COMMONLAWONREMOTENESSOFD AMAGES POSTTHE A ACHILLEASJUDGEMENT
BY RAHULDEODHAR
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I.
T ABLEOFCONTENTS
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TABLEOFCONTENTS
II.
INTRODUCTION
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III.
BASICSOFLAWONREMOTENESSOFDAMAGES
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IV.
CASESDETERMININGTHE PRINCIPLEOFLIABILITYANDCALCULATIONOFDAMAGES
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V. VI. VII. VIII.
OTHERDECISIONPRIORTO ACHILLEASINTERPRETINGREMOTENESS THEACHILLEASCASESUMMARY CASESPOST ‐SCHILLEAS SUMMARYOF IMPACTOF ACHILLEASONSUBSEQUENTDECISIONS
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II.
INTRODUCTION
ThelawonRemotenessofdamagesformsacriticalpartofdamagesclaimedin breachofcontract.AsagainstdamagesinTorts,theliabilityislimitedbyvarious principlessuchase.g.doctrineagainstunjustenrichment. The The prim primar ary y law law was was form formul ulat ated ed in 1854 1854 in a popu popula lar r case case call called ed Hadl Hadley ey v. Baxe axend ndal ale. e. The Therea reafte fter, it was eluci lucida date ted d in subs subseq eque uent nt jud judgem gements ents and and decisions.Inthisform,ithadserveduswell. The The deci decisi sion on in a rece recent nt,, also also popu popula lar, r, case case call called ed The The Achi Achill llea eas s seem seemin ingl gly y chan change ged d the the prin princi cipl ple e expa expand ndin ing g the the scop scope e of liab liabil ilit ity y of the the part party y in brea breach ch.. Naturally,posttheAchilleas,therewasaspateoflitigationurgingtheCourtsto grantexemplarydamagesundercontracts. Howe owever ver, sub subsequ seque ent jud judgeme gement nts s have have cla clarifi rifie ed that that Achil chillleas eas remai emain n a modificationoftheruleinspecialcase.Thus,itwasessentialtosynthesizekey judg judgem emen ents ts expl explai aini ning ng the the law law as it form formed ed,, the the judg judgem emen ents ts that that modi modifi fied ed includingtheAchilleasandjudgementsthereafter. Ihavesummarizedthecurrentpositionofthelawregardingtheremotenessof damagesattheendofthisdocument.
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III.
B ASICSOFLAWONREMOTENESSOFDAMAGES
1. The The loss losses es arisi arising ng from from brea breach ch of cont contra ract ct are are pu purv rvie iew w of, of, what what is gene genera rall lly y referredas,testorruleof“remotenessofdamage”.Thetestwasfirstestablished inlandmarkcaseofHadleyvBaxendale 1andruleiscrystallizedandexplainedin Victor Victoria iaLau Laundr ndry y (Winds (Windsor) or) Ltd v Newman Newman Indust Industrie ries s Ltd2,CCzarnikowLtdv Kouf Koufos os (The (The Hero Heron n II) II)3 and and Sout South h Aust Austra rali lia a Asse Asset t Mana Manage geme ment nt Corp Corp v York York Montague Montague Ltd4. BHL BHL subm submit its s that that it is im impo port rtan ant t to firs first t exam examin ine e the the rule rules s in greaterdetail. 2. The test test is usually usually formul formulate ated d from from the speech speech of Baron Baron Alders Alderson on in Hadley Hadley v Baxend Baxendale ale as follow follows s “Where “Where two partie parties s have have made made a contrac contract, t, which which one of themhasbroken,thedam themhasbroken,thedamageswhic ageswhichtheotherparty htheotherpartyoughttoreceiveinrespe oughttoreceiveinrespect ct ofsuchbreachofacontractshouldbesuchasmay: a. Fairl airly y and and reas reason ona ably bly be cons consid ide ered red as eith eithe er arisi rising ng natur atural ally ly,, ie, ie, accordingtotheusualcourseofthings,fromthebreachofcontractitself (“firstlimb”);or b. Such Such as may reason reasonabl ably y be suppos supposed ed to have have been been in contem contempla platio tion n of bothparties, bothparties,atthetimetheymade atthetimetheymadethecontract thecontract,astheprobab ,astheprobableresult leresultof of breachofit(“secondlimb”).” 3. In Vict Victor oria ia Laun Laund dry (Win (Winds dsor or) ) Ltd Ltd v New Newman man Ind Industr ustrie ies s Ltd, td, her hereina einaft fte er referred referredto toasVictoria asVictoriaLaundryCase, LaundryCase,AsquithLJin AsquithLJin theCourtofAppealheldthat theCourtofAppealheldthat NewmanIndustries(defendant)onlyhadtocompensatefortheordinary,notthe extr extrao aord rdin inar ary y loss loss of prof profit its s suff suffer ered ed by Vict Victor oria ia Laun Laundr dry y (cla (claim iman ants ts). ). He distinguished(atp543)lossesfrom“particularlylucrativedyeingcontracts”asa diff differ eren ent t type type of loss loss which which woul would d only only be reco recove vera rabl ble e if the the defe defend ndan ant t had had sufficie cient knowledge of them to make it reasonable to attribute to him acceptanceofliabilityforsuchlosses. 1
Hadley & Anor v Baxendale & Ors., [1854] EWHC Exch J70
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Victoria Laundry (Windsor) Ltd v Newman Industries Ltd
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C Czarnikow Ltd v Koufos (The Heron II), [1967] UKHL 4
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South Australia Asset Management Management Corp v York Montague Ltd, [1997] 1 A.C. 191 HL
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4. InCCzarnikowLtdvKoufos(TheHeronII),hereinafterreferredasTheHeronII case,clarificationwasgivenaboutdegreeoflikelihoodrequiredinorderthata claima claimant nt may recove recover r damage damages s for a partic particula ular r type type of loss. loss. In the judgem judgement ent,, LordReid LordReid saidthattheprop saidthatthepropertes ertestis tis whethe whetherthelossinquest rthelossinquestion ion is“ofa kind kind whichthedefendant,whenhemadethecontract,oughttohaverealisedwasnot unlike unlikelyto lyto result result from fromthe the breach breach Iuse I use the words"notunlik words"notunlikely ely" "asdenot asdenoting ing a degreeofprobabilityconsiderablylessthananevenchancebutneverthelessnot very very un unus usua ual l and and easi easily ly fore forese seea eabl ble. e.” ” Lord Lord Reid Reid cont contin inue ues s late later r “Ind “Indee eed d the the decisionmakes decisionmakesitclearthatatypeofdama itclearthatatypeofdamagewhichwaspla gewhichwasplainlyfore inlyforeseea seeableasa bleasa realpossibilitybutwhichwouldonlyoccurinasmallminorityofcasescannotbe regarded regardedas asarisi arisingintheusualcourseofthingsorbesupposed ngintheusualcourseofthingsorbesupposedto tohavebee havebeenin nin thecontemplationoftheparties:thepartiesarenotsupposedtocontemplateas ground grounds s for the recove recovery ry of damage damage any type type of loss loss or damage damage which which on the knowledgeavailabletothedefendantwouldappeartohimasonlylikelytooccur inasmallminorityofcases.” 5. In Sout South h Aust Austra rali lia a Asse Asset t Mana Manage geme ment nt Corp Corpor orat atio ion n v. York York Mont Montag ague ue Ltd. Ltd.,, hereinaft hereinafterrefer erreferredastheSAAMCO redastheSAAMCOcase,thequestion case,thequestionwaswhatistheextentof waswhatistheextentof theliabilityofavaluerwhohasprovidedalenderwithanegligentovervaluation ofthepropertyofferedassecurityfortheloan?Itwasheldthatthevaluerswere responsibleforthelossforwhichthevaluer“assumedresponsibility”.Theloss was was deem deemed ed to be equi equiva vale lent nt to what what lend lender er had had suff suffer ered ed if ther there e were were no circumstancesaggravatingthelosscausedbythenegligentovervaluation. 6. Thus,SAAMCOcasemodifiedtheruleortestof“remotenessofdamages”.Evenif foreseeableandnatural,aloss,likelosssufferedbythelenderinthiscase,may not berecovera berecoverable ble..The The Houseof Houseof Lordsprefe Lordspreferre rred d toexplainsuch toexplainsuch casesby casesby the agreement‐centred approach of an impliedly restricted assump umption ion of respon responsib sibili ility, ty, rather rather than than by the vaguer vaguer reason reasoning ing of a break break in the chain chain of causat causation ion betwee between n the breach breach and the loss. loss. This This princi principle ple applie applies s not only only in second second‐li ‐limb mb cases cases of losses losses forese foreseeab eable lein in the light light of specia specially lly commun communica icated ted informationaswaspreviouslythought,butalsotofirstlimbcaseslikeSAAMCO itself.
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7. ThedecisioninTransfieldShippingIncvMercatorShippingInc(TheAchilleas) 5, hereinafterreferredtoasTheAchilleascase hereinafterreferredtoasTheAchilleascase,extendstherulefurther ,extendstherulefurther. . 8. ThefactspertainingtothecaseofTheAchilleasarediscussedinshortherein.The owne owners rs of the the ship ship,, The The Achi Achill llea eas, s, had had a time time char charte ter r agre agreem emen ent t with with firs first t chartererswhereinthelatestdateofdeliverybacktotheownerswasdecidedas May2.Thefirstcharterersgavenoticeofdeliverybetween30thApriland2nd May. May. The owners owners entere entered d into into anothe another r time time charte charter r with with new charte charterer rers s with with lastdateofdelivery,tothenewcharterers,asMay8thattherateof$39,500. However,thefirstcharterersfinallydeliveredtheshiponMay11th.Becauseof thedelayownershadtoagreetolowerpriceof$31,500withsecondcharterers. Theownersclaimeddamagesof$1.8millioncalculatedasthedifferenceinthe rates($39500‐$31500=$8000)Xtimedurationofthenewcharter.Thenormin shippingindustrywastopaymarketrate(dailycharterrate)forthenumberof daysforwhichrevenuewaslost.Thusnorma daysforwhichrevenuewaslost.Thusnormativedama tivedamagescameto$158,301 gescameto$158,301.17 .17 calculatedasmarketrateX9daysrevenuelost.Intheappeal,theHouseofLords heldthattheownersofTheAchillea heldthattheownersofTheAchilleasarenotentitled sarenotentitledto tothelossfromreduct thelossfromreduction ion ofcontractpriceofsubsequentcontractbutonlyequaltothepaymentfor9days oflossesatthecurrentmarketpricesamountingto$158,301.17. 9. Base Based d on the the fact facts s and and judg judgem emen ent t in The The Achi Achill llea eas, s, foll follow owin ing g thin things gs are are to be consideredbeforeestimatingdamages: a. Whetheralosswassufficientlyforeseeableatthetimeofcontractingthat it can can sens sensib ibly ly be said said to have have been been “wit “within hin the the horizo horizon n of the the part partie ies’ s’ contemplation” b. Any Any info inform rmat atio ion n comm commun unica icate ted d with with the the count counter erpa part rty y in a mann manner er to allow allow the counte counter‐p r‐part arty y to preven prevent t the excess excess liabil liability ity if he is so faced faced with. c. Thepurposeoftheduty,i.e.whichinterestsitwasintendedtoprotect. d. Theabsenceofanexpressterm(especiallyexclusionclause)coveringthe risk. e. Anygeneralmarketunderstandingorexpectation.(Exclusionimplied)
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Transfield Shipping Shipping Inc v Mercator Shipping Inc (The Achilleas), [2008] UKHL 48
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f.
