the accident occurred the road inclines upwards to
form a sort of “hump” and there are metal studs along the centre line of the road. The plaintiff's case was that the
defendant came over the “hump” on the plaintiff's side of the road to such an extent that the evasive action which he
took by pulling to the extreme left side of the road could not prevent the defendant's lorry from touching his vehicle.
The defendant alleged that the plaintiff's negligence caused the accident in that he was driving too fast and driving with
one hand. Prior to the accident the plaintiff was a communications officer earning US $139.88 per week. He was not
able to resume this occupation and was subsequently employed as a switchboard attendant at the same salary. He lost
all reasonable prospects of promotion which were open to him of becoming chief communications officer or manager.
The trial judge found the defendant solely to blame for the accident and awarded the plaintiff $25,000 as general
damages. On the question as to the legal principles with respect to factors to be taken into account in assessing
damages,
Held: (i) the legal principles as to the factors to be taken into account in assessing damages are, generally speaking, the
same as those applicable in England, and it is proper when making such assessment that regard should be paid to the
range of awards in comparable cases determined in the same jurisdiction or in neighbouring localities where similar
social, economic and industrial conditions exist. Regard should also be paid to the alterations in the value of money
from time to time;
(ii) the plaintiff's injuries which were of considerable gravity were attended with much pain and suffering. They
resulted in his becoming a one-armed man, and so caused him to lose not only all reasonable prospects of promotion
open to him in his field of employment but also handicapped him in regard to future employment in the labour market.
On account of the loss of amenities which the plaintiff suffered as a result of the injuries and their adverse effect on his
pecuniary prospects an award of $25,000 general damages would be appropriate.
Judgment for plaintiff.

Yarde & Subryan v. McWatt

In the assessment of damages in an action for personal injuries efforts should be made by courts to achieve some
degree of uniformity in awards in respect of injuries of a particular type. In so doing, regard must be paid to awards by
courts in near locality and to countries where similar social economic and industrial conditions exist.

Heeralall v. Hack Bros

The plaintiff was knocked down by a lorry on the public road and as the result suffered an amputation of his left leg
above the knee. In the High Court he sued the defendants who were employer and employee/driver respectively and
recovered a total of $26,544 general and special damages. However, on appeal both general and special damages were
attacked as being erroneous and unrealistic as an estimate of the damages suffered.
The trial judge made no award of a conventional sum in respect of the loss of the plaintiff's leg and in endeavouring to
calculate loss of prospective earnings found that the plaintiff earned a livelihood from three main sources of income,
(i) $2,300 per annum from rice farming; (ii) $624 per annum from market gardening; and (iii) $873.60 per annum
from the sale of milk from four cows. He also found that the injury forced plaintiff to sell his four cows for $2,000 and
that this amount had been put into the savings bank where it was earning interest. He thereby concluded that the
plaintiff would have suffered “hardly any loss” of income from the sale of milk, which caused him completely to
ignore item (iii) above when computing the plaintiff's future loss in arriving at the figure of $17,544 by the use of a
multiplier of 12. The judge merely divided the sum of the annual incomes from rice farming and market gardening by
two because he estimated the plaintiff would only be able to earn, after payment of disbursements, about one-half of
what he previously earned.
On appeal it was contended (i) that there was no justification for the judge's conclusion that plaintiff would earn only
one-half of what he previously did; (ii) that there was error in excluding from the computation plaintiff's annual
earnings from the sale of milk for the reason that he suffered “hardly any loss”, but rather was in a position to gain
income for the future by way of the interest derived from investing the $2,000; (iii) that the multiplier of 12 was too
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low and that 16 would have been a more realistic figure; (iv) that the court failed to award plaintiff any conventional
sum in respect of the loss of the leg; (v) that the court failed to exercise its discretion judicially when it refused to
award the appellant interest under the law.
Held: (i) that the judge misapprehended the facts when he concluded that with paid help the appellant could have
mitigated his loss and earned annually roughly one-half of his pre-accident income from the kitchen garden and rice
cultivation;
(ii) that there was ample justification for this conclusion and for the course taken by the trial judge. The matter was a
difficult one and he did the best he could in the circumstances. It was essential to determine what was plaintiff's
immediate loss of earnings from the pursuits in which he was engaged, ie, those that were adversely affected by the
accident if his prospective loss of earnings was to be reasonably calculated. To find this loss, it was necessary to
determine what he was capable of earning in his semi-disabled state and deduct such earnings from that which he
earned in his pre-accident condition. It was necessary to do this as a preliminary to converting such loss of earning
capacity into a capital sum by using an appropriate multiplier;
(iii) that it is not an unreasonable assumption to make that plaintiff's earnings as from now would not measure up to the
standard of his pre-accident earnings. It is estimated he would earn at the rate of one-half of what he had been earning
at the date of the accident;
(iv) that it was wrong in principle to leave the milk sales money out of the count for the reason the trial judge did so.
The test is not if he could have invested this sum, but whether it was so unreasonable not to do so that the plaintiff
should not get the benefit of the loss from this source of income;
(v) that to regularise the position it was necessary for the judge to bring into computation the $2,000 for which the
cows were sold when calculating plaintiff's prospective loss of income, because if plaintiff were to be allowed to have
his earnings from the cows aggregated with the other two annual earnings, and yet be allowed to retain the proceeds
without bringing them into account, that would infringe the equitable principle of equality of burden and benefit;
(vi) that the trial judge was not shown to err when he found the appropriate multiplier to be 12. His finding should not
be disturbed as that figure is not unduly low in all the circumstances;
(vii) that there is no established discernible pattern or trend of awards of compensation under the head pain, suffering
and loss of amenities in the reported cases in Guyana;
(viii) that the award of $3,500 for pain, suffering and loss of amenities was much too low and the scale goes down
heavily against it; but where it is thought fit to make a comparison with a view to ascertaining a conventional figure to
be awarded as damages it is preferable to leave it to the sound judgment and good sense of proportion of the trial judge
assisted by counsel, to determine in every case as it arises, subject to appellate review, the proper adjustment to be
made in using an award in a comparable English case. In the use of comparable cases as a guide to assessment, the
reduction in the value or purchasing power of the pound sterling or of the dollar must be taken into account. The
proposition that the failure to employ one of the two conventional methods is, per se, an error in principle, cannot be
accepted, although in the majority of cases a judge will and probably ought to use one or the other;
(ix) that the trial judge erred in not making the basic and necessary award of a conventional sum for loss of the
plaintiff's leg. This lies at the root of an assessment for general damages, and now Guyana is more or less committed to
a policy of socialist orientation, it would not be entirely right to regard English decisions in the light they were
formerly held, viz, as the sole “pointers to a possible result” when comparing conventional awards for damages in
personal injuries cases;
(x) that this is not a fitting case for the award of interest on damages because the appellant is adequately compensated
by a substantial award of damages.

