LAW OF REMEDIES

1. OBJECT OF AN AWARD OF DAMAGES

- The object of an award of damages is to put P in the same position, so far as money can do so, as he would have been
in, had the wrong not been committed - restitutio in integrum.

- An award of damages has a compensatory or substitutionary function.

- In actions in tort, the measure of damages is to put P in the position he would have been in if the tort had not been
committed.

- In actions for breach of contract, measure of damages is to put P in the position he would have been in if the contract
had been performed according to its terms - 'ordinary contract measure'.

- Alternatively, measure may be to put P in the position he would have been in if he had not entered into a contract
with D - 'extraordinary contract measure'.

- The ordinary contract measure is compensatory and rewards an expectation.

- The extraordinary contract measure is restitutionary, i.e., to return to P the expenses he would have incurred in
reliance on the contract.

- It is primarily used in land transactions where D is unable to complete because of some defect in title.

2. NON-COMPENSATORY DAMAGES
- There are exceptional cases in which the court is not concerned with applying the principle that damages are a
compensation for loss:
(a) contemptuous damages
(b) nominal damages
(c) exemplary damages
(d) liquidated damages as agreed between contracting parties

(a) Contemptuous damages

- Award indicates that though P is strictly entitled to a verdict, not only has he suffered no loss, but in the opinion of
the court he ought not to have brought the action at all.

- Ordered to manifest judicial contempt and disapproval of P's bringing the action.

- P awarded a derisory sum, usu. the coin of lowest value in the jurisdiction.

- P will invariably be deprived of costs, and in exceptional cases may have to pay D's costs.

(b) Nominal damages

- To establish a cause of action in certain torts, e.g., slander, negligence, P has show that he suffered an injury from the
tort, i.e., he must prove special damage.

- Torts actionable per se, as well as breach of contract, are actionable without proof of damage.

- Damages for torts actionable per se are "at large", i.e. the court, taking into account all the relevant circumstances,
can assess the loss which it presumes P has sustained, e.g., in a libel case, jury can award a sum to compensate the loss
to P's reputation which it presumes he sustained as a result of the defamatory statement.

- Generally, courts do not presume any loss to flow from a breach of contract; however, there are exceptional situations
in which damages are "at large" b/c the court considers that a breach will result in a loss of reputation e.g., where a
banker dishonours a trading customer's cheque.

- Nominal damages will be awarded against a D who has committed a tort actionable per se, where loss to P is neither
proved nor presumed.
 Constantine v Imperial Hotels Ltd - P was refused accommodation at D's hotel. P successfully alleged that D
were in breach of the duty they owed as innkeepers to receive and lodge travellers (old tort actionable per se). P
recovered nominal damages b/c he had shown no actual loss, and no loss to him was presumed.

- A case for nominal damages arises on a breach of contract where P cannot prove actual loss and fails to bring his case
w/in one of the exceptional situations.

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- The trivial sum given for nominal damages is distinguished from a similar amount awarded as compensation, since
nominal damages are not compensatory.

- Nominal damages are said to have two functions: -

* Declaring that P's legal rights have been infringed

- At present, remedy of declaration more effective to perform this function.

* "A mere peg on which to hang costs": per Maule J. in Beaumont v Greathead

- P, unable to prove loss, may wish to recover his costs from D.

- However, costs are at the discretion of the court.

 P awarded nominal damages should not necessarily be regarded as a successful P for the purposes of costs: per
Devlin J. in Anglo-Cyprian Trade Agencies v Paphos Wine Industries Ltd.

- Costs should be awarded to a P who has endeavoured to establish or confirm a legal right, not to a P who has
prolonged his cause merely to recover costs.

(c) Exemplary Damages

- The object of an award of exemplary or punitive damages is to punish & deter D.

- Exemplary damages are generally not awarded for breach of contract.

- An employee cannot recover exemplary damages for wrongful dismissal: Addis v Gramophone

- In Rookes v Barnard and Cassell & Co Ltd v Broome, it was laid down that as a general rule exemplary damages
should not be awarded. Rationale:
(i) the object of a damages award is to compensate P;
(ii) awarding exemplary damages tends to confuse the role of the civil and criminal law;
(iii) punishing a man in the civil courts deprives him of the protection granted in the criminal courts.

- According to Lord Devlin in Rookes v Barnard, there are three categories of cases in which an award of exemplary
damages for torts "could serve a useful purpose in justifying the strength of the law": -

- Oppressive, arbitrary or unconstitutional actions by servants of the government

 In Cassell v Broome, Lord Diplock said that 'servants of the government' is to be widely construed and 'embrace
all persons purporting to exercise powers of government, central or local, conferred upon them by statute or at
common law by virtue of the official status or employment which they hold.'

 Tynes v Barr - P attorney was unlawfully arrested and maltreated by a member of the Police Force. Police failed to
produce all relevant documents by close of trial. Judge found P had been unnecessarily hand-cuffed, body-
searched twice and without regard to decency, and had been publicly moved in an open vehicle while handcuffed
and under arrest.
Held: Assaults and batteries to P, manner in which defence was conducted and delay on part of police in producing
relevant documents brought case within first category and entitled P to exemplary damages.

- D must be exercising governmental power when the tort is committed.

 AB v South West Water Services Ltd - actions of a nationalised corporation in contaminating drinking
water and failing to warn the public properly of this were held not to fall within the first category. Ds had
not been exercising executive power derived from local or central government when the public nuisance
had been committed but had instead been carrying out a commercial operation.

- Lord Devlin stated that this category excludes the acts of private individuals: a big man bullying a small man will be
a source of humiliation that would attract an award of aggravated damages.

- This exception is predicated on judicial dislike of the abuse of power by servants of the government.
 Douglas v Bowen (C/A, J'ca) - Landlord let premises to tenant for purpose of carrying on night club. L
wanted the use of the premises and unlawfully evicted T: used bulldozer to demolish premises; cut off
electricity and water supply. Trial judge awarded exemplary damages b/c of the L's high-handed,
oppressive and vindictive behaviour. Court of Appeal held that acts of L were that of a private bully and
fell outside of first category.

 cf. Valentine v Rampersad (C/A, T&T) - Landlord wanted to demolish rented premises in order to erect a
new building. Landlord terminated tenancy and committed various acts of harassment against tenant which
made premises unsuitable for occupation - cut down tree which demolished latrine; dumped loads of
gravel on premises; removed galvanised sheets from roof. Court of Appeal awarded exemplary damages
on the basis that L's actions were oppressive and warranted punishment. Decided (wrongly) that first
category does not exclude oppressive action by private corporations or individuals.

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- The tortious acts of a servant of the government acting in a private capacity are also excluded.
 Marshall v Semper (High Ct., T&T) - M, shop detective, apprehended S's wife for shop-lifting; she was
not prosecuted. S, a sergeant, accosted M and threatened to cause him to lose his employment for accusing
his wife of theft. M challenged S to carry out threat. S cuffed M and alleging that M had molested a
woman passing by, called upon two corporals to arrest him. S taken to police station and later released
w/out being charged.
Held: Exemplary damages not awarded in addition to compensatory damages. S was not acting as a
servant of the government; he was merely pretending to be acting as a police officer when in fact he was
acting in his private capacity, i.e., carrying out a personal vendetta.

 c/f. Gordon v Panday (High Ct., T&T) - P, media executive, sued D, T&T prime minister for a statement
he made at an Indian Arrival Day function in which he described P as a "pseudo-racist". High Court judge
found D guilty of slander and awarded more than TT$850,000 in damages, including TT$150,000 for
exemplary damages. Judge found that P had been caused undue stress and public humiliation and that the
damage done to him was irreparable because of D's national and international image. He found D's action
went beyond simple malice to the point of being "oppressive" and an "abuse of power."

NB: Question is whether the judge erred in awarding exemplary damages, b/c although the prime minister's actions
may have been oppressive, he was not acting as a servant of the government when he uttered the slanderous words.

* D's conduct has been calculated by him to make a profit for himself which may well exceed the compensation
payable to the P

- Lord Devlin in Rookes v Barnard said that this category is not confined to money-making in the strict sense but
extends to cases in which D is seeking to gain at the expense of P some object, which either he could not obtain at all
or could not obtain except at a price greater than he is willing to pay.

- In Cassell v Broome, the House of Lords held that the fact that the tortious act was committed in the course of
carrying on a profit-making business is not sufficient to bring a case within the second category.

- Also, it is not necessary for D to have arithmetically calculated that the profit to be made from the tort would exceed
the damages and costs to which he would make himself liable.

- According to Lord Hailsham, two things are required:

(i) knowledge that what is proposed to be done is unlawful, or reckless disregard whether it is lawful or not,
AND
(ii) a decision to carry on doing it b/c the prospects of material advantages outweigh any compensatory
damages D likely to pay to P.

- Lord Diplock said that the object of damages under this category is not merely to reverse D's unjust enrichment, but
also to teach a wrongdoer that tort does not pay.

- This category has been used in libel cases.

 Cassell v Broome - P, distinguished naval officer sued the publisher and author of a book telling of the wartime
destruction of a navy-escorted convoy, and libellous of P imputing to him responsibility for the disaster. House of
Lords justified exemplary damages b/c there was clear evidence that Ds, in knowledge that they might be
defaming P, were still prepared to sell the book in its sensational form.

- Category has also been used in actions by tenants against landlords for wrongful harassment or eviction founded on
the torts of trespass or nuisance.
 Drane v Evangelou - L engineered T's exclusion from the premises by trespass, forcefully entering them while T
was out. On return, T found flat bolted on inside with several people within and his belongings out in the yard.
Court of Appeal upheld county court's award of exemplary damages.

- Lord Denning said that the second category includes cases where L resorts to harassing tactics to gain possession so
as to get a higher rent than that awarded by a rent tribunal, or to get possession from a statutory-protected T.

* Express authorisation by statute

- e.g., s.32(2), Copyright Act authorises a court, in an action by a copyright owner, to award additional damages,
having regard to the benefit accruing to D by reason of the infringement.

- If a statute expressly permits an award of exemplary damages, tribunal simply proceeds to assess the quantum.

NB: In Douglas v Bowen, Court of Appeal held that categories enumerated in Rookes v Barnard should be adopted
and applied in Jamaica.

Additional considerations: -

- Exemplary damages will not necessarily be awarded simply b/c the case falls w/in one of the three categories. The
court should also consider:
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* whether the tort is one for which exemplary damages were awarded prior to Rookes v Barnard

- In Cassell v Broome, Lords Hailsham and Diplock considered that Lord Devlin's intention was to restrict, not widen,
the availability of exemplary damages.
- Therefore, in their view, even if the facts fell within the second category, no exemplary damages can be awarded for
the torts of deceit or negligence.

- In AB v South West Water Services Ltd, Court of Appeal decided that Cassell v Broome required that the tort be one
for which exemplary damages had been awarded pre-Rookes v Barnard.

- Claim for exemplary damages for tort of public nuisance in supplying contaminated drinking water struck out b/c that
tort was not one for which exemplary damages had been awarded before Rookes v Barnard.

* whether D has already been punished in respect of the circumstances which gave rise to the tort

- Since the purpose of exemplary damages was to punish the D, they ought not to be awarded when the D had already
been punished in respect of his tortious acts by the criminal courts: Archer v Brown (D, by fraudulent representations,
induced P to buy shares from D which he did not own. D had been convicted of two offences in respect of frauds and
imprisoned. Claim for exemplary damages for deceit failed)

* P's conduct

- In Rookes v Barnard, Lord Devlin said that the court should take into account all mitigating circumstances.
- Exemplary damages may be refused (or reduced) if P has brought D's conduct upon himself:
 O'Connor v Hewitson (exemplary damages refused for trespass to the person under first category b/c P
had provoked D policeman's assault)

* whether compensatory damages has an appropriate impact on D

- In Rookes v Barnard and Cassell v Broome, it was stressed that if it is considered that the compensatory damages are
adequate to punish D, the court should exercise restraint and refrain from adding a punitive component.
 Douglas v Bowen - Court found that in instant case of trespass to goods or trespass to land, injured party
could be adequately compensated for any humiliation or mental distress by an award in an appropriate
sum, without recourse to an award of exemplary damages.

 Carrington v Karamath (C/A, T&T) - K, senior civil servant, illegally arrested by an armed party of
police; circumstances surrounding arrest particularly aggravating. Judge granted $25,000 damages
($10,000 as a compensatory award).Court of Appeal held that trial judge had not appreciated that
circumstances of aggravation are to be taken into account in arriving at compensatory damages, i.e.,
aggravated damages are a form of compensatory damages.

- Case was one in which exemplary damages were appropriate, but judge had to determine whether sum he had in
mind as compensatory damages (incl. an award of aggravated damages) was inadequate to punish appellant for
conduct toward respondent. If judge found compensatory award was inadequate to punish and deter appellant, he
should have awarded some larger sum as punitive damages.

- Court of Appeal found that compensatory award of $45,000 would be adequate for punishment or deterrence.

* P cannot recover exemplary damages unless he is the victim of the tort.

- Punitive awards therefore cannot be made to (i) a person suing for loss of dependency, and (ii) personal
representatives suing on behalf of deceased's estate.

- Under s.2(2)(a), Law Reform (Miscellaneous Provisions) Act, damages recoverable for benefit of deceased's estate
should not include exemplary damages.

Assessing exemplary damages

- Lord Devlin stressed that awards should be moderate. However, court has discretion to award whatever sum is felt
necessary to punish and deter D.

- The means of the parties should also be considered.

- Where joint tortfeasors are sued together, only one sum can be awarded and this sum must represent the lowest sum
for which any of the Ds can be held liable: Cassell v Broome

- Therefore, the conduct of one D does not allow exemplary damages to be awarded in the single judgment which must
be entered against all if the conduct of the other D does not merit punishment.
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- Therefore, P may recover more if he elects to sue the most blameworthy tortfeasor on his own.

- Where there are multiple Ps, the total amount of exemplary damages considered fair for the D to pay should first be
decided on.

- Then that amount can de divided among the plaintiffs: Riches v News Group Newspapers (Court of Appeal set aside
a total award of £250,000 exemplary damages to 10 Ps for libel b/c, inter alia, the judge had given no direction on the
point and there was the possibility that the jury had considered that £25,000 rather than £250,000 should be the total
amount of exemplary damages)

Exemplary damages as constitutional redress

 AG of St. Christpher, Nevis & Anguilla v Reynolds (PC) - During a state of public emergency, respondent
arrested and detained under emergency regulations on the ground that he had been concerned in acts prejudicial to
public safety or public order. No evidence on which this could reasonably have been justified. Respondent claimed
damages for false imprisonment and compensation pursuant to s.3(6) of the Constitution for unlawful deprivation
of liberty. Trial judge awarded $5,000. Court of Appeal dismissed appeal of A-G, holding that damages should
include an element of exemplary damages and be increased to $18,000. A-G appealed, arguing that no exemplary
damages should have been awarded b/c only compensation could be claimed under s.3(6) of Constitution.
Held: An award of compensation for unlawful arrest and detention in breach of an unauthorised deprivation of
personal liberty, contrary to the Constitution might (in an appropriate case) include an award for exemplary
damages under s.16(1) of the Constitution, under which redress was available w/out prejudice to any other remedy
at law and there was no need to specify exemplary damages in the award.

Aggravated damages

- An award of aggravated damages serves to compensate non-pecuniary losses such as injury to the P's feelings and
pride.

- Aggravated damages are awarded for P's reaction to D's conduct, therefore the nature of D's conduct will be relevant
in determining whether P's reaction was justifiable, e.g., whether P suffered legitimate humiliation.

* Contract
 Addis v Gramophone generally regarded as barring damages for mental distress in an action for breach of
contract. House of Lords held that damages for the wrongful dismissal of a servant could not include
compensation for his injured feelings, even if he had been dismissed in a harsh and humiliating manner.

- However, there are two situations in which damages for mental distress can be recovered in contract:

(a) where the predominant object of the contract was to obtain mental satisfaction, whether enjoyment or relief from
distress.
 Jarvis v Swan Tours - P booked a winter sports holiday in Switzerland in reliance on the D travel agents'
lavishly illustrated brochure, only to discover that the "great time" promised did not materialise and the
many facilities which he had been led to expect were simply not there. Holiday proved to be a great
disappointment.
Court of Appeal awarded P damages for the disappointment, distress, annoyance and frustration caused by
the breach of contract. Here, the non-pecuniary losses suffered would not be too remote b/c provision of
mental satisfaction would been within the reasonable contemplation of the parties at the time the contract
was made.

(b) where P's mental distress is directly consequent on physical inconvenience caused by D's breach of contract
 Perry v Sidney Phillips & Son - P bought a house on the faith of a survey report prepared by Ds, a firm of
chartered surveyors. Report had been negligently made, in breach of Ds' contractual and tortious duty of
care, and failed to mention serious defects, incl. leaking roof and septic tank which produced an offensive
smell. P recovered damages for anxiety, worry and distress (which was directly consequent on physical
inconvenience of having to live in a house in a poor condition).

- Beyond these two situations, damages for mental distress in contract are irrecoverable.

* Tort
- Aggravated damages have been awarded for non-pecuniary losses caused by torts.

- Where an award of exemplary damages cannot be made b/c the case does not fall within one of the three categories,
an award of aggravated damages could be made because of the manner in which the tort was committed, e.g., if done
with malice or accompanied by insolence or arrogance which injured P's feelings or caused him distress.
 Henry v AG of Jamaica (Sup.Ct., J'ca) - P detained, arrested and charged with possession of ganja twice
on the same day by the same policeman although his travelling companion admitted ganja belonged to
him. Arrest was highly publicized. P sued Ds for malicious prosecution and false imprisonment. Held: In
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 imprisoning P a second time while he was in possession of bail bond, D acted in a manner which attracted
aggravated damages. Behaviour could only be explained as calculated to further embarrass, humiliate and
insult P. Behaviour was outrageous and malicious and was aggravating.

 Drane v Evangelou - aggravated damages were awarded to the T for L's trespass to land or nuisance in
wrongfully evicting him. Court of Appeal emphasized the worry and stress of being deprived of a roof
over one's head.

 Archer v Brown - Aggravated damages were awarded to the P for injured feelings in his action for deceit.

- Sensations of fear, mental distress or grief suffered as a result of the tortious act do not of themselves give rise to a
cause of action: Hicks v Chief Constable of South Yorkshire (no damages recoverable for fear of impending death felt
by victims of a disaster who were trapped, fully conscious, for some time before they suffered a swift death by
asphyxia).

- Aggravated damages may be awarded for mental distress if there is some other tangible injury.

- Aggravated damages are compensatory, not punitive: Rookes v Barnard.

(d) Liquidated Damages

Distinction between liquidated damages and liquidated sums

- Actions for liquidated sums include:

* Actions claiming money payable by the terms of a contract, e.g., actions for the price of goods sold and
delivered, actions for rent, actions for salary or wages or for services rendered.
NB: These are actions for money which D has promised by the contract to pay distinct from actions for damages
for breach of contract

* Actions claiming money in quasi-contract, e.g., actions for money paid under a mistake of fact; actions for
money paid under a contract which is in some way vitiated; actions for money under a quantum meruit where
P supplied services under a mistaken belief that he was contractually bound to do so
NB: The existence of these actions stem from the fact that no wrong, whether tort or breach of contract, is available
upon which P might sue.

- In respect of a claim for a liquidated sum, when default judgment is entered, it is final judgment b/c there is nothing
further for the tribunal to adjudicate, i.e., there is no scope for assessment.

- Liquidated damages, however, represent a genuine pre-estimate of the loss likely to flow from a breach of the
contract.

- If a sum stipulated for is found to be liquidated damages, the aggrieved party could claim it as a liquidated sum.

- When claiming for a liquidated sum together with interest thereon, the interest must be pleaded if it is based on a
contract.

- P could then move to enter final judgment for both the principal and the contracted interest.

- When claiming interest without any contractual basis, final judgment cannot be entered for the amount claimed
unless it is consistent with the rate specified under the Rules of Court - (12% pursuant to the Judicature (Supreme
Court) (Rate of Interest on Judgment Debts) Order).
- If the interest claimed is above this rate, P's claim would be for an unliquidated sum, and the interest would have to
be adjudicated upon: Steadman v Sugar Co of Jamaica (In action for goods sold and delivered, P entered default
judgment for balance owing together with interest of 35% p.a. Contractual rate of interest was 10% p.a. D successfully
set aside default judgment. Judge found judgment entered irregularly b/c it was entered for unliquidated sum w/out
interest adjudicated upon).

Liquidated Damages and Penalties:

- Where a sum of money is expressed to be payable on the breach of one or more obligations, crucial question is
whether the sum is to be regarded as 'liquidated damages' or as a 'penalty'.

- This distinction is only relevant where the sum is payable on a breach of contract b/w the contemplated payer and the
contemplated payee.
 Export Credits Guarantee Dept. v Universal Oil Products Co - Ds contracted to construct oil refinery for
group of companies. Bankers had provided financing of project in return for issue of promissory notes by
the companies and for Ps' guarantee of the promissory notes. By further contract b/w Ps and Ds, Ps
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 required Ds, in event of their default in performance of the construction contract, to indemnify Ps against
any liability they might incur under the contract of guarantee. Some promissory notes were dishonoured,
Ps duly indemnified bankers under contract of guarantee and then claimed indemnity for themselves
against Ds whom they alleged were in default under construction contract. Ds alleged sum claimed
constituted a penalty.
House of Lords held that the sum in question could not be a penalty b/c it became payable in the event of
breach by Ds of contractual obligations owed not to the Ps but to third parties.

- Classic exposition of distinction b/w liquidated damages and penalties given by Lord Dunedin in Dunlop Pneumatic
Tyre Co Ltd v New Garage & Motor Co Ltd.