The price price paid paid to the promiso promisor, r, as compar compared ed with with the size of potent potential ial lossesforwhichthepromisorissaidtohavetakentherisk.
10. Understandingthemeaningof:Lossthatis“Notunlikely” a. LordReidhasclarified“notunlikely”inHeronIIbysaying“Indeedthe decision makes it clear that a type of damage which was plainly forese foreseeab eable le as a real real possibi possibilit lity y but which which would would only only occur occur in a small small mino mi nori rity ty of case cases s cann cannot ot be rega regard rded ed as aris arisin ing g in the the usual usual cours course e of things things orbe suppos supposedto edto have havebee been ninthe inthe contem contempla platio tion n ofthepa ofthe parti rties: es: thepartiesarenotsupposedtocontemplateasgroundsfortherecovery ofdamageanytypeoflossordamagewhichontheknowledgeavailable tothedefendantwouldappeartohimasonlylikelytooccurinasmall minorityofcases.” b. Lord ord Toul Toulso son n expou xpound nds s the the term terms s used used by vari variou ous s cour courts ts in many many decisi decisions ons inSup in Supers ershie hieldcase ldcasepar para a 38:“Lord Reid Reid went wenton onto tofor formul mulate ate thetestaswhetherthelosswasofakindwhichthedefendantatthetime ofthecontractoughttohaverealisedwas"notunlikely"toresultfromthe breac reach, h, the wor words "not "not un unllikel ikely" y" denot enotin ing g "a degre gree of proba robabi bili lity ty considerab considerablylessthananevenchancebutneverthe lylessthananevenchancebutneverthelessnotveryunusual lessnotveryunusual andeasilyforese andeasilyforeseeable eable".LordsMorris ".LordsMorris,Pearce ,PearceandUpjohnusedthewords andUpjohnusedthewords "a serious serious possib possibili ility" ty" and "real "real danger danger" " as convey conveying ing the approp appropria riate te shadeofmeaning.” 11. Questionofassumptionofliability a. LordReidexplains LordReidexplainsinHeronII“Incontract inHeronII“Incontract,ifonepartywishes ,ifonepartywishesto toprote protect ct himselfagainstariskwhichtotheotherpartywouldappearunusual,he candirecttheotherparty'sattentiontoitbeforethecontractismade.” b. Thus Thus this this is not a contem contempla plation tion of damage damage within within torts torts where where liabil liability ity can can be exte extend nded ed.. Liab Liabil ilit ity y un unde der r cont contra ract cts s must must be assum assumed ed,, eith either er in expressedorimpliedway.ThedecisioninTheAchilleasclarifiedthatone way to deduce uce implied assumption of risk is to look if there was considerationpaidforassumptionofsuchrisks.
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IV.
C ASESDETERMININGTHEPRINCIPLEOFLIABILITY RINCIPLEOFLIABILITYANDCALCULATION ANDCALCULATIONOFDAMAGES OFDAMAGES The following cases helped evolve the law related to remoteness of damages, the principles of liability and calculation of damages:
1] Hadley&AnorvBaxendale&Ors.
a. Citation:[1854]EWHCExchJ70 b. Ruleofremoteness:HadleyvBaxendaleestablishedtherulesfordeciding whet whethe her r a defa defaul ulti ting ng part party y was was liab liable le for for all all the the dama damage ge caus caused ed by its its brea breach ch.. Thes These e are are commo commonl nly y descr describ ibed ed as the the rule rules s of ‘rem ‘remot oten enes ess s of damage’: c. ‘Wheretwoparties ‘Wheretwopartieshavemadeacontract havemadeacontract,whichoneofthemhasbroken, ,whichoneofthemhasbroken, the damage damages s which which the other other party party ought ought to receiv receive e in respec respect t of such such breachofacontractshouldbesuchasmay: i. Fairlyandreasonablybeconsideredaseitherarisingnaturally,ie, accordingtotheusualcourseofthings,fromthebreachofcontract itself(“firstlimb”);or ii. Suchasmayreasonablybesupposedtohavebeenincontemplation ofbothparties,atthetimetheymadethecontract,astheprobable resultofbreachofit(“secondlimb”). d. Quotat Quotation: ion: Alders Alderson on B in Hadley Hadley v Baxend Baxendale ale said said at p354‐5 p354‐55: 5: “where “where two two part partie ies s have have made made a cont contra ract ct whic which h one one of them them has has brok broken en,, the the damageswhichtheotherpartyoughttoreceiveinrespectofsuchbreach of contra contract ct should should be such as may fairly fairly and reason reasonabl ably y be consid considere ered d eitherarisingnaturally,i.e.accordingtotheusualcourseofthings,from suchbreachofcontractitself,orsuchasmayreasonablybesupposedto havebeeninthecontemplationofbothparties,atthetimetheymadethe cont contra ract ct,, as the the prob probab able le resu result lt of the the brea breach ch of it. it. Now, Now, if the the spec specia ial l circumstances ces under which ich the contract was actually made were communicatedbytheclaimantstothedefendantsandthusknowntoboth parties,thedamagesresultingfromthebreachofsuchacontract,which theywouldreasonablycontemplate,wouldbetheamountofinjurywhich
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woul would d ordi ordina nari rily ly foll follow ow from from a brea breach ch of cont contra ract ct un unde der r this this spec specia ial l circum circumsta stance nces s so known known and commun communica icated ted.. But, But, on the other other hand, hand, if thesespecialcircumstanceswerewhollyunknowntothepartybreaking the contra contract, ct, he, atthemost,would atthemost,would onlybe onlybesup suppos posedtohavehadinhis edtohavehadinhis contemplationtheamountofinjurywhichwouldarisegenerally,andin the great great multit multitude ude of cases cases not affect affected ed by any specia special l circum circumsta stance nces, s, fromsuchabreachofcontract." e. Quotat Quotation: ion: Lord Lord Hoffma Hoffman n descri described bed the rule rule in Hadley Hadley v Baxend Baxendale ale and subsequentcases,as"theordinaryforeseeabilityrule". 2] R&HHallLtd-v-WHPimJunr&CoLtd.
a. Citation:[1928]30LLR159 b. BasicFacts:PimsoldacargoofwheattoHallat51s9daquarter.Hallhad agreedtosellasimilarcargotoWilliamsat56s9daquarter,andWilliams tosellagainSuzukiat59s3daquarter.Pimboughtacargoofwheaton board board the "S.S. "S.S. Indian Indianic" ic" at 60s a quarte quarter. r. Pim later later secure secured d agreem agreement ent with ith all conc conce erne rned tha that the the sal sales from from Pim Pim to Hall and and from from Hall all to WilliamsandfromWilliamstoSuzukishouldbetreated,ineachcase,as resale resales s of the cargo cargo the subjec subject t of the preced preceding ing purcha purchase se in the chain. chain. Pimgavenoticeapprop Pimgavenoticeappropriatin riatingtheIndianic gtheIndianiccargotoits cargotoitscontra contractwithHall ctwithHall andthatnoticewaspasseddownthechain.PimsoldtheIndianiccargoto Rankat59s11.5daquarter.Whenthecargoarrivedthemarketpricewas 53s9daquarter.HavingsoldthecargotoRankPimcouldnotdeliverthe documentscoveringthecargotoHall.TheCourtofAppealhadheldthat Hall' Hall's s damage damages s were werelim limite ited d to the differ differenc ence e betwee between n the market market (53s (53s 9d)andthecontract(51s9d)priceatthedateofthebreach.Hallclaimed thedifferencebetweenthepriceatwhichtheyhadbought(51s9d)and theprice(56s9d)undertheirsub‐saletoWilliams. c. Decis Decisio ion: n: The The Hous House e rest restor ored ed the the decis decisio ion n of Rowl Rowlat att t J that that Hall Hall was was enti entitl tled ed to reco recove ver r the the diff differ eren ence ce betw betwee een n the the pric price e at whic which h it had had bought bought and the price price atwhi at which ch it had resold resold the cargo cargo togeth together erwit with h an indemnityforthedamagesandcostswhichHallwouldhavetopaytothe buyerswhohadbroughtfromthem.Ittreatedthequestionasoneofthe applicationoftheruleinHadleyvBaxendale.
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d. Quotat Quotations ions: : Viscoun Viscount t Haldan Haldane e said said the contrac contract t was not merely merely for the sale sale of corn corn in bulk bulk but but for for the the sale sale of the the carg cargo o of an indi indivi vidu dual al ship ship,, eith either er spec specif ific ical ally ly iden identi tifi fied ed or to be iden identi tifi fied ed,, by whic which h the the sell seller er contractedtoputthebuyerinapositiontofulfilsuchsub‐contractashe mightmake.Itdidnotmatterwhetherthebuyerwaslikelytoenterintoa sub‐ sub‐co cont ntra ract ct.. He reac reache hed d this this conc conclu lusio sion n on the the term terms s of the the contr contrac act t alonewithoutrefere alonewithoutreferencetowhattook ncetowhattook placebetween placebetweenthe thepart partiesafterthe iesafterthe contractwasmade.Condition1ofthecontracthadprovidedfornoticeof appropriation to be given by Pim, "and by each othe otherr seller"; the arbitrationclausereferredtointermediatebuyersandsellersandto"the lastbuyer";andthestrikeclausereferredtonoticesbeing"passedonin duecourse". e. Quotations:ViscountDunedinsaidthatbothpartiesknewitwascommon practice to resell cargoes whilst afloat oat, that, apart from common knowledge,thecontractitselfshowedthis,andthatthecorrespondence astotheactualappropriationofthevesselwasadditionalproof,ifproof were were need needed ed,, of the the fami famili liar arit ity y of Pim Pim with with the the prac practi tice ce of succ succes essi sive ve resalesofcargoafloat.Pimknewassoonasitnominatedacargothatonly deliv delivery ery ofthatcar ofthat cargo gocoul could d satisf satisfy y the contra contract, ct, and itwas it was suffic sufficien ient t to giveriseto giveriseto liabil liability ity for loss lossofprofi ofprofitthatthere tthatthere was aneven chance chance ofa sub‐saletakingplace. f.