Associated Industries Ltd v. Kumar Ragnauth

The respondent was an active sportsman who also enjoyed outdoor pursuits such as hunting and fishing. At the age of
36 years, 5 months, he was injured in a motor accident. He suffered extensive deep lacerations on the scalp, multiple
abrasions and bruises all over his body, fractures of the right tibia, fibula and humerus. He spent three months in
hospital and underwent three operations. He suffered extensive and lasting pain and, even after discharge from
hospital, suffered pain in the right hand, right leg and both hips (from which bone had been grafted). His right leg was
3/4 inch shorter than his left, and he was no longer able to participate in sport or other outdoor activities which he had
previously enjoyed. The trial judge awarded the respondent $17,000 for pain, suffering and loss of amenities. On
appeal.
Held, allowing the appeal as to quantum of damages, the award for pain, suffering and loss of amenities was
inordinately high by comparison with other awards, even allowing for the constant decline in the spending power of
money; $12,000 would be a fair and reasonable assessment.

FATAL ACCIDENTS
Khan v. Khan
In an action brought by the respondent in her capacity as the administratrix of her deceased husband's estate, and in her
own capacity as a result of a motor accident in which her husband died, the trial judge found that the deceased was
guilty of contributory negligence to the extent of three-fifths, and awarded damages against the appellant, the driver of
the motor vehicle on that basis. Having awarded a sum in respect of loss of expectation of life and another for funeral
expenses the judge based his award in respect of the loss to the deceased's family on the deceased's annual income.
Held: (i) that an appellate court will not interfere with the trial judge's finding and apportionment of contributory
negligence unless he has misdirected himself, or has failed to take some vital matter into account;
(ii) that an award of damages made under Accidental Death and Workmen's Injuries (Compensation) Ordinance, Cap
112 [G] must be calculated on the financial loss or loss of support which the dependants of the deceased have suffered
as a result of the accident, and any sums awarded under the Law Reform (Miscellaneous) Provisions Ordinance, Cap 4
[G] must be deducted therefrom.

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Mykoo v. Katee
The respondent successfully sued the appellant for damages for the death of the respondent's son in a motor accident.
She sued in her capacity both as a dependant and as administratrix of her son's estate.
A motor cycle ridden by the deceased collided with a vehicle driven by the appellant. The evidence of the sole eye-
witness for the plaintiff-respondent was rejected. The trial judge, however, accepted the evidence of the investigating
officer. The trial judge rejected the appellant's version of the accident but preferred the respondent's case that the
appellant's vehicle emerged from his private premises on the public road at a time when it was unsafe to do so.
On appeal the appellant disputed liability and contended that the trial judge erred in not taking into account the sum of
$1,000 awarded the respondent as administratrix for the deceased's loss of expectation of life in awarding the sum of
$5,000 by way of compensation under the Compensation for Injuries Ordinance.
Held: (i) that in the circumstances liability was a question of fact, and the findings of fact made by the trial judge
would not be disturbed;
(ii) that the judge had failed to consider the principle that prima facie an award of damages to a plaintiff in respect of
dependency on a deceased should be reduced by the amount awarded by reason of the death of the same deceased.

Jaichand Persaud v Vincent Lewis

The deceased contributed a substantial part of his wages partly for the sole use and benefit of his mother, and partly
towards the education of his brothers and sisters. On a claim under the Accidental Deaths and Workmen's Injuries
(Compensation) Ordinance, Cap 112 [G] for the payment of compensation to the deceased's dependants, the trial judge
made an award in respect of the brothers and sisters of the deceased.
Held: on appeal (CUMMINGS JA, dissenting), that the brothers and sisters of the deceased were not dependants within
the meaning of the Ordinance (s 4), and that the trial judge ought to have determined the extent of the mother's
dependency, and to have made an award on that basis only.
Appeal allowed.

Hubah v. Ramjass
Following the death of her husband in a road accident on 23 March 1952, the plaintiff as his widow received the
proceeds of an insurance policy on his life amounting to $2, 500, a gratuity of $2, 400 from the deceased's employers,
and from the Widows and Orphans Pensions fund to which the deceased was a contributor she received $80 per month
for herself and $100 per month for their two children, Diana Lyn, born on 28 March 1948 and Carol, born on 20
August 1952. The plaintiff remarried on 16 May 1958, whereupon her allowance from the Fund of $80 per month
ceased. At the date of his death the deceased was thirty five years of age and earning $200 per month out of which he
contributed $134 to his home. It was anticipated that but for his death the deceased would have continued in his
employment and earned a salary of $7, 200 per annum in approximately twenty years. During the lifetime of the
deceased the plaintiff worked for $180 per month which had increased to $240 at the time of her remarriage when she
stopped working. Her second husband, since her remarriage, adequately maintaining maintaining and supporting her
and her two children.
Held: in assessing the damages the following factors factors should be taken into account:
(i) so far as the plaintiff was concerned: (a) that her dependency on the deceased terminated on her remarriage on 16
May 1958; (b) the financial benefits that had accrued to her on husband's death; (c) income tax deductions;
(ii) so far as the children were concerned: (a) that the plaintiff's second husband was under no legal obligation to
support them and may, with impunity, cease supporting them at any time; (b) the financial benefits that accrued to
them upon the death of the deceased; and (c) income tax deductions. Order accordingly.

TORTS AFFECTING CHATTELS

DAMAGES TO AND DESTRUCTION OF CHATTLE

Personal damage or destruction of goods may result from a large variety of different torts of which trespass is the
oldest and negligence the most prolific. Most of the cases in which the measure of damage has been worked out have
involved damage or destruction of ships, generally by collision. The principles expounded in these cases are of
universal application.
- The normal measure of damage is the amount by which the value of the goods damaged has been diminished.
In ship collision cases, this has invariably been taken as the reasonable cost of repair.