Nature of liquidated damages and penalties:

- The essence of liquidated damages is a genuine covenanted pre-estimate of the damage which would probably arise
from breach of the contract.

- The essence of a penalty is payment of money stipulated as in terrorem of the other party.

- Object of liquidated damages clauses is to save judicial time and costs: it would be impractical, expensive and
detrimental to commerce if P in an action for breach of contract, had in every case, to rely on a court's assessment of
his loss.

- On the other hand, the court could hardly stand by in cases of real exploitation, where the stipulated sum is designed
to intimidate the promisor into performance rather than to compensate the promisee for his expected loss.

Legal Consequences of a sum held to be liquidated damages or a penalty

- On the breach of an obligation governed by a liquidated damages clause, P is entitled to recover the stipulated sum
w/out proof of actual loss.

- This is so even where his actual loss exceeds the agreed amount.

- P cannot substitute for liquidated damages another legal or equitable remedy, e.g., an injunction.

- P may claim unliquidated damages or another remedy for the breach of an obligation which is not governed by the
liquidated damages clause - question of construction.

- If the sum is regarded as a penalty, P is entitled to sue and recover for such loss as he can prove in the ordinary way.

- He cannot claim to recover the stipulated sum on serious breaches if the clause has been held to be a penalty in
respect of some breaches, since the same sum cannot in the same agreement be treated as a penalty for some purposes
and as liquidated damages for others.

- There is some doubt concerning situation where P's actual loss exceeds the amount in the penal clause.

- Position appears to be that P can sue for breach of contract, without relying on the penal clause, and may recover
compensation for his actual loss, however great: Wall v Rederiaktiebolaget Luggude, approved by House of Lords in
Watts, Watts & Co Ltd v Mitsui & Co Ltd.

Rules for Distinguishing Liquidated Damages from Penalties

* Test is an objective one: given all the circumstances of the case, at the time of the agreement, was the stipulated sum
a reasonable pre-estimate of the loss likely to occur on breach?

- In Phillips Hong Kong Ltd v AG of Hong Kong, Privy Council stated that the fact that the issue had to be
determined objectively, judged at the date the contract was made, did not mean that what actually happened
subsequently was irrelevant.

- Post-contractual circumstances could provide valuable evidence as to what could reasonably have been expected to
be the loss at the time the contract was made.

* The use of the words 'penalty' or 'liquidated damages' is not conclusive. The court must determine the true nature of
the stipulated sum.

* Where a single sum is stipulated for the breach of one or more of several obligations, there is a presumption, not a
rule of law, that the sum is a penalty.

- There are circumstances where the presumption may be rebutted and the sum regarded as liquidated damages:
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 - Where the loss likely to arise from the breach of some or all of the obligations is uncertain or difficult to assess, and
the parties speculated on a reasonable sum.

 Dunlop case - Ds agreed not to tamper with the markings on Ps' tyres, nor to sell the tyres below the listed price,
nor to persons whose supplies Ps had decided to suspend, nor to exhibit or export them without Ps' consent. £5 was
made payable for every tyre "sold or offered" in breach of the agreement. Loss likely to result from any such
breach was difficult to assess. £5 was considered a reasonable speculation.
- Where on a true construction of the agreement, the sum was made payable for the breach of a single
obligation or of a number of similar obligations.
The court must look at the substance of the agreement and determine whether the sum was payable on the breach
of obligations which were truly different in nature or effect.
- Agreed sum of £5 was payable on what was in effect the breach of a single obligation not to sell tyres
contrary to the terms of the agreement.

 c.f. Ford Motor Co (England) Ltd v Armstrong - D, car dealer, covenanted not to sell cars below a certain price,
or to certain persons, or to exhibit them without P's consent. Stipulated sum was made payable "for every breach"
of the agreement. Sum covered term not to exhibit which was different in its object and importance from the
stipulations regarding sale of cars. Presumption not rebutted.
- Where the sum is an attempt to "average out" the loss likely to be suffered from the breach of all the
obligations, e.g., if breach of one term would likely result in loss of $5-$15, and breach of another term $2-$12,
sum of $8 covering both breaches would be reasonable.
First, there must be some uncertainty as to what loss will be sustained, and second, the difference between the
losses likely to arise from the several breaches must not be too great.
- A clause requiring a debtor to pay a greater sum than the contractual debt if he fails to pay the debt will be
held to be a penalty, e.g., clause making debtor liable to pay $200 if he fails to pay $150 on the due date.

- Rule is harsh. Suggested approach is that if the sum is disproportionate to the contractual debt, then it will be treated
to be a penalty. If the sum is a reasonable pre-estimate of the loss likely to be sustained on non-payment, it should be
recoverable as liquidated damages.

- It will be held to be a penalty if the sum stipulated is extravagant and unconscionable in comparison with the greatest
loss that could conceivably be proved to have flowed from the breach.

- The court must attempt to put itself into the position of the parties at the time of the making of the contract, and
viewing the nature of the agreement and all its terms, determine whether the sum stipulated was a reasonable pre-
estimate of the loss likely to result from the breach.

 In Phillips Hong Kong Ltd, the Privy Council stated that the court had to be careful not to set too stringent a
standard and bear in mind that what the parties had agreed should normally be upheld. Any other approach would
lead to undesirable certainty, especially in commercial contracts. It was stressed that a clause can be a genuine
pre-estimate of loss even though hypothetical situations could be presented in which P's actual loss would be
substantially lower.

Three classes of contract in which the rules have been developed are:

(i) Agreements in which time is of the essence, e.g., building contracts

- Usually, there is a clause to the effect that if the contractual obligation is not performed within the specified time, an
agreed sum of damages will be payable.
- Where the sum is payable whatever the extent of the breach, it is likely to be treated as a penalty, e.g. D agrees that if
he exceeds the period of time stipulated for the work, he will pay P $x.
- The same sum is payable whether the delay is substantial or trivial, and thus it is unlikely to be regarded as a
reasonable pre-estimate of the loss occurring on breach.
- Where the sum is graduated according to the extent of the breach, it will generally be regarded as liquidated
damages: the parties, by making the sum proportionate to the extent of the breach indicated an attempt to pre-estimate
loss.
 Clydebank Engineering Co v Don Jose Ramos - Spanish Govt., in expectation of war, contracted for the
construction and delivery of 4 torpedo-boats by the Ds within a certain time, £500 to be paid for each vessel for
every week of delay. This was held to constitute liquidate damages.

(ii) "Restrictive" agreements, e.g. covenants restricting the sale or resale of goods, restrictive covenants b/w
employer and employee
- Covenants restricting resale of goods pose special problems in the assessment of damages b/c the breach by D of his
agreement may have far-reaching effects on the whole structure of P's trade.
- Consequently, courts have been reluctant to interfere with the stipulated sum on the ground that it is out of
proportion to the anticipated loss.
- c.f. where the sum is payable on the breach of different kinds of obligations: Ford Motor Co v Armstrong

(iii) Hire-purchase agreements

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 Bridge v Campbell Discount Co Ltd - there was a minimum payment clause in the hire-purchase agreement
whereby if the hirer was in breach of contract (or chose to lawfully terminate the contract) he should return the
goods to the creditor to make up the payments already paid to two-thirds to the hire-purchase price. This sum was
expressed to be 'compensation for depreciation'. The hirer, having made the initial car payment and one
installment, was unable to pay any more and returned the car.
- House of Lords held that the sum payable under the minimum payment clause was penal b/c it did not represent a
genuine pre-estimate of the loss that the owner was likely to sustain through depreciation of the car.
- Naturally, the longer the article remained in the hirer's possession, the more its value would depreciate. Yet the
clause operated in such a way that the sum payable would decrease as the period of hire continued and more
instalment payments were made.
- Lord Radcliffe stated that it was a sliding scale of compensation, but a scale that slides in the wrong direction. The
real purpose of the clause was not to provide compensation for depreciation but to substantially guarantee the
owners against loss of their hiring contract.

Forfeiture of deposits and part payments

- Instead of requiring that a party in breach should pay an agreed sum as compensation, the contract may provide for an
advance payment, by way of deposit or part payment, which will be forfeited if the depositor or purchaser should fail
to perform his contract.

- Note differences b/w cases of forfeiture of deposits and payment of agreed damages:
 in forfeiture, money is paid or payable before breach.

 in forfeiture, C who seeks recovery of his deposit or part payment is the party in breach of contract
(whereas in a liquidated damages case, C is the victim of the breach).

- Both liquidated damages clauses and forfeiture clauses may operate in terrorem of the party performing his
obligations.

- Yet courts have been slow to grant relief in cases in cases of forfeiture.

At common law

- The simple rule prevails that where the contracting parties have agreed that a sum deposited is to be forfeited on
breach of contract, the party in default may in no circumstances recover the money.
 Stockloser v Johnson - C sold to D certain plant and machinery. D agreed that if he were to default by a period of
28 days in his instalment payments C would be entitled to rescind the contract, recover possession and retain the
payments already made. C defaulted in his instalments. C was unable and unwilling to complete performance of
the contract and sued to recover the amount of instalments he had paid. By then, he had already received
substantial royalties from the plant.
Held: Even if C could show that the forfeiture clause had a penal character, he could not argue that it should be
ignored so as to enable him to recover the money at common law by an action for money had and received.

In equity

- Where a contract provides for payment by instalments, and on default of any payment for the forfeiture of
instalments already paid, equity may relieve against forfeiture if the contract has not been rescinded and the purchaser
is able and willing to perform, i.e., if specific performance is available: Kilmer v British Columbia Orchard Lands Ltd

- The problem is whether equity will grant relief against forfeiture in cases where specific performance is unavailable
on the ground that the sum forfeitable is unconscionable in relation to the apprehended loss.
 In Steedman v Drinkle, relief was granted. Under a contract for the sale of land between vendor P and purchaser
D, D had paid a deposit of $1,000 and had agreed to pay the balance of the purchase price by instalments. It was
stipulated that time was of the essence and that if D defaulted in payment of the instalments, P was free to rescind
the contract and retain "as liquidated damages" the payments already made. D defaulted in payment, but before P
had rescinded the contract, D successfully claimed recovery of the payments he had already made, even though
specific performance was unavailable. It was held that the stipulation was a penalty.

 In Stockloser v Johnson, majority of the Court of Appeal considered that Steedman v Drinkle had established a
general doctrine of relief against forfeiture similar to that of relief against penalties.
Denning LJ stated that for the doctrine to apply, two things are necessary: -
(i) the forfeiture clause must be penal in nature, i.e., the sum forfeited must be out of proportion to the damage
(ii) it must be unconscionable for the seller to retain the money
It was held that it was not unconscionable for P to retain the instalments already paid b/c by the time D claimed
relief he had already received substantial royalties from use of the plant.

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 Romer LJ, dissenting, took a narrower view of Steedman v Drinkle; he felt that it only illustrated the rule that
relief could only be granted before rescission where the purchaser was able and willing to perform his contractual
obligations.

 In Galbraith v Mitchenhall Estates Ltd, Sachs J. regarded the propositions of the majority in Stockloser as obiter,
in that on the facts, the P was not entitled to relief. He adopted the narrower view of Romer LJ and refused the P
relief against forfeiture although the terms of the contract of hire enabling the Ds to both retain the initial payment
and have re-possession of the caravan were unduly harsh so as to be a penal nature.

- According to McGregor and Ogus, broader approach of majority in Stockloser is more consistent with general
principles of equitable relief; narrower view gives rise to unnecessary and harsh distinctions b/w forfeiture of sums
already paid and the promise to pay agreed damages.

Money payable on events other than breach

- Where contracting parties agreed that a stipulated sum was payable on the occurrence of some event other than a
breach, the conventional approach was that the sum, however extravagant, was recoverable. i.e., the liquidated
damages / penalty distinction does not apply b/c the sum is not damages: it becomes payable on an event other than a
breach of contract.
 In Bridge v Campbell Discount, some doubt was cast on this approach where the sum is payable either on a breach
of contract or on lawful termination by the hirer.
A majority of the House of Lords held that on the facts the hirer had not exercised his option to determine, but had
committed a breach of the agreement. On that basis, the sum payable was held to be a penalty.

- The position appears to be that where a sum is payable on the occurrence of a number of events, some of which
involve a breach of contract, and others which do not, the question whether the liquidated damages/penalty approach
can be applied to the stipulated sum depends on the event which in fact occurs.
- If the right to the stipulated sum arises on an event which constitutes a breach, the law of penalties does apply.

- If the event does not constitute a breach, the sum will be recoverable, however unconscionable.

- If counsel leads circumstances for the court to consider, it may examine these circumstances to determine whether
they disclose a breach of contract, which would entitle the court to review the stipulation.

3. FACTORS LIMITING COMPENSATORY DAMAGES

- The object of compensatory damages is redressing loss.

- However, tribunal is not mandated to redress every loss.

- Even if a loss has been incurred, no damages can be recovered if a wrong has not been committed: it is damnum sine
injuria.

- To establish liability, P must prove that the loss sustained was caused by the tort or breach of contract and that it was
not too remote a consequence.

- As regards damages, P will recover such losses as resulted from and were not too remote a consequence of the breach
of duty for which D is liable.

- Note: Remoteness operates at two levels: liability and recoverability.

- P may have his damages reduced because his own conduct constituted contributory negligence.

- P has an obligation to take reasonable steps to mitigate his losses and cannot claim compensation for any loss caused
by his failure to do so.

(A) CAUSATION

- Causation determines whether as a matter of fact the loss was caused by D's breach of duty.

- Remoteness determines whether as a matter of policy, recovery of the loss sustained should, in law, be excluded.

- "The law cannot take account of everything that follows a wrongful act": per Lord Wright in Liesbosch Dredger v
S.S. Edison

Sine qua non test

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- P must show that D's breach of duty was causally related to his loss, i.e. that the loss would not have occurred but for
the breach of duty - sine qua non test.

- Principle applies tort and contract.

Additional sufficient events

- There may be two or more events, each of which is sufficient without the other to bring about the loss.

- The events may be concurrent, e.g., P loses business profits when he is physically injured by D1. At the same time,
the firm's machinery is damaged by D2. Each is a sine qua non of the lost profits.

- Alternatively, the events may be successive.

Note: -
- Where a loss results from a natural event and a single unlawful act, and both are sufficient causes, in general the sine
qua non test will determine liability.

- P, would irrespective of D's interference, in any event have sustained the loss and it is not the task of the law to shift
the burden of naturally occurring losses on to another.

 Jobling v Associated Dairies - Ds' breach of statutory duty had caused P to suffer a back injury; could only do
light work afterwards. 3 years later and before trial, he was found to be suffering from a spinal disease unrelated to
and arising after the accident but which in itself rendered him wholly unfit to work. Ds argued that the onset of the
disease ended their liability for his loss of earnings resulting from his back injury.
House of Lords held that the supervening illness was to be taken into account and that there could be no recovery
for loss of earnings from the date of total incapacity to the date of trial and for the future from the date of trial. The
sine qua non test was applied.

- Where the sufficient causes of a loss involve two or more unlawful acts, the sine qua non test can no longer cope w/
problem.

- An injured party should not be worse off b/c more than one party has inflicted injury upon him.

- The task of the law is to apportion responsibility equitably b/w those in breach.

 Baker v Willoughby - P sustained an injury to his leg when he was hit by D1's vehicle. Before P's claim against D
was heard, he was shot in the same leg by D2 during an armed robbery. The leg had to be amputated. D2 was a
man of straw and was not sued. D1 argued that he was liable only for loss suffered from having an injured leg until
the date of the robbery: after that his breach should not be regarded as a factual cause of the loss.
- House of Lords held that D1 should be liable for the loss suffered from having an injured leg without any
reduction on the ground of D2's breach. D1 alone was liable for the loss suffered from an injured leg after the date
of the robbery. P's loss should not be diminished by the mere fact that another person may be liable. Lord Reid
said that the case could be treated as if the two injuries were concurrent causes. Note the sine qua non test was not
applied in respect of D1.
- House considered that D2 would only have been liable for depriving P of an already damaged leg. He would only
have been liable for the additional injury since he takes his victim as he finds him. *Note the sine qua non test was
accepted in respect of D2.

Intervening cause

- Even though D's breach of duty is a cause of P's loss, P may not recover damages for it because an intervening cause,
combining with it to produce loss, is regarded as breaking the chain of causation b/w D's breach of duty and the loss.
- Underlying policy is that where an intervening cause is much more responsible for the loss than is D's breach of duty,
it is unfair on D and is imposing too great a burden on him to hold him liable for the loss.

* Intervening acts of a third party

(i) Where there was a duty to guard against such a third party intervention

- Where an intervening voluntary act of a third party, intended by him to cause the damage, is perpetrated in
circumstances where D's duty to P is take care that such an act does not happen, D will be liable.
 London Joint Stock Bank v Macmillan - A customer of the P bank , in breach of his contractual duty to the bank
not to draw cheques so as to facilitate fraud, signed for a trusted clerk a cheque for £2 drawn in such a way as to
enable the clerk readily to alter the amount to £120. Clerk obtained this sum from the bank and absconded.
- House of Lords held that the customer was liable to the bank for the forged increase. The intervening acts of the
third party, albeit criminal, did not break the chain of causation b/c the duty broken was to guard against a third
party fraudulently obtaining money from the bank.
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 c.f. Weld-Blundell v Stephens - P, when employing D chartered accountant to investigate the affairs of a
company, libelled certain officials of the company in his letter of instructions to D. As a result of D's negligence in
leaving the letter at the company's office, it was read by a third party, who communicated its contents to the
officials, who in turn sued P for libel and recovered damages. P sought to recover these damages in an action for
breach of contract against D, together with the costs incurred in the prior action.
- House of Lords held that he could recover only nominal damages on the main ground that the third party's
mischievous activity, though facilitated by D was a new and independent cause.
- Two difficulties with decision: (1) the intervening act was probably foreseeable and (2) the very thing happened
which it was D's duty to guard against.

 Dorset Yacht Co v Home Office - House of Lords held, on a preliminary point of law, that Ds could be liable for
the damage caused to Ps' yacht by Borstal boys in an attempt to escape from the island on which they were
working, an attempt made possible by the failure of the Ds' officers, in whose charge the boys were, to exercise
any effective control or supervision over them.

(ii) Third party intervention other than where there was a duty to guard against it

- There is no hard and fast rule, but it seems that where the third party's intervention comprises wrongdoing it breaks
the chain of causation unless it was a likely, or in the case of intentional wrongdoing, a very likely consequence of D's
breach of duty.
- Non-wrongful conduct of a third party will probably only break the chain on the same principle as for natural events.
 Knightley v Johns - D1 negligently over-turned his car thereby blocking a tunnel. D2, police inspector, was held to
be negligent in not immediately closing the tunnel and in ordering P, a constable, to ride back along the tunnel
against traffic in order to close it. While doing so, P collided with D3's oncoming car and was injured.
Court of Appeal held that D2's negligent acts broke the chain of causation and that D1 was not liable for P's
injuries.

- Where the third party's conduct comprises intentional wrongdoing, the intervention will break the chain of causation,
unless it was a very likely consequence of D's breach of duty.
 Ward v Cannock Chase District Council - P owned 2 cottages belonging to D council. Council's policy was to
board up the cottages it owned as they became vacant with the result that they fell into disrepair and were being
damaged by vandals. D held liable for damage to P's premises resulting initially from vandalisation of Ds empty
house next door and later from direct vandalisation of P's they unoccupied premises.
- Chain of causation was held to be unbroken b/c it was very likely that unoccupied houses in the area would be
vandalised b/c of disrepair. Note court did not allow recovery for loss in respect of the chattels on the premises b/c
P could have taken steps to secure the chattels, as opposed to the premises themselves, against the acts of the
vandals.

* Intervening acts of the plaintiff

- Position seems to be that unreasonable conduct of P (unless the duty was to guard against that intervention) breaks
the chain of causation whereas reasonable conduct does not.
- Note P's unreasonable action subsequent to the breach of duty may be the cause of his loss and deny him damages.
Similarly, P's failure to mitigate his losses, i.e. his unreasonable inaction, can limit his recovery of damages.
- Contributory negligence subsequent to the tort or breach of contract might not break the chain of causation, but might
allow a reduction of damages: The Calliope
 Haynes v Harwood - D's servant negligently left a horse and van unattended in a busy street at a time when there
were many children about. Horse ran away, and P, a police constable, eventually managed to stop it but was
injured in so doing. D contended damage was too remote.
- Court of Appeal held that D ought to have contemplated that someone might try to stop the horse in order to
prevent injury to life and limb, and that, as the police were under a general duty to protect life and property, the act
of P and the injuries sustained by him were the natural and probable consequences of D's negligence.

 Videan v British Transport Corp'n - same principle applies even where D is under no duty of care to the person P
rescues, in that case, a child trespasser.

 Quinn v Burch Bros (Builders) Ltd - Ds in breach of contract failed to supply a step-ladder to P, a sub-contractor.
P injured himself when he fell from an unfooted trestle which he had made use of in the absence of a step-ladder.
- Court of Appeal held that Ds were not liable for P's injuries b/c P's own unreasonable acts broke the chain of
causation b/w the breach of contract and his injuries.

* Intervening natural events

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- Where the event is independent of D's act in the sense that it would have happened whether D had acted or not, then
D will not be liable for further damage following upon the happening of the event if the event can be regarded as a
coincidence.
- Classic illustration: P who, having been injured by D's negligence and while on the way to the hospital, is further
injured by a falling tree or roof-tile or, while in hospital, suffers further injury b/c of a fire there: per Lord Macdermott
in Hogan v Bentinck West Hartley Collieries (Owners) Ltd.