Quot Quotat ation ions: s: Lord Lord Shaw Shaw agre agreed ed with with Visco Viscoun unt t Hald Haldan ane: e: "My "My prin princi cipa pal l reasonisthatIthinkthatthetwopartieshadactuallyprovidedforthe very very case case of sub‐sa sub‐sales les". ". He stated stated the propos propositi ition on that that a "not "not unlike unlikely" ly" resultofthebreachmustbereckonedtobewithinthecontemplationof the partie parties s as to its breach breach.. He deprec deprecate ated d an "ultra "ultra analys analysis" is" of Baron Baron Alde Alders rson on's 's sent senten ence ce into into two two port portio ions ns "whi "which ch are are to be reck reckon oned ed as necessaril necessarilyandalwaystwodistinct yandalwaystwodistinctand anddiffe different rentcases"andsaid:"These cases"andsaid:"These two things things,, arisin arising g natura naturally lly from from or the probab probable le result result of the breach breach,, need need not not be anti antith thet etica icall lly y trea treate ted; d; they they may may run run into into each each othe other r and, and, indeed,beone.Ithinkforinstance,thatinthiscase,wherethestringof saleswastotheknowled saleswastotheknowledgeofthebreake geofthebreakerofthecontract rofthecontractwithinthevery withinthevery scopeoftheconditionsofhisbargain,itwasfairlyandreasonablytobe
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expec xpecte ted d, not onl only, to use use the the langu angua age of the the judg judgm ment ent as "ari "arisi sing ng naturallyi.e.accordingtotheusualcourseofthings,fromsuchbreach", but also lso "suc "such h as may may rea reason sonabl ably be sup suppose posed d to have have been been in the the contempla contemplationofbothpartie tionofbothparties,atthetimethattheymad s,atthetimethattheymadethecontrac ethecontract,as t,as theprobableresultofthebreachofit".Whatmayberegardedasarising naturallyfromthebreach,mayitselfbedependentonwhatisknownto thepartiesatthetimeofthecontractasapossibleresultofthebreach. g. Quotat Quotations ions: : Lord Lord Philli Phillimor more e thought thought the questi question on to beone be one of contra contract. ct. Noticeor Noticeorknowl knowledge edgeof ofaninten anintendedusewould dedusewouldnotdo notdoofitself ofitself:"Butifthe :"Butifthe tribunalwhichtriesthecasecomestotheconclusionthathecontracted to sell sell or to carr carry y on term terms s that that he shoul should d be resp respon onsi sibl ble e for for dama damage ge which which mi migh ght t accr accrue ue from from his fail failur ure e to prov provid ide e for for any any one one of cert certai ain n object objects s then then hemustbe held heldlia liable ble".The ".The contra contractterms ctterms were weresuc such h that that thesellers"mustbetakentohaveconsented"toastateofaffairswhereby the the pu purc rcha hase sers rs woul would d sell sell on in a stri string ng of sale sales s and and "the "there reby by to have have madethemselvesliabletopaytotheappel madethemselvesliabletopaytotheappellantstheirprofitonresale" lantstheirprofitonresale". . h. Quot Quotat ation ions: s: Lord Lord Blan Blanes esbu burg rgh h held held that that it must must be take taken n to have have been been withinthecontemp withinthecontemplatio lationoftheparties nofthepartiesthatintheeventofdefa thatintheeventofdefaultbythe ultbythe sellersintendering sellersintendering documents"their documents"theirliabilitytotheirbuyersindamages liabilitytotheirbuyersindamages would would be in exact exact corres correspon ponde dence nce with with what what it would would have have been been if the cont contra ract ct had had been been spec specif ific ic all all thro throug ugh h and and if to the the know knowle ledg dge e of the the sellersthesub‐contracthadatthedateofthatcontractthenexistedor beenincontemplation". 3] MonarchSteamshipvKarlshamnsOljefabricker
a. Citation:[1948]UKHL1 b. Key Key Fact Facts: s: Mitsui Mitsui cont contra ract cted ed a ship ship “Mon “Monar arch ch” ” to supp supply ly soyab soyabea eans ns to SwedishCompany SwedishCompany.Becauseofdefect .Becauseofdefectsin sintheship,thevoyage theship,thevoyagetook tooklonge longer r thanexpectedandinthemeanwhilewarbroke.Consequently,Monarch unloadedthecargoataportfromwhereitwastakenbyothershipshired by the the Swed Swedis ish h Co. Co. at cost cost of £ 22 22,1 ,134 34,, 7s. 7s. 4d 4d.. The The argu argume ment nt runs runs as follows:theundertakingwastocarrythebeanstooneofarangeofports attheoptionofMitsuiorofthosetowhomtheytransferredthebillsof lading lading; ; the option option was exerci exercised sed in favour favour of Karlsh Karlshamn amn; ; the appell appellant ants s
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failedtocarryouttheirobligationandaccordinglytherespondentshad the right right to fulfil fulfil the contra contract ct themse themselve lves s and to charge charge the appel appellan lants ts withthecostofdoingso;theappel withthecostofdoingso; theappellants lantsshouldhavedeliver shouldhavedeliveredthebeans edthebeans at Karlsh Karlshamn amn within within a reasona reasonable ble time, time, they they failed failed to do so becaus because e of theirbreachofcontracttoprovideaseaworthyship,andtheadditional expenseofcarryingoutthecontractmustthereforefallonthem.Ifthey had not taken takenso so unduly unduly long long a time time the "Britis "British h Monarc Monarch" h" would would have have arrivedatKarlshamnlongbeforetheoutbreakofwarandthehireofthe three additional additional shipswouldhavebeenunnece shipswouldhavebeenunnecessary ssary.Appella .Appellantscontend ntscontend thatthewarclauseinthecharterpartyagreementabsolvesthemofany paym paymen ent t towa toward rds s curr curren ent t resp respon onde dent nts, s, the the Swed Swedis ish h Comp Compan any. y. Some Some crit critic ica al fact facts s are are as im impo port rta ant. nt. The There was was no damag mage caus cause ed to the the SwedishCosavetheexpensefortranshipment.Theexpensewasincurred becauseMonarchwasdirectedtootherportbyBritishAdmiralty(Navy invo involv lved ed beca because use of war war condi conditi tion on). ). The ship ship owne owners rs appe appeal aled ed when when awardwasmadeinfavourofSwedishCo.foranamountof£21,000and more. c. Decision:Appealwasdismissed.AmericancaseTheMalcolmBaxterwith similarcircumstanceswasdifferentiatedanddiscarded. d. Comm Commen ents ts: : No spec specif ific ic dedu deduct ction ion to be made made base based d on prin princip ciple le.. The The caus causat ation ion (did (did un unse seaw awor orth thin ines ess s caus cause e tran transh ship ipme ment nt loss loss?) ?) was was un unde der r debateanddeba debateanddebatewasresolv tewasresolved.Itwasheldthatthrou ed.Itwasheldthatthroughchainofevents ghchainofevents it was ultimately unseaworthiness that result ulted in transhipm ipment expenses. 4] VictoriaLaundry(Windsor)LtdvNewmanIndustriesLtd
a. Citation:[1949]2KB528 b. Key Key fact facts: s: Newm Newman an Indu Indust stri ries es Ltd Ltd was was mean meant t to deli delive ver r a boil boiler er for for VictoriaLaundry(Windsor)Ltd.Thedeliverywasfivemonthslate.Asa resu result lt of not not havi having ng enoug enough h laun laundr dry y capa capaci city ty,, Vict Victor oria ia Laun Laundr dry y lost lost a lucrativeclean lucrativecleaningcontract ingcontract fromtheMinistryofSuppl fromtheMinistryof Supply.VictoriaLaundr y.VictoriaLaundry y sued sued for the ordina ordinary ry profit profit that that it had forgon forgone e throug through h not having having the boil oiler on time. The question was whether her it could also claim the
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extraordinary profi ofit it would have made, had it been able to take advantageofthelucrativeMinistryofSupplycontract. c. Decision:AsquithLJintheCourtofAppealheldthatNewmanIndustries only only had to compen compensat sate e for the ordina ordinary, ry, not the extrao extraordi rdinar nary y loss loss of profit profits. s. He distin distinguis guished hed (at p 54 543) 3) losses losses from from “parti “particul cularl arly y lucrat lucrative ive dyeing ing contracts cts” as a different type of loss which ich would only be recoverab recoverableifthe leifthedefe defendan ndanthadsufficient thadsufficientknowledg knowledgeof eofthemtomakeit themtomakeit reasonabletoattributetohimacceptanceofliabilityforsuchlosses.The vendoroftheboilerswouldhaveregardedtheprofitsonthesecontracts as a diff differ eren ent t and and high higher er form form of risk risk than than the the gene genera ral l risk risk of loss loss of profitsbythelaundry. d. Ratio:Onlynormalorusuallossisrecoverable. 5] CCzarnikowLtdvKoufos(TheHeronII)
a. Citation:[1967]UKHL4 b. Basi Basic c Fact Facts: s: By chart charter er Part Party y of 15 15th th Octo Octobe ber, r, 19 1960 60 the the Resp Respon onde dent nts s charteredtheAppellant'sVessel,HeronII,toproceedtoConstanza,there toloadacargoof3,000tonsofsugar;andtocarryittoBasrah,or,inthe Charterer'soption,toJeddah.ThevesselleftConstanzaon1st November. The The opti option on was was not not exer exerci cise sed d and and the the vess vessel el arri arrive ved d at Basr Basrah ah on 2 nd DecemberTheUmpirehasfoundthat"areasonablyaccurateprediction of the the leng length th of the the voya voyage ge " was was twen twenty ty days days ". But But the the vess vessel el had had in breachofcontractmadedeviationswhichcausedadelayofninedays.It wastheintentionoftheRespondentstosellthesugar"promptlyafter" arrivalatBasrahandafterinspectionbymerchants".TheAppellantdid notknowthisbuthewasawareofthefactthattherewasamarketfor sugaratBasrah. sugaratBasrah.ThesugarwasinfactsoldatBas ThesugarwasinfactsoldatBasrahinlotsbetw rahinlotsbetween12 een12 th and and 22nd Dece Decemb mber er but but shor shortl tly y befo before re that that time time the the mark market et price price had had fall fallen en part partly ly by reas reason on of the the arri arriva val l of anot anothe her r carg cargo o of suga sugar. r. It was was foundbytheUmpirethatiftherehadnotbeenthisdelayofninedaysthe sugarwouldhavefetched£3210s.0d.perton.Theactualpricerealised wasonly£312s.9d.perton.TheRespondentsclaimthattheyareentitled torecoverthedifferenceasdamageforbreachofcontract.TheAppellant admitsthatheisliabletopayinterestforninedaysonthevalueofthe
14
sugarandcertainminorexpensesbutdeniesthatfallinmarketvaluecan betakenintoaccountinassessingdamagesinthiscase. c. Quotation:LordReidclarifiedthelawonthedegreeoflikelihoodrequired inorderthataclaimantmayrecoverdamagesforaparticulartypeofloss. Inawellknownpassagehesaidthatthepropertestiswhetherthelossin questi question on is (at p382G‐3 p382G‐383A 83A): ): “of a kind kind which which the defend defendant ant,, when when he madethecontract,ought madethecontract,oughtto tohaverea haverealised lisedwasnot wasnotunlik unlikelytoresultfrom elytoresultfrom the breach I use the word ords "not unlikely" as denoting a degree of probab probabili ility ty conside considerab rably ly less less than than an even even chance chance but nevert neverthel heless ess not veryunusualandeasilyforeseeable.” d. Furt Furthe her r Quot Quotat ation ion: : Lord Lord Reid Reid cont contin inue ues s “Ind “Indee eed d the the decis decisio ion n make makes s it clea clear r that that a type type of dama damage ge whic which h was was plai plainl nly y fore forese seea eabl ble e as a real real possibilitybutwhichwouldonlyoccurinasmallminorityofcasescannot be rega regard rded ed as arisi arising ng in the the usua usual l cours course e of thin things gs or be suppo suppose sed d to have have been een in the the cont contem empl pla ation tion of the the parti arties es: : the the part partie ies s are not not supposedtocontemplateasgroundsfortherecoveryofdamageanytype of loss loss or dama damage ge whic which h on the the know knowle ledg dge e avai availa labl ble e to the the defe defend ndan ant t wouldappeartohimasonlylikelytooccurinasmallminorityofcases.” e. ImportantQuota ImportantQuotationonprobabil tiononprobability:LordReid“Ithasneverbeenheld ity:LordReid“Ithasneverbeenheldto to be suff suffic icie ient nt in cont contra ract ct that that the the loss loss was was fore forese seea eabl ble e as " a seri seriou ous s possibility"or"arealdanger"orasbeing"onthecards".Itisonthe card cards s that that one one can can win win £100, £100,00 000 0 or more more for for a stak stake e of a few few penc pence— e— severalpeoplehavedonethat.Andanyonewhobacksahundredtoone chanceregard chanceregardsa sawinasaseriouspossibil winasaseriouspossibility—m ity—manypeopl anypeoplehavewonon ehavewonon suchachance.AndtheWagonMoundNo.2[1966]3W.L.R.498couldnot havebeendecidedasitwasunlesstheextremelyunlikelyfireshouldhave beenforeseenbytheship'sofficerasarealdanger.” f.