The cost of repair is appropriate only if in the circumstances it is reasonable for the plaintiff to effect the repair; it
might be cheaper to buy a replacement on the market and sell the damaged goods for what they will fetch. (Compare
Darbishire & O’Grady)

Darbishire v. Warren
Harman LJ said where “it can be proved that the cost of repair greatly exceeds the value in the market of the damaged
article” this would be an exception to the rule.
The P’s second hand shooting brake, which was reliable, suited his needs, and had been kept in good repair by him,
was damaged by the D, and the P repaired it at a cost of $192 despite advice from the repair garage and his insurers
that repairs would be “uneconomic”. There was evidence that it would have been difficult to get a replacement of the
particular model in the second-hand market, but that similar shooting brakes could be had for $80 to $100. The COA
held that in the circumstances the P, in having the car repaired at a cost exceeding its market value instead of trying to
replace it with a comparable car at the market price, had failed to mitigate his loss and was entitled to recover not the
cost of repair, but only the lower market value. The COA pointed out that the P may have acted reasonably as far as he
was concerned in having the car repaired but the relevant question was whether he had acted reasonably as between
himself and the D in view of his duty to mitigate, a question which had to be considered from the point of view of a
businessman.
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O’Grady v. Westminister Scaffolding Ltd
Repair costs were allowed in excess of the car’s market value. The car was the apple of the owner’s eye, and had,
through special work done on it, become a unique article thus making the standard market value irrelevant.

Where the ship which has been damaged is not profit-earning either because she is used for utility by public bodies or
because she is used for pleasure, and the P does not hire a substitute during the period of repair, difficulties arise with
regard to the head of damage representing loss of use. In The Greta Holme, the argument put forward by the D was
that in such a case the P has not suffered any pecuniary loss, beyond out of pocket expenses by being deprived of the
ship during the time required for repair and that he ought therefore to be limited to damages representing out-of-pocket
expenses, such as costs of repair and wages still paid to the crew. The HL “corrected the error” and decided that in
such a case general damages might be recovered.
In this case the damaged ship was a dredger and the damage resulted in a delay in the dredging, the Ps not having gone
to the cost of substituting a new dredger while the damaged one was repaired. The HL in reversing the COA decision,
allowed general damages for the loss of use while the dredger was undergoing repairs. Lord Watson said that the
principles applied by the COA would entail the result “that a corporation who invest large sums of money in a
dredger, or in any other article which they intend to use, and do use continuously, for purposes which are of interest to
them, and protect the pocket of the ratepayers, although they are not productive of private gain, can recover from the
wrongdoer the cost of repairing injury to these articles, but are not entitled to recover damages from the person who
deprives them of the use of such articles w/o lawful cause.”

This decision was followed by the HL in The Mediana. In both cases the P was the Mersey Docks and Harbour
Board, a public authority deriving its funds from the rates and not entitled to make or distribute profits. The damaged
ship in this case was a lightship.
In this case the place of the damaged lightship was taken during her repair by another lightship belonging to the P
harbour board, the substituted ship being kept expressly for the purpose of such an emergency. The HL held that the Ps
were entitled to substantial damages for the loss of the use of the damaged lightship. Lord Halsbury LC said: “Where
by the wrongful act of one man something belonging to another is either itself so injured as not to be capable of being
used or is taken away so that it cannot be used at all, that of itself is a ground for damages.”

- It is to be noted that these two cases did not help in establishing how the measure of such damages is to be
calculated.
The amount of damages awarded under this head, where there is no substitute ship hired and no stand-by ship kept
available, is generally to be calculated on the basis of interest upon the capital value of the damaged ship at the time of
the collision, this value being ascertained by taking the original cost and deducting depreciation.

The S.S. Chekiang

The HL refused to disturb the registrar’s award in which damages for loss of use of an Admiralty light cruiser had been
calculated on the basis of 5% interest upon the capital value of the ship at the time of the collision, this value being
ascertained by taking the original costs and deducting depreciation.

Where a stand-by ship has been kept available by the P, the calculation is made upon the value of the stand-by itself.

The S.S. Susquehanna

The HL held wrong the registrar’s award for the loss of use of an Admiralty oil tanker, which he had based upon the
tanker’s commercial value if properly chartered, b/c the tanker would not have been hired out during the period of
repair. Interest on the stand-by ship form the correct calculation, h/v, only if the stand-by ship is in fact substituted for
the damaged ship.

Birmingham Corporation v. Sowsberry

In applying these rules evolved in the cases concerning ships to the assessment of the proper award in respect of
damage to a city corporation’s omnibus, Geoffrey Lane J assumed that the earlier authorities had established two
possible methods of calculation of damages, which he stated as “the interest on capital and depreciation method
exemplified in The Chekiang” and “the method of cost of maintenance and operation.” He then proceeded to apply the
latter since “the standing cost basis of calculation did not suffer from possible fluctuations in capital value and interest
rates, and provided a reasonably stable basis for calculation as fair to both sides as could be devised.” The P were
entitled to the aggregate daily standing cost charge for the days when the use of the vehicle was lost, there being no
suggestion that the daily rate was other than an accurate estimate of the cost of running an omnibus by a reasonably
efficient organisation.

Bruce v. Rammarine
A motor lorry which the appellant bought for $4,000 in October 1967, was involved in a collision in February 1968.
The appellant repaired the vehicle at a cost of $2,810 which was included in her claim for $3,985 as special damages.
Accepting an unreliable estimate of $1,000 as the value of the vehicle at the time of the collision the trial judge
awarded the appellant $640 which, when calculated on the basis of a salvage value of $600, included special damages
of $400 for loss of the lorry. The trial judge held that the lorry was not economically repairable.
Held: (i) that the rule of liability in common law cases is the same as in admiralty cases and damages are therefore
awarded on the principle of restitutio in integrum, that is to say, to put a plaintiff in the same position as though the
damage had not happened.

32
(ii) that the cost of a complete repair of all damage is recoverable by the appellant, notwithstanding that the result of a
complete repair may be to render the vehicle more valuable than it was before the collision.
(iii) that if the charges are extravagant they must be reduced, but for necessary repairs the owner has a right to be
reimbursed; and the evidence of skilful persons who saw the vehicle after the collision is the best proof of that
necessity.
Appeal allowed. Case remitted to High Court for a fresh assessment of special damages.

DETINUE AND CONVERSION

General and Finance Facilities Ltd v. Cook Cars (Rowford) Ltd

A successful plaintiff in an action in detinue who obtains judgment for the return of the detained chattel or recovery of
its value and damages for its detention is entitled to have assessed separately:
(i) The value of the chattel at the date of the assessment; and
(ii) The damages sustained by the plaintiff up to that date.

