Basic Process for Assessing Damages: 97 Select  interest that deserves vindication 97 a. Restitution 97

Dodd Properties v. Canterbury City Council [Eng. CA]

Two neighbouring buildings, one damaged during construction.

Value ↓ over time, by ~£30k

π wanted damages calculated at the later date, to account for the decline in value.

Held: damages assessed at later date

Reasons:

There will always be some reasonable period in which for π to organize finances, arrange contractors etc  to move on from the breached K.

Court allowed the π to wait 8 years in this case, during which time the cost of repairs massively increased.

πs argued it wasn’t reasonable for them to put their own $ at risk doing repairs at earlier date, for several reasons (none of which are especially convincing):

1. ∆s were denying liability

That’s sort of ridiculous, since ∆s deny liability all the time and it doesn’t typically let you off the hook for mitigation.

Maybe because it was government, in this case? Not at all clear from the judgment, though.

2. πs didn’t want to spend their own money because (a) they had a cash problem, and (b) even if they didn’t, director testified that they still wouldn’t have spent the money before they were sure of recovering cost from ∆.

This is a dangerous argument: recall Radford v. DeFroberville: intent to do the work is key in whether π can recover. So, in their anti-mitigation argument, π here actually led evidence that undercuts their main argument.

∆ argued they shouldn’t have to pay full amount of lost business. Since it’s less than 100% likely that they will actually experience loss because they may not conduct the repairs, ∆ argued for 60%.

Perry v. Sidney Philips [1982, Eng. CA]

Defective property – surveyor ∆ failed to detect the defect.

π couldn’t afford to properly repair the defect at the time it was discovered.

π claimed cost of repairs, and also damages for the physical inconvenience and stress of living in a crappy house (full of mould etc.) for 4 years as a result of the negligent survey.

Held: CA refused to award cost of repairs. Instead, awarded damages based on difference between cost paid and reasonable cost knowing about the defect. However, he gets the physical inconvenience b/c he had to stick with it due to impecuniosity (and no failure to mitigate)

Reasons

Hence, π gets difference between cost paid and cost he should have paid given the defects.

2. Impecuniosity claim allowed

Consumer case, not commercial

Part of the reason people use a surveyor is to avoid financial risk

The key: is it within the scope of the K? (i.e., what is the K about?)

This is not a risk that π could have protected himself against.

No insurance for hidden defects

The way you protect against this is by hiring a surveyor.

Damages in Lieu of Specific Performance

Wroth v. Tyler [1974, Eng.]

House price: £6000. ∆ breached K for sale; π sued for SP.

At time of breach, house was worth £7500. At trial, worth £11,500.

So, damages at time of breach = £1500. But if real and substantial claim for SP, damages in lieu would be £5500.

Held: court awards damages in lieu of SP, totaling £5500

Reasons

Court wouldn’t grant SP, because it would cause husband to sue wife over charge, or SP subject to wife’s occupation rights.

 You can’t get SP where it would require a third party to waive their legal rights.

But, where π has a legitimate claim for SP, damages should be calculated in lieu.

Principle: π couldn’t mitigate, and reasonably didn’t, because they expected SP. So, court can push the time of assessment right up to trial.

Problem: people will always throw in a claim for SP even if they don’t want it, to push time of assessment. But must be real & substantial interest.

Semelhago v. Paramadevan [1996, SCC]

Courts will take a different approach to damages and mitigation where there is a real and substantial interest in specific performance.

Facts:

House under construction at time of K. Purchase price = $205k

At time of trial, worth $325k

π was going to buy the house with $75k cash plus mortgage of $135, then sell their old house for $190k. Value of old house at time of trial = $300k.

So, if no breach: up by $114k between -6000 mortgage and +120k on (new) house.

Held:

Result of judgment:

New house: +$120k;

Old house: +$110k;

Return on the $75k not spent: $20k;

So, up by a total of $250k.

Reasons

Court says you can’t deduct the increase in value to the old house, but they let the reduction in mortgage costs stand because it wasn’t argued. Yes, it is a windfall, but SP would have been too.

Note: later cases have resiled from this a bit.

Picks up line from Asamera: need real and substantial interest to rely on SP claim to get damages in lieu.