Quote uote by Lord Lord Morr Morris is: : “The “The App ppel ella lant nt at the the time time that hat he made made his his contractmusthaveknownthatifinbreachofcontracthisshipdidnot arriv rrive e at Basra asrah h when hen it ough ought t to arriv rrive e he woul ould be lia liable ble to pay pay damages.HewouldnotknowthatalosstotheRespondentswascertain or inevitable but he must, as a reasonable business man, have contemplatedthattheRespondentswouldverylikelysufferloss,andthat
15
it woul would d be or woul would d be like likely ly to be a loss loss refe refera rabl ble e to mark market et pric price e fluctu fluctuati ations ons at Basrah Basrah.. I cannot cannot think think that that he should should escape escape liabil liability ity by sayi saying ng that that he woul would d only only be awar aware e of a possi possibi bili lity ty of loss loss but but not not of a proba robabi bili lity ty or cert certa ainty inty of it. it. He might ight have have use used any one one of many any phra phrase ses. s. He mi migh ght t have have said said that that a loss loss woul would d be like likely ly: : or that that a loss loss wouldnotbeunlikely:orthatalosswasliabletoresult:orthattherisk thatdelaywouldcause thatdelaywouldcauselossto losstotheRespo theResponden ndentswasaseriouspossibil tswasaseriouspossibility: ity: orthattherewould orthattherewouldbearealdang bearealdangerofaloss:orthatthe erofaloss:orthattheriskofhisbeing riskofhisbeing liable liable tohave topayforthelosswasonethathe oughtcomme oughtcommerci rciall allyto yto takeintoaccount.Asapracticalbusinessmanhewouldnothavepaused toreflectonthepossiblenuancesofmeaningofanyoneofthesephrases. Norwouldhehavesentforadictionary.” g. Dama Damage ge in tort tort v dama damage ge in cont contra ract ct: : Ther There e is diff ifferen erence ce bet betwee ween tortuousliabilityandcontractualliability,tortuousbeingmoreexpansive ofthetwo. i. Lord Lord Hods Hodson on “The “The appr approa oach ch in tort tort will will,, howe howeve ver, r, norm normal ally ly be differentsimplybecausetherelationshipofthepartiesisdifferent. Theclaimagainstthetortfeasorwhohasinflictedtortiousdamage isnotthesameastheclaimagainstanoppositepartyforbreachof contractforthelatterclaimdependsonthecontemplationofthe partiestothecontractandquestionsofremotenessassuchdonot arise.Consequentlyliabilityintortmayoftenbeofawiderkind.” ii. FurtherbyLordPearce“Inthepresentcase(asintheWagonMound No. 2 (report orted as Overseas Tankship (U.K.), Ltd. v. Mill iller SteamshipCo.Pty.Ltd.[1966]2All.E.R.709))itwassuggestedin argumentthattherewasorshouldbeoneprincipleofdamagesfor bothcontractandtortandthatguidanceforonecouldbeobtained fromtheother.Idonotfindsuchacomparisonhelpful.Inthecase of cont contrract act two two part partie ies, s, usua usuall lly y with with som some know knowle ledg dge e of one one anot anothe her, r, deli delibe bera rate tely ly un unde dert rtak ake e mutu mutual al duti duties es.. They They have have the the opportunitytodefineclearlyinrespectofwhattheyshallandshall notbeliable.Thelawhastosaywhatshallbetheboundariesof theirliabilitywherethisisnotexpressed,definingthatboundary
16
in rela relati tion on to what what has has been been expr expres esse sed d and and im impl plie ied d In tort tort two two pers person ons, s, usua usuall lly y un unkn know own n to one one anot anothe her, r, find find that that the the acts acts or utterancesofonehavecollidedwiththerightsoftheother,andthe Court Court has to define define what what is the liabil liability ity for the ensuing ensuing damage damage,, whetheritshallbeshared,andhowfaritextends.” iii. FurtherbyLordUpjohn“Thisdifferenceisveryreasonable.Oncean examinationofthefactsestablishesabreachofdutyonthepartof the the tort tortfe feas asor or,, the the acts acts and and omiss omissio ions ns of the the inno innoce cent nt part party y are are irrelevan irrelevant t untilthe until the question question of contributory contributory negligence negligence comes to be cons consid ider ered ed.. A tort tortfe feas asor or may may and and freq freque uent ntly ly is a comp comple lete te stra strang nger er to the the inno innoce cent nt part party y but but he is, is, howe howeve ver r flee fleeti ting ngly ly in manycases,hisneighbourforthepurposesofthelawandbound toactwithdueregardtohisneighbour'srightswhoeverhemay be. be. If he fail fails s in such such duty duty the the law law has has righ rightl tly y laid laid down down a more more string stringent ent test test for the assess assessmen ment t ofdam of damage ages. s.But But incon in contra tract ctthe the partieshaveonlytoconsidertheconsequencesofabreachtothe other;itisfairthattheassessmentofdamagesshoulddependon theirassumedcommonknowledgeandcontemplationandnoton a fore forese seea eabl ble e but but most most un unli like kely ly cons conseq eque uenc nce. e. The The part partie ies s may may moreoveragreetolimitorexcludeliabilityfordamage,oragreeon a liqu liquid idat ated ed sum, sum, or one one part party y can can disc disclo lose se to the the othe other r spec specia ial l circum circumst stan ance ces s whic which h will will rend render er a brea breach ch espe especi cial ally ly seri seriou ous s to him.Sotherulesastotheassessmentofdamageshavedivergedin thetwocases,andnowaday thetwocases,andnowadaystheconceptof"foresee stheconceptof"foreseeabili ability"and" ty"and" contemplationofthe"parties"aredifferentconceptsinthelaw.It istruethatasamatteroflanguagetherewillinmanycasesbeno grea great t diff differ eren ence ce betw betwee een n fore forese seei eing ng the the possi possibi bili lity ty of an even event t hap happening and cont ontemplating the possib sibility ity of that event happeningandinsomeofthecases,fromLordBlackburninCory v. Tham Thames es Iron Ironwo work rks s L.R. L.R. 3 Q.B. Q.B. 181 at 188 onwa onward rds s the the word word foreseeorforesee foreseeorforeseeable ableis isusedinconnect usedinconnectionwithcontra ionwithcontractbutit ctbutitis is cle clear that that it has has rea really lly bee been used used in the sens sense e of rea reason sonabl able contem contempla platio tion n and in my view view it is better better to use contem contempla plate te or
17
contemplation in the case of contract, leaving foresee or foreseeabilitytotherealmoftorts.” iv. 6] SouthAustraliaAssetManagementCorpvYorkMontagueLtd.
e. Citation:[1997]1A.C.191HL f.
Key Key Fact Facts: s: The The judge judgeme ment nt is a joint joint judg judgme ment nt in thre three e case cases. s. The fact facts s havetwocommonfeatures.Thefirstisthatifthelenderhadknownthe truevalueoftheproperty,hewouldnothavelent.Thesecondisthatafall inthe in the prope property rty market market afterthe afterthe date date ofthe of the valuat valuation ion greatl greatly y inc increa reased sed thelosswhichthelendereventuallysuffered.
g. Question:Whatistheextentoftheliabilityofavaluerwhohasprovideda lenderwithanegligentovervaluationofthepropertyofferedassecurity fortheloan? h. Deci Decisi sion on: : It was was held held that that the the valu valuer ers s were were resp respon onsi sibl ble e for for the the loss loss equiva equivalen lent t to what what lender lender had suffer suffered ed if there there were were no circum circumsta stance nces s aggravatingthelosscausedbythenegligentovervaluation. i.