 Carslogie SS Co v Royal Norwegian Govt - P's ship, negligently damaged by D's, had temporary repairs effected
to render her seaworthy, and subsequently proceeded to New York to carry out permanent repairs. En route she
was rendered unseaworthy by heavy weather, thus requiring immediate repair. At New York, both sets of repairs
were effected concurrently, and the period taken would have been no less had only the heavy weather repairs been
carried out.
- House of Lords held that D was not liable for damages for loss of use for the ten days which would have been
required to repair the tort damage separately. The damage was not a consequence of the collision; the chain of
causation was broken by a supervening event.

- Where the intervening event, although independent of D's act, is one which is in no way abnormal but in the ordinary
course of things, then D will remain liable for the further damage.
 Monarch SS Co v Karlshamns Oljefabriker - By reason of D's failure to provide a seaworthy ship for the carriage
of P's cargo, the voyage was delayed so that the ship could not reach her Swedish destination before the outbreak
of World War II, and was ordered by the Admiralty to discharge her cargo at Glasgow.
- The cost of transhipping the cargo was held to be a consequence of the breach of contract, since the outbreak of
war was such a possibility that P could have anticipated it. Delay, at a time when war was likely to occur, gave
more opportunity for the incidence of the intervening event than a speedy and proper dispatch would give.

- Standard set for establishing chain of causation is broken by natural events is fairly high when contrasted with
approach to wrongful intervention by a third party or P's own unreasonable conduct.
Rationale: D cannot attach blame to anyone else in case of natural events.

(B) REMOTENESS

- In tort, the test is whether the harm was reasonably foreseeable at the time of the tort.
- In contract, the test is whether the harm was reasonably contemplated at the time of the making of the contract.

* Torts
 The Wagon Mound (No 1) established that consequences are too remote if a reasonable man would not have
foreseen them.
- Ds carelessly discharged oil from their ship into a harbour. Over two days later, molten metal from P's welding
operations on the wharf set fire to the oil on the water. P's wharf was severely damaged.
- Privy Council held that Ds were not liable in negligence b/c while they could have reasonably foreseen damage
to the wharf by fouling, they could not have reasonably foreseen that the wharf would be damaged by fire when
they carelessly discharged the oil.
- Wagon Mound test of 'reasonably foreseeability' has been loosely applied.

Note the following: -

(i) So long as the type of physical damage which has resulted was reasonably foreseeable at the time of the negligence,
neither the actual manner in which it came about nor its actual extent needs to have been reasonably foreseeable.
 Hughes v Lord Advocate - Post office workmen left an open manhole, in which they had been working, covered
by a shelter tent and surrounded by warning paraffin lamps. P, aged 8, was playing with one of the lamps when he
stumbled over it and was knocked into the hole. An explosion followed and P was thrown into the manhole and
was severely burned.
- Ds were held liable b/c while it was not reasonably foreseeable that a child would be burned as a result of the
actual sequence of events that had occurred, it was reasonably foreseeable that a child could be burned by playing
with one of the gas-lamps. Nor did it matter that the burns were more serious than those that were reasonably
foreseeable.

- The reasonable foreseeability test is therefore applied to limit the kind of damage recoverable but not the extent of the
damage recoverable.

(ii) The tortfeasor must take his victim as he finds him - 'thin skull' principle.

- This is considered to be an exception to the principle of remoteness - an admitted or established wrongdoer is liable
for any increased injury to his victim by reason of a state of affairs existing at the time of the wrongful act.
 Smith v Leech Brain & Co Ltd - a negligently inflicted burn on P's husband's lip resulted in his dying of cancer,
b/c he was suffering from pre-malignant cancer and this was caused to develop by the burn. Ds were held liable for
his death.

- Note also Liability was established by proving that the type of injury (the burn) was a foreseeable consequence of
D's negligence, despite the fact that the extent of damage (death) was not foreseeable as resulting from the accident.

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(iii) Where D's tortious conduct inflicts a physical injury on P's person or property, P must show that the type of injury
inflicted was a reasonably foreseeable consequence of the tort, but he need not show that the losses consequent on that
injury were equally foreseeable.

- Here, the test of reasonable foreseeability determines the existence of liability rather than the quantum of
compensation.

- It is no bar to recovery that the pecuniary value of the property damage or the loss of earnings/dependency resulting
from personal injury or death is far greater than could reasonably have been foreseen.

- E.g., if D negligently injures a millionaire or negligently damages an antique vase, he will be liable so long as the
personal injury or property damage was reasonably foreseeable, even though he could not reasonably foreseen that the
loss of earnings or pecuniary value would be so great.

- It is doubtful whether this reasoning extends to loss of profits consequent on physical damage or to other pecuniary
loss (i.e., P would recover damages only for losses that were reasonably foreseeable).

Impecuniosity

 In Liesbosch Dredger v SS Edison, the House of Lords denied recovery for those losses which had resulted from
P's impecuniosity.
- Ds negligently sank Ps' dredger which was engaged in operation under contract. Ps were unable to buy a
substitute b/c they had invested all their funds in the Liesbosch. Had they bought a substitute, the delay in
resuming operation would have been comparatively short. Much additional time was lost and considerable further
expenses in wages and maintenance were incurred before Ps found a dredger they could hire; this dredger was
more expensive to work.
- House of Lords held that Ps could not recover for the expenses, loss and damage incurred over and above that
which would have been incurred had they bought a substitute. Therefore, they could not recover their actual
greater loss, incl. the hire fee and expenditure incurred in using the hire vessel.
- Lord Wright said that the extra loss was due to their impecuniosity, a separate cause distinct from the tort. In the
alternative, their impecuniosity was too remote to be regarded as a consequence of Ds' tortious acts.
- Criticism: the loss from impecuniosity should have been recoverable b/c the tortfeasor is to take his victim as he
finds him and the damage arising was arguably foreseeable. In reality, Lord Wright, as a matter of policy, was
treating impecuniosity as a factor limiting damages.

- The Liesbosch has not been overruled, but courts have not often followed it.

 In Muhammad v Ali, loss flowing from impecuniosity was held to be recoverable so long as it satisfied the
normal test of remoteness. (contract case; recovery allowed in respect of loss arising from impecuniosity when
such was within the reasonable contemplation of the parties).

 In Archer v Brown, P had claimed damages representing the amount of interest charges paid on the loan taken out
to purchase the shares. Judge rejected D's argument that the loan was irrecoverable because it flowed from D's
impecuniosity and said that applying a reasonable foreseeability test, it must have been plain to D that his deceit
was putting P in a position where he could not repay the bank. Liesbosch distinguished on ground that in that case
parties were strangers before the accident.

Economic loss

- Economic loss is not recoverable in the absence of physical damage to P: Spartan Steel & Alloys v Martin & Co
(Court of Appeal denied recovery for foreseeable economic loss to P which had been triggered off by the conduct of D
causing physical damage to a third person. Recovery would be allowed where as a result of the physical damage to the
third person, P had suffered foreseeable though indirect physical damage to his own property)

Psychiatric trauma or nervous shock

- Limitations beyond reasonable foreseeability are also placed on claims for psychiatric trauma or nervous shock b/c
like economic loss, it may affect a wide range of people beyond the direct victim of the D's tortious conduct.

 In Alcock v Chief Constable of South Yorkshire, the 10 appellants had suffered psychiatric trauma as a result of
the disaster in 1989 at Hillsborough Stadium, Sheffield, in which, as a result of admitted negligence of the Ds,
some 95 people were crushed to death and over 400 physically injured. None of the appellants had suffered any
physical injury, nor been in danger, most of them were not at the ground, though they saw part of the events on
television. All of the appeals failed.
- The House of Lords stated that claims for nervous shock are to be controlled by reference to three elements:
(i) The class of persons whose claims should be recognised

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 - The House of Lords rejected arbitrary qualifications by reference to particular relationships, such as
husband and wife or parent and child.
- Lord Keith pointed out that the kinds of relationships which may involve close ties of love and
affection are numerous and that it is the existence of such close ties which leads to mental disturbance when
the loved one suffers a catastrophe.
- The test should simply be reasonable foreseeability subject to qualifications that a sufficiently close
relationship of affection will readily be presumed in the case of close relatives and the claims of remoter
relatives will be scrutinised with care.

(ii) the proximity of such persons to the accident

- There must be sufficient proximity of time and place to the event leading to the psychiatric trauma.
- "Proximity" has its primary meaning of nearness in space and relationship, but is extended to cover
the "immediate aftermath" of the event.

 McLoughlin v O'Brian - road accident caused by D's negligence caused by D's negligence killed P's young
daughter and caused injuries to her other children and to her husband. At time, P was at home 2 miles away. Hour
later told of accident and taken to hospital where she was told of the death and saw the injured members of her
family in circumstances which were extremely distressing and "capable of producing effect well beyond grief and
sorrow". P's claim was unanimously upheld by House of Lords.

- McLoughlin was distinguished in Alcock, b/c (i) interval b/w accident and sight of the bodies by Ps was longer (9
hours) and (ii) purpose was formal identification, rather than aid and comfort.

(iii) The means by which the trauma is caused

- There need not be direct perception of the accident by sight or hearing but notification by third parties (including
newspaper or broadcast reports) will not suffice.

- House of Lords did not rule out the possibility of liability where the psychiatric illness was induced by
contemporaneous television transmission of the accident, e.g., live television broadcast of a ballooning event for
children, watched by parents, in which the balloon burst into flames.

- In Alcock, the television transmission showed the developing chaos in the stadium and provided the framework in
which the fear of the Ps for their loved ones developed, but it did not show the suffering of identifiable individuals and
therefore lacked the immediacy necessary to found a claim.

NB: Lord Oliver in Alcock thought that would reject claim where D suffers an accident through his own fault and this
causes psychiatric trauma to P. (could give rise to difficulty, if a 2nd D had made some contribution to the accident).

*Note generally:
 Van de Weg v Minister of Health & Social Services (Sup Ct, Bermuda) - following outbreak of swine flu, US
President undertook mass immunisation programme; consent form was to be signed by person vaccinated. D,
acting through Chief Medical Officer who assumed US President had acted on informed and responsible advice,
decided to introduce vaccination programme in Bermuda, at first confined to members of essential services. At
time, little or no evidence of serious adverse effects of influenza vaccines, although any vaccination was
recognised as carrying an element of risk. P, police sergeant, developed GBS (neurological disorder) subsequent to
vaccination. US programme halted in same year after many persons vaccinated developed GBS. P sued Minister
and Commissioner of Police in negligence. Held,
(1) In light of knowledge at time, there was no negligence in inaugurating an immunisation
programme in Bermuda. The risk of serious neurological problems was remote. It was not
unreasonable for Minister to try and protect not only his own people, but tourists, on whom country
was dependent.
(2) No negligence in omitting consent form, since that practice was peculiar to US and there
was believed to be no reason to give any specific warning about possible side-effects to persons
vaccinated. In any event, P would have consented b/c of his concern about an adverse report going on
his file for not obeying orders.

* Contract

- Test for remoteness dealt with in four main cases.

 Hadley v Baxendale - Ps delivered a broken millshaft to Ds, carriers, to convey to its makers as a model for a
replacement. Ps had no spare shaft, but Ds were told only that the article was a broken millshaft, and that Ps were
owners of the mill in question. Ds were late in delivering the shaft.
- Held that the carriers were not liable for the loss of profits while the mill remained idle b/c it was too remote.
- Alderson B. laid down the test for remoteness in two rules. He said losses arising from a breach of contract which
were not too remote were those either:
(i) arising naturally, i.e., according to the usual course of things, from the breach, or
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 (ii) reasonably supposed to be have been in the contemplation of the parties, at the time they
made the contract, as the probable result of the breach.
- On the facts, neither rule was satisfied. Loss of profits was not a loss arising naturally from the delay in
delivering a piece of machinery. The loss was not in the contemplation of both parties b/c the special
circumstances under which the contract was made, that the mill would remain idle until a replacement was
obtained, were not communicated to the Ds.

 Victoria Laundry (Windsor) Ltd v Newman Industries Ltd - Ps, launderers and dyers, decided to extend their
business and contracted to buy a boiler from Ds. Ds knew that Ps wanted the boiler for immediate use in their
business, but in breach of contract delivered the boiler 5 months late. Ps claimed damages for the loss of profits
that would have resulted from using the boiler, incl. damages for the exceptional loss of profits that they would
have been able to gain from contracts made w/ the Ministry of Supply.
- Court of Appeal held that damages should be awarded for ordinary loss of profits but not for the exceptional loss
of profits. The exceptional loss of profits were too remote b/c they did not arise naturally and were not in the
contemplation of the parties at the time of contracting since Ds knew nothing about the Ministry of Supply
contracts.
- Asquith LJ said that the two rules of Hadley v Baxendale could be reformulated as a single rule, centring on
reasonable contemplation.

- Note the rule, based on the contemplation of the parties (actual or implied) contains both objective and subjective
aspects.
- It is subjective in the sense that it depends on special circumstances known to both parties.
- It is objective in that actual contemplation is not required - it need only reasonably be supposed to have been in the
contemplation of the parties.

 The Heron II - a ship was chartered to carry sugar to Basrah. At the time of contracting the P charterer intended to
sell the sugar as soon as it reached Basrah. D shipowner did not actually know this but did know that there was a
market for sugar at Basrah. In breach of contract the shipowner reached Basrah 9 days late. During those 9 days
the market price of sugar at Basrah fell.
-House of Lords held that he should recover such damages for the profit lost by reason of that fall and that a
higher likelihood of the loss occurring was required in contract than in tort.

- In tort, D should be liable for slight but foreseeable risks.

- In contract, the loss is too remote if D could not reasonably have contemplated that loss as a serious possibility, if he
had thought or did think about the breach at the time the contract was made.

 Parsons v Uttley Ingham - Ds supplied to Ps a hopper for storing pig food; in breach of contract, they failed to
provide for proper ventilation so that food become mouldy and many of Ps' pigs died from a rare intestinal disease.
Ps claim… at the time of contracting.
- Applying that test to the facts, as it was reasonably contemplated by the parties at the time of the contract that by
reason of the failure to provide a hopper fit for storing pig food, there was a serious possibility that the pigs would
become ill and since illness could be said to be the same type of loss as death, it did not matter that the extent of
that loss (i.e. death of many of the pigs) was not reasonably contemplated as a serious possibility.

Degree of knowledge required

- Actual knowledge is only relevant if w/out that knowledge there would not have been liability.
- In most cases, knowledge would have been imputed in any event because it was w/in the ordinary course of things.
- Each case must be taken on its own facts in deciding what knowledge is to be imputed to D.
- The business or profession of the parties, particularly of P, is relevant.
- Authorities tend to give damages for loss of business or resale profits against a seller of goods, but not a carrier of
goods b/c seller may reasonably contemplate that his purchaser will resell the goods but a carrier will not generally be
expected to contemplate this consequence.
- Seller of land also less likely to be held liable for loss profits.

 Diamond v Campbell-Jones - buyer of leasehold house, who was in business as a dealer in real estate and had
bought and converted a number of town houses, was refused damages in an action against the repudiating seller for
the profit he would have made upon the conversion of the houses into flats and offices.
- Buckley J. found that in some cases the nature of the subject-matter of a contract or of its terms may be such as to
make it clear that one of the parties is entering into the contract for the purpose of a particular business, and court
will infer that the other party must have appreciated this.
- Special circumstances are necessary to justify imputing to a vendor of land knowledge that the purchaser intends
to use it any particular manner.
- Where actual knowledge is required to impose liability upon D for particular losses, he must have that knowledge
at the time of entering into the contract; knowledge after this time, although before breach, is not enough.
- For D to be liable for damage resulting from special circumstances, not only must the parties contemplate that the
damage resulting from the special circumstances may occur, but they must further contemplate that D is taking the
risk of being liable for such consequences.
- Special circumstances need not be a term of the contract for D to be liable for the extraordinary loss.

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(C) MITIGATION

- There are three rules as to avoiding the consequences of a wrong: -

(i) P cannot recover for avoidable loss

- P must take all reasonable steps to mitigate the loss to him flowing from D's wrong and cannot recover damages for
any such loss which he could have avoided but has failed, through unreasonable action or inaction, to avoid: Viscount
Haldane LC British Westinghouse Co v Underground Ry.

(ii) P can recover for loss incurred in reasonable attempts to avoid loss

- Where P does take reasonable steps to mitigate the loss to him flowing from 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.

(iii) P cannot recover for avoided loss

- Where P does take steps to mitigate the loss to him flowing from D's wrong and these steps are successful, D is
entitled to the benefit accruing from P's action and is liable only for the loss as lessened.

No recovery for avoidable loss

Note the following: -

- The principle concerns mitigation of pecuniary and non-pecuniary loss, e.g., where P, who having been physically
injured, fails to take reasonable steps to obtain medial aid and thereby fails to cut down the pain and suffering resulting
from the injury.

- P is under no duty to mitigate. He is fully entitled to be as extravagant as he pleases in making good the loss but not
at D's expense.

- The onus of proof on the issue of mitigation is on D.

- If he fails to show that P ought reasonably to have taken certain mitigating steps, then the normal measure will apply.
 Note, in Selvanayagam v UWI, Privy Council held that where a physically injured P had refused to undergo
medical treatment which had been recommended, the burden was on him to proved that he acted reasonably.

 Russell v van Galen, the Court of Appeal of Bermuda found that it was bound by the Privy Council ruling.

- However, it regarded as obiter, dicta that the burden of proving reasonableness is always on the P in a case in which
it is suggested that, had P made a different decision, his loss would have been less than it actually was.
 In Russell, P was injured in an accident caused by the negligent driving of D. P was an English-trained Registered
Nurse, who had at the date of the accident, had been employed full time as a private nurse in Bermuda for 7 years.
P's husband was non-Bermudian. P's evidence was that had it not been for the handicaps caused by the accident, it
was likely that she would have continued as a full-time private nurse on her return to England. Trial judge included
in P's awarded of damages, a sum for loss of future earnings as a full-time private nurse in England. On appeal, D
submitted that the trial judge erred in holding that the onus rested on D to prove that P had failed to mitigate past
and prospective loss of income. D had suggested that she should have mitigated her damages by retraining for
some other sedentary work in an entirely different profession, which might have enabled her to work 40hrs/wk.
- Court of Appeal rejected D's submission and held that the onus was not on P to negative his suggestions. Instead,
the onus was on D to prove his assertion and he had failed to discharge it.

- Note: mitigation must be possible.

Time when mitigation ought to commence

- P need take no steps in mitigation until a wrong has been committed against him.
- Where a party to a contract repudiates it, the other party has an option to accept or not to accept the repudiation.
- If he does not accept it there is still no breach of contract, and the contract subsists for the benefit of both parties and
no need to mitigate arises.
- If the repudiation is accepted, this results in an anticipatory breach of contract in respect of which a suit can be
brought for damages.

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- Although the measure of damages is still prima facie assessed as from the date when D ought to have performed the
contract, this amount is subject to being cut down if P fails to mitigate after his acceptance of the repudiation.
 Shindler v Northern Raincoat Co - D company, in the course of P's employment by them under a 10-year
agreement, wrongfully repudiated the contract by informing P that they would not continue to require his service
as from an apparently unspecified later date, but only removed him from office at an extraordinary general meeting
of the company some months after this repudiation.
- Held: P had no duty to mitigate by accepting alternative offers of employment b/w Ds' wrongful repudiation and
their removal of him from office b/c during this period there had been no breach: P had not accepted the
repudiation
- If D repudiates, P need not take steps to mitigate loss, by accepting the repudiation and suing for damages.
- He may instead, where he can do so w/out D's assistance, perform his side of the contract and claim in debt for
the contract price.
- Even if this involves incurring expense in the performance of the contract which, in the face of D's repudiation, is
rendered useless, P is not required to minimise the loss by accepting the repudiation and suing for damages.

 White & Carter v McGregor - Ps, advertising agents, contracted w/ sales manager of D garage proprietor to
display on litter bins advertisements for D's garage for 3 years. D, on hearing of the contract, wrote to Ps to cancel
it but Ps refused, displayed the advertisements in accordance with the agreement and sued for the contract price.
- House of Lords held that 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.

- Not yet clear how absolute is P's right to ignore a repudiation and carry on w/ performance.
- Lord Reid in White & Carter v McGregor said that 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 to be allowed to
saddle the other party w/ an additional burden with no benefit to himself.

Standard of reasonableness
- Standard required of P is that which a reasonable and prudent person might in the ordinary conduct of business (or
ordinary course of events) properly have taken: Viscount Haldane in British Westinghouse.

- Whether P has acted reasonably or not is a question of fact, taking into account all the circumstances of the particular
case.

- Although P must act with the D's as well as with his own interests in mind, he is only required to act reasonably and
the standard of reasonableness is not high in view of the fact that D is an admitted wrongdoer.
 Lord Macmillan in Banco de Portugal v Waterlow said that criticism after an emergency has passed of the steps
taken to meet it does not come well from those who have themselves created the emergency. The law is satisfied
if P acted reasonably and he will not be barred from recovering the cost of the remedial measures merely b/c the
party in breach can suggest that other measures less burdensome to him might have been taken.

- Illustrations of standard required of P: -

- P need not risk his person too far in the hands of surgeons: Selvanayagam v UWI (Privy Council held that the refusal
of a physically injured P to undergo a dangerous and risky neck operation which a doctor had recommended did not
constitute a failure to mitigate, given P's diabetic condition)
- On the other hand, where the operation would not be regarded by reasonable men as a risky one, then a refusal to
allow it will be a failure to mitigate on the part of P. McAuley v London Transport Executive - injured P refused to
undergo an operation strongly recommended by a doctor which, if successful, would have restored him to his previous
earning capacity. Held that P's refusal was unreasonable, so that D was only liable for loss of wages up to the time
when would have returned to work had he had the operation.