Galloway v. McLaughlin

Sachs v. Miklos
In 1940 a bailor arranged with a bailee that the latter should gratuitously store his furniture in her house. In 1944 the
bailee, wishing to terminate the bailment, wrote to the bailor at his supposed address, requesting him to remove the
furniture. Receiving no reply, she wrote once more stating her intention, failing instructions, to sell the furniture, and
again received no reply. Attempts were also made by telephone to get in touch with the bailor, but without result. In
July, 1944, the furniture was sold by auction and realised £13. In an action for detinue and conversion, commenced in
1946, the bailor claimed the current value of the furniture, which was assessed at £115.
HELD:- the bailee was not an agent of necessity and in selling the furniture was guilty of conversion. While the
measure of damages for both conversion and detinue was usually the value of the goods at the date when judgment was
given, nevertheless, if the bailor knew or ought to have known at an earlier date that the conversion had taken place or
was about to take place and took no immediate steps to recover the goods, the measure of damages was the value of
the goods at the date of his knowledge or supposed knowledge and not the date when judgment was given.

Rosenthal v. Alderton
In an action of detinue it was contended by the defendants (i) that the value of the goods detained and not subsequently
returned should be assessed as at the date when the cause of action arose, i.e. when the defendants had refused the
plaintiff's claim for the goods; (ii) that the value of such goods as had been wrongfully sold by the defendants should
be assessed as at the date of sale.
HELD:- The value of the goods detained and not subsequently returned should be assessed as at the date of judgment
or verdict.
- The same principle applied whether the goods had been converted (provided that the plaintiff was not aware of
the conversion at the time) or whether the defendants failed to re-deliver them for some other reason. The
defendants could not improve their position by reason of their own misconduct.

Munro v. Wilmot
By permission of the licensee the owner of a motor car left it for nearly three years in the yard of an inn. The licensee
found that it was causing difficulty to drivers of vehicles using the yard, particularly ambulances of the St John's
Ambulance Corps, to whom a garage on the premises was let. Being unable to trace the owner, he had repairs carried
out on the car at a cost of £85, and then had it sold by auction for £105, less commission amounting to £5. The value of
the car was £120 at the date of judgment.
HELD:- The doctrine of agency of necessity could be applied to goods stored in premises, if at all, only in a case of
emergency necessitating the disposal of the goods which did not exist here, and, accordingly, the licensee was liable to
the owner for detinue and conversion of the car.

- The measure of damages for the conversion and in detinue was the value of the car at the date of judgment less
any increase in value attributable to the expenditure of money on it by the licensee, and judgment would,
therefore, be given for the plaintiff for £35.

Strand Electronic Co v. Brosford Entertainment Ltd

The defendants, who were negotiating for the sale of a theatre to BT, Ltd having allowed that company to go into
possession before completion, the plaintiffs, in the ordinary course of their business, hired to BT Ltd protable switch-
boards to control the stage lighting of the theatre. BT Ltd being unable to complete the purchase of the theatre
informed the plaintiffs that they were willing to return the equipment to them, but were prevented from doing so by the
defendants who had taken possession of the theatre. The plaintiffs demanded from the defendants the return of the
equipment, but the defendants retained possession of it. On the question of damages:
HELD:- The plaintiffs were entitled to a sum representing a reasonable charge for the hire of the goods from the date
on which the defendants took possession of them to the date of the return of the goods.

33
Where a defendant has detained and used a chattel of the plaintiff which the plaintiff, as part of his business, hires out
to users, the measure of damages in an action for the detinue of the chattel is a reasonable sum for the hire of the
chattel during the period of the detention.

The Arpad (Read case…confusing…clarify)

Whether an action in respect of the non-delivery or short delivery of goods is in tort (for conversion) or in contract (for
breach of the contract of carriage) circumstances peculiar to the plaintiff, such o & a sub-contract entered into by him
and not communicated to the defendant) must be excluded from consideration in assessing damages although in a
proper case such a sub-contract might be used as evidence of value. The matter to be ascertained is the value of the
goods at the date of the non-delivery or short delivery, and so a sub-contract which the plaintiff has made at a date far
removed from that of the non-delivery or short delivery must be ignored in assessing the damages. If there is a market
at the time when the goods should be delivered in which goods of a kind fit to implement the contract can be bought
and sold, the measure of damages is the value of the goods ascertained by the market price of identically similar goods.
Where there is no such market, the value must be otherwise ascertained, and the price at which the plaintiff has sold
them a substantial time before the non-delivery or short delivery is not evidence of their value at the time of the breach.

The Winkfield

Wilson v. Lombark
The plaintiff, a motor car dealer, bought car for £470 from a vendor who had no title in it to sell. The car needed repair,
and the plaintiff left it at a garage, where he had had dealings for many years and where he had monthly credit terms.
The repairs were completed at a cost of £27 14s, and the car was placed on the forecourt of the garage. While the car
was there a representative of the defendants, thinking that they had legal title to the car, took it away. The defendants,
who in fact had no legal title to the car, although there had been a purported sale to them, subsequently discovered in
whom the legal title was vested and delivered the car to the true owner. In an action by the plaintiff for trespass by the
defendants,
HELD:- Notwithstanding that the defendants had delivered the car to the true owner, they were liable in trespass to the
plaintiff, who was thus entitled to recover in damages the full value of the car (£470) together with the cost of the
repairs, for in the circumstances the plaintiff had not lost possession of the car while it was at the garage, nor had the
garage acquired a lien on it in view of the course of dealings between the garage and the plaintiff

DAMAGES IN CONTRACT

Anglia Television Ltd v. Reed [1971] 3 All ER 690

The claimants with the intention of mounting the film production of a play, sought to engage the defendant for the
main part. For the purposes of the production they incurred expenditures to the extent of some $2,750 including fees
for a director, designer, stage manager and supporting artists. The contract between the claimants and the defendant
was made but a few days later he repudiated. In an action for breach of contract, the claimants did not claim profits
that the play would have made since they conceded that these could not be ascertained. They sought instead to recover
the $2,750 expenditure in organising the production. The COA affirmed the lower court’s judgment awarding the full
$2,750.
- This may be viewed as the award of the reliance loss to claimants who could not directly prove their
expectation loss.
- Many of the expenses recovered were pre-contractual
Lord Denning:
If the plaintiff claims the wasted expenditure, he is not entitled to the expenditure incurred after the contract
was concluded. He can claim also the expenditure incurred before the contract, provided it was such as would
reasonably be in the contemplation of the parties as likely to be wasted if the contract was broken.