Ratio:WehavefollowingconclusionforSAAMCOjudgement: i. Evenifforeseeableandnatural,aloss(inthatcasethemarketand othe other r loss losses es resu result ltin ing g from from the the lend lender ers s lend lendin ing g at all) all) may may be unrecoverable. ii. The House of Lords preferred to explain such cases by the agreement‐centred
approach
of
an
impliedly
restricted
assumptionofresponsibility,ratherthanbythevaguerreasoning of a break breakin in the chain chain of causat causation ion betwee between n the breach breach and the loss. iii. Thisprincipleappliesnotonly(aswascomingtobetheorthodox unders understan tandin ding) g) in second second‐li ‐limb mb cases cases of losses losses forese foreseeab eable le in the lightofspeciallycommunicatedinformation,butalsotofirstlimb cases.(WeknowthisbecauseSAAMCOwasafirstlimbcase.) b. ImportantQuotations:LordHoffmansaid“Ithinkthatthiswasthewrong placetobegin.Beforeonecanconsidertheprincipleonwhichoneshould calculate calculatethe thedama damagestowhicha gestowhicha plaintiffisentitle plaintiffisentitledas dascompe compensati nsationfor onfor loss, oss, it is nece ecessa ssary to deci decid de for for what hat kind ind of loss oss he is entit ntitle led d to
18
compen compensat sation. ion. A correc correct t descri descripti ption on of the loss loss for which which the valuer valuer is liablemustprecedeanyconsiderationofthemeasureofdamages.Forthis purposeitisbettertobeginatthebeginningandconsiderthelender’s causeofaction.” c. ImportantQuote:LordHoffmansaid,“Aplaintiffwhosuesforbreachofa dutyimposedbythelaw(whetherincontractortortorunderstatute) mustdomorethanprovethatthedefendanthasfailedtocomply.Hemust showthat showthatthedutywas thedutywasowedtohimandtha owedtohimandthatitwasadutyinresp titwasadutyinrespect ect of the kind kind of loss loss which which he has suffer suffered. ed. Both Both of these these requir requireme ements nts are illust illustrat rated ed by Caparo Caparo Indust Industrie ries s Plc. Plc. v. Dickma Dickman n [1990] [1990] 2 A.C. A.C. 605. 605. The audit uditor ors’ s’ fail ailure ure to use use reas reason ona able ble care care in audit uditin ing g the the comp compa any’s ny’s statutoryaccountswasabreachoftheirdutyofcare.Buttheywerenot liable liable toanoutsid to anoutside e take‐o take‐over ver bidder bidder becaus because e the duty duty was was not owed owed to him.Norweretheyliabletoshareholderswhohadboughtmoresharesin relianceontheaccountsbecause,althoughtheywereowedadutyofcare, it was in thei theirr cap capacit acity y as memb member ers s of the the com company pany and not not in the the capacity(whichtheysharedwitheveryoneelse)ofpotentialbuyersofits shares.Accordingly,thedutywhichtheywereowedwasnotinrespectof loss loss whic which h they they mi migh ght t suff suffer er by buyi buying ng its its shar shares es.. As Lord Lord Brid Bridge ge of Harwi Harwich ch said, said, at p. 627: "It is never never suffic sufficien ient t to ask simply simply whethe whether r A owesBadutyofcare.Itisalwaysnecessarytodeterminethescopeofthe dutybyreferencetothekindofdamagefromwhichAmusttakecareto saveBharmless.”” d. Quotation:LordHoffman“Howisthescopeofthedutydetermined?In the case case of a statut statutory ory duty, duty, the questi question on is answe answered red by deduc deducing ing the purposeofthedutyfromthelanguageandcontextofthestatute:Gorrisv. Scot Scott t (1874 (1874) ) L.R. L.R. 9 Ex. Ex. 12 125. 5. In the the case case of tort tort,, it will will simil similar arly ly depe depend nd uponthepurposeoftherule uponthepurposeoftheruleimposingthe imposingtheduty.Mostofthejudg duty.Mostofthejudgments mentsin in the Caparo Caparo case case are occupie occupied d in examin examining ing the Compan Companies ies Act 1985 1985 to ascertainthepurposeoftheauditor"sdutytotakecarethatthestatutory accountscomplywiththeAct.Inthecaseofanimpliedcontractualduty, thenatureandexte thenatureandextentoftheliabil ntoftheliabilityisdefin ityisdefinedbytheterm edbythetermwhichthelaw whichthelaw implies. As in the case of any implied ied term, the process is one of
19
constr construct uction ion ofthe agreem agreement ent asa wholein wholein its commer commercia cial l settin setting.The g.The contra contractu ctual al duty duty to provid provide e a valuat valuation ion and the known known purpos purpose e of that that valuationcompe valuationcompeltheconclusio ltheconclusionthatthecontrac nthatthecontractinclude tincludesadutyof sadutyofcare care.. The The scope scope of the the duty duty,, in the the sens sense e of the the conse consequ quen ence ces s for for whic which h the the valuerisresponsible,isthatwhichthelawregardsasbestgivingeffectto theexpressobligationsassumedbythevaluer:neithercuttingthemdown sothatthelenderobtainslessthanhe sothatthelenderobtain slessthanhe wasreasonably wasreasonably entitledtoexpect, entitledtoexpect, norextendingthemsoastoimposeonthevalueraliabilitygreaterthan hecouldreasonablyhavethoughthewasundertaking.” e. Quota uotattion: ion: Diff Differ eren enti tiat atin ing g bet betwee ween act and and cons conse equen quence ces s by Lord ord Hoffman “Rules which make the wrongdoer liable for all the cons conseq eque uenc nces es of his his wron wrongf gful ul cond conduc uct t are are exce except ption ional al and and need need to be justifiedbysomespecialpolicy.Normallythelawlimitsliabilitytothose consequenceswhichareattributabletothatwhichmadetheactwrongful. Inthecaseofliabilityin Inthecaseofliabilityinnegli negligence gencefor forprovi providinginaccu dinginaccurate rateinformati information, on, thiswouldmeanliabilityfortheconsequencesoftheinformationbeing inaccurate.Icanillustratethedifferencebetweentheordinaryprinciple and that that adopte adopted dbythe bythe Court CourtofAppea ofAppeal lbyan byan exampl example.A e.A mounta mountaine ineer er abouttoundertakeadifficultclimbisconcernedaboutthefitnessofhis knee. He goes to a doctor who negligently makes a superficial exami xamina nati tion on and prono ronoun unce ces s the the knee knee fit. it. The The clim climb ber goes goes on the expedi expeditio tion, n, which which he would would not have have undert undertake aken n if the doctor doctor had told told himthetruestateofhisknee.Hesuffersaninjurywhichisanentirely forese foreseeab eable le consequ consequenc ence e of mounta mountaine ineeri ering ng but has nothin nothing g to do with with hisknee.OntheCourtofAppeal’sprinciple,thedoctorisresponsiblefor theinjurysufferedbythemountaineerbecauseitisdamagewhichwould not not have have occu occurr rred ed if he had had been been give given n corre correct ct info inform rmat ation ion about about his knee.Hewouldnothavegoneontheexpeditionandwouldhavesuffered noinjury.OnwhatIhavesuggestedisthemoreusualprinciple,thedoctor isnotliable.Theinjuryhasnotbeencausedbythedoctor’sbadadvice becauseitwouldhaveoccurredeveniftheadvicehadbeencorrect.” f.
Deci Decisi sion on: : In Sout South h Aust Austra rali lia a Asse Asset t Mana Manage geme ment nt Corp Corpor orat atio ion n v. York York Mont Montag ague ue Ltd. td. the lend lender ers s on 3 Augus ugustt 19 1990 90 adva advanc nced ed £11m £11m.. on a
20
propertyvaluedat£15m.MayJ.foundthattheactualvalueatthetime was£5m.On5August1994thepropertywassoldfor£2,477,000.MayJ. quanti quantifie fied d the loss loss at £9,753 £9,753,92 ,927.9 7.99 9 and deduc deducted ted 25 per cent. cent. for the plai plaint ntif iff" f"s s cont contri ribu buto tory ry negl neglig igen ence ce.. The The cons conseq eque uenc nce e of the the valu valuat atio ion n bein being g wron wrong g was was that that the the plai plaint ntif iffs fs had had £10m £10m.. less less secu securi rity ty than than they they though thought. t. Ifthe If they y had had this margin margin,, they they would would have have suffe suffered red no loss. loss. Thewholelosswasthereforewithinthescopeofthedefendants"duty.
21
V.
OTHERDECISIONPRIORTO ACHILLEASINTERPRETINGREMOTENESS Following decision have been given prior to The Achilleas and have helped interpret the law related to remoteness of damages.
1] MulvennavRoyalBankofScotlandPlc
a. Citation:[2003]EWCACiv1112 b. Relevance:NotApplicable c. Basic Basic Facts: Facts: T. Mulven Mulvenna na (TM) (TM) had accoun account t with with RBS that that RBS wrongl wrongly y clas classi sifi fied ed as troub trouble led d (to (to pu put t it coll colloq oquia uiall lly y not not usag usage e of the the cour court t or judgement).ThusnootherbankwouldlendtoTM.Further,negotiations result resultedin edin contra contractfor ctfor settle settlemen ment t ofthisiss ofthis issue. ue. RBS was foundto foundto bein breachwhentheydidnotgiveoverdrafttoTMforthedifference(which TMcalculatedas£90,000whileRBSgaveonly£80,000).ThismeantTM didnotgetroadcontractwhereinhewouldhaveearned£400,000profits. Courtheldthatcausationisnotconfirmedandlosscannotbeattributed tobreachofcontract. d. Basis:Dealswithchainofcausationandinterp Basis:Dealswithchainofcausationandinterpreta retation(slight tion(slight)of )ofnatur natural al consequencesandinterveningcauses. 2] Jackson&Anorv.RoyalBankofScotland
e. Citation:[2005]UKHL3 f.
Basic Basic Facts: Facts: RBS disclo disclosed sed the invoice invoice and privat private e papers papers belong belonging ing to claima claimants nts to the client clients s of claima claimants nts.. The client client noted notedthe the unreas unreasona onable ble margin charged by the claimants and discontinued their 4‐year rela relati tion onsh ship ip.. Clai Claima mant nts s sued sued RBS RBS for for brea breach ch of cont contra ract ct and and dama damage ges s there hereof of.. Cour Court t awarde arded d next next 4 yea years pros prosp pecti ective ve loss oss of profi rofits ts as damages.Thedamagesweredecidedtooccurasanaturalconsequenceof thebreachofthecontractbyRBS.
3] BalfourBeattyConstruction(Scotland)Ltd-v-ScottishPowerPlc
g. Citati Citation: on: [1994] [1994] UKHL11; UKHL11; [1994] [1994] CLC 321; 1994SC 1994SC (HL) (HL)20; 20; 1994SLT 1994SLT 807
22
h. Basic asic Fact Facts: s: In 19 1985 85 the resp respon onde dent nts s Balf Balfou ourr Beatt eatty y Cons Constr truc ucttion ion (Scotland)Limited("BalfourBeatty")werethemaincontractorsforthe cons constr truc ucti tion on of the the road roadwa way y and and asso associa ciate ted d stru struct ctur ures es of the the Sight Sighthil hill l sectionoftheEdinburghcitybypass.Inordertocarryoutthenecessary work ork they hey inst insta alled lled a conc concrrete ete batch atchin ing g plant lant a few few mi mile les s away at HillwoodQuarry,Ratho,andenteredintoanagreementforatemporary supplyof supplyof electricity electricity theretowith theretowiththeappella theappellants'predec nts'predecessor essors,the s,the South ofScotlandElectricityBoard("theBoard").Duringtheconstructionofa concre concrete te aquedu aqueduct ct to carry carry the Union Union Canal Canal over over the road road the batchi batching ng plan plant t ceas ceased ed to oper operat ate e due due to the the rupt ruptur urin ing g of fuse fuses s provi provide ded d by the the Boardintheirsupplysystem.Asaresultofthefailure,theaqueductcould no long longer er be comp comple lete ted d to the the stan standa dard rd requ requir ired ed by Balf Balfou our r Beat Beatty ty's 's cont contra ract ct with with Loth Lothia ian n Regi Region onal al Coun Counci cil l and and it beca became me nece necess ssar ary y to demolishwhathadbeenconstructedandtorebuildfromscratch.This,in summary,isthebackgro summary,isthebackgroundtotheactioninwhichBalfou undtotheactioninwhichBalfourBeatty rBeattysought sought to reco recove verr from rom the the Boa Board, rd, as dama damage ges, s, the the cost cost of demo demoli liti tion on and and reconstruction. i.