- Where D makes to P an offer of an alternative, though less valuable, performance, P should ascertain the exact nature
of the offer, rather than dismiss it out of hand.
- Whether or not it will then be reasonable for P to accept the offer will depend on such factors as (i) the "personal
relationship" b/w P and D (ii) the nature and extent of D's breach, (iii) the terms of the offer having regard to P's
business methods and financial position.
 Payzu v Saunders - D contracted to deliver goods to Ps in instalments. Ds, wrongly assuming that Ps could not
pay for the goods, refused to deliver the second and subsequent instalments unless Ps would pay cash on receipt.
Ps refused this offer and sued Ds for breach.
-Held: Although Ds were in breach by refusing to deliver, Ps should have mitigated their loss by accepting Ds'
offer of delivery for ready cash. P's only recovered damages for the period of credit they would have lost by
paying the cash on delivery rather than when stipulated in the contract.

- P need not take the risk of starting an uncertain litigation against a third party. Pilkington v Wood - P bought house
but when he came to sell it, he discovered vendor had given him defective title. P sued his solicitor for negligence. D's
argument that P should have mitigated by suing his vendor was rejected.

- P need not take action which will put his commercial reputation at risk, or which will cause loss to innocent persons.

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Impecuniosity

 In Clippens Oil Co Ltd v Edinburgh & District Water Trustees, Lord Collins said that the wrongdoer must take
his victim as he finds him. Therefore, if P failed to mitigate his loss b/c of impecuniosity, this would not reduce the
amount of damages he would recover.
- Lord Wright accepted this dictum in The Liesbosch, but nevertheless assessed damages as if Ps had been able to
buy a substitute dredger.

- Courts have distinguished the Liesbosch or sought to set limits on its scope.

 Dodd Pties v Canterbury City Council - P's premises had been damaged by a nuisance perpetrated by D. D
strenuously denied all liability. Ps had not carried out repairs b/c inter alia, they could not afford to do so unless
they knew that Ds would be legally liable for the repair cost. Court of Appeal found that it was commercially
reasonable to postpone the expense, inter alia, whilst D was denying liability.
- The Liesbosch was distinguished b/c here impecuniosity was not the only reason whey had delayed in carrying
out repairs: the other was that it would not have been commercially prudent to repair the premises without first
knowing whether they could recover the cost of repairs.
Donaldson LJ said that a P who is under a duty to mitigate is not obliged in order to reduce the damages to do that
which he cannot afford to do, particularly where his financial position arose as a consequence of D's wrongdoing.

 In Mattocks v Mann, Beldam LJ said that it is only in an exceptional case that it is possible or correct to isolate
impecuniosity as a separate cause and as terminating the consequences of D's wrong. Necessary to consider
whether, having regard to all the circumstances of the case and the resources available to P, P acted reasonably.

- Tendency is to admit impecuniosity as an exempting factor since the tortfeasor must take his victim as he finds him.

- Mitigation must be possible and there is no reason to require P to do more than he is financially capable of doing,
unless loan financing is feasible, in which case the reasonable cost of the loan will have to be paid by D.

Actions taken before breach

- No question of mitigation arises where actions are taken before breach since the action must arise out of the
consequences of the breach of duty.

- Where P has taken precautions against injury by way of insurance, pension, or the like, and is then injured by D's
wrong, the damages recoverable will not be diminished by the amount of insurance, pension or other such moneys.
 This was settled in Bradburn v GWR as to insurance moneys. (a sum received by P on a policy of accident
insurance was not to be taken into account in an action by him for damages in respect of the injury for which he
had been paid the insurance moneys.

 The same was settled as to pension moneys by Parry v Cleaver.

- Such payments could have been taken into account only on the ground that they were relevant to show what loss
had in fact been incurred by P.

Actions taken after breach by third parties

- Similarly, no question of mitigation arises where actions are taken after breach by third parties; only steps taken by P
himself are relevant.

- Well illustrated by cases in which P has suffered personal injuries and a third party has gratuitously come to his
financial rescue by payment of medical or living expenses, or continued payment of wages, or by way of a general sum
not in relation to a particular head of loss.

 Redpath v Belfast & County Down Ry - a charitable fund, voluntarily subscribed to by the public, was set up to
aid victims of a railway disaster, and P, one of the victims, received a sum from this fund. No deduction was made
in any of these cases from the damages on account of such payment.

Application of principle of mitigation in quantification of damages

* Out of pocket expenses

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- In an action for tort or breach of contract, P may claim as special damages incidental or out of pocket expenses, e.g.
in a personal injuries case, increased living expenses; in fatal accident cases, funeral expenses.
- These items of expenditure of expenditure will, in general, be recoverable if the outlay was "reasonable necessary"
and if the amount involved was "reasonable" in the circumstances.
- If the expense was excessive or should have been avoided, P's award will be to that extent reduced.

* Restoration cost

- Mitigation will indicate in what circumstances efforts at restoration are to be expected, and whether the amount spent
was reasonable.
- Examples of restoration costs - medical expenses in personal injury cases; cost of repairs in property damage cases.

* Cost of substitute

- Where due performance of a contract or the absence of tortious conduct would have conferred on P a profit, he may
not recover from D the gross profits that would have been made if D had properly performed his obligation.
- He is generally expected to mitigate his loss by finding a substitute profit-earner.
- Compensation will be limited to:
- cost of the substitute (in tort), or
- (in contract) difference b/w contract price and the cost of the substitute + the net difference in profit-earning potential
b/w the situation before and after substitution.

(D) CERTAINTY OF DAMAGE

- To justify an award of substantial damages, P must satisfy the court both as to the fact of damage and as to its
amount.
- If he satisfies the court on neither, his action will fail, or he will be awarded nominal damages where a right has been
infringed.

Difficulty of assessment is no bar to recovery

- Where it is clear that some substantial loss has been incurred, fact that an assessment is difficult b/c of the nature of
the damage is no reason for awarding no damages or merely nominal damages.

- "The fact that damages cannot be assessed with certainty does not relieve the wrongdoer of the necessity of paying
damages": Vaughan Williams LJ Chaplain v Hicks.

- Standard of proof requires only requires evidence from which the existence of damage can be reasonably inferred and
which provides adequate data for calculating its amount.

- Circumstances in which damages may be awarded although the nature of the damage prevents absolute certainty of
proof: -
* Where damage is presumed, i.e., damages are "at large"

* Where loss is non-pecuniary, e.g., pain and suffering, loss of amenities and of expectation of life, physical
inconvenience, discomfort, injury to reputation, mental distress

- Fact that loss cannot be calculated in money w/ mathematical precision is no good reason for refusing damages
altogether.

- Money is the best that the court can do:

* Where it is uncertain how a pecuniary loss is to be measured

Simpson v London & North Western Rly Co - P, manufacturer who displayed samples of his goods at shows to
attract custom. Ds, in breach of contract, failed to deliver the samples in time for a particular show.

* Where it is uncertain whether a particular pecuniary loss will be or would have been incurred

Loss of a chance
- P may lose one particular chance, one particular contingency upon which a gain to him has depended.

Chaplain v Hicks - P entered a beauty competition organised by D, a theatrical manager. 50 of the entrants were to be
selected for interview, and 12 of these were to be offered theatrical engagements. P was selected as one of the 50 for
interview but through D's breach she was not informed in time and was thus deprived of the opportunity of securing
an engagement.
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Court of Appeal held that P's chance of winning an engagement was not too speculative and she could recover
substantial damages for the loss.

- Where a loss is contingent or speculative, damages should be quantified according to the likelihood of the loss
occurring.

- In Chaplain v Hicks, while P could not recover for the loss of a theatrical engagement, since she could not establish
to the required degree of proof that she would have been one of the 12, she could be awarded damages for the loss of
the chance of being one of the 12. P had approximately a one in four chance of winning a prize. Thus, the average of
the benefits which would have been earned if P had won should be divided by four.

- P cannot recover any damages if the chance of the gain was entirely speculative.
- There would be no basis for assessing the client's loss if there were too many contingencies.

- Classic example: if a lady was injured and disfigured in a railway accident, she could not recover damages b/c she
was prevented from going to a ball, at which she might have met a rich husband: Erle CJ in Priestley v MacLean.

Davies v Taylor - Claim under Fatal Accidents Act by a wife, who had deserted the deceased husband. Husband had
begun divorce proceedings against her. Held that she had no claim b/c she could show nothing more than a speculative
possibility of a reconciliation, and hence a pecuniary gain, had the husband lived.

- If parents wanted to claim damages under the Fatal Accidents Act in respect of their deceased child, they would be
claiming loss of the chance of support, since in normal circumstances, there would have been no support.

- Where P is claiming recovery for loss of a chance, the tribunal should assess the loss of the chance to acquire the
gain, not the gain itself.

NB: Murray v Lloyd - In 1981, P purchased leasehold interest of property held under a lease for a term of 15 years
expiring in 1991. Under lease, prohibition against assignment w/out prior written consent of L. P, acting on advice of
D solicitors, assigned lease to company reg'd in BVI to avoid UK tax. Ds had advised her that she would be entitled to
occupy the property as her own w/ all the benefits of ownership in her name and that the lease could be assigned to her
personally in the future. P discovered advice incorrect when in 1986, L's consent to assignment to her refused b/c it
would confer rights under Rent Acts upon her. P claimed damages for negligence.
Held: Since P had irretrievably lost the opportunity of becoming a statutory tenant, and would be obliged on the expiry
of the lease to vacate the property, she was entitled to compensation for the cost of acquiring similar rights of
occupation, on similar terms in similar alternative accommodation.
Damages should have been awarded for the loss of the opportunity to become a statutory tenant, not the loss of the
benefit of the statutory rights of occupation.
- To determine whether P can recover for loss of the chance, first resolve whether the damage is too remote.
- If this is resolved in P's favour, no reason why P should be debarred from all recovery on ground of uncertainty.

Hotson v East Berkshire Area Health Authority - a hip injury in a school accident was through negligence not
diagnosed by D until 5 days had elapsed. Had the correct diagnosis been made immediately w/ consequent appropriate
treatment, there remained a 75% risk of P's disability developing, but D's breach of duty had turned that risk into an
inevitability. P was awarded 25% of the full value of the damages awardable for his disability since he had been denied
a 25% chance of avoiding it.
House of Lords exonerated Ds from liability on basis that its sole cause had been the original accident so no loss of a
chance was caused to P by D's subsequent negligence.

- Note If an illness would have been averted if a doctor had been promptly called and had prescribed one particular
type of medicine, if the uncertainty on causation revolves around whether the doctor would have exercised his
judgment to choose the one type of medicine, damages could be awarded for the loss of the chance of avoiding the
illness.

(E) CONTRIBUTORY NEGLIGENCE

- Contributory negligence limits liability and therefore requires an apportionment of damages.

- If contributory negligence arises from the pleadings or evidence at trial, the tribunal would have to first assess
damage on the basis of 100% liability.
- Their finding on the extent of contributory negligence would be the basis of the apportionment of damages.

4. DAMAGE TO AND DESTRUCTION OF PROPERTY

- Note, the normal or basic loss is the loss that every P in a like situation will suffer.
- Consequential losses are those beyond the basic loss which are special to P's circumstances and are recoverable if not
too remote.

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(A) CHATTELS

DESTRUCTION OF CHATTELS
- For the purpose of assessing damages for destruction of chattels, courts include: -
- cases of total destruction where the property has disappeared or completely disintegrated
- cases of constructive total loss where the property is in such a condition as to make repair impracticable or
uneconomic, i.e. "write-off"

- The general compensatory principle is restitutio in integrum - to put P in same position before tort committed.

Assessment of damages

- Two alternative methods of assessing the damages for destruction of chattels: -

(a) Cost of replacement

- This is the usual method and is based on the cost of finding a reasonable replacement.
- Most direct application of restitutio in integrum - awarding sum as will enable P to put himself in the position he was
in before tort committed.

- Where a chattel of the identical kind to that destroyed is available for purchase in the ordinary market, P will recover
the price to be paid for this purchase.

- Where specific replacement is deemed unreasonable, P may recover the purchase-price of another chattel, which
reasonably meets his needs, and which is in a similar condition to that which was destroyed.
Uctkos v Mazzetta - owner of a totally destroyed motor-boat was held not entitled to its replacement, since the motor-
boat was of an unusual type requiring a very large expenditure to construct a similar one and since there were boats of
a comparatively similar design, construction and performance available.

- P could recover as consequential losses: -

(1) where substitute article has to be adapted to P's particular purpose, expenses for such work
(2) loss of user or of profits during any delay before the replacement is ready for use

(3) the hire of a substitute in the interim period before the replacement chattel can be used
Moore v DER Ltd - P's Rover car, which was used by him in his dental practice, was rendered a total loss in an
accident caused by D's negligence; P entitled to recover for the cost of hiring another Rover car for the period it took to
obtain a new Rover. Argument that P should have hired a less expensive car rejected on ground that he was entitled to
a comparable car. Court also rejected argument that claim for cost of a substitute should be cut down b/c P could have
bought a second-hand Rover; P had acted in a sensible and business-like manner b/c he had a busy practice and needed
a reliable car.

NB: Costs of hiring substitute will often mitigate any loss of use, and where they ought to have been incurred to
mitigate loss of use, they will be awarded instead of damages for loss of use

(b) Market value

- Court may base award on the market value ( i.e. selling price) of the chattel at the time of the loss, as well as the loss
of profits or loss of use.

Applying market value method

- In the Liesbosch, Lord Wright stated that the "value" was not the "market value" but the value of the chattel to its
owner "as a going concern".
- The award should represent the "capitalised value of the vessel as a profit-earning machine."

- Where chattel is a profit-earner, court must be wary of duplicating the profit element.
- Thus, in quantifying the award, the court should not simply take the "market value" and add to it the future profits
which had been lost, but should take them into account in assessing the value of the chattel.
The Llanover - the "market value" of a ship lost during World War II already reflected the great profit-earning
potential of the vessel and Ps could not recover under a separate head for loss of trading profits.

The Fortunity - vessel destroyed was one of a fleet of motor cruisers which Ps hired out; award included not only the
"market value" but also for loss of profits for one season. NB Evidence revealed that though the selling price for a
motor cruiser would to a certain extent be governed by the profits it would be expected to make, yet it would not take

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a/c of the very heavy bookings which had already been made for the vessel for the season immediately following its
destruction.

- Where the chattel is not a profit-earner, P should recover for loss of use as well as "market value".

- Which of the two methods is appropriate depends on the nature of P's holding of the chattel.
- If use and possession of the chattel is of greater importance, cost of replacement method more appropriate.
- If he possesses chattel as a capital investment, intending eventually to profit by its sale, "market value" method more
appropriate.

Special value

- Where a chattel has a "value" peculiar to itself or to its owner, or where its owner employs it for a special or unusual
purpose, in general the cost of replacement will be applied.
- If, however, the court considers that in the circumstances the purchase of a replacement was unadvisable or
unreasonable or impossible (e.g. a unique article, work of art, heirloom, cannot by its nature be replaced), it may
determine on a sum which does not reflect objective commercial criteria, but seeks to express the "real subjective
value" of the chattel to its owner.
- Assessment will be based on factors such as (i) original cost of chattel, length of time P had it in his possession,
extent of deterioration, amount spent on repairs, the uses to which the chattel is put and even the intangible features of
"sentiment."
- NB: Special value must manifest itself in objective criteria.

The Harmonides - court regarded "market value" of a ship assessed by the Registrar at £18,000 as inadequate in light
of the special business of the vessel as an Atlantic liner, and varied award to £31,000.

Expenses and constructive total loss

- P may also recover for all reasonable out-of-pocket expenses made necessary through loss of chattel.
- In cases of constructive total loss, P may also recover reasonably incurred expenses in ascertaining whether or not
wreck was to be regarded as beyond reasonable repair, incl. raising and transport of wreck.
- Scrap value of wreck should be deducted from award.

DAMAGE TO CHATTELS

- Where a chattel is damaged, there are two possible modes of assessment:

(1) if the chattel is in such a condition that it is reasonable to repair it, the basic measure is the cost of such repairs
(2) if the injury is so severe that it is not reasonable to repair it, the case will be treated as one of constructive total loss,
in which case the rules relating to destruction of a chattel will apply.

Basic loss: cost of repairs

- The basic loss is measured by estimating the cost necessary to restore the article to its condition before the injury.

- NB chattel owner is required to take reasonable steps to mitigate his losses.

- Reasonable starting point would be obtaining a reasonable assessment of the loss by a loss adjustor.

Note the following:

* It must be reasonable to repair

- In determining whether or not it was reasonable to repair the chattel, the court will look first to the cost of repairs.
- If cost of repairs exceeds the "value" of the article (i.e., purchase price of an equivalent article on the market),
presumption is that the repair was unreasonable.
- Presumption may be rebutted by the existence of special circumstances, such as the special value of the chattel to the
owner and the difficulty of replacing it.

Algeiba v Australind - cost of repairing the P ship exceeded her value when sold. Repairs were reasonable b/c (i) at
the time of the accident it was difficult to find a substitute vessel, and (ii) the P ship was of "special value" to its
owners as it was unusually well equipped for the particular work which they were undertaking.

O'Grady v Westminster Scaffolding - P's car "Hortensia", a 1938 MG and his pride and joy, was damaged in
accident for which D was liable. P spent £253 on repairs and £207 in hiring substitutes during repairs. The pre-accident
market value of "Hortensia" was £180-200.
Held: In the circumstances P had acted reasonably b/c of (i) his obvious attachment to the vehicle (ii) the difficulty of
obtaining a similar vehicle on the open market. P awarded full cost of repairs.

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- Sentimental attachment of the owner is relevant if it extends beyond emotion, and manifests itself in objective
criteria, e.g. naming the car, spending much time and effort on maintaining it.
- To prove that he acted reasonably in repairing the vehicle at such a high cost, chattel owner must show not just
sentimental attachment but that there is no reasonable replacement for the item on the market.

Darbishire v Warren - claim rejected for the cost of repairing a second-hand shooting brake where cost substantially
exceeded the pre-accident value of the car. P was awarded sum representing market value of the vehicle on the ground
that he should have treated it as a total constructive loss. O'Grady distinguished on basis of uniqueness and
irreplaceability of "Hortensia".

* Repairs must be necessary

- For P to recover the full cost of repairs, he must show that the need for repairs arose from the accident for which D
was liable.
Organic Research Chemicals v Ricketts - car broke down and was towed to garage for repair. Garage negligently
caused further damage to engine. Cost of a reconditioned engine given as damages against garage. C.A. held that since
installation of a new engine remedied the existing defect as well, proper measure of damages was difference b/w cost
of a new engine and cost of repairing defect which caused first breakdown.

- Also, the repairs for which D must account must be necessary to restore the chattel to its former condition.
- If repairs were merely expedient for better functioning of chattel, can't be charged to D's account.

* Cost of repairs must be reasonable

- Even if repairs necessary, P will recover cost only if it was reasonable.

- If court considers P was charged an excessive amount, it may reduce award to what is the ordinary rate for the job:
The Pactolus.

* Cost of repairs may include overhead charges

- Normal measure is for labour and materials.

- Where chattel not sent to independent contractor and Ps provide facilities for repairs, overheads are only recoverable
if repairs gave rise to some exceptional cases: London Transport Executive v Court

* Betterment

- Where the execution of repairs makes the chattel more valuable than it was before it was injured, no deduction is
made from P's award for the consequential increase in value.

The Gazelle - P's ship damaged in a collision w/ D's ship caused by D's negligence. In P's action for damages for costs
of repairing ship and replacing destroyed items, assessors of damages deducted one-third from costs b/c P was getting
new for old. Later overruled.

Bacon v Cooper (Metals) Ltd - Ds were in breach of contract in supplying Ps with wrong kind of scrap metal which
then broke the rotor of P's fragmentiser. Ps held to be entitled to the hire-purchase cost of a new rotor and no deduction
was made for the fact that the new rotor had an expected life of 7 years, whereas the old rotor had only 33/4 years'
expected life.

- One must consider that an element of betterment is inherent in anything that is repaired or replaced.
- Therefore, D alleging that an appropriate deduction should be made for betterment must show that there is a
substantial margin of overcompensation as opposed to inherent betterment, i.e. P has been compensated over and
above that which in all fairness should be awarded; P has clearly benefited from the new for old.

* Chattel only partially repaired

- Here, P will recover in addition to the cost of partial repairs a sum representing the difference in value (i.e. selling
price) b/w the condition of the chattel at the time of accident and its partially repaired condition.

* Repairs not yet executed

- Even if repairs never carried out, estimated cost of repairs is a valid measure.
- Qualification is that P must not benefit from any rise in the cost of repairs through his delay in having the repairs
executed.

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Martindale v Duncan - was not unreasonable for P, being impecunious, to delay repairs pending approval of them by
the D's and his own insurers.

- Cost of repairs should be estimated at the time when it was reasonable to execute them.

Consequential losses

- Subject to the principles of causation, remoteness or mitigation, P is entitled to recover for the loss of use of the
chattel during the period of repairs.

* Profit-earning chattels

- Where a chattel customarily earns profits for its owner, normal measure for loss of its use during repairs is the profits
it would have earned but for its detention.
- To plead special damages, P must offer proof of some current or future contractual engagement from which he was
bound to w/draw as a result of the detention for repairs.
- Where no special damages are pleaded, court must attempt to assess profits which would have been earned, e.g., in
simple cases by multiplying the number of days lost through repairs by the average daily profits.

- P is under a duty to mitigate his loss.