CC Films (London) Ltd v. Impact Quadrant Films Ltd [1984] 3 All ER 29

The defendants had there guaranteed a licence to the claimants to exploit three films and the claimants had paid the
agreed consideration of $12,000 for that licence. By the contract the defendants were to send to the claimant’s video
tapes of the films and were to insure them. In breach of contract the defendants sent the video tapes by ordinary post
and uninsured and they were lost. The defendants were also in breach of contract in failing to deliver replacement
tapes. The claimants could not prove any loss of profits and instead claimed damages in respect of the expenses of
$12,000. Hutchinson J held that they could recover those damages.
‘…the plaintiff has an unfettered choice; it is not only where he establishes by evidence that he cannot prove
loss of profit or that such loss of profit as he can prove is small that he is permitted to frame his claim as one
for wasted expenditure…I consider that those cases (Culliname & Anglia) are authority for the proposition that
a plaintiff may always frame his claim in the alternative way if he chooses.
Where the claimant claims reliance damages, the burden of proving that he has made a bad bargain, that is, that he
would not have recouped his expenses if the contract had been performed is on the defendant.

- (The reliance interest bows to the expectation interest.)

Lloyd v. Stanbury [1971] 2 All ER 267

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Pre-contractual expenditure was recovered and Brightman J said that this should be so, so long as the costs were of
‘…performing an act required to be done by the contract.’

CONTRACTS FOR SALE OF LAND

Bain v. Fothergill (1874) LR 7 HL 158
Upon a contract for the sale and purchase of a real estate, if the vendor, without fraud, is incapable of making a good
title, the proposing purchaser is not entitled to recover compensation in damages for the loss of his bargain.
Per LORD CHELMSFORD:--The rule laid down in Flureau v.Thornhill as to the limits within which damages may be
recovered upon the breach of a contract for the sale of real estate, must be taken to be without exception. If a person
enters into a contract for the sale of real estate, knowing that he has no title to it, nor any means of acquiring it, the
purchaser cannot, in an action for breach of the contract, recover damages beyond the expenses he has incurred. Any
other damages must be the subject of an action for deceit.
Per LORD HATHERLEY:--A contract for the sale of real estate is very different from a contract for the sale of a
chattel. In the former the purchaser knows that there must, with all the complications of our law, be an uncertainty as to
making out a good title; in the latter the vendor must know what his right to the chattel is.

Keen v. Mear [1920] 2 Ch 57**

The mere employment of an estate agent by an owner to dispose of a house confers no authority to make a contract; the
agent is solely employed to find some one to negotiate with the owner; but, if the agent is definitely instructed to sell at
a certain price, those instructions involve authority to make a binding contract and to sign an agreement.
The law of England as to the sale of land being so complicated, it may not be right in such cases to charge a vendor for
being unable to carry out his contract. But here the contract was entered into by Samuel Mear recklessly and without
regard to whether he could or could not carry it out. This case is different from Bain v. Fothergill. I am satisfied that
Samuel Mear acted in perfect good faith, that he considered the price satisfactory, and that he did his best to induce his
brother to complete the sale. In these circumstances the case falls within the rule in Flureau v. Thornhill and Bain v.
Fothergill. The plaintiff is not entitled to damages for loss of bargain nor is he, in my opinion, entitled either (a) to any
part of the costs of this litigation as damages or (b) to any interest in respect of the balance of purchase money which
he placed on deposit at his bank. He is entitled to (a) interest at 5 per cent. on the deposit of 50l. from December 17,
1918, (b) such costs (if any) as he may have been put to in investigating title, and (c) a sum of 7s. 6d. which he paid to
insure the property on the faith of the contract and before the contract had been repudiated by Walter Mear.

Malhorta v. Choudry [1979] 1 All ER 186

The plaintiff was one of two partners in a medical practice of which the senior resided at a property comprising a house
and a surgery. On the retirement of the senior partner the plaintiff agreed to take the defendant into the practice as
junior partner, and the senior partner agreed to sell the property to the defendant and his wife. The partnership deed,
made on 19 May 1972, two weeks after the contract for the sale of the property, provided, inter alia, that if the
defendant ceased to be a partner, he would offer to sell the house and surgery to the plaintiff at a fair market price, to
be fixed, in the absence of agreement, by a valuer. On 1 August the property was conveyed to the defendant and his
wife as joint tenants. At the date of the partnership deed the plaintiff was practising from the surgery at the property
and thereafter both he and the defendant practised from the surgery. The partnership was not successful, and on 30
March 1973 the plaintiff gave written notice to the defendant to dissolve it, and also gave notice that he wished to
exercise the option requiring the defendant to offer the property to him for sale. The defendant asserted that in the
events which had happened the option was not exercisable, and refused to sell the property to the plaintiff. In
September 1973 the plaintiff commenced an action claiming, inter alia, specific performance of the option. By his
defence the defendant denied that the plaintiff was entitled to specific performance and in an affidavit in support stated
that the property was the home of his wife and himself, that it was vested in both of them, that the surgery was an
integral part of the property, and that on termination of the partnership he intended to practise from the surgery on his
own. On 28 October 1973 a judge held that the plaintiff had properly exercised the option and ordered specific
performance of it. He also ordered that the defendant should give a valuer access to the property and deliver up all the
deeds relating to it, that there should be an enquiry into title and that the plaintiff should be given vacant possession of
the property. On the defendant’s appeal, the Court of Appeal struck out the order for specific performance because the
defendant’s wife was a joint tenant of the property and might resist an order for sale and refuse to agree to any
conveyance, but the court affirmed the rest of the judge’s order. The defendant did not comply with that part of the
order which was affirmed and the plaintiff took out a summons to proceed seeking the title deeds, access to the
property and an enquiry as to title. On 8 November 1974 the defendant’s wife swore an affidavit in the action stating
that she refused to agree to any sale of the property to the plaintiff. The plaintiff took no further steps in the action
between April 1975 and January 1977 when he issued a notice of motion asking for damages at common law for
breach of the contract constituted by the option. The defendant admitted breach of the option but contested the measure
of the damages payable. The judge, while finding that the defendant had not shown any enthusiasm for carrying out the
court’s order to show title, also found that there was uncontradicted evidence that the defendant was unable to make a
good title because of his wife’s refusal to consent to a sale and no evidence that he had persuaded her to refuse to
consent, and held that because the defendant was unable to make a good title the damages recoverable by the plaintiff
were limited to the costs of investigating the title to the property and any costs connected with obtaining a valuation.
The plaintiff appealed seeking substantial damages under the general principles applicable to a breach of contract:
HELD: the appeal would be allowed because (1) the rule that where a vendor of land was unable to make a good title
the damages recoverable by his purchaser for breach of the contract were limited to his expenses incurred in
investigating title and did not include damages for the loss of his bargain was an exceptional rule which only applied if
the vendor was unable, through no default of his own, to carry out his contractual duty to make a good title. To obtain
the benefit of the rule the vendor was required to prove that he had used his best endeavours to make a good title. Bad
faith on his part, even without actual fraud, was sufficient to exclude the rule, and unwillingness to use his best
35
endeavours to make a good title constituted bad faith. The statement that the defendant’s wife refused to consent to a
sale did not indicate that the defendant tried to persuade her to consent and, in the absence of any other evidence to that
effect it was to be inferred that the defendant had not used his best endeavours to persuade his wife to agree to the sale
and that he was therefore guilty of bad faith. It followed that the plaintiff was entitled to substantial damages; (2)
damages awarded in substitution for an order for specific performance of a contract of sale of real property were to be
assessed by reference to the value of the property at the date of the judgment and not at the date of breach of the
contract. However, as there has been delay by the plaintiff since 1975 in bringing the proceedings to a conclusion, the
date for valuing the property would be moved back one year from the date of the judgment in October 1977 to October
1976. Furthermore, since the parties must have contemplated that if the plaintiff exercised the option, he would use the
surgery for his practice, the damages in substitution for specific performance of the option should include such loss in
the plaintiff’s medical practice as had flowed in the past, or would flow in the future from the defendant’s failure to sell
the house and surgery to the plaintiff.