RelevantFact: RelevantFact:The TheLordOrdin LordOrdinaryfoundthatnomoredetail aryfoundthatnomoredetailwasgivento wasgivento theBoardthanthattheconcretefromthebatchingplantwasrequiredfor thestructuresandroadwayofthebypass.
j.
Decision:ByLordJauncey“MyLords,attheendofthedayitisaquestion offactwhatmusthavebeenwithinthereasonablecontemplationofthe Boar oard at the the date ate of the the con contra tract. ct. The The Lord Lord Ordin rdina ary in a care carefu full lly y reasonedjudgmenthasfoundthatthedemolitionandreconstructionof theaqueductconsequentuponfailureofthepowersupplywasnotwithin that that contem contempla platio tion. n. Their Their Lordsh Lordships ips were were referr referred ed to no eviden evidence ce from from whichitcouldbesaidthatitshouldhaveappearedtotheBoardthatthese cons conse eque quences nces of the the rup rupturi turing ng of the the fuse fuses s woul ould have have had had a very very substa substanti ntialdegre aldegree e ofpro of probab babili ility, ty, from from which which it follow follows s that that the Second Second Divisionwerenotjustifiedindifferingfromthosefindings.
23
VI.
THE ACHILLEAS CASE SUMMARY
1] TransfieldShippingIncvMercatorS TransfieldShippingIncvMercatorShippingInc hippingInc
g. Cita Citati tion on: : [2009 [2009] ] 1 AC 61, [2008 [2008] ] 2 Lloyd Lloyd's 's Rep Rep 275, 275, [2008 [2008] ] UKHL UKHL 48 48,, [2008]3WLR345,[2008]2CLC1,[2008]4AllER159,[2008]BusLR 1395,[2008]2AllER(Comm)753 h. KeyIdea:Mainauthoritytomodifytheremotenessofdamagesclause i.
Facts:Followingareimportantfacts: i. OwnersofTheAchilleashadatimecharterwithfirstcharterersat the rate rate of $13,500 $13,500,, furthe further r enhanc enhanced edto to $16,750. $16,750. (All (All prices prices per day)LatestdateofdeliverywasMay2,2004.Firstcharterersgave noticeofdeliverybetween30thApriland2ndMay. ii. Ownersenteredintoanothertimecharterwithnewchartererswith lastdateofdeliveryasMay8 thattherateof$39,500.However,the firstcharterersfinallydeliveredtheshiponMay11 th.Becauseof the the dela delay y owne owners rs had had to agre agree e to lowe lower r pric price e of $31, $31,50 500 0 with with secondcharterers. iii. Owners claimed damages of $ 1.8 million calculated as the differenceintherates($39500‐$31500=$8000)*timeduration ofthenewcharter.Thenorminshippingindustrywastopaythe differ differenc ence e betwee between n old charte charter r rate rate and new charte charter r rate rate for the numb nu mbe er of days ays for whic which h reve reven nue was lost lost.. Thus Thus norm normat ativ ive e damage damages scam came eto$158,3 to$158,301. 01.17 17cal calcul culate ated dasmark asmarketrate etrate *9 * 9day days s revenuelost. iv. Arbitrators decided in favour of the owners. Appeal on the arbitrationproceedingwasalsodecidedinfavouroftheowners. v. PreviousrulewasdifferentasLordHoffmansays“Butthereisno reportedcase reportedcasein inwhichsuchaclaimhasbeen whichsuchaclaimhasbeenmade.Inste made.Instead,there ad,there hasbeenauniformseriesofdictaovermanyyearsinwhichjudges have have said said or assume assumed d that that the damage damages s for late late delive delivery ry are the differ differenc ence e betwee between n the charte charter r rate rate and the market market rate: rate:see see for examplesLordDenningMRinAlmaShippingCorpnofMonroviav
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Mantov Mantovani ani (The (The Dione)[1975 Dione)[1975] ] 1 Lloyd' Lloyd's s Rep Rep 115, 115, 117‐118; 117‐118; Lord Lord DenningMRinArtaShippingCoLtdvThaiEuropeTapiocaService Ltd(TheJohnny)[1977]2Lloyd'sRep1,2;BinghamLJinHyundai MerchantMarineCoLtdvGesuriCharteringCoLtd(ThePeonia) [1991]1Lloyd'sRep100,118.Textbookshavesaidthesame:see Scrutt Scrutton on on Charte Charterpa rparti rties es 20th ed (1996) (1996),, pp 348‐34 348‐349; 9; Wil Wilfor ford d andothersTimeCharters5thed(2003),atpara4.20.Nowhereis thereasuggestionofevenatheoreticalpossibilityofdamagesfor thelossofafollowingfixture.” j.
QuestionsbeforetheLord:InthewordsofLordHoffman i. “Istherulethatapartymayrecover “Istherulethatapartymayrecoverlosseswhichwereforese losseswhichwereforeseeabl eable e ("notunlikely")anexternalruleoflaw,imposedupontheparties toeverycontractindefaultofexpressprovisiontothecontrary,or isitaprimafacieassumptionaboutwhatthepartiesmaybetaken tohaveintended,nodoubtapplicableinthegreatmajorityofcases butcapableofrebuttalincasesinwhichthecontext,surrounding circum circumsta stance nces s or genera general l unders understan tandin ding g in the releva relevant nt market market shows shows that that a party partywou would ld not reason reasonabl ably y have have been been regard regarded edas as assumingresponsibilityforsuchlosses?” ii. “Whe “Wheth ther er a give given n type type of loss loss is one one for for whic which h a part party y assu assume med d con contra tractua ctuall resp esponsi onsib bilit ility y inv involve olves s the the int interpr erpre etati tation on of the contra contract ctas asa a wholeagain wholeagainst stits its commer commercia cial l backgr backgroun ound, d,and and this, this, likeallquestionsofinterpretation,isaquestionoflaw.”
k. Decision:TheAppealisallowedandtheOwnersofTheAchilleasarenot entit ntitle led d to the the loss oss from rom red reduct uction ion of cont contrract act price rice of subs subse eque quent contractbutonlyequa contractbutonlyequaltothepaymentfor9daysoflossesatthecurre ltothepaymentfor9daysoflossesatthecurrent nt marketpricesroughlyamountingto$160,000. l.
Thetestasdistilledfromthejudgement:TheAchilleasagreement‐centred test test “inv “invol olve ves s the the inte interp rpre reta tati tion on of the the cont contra ract ct as a whol whole e agai agains nst t its its commercialbackground”(LordHoffmannat[25]–[26]).Thefollowingare a few few of the the key key fact factor ors s to be weig weighe hed d in the the const constru ruct ction ion proce process ss by whichthe whichthe “commo “common nbas basis” is” isto bediscerne bediscerned,in d,in the lightof lightof the expres express s andimpliedtermsandthematrixoffact:
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i. Whether a loss was sufficiently foreseeable at the time of contra contracti cting ng that that it can sensibl sensibly y be said said to have have been been “withi “within n the horizon horizon of the partie parties’ s’ contemp contemplat lation ion” ” (Lord (Lord Walker Walker at [78]). [78]). In partic particula ular, r, whethe whether r the likeli likelihood hood and quantu quantum m of the loss loss were were sufficientlyforeseeableatthetimeofcontractingthatthepromisor couldhaverealisticallytakenitintoaccountinpricingthecontract, taking taking out insura insurance nce,, drafti drafting ng any exclus exclusion ions, s, and later later decidi deciding ng what effort ort to take in trying not to breach. This his purp urposive ive foreseeability approach replaces the old approach’s blind applicationofalabelsuchas“notunlikely”or“realdanger”.Itwas of some import ortance in SAAMCO (at 211 11E– E–F F), and Hadley v Baxe Baxend ndal ale e (185 (1854) 4) 9 Exch Exch.. 34 341 1 Ex Ct mi migh ght t have have been been deci decide ded d differentlyifthedefendanthadbeenavendorofmillshaftsand not not a carr carrie ier r (see (see furt furthe her r Lord Lord Walk Walker er at [67]) [67]).. (For (Fores esee eeab abil ilit ity y (reconceived)wasthemostimportantfactorinTheAchilleasfor LordHoffmann,LordHopeandLordWalker:see[23],[34],[36] and [86].For [86].Foratleas atleastLordHoff tLordHoffman mannandLordHope nandLordHope (at [23]and [23]and [34]),thecharterersdidnotacceptliabilityforanylossofprofits from from follow follow‐on ‐on fixtur fixtures, es, becaus because e at the time time of contra contractin cting g such lossesweretoounpredictableforthepartiestohavethoughtthe charterer charterershouldhavehadtheminmindassomething shouldhavehadtheminmindassomethingit itwould wouldbe be liablefor(howeversmallorlargethelossinfactturnsouttobe). For For thes these e two two judg judges es it was was not not the the exte extent nt of the the loss losses es in the the part partic icul ula ar case case tha that was too remo remote te (whi (which ch shou shoulld lead ead to a Victoria Victoria Laundr Laundry y award award of the ordina ordinary ry losses losses,, an approa approach ch that that can can stil still l appl apply y un unde der r the the new new appr approa oach ch: : per per Lord Lord Hoff Hoffma mann nn at [22]),buttheentiretypeoflossesofprofitsinrelationtofollow‐on fixtures(althoughLordWalkerleanstowardstheVictoriaLaundry approac oach at [82]–[86 86]]). The difficulty with this reasonin oning g, how however, is that delays or other breaches can can oft often lead to unpr un pred edict ictab able le foll follow ow on loss losses es (oft (often en part partly ly rela relate ted d to mark market et movements),andthatsuchlossesareoftenrecoverable(subjectto capp cappin ing g un unde der r Vict Victor oria ia Laun Laundr dry) y): : for for exam exampl ple e the the cont contra ract ct of
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carriageinTheHeronIIandthesale carriageinTheHeronIIandthesaleof ofgoodsinVictor goodsinVictoriaLaundr iaLaundry. y. One possib possibleexpl leexplana anation tion for the result result inTheAch inThe Achill illea eas s isthatin long long‐t ‐ter erm m time time char charte ters rs ther there e is not not only only a pote potent ntia iall lly y vola volati tile le market but also a long period (mont onths or longer) between contr contrac acti ting ng and and brea breach, ch, alth althou ough gh one one wond wonder ers s whet whethe her r this this is enoug enough h to just justif ify y the the concl conclus usion ion in The The Achi Achill llea eas, s, and and ther there e are are plen plenty ty of othe other r long long‐t ‐ter erm m contr contrac act t type types, s, incl includ udin ing g fixe fixed‐ d‐te term rm leas leases es of real real prop proper erty ty (as (as to whic which h see see Bram Bramle ley y v Ch Ches este tert rton on (185 857) 7) 2 C.B. (N.S.) 592 Ct of Common Pleas). Certainly an expe expect ctat atio ion n of a long long peri period od betw betwee een n cont contra ract ctin ing g and and brea breach ch cannot be enough on its own to render a type of loss unrecoverable.) ii. Incaseswhererelevantinformationwasspeciallycommunicatedto thepromisorpriortocontracting(i.e.secondlimbcases),whether thatinformationwascommunicatedincircumstances(i.e.timing, casualness, to which employee, etc.) in which it could be reas reason onab ably ly be un unde ders rsto tood od to have have been been take taken n on boar board d by the the promisorassomethingthatthepartieswouldtreatasaffectingthe extentofhisliability. iii. The The pu purp rpos ose e of the the duty duty,, i.e. i.e. whic which h inte intere rest sts s it was was inte intend nded ed to protect.Thusalightningconductorisintendedtoprotectagainst lightn lightning ing damage damage,, howeve however r unlike unlikely ly(Lo (LordWalke rdWalker r at[78 at [78]), ]), and a propertyvaluationisnotintendedtoprotectagainsttransactional loss losses es thro throug ugh h ente enteri ring ng the the prop proper erty ty mark market et,, howe howeve ver r like likely ly (SAAMCO MCO). (In The Achilleas the right ight to refuse to obey an illegitimatelastvoyageordercanbearguedtobesignificantboth ways: ways: either either it emphas emphasise ises s the import importanc ance e under under the contra contract ct of ensuringthattheship‐ownerhasthevesselontheredeliverydate, soastoprotectfollow‐oncharters;oritshowsthattheship‐owner hasenoughprotectionanddoesnotexpecttorecoverdamagesfor the the loss loss of prof profit its s wher where e the the orde order r is a legi legiti tima mate te one: one: see see Lord Lord Hoffmannat[23].)