- Therefore, from the award for loss of profits will be deducted a sum representing those profits which he actually did
make or should have made during the period for which he claims compensation.
- For the deduction to be made, it must be clear that the profits actually earned were in mitigation of P's losses, i.e.
there must be a causal link b/w tort and earning substitute profit.
- No deduction will be made if Ps can show that even if the accident had not occurred they would still have earned a
profit.
The World Beauty - P ship engaged on charterparty A until Sept. 1958. In Aug. 1957, ship was engaged on
charterparty B from not earlier than Aug. 1958 and not later than Oct. 1958. In April 1958 P ship damaged in collision
for which Ds were liable. On day substitute vessel Q engaged to complete charterparty A, repairs on P completed.
Then arranged that P should commence on charterparty B 100 days earlier than had been originally agreed.
- In assessing damages for loss of use of P ship, court took a/c of profits accruing from the completion of charterparty
A by Q ship. Profit earned on charterparty B was not deducted, since it would have been earned quite independently of
the accident. Only gain acquired under charterparty B to be taken into a/c was advancement of profits by 100 days.

- Deductions will also be made for the saving of expenses which would have been incurred if chattel had been
profitably employed.

* Temporary replacement by another chattel

- Where P has lost the use of a profit-earning or a non-profit earning chattel, one way of mitigating his loss is to hire a
substitute while the damaged item is being repaired.
- If substitute carries out what damaged chattel would have done if available, measure of damages will be cost of
hiring the substitute (application of restitutio in integrum doctrine).
- Deductions will be made if P unreasonably delays in effecting the repairs: O'Grady v Westminister Scaffolding
- The replacement hired and the cost of hiring must be reasonable.
Watson Norie v Shaw - Jensen car w/ which P company, w/ an eye to prestige, had supplied its managing director was
damaged; company hired first a Rover and then a Jaguar during the period when the Jensen was being repaired
Held that the full cost of hire should not be allowed but only the amount it would have cost to hire a Ford Zephyr,
which the court thought was quite adequate for the company's needs while its prestige car was being repaired.

* Non profit-earning chattels

- If chattel is not a profit-earner and P has not hired a substitute, problem w/ measuring P's loss of use of chattel is that
there is little tangible pecuniary loss.

- Recovery for loss of use first recognized by House of Lords in The Greta Holme - damage to the dredger resulted in
delay in the dredging, Ps not having gone to the cost of substituting a new dredger while damage was being repaired.
General damages allowed for loss of use while dredger was undergoing repairs.

The Mediana - place of damaged lightship was taken by another lightship belonging to P harbour board, the substituted
ship being kept expressly for purpose of such an emergency. House of Lords held Ps entitled to substantial damages
for the loss of use of damaged lightship.

- Two modes of assessing loss: -

(i) standing charge cost

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- This is based on the cost of maintaining and operating the chattel.
- The justification for this measure is that the cost represents the "value" of the chattel to its owner.

- In The Marpessa, the House of Lords held that damages should be assessed according to the costs of working and
maintaining the dredger that would have been incurred, plus its depreciation, during the period of repairs.
- In Birmingham Corp'n v Sowsberry, Geoffrey Lane J. preferred this method as a reasonably stable basis for
calculation and one which is fair to both sides. It was considered to be an accurate estimate of the cost of running the
omnibus by a reasonably efficient organisation.

(ii) Interest on capital and depreciation

- The amount of damages awarded is calculated on the basis of the interest upon the capital value of the damaged
chattel at the time of the injury: Admiralty Commissioners v SS Chekiang.
- The justification is that P has lost part of the "return" on the capital invested in the purchase of the damaged article.
- Where there is no substitute chattel hired and no stand-by kept available, the capital value is assessed as the original
cost less depreciation.
- Where a stand-by has been kept available and is in fact substituted for the damaged chattel, the calculation is based
upon the value of the stand-by itself: Admiralty Commissioners v SS Susquehanna.

Expenses

- In addition to damages for his basic loss (cost of repairs) and consequential losses (damages for loss of use), P may
recover all reasonable out-of-pocket expenses which necessarily arise from the tort.

(B) DAMAGE TO REALTY

Basic loss

- There are three approaches to assessment: -

(1) the diminution in value, assessed by taking the difference b/w the market value (i.e. selling price) of the damaged
and undamaged property
(2) the cost of cure, comprising the cost of repair, or where a building has been destroyed, the cost of reinstatement.
(3) the cost of cure, comprising the market cost of buying or building replacement property elsewhere, minus the
selling value of P's damaged property Note, rarely a realistic option in view of the nature of real
property

- In Dodd Properties v Canterbury City Council, Donaldson LJ said that which measure (diminution in value or cost of
repair / reinstatement) is appropriate will depend on a number of factors, such as P's future intentions as to the use of
the property and the reasonableness of those intentions.
- The tribunal will consider what is reasonable and fair b/w the parties.
- If P reasonably intends to sell the property, diminution in value is the appropriate measure.
- If P reasonably intends to continue to occupy it or premises are unique, the cost of repairs is the true measure.

Where court awarded cost of repairs / reinstatement: -

Synagogue Trust Ltd v Perry (Sup Ct, J'ca) - P's dwelling house badly burnt by fire due to negligence of worker on
D's premises. P had tendered assessor's reports based on the cost of reinstatement. Held that appropriate measure of
damages was the costs of replacement or repair of P's premises.

Harbutt's Plasticine Ltd v Wayne Tank & Pump Co Ltd - Ps' factory burnt down due to D's breach of contract. Ps
awarded cost of building and equipping a new factory. Ps had already had the factory rebuilt and, given that factory
was owned for business, it was not only reasonable, but necessary in order to keep their business going.

Where court awarded cost of buying or building replacement property elsewhere:-

Ward v Cannock Chase District Council - D council's negligence in failing to maintain their houses in a particular
terrace had led, through the activities of vandals, to the destruction of P's 2 houses where he had been living w/ his
large family.
Held: Cost of reinstatement should be awarded, provided P could obtain planning permission to rebuild the houses. If
not, and if permission was also refused to convert another of P's houses nearby, he should instead be awarded
diminution in value of the properties.
NB: Damages must be awarded unconditionally.

Dominion Mosaics & Tile Co Ltd v Trafalgar Trucking Co Ltd - Ps' business premises burnt down b/c of Ds'
negligence. Court of Appeal awarded cost of cure measure - cost of leasing property elsewhere rather than the cost of
reinstatement. Note Ps had leased other property and it was reasonable for them to do so to mitigate their loss of use.
The cost of the lease was significantly less than the cost of rebuilding.

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Where court awarded diminution in value

CR Taylor (Wholesale) Ltd v Hepworths Ltd - Ps' disused billiard hall was destroyed by fire. Diminution in value
measure was preferred b/c the site and billiard hall were owned by Ps as an investment, which in time would be sold
off for redevelopment. Ps had no intention, prior to or subsequent to the fire, of rebuilding the billiard hall.

Standard of repairs / reinstatement must be reasonable

- P is entitled to the reasonable cost of doing reasonable work of restoration or repair.

- P not bound to accept shoddy work to save D's expense. But if cost of complete and meticulous restoration is
disproportionately high, P must be content with the cost of a less extensive restoration where this will provide him with
a sufficiently approximate equivalent of what has been lost: Cantley J. in Dodd Pties (first instance).
- While generally repair or reinstatement means to produce as close a restoration to the original condition as is
reasonably possible, it will mean a less extensive restoration where this will serve P's purposes just as well and will
cost far less.

Betterment
- No deduction will be made from P's award for any increase in the value of the property resulting from repairs or
reinstatement: Harbutt's Plasticine (no deduction made for the fact that the new factory would be better than the old
one)

Non-pecuniary losses
- Beyond physical damage to the land, P may recover, as part of the normal measure of damages, for resulting non-
pecuniary losses such as annoyance, inconvenience, discomfort, or illness to P.

Cases of nuisance, where P disturbed in occupation of his home: -

Halsey v Esso Petroleum Co - P suffered noise and smell from an oil distributing depot
Bone v Seale - P had to endure persistent smells emanating from a pig farm
Bunclark v Hertfordshire CC - spreading of tree roots inflicted upon P cracked walls, dust and general anxiety.

Case of negligence
Ward v Cannock Chase District Council - P entitled to damages for the discomfort, and any attendant anxiety and
distress, experienced by himself and his large family, first living in a house which D council had failed to repair and
later living in temporary and unsatisfactory, accommodation while house was being rebuilt.

Consequential losses

- Ps may recover for other pecuniary losses resulting from property damage subject to usual limiting principles.

* Loss of profits and expenses incurred

Grosvenor Hotel Co v Hamilton - Ps' expenses in moving their hotel business from damaged property recovered
Ward v Cannock Chase District Council - P recovered extra cost incurred by him by reason of living with his family in
other accommodation and also, on the assumption that his demolished house was to be rebuilt, for the cost of removal
back there on completion.
NB: P could not recover, as too remote, for loss of use of his adjoining land for various money-making activities
carried on by him there.

Dodd Pties - Ps awarded the potential loss of profits through the dislocation of their business for the time during which
repairs would be carried out

* Losses grounding a separate cause of action

- Losses which were capable of giving rise to an independent cause of action in tort have as an alternative been
compensated as consequential losses for damage to land.
Bennett v Alcott - in an action for trespass to land, P recovered for losses arising from D's seduction of his daughter
Pritchard v Long - in trespass action, P recovered for goods taken by D
Anderson v Buckton - in trespass action, P recovered for infection of his cattle

- Where the court refused to compensate P under the head of consequential losses, damages were awarded under the
head of aggravation of damage.

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Bracegirdle v Orford - D had broken into P's house under a false and unfounded charge that P was keeping stolen
property there. P could not recover for slander as a separate head of consequential loss in the trespass action, but
constituted aggravation of damage.

Huxley v Berg - nervous shock to P's wife resulting from D's violent entry furnished evidence of aggravation of
damage but did not itself constitute a substantive head of consequential loss.

Time at which damages assessed

- The general rule in tort is that damages should be assessed at the date of breach: Milangos v George Frank (Textiles)
Ltd.
- However, the court has a discretion to take some other date if the adoption of the 'breach date' rule produces injustice:
Alcoa Minerals of Jamaica v Herbert Broderick (PC).

- In Dodd Pties Ltd v Canterbury City Council, Megaw LJ said that where there is a material difference b/w the cost of
repair at the date of the wrongful act and the cost of repair when the repairs can, having regard to all the relevant
circumstances, first reasonably be undertaken, cost of repair is to be assessed at the latter date.
- Donaldson LJ found that where P has not effected reinstatement by the time of hearing, there is a prima facie
presumption that the cost of reinstatement should be assessed at the date of hearing, unless P acting reasonably should
have undertaken the reinstatement earlier.
- Court of Appeal assessed did not assess the cost of repairs at the date the cause of action arose, but at the date of the
hearing, by which time the repair costs had almost trebled. The Court found that it was commercially reasonable for
the Ps to wait until they knew that they could recover the cost of repairs.

Alcoa Minerals of Jamaica v Herbert Broderick - Operations of the Ds' smelting plant caused corrosion to the roof
of P's house and other injury to his property and to his health. P repaired damage when it first occurred, but by 1989
the damage occurred again and he was unable to pay for the necessary repairs. In 1994, he amended his claim for
repairs to reflect the increase in the cost of doing the repair since 1990 when he brought the action. P alleged that in
1987 and 1988, representatives of Ds' admitted responsibility for the damage to the P's premises and those of other
residents in the area, and agreed to repair the damaged houses at their expense. Trial judge awarded damages for cost
of repairs assessed at 1994. Award affirmed by Court of Appeal.
Two questions before the Privy Council:-
(a) was P entitled to have damages assessed at a date other than the date by which physical damage was complete
(b) did the fact that P could not afford to pay for repairs until he had obtained judgment have to be ignored when fixing
the date by which damages must be assessed.
Held:
(1) Starting point for assessing damages is the date of breach, but where that produces injustice, court has discretion to
adopt another date.
(2) There was no absolute rule that where P at the date of the breach did not have the funds to repair the damage, his
impecuniosity is to be ignored in all cases when deciding the appropriate date for the assessment of damages.
- P acted reasonably in waiting until he was sure that Ds would pay or be liable before he did the repairs. Even
assuming that P could have raised a loan, he was not in breach of duty to mitigate in waiting and not borrowing money
at a high rate of interest for some six years. There was no question of P deliberately delaying doing the repairs so as to
increase D's liability and there was no windfall in it for him.
- In the present case justice required that damages be assessed at the date of judgment, and not at the date of the
breach.

Note: Privy Council found that the damage resulting from P's impecuniosity was not too remote. It was foreseeable
that if the house of a person in P's position was seriously damaged, he would not or might not have the means to repair
it and that his ability to do so would depend on his establishing the liability of, and recovering damages from D.

5. DAMAGES FOR WRONGFUL DEATH

(A) FATAL ACCIDENTS ACT

Right of action
- s. 3 is the statutory basis of the cause of action for damages arising out of wrongful act.

Who can claim

- s. 4 - action is for the benefit of the "near relations" of the deceased
- s. 2(1) - "near relations" means the wife, husband, parent (incl. grandparent, and step-parent), child (incl. grandchild
and stepchild), brother, sister, nephew or niece of the deceased.
- "Child" covers legitimate and illegitimate child.
- A common law wife or divorced wife not included in category of dependants.

Commencement of action
- S. 4(1) - action must be brought by and in the name of:
(i) personal representative of deceased, or
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(ii) where office of PR vacant, or no action brought by PR w/in 6 months of death of deceased, by any or all of the near
relations of deceased.

- s. 4(2) - Limitation period of 3 years after death; court has discretion, if interests of justice require, to extend time.

Basis of recovery
- Damages awarded for actual or reasonably expected pecuniary loss: s.4(4)
- No recovery for mental distress or loss of society of deceased.
- "Hard matter of pounds, shilling and pence": Lord Wright in Davies v Powell Duffryn Associated Collieries Ltd

- Claimant must prove actual dependence on the deceased at or before his death or reasonable expectation that they
would have received some support from him in the future if he lived.

Method of Assessment
- In Dyer & Dyer v Stone, Campbell JA outlined the principles for assessing the amount of dependency lost:

(1) Calculate the amount of dependency in the year of death of the deceased
Using the "annualised expenditure" approach:-
- Firstly, use all the relevant annualised expenditures of which there is evidence.
- Secondly, apportion the actual annualised expenditures b/w expenditures exclusively for the deceased's benefit and
expenditures for dependants.
Then, calculate expenditures on dependants as a % of the total actual annualised expenditure.
- Thirdly, apply this % to the net income at the date of death = dependency in year of death of deceased

(2) Arrive at an average figure of dependency (multiplicand) for each of the pre-trial years, in order to ascertain the
aggregate dependency for the pre-trial period (i.e. b/w time of death and time of trial).
- Estimate the deceased's net income at the time of trial, considering evidence of his probable advancement in his
employment had he lived and any consequent increase in wages.
- Estimated net income at the time of trial x same % as at the time of death = dependency in the year of trial.
- The average of the dependency in the year of death and the dependency in the year of trial = average annual
dependency for the pre-trial period.
- Average annual dependency x number of pre-trial years = aggregate dependency for the pre-trial period.

(3) Calculation of the post-trial dependency

- The multiplicand (i.e. annual dependency) for each of the post-trial years is calculated by applying the same % to the
estimated net income at the time of trial.
- Multiplicand x remainder of multiplier (i.e. multiplier - no. of pre-trial years) = Post -trial dependency.

(4) Pre-trial loss of dependency + Post-trial loss of dependency = Total loss of dependency

Note the following: -

- Income derived from an illegal activity cannot be taken into account in determining the multiplicand: Burns v
Edman.
- As a consequence of the rule in British Transport Corp'n v Gourley, calculation of the multiplicand must be based on
the deceased's earnings after tax.

* The Multiplier (or number of years purchase)

- Essentially reflects the number of years the dependency would have lasted had the deceased not been killed.
- In Dyer & Dyer v Stone, Forte JA said that consideration must be given to:
(a) the age of the deceased at the time of his death
(b) his condition of health
(c) normal retiring age of the country in which deceased was employed
(d) how long in all the circumstances he would be expected to continue working
(e) the age of the widow
(f) the probability of her seeking employment, hence diminishing the scope of her dependency
(g) the ages of the children, in so far as they may be reaching the age of majority, thus decreasing the number of years
in which they would have been dependant on the deceased
(h) the probability of the deceased continuing to support the children beyond the age of majority, e.g. if they pursue
higher education

- Provision should also be made for the contingencies and uncertainties which could have occurred in the future, e.g.,
illness, or accident, which could have rendered him unable to continue in employment had he lived.

Dyer & Dyer v Stone - Deceased 35 at date of death and enjoying good health. Trial judge used multiplier of 15.
Court of Appeal found that multiplier was unreasonable having regard to previous decisions of the Court. Multiplier of
11 more consistent.

Cf. Jamaica Public Service Co v Elsada Morgan - P aged 25 years at time of death and in excellent health. Court of
Appeal approved multiplier of 14.

Note: -

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- s. 4(5)(c) - in assessing damages under the Act, the court shall not take into a/c the remarriage or prospects of
remarriage of the widow of the deceased.
- As a matter of construction, the following may still be considered in choosing a suitable multiplier:
(a) the prospects of remarriage of a widower where an action is brought on his behalf
(b) in an infant child's claim for the death of his father or mother, the possibility that his surviving parent will remarry
and that the child will get the benefit of a step-father or step-mother
(c) in the claim by parents in respect of the death of an unmarried child contributing to their financial support, the
possibility that the contributions will be reduced or cease on the child's marriage

* Deductions for collateral benefits

- s. 4(5)(b) - in assessing damages under the Act, no account shall be taken of any insurance money, benefit, pension or
gratuity which has been or will be paid as a result of the death.

- However, it is accepted that the benefit is not deductible in full, but only an amount representing the value to the
dependants of the acceleration of their receipt of the benefit.
- In some cases, the gain by the accelerated payment may be cancelled out by the loss to the estate of the deceased's
probable future savings - strictly proper approach is to make a deduction for acceleration and then add make an
addition for future savings lost: Taylor v O'Connor

- Note: Awards under the Law Reform (Miscellaneous Provisions) Act, are also deductible from Fatal Accident
damages where and to the extent that the persons standing to benefit under both actions are the same.
Dyer & Dyer v Stone - Court of Appeal found trial judge erred in not deducting the P widow's award under the Law
Reform Act from her award under the Fatal Accidents Act since she was the executrix and sole beneficiary of the
deceased's estate. She could only benefit under the Fatal Accidents Act to the extent that her dependency under the Act
exceeded her award under the Law Reform Act.

* Funeral Expenses
- s. 4(5)(a) - funeral expenses of deceased, where incurred by the near relations, may be taken into account in assessing
damages

* Inflation
- No adjustment in the multiplicand is permissible to allow for inflation: Young v Percival; Cookson v Knowles.

- In Dyer & Dyer v Stone, Campbell JA said that the annual dependency in fatal accident cases is directly linked with
the actual and/or estimated income of the deceased.
- Inflation, however much it may erode the real value of the dependency cannot per se result in any increase in the
money value of that dependency.
- An increase can only result from an increase in the net income of the provider on the reasonable assumption that w/
increased net income he will provide more in the money value of the dependency.
- The Court of Appeal held that evidence of inflation is irrelevant and cannot be used in estimating income at any
given time, unless there is further evidence that such income is contractually or statutorily linked to the cost of living
price index.
Since there was no such evidence, the trial judge had erred in using evidence of inflation for adjusting upwards the
dependency at the time of death, in order to ascertain the aggregate dependency for the pre-trial period. He should not
have used this evidence as capable of confirming the level of income which the deceased would have attained in the
year of trial for the purposes of determining the dependency for the post-trial period.

* Interest
- In Cookson v Knowles, it was held that the award of damages should be separated into two components for the
purpose of awarding interest: -
(a) Pre-trial, being the dependency lost from the date of the accident to the time of trial, on which interest is awarded at
half the rate usu. appropriate to special damages (6% in J'ca)
(b) Post-trial, being the dependency lost after the date of the trial, on which no interest is awarded

- Rationale - this part of the award is attributable to dependants' loss of support and is not money that they can be said
to have been kept out of.

Dyer & Dyer v Stone - 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.

* Apportionment
- s. 4(4) provides for the division of the amount awarded among the dependants of the deceased.
- In case of widow's action on behalf of herself and children, reasonable to apportion greater part of award to her on
assumption that she will maintain the children as long as they are dependent.
- Usu. younger child awarded more than older child b/c of greater expected period of dependency.

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(B) LAW REFORM (MISCELLANEOUS PROVISIONS) ACT

- The Act provides for the survival of causes of action vested in the deceased for the benefit of his estate.
- Under the Fatal Accidents Act, the action enures for the benefit of dependants of the deceased at the time of his
death.

- In Pickett v British Rail Engineering, the House of Lords, overruling Oliver v Asham, held that where an injured P's
life expectancy had been shortened as a result of his accident, he was entitled to compensation for loss of earnings
during the 'lost years', when, but for his injuries, he would have continued to work and earn.
- In Gammell v Wison, the House of Lords held that the claim for loss of earnings in the 'lost years' survives for the
benefit of his estate.

Commencement of action
- s. 3 - Proceedings in respect of a cause of action in tort can only be brought if: -
(a) proceedings against the deceased were pending at the date of his death, or
(b) the cause of action arose less than six months before his death and proceedings are brought w/in six months after
his PR took out representation.

Calculating the loss of earnings for the 'lost years'

- In Dyer & Dyer v Stone, Campbell JA set out the principles for assessing the loss of future earnings for the lost years:

(1) Ascertain from credible evidence the net income of deceased at the date of death.

(2) Where a relatively long period has elapsed b/w date of death and trial of the action, estimate deceased's net income
being earned at the date of trial by reference to the net income being earned at the date of trial by persons in a
corresponding position to that held by deceased at time of his death, or by persons in a position to which deceased
might reasonably have attained.