Re Daniel, Daniel v. Vassell [1917] 2 Ch. 105

Testator had agreed to sell real property which, with other property, was subject to one mortgage. After his death the
title was accepted by the purchasers; but the mortgagees refused to release the property sold from their mortgage, and
the executors of the vendor had not enough funds of the estate for redemption of the mortgage:--
Held: that the liability to the purchasers was not limited to the costs of investigating the title, but that they were entitled
to general damages for loss of bargain.
In such a case the absence of wilful default and bad faith is immaterial.

Diamond v. Campbell Jones [1960] 1 All ER 583

In July 1956, defendants agreed to sell to plaintiff for £6,000 a leasehold interest for a term expiring in the year 2003 in
property in Mayfair comprising a basement and ground floor and four upper floors. The agreement was expressed to be
subject to and with the benefit of a contract for the grant of a new lease, which contract required works of conversion
of the property into ground floor office accommodation and residential maisonettes above to be carried out by the
lessee. The agreement also stated that the permitted use for the purpose of the Town and Country Planning Act 1947,
was that stated in a letter by which permission was given for office use of the ground floor until a date in 1970 and
from which it appeared that permission for multiple residential use of the rest of the premises would probably be given
if requested. Defendants repudiated the contract and an inquiry as to damages was ordered. Plaintiff contended that the
proper measure of damages was the profit that he would have realised if he had converted the upper floors into
maisonettes and the ground floor into offices, and if he had disposed of the premises when so converted. Plaintiff was a
dealer in real property, but it was neither pleaded nor shown in evidence that defendants knew what his occupation was
or that he intended to carry out a conversion of the premises. The market value of the property at the date of the breach
of contract, without having been converted, substantially exceeded £6,000:
HELD: (1) plaintiff was not entitled to damages measured by reference to the profit obtainable by converting the
property, because special circumstances were necessary to justify imputing to a vendor of land knowledge that the
purchaser intended to use it in a particular manner, and the mere facts that the property was ripe for conversion and
that everyone recognised this were not sufficient to impute to defendants knowledge that plaintiff intended to convert
the property for profit: therefore, the damages should be assessed by reference to the difference between the purchase
price and the market value at the date of the breach of contract; (2) since the damages recovered by plaintiff were liable
to attract income tax as part of the profits or gains of his business, he should be awarded a gross sum in damages (equal
to the excess of the market value over the purchase price at the relevant date), not merely a net sum equivalent to the
profit remaining after deduction of income tax.

Cottril v. Steyning & Littlehampton Building Society [1966] 2 All ER 295

In February 1957, vendors granted to plaintiff an option to purchase a house and land for £5,000; the option included a
term that he should apply for planning permission and modification of a tree preservation order to permit alteration of
the house and building on the land. At the time when the option was granted the vendors knew that the purchaser
intended to develop the land. Plaintiff promptly took steps towards obtaining planning permission and modification of
the tree preservation order. He left England, however, for a month in April 1957, returning on 10 May. The vendors,
wrongly as the court found, treated this as repudiation and resold for £6,250. They were thus in breach of their contract
with plaintiff. Plaintiff who had developed other properties, effected his developments of land through companies, and
he had, on a former occasion, conveyed a neighbouring property for development to one of his companies without
taking a profit on the sale. The vendors had no knowledge at the time of the option contract of the method used by
plaintiff in developing land through companies of his intentions in that respect:
HELD: plaintiff’s damages for breach of contract should be assessed by reference to the profits which both parties
contemplated that he would make and which defendants’ breach of contract had prevented him from making:
accordingly, the market value of the property should be assessed on the footing that planning permission would be
granted and the tree-preservation order would be modified within six months of plaintiff’s return on 10 May 1957, and
that the building and alteration would have been completed within eighteen months of 10 May 1957, with the
consequence that the damages would be the difference between the market value so estimated and the expenses of
building together with the agreed price of the land.

