LECTURE 3 NOTES- DAMAGES

McGregor on damages- Damages are for the vast majority awards in money for a civil
wrong or damages are the pecuniary compensation, obtained by success in an action,
for a wrong which is either a tort or breach of contract. This compensation may be in the
form of a lump sum which is awarded unconditionally.

Form-

A lump sum is a final award and is given at the judgement of the claim. Damages later
on cannot be given after the judgement. The award must also be unconditional.

For example, in the Montreal case where the claimant received approximately 25,000
pounds in damages and he would have been required to return all securities and this
was deemed inappropriate by the court. The court ordered a retract.

The first question to determine whether a claimant is entitled to damages you must first
assess if a wrong has been committed. Where no loss has occurred the claimant will
still be entitled to what is referred to as nominal damages. This is known as Injuria sine
Damno which means injury without damage.

Aim- see p. 44 of man.

PECUNIARY REMEDIES THAT ARE NOT A CLAIM FOR DAMAGES-

There are remedies which are not damages and these can be found in actions being
brought by clients for monies payable to them under a contract. E.g., action for
recovering monies payable for the price of goods such as a vehicle. In such cases the
claimant can bring an action for the monies owing to the breach of the contract.

These actions also include actions for wages and rents. There are also actions which
fall in the realm of quasi-contracts. These exist where there is no wrong for which the
claimant may sue, for example monies paid under mistake of fact or where a third party
owes funds.

Awards for quantum meruit- in such claims it is translated as much that has been
earned. Contractual claim by the claimant for work that was not provided for, but it was
carried out by an implied request by the employer. The court may award a reasonable
sum based on the value of the work carried out. See British Steel Corporation v.
Cleveland Bridge. THIS IS NO AN AWARD FOR DAMAGES.

Equitable compensation that can be awarded to clients- breach of trust where the
trustee has lost the trust funds. An action for recission based on innocent
misrepresentation.

COMPENSATORY DAMAGES

These are damages which are awarded upon actual loss suffered by the claimant.
Intended to restore what the plaintiff has loss as a result of the defendant’s wrongful
conduct. However, it is for the plaintiff to prove that he has suffered a legally
recognizable harm.

AIM- How do we place the plaintiff back in the position as if the breach of the contract
had not occurred. See – Livingston v Rawyards

An alternative way of stating the rule to avoid ambiguity- see – Parke B in Robinson v
Harman

Compensatory damages may be less than the loss or more than the loss suffered. This
is done by assessing whether there are some contributing factors based on contributory
negligence, or a loss claimed by the claimant that was not the fault of the defendant or a
loss that is not in the protection of tort or contract then the court may reduce the award
of compensatory damages. Remoteness/Uncertainty of the loss is essential here.

GENERAL & SPECIAL DAMAGES

The court assess damages by looking at;

1. Liability- Hadley v. Baxendale

 2. Proof of damages- Prehn v Royal bank of Liverpool
3. Pleadings- The Susquehana [1926]
4. Torts actionable upon proof of damage eg. Slander & public nuisance

General damages are those that arise naturally. In the normal course of the transaction.
Special damages arises where there are special circumstances known by both parties
of the contract- see Hadley.

How to prove it to the court? – In Prehn v RBL, defined general damages as such that
the jury of the court may give when the judge can appoint without any measure by
which to be assessed except the opinion and judgement of a reasonable man. By their
nature must be estimated by the court.

Special damages is given in respect of consequence reasonably and probably arising

from the breach. These must be specifically proven and pleaded and this is very
important in personal injury matters because there will be items that can be specifically
ascertained by virtue of existence of expenditure and items which cannot be
ascertained.

BASIC PECUNIARY LOSSES- see Allen v Olds Discount Co. of Jamaica

It relates to financial obligations the claimant was entitled to under the contract and has
been deprived of because of the defendant’s breach. E.g., loss of earnings, loss of
profits, medical expenses, cost of repair and replacement.

What is the loss suffered/Normal measure of damages?- Our starting point is the market
value of the benefit which has been deprived as a result of the breach. This can take the
form of non-performance by D, a delayed performance by D or a defective performance
by D.

Basic loss equation- market value of the item/service at the date it was to be delivered –
(minus) the market value of the item/service it was actually delivered.

CONSEQUENTIAL PECUNIARY LOSSES- Addis v Gramaphone

Includes:

1. Loss of use, profit, interest- see Cory v Thames Ironworks Co.

2. Loss of future reputation, publicity, credit- see Foaminol Laboratories v British
Artid Plastics
3. Loss of services of relatives – see Jackson v Watson
4. Expenses cause by breach e.g. transportation- see Hales v L.N.W Ry [1863]

NON-PECUNIARY LOSSES

1. Physical Inconvenience and discomfort- Burton v Pinkerton[1867]. Hobbs v

L.S.W Ry [1875]
2. Pain and Suffering, loss of amenities and of expectation of life.
3. Mental distress – Hamlin v G.N Ry [1856]
4. Social Discredit – Addis v Gramophone co. [1909]- under contract mental pain
cannot be recovered but under tort it can be recovered.

FACTORS AFFECTING THE ASSESSMENT OF DAMAGES

- Inflation/devaluation- see Wright v BITISH Railway Board [1983]

- Taxation- British Transport Corporation v. Gouley
- Interest- see chapter 6.

ASSESSMENT OF DAMAGES

Damages are assessed at the time of the breach. Factors to be included in assessing
your damages also include past recurring pecuniary loss, future pecuniary loss and
other pecuniary loss which is the market value of the goods at the date of the breach.-
see General & Finance Facilities Ltd. v Cooks Cars- court examined what was the value
of the crane to the plaintiff and what were the damages that occurred.