- The average of the net income at date of death and the net income at date of trial = average net income for each of the
pre-trial years.
- Actual estimated net income at the date of trial = net income for each of the post-trial years
Total the expenditures, at date of death, exclusively incurred by deceased to maintain himself reasonably consistent w/
his status in life.
In addition to these expenditures, add a portion (which depends on the number of dependants) of the joint living
expenses like rent and electricity which under the Fatal Accidents Act would have been treated as wholly for the
benefit of the dependants.
Calculate the total sum of these exclusive living expenses of the deceased as a % of the average net income at date of
death.
Average net income for the pre-trial years x % of the net income at date of death = lost earnings for the pre-trial years

Calculate the total living expenses as a % of the estimated income at date of trial.
Net income for the post-trial years x % of the estimated income at date of trial = lost earnings for the post-trial years

Lost earnings for the pre-trial years + lost earnings for the post-trial years = Total lost earnings for the lost years

Note: Damages may also be awarded under the Act for funeral expenses and for loss of expectation of life.

CONTRACTS OF EMPLOYMENT
BREACH BY EMPLOYER

WRONGFUL DISMISSAL

- Where an employer by wrongfully dismissing his employee discharges the contract by his breach, number of
alternatives open to the employee.
- If he has completed the contract, he can sue for wages under the terms of the contract.
- If he is dismissed during the period covered by the contract of service, he cannot sue for wages under its terms unless
the contract is divisible, but he may either:
(a) sue quasi-contractually on a quantum meruit for the services already rendered, or
(b) bring an action for damages for breach of contract.

Normal measure
- The measure of damages for wrongful dismissal is prima facie the amount that P would have earned had the
employment continued according to contract, subject to a deduction in respect of any amount accruing from any other
employment which P, in minimising damages, either had obtained or should reasonably have obtained.
- The prima facie measure of damages is the contract price, which is all P need show.
- This is then subject to mitigation by P who is obliged to place his services on the market, but the onus here is on D to
show that P has or should have obtained an alternative employment.

* The amount the employee would have earned under the contract
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- The amount that P would have earned under the contract is the salary or the wages which D had agreed to pay.
- In addition, there may be benefits in kind, the value of which must also be taken into account, e.g. rent-free residence,
board and lodging, luncheon vouchers, and also benefits under pension schemes.
- Where the amount the employee would have earned under the contract turns on a contingency depending on the will
of the employer himself, the situation is different b/c of the rule that damages against a contract breaker must be
assessed on the basis that he will perform the contract in the manner most beneficial to himself.

Beach v Reed Corrugated Cases - where a company director claimed damages for wrongful dismissal, no damages
were awarded for loss under the company's retirement scheme for directors, as the D company had the right to
discontinue either the whole scheme or any participant's assurance under it at any time.

Cf. Bold v Brough, Nicholson v Hall - employee was held entitled to claim for loss of the chance of obtaining benefits
under his employers' pension scheme b/c, although the employers had a right to discontinue the scheme as a whole,
they had no discretion to withhold contributions in respect of the P employee so long as the scheme continued.

- In Beach, the employers' discretion to continue or discontinue the retirement scheme was a discretion as to the
manner of performing their contract of service w/ P.
- In Bold, the employers' discretion to continue or discontinue the pensions scheme was a discretion as to the way in
which they would conduct their business as a whole.
Lavarack v Woods of Colchester - Before the employee's action came to trial, the bonus scheme had been
legitimately discontinued by the D employers and replaced, in the case of most employees, by increased salaries.
- Court of Appeal, by majority, held that the P employee was not entitled to damages representing the probable
increase in salary which would have come to him had he continued to be employed by the Ds.
- Russell LJ said that a P suing for wrongful dismissal can rely only on the fact that D was obliged to carry out the
contract sued upon. P cannot claim a sum on the ground that D might after the repudiation date have voluntarily
subjected himself to an additional contractual obligation in favour of P.
- Diplock LJ admitted that if Ds had continued their bonus scheme, P might have been entitled to recover for the loss
of the bonus.

- The employee is entitled to recover for prospective loss.

- In Edwards v Society of Graphical & Allied Trades, where there was no foreseeable likelihood of P obtaining
employment of a similar type to that he had lost, the court applied principles analogous to personal injuries cases, in
assessing his damages.
- Damages were calculated by applying a multiplier to P's annual loss of earning capacity.

* The amount the employee has or should have earned in alternative employment

- Any amount that P has earned in substituted employment since the breach will be deducted.
- NB: The employee's loss will vanish where P has immediately passed into other employment on equally good terms.
Reid v Explosives Co - P was entitled to six months' notice by his employers, D company. The appointment of a
manager by order of the court at the instance of the debenture holders was held to be a wrongful dismissal of P; but by
the instructions of the manager he continued his duties at the same salary for over six months. Held that he was entitled
to no damages.
- The amount which the employee earns in the substituted employment includes benefits in kind, benefits from pension
schemes and the like.

- Any amount that P ought to have earned where he could reasonably have obtained alternative suitable employment
also falls to be deducted, and again may cause the loss incurred to vanish.
Brace v Calder - 2 persons out of a partnership of 4 employing P resigned from the partnership, which operated as a
technical dismissal of P. The remaining 2 offered to keep P on in his employment but P refused. Held that he should
have accepted it in mitigation and he was awarded only nominal damages.

- General principles of how far P required to act in mitigation apply.

- An employee is not expected to accept employment in a lower status.

Yetton v Eastwoods Froy - P, dismissed as a managing director of the D company, was held to have acted reasonably
in refusing Ds' offer of employment as assistant managing director, a position which was a significant step down.

Edwards v Society of Graphical & Allied Trades - P brought an action against his trade union for wrongful expulsion
resulting in legitimate dismissal from his employment as a skilled worker in a printing business. It was held that P
could not reasonably have been expected to accept offers of work as a general labourer having regard to his standing,
experience and personal history, and even though at the time there was no foreseeable likelihood of his again obtaining
employment in his particular grade in the industry.

- An employee will not necessarily be expected to accept employment in a different part of the country, or in a
different type of work even if of an equal status w/ that from which he has been dismissed.

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- It may however be reasonable for him in the state of the labour market to accept a lower salary, although he may be
regarded as continuing to act reasonably, as in Yetton, if he continues for some time to seek employment in the same
class of post as that from which he has been dismissed before turning to apply for less well-paid posts.

- The refusal of an offer by D at a lower salary is likely to be regarded as reasonable, as in Jackson v Hayes.
- It may be reasonable to refuse an offer by D made on the terms that P should not act on his legal rights against D or
on terms requiring P to work under the direction of persons w/ whom he has quarrelled in the course of his dismissal:
Shindler v Northern Raincoat Co.
- In Yetton, one of the factors which led the court to hold that D's offer to P of alternative employment was reasonably
refused was that the dismissal had taken place in an arbitrary and high-handed fashion.

Consequential losses

* Injury to feelings and loss of reputation; loss of publicity

- An employee cannot recover damages for non-pecuniary losses, such as injury to feelings, in an action for wrongful
dismissal.
- In Addis v Gramophone, where P had been dismissed in a harsh and humiliating manner, the House of Lords held
that the manner of dismissal could in no way affect the damages.
- Two reasons for this conclusion: first that exemplary or aggravated damages cannot be awarded for wrongful
dismissal, secondly, that injury to feelings is not a head of damage, recoverable in, or an interest protected by contract.
- Non-pecuniary losses are not considered to be w/in the reasonable in the contemplation of the parties to a contract of
employment at the time it was made.
- What would be reasonably in the contemplation of the parties would be that one would provide services and the other
would pay money.

- There was a departure from this view in Cox v Phillips Industries Ltd - Ds had contracted to give P a better job w/
greater responsibility and an increased salary but having initially complied w/ this, they later, in breach of contract,
relegated him to a position of lower responsibility with vague duties. Despite Addis, P awarded damages for mental
distress on the basis that the vexation, distress and general disappointment and frustration he suffered as a result of the
contractual breach was w/in the reasonable contemplation of the parties.
- However, Cox was overruled by the Court of Appeal in Bliss v South East Thames Regional Health Authority -
Court of Appeal overturned award of damages for mental distress to P, a consultant surgeon who had been suspended,
in breach of contract by D health authority, on unfounded grounds that he was mentally unfit for his job. It was held
that Addis largely remained good law.

- In Addis, Lord Loreburn said that an employee cannot recover damages for the loss he may sustain from the fact that
his having been dismissed of itself makes it more difficult for him to obtain fresh employment.
- In Withers v General Theatre Corp'n, the Court of Appeal held that no damages were recoverable where the P's only
loss was injury to his already existing reputation as an actor.

- However, in Malik v Bank of Credit & Commerce International, the House of Lords, overruling Withers in part,
found that pecuniary loss is recoverable in respect of damage to reputation caused by breach of an employment
contract.
Ps were employees w/ a bank that went into liquidation. It became widely known that the bank's business had for a
number of years been carried on fraudulently. Provisional liquidators terminated Ps employment on grounds of
redundancy. Neither applicant was thereafter able to obtain employment in the financial services industry, allegedly
b/c of the stigma attaching to him as a former employee of the bank, notwithstanding his innocence of wrongdoing. Ps
claimed compensation for the alleged stigma. On a preliminary issue, it was held:
- There was an implied obligation on an employer that he would not carry on a dishonest and corrupt business.
- If it could be shown that it was reasonably foreseeable that in consequence of his corruption there was a serious
possibility that an employee's future employment prospects were handicapped, damages were recoverable for any such
continuing financial losses sustained.
- It made no difference if employee only heard of the employer's conduct after leaving the employment.
- The House did not follow Addis, noting that the case was decided in 1909 long before the evolution of the implied
mutual obligation of trust and confidence.

- Where the enhancement of P's reputation by publicity was particularly contemplated by the contract, loss of publicity
is recoverable by P since it was w/in the contemplation of the parties that such loss would result if the contract was
broken by D.
- In Marbe v George Edwards, it was established that a dismissed actor could recover damages for loss of promised
publicity.
- In Malik v BCCI, Lord Nicholls, favouring Marbe over Withers, said that loss of promised publicity might cause an
actor financial loss for two reasons: first, through loss of opportunity to enhance his professional reputation, and
secondly, his absence from the theatre scene might damage his existing professional reputation.

- Similarly, a dismissed apprentice may recover damages for loss of training.

Dunk v George Waller & Son - P, whose contract of apprenticeship had been wrongfully terminated during its course,
was held entitled, apart from loss of earnings, to damages for his loss of training and also for the diminution of his

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future prospects by reason of his loss of status of a man who has completed an apprenticeship, which might be
important in acquiring a new job.

Notice
- A contract of employment is an inherently determinable arrangement; however, it must be determined in accordance
with the law.
- The period of notice to which to which either party is entitled is governed by the contract, subject to the statutory
minimum periods if the employee has been continuously employed in the business for more than four weeks.
- Under s.3(1), Employment (Termination & Redundancy Payments) Act, an employee so employed is entitled to:
(a) 2 weeks - if employed for up to 5 years
(b) 4 weeks - if employed for 5-10 years
(c) 6 weeks - if employed for 10-15 years
(d) 8 weeks - if employed for 15-20 years
(e) 12 weeks - if employed for more than 20 years

- The employment contract may entitle the employee to a longer period of notice, which takes priority.
- A fixed term contract cannot be terminated by notice unless the contract expressly provides for this.
- Note one must still inquire whether the statutory minimum periods or the contractual period is reasonable.
- The function of the notice period is to give the dismissed party an opportunity to seek alternative employment.
- The reasonableness of the notice period will depend on the skill of the employee; the nature of the work the employee
was doing; the availability of, and the amount of time needed to find, alternative employment.

- When an employee is dismissed without the notice to which he is entitled under the contract in circumstances where
his conduct does not justify summary dismissal (e.g. gross misconduct which was unprovoked), employee is entitled to
claim damages for wrongful dismissal.
- The measure of damages would be the amount of wages or salaries that is payable in lieu of notice.

B. BREACH BY EMPLOYEE

- Note, employer may not sue for damages for breach of contract by employee b/c: -
(a) He can often benefit by employee forfeiting his right to his wages
(b) He is more likely to dismiss employee summarily w/ or w/out forfeiture of wages
(c) In case of employee's breach of contract in restraint of trade, employer more likely to claim an injunction or to be
able to sue for liquidated damages.

* Failure or refusal to work

- Prima facie measure of damages will be cost of procuring another person to do the work, less the amount that would
have been paid under the contract to D.
- Beyond this P may claim, as consequential loss, the value of the work lost by reason of the employee's defection, less
the amount that would have been paid to him under the contract. (arises when a substitute is not immediately
available).

- P may sometimes wish to claim for expenditure rendered futile by D's breach of contract.
Anglia Television v Reed - P television company employed D actor to play leading role in a film which Ps had decided
to make for television. When D repudiated contract and refused to perform, Ps unable to find substitute for D, and film
abandoned. Unable to prove what profit they would have obtained had film been made w/ D in it, Ps claimed to
recover their expenditure which had been wasted by D's breach.
Held that Ps could recover the expenditure which they had already incurred in employing other personnel for the
projected film before entering into the contract w D, as well as for their post-contractual expenditure, since it was
reasonably w/in contemplation of parties that all expenditure would be wasted if contract broken by D.

* Careless or defective work

- Where employee does careless or defective work, he will be liable for loss resulting to employer's person or property
as by physical injury and damage, or loss to the employer by reason of his liability in damages to a third person.

* Other breaches
Sanders v Parry - D, who had been engaged as an assistant solicitor by P, made a secret agreement w/ one of P's clients
that he would leave P's employ and set up in practice on his own account, whereupon the client would transfer to him
from P all client's legal work. Agreement having been carried through, P successfully claimed for breach of the
implied term of the employment contract that D would serve him w/ good faith and fidelity, and was awarded damages
for the loss of the chance of retaining the legal work of the departed client.

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7. PERSONAL INJURY LOSSES

* General and special damages

- In British Transport Commission v Gourley, Lord Goddard said that in an action for personal injuries, damages are
special and general.

- Special damages must be specifically pleaded and proved, and are awarded in respect of out-of-pocket expenses and
loss of earnings actually incurred down to the date of the trial.
- They are generally capable of substantially exact calculation.
- The nature of an award in special damages is restitutionary.

- General damage need not be pleaded specifically as the law implies it.
- General damages either have no pecuniary equivalent, e.g., pain and suffering, or their quantification involves
substantial guesswork, as with future pecuniary losses.
- The nature of an award in general damages is compensatory.

* Quantifying special damages

Loss of past earnings

- The multiplicand is the annual net sum P was earning or would have earned at the date of the injury, less the annual
net sum, if any, P is actually earning at the date of trial.
- In principle, set off expenses P would have incurred in employment, e.g. travel, special clothes, unless he still incurs
them.
- The multiplier is the time which has lapsed b/w the injury and the trial.

Cost of care
- P can recover all medical, nursing and hospital expenses where reasonably incurred.

* Assessment of general damages

Heads of General Damage

- In Cornilliac v St Louis (CA, T&T), Wooding CJ said that the considerations which a judge should bear in mind in
assessing general damages are:
(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 are affected

- He said it is important to keep in mind these heads of damage so as to arrive at an appropriate final figure.
- However, it would be wrong to quantify the damages under each head separately (with the exception of loss of
pecuniary prospects) and to simply add up them up at the end.
- Judge must be satisfied that his total award is fair and reasonable compensation. He must look for sources of error,
e.g. overlapping of items of damage, over or under-evaluation.

- In Fletcher v Autocar & Transporters Ltd, Lord Denning said that the items are not separate heads of compensation,
but are aids to arriving at a fair and reasonable compensation.

- Wooding CJ said that with the exception of loss of pecuniary prospects, the quantification for each head of damage
need not be disclosed.
- Damages for non-pecuniary loss are normally made as a single award.

Quantifying general damages

(a) Loss of pecuniary prospects

Loss of future earnings

- This arises where there is at the date of trial an annual loss of earnings which is measurable at today's values, and
evidence that it will continue into the future.
- The courts prefer the multiplicand / multiplier method, rather than the use of actuarial evidence as the primary basis
of assessment of loss of future earnings: Mitchell v Mulholland (No 2)

The multiplicand / multiplier method

- Multiplicand is P's present annual loss of net earnings, i.e. the annual net sum P would have been earning at the date
of trial had he not been injured, less the annual net amount, if any, which he actually is earning
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- If Ps present annual earnings are likely to increase or decrease over the years, the multiplicand is adjusted, e.g. if P
would have progressed in his career.
- Computation made on earnings after deduction of the income tax which would have been payable on them: British
Transport Commission v Gourley
- Note, in Gourley, it was emphasised that deduction should apply only if the damages themselves were not to be taxed
on the basis that otherwise P would be taxed twice.

- Starting point for the multiplier is the estimated number of years of disability from trial. If P is expected to be
disabled for the rest of his life, starting point is the remaining years of working life.
- Figure is then reduced b/c of two considerations:
(a) the fact that P receives a capital sum now rather than periodical payments over the years
NB: P is getting lost earnings long before he would have otherwise received them; without deduction, he would be able
to enjoy interest accruing in the intervening period.

(b) The contingencies or vicissitudes of life which might have arisen to cut off earnings before period of disability
would otherwise come to an end, e.g. unemployment, illness.

- Factors which affect choice of multiplier:

(a) P's age, health and life expectancy
(b) P's sex - possibility female P would have given up or interrupted her employment to have children and raise a
family)
(c) Ps pre-accident employment - low multiplier for jobs w/ low retirement age; low multiplier where no regular job or
there is risk of redundancy unless there is alternate employment; higher multiplier if P self-employed w/ not retirement
age.
(d) General uncertainty

- Factors which do not affect choice of multiplier:

(a) future inflation - no adjustment since high inflation is usu. accompanied by higher interest rates: Lim Poo Choo v
Camden & Islington Health Authority
(b) period b/w injury and trial - court looks to number of working years lost at date of trial, not date of injury

- Remember P can claim loss of future earnings not only for the period he will survive, but also for years he has lost:
Pickett v British Rail Engineering
- Loss too remote if P very young child or if years lost only would make only negligible difference to choice of
multiplier
- In a lost years case, two awards for loss of future earnings, each w/ different multiplicand and multiplier:
(a) for period that P likely to survive, using multiplicand from which living expenses not deducted
(b) for lost years, using multiplicand from which deduction made for P's living expenses (i.e. those exclusively for P +
those for joint benefit of himself and dependants)

Loss of earning capacity

- Arises where there is clear evidence P will not earn as much in future as he would have done in the future but for his
injury, but there is no measurable annual loss to found award for loss of future earnings on a multiplier / multiplicand
basis.
- Award quantified as a lump sum, w/ reference to comparable awards.
- This type of award is appropriate where:
- P back in his pre-accident employment, or in work of equal value, but as a result of his injury,
(a) there is a real and substantial risk he will be forced into an early retirement or less well paid job, or
(b) prospects of promotion or ability to advance his career damaged.
- P is a child who has not yet entered labour market
- P is handicapped on labour market by his injury - P was unemployed at time of injury, or is not yet back at work, and
will find work harder to come by, or will find range of jobs open to him narrower.

(b) Non-pecuniary loss

- Compensation cannot be calculated, but money is the best the law can do.
- Basis for award is convention, coupled w/ comparison with previous awards, experience, and intuition.

Pain and suffering and loss of amenities

- Damages for pain and suffering compensate P for the physical pain and the mental suffering caused by the injury.
- Therefore, a total 'living vegetable', who is permanently unconscious, recovers nothing: Wise v Kaye
- Not the injury itself, but its actual effects being compensated.
- Courts award damages for:
(a) pain caused by injury or its treatment
(b) awareness of physical disability and its consequences
(c) fear of future incapacity
(d) embarrassment at disfigurement
(e) mental distress P has suffered and will suffer in future as a result of the injury; emotional distress unconnected w/
injury will not by itself be recoverable

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- Pain and suffering is have earned where he could reasonably have obtained alternative suitable employment also
falls- to be deducted, and again may cau(a) which operated as a technical dismi(b) ssal of P. The remaining 2 offered
to keep P on in his employment but P refused. Held that he to play a game or a musical instrument
(c) loss of brain function, any of the five senses, sex-life, mobility, ability to do one's job, job satisfaction, friendships,
marriage prospects

- It is the loss of amenity itself for which P being compensated, not suffering or awareness of it, so 'living vegetable'
can recover damages under this head.

Assessment of damages for pain and suffering and loss of amenities

- To produce some measure of uniformity of awards, awards given for comparable injuries represent the 'conventional
sum' or basic award, which may be varied to take account of P's circumstances.
- Note past cases serve only as a guide, i.e. they illustrate the general standard or judicial consensus, but are referable
to their own facts: Wooding CJ in Aziz Ahamad Ltd v Raghubar (CA, T&T)

- In looking at the trend of judicial awards in similar cases, the court must take account of inflation which has reduced
the value of the money at the date of the award b/c the sums awarded should increase w/ inflation: Widgery LJ in
Mitchell v Mulholland; Mohammed Ibrahim Hosein v Camacho (CA, T&T)

Loss of expectation of life

- Where P's injury has shortened his expectation of life, he is entitled to damages in respect of its shortening.

- In Benham v Gambling, Viscount Simon LC laid down the principles upon which assessment is based:
(a) Damages represent a reasonable fixed figure for the loss of "the prospect of a predominantly happy life"
(b) court must be satisfied that the circumstances of P's life were calculated to lead him to a positive measure of
happiness, of which the injury has deprived him.

- Damages for loss of expectation of life is a conventional sum, i.e. an objective fixed sum which generally does not
alter regardless of P's circumstances.