Johnson v. Agnew [1979] 2 WLR 487 (fixing a flexible date of assessment)

Lord Wilberforce said: If the vendor treats the purchaser as having repudiated the contract and accepts the
repudiation, he cannot thereafter seek specific performance. This follows from the fact that, the purchaser having
repudiated the contract and his repudiation having been accepted, both parties are discharged from further
performance.’
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The vendor of land was a claimant in a situation where mortgagees had sold off the land at a low value subsequent to
the date of the breach. The vendor had initially obtained an order for specific performance but the defendant purchaser
had delayed in complying with the order with the consequence that the vendor could not pay off his mortgage and his
mortgagee became entitled to sell of his land. The vendor therefore now sought damages for the purchaser’s breach of
contract. Having emphasised that damages in lieu of specific performance and ordinary common law damages should
be assessed on the same basis, Lord Wilberforce went on to say:
‘The general principle for the assessment of damages is compensatory, i.e. that the innocent party is to be placed, so far
as money can do, in the same position as if the contract had been performed. Where the contract is one of sale, this
principle normally leads to an assessment of damages as at the date of breach – a principle recognised and embodied in
s.51 of the Sale of Goods Act 1893. But this is not an absolute rule; if to follow it would give rise to injustice, the
court has power to fix such other date as may be appropriate in the circumstances. In cases where a breach of contract
for sale has occurred, and the innocent party reasonably continues to try to have the contract completed, it would to me
appear more logical and just rather than tie him to the date of the original breach to assess damages as at the date when
otherwise than by his default the contract is lost.’
Accordingly, it was decided that the market value of the land should be assessed not at the date of the purchaser’s
original breach but rather when the vendor’s reasonable attempts to have the contract enforced failed: i.e. when the
mortgagees, as they were entitled to do, contracted to sell the land to another party hence making it impossible for the
claimant vendor to comply with his side of the contract.

Rose v. Chung 27 WIR 211 (damages out to be assessed at the date of the assessment)
The plaintiffs were executors of the estate of one MJH who had entered into an agreement with the first defendant to
purchase a lot in a subdivision. The subdivision was in breach of the Local Improvements Law and contracts for the
sale of lots in it were consequently found by the court to be illegal and unenforceable. Such contracts were
subsequently validated by legislation but in the meanwhile the land which was the subject of this contract had been
transferred to another purchaser and registered under the Registration of Titles Act. The plaintiffs brought an action for
breach of contract. Counsel for the plaintiffs, and counsel for the defendants, agreed that the only issue joined was that
on the question of damages. The questions for the court were: How should damages be assessed? What measure of
damages should be applied? What principles of law are applicable? Plaintiffs’ counsel relied heavily on the judgment
of Megarry J (as he then was) in the case of Wroth and Others v Tyler, in which damages for loss of bargain were
awarded as at the date of assessment, and not as at the date of breach of contract, the rationale being that since the
plaintiffs had a proper claim for specific performance, the case fell within s 2 of the Chancery Amendment Act 1858
(Lord Cairns’ Act) the wording of which envisaged damages as a true substitute for specific performance, and
envisages an award at the time the court makes its decision to award damages in substitution for specific performance.
What then are the considerations applicable at common law to the measure of damages for breach by the seller/vendor
of a contract for the sale of land? The general rule, long established by the common law (and first taught to students of
law) is that expressed by Alderson B, in Hadley v Baxendale as follows:
‘Where two parties have made a contract which one of them has broken, the damages which the other party
ought to receive in respect of such breach of contract should be such as may fairly and reasonably be
considered either arising naturally, i.e. according to the usual course of things, from such breach of contract
itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time
they made the contract, as the probable result of the breach of it.’
The principle is sometimes referred to as the principle of restitutio in integrum which applies to both tort and contract.
As frequently quoted is the rule stated by Parke B, in Robinson v Harman, which has been consistently cited with
approval and restated in similar language:
‘The rule is that the plaintiff is entitled to be placed so far as money can do it, in the same position as he
would have been in had the contract been performed.’
The comment of Megarry J, that the rule at common law requiring damages to be assessed as at the date of the breach
does not seem to be inflexible. The damages which can be awarded to the plaintiffs now represent a compensation
once and for all for what has been due to Mabel Harvey-McIntosh up to the date of assessment. Where a contract is
not duly performed on one side, the normal remedy is an action at law to recover damages for breach of contract; but if
this were the only remedy, it would always be at the option of the defaulting party either to perform his contract or to
pay damages. However, equity has assumed jurisdiction to deprive the defaulting party of this option and to compel
performance where damages would be inadequate remedy. The facts in this case disclose that the defendants/vendors
chose to breach the contract which had been subsisting for over ten years, and to ignore the moral if not then legal
rights of the purchaser. An assessment of damages which would profit the defaulting vendor to breach the agreement
at the expense of the purchaser would seem to me to be inadequate remedy to compensate the purchaser. Damages
assessed on common law principles would be totally inadequate. The case is a proper case for an order that the
contract be specifically performed. The court, in exercise of its discretion, refuses the order for specific performance,
and awards damages in lieu of such an order.

Rall-Morgan v. Chung 27 WIR 196 (damages out to be assessed at the date of the breach)
The first defendant entered into an agreement with one IW for the sale of a lot in a proposed subdivision. IW
transferred his interest therein to the plaintiff. The subdivision was in breach of the Local Improvements Law and
contracts for the sale of land in it were declared by the courts to be illegal and unenforceable. The contracts were
subsequently validated by legislation but the land the subject of the agreements with IW had in the meanwhile been
transferred to another purchaser. The plaintiff brought an action for breach of contract. It is of importance to ascertain
whether the plaintiff in this case would be entitled to specific performance of the original contract, and correlatively, is
this a case in which damages can be awarded in lieu of specific performance?
HELD: I find that the plaintiff was at the date of hearing entitled to specific performance. At the same time the decree
for performance in specie has always been governed by discretionary considerations. To this extent, therefore, I accept
37
the submissions by attorney for the defendants that the plaintiff in this case cannot get specific performance because
the land had already been sold to a third party, which had registered its title by transfer. Specific performance will not
be decreed if it is impossible for the defendant to comply with the order of the court, whether or not the impossibility
arises from the defendants’ acts.
In this case the claim is for specific performance and for damages in substitution therefore. Such a claim envisages
equitable damages which are granted in discretion of the court. Wroth v illustrates one way in which the court will
grant equitable damages. That is on the basis of damages being a 'true substitute', for damages awarded were measured
by reference to the price of land at the date of judgment rather than at the date of breach. The discretion of the court
was exercised so as to allow it to depart from common law principles as to the measure of damages. Unless there are
special circumstances dictating otherwise, it is not possible for the Supreme Court of Jamaica to deviate from the
common law principles of the measure of damages. Damages for the breach of contract for the sale of land, that is,
loss of bargain, are assessed as at the date of breach. The measure of damages at that date being the difference between
the contract price and the market price at the date of breach. This oft applied principle is in my view, the measure
which is applicable to the instant case. The claim for equitable relief has not been made any stronger by the
submissions made to me on behalf of the plaintiff, and though I have cogitated whether in the inherent jurisdiction of
the court, equitable damages are available to the plaintiff, I am satisfied that this is not one of those cases in which
such an award could be made. Megarry J, in Wroth v Tyler reminded that 'a court with equitable jurisdiction will
remember that equity follows the law, and will in general apply common law rules for the assessment of damages'.