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iv. The The abse bsence nce of an exp express ress term term (esp especia eciallly exclu xclusi sion on cla clause) use) coveringtherisk.Thismayormaynotindicateanythingaboutthe inte intend nded ed allo alloca cati tion on of risk risk.. (In (In The The Achi Achill llea eas, s, Lord Lord Hoff Hoffma mann nn thoughtitwasofnosignificance(at[26]),whereasBaronessHale thoug thought ht it poin pointe ted d towa toward rds s an assum assumpt ptio ion n of resp respon onsib sibil ilit ity y (at (at [90] [90]), ), whil while e at the the same same time time argu arguin ing g for for the the old old appr approa oach ch to remotenessunderwhichsuchanargumentwasirrelevant.) v. Any Any gene genera ral l mark market et un unde ders rsta tand ndin ing g or expe expect ctat atio ion. n. Inde Indeed ed,, an exclusionclausecouldbeimpliedinfactbycustom,withnoneed to discu iscuss ss remot emoten enes ess, s, if such such a mark market et un und derst ersta and ndin ing g were ere sufficientlyclear.(LordHoffmanndidplacesomerelianceupona marketunderstandinginTheAchilleas,althoughnoneoftheother judgesintheHouseascribedanyrealsignificancetoit.) vi. The The pric price e paid aid to the prom promis isor or,, as comp compa ared with with the the size size of potentiallossesforwhichthepromisorissaidtohavetakenthe risk,perLordHoffm risk,perLordHoffmann ann at[13]and[20](seealsotheAustr at[13]and[20](seealsotheAustrali alian an decisionofStuartPropert decisionofStuartPropertyv yvCondor CondorCommercia CommercialPropert lProperty[2006] y[2006] NSWC NSWCA A 334 at [97] [97]). ). (This (This cann cannot ot have have been been im impo port rtan ant t in The The Achilleas.Althoughlarge,thelossclaimedwasstilllessthan25per centoftheamountofcharter centoftheamountofchartercostspaidbyTrans costspaidbyTransfielddur fieldduringtheir ingtheir charter,i.e.notentirelydisproportionate.) m. Ruleinshort: i. Whether a loss was sufficiently foreseeable at the time of contra contracti cting ng that that it can sensibl sensibly y be said said to have have been been “withi “within n the horizonoftheparties’contemplation” ii. Anyinformationcommunicatedwiththecounterpartyinamanner toallowthecounter‐p toallowthecounter‐partytoprev artytopreventtheexce enttheexcessliabil ssliabilityifheisso ityifheisso facedwith. iii. The The pu purp rpos ose e of the the duty duty,, i.e. i.e. whic which h inte intere rest sts s it was was inte intend nded ed to protect. iv. The The abse bsence nce of an exp express ress term term (esp especia eciallly exclu xclusi sion on cla clause) use) coveringtherisk.
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v. Any Any gene genera ral l mark market et un unde ders rsta tand ndin ing g or expe expect ctat atio ion. n.
(Exc (Exclu lusi sion on
implied) vi. The The pric price e paid to the prom promis isor or,, as comp compa ared red with ith the the size size of potentiallossesforwhichthepromisorissaidtohavetakenthe risk. n. Commentary–ratioofjudgement: i. LordHoffmanandLordHopealludedtothisnewrulemodifyingthe ruleinVictoriaLaundry,Hadleyv.BaxendaleandHeronII. ii. LordRogershowever, LordRogershowever,alliedwiththereason alliedwiththereasoninginVictoriaLaund inginVictoriaLaundry ry butstillmodifyingtheHadleyvBaxendaleandHeronII. iii. Barone Baroness ss Hale, Hale, howeve however, r, explai explained ned the judgem judgement ent in accord accordanc ance e with with inte interp rpre reta tati tion on of all all thre three e prec preced eden ents ts list listed ed im imme medi diat atel ely y above. o. Impo Import rtan ant t Quot Quotat ation ions: s: Baro Barone ness ss Hale Hale stat stated ed her her un unde ders rsta tand ndin ing g of his conc concllusio usion n in the the fol followi lowing ng term terms s (pa (para. ra. 91 91): ): "…on "…one e answ answe er to our our questi question, on, givenas givenas I unders understan tand d itby mynoble and learne learned d friend friend,,Lor Lord d Rodge odger r of Ear Earlsfe lsferr rry, y, is that hat the these part partie ies s woul would d not not have have had had this his particulartypeoflosswithintheircontemplation.Theywouldexpectthat theownerwouldbeabletofindauseforhisshipevenifitwasreturned late. late. It was only only becaus because e of the unusua unusual l volati volatilit lity y of the market market at that that particulartimethatthisparticularlosswassuffered.Itisonethingtosay, asdidthemajorityarbitrators,thatmissingdatesforasubsequentfixture waswithintheparties'contemplationas"notunlikely".Itisanotherthing tosaythatthe"extremelyvolatile"conditions,whichbroughtaboutthis particularlosswere"notunlikely". p. FurtherQuotation FurtherQuotation: :Baro BaronessHalefurther nessHalefurther saidPara92:“Anoth saidPara92: “Anotheranswer eranswer tothequestion,given tothequestion,givenasIunderstan asIunderstanditbymynobleandlear ditbymynobleandlearnedfrie nedfriends, nds, LordHoffmannandLordHope,isthatonemustask,notonlywhetherthe parties must be taken to have had this type of loss within their contemplationwhenthecontractwasmade,butalsowhethertheymust be taken to have had liability for this type of loss within their contemplationthen.Inotherwords,isthecharterertobetakentohave unde un dert rtak aken en lega legal l resp respon onsi sibi bili lity ty for for this this type type of loss loss? ? Wh What at shou should ld the the
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unspok unspokenterm enterms s oftheir contra contractbe ctbe takento takento be? Ifthatis the questi question, on, thenitbecomesrelevanttoaskwhathasbeenthenormalexpectationof partiestosuchcontractsinthisparticularmarket.Ifchartererswouldnot normallyexpe normallyexpecttopaymorethanthemar cttopaymorethanthemarketrate ketrateforthedaystheywere forthedaystheywere late,and late,and ship‐o ship‐owne wnerswould rswould not normal normallyexpec lyexpect t toget more more than than that, that, thenonewouldexpectsomethingextrabeforeliabilityforanunusualloss suchasthiswouldarise.Thatis suchasthiswouldarise. Thatisessen essentiall tiallythereasoning ythereasoningadoptedbythe adoptedbythe minorityarbitrator.”
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VII.
CASES POST- SCHILLEAS
Following cases have been decided after the Achilleas, expounding how applicability of ratio in Achilleas is determined.
1] SylviaShippingCoLtdvProgressBulkCarriersLtd
a. Citation:[2010]EWHC542(Comm) b. Dateofdecision:18March2010 c. Commentary:Achilleasnotapplied d. Basi Basic c fact facts: s: Ch Char arte tere rers rs had had hired hired the the ship ship and and sub‐ch sub‐char arte tere red d it. it. In the the meanwhile,portauthoritydeclaredthatsomerepairswereessentialtobe carriedout.Theownersdelayedtherepairsbecauseofwhichtheshiphad togotoemer togoto emergency gencyrepairstomakeitsea‐wort repairstomakeitsea‐worthyforspecificgoods. hyforspecificgoods.This This caused caused in a delay delay that that result resulted ed in the loss of sub‐ch sub‐chart arter er contrac contract. t. The char charte tere rers rs were were able able to find find alte altern rnat ate e cont contra ract ct at lowe lower r pric prices es.. The The charte charterer rers s sued sued for damage damages s equal equal to loss loss of profit profit on sub‐ch sub‐chart arter er that that waslost.Theownerscontendedthatlossfromsub‐charterswasbeyond theircontemplationinaccordancewiththedecisioninAchilleas. e. Decision: It was held that Achilleas was not applicable and the requ requir irem emen ents ts to appl apply y Achi Achill llea eas s were were not not sati satisf sfie ied. d. The The arbi arbitr trat ator ors s howe howeve ver r allo allowe wed d the the loss loss equa equal l to loss loss suff suffer ered ed from from sub‐ sub‐ch char arte ter r less less profitearnedonalternatesub‐charterthatwasavailed. f.