* Deductions for compensating advantages

- On the compensatory principle, any gains made as a result of the injury would be deducted from the claim.
- Not all benefits received are deducted, b/c courts require a clear causal link b/w injury and benefit.
- No deduction made for benefit of accident insurance, pensions, redundancy payments (unless P made redundant b/c
of injury), charitable donations.
- Deduction made for contractual sick pay.

* Inflation
- Award of damages in personal injury cases must not take into account the possibility of continuing inflation: Widgery
LJ in Mitchell v Mulholland..
- Damages for personal injuries must be assessed by reference to present value of money, i.e. at the date of trial.
- Rationale: once the award is made, P must protect himself against a subsequent fall in the value of money by prudent
investment.

* Interest
- s. 3, Law Reform (Miscellaneous Provisions) Act provides that in an proceedings for the recovery of a debt or
damages, court may, if it thinks fit, order interest at the rate it thinks fit for any period b/w date cause of action arose
and date of judgment.
- The nature of an award of interest is discretionary.

- In Jefford v Gee, Lord Denning MR said that in personal injury cases, interest should not be awarded as
compensation for damages; it should only be awarded to P for being kept out of money which ought to have been paid
to him.
- It was held in Jefford v Gee that no interest should be awarded for loss of future earnings.

- In Wright v British Railways Board, Lord Diplock said it was necessary to have predictable rules for the assessment
of damages in personal injury cases b/c a high proportion of them are settled before trial, and even before the writ is
issued.

- In Central Soya of Jamaica Ltd v Freeman, the Court of Appeal of Jamaica laid down the following guidelines for
the award of interest:
(a) Interest should be awarded on special damages from the date of the accident to the date of judgment.
(b) Interest should be awarded on general damages (except loss of future earnings) from the date of the service of the
writ to the date of judgment.

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- Court of Appeal made no distinction b/w the rate of interest on general and special damages, and the rate payable
should be half that payable on judgment debts.
- Rate payable should now be 6% - Judicature (Supreme Court)(Rate of Interest on Judgment Debts) Order.

8. GENERAL POINTS ON THE ASSESSMENT OF DAMAGES

Note the following in respect of compensatory damages:

- In determining the award, the court must attempt to balance the scales b/w P and D.
- Damages must be in money.
- An award of damages cannot be perfect compensation; but it must be full and adequate.
- When assessing compensatory damages, means of D are not relevant.

* Form of damages

(a) The once-and-for-all rule

- The court must assess in a lump sum all past, present and prospective loss flowing from the tort or breach of contract.
- No damages can later be given for a cause of action on which judgment has already been given.
Fitter v Veal - P had been awarded £11 damages against D in action for assault and battery. Injuries proved to be more
serious than at first thought and he had to undergo an operation on his skull. Held he could not recover in a new action
for this further loss.

- Two exceptions to this rule:

(i) P may recover for his subsequent loss if he is able to ground D's liability on a different cause of action. This arises
where D has violated two separate legally protected interests.
Brunsden v Humphrey - A road accident injured P and damaged his vehicle. Held that P had tow separate causes of
action, one for his personal injury and another for his property damage.

(ii) Losses caused by a continuing breach of contract (e.g. continued use of property for a purpose prohibited under a
restrictive covenant) or a continuing tort (e.g. a trespasser remaining on P's land).
- As regards breaches of contract and torts actionable per se, a fresh cause of action arises until the unlawful act ceases.
- Where tort only actionable on proof of actual harm, a fresh cause of action will arise for every fresh incidence of
harm.

- Note, there can be successive violation of the same interest by different persons, which will give rise to separate
causes of action - cases of additional successive causes: Baker v Willoughby

Note the following:

- Purpose of once-and-for-all rule is to prevent continual litigation.
- However, court faces problem of having to make assessment for future loss, which must involve guesswork and
produces inaccuracy.
- Problem may be addressed if court had the power to award provisional damages e.g. in personal injury cases where
there is a possibility of a serious deterioration in P's condition. The award would be variable w/in a specified time limit
to increase compensation should the deterioration occur.
- Provisional award avoids P receiving a windfall in the award if the risk of deterioration does not materialise.
- It also eliminates need for an application for leave to adduce fresh evidence.

- Under the Judicature (Civil Procedure Code) (Amendment) (Interim Payment) Rules, the Supreme Court has power
to award interim damages, i.e. at an interlocutory (pre-trial) stage.

(b) Award of damages must be unconditional

- As a general principle, court cannot order that the damages be payable only on the occurrence of a certain event.
Banbury v Bank of Montreal - House of Lords found obiter that damages "for £25,000 and all securities to be returned
to the D bank" was improper b/c of the condition attached.

- The court cannot control what P does with his money.

- One exception is where the successful P is under a disability, e.g. an infant or insane.

Settlement of a minor's claim

- A minor's legal adviser cannot simply settle out of court the minor's claim.
- In an action brought on behalf of a minor, no settlement is valid w/out the approval of the court: s.226(1), CPC.
- The court must approve the settlement for two reasons:
(a) to protect the minor from disadvantageous settlements and
(b) to provide D w/ a valid discharge for any money paid in settlement

Procedure:

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- The negotiated settlement must be evaluated by an eminent practitioner. If the settlement is appropriate, the
practitioner would certify it. He must advert not only to the adequacy of the quantum (based on the strength of the
minor's claim) but also to whether the settlement is beneficial to the minor.

- The legal adviser must then apply, by originating summons, for the court's approval of the settlement, for
appointment of trustees and for directions as to how the proceeds the money is to be applied for the current and future
needs of the minor.
- The affidavit in support of the originating summons would exhibit the Certificate by the Counsel of eminence.
- The fitness of the persons recommended as trustees would have to be sworn to by affidavit.

- Other documents usu. required are the writ and pleadings (if any), any police reports and witness statements, medical
reports, schedule of special damages, minor's birth certificate.

- Judge will assess the minor's prospects of success and decide whether the proposed settlement is a reasonable and
beneficial to the minor.
- If not, matter adjourned to give parties an opportunity to renegotiate.

* The date for assessment of damages

- Damages must be assessed on the basis of P's loss at the date of judgment.
- Trial judge can avail himself of evidence relating of all events that occur prior to the date of judgment: Lord
Macnaughten in Bwlfa & Merthyr Dare Steam Collieries Ltd v Ponypridd Waterworks Co.

Adducing fresh evidence

- Court of Appeal has the discretion to admit evidence of events occurring since the judgment at first instance.

- Discretion has been exercised by the courts only in exceptional circumstances.

- Courts have shown three approaches to question whether discretion ought to be exercised:

(i) Fresh evidence should be admitted where damages were awarded on the wrong basis.
Jenkins v Richard Thomas & Baldwins - damages awarded to P, injured in an industrial accident, on the assumption
that he would be employed as a grinder. After trial, it was found that he had no aptitude for the work and his earnings
were thereby reduced. Evidence of this was admitted and damages increased.
- Salmon LJ said that if the basis on which damages have been assessed proves to be wrong very shortly after trial, and
the point is promptly taken up w/ the other side, then there may be good grounds for court giving leave to adduce
further evidence.

(ii) Fresh evidence should be admitted where the basis of the award was falsified by D's conduct.
Murphy v Stone Wallwork - Ps recovered damages from Ds for personal injuries sustained while in their employment.
Ds continued to employ P for some time after the accident but shortly after case heard on appeal, they dismissed him.
- House of Lords admitted evidence and award was increased. Lord Pearce said that it would be inequitable to allow
Ds to obtain an advantage from the assumption that their conduct had induced and then falsified.

(iii) All-embracing approach

- In Mulholland v Mitchell, the House of Lords found there was no precise criterion on which the court should
exercise its discretion. Lord Wilberforce laid down some guidelines:
(a) Fresh evidence ought not to be admitted when it bears upon matters falling w/in the field of uncertainty, in which
the trial judge's estimate has previously been made.
(b) Fresh evidence ought to be admitted if some basic assumptions, common to both sides, have clearly been falsified
by subsequent events, particularly by D's act.
(c) Fresh evidence ought to be admitted where to refuse it would be an affront common sense, or a sense of justice.

In Mulholland, P had been permanently incapacitated, both mentally and physically due to a car accident. Judge
awarded damages for medical expenses on the basis that P would be nursed by his wife at home at a cost of £1,312
p.a., but took into a/c that the strain might be too much for her and that P might therefore have to go into a nursing
home where the cost was £903 p.a. Before hearing of appeal, it became clear that it was impossible for him to continue
living at home due to the effect on his health and he was moved to the only suitable nursing home the cost of which
was £1,827 p.a., the nursing home contemplated at trial being no longer in existence.
- House of Lords upheld Court of Appeal's exercise of its discretion to give leave to introduce fresh evidence.
Assumptions, common to both sides, had been falsified by subsequent events, though not owing to D's act.

Lim Poo Choo v Camden & Islington Area Health Authority - trial judge had assessed damages on the assumption
that P, turned into a vegetable by negligent hospital treatment, would be cared for by her mother in Malaysia for a
good many years. But since then, her mother had become ill and P had been transferred to a nursing home in England.
- House of Lords admitted such fresh evidence, so cost of future care was reassessed. Lord Scarman said exercise of
the discretion can mitigate injustice of a lump sum system by enabling appellate courts to bring award in line w/ what
has happened since trial.

Consider the following: -

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P suffered serious injury but two doctors found that he was fully recovered. P has been at work for months and no
disability has surfaced. At trial, P's lawyers are claiming against D, P's employer, a certain sum as compensation,
relying on an authority involving similar injuries but which had left the P in that case wheel chair bound. P's lawyers
seek to tender medical reports of the two doctors, but does not intend to call the doctors.
- Note when the court examines the two medical reports which conclude that P has fully recovered, i.e. has no residual
disability, there is no scope for the court to consider any possibility of future disability. However, if P can find a doctor
who will testify that there is a risk of future disability, the court would have to address its mind to that uncertainty. If it
rules it out as nebulous, fresh evidence might not be admitted on appeal.

- In de Freitas v Alphonso Modern Record Store, Guyanese Court of Appeal applied dicta of Denning LJ in Ladd v
Marshall.
- Denning LJ had said that to justify the reception of fresh evidence, 3 conditions must be satisfied:
(a) evidence could not have been obtained w/ reasonable diligence for use at the trial
(b) evidence must be such as to have a probable impact on the result of the case
(c) evidence must be apparently credible, though it need not be incontrovertible

- In de Freitas, P has transferred shares held in her name to D company. Cheque was drawn on D company's bank a/c
in favour P and was cashed. P's name was indorsed on the cheque. P sought declaration that transfer was void. P
admitted indorsing the cheque, but claimed that she had not received the proceeds of the cheque. Action dismissed and
on appeal, P sought to adduce fresh evidence of a handwriting expert to show that she did not indorse the cheque.
Leave refused for two reasons:
(1) P did not show why evidence could not have been led. Court found there was sufficient opportunity to do so, or to
at least set appropriate investigations in motion and seek an adjournment while they were being completed. Having
failed at first to prove her case by admitting that she indorsed the cheque, she now sought to do so by seeking to
introduce handwriting evidence.
(2) Expert was to compare signature made on the cheque with signatures made long after the event. Such evidence
would not be very helpful to P's case.

NOMINAL DAMAGES

Circumstances giving rise to an award

Lord Halsbury in The Medina stated that “nominal damages is a technical phrase which means that you
have negatived anything like real damages but that you are affirming by your nominal damages that there is
an infraction of a legal right which, though it gives you no right to ant real damages at all, yet it gives you a
right to the verdict or judgement because your legal right has been infringed.”

In essence an injury or wrong entitles P to a judgement for damages in his favour even without loss or
damage, but where there is no loss or damage such judgement will be for nominal damages only.

Nominal damages also awarded where the fact of a loss is shown but the necessary evidence as to its amount
is not given. The problem is one of proof; one not of absence of loss but of absence of evidence of the
amount of loss. In Dixon v. Deveridge there was an action for the price of goods sold and delivered.
Evidence went to show that an amount was due from Def but nominal damages were awarded since P did not
give evidence as to what the amount was.

Functions of Nominal Damages

(a) As a means of establishing, determining or protecting a legal right
(b) It is a mere peg on which to hang costs------Lord Devlin in Anglo-Cyprian Angencies v. Paphos
Industries stated that “…the ordinary rule is that, where P has been successful, he ought not to be deprived
of his costs, or at any rate made to pay the costs of the other side, unless he has been guilty of some sort of
misconduct. In applying that rule however, it is necessary to decide whether the P really have been
successful, and …a P who recovers nominal damages ought necessarily to be regarded in the ordinary sense
of the word as a “successful P”. In certain cases he may be, for e.g.where part of the object of the action was
to establish a legal right, wholly irrespective of whether any substantial remedy is obtained. To that extent a
P who recovers nominal damages may properly be regarded as a successful p, but it is necessary to examine
the facts of each particular case.”

CONTEMPTUOUS DAMAGES
Rarely awarded other than by a jury in a defamation case, these are damages of a very small amount-usually
of the lowest coin of the realm whose function is to indicate that, while the defendant has committed the
alleged wrong (including a tort actionable only on proof of damage) the plaintiff deserves no more than a
technical acknowledgment of the infringement of his rights, because of his own conduct in the matter.
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A plaintiff awarded merely contemptuous damages is even less likely to recover his costs than one awarded
nominal damages. In exceptional cases he may even have to pay the costs of the defendant. The award is
usually given in cases of defamation but is not confined to such cases.

Note that contemptuous and nominal damages are seen as non-compensatory and have no substitionary
effect.

AGGRAVATED AND EXEMPLARY DAMAGES

THE CAUSE FOR CONFUSION: Very often aggravated and exemplary damages are granted by the courts
on the same facts and this has often led to a blurring of the line and the rationale of these two forms of
damages. The actions of a defendant which tend to humiliate and aggravate the damage to the plaintiff for
which he should be compensated often attracts the sanction of the court to punish him for his high-
handedness as well as to set an example to others.

ROOKES V BARNARD:
Here the House of Lords sought to set policy guidelines as to when each should be applied by distinguishing
and limiting the situations when exemplary damages will apply. The relevance of this approach to the
Caribbean should be studied in the context of the Jamaican court of appeal decision in Douglas v Bowen
with particular attention to the judgment of Graham-Perkins JA.

In Douglas v Bowen, the appellant let a dwelling house to the respondent, With the appellant’s approval, the
respondent converted the building for the enhancement of her business as a night club, adding a bar. The
respondent had been absent from the building for a short while and when she returned she found that the
electricity had been cut off. The rent due on September 17 was paid on September 20. The appellant gave her
a notice to quit on that date and to deliver up possession by October 16, 1969, which was patently invalid.
On October 17, the appellant caused a bulldozer to enter the demised premises and demolish the terrace.. The
mounted sign was knocked down, and the piano turned on its side.. The respondent reported this matter to
the police. The police advised the appellant as to the proper procedure to be adopted in order to obtain
recovery of the premises. This was rejected by the appellant who said he wanted his place.. The appellant
subsequently cut off the water supply and chopped down a hedge near the entrance to the demised premises.
It became impossible for the respondent to carry on business, and she locked up the club and left two men to
watch the premises. A week later, the appellant caused the repondent’s furniture to be removed. The
demolition continued. The main building and the outbuilding were demolished. The respondent’s furniture
and other belongings suffered considerable damage. The respondent claimed against the appellant damages
for loss of use and enjoyment of the house, and trespass to the goods. The matter came before Rowe J on the
issue of damages only. The appellant admitted that when he caused the demolition of the demised premises
his state of mind was that he was prepared to pay for so doing. Rowe J came to the conclusion that the
appellant did not want the premises for any particular reason but that “ in a high-handed, oppressive,
vindictive, wanton manner destroyed the respondent’s means of livelihood, her house, and that of her
children. He awarded her special damages, general damages, including compensatory damages and
exemplary damages. In awarding exemplary damages, Rowe J said that this was “ The most outrageous
trespass, the most cold blooded disregard of anyone’s rights, the most calculated misuse of personal power,
the most cruel onslaught on a defenceless woman and her children without rhyme or reason that I have ever
seen in these courts.”
On appeal the appellant sought to have the award of compensatory damages reduced as being too high. He
also sought to have the award of exemplary damages set aside on the ground that in the particular
circumstance of this case an award of exemplary damages was not permissible. The appellant relied on
Rookes v Barnard. Alternatively he sought to have the award under this head reduced.

Held:(1) that the sum of $5,000 awarded as compensatory damages for the injury to the respondent’s feelings
including the mental distress to which she was subjected by reason of the appellant’s conduct in evicting her
could not, in the exceptional circumstances of the case, be said to be too high.
(2) (Graham-Perkins.JA., dissenting). The categories of cases in which exemplary damages might be
awarded and which were enumerated in Rookes v Barnard and explained in Cassell v Broome should be
adopted and applied in Jamaica. In that event it was clear that the acts of the appellant would fall outside of
those categories thus disentitling the respondent to an award of exemplary damages.
Appeal allowed as to the award of exemplary damages.

Graham-Perkins JA: In the result I am compelled to the conclusion that Lord dDelvin’s first and second
categories do not constitute a pronouncement, sanctioned either by principle or by precedent, as to the
common law of England or of Jamaica. I would hold that the Rookes v Barnard(1) categories should not be
held to be applicable to Jamaica. Indeed, there has not been evident in the “progress” of the common law in
Jamaica any consideration of socio-legal policy that ought to compel the courts of this country to follow
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Rookes v Barnard.. For my part I would leave the matter of damages to “ sensible, untheoretical directions”
by judges.
As to the case under review, I have not the least doubt that on its particular facts as recited by the Acting
President, an award of exemplary damages was eminently justified and, indeed, necessary. I would therefore,
dismiss the appeal. I do not regard the figure awarded by Rowe J under this head as unreasonable.

COMPARE AND CONTRAST

Aggravated Damages: This is based on the compensatory principle of tort and is used to describe the
compensation payable to the plaintiff to satisfy his mental suffering and humiliation at the hands of the
defendant. Its computation is part of the general award of damages where the humiliation and mental
suffering of the plaintiff is accounted for.
Exemplary Damages: This is meant to punish the defendant for his oppresive and high-handed actions and is
now only awardable under the categories defined in Rookes v Barnard. This is computed after an award of
aggravated damages is granted and will only be awarded if it is considered that that award is insufficient to
punish the defendant

As noted in the WI case of Marshall v Semper, the Chief Justice Wooding noted:- “ A clear distinction is
now drawn between damages which are compensatory and damages which are exemplary. The object of the
first is to compensate, and of the second to punish and deter. The compensation may nevertheless be
aggravated because the injury which has been occasioned has in essence been aggravated. Care must
however be taken not to confuse aggravation of the injury, such as would warrant aggravation of the
damages, with punishment for malevolent, spiteful or malicious conduct such as might call for the award of
exemplary damages. If, therefore, a plaintiff is to be fully compensated for the injury he has sustained, it
must be the aggregate of the injury to which the compensation must be related. But exemplary damages
should never be awarded against a defendant whose conduct has not been such as to call for punishment or
deferrence merely because a c0-defendant has been found to be within one of the categories of persons who
should be punished or deterred.”

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 4. EXEMPLARY DAMAGES:

(1) Are exemplary damages awarded for breach of contract?

No exemplary damages can be awarded for breach of contract.

Addis v Gramophone Co Ltd. [1909] AC 488:

Laid down that no exemplary damages can be awarded for breach of contract.

Here the plaintiff was employed by defendants as manager of their Calcutta business. He could be dismissed
by 6 months notice. He was given the 6 months notice, but at the same time his successor was appointed,
and took steps to prevent the plaintiff from acting any longer as manager.
The House of Lords restricted damages to his pecuniary loss and refused to award any damages for the harsh
manner in which he had been treated.
Lord Loreburn, [damages to which the plaintiff entitled are] the salary to which the plaintiff was entitled for
the 6 months, together with the commission which the jury think he would have earned had he been allowed
to manage the business himself. I cannot agree that the manner of dismissal affects these damages…
If there be a dismissal without notice the employer must pay an indemnity; but that indemnity cannot include
compensation either for injured feelings of the servant, or for the loss he may sustain from the fact that his
having been dismissed of itself makes it more difficult for him to obtain fresh employment.”
The house of Lords restricted damages to his pecuniary loss and refused to award any damages for the harsh
manner in which he had been treated.

In Perera v Vandiyar, the pliantiff was the tenant of the defendant’s flat and in an attempt to get rid of him,
the defendant cut off the supply of gas and electricity to the flat leaving the plaintiff without alternative
means of heat or light. A week later the gas and electricity supply was restored as a result of an interlocutory
judgment granted by the county court, and the tenant was able to return. In an action for damages for breach
of the defendant’s covenant of quiet enjoyment the trial judge awarded inter alia 25 pounds exemplary
damages, but the court of appeal overturned this, damages were here being given for breach of contract( and
indeed no tort had been committed) no exemplary damages could be awarded.
Exemplary damages were also refused in Kenny v Preen.

THE THREE CATEGORIES IN ROOKES V BARNARD:

(1) Oppressive, arbitrary or unconstitutional actions by servants of the government:

The category excludes acts of private individuals however oppressive it may be. It may also exclude the
acts of public officials acting in their private capacity.

Marshall v Semper [1966] 10 WIR 129 HC T/T

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 P 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 later 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
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.

---The court applied Devlin’s decision in Rookes v. Barnard, and made the distinction between one acting in
his capacity as a crown servant. Where such a person acts oppressively, arbitrarily or unconstitutionally,
exemplary damages would lie.

---Where such servant is pursuing a private vendetta he will not be seen as acting in the capacity of a crown
servant.

In Cassell v Broome: Lord Diplock indicated: “it would embrace all persons purporting to exercise powers
of government, central or local, conferred upon them by statute or at common law by virtue of the official
status or employment which they hold. But the defendant must be exercising governmental power.”