Raineri v. Miles [1980] 2 All ER 145

The vendor agreed to complete the sale of his house to the defendant on 12 July 1977, and on the same day the
defendant was to complete the sale of his house to the plaintiff. The vendor was unable to complete on the due date, as
he was unable to raise sufficient money. The plaintiff had already vacated his home and was forced to rent
accommodation until he obtained vacant possession of the defendant’s house. In accordance with the Law Society’s
Conditions of Sale 1973, condition 19, the defendant gave the vendor notice to complete within twenty-eight days and
completion took place on 11 August. The defendant’s contract with the plaintiff was completed on that day and the
plaintiff was let into possession. The plaintiff sued and was awarded damages against the defendant for the expenses
incurred due to the delay in completion. The defendant served the vendor with a third party notice claiming indemnity.
The questions for the court were (i) whether there had been a breach of contract on 12 July, or within a reasonable time
thereafter, which could be remedied in damages; (ii) whether the service of a notice pursuant to condition 19 varied the
original date for completion so that if completion took place before the new date, there was no breach of contract, it
being accepted by the parties that if the vendor was in breach of contract he was liable to indemnify the plaintiff; (iii)
whether the reason why the vendors delayed completion absolved them from liability:
Held Viscount Dilhorne dissenting, (i) the vendor committed a breach of contract by failing to complete on 12 July.
Although a claim for specific performance of the contract would have been refused on the ground that the stipulation
as to time was not of the essence of the contract, that was no ground for relieving the vendor or defendant from
liability for failure to complete; (ii) a completion notice could only be served after the specified completion date had
passed, at which time the innocent party had an accrued right to damages. The court would reject the argument that in
serving a completion notice, the defendant had waived his accrued right; (iii) the vendor’s inability to make the
necessary financial arrangements and his deliberate decision not to complete afforded no defence. The vendor was thus
liable to indemnify the defendant for damages paid to the plaintiff.

Gloucester House v. Peskin 4 WIR 182

The respondent agreed to buy land from the appellant company for £30,000. He intended to form a private company
which would construct and operate a hotel for tourists. The appellant company refused to perform the contract and in
an action for specific performance and damages by the respondent, specific performance was decreed and the Registrar
was directed to assess damages for delay (3 years). He assessed damages at £114,328 14s.
HELD: Damages should have been based on what would have been the value of the possession of the premises to the
respondent for the period of the delay and not on the prospective profits of the company which the respondent had
intended to promote.
CROOM-JOHNSON in Phillips v Lamdin said:
“Damages for breach of contract for delay, even after the purchase and the sale of goods has been completed,
are always recoverable in a proper case, provided the plaintiff can prove them”.
That principle is that the damages are to be based on what would have been the value of the possession of the premises
to the plaintiff for the period of the delay, subject always to the general principle that the damages should be such as
may reasonably be said to have naturally arisen in the ordinary course of things from the delay, or which may
reasonably be supposed to have been in the contemplation of the parties as likely to arise from the breach of contract.
In Jones v Gardiner the plaintiff had purchased two plots of freehold land for £620 for the express purpose of erecting
dwelling houses to be let in the ensuing summer and of converting certain buildings into a bungalow, suitable for
persons who might visit the neighbourhood for boating. The delay in performance of the contract was three months
and the claim was for £65 for loss of rent. In his judgment, BYRNE, J, said:
“I think that the plaintiffs are also entitled to reasonable damages, having regard to the measure as laid down
in Jaques v Millar, for the delay, and for not having vacant possession. I bear in mind that one of the lots was
sold as for a building site, that both were sold as with possession, and that the purchasers intended to build
and have been delayed in their work by the defendant's default. On the other hand, I have had regard to the
fact that some of the claims in the plaintiffs’ particulars are untenable and some exaggerated, while the
evidence is loose and unsatisfactory, and I award £25 by way of damages.”
The general principle to which I have referred and which I consider is applicable to this case covers damages which
may reasonably be supposed to have been in the contemplation of the parties as likely to arise from the breach of
contract. Here the damages awarded are nearly four times the purchase price of the land. Can it be said that the parties

38
could reasonably have contemplated that any such loss would have been the consequence of mere delay in the
performance of the contract? In my view, such a proposition is obviously untenable and the damages awarded cannot
be justified on any such hypothesis. I have arrived at the amount of £15,000 which I consider reasonable
compensation for the loss occasioned by the delay.
The respondent is entitled to damages for loss of profit which he might have earned if he had had the use of the land
for the purpose of his hotel project. The measure of damages is the value of the possession of the land to him for that
purpose. Where a specific breach of contract is pleaded and proved, but the claim for damages in respect of that
particular breach is misconceived, the court may yet have regard to the evidence and award such damages as flow in
law from the same breach.

Phillips v. Lamdin [1949] 1 All ER 770

Plaintiff, a naturopath, entered into a contract with defendant for the purchase of leasehold premises which she
required for professional and residential use. Completion date was fixed as 28 March 1947. In the event of failure to
complete on the agreed date, the contract provided for the payment of interest by the purchaser on the outstanding
purchase-money from the date fixed for completion to the date of actual completion. The contract also laid down a
time limit of four days, which plaintiff in fact exceeded, for the return by the purchaser to the vendor of the engrossed
assignment after a draft thereof had been agreed by the vendor. Plaintiff had issued a writ for specific performance on
15 April 1947, but the matter never came to trial as possession was granted on 5 June 1947. She now claimed damages
including damages for loss of earnings and expenses caused by the vendor’s failure to give her possession on 28
March. She also claimed the reinstatement of an Adam door removed by the vendor at some time between the date of
the contract and completion:
HELD: (1) the vendor’s delay in completion of the contract was wilful and wrongful, and plaintiff was entitled to
recover the damages claimed calculated from the date when her own default ceased; (2) defendant should be ordered to
reinstate the door, without having an option to pay its value.

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