In AB v South West Water Services Ltd., the actions of a nationalised corporation in contaminating
drinking water and failing to warn the public properly of this were therefore held not to fall within the first

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category even if exemplary damages could be awarded for the tort of public nuisance ( which, it was held,
they could not be.)

In Tynes v Barr, where a counsel and attorney sued a member of the police force for assault, false
imprisonment, malicious prosecution and breach of his constitutional rights, and the court held inter alia, that
the wrongs done to the plaintiff had been aggravated by an element of humiliation, loss of reputation, mental
suffering, the manner in which the defence had been conducted and the delay on the part of the police in
producing relevant documents; accordingly, the case fell within the category of oppressive, arbitrary or
unconstitutional action by servants of the Government and entitled the plaintiff to exemplary damages.

In Carrington and Another v Karamath, the respondent, a senior civil servant was illegally arrested at his
home by an armed party of police officers, and taken to the police headquarters. He was later released
without any charge being preferred against him. The circumstances surrounding his arrest were particularly
aggravating.. The respondent was allowed to amend his claim to include exemplary damages. The appellants
appealed to the court appeal against the amendment, and the respondent cross-appealed against the quantum.
The appeal was dismissed and the cross appeal allowed, holding that the quantum was inadequate as
punishment or deterrence, and increased the award. They applied Rookes v Barnard and Cassell v Broome.

AG of St. Christopher v Reynolds [1979] 43 WIR 108 PC

During a state of public emergency, the respondent was arrested and detained under the Emergency Powers
Regulations 1967, on the ground that he had been concerned in acts prejudicial to public safety or public
order. There was no evidence on which he could with reasonable justification have been regarded as having
done anything of the sort. He claimed damages for false imprisonment and compensation under s.3(6) of the
Constitution for unlawful deprivation of his liberty. His claim succeeded before Glasgow J and he was
awarded %5,000. An appeal by the AG to the CA was dismissed, the court holding that the 1967
Regulations offended against the Constitution and that the damages should include an element of exemplary
damages and should accordingly be increased to $18,000.

The court held inter alia that in the absence of exceptional circumstances, The PC would not interfere with
the quantum of an award of damages assessed by the court of appeal; an award of compensation for unlawful
arrest and detention in breach of an unauthorised depreivation of personal liberty contrary to section 3(1) and
(6) of the constitution might (in an appropriate case) include an award of exemplary damages under section
16 of the constitution, under which redress was available without prejudice to any other remedy in law, and
there was no need for the exemplary damages to be specified as such in the award.

(2) The defendant’s conduct has been calculated by him to make a profit for himself which may well
exceed the compensation payable to the plaintiff:

This does not mean that the Def sat down and made mathematical calculations.

In Cassell v Broome, the plaintiff, a distinguished retired naval officer, brought an action for libel against
two publishers of a book presented as an authentic account of a war-time disaster when a British convoy had
been destroyed. The jury awarded the plaintiff 15,000 pounds in compensatory damages and 25,000 pounds
exemplary damages. The defendants appealed against the exemplary damages, but the House of Lords
upheld it as falling within Lord Delvin’s second category.
Held that while on the one hand, the fact that the tortuous act was committed in the course of carrying on a
profit-making business is not sufficient to bring a case within the second category, on the other hand it is not
necessary for the defendant actually to have calculated in arithmetical form that the profit to be made from
the tort would exceed the damages and costs to which he would make himself liable. The defendant may
calculate that the plaintiff will not sue at all
Damages under this second category are not concerned merely to reverse the defendant’s unjust enrichment
but also to discourage the financial benefit of such action.

What is required is:

(a) knowledge that what is proposed to be done is against the law or a reckless disregard whether what is
proposed to be done is illegal or legal and
(b) a decision to carry on doing it because the prospects of material advantage outweigh the prospects of
material loss.

Landlord and Tenant Actions: Apart from libel, the main use of this second category has been in actions by
tenants against landlords for wrongful harassment or eviction founded on the torts of trespass or nuisance.
In Drane v Evangelou, the jury awarded 1,000 pounds for the landlord’s wrongful eviction of his tenant,
and the court of appeal held that this award was justified as including some exemplary damages for the tort
of trespass under the second category.

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In Guppys Ltd v Brooking and James, the landlords removed all the internal sanitary and washing
facilities, discontinued the supply of water to the external toilets and cut off the electricity. The trial judge
awarded 1,000 pounds exemplary damages to each of the two plaintiff tenants. The court of appeal upheld
this as awarded not for the tort of trespass, which was here difficult to make out, but rather for the tort of
nuisance. The case fell within Lord’s Delvin second category.

In WI, in the case of Valentine v Rampersad, the court of appeal held inter alia, that the respondent’s
conduct was oppressive in a real sense and warranted punishment by exemplary damages. (Lord Delvin’s
dicta in Rookes v Barnard was followed)

Facts: In 1959 R purchased dwelling premises occupied for 9 yrs by V, who paid a monthly rent of $6 for 3
rooms of a 4-roomed building in which one of the rooms was unoccupied when R purchased. Shortly after
the purchase V offered to pay rent to R, who refused it and told her that he intended to demolish the
premises, so she could keep the money and seek other accommodation. V sent the rent by registered post
and R terminated the tenancy by a notice in march.
R’s workman on his instructions entered the premises without V’s knowledge or consent and cut down a true
which fell and demolished the latrine. It was never adequately replace.
R later dumped 100 loads of gravel which formed a high mound on the premises and he instructed the
workman to carry out certain works including the removal of galvanised sheets from the roof of the
unoccupied room.
On Oct 22 the second unsuccessful ejectment proceedings by R against V were dismissed. This action for
trespass against L filed Nov 1959. R obtained order for possession in March 1959 and in May 1960 V moved
voluntarily.
The trial judge regarded the action as a proper case in which an element of aggravation should be taken into
account in assessing compensatory damages, and awarded aggravated damages, but declined to award
exemplary damages because he was not persuaded to the view that the respondent’s conduct was either so
high-handed or ruthless to warrant punishment.
On appeal the sole question was whether an award of exemplary damages ought also to have been made:
Held, allowing the appeal, in effect the judgement that the defendants conduct brings case within the first
and second categories of Rookes.
(i) that on the facts found by the trial judge the circumstances disclosed a clear case of harassment and
ruthless disregard by the L of the rights of the T
(ii) that the dictum of lord Devlin in Rookes v Barnard does not exclude the possibility of oppressive
action by private corporations or individuals being visited by an award of exemplary damages
(iii) that the respondent’s conduct was oppressive in a real sense and warranted punishment by
exemplary damages.

Trespass

Beckles v Chandler [1959] 2 WIR 1 Supreme Ct B/dos

P became the owner of a parcel of land by a conveyance from the court. At the time of the 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 P.
Subsequently the Ds started to demolish a building on the land and on two occasions erected a chattel house
thereon. The Ds further threatened to continue their trespass.
Held, (i) the actions of the Ds went beyond simple trespass for which the award of damages would not be an
adequate remedy, and a perpetual injunction restraining the Ds from trespassing should be granted;
(iv) the erection of the chattel house constituted a nuisance for which a mandatory injunction should issue
against the male D, 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 Ds in continuing the
trespass. In fixing the damages the court took into account the fact that P suffered the Ds to be on
the land from 1950 to 1954 before bringing the action.

Tortious interference with the plaintiff’s business:

In Bell v Midland Rly., the defendants had wrongfully prevented trains running to the plaintiff’s wharf so as
to divert trade to themselves. Wiles J indicated: “If ever there was a case in which the jury were warranted in
awarding exemplary damages, this is that case. The defendants have committed a grievous wrong.. For the
purpose of destroying the plaintiff’s business and securing gain for themselves.”

In Messenger Newspaper Group v National Graphical Association, exemplary damages were awarded
against a trade union under the second category for the torts of interference with business by unlawful
means, intimidation and public and private nuisance, committed in the course of a dispute over the plaintiffs’
refusal to operate a closed shop.

(3) Express authorisation by Statute:

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Acts were mentioned which empowered the court in assessing damages for an infringement of copyright to
award such additional damages as the court may consider appropriate for the flagrancy of the infringement.
If a statute explicitly allows an award of exemplary damages that is the end of the matter, the statutory body
will just have to proceed to assess the amount.
The difficulty of a legislation such as a Labour Code permitting exemplary damages against an employer
who breaches a contract is that it departs from the common law rule that exemplary damages are not
awardable for breach of contract.

FURTHER RESTRICTIONS BEYOND THE THREE CATEGORIES:

(1) The tort is not one for which exemplary damages were awarded before Rookes v Barnard:
In Bradford City Metropolitan Council v Arora, exemplary damages were awarded for sex and race
discrimination and no point was taken that such damages could be given as the statutory torts were created
after 1964.

(11) Double punishment: As laid down in Devonshire and Smith v Kenkins and Archer v Brown,
where a defendant has already been punished by the criminal law in respect of the facts upon which the
plaintiff now founds his tortious action, no exemplary damages should be awarded since a person should not
be punished twice for the same offence. In the first of these cases the defendant had already been fined, and
in the second, imprisoned for the conduct in question.

(111) The plaintiff’s conduct: In Rookes v Barnard, Lord Delvin said that the court should take into account
all mitigating circumstances. So exemplary damages may be refused ( or reduced) if the plaintiff brought the
defendant’s conduct upon himself.
In O’Connor v Hewiston, exemplary damages were refused for trespass to the person under the first
category because the plaintiff had provoked the defendant policeman’s assault.

(1V)) Compensatory damages sufficient: As stressed in Rookes v Barnard and Cassell V Broome, there
should be no exemplary damages if it is considered that the compensatory damages are adequate to punish
the defendant.

In Carrington v Karamath, the court of appeal noted that the trial judge had not fully appreciated that the
circumstances of the aggravation were to be taken into account in arriving at an award of compensatory
damages; very full compensation ought to be awarded to the respondent, but even an award of $25,000 in
such a case was inadequate as punishment or deferrence; the court increased the award to $45,000.

ASSESSING EXEMPLARY DAMAGES:

Discretionary: Whatever sum is felt necessary to punish the defendant and to set an example to others is
allowable. The parties’ means and all mitigating circumstances should be taken into account such as the
plaintiff’s own contributory blameworty conduct, as well as what defendants can pay.

Joint defendants: where there are joint defendants exemplary damages must not exceed the lowest sum that
any of the defendants ought to pay; so that if damages are not justified against any one of the defendants,
they should not be awarded at all.
As noted in Marshall v Semper, the court indicated that 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.

Multiple Plaintiffs: where there are multiple plaintiffs the total amount of exemplary damages considered fair
for the defendant to pay should first be decided on. Then that amount can be divided among the plaintiffs.

In Riches v News Group Newspapers, the court of appeal therefore set aside a total award of 250,000
ponds exemplary damages to ten plaintiffs for libel because, inter alia, there had been no direction on this
point by the judge and there was the possibility (and on the face of it, surely a high probability) that the jury
had considered that the 25,000 pounds rather than 25,000 pounds(2,500 pounds rather than 25,000 pounds to
each plaintiff) should be the total amount of exemplary damages.

Quantification: there is no need for the trial judge to separately quantify damages under this head.

AGGRAVATED DAMAGES:

TORT
The law has traditionally been more favourable to the distressed plaintiff in tort than in contract. So there has
been compensation, often under the head of “aggravated damages”, for mental distress caused by torts such
as:

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False Imprisonment
Lawrence LJ in Walter v Alltools (1944) TLR 39: “ … any evidence which tends to aggravate or mitigate
the damage to a man’s reputation which flows naturally from his imprisonment must be admissible up to the
moment when damages are assessed. A false imprisonment does not merely affect a man’s liberty; it also
affects his reputation. The damage continues until it is caused to cease by an avowal that the imprisonment
was false.”
Here the damages were increased because the Ds had not expressed their regret, had not notified the P’s
fellow-workmen that he had been exonerated from suspicion, and had written a letter which suggested that
the P’s conduct had been suspicious and which in effect justified the imprisonment.
---See to Marshall v. Semper

Malicious Prosecution
Saville v Roberts (1699) 1 Ld Raym 374
Lord Holt:
“There are three sorts of damage, any of which would be sufficient ground to support this action. (1) The
damage to a man’s fame, as if the matter whereof he is accused be scandalous… (2) Such as are done to the
person; as where a man is put in danger to lose his life, or limb, or liberty. (3) Damage to a man’s property,
as where he is forced to spend his money in necessary charges to acquit himself of the crime of which he is
accused.”

Assault and Battery

W v Meah [1986] 1 All ER 935
Here damages were awarded to two women who had been the victims of serious sexual assaults by the
defendant. Woolf J. considered that the awards on account of aggravation should be moderate, as
compensation for the personal injuries suffered remained the primary purpose of the damages.

See too Marshall v. Semper

Defamation
Mc Carey v Associated Newspapers Ltd [1965] 2 QB 86
Pearson LJ said that P’s damages “may also include the natural injury to his feelings – the natural grief and
distress which he may have felt at having been spoken of in defamatory terms, and if there has been any kind
of high-handed, oppressive, insulting or contumelious behaviour by the defendant which increases the mental
pain and suffering caused by the defamation and may constitute injury to the plaintiff’s pride and self-
confidence, those are proper elements to be taken into account in a case where the damages are at large.”

Nuisance
Bone v Seale [1975] 1 WLR 797
Here P had to endure persistent smells emanating from a pig farm. Here P was being disturbed in the
occupation of his home. P was awarded damages for any annoyance, inconvenience, discomfort or even
illness.
But the Court Appeal reduced the award taking into account the awards for loss of the sense of smell in
personal injury cases.

Trespass to goods
Owen & Smith v Reo Motors Ltd. (1934) 2 QB 86
The Ds supplied to P a motor chassis for display purposes, with an option to purchase it on stated terms and
with liberty to attach to it a body belonging to P. The Ds were to be entitled to remove the chassis at any
time, but if the body was so attached P was to entitled to dismantle it before such removal. D, without notice,
entered P’s garage and seized the chassis and body, which they took into the street where they dismantled the
body in view of a number of dealers and one of P’s creditors. The Court of Appeal held P entitled to
damages which appear to have been assessed on an exemplary basis, and it seems that this should suffice to
allow exemplary damages to be awarded, in appropriate circumstances, today.

Negligence
Perry v Sidney Phillips & Son [1982] 1 WLR 1297
Here the Plaintiff bought a house in reliance on the Defendant surveyors’ report. Serious defects soon made
their appearance but only minor repairs were effected by P as he could not afford major ones. On P’s claim
for damages the judge improperly awarded the cost of repair; however by the time the matter reached the
Court of Appeal P had sold the house at a price well in excess of what he had paid for it, and therefore the
question of assessing damages by the cost of repair fell away.
The Court of Appeal had no doubt but that the measure of damages which represented P’s financial loss was
constituted by the price he had paid for the house less its market value in its actual condition at the time of
purchase; on this amount interest was awarded.
P was awarded damages for the distress, vexation, anxiety and inconvenience suffered as a result of having
to live for a lengthy period in a defective house without being sure when repairs would be executed.
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Whitmore v Euroways Express Coaches Ltd. (1984) Times, 4 May
Here in an action against a holiday coach firm for negligent driving, P’s wife was awarded damages for the
‘ordinary shock’ (as opposed to nervous shock which is a recognised psychiatric illness) suffered at seeing
her husband’s injuries both at the time of the accident and in the weeks afterwards.

Medical Negligence
Bagley v North Herts Health Authority [1986] NLJ 1014
Here D’s medical negligence resulted in P giving birth to a still-born child, damages were awarded for P’s
loss of satisfaction in bringing her pregnancy to a successful conclusion and for her acute disappointment
and loss of pleasure in not being able to have her desired number of children.

Landlord and tenant:

Valentine v Rampersad, R purchased dwelling premises occupied by V for 9 years. Shortly after the
purchase, v offered rent to R, who refused, and told her that he intended to demolish the premises, so that she
should seek other accommodation. V sent the rent by registered post, and R terminated the tenancy by a
notice in March. R’s workmen on his instructions entered the premises and cut down a tree which fell and
demolished the latrine. It was never replaced. R later dumped 100 loads of gravel which formed a high
mound, and he instructed his workmen to carry out certain works including the removal of galavanise from
the unoccupied room . All of this was done unknown to V. The second unsuccessful ejectment proceedings
by R against V were dismissed in October 1959. R finally obtained an order for possession against v in
March the following year, and V removed voluntarily in May 1990

The trial judge held that the damage to the plaintiff can properly be said to be aggravated, and regarded the
action as a proper case in which an element of aggravation should be taken into account in assessing
compensatory damages, but declined to award exemplary damages, because, as he said, he was not
persuaded to the view that the respondent’s conduct was either so high-handed or ruthless to warrant
punishment. However, the court of appeal thought differently. Fraser JA indicated:” But I respectfully
disagree with the conclusion that the respondent’s conduct was not so high-handed or ruthless as to deserve
punishment. In my judgment, this was a clear case of harassment and ruthless disregard for the rights of the
tenant.... The respondent’s ultimate objective may have been commendable, but some of the methods he
chose to achieve it were oppressive and high-handed and deserve to be firmly reprobated. I am satisfied that
the respondent’s conduct falls within the second category of acts described by Lord Delvin in which “the
defendant’s conduct has been calculated by him to make a profit for himself which may well exceed the
compensation payable to the plaintiff.”
De la Bastide: “It would seem that the only reasonable conclusion which can be arrived at in the instant case
is that the respondent, despite such knowledge, was apparently prepared to take the risk of having to pay
damages in consequence of his several tortious acts in the expectation or hope that the money to be made out
of his wrongdoing would probably exceed the damages which might be awarded by this court.” He went on
to quote Lord Delvin with regards his second category where he indicated: “Where a defendant with a
cynical disregard for a plaintiff’s rights has calculated that the money to be made out of his wrongful doing
will probably exceed the damages at risk, it is necessary for the law to show that it cannot be broken with
impunity. This category is not confined to money making in the strict sense. It 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 he either could not obtain at all or not obtain except at a price greater than he wants to put
down.”
De la Bastide continued: “ I am of the opinion that the award of damages in this case should be increased to
include a measure of exemplary damages.”

In Drane v Evangelou and McMillan v singh, aggravated damages were awarded to a tenant for his
landlord’s trespass to land or nuisance in wrongfully evicting him. In the former, the court of appeal
emphasised the worry and stress of being deprived of a roof over one’s head and in the latter, the court also
stressed the tenant’s outrage at the landlord’s actions.

Limitations on compensation for mental suffering:

There is no tortious recovery for grief, anguish, upset, worry or strain suffered by a person as a result of the
personal injuries tortiously inflicted on that person’s spouse or child except for statutory bereavement
damages. However in Bagley v North Herts Health Authority, where the defendant’s medical negligence
resulted in the plaintiff giving birth to a still-born child, damages were awarded for the plaintiff’s loss of
satisfaction in bringing her pregancy to a successful conclusion and for her acute disappointment and loss of
pleasure in not being able to have her desired number of children.

There can be no recovery (except under the tort of assault) for the mental distress of being frightened for
one’s own safety.
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In Behrens v Betram Mills Circus, the plaintiff, a midget, was in a booth when an elephant went out of
control and knocked the booth over. Delvin J found that the plaintiff must have been very frightened and “
shocked”. He said, “ I should like to award him a substantial sum under this head, but I am satisfied that I
cannot do so except to the extremely limited extent that the shock resulted in physical or mental harm.

(2) Assessing damages for mental distress:

As with all non-pecuniary losses the aim must be to award a fair and reasonable sum, which is in line with
other mental stress awards. However, the courts do not regard mental distress as that serious for they have
often stressed that awards should be kept at a moderate level.
In Watts v Morrow, the plaintiffs brought an action against the defendant claiming for the costs of repairs.
The judge also awarded a sum of 4,000 pounds to each plaintiff for distress and inconvenience. The
defendants appealed inter alia, that either no or only modest damages should have been awarded for distress
and inconvenience.
The court of appeal held inter alia, that damages for breach of normal contract of survey were only
recoverable for distress caused by physical consequences of the breach and not for mental distress not caused
by physical discomfort or inconvenience resulting from the breach. Acordingly, the plaintiffs were not
entitled to damages for distress and inconvenience but instead they would each be awarded damages of 750
pounds for physical discomfort.

AGGRAVATED DAMAGES IN DEFAMATION CASES:

Most awards of aggravated damages are found in defamation actions where the following factors are
considered.

(1) The defendant’s conduct: the defendant’s conduct is relevant in this way to show whether he has acted
with or without malice.
(2) importance of evidence: Tindal CJ in Pearson v Lemaitre “ that either party may, with a view to the
damages, give evidence to prove or disprove the existence of a malicious motive in the mind of the publisher
of defamatory matter.”
(a) Evidence to prove malice in aggravation of damages. Malice may be shown by the defendant’s conduct
generally, but there are two particular ways in which it has come to be shown: by other derogatory
statements made of the plaintiff by the defendant and by the defendant’s persistence in the accusation, such
persistence being either by way of an unreasonable plea of justification or by lack of any, or any adequate,
apology.
(c) Evidence to disprove malice in mitigation of damages. Must be specially pleaded.
(1) truth or partial truth of the statement
(2) statement not originated by the defendant
(3) Provocation of the defendant. If the plaintiff has provoked the defendant into the defamatory statement,
this is evidence to disprove malice in mitigation of damages
(4) Apology by the defendant. ----an apology has been admissible in mitigation of damages.
(5) the plaintiff’s character: bad reputation

(3) Other circumstance of the plaintiff and defendant: On principle, the social and financial position should
be relevant to damages only in so far as it shows the extent of the injury to the plaintiff. Also the extent of
the publication of the defamatory statement as a factor operating in aggravation or mitigation of the damage

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