Reliedon: i. TheAmerEnergy[2009]1Lloyd'sRep.293 ii. Classi Classic c Mariti Maritime me v Lion Lion Diversi Diversifie fied d Holdin Holdings gs [2010] [2010] 1 Lloyd' Lloyd's s Rep 59 iii. Supe Supers rshi hiel eld d Ltd Ltd v. Sieme Siemens ns Buil Buildi ding ng Tech Techno nolo logi gies es FE Ltd Ltd [2010 [2010] ] EWCACiv7,[2010]1Lloyd'sRep.Plus20 iv.
g. Rationa onale: The decisi ision in Slyvia Shipp ipping helpfully clarifies the uncertaint uncertaintycreated ycreatedby bytheHouseofLords'deci theHouseofLords'decisioninTheAchilleas sioninTheAchilleas.The .The appl applic icat ation ion of The The Achil Achille leas as deci decisi sion on is now now rest restri rict cted ed to case cases s wher where e
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except exception ional al circum circumsta stance nces s justif justify y a requir requireme ement nt that that the party party seekin seeking g "firstlimb"damages(whichareassumedtoariseintheordinarycourse ofthings)alsodemonstratethatthepartyinbreachofcontractassumed resp respon onsi sibi bili lity ty for for the the loss loss in ques questi tion on.. In the the vast vast majo majori rity ty of case cases, s, clai claima mant nts s will will not not have have to demo demons nstr trat ate e that that the the defe defend ndan ant t acce accept pted ed liabilityforthelosssuffered. h. Quotation:Mr.JusticeHamblensaid“Theorthodoxapproachremainsthe gene genera ral l test test of remo remote tene ness ss appl applic icab able le in the the grea great t majo majori rity ty of case cases. s. Howeve However, r, there there may be "unusua "unusual" l" cases, cases, such such as The Achill Achilleas eas itself itself,, in whichthecontext,surroundingcircumstancesorgeneralunderstanding intherelevantmarketmakeitnecessaryspecificallytoconsiderwhether therehasbeenanassumptionofresponsibility.Thisismostlikelytobein thoserelative thoserelativelyrarecase lyrarecaseswheretheapplic swheretheapplication ationof ofthegener thegeneraltestlead altestleads s or may lead ead to an un unqu quan anti tifi fia able ble, un unpr pred edic icta tabl ble e, un unco cont ntrrolla ollabl ble e or disp dispro ropo port rtion ionat ate e liab liabil ilit ity y or wher where e ther there e is clea clear r evid eviden ence ce that that such such a liabilitywouldbecontrarytomarketunderstandingandexpectations. 4] AsmShippingLtd.ofIndiavTTMILtd.of AsmShippingLtd.ofIndiavTTMILtd.ofEngland(“TheAme England(“TheAmerEnergy”) rEnergy”)
a. Citation:[2009]1Lloyd'sRep.293 b. Quotation:FlauxJsummarisedtheeffectofTheAchilleasasfollows: c. "Par "Para a 17: Firs First, t, I do not not consid consider er that that the the Hous House e of Lord Lords s (at (at leas least t the the majorityoftheirLordships)wereintendingtolaydownsomecompletely new new test test as to reco recove vera rabi bili lity ty of dama damage ges s in contr contrac act t and and remo remote tene ness ss differentfromtheso‐calledruleinHadleyvBaxendale(1854)9Exch341 as refi refine ned d in subs subseq eque uent nt case cases, s, abov above e all all the the deci decisi sion on of the the House House of LordsitselfinCCzarnikowLtdvKoufos(TheHeronII)[1967]2Lloyd's Rep.457;[1969 Rep.457;[1969]1AC350.SeeLordHope ]1AC350.SeeLordHopeatparas31to34,Lord atparas31to34,LordRodger Rodger at para paras s 47 to 52 52,, Lord Lord Walk Walker er at para paras s 66to 78and Baro Barone ness ss Hale Hale at paras 89 to 93” Further in Para 18 he continues: “Lord ord Hoffmann acknowledgesinparas9and11ofhisopinionthatdeparturefromthe normalprinciplesofforeseeabilitywouldbeunusual.Althoughherefers toshippingasamarketwherelimitationsontheextentofliabilityarising out ofgeneral ofgeneral expect expectati ationsin onsin that thatmar market ket mightbe mightbe morecommon morecommon,,Ido Ido not consid consider ertha that t he was intend intending ing to say that that in all shippin shipping g cases cases (as
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oppose opposed d tothe to the type type of time time charte charter r case case then then under undercon consid sidera eratio tion) n)the the rule inHadleyvBaxendaleassubsequent inHadleyvBaxendaleassubsequentlyrefined lyrefined,willno ,willno longerapply. longerapply. If he was was sayi saying ng that that,, it was was not not a view view shar shared ed by the the majo majori rity ty and and it wouldbeheterodoxtosaytheleast." 5] ClassicMaritimevLionDiversifiedHoldings
a. Citation:[2010]1Lloyd'sRep59 b. Contention: Contention:Lionattempte Lionattemptedtorestrictthequantu dtorestrictthequantumoflossrelyingonthe moflossrelyingonthe “extremevolatility”citedintheAchilleas.InthewordsofCookeJ,“Lion submitt itted that the House of Lord ords had set out a new test for the recoverabilityofdamagesforbreachofcontract,namelywhethertheloss was was a type type of loss loss for for whic which h the the part party y in brea breach ch coul could d reas reason onab ably ly be rega regard rded ed as havi having ng assu assume med d resp respon onsi sibi bili lity ty.. Beca Becaus use e of the the extr extrem eme e vola olatilit ility y of the freigh ight market in late 20 200 08 it was submitted that Limbungancouldnotbeliableforthefullextentofthelossclaimedby Classicwhichreflectedthefull95%fallinfreightrates,butonlyforthe lossflowingfromafallinfreight lossflowingfromafallinfreightratesforvessel ratesforvesselsofthekindinquestion, softhekindinquestion, ofthemagnitudewhichthepartieswouldhavecontemplated,atthetime ofcontracting,asbeinglikelytooccurintheordinarycourseofthings.” c. Decision:Achilleasnotapplicable. d. Quotation:CookeJstated(atp71)thathewouldbe"highlysurprised"if TheAchilleasestablishedanewtestfortherecoverabilityofdamagesfor breachofcontract,andnotedthatFlauxJhadbeen"whollyunpersuaded" thattheyhaddoneso. e. Quotation:InPara72CookeJsays:“Inthecontextofthisactiontheexact formulationofthetestoftheremotenessdoesnotseemtometomatter. TheHouseof TheHouseofLords Lordshadto hadtograp grapplewithtwodiff plewithtwodifferen erenttypesoflosswhich ttypesoflosswhich aroseonthefacts.Thecontestwasbetweenthemarketrate/contractrate diff differ eren enti tial al on the the exis existi ting ng char charte ter r for for the the peri period od of over overru run n on late late deliv delivery ery of the vessel vessel and the lost lost profit profits s for the whole wholedur durati ation on of the foll follow ow‐on ‐on voya voyage ge as a resu result lt of that that late late deli delive very ry.. Thei Their r Lord Lordsh ship ips, s, for for diff ifferin ering g reas reason ons, s, hel held that hat the forme ormer r was the the corr corre ect measu easure re of damages.”
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f.
Quotat Quotation: ion: Furthe Furtherin rin Para72 Para72 “Here, “Here, thereis thereisonl onlyone yonekin kindof dof loss losstobe tobe considered,namelythedifferencebetweencontractandmarketratefor the the two two vesse vessels ls whic which h were were canc cancel elle led. d. It is only only the the exte extent nt of that that loss loss which is in issue, if liability is esta stablished hed. This his raise ises the classic distinction,recognisedinnumerouspriorauthoritiesbetweentypeofloss and and exte extent nt of loss loss.. Ther There e is no issue issue here here with with rega regard rd to know knowle ledg dge e of specialcontra specialcontractsorspecial ctsorspecialprofits.Theissue profits.Theissueis iswhichoftwopartie whichoftwopartiesis sisto to bearthelossbetweenthecontractrateandthemarketrate.Bothvessels wereontimecharterandnoquestionarisesastoextricationbyClassic, asdisponentownersfromthosecontracts.Theclaimisonebasedonthe simple simple princi principle ples s expres expressed sed inThe in The ElenaD'Amic ElenaD'Amico o [1980] [1980] 1 Lloyd' Lloyd's s Rep 75. Whatev Whatevertestone ertestone adopts adopts,, inthe contex context tofbreak ofbreaking ing two fixtur fixturesof esof this kind, it cannot be said that the type of loss is outwith the contempla contemplationoftheparti tionofthepartiesatthetimeofenter esatthetimeofenteringthecontra ingthecontract,ifoneof ct,ifoneof themshouldbreakit.ThisisaHadleyvBaxendalerule1case.”
6] SupershieldLtdv.SiemensBuild SupershieldLtdv.SiemensBuildingTechnologi ingTechnologiesFELtd, esFELtd,
a. Citation:[2010]EWCACiv7,[2010]1Lloyd'sRep.Plus20, b. Howtoclassifythiscase:Inthejudgmentpara44,LordToulsonclassifies thiscaseas“simultaneousfailureofseparateprotectionmeasures”. c. Basic Basic facts: facts: A nut and bolt bolt connec connectio tion n on a float floatval valve ve faile failed d and water water fromastoragetankoverflowedintothebasementofanewofficebuilding for for Slau Slaught ghter er and and May May in the the City City of Lond London on.. The The wate water r from from the the tank tank over overfl flow owed ed into into a bund bunded ed area area whic which h cont contai aine ned d a 60 600 0 mm high high wall wall designedtoretainanyoverflowingwater.Thereweredrainsinthetank roomfloorwithinthebunded roomfloorwithinthebundedareabutthesebecame areabutthesebecameblockedorpartia blockedorpartially lly blockedbypackaging,insulatingorothermaterialonthetankroomfloor. Thewateroverflowedthebundandcausedafloodwhichledtoextensive damagetotheelectricalequipmentinthebasement.Theclaimantssued the the cont contra ract ctor or who who sued sued sub sub cont contra ract ctor or and and it went went for for a few few leve levels ls.. Eventu Eventuall ally, y, the third third or fourth fourth level level sub‐con sub‐contra tracto ctor r Siemen Siemens s settle settled d the claimswithallclaimingpartiesupthecontractualchainbutmaintaineda suit suit agai agains nst t its its subc subcon ontr trac acto tor r Supe Supers rshi hiel eld. d. Supe Supers rshi hiel eld d disp disput uted ed the the amountofclaimsettlementthatSiemenshadenteredinto.
34
d. Quot Quotat ation ion: : The The Cour Court t of Appe Appeal al summ summar aris ised ed the the posit positio ion n as foll follow ows s in Para Para 43 43: : “Had “Hadle ley y v Baxe Baxend ndal ale e rema remain ins s a stan standa dard rd rule rule but but it has has been been rationalisedonthebasisthatitreflectstheexpectationtobeimputedto the part partie ies s in the the ord ordina inary case case,, i.e i.e. that hat a con contra tract brea breake ker r shou shoulld ordi ordina nari rily ly be liab liable le to the the othe other r part party y for for dama damage ge resu result ltin ing g from from his his brea breach ch if, if, but but only only if, if, at the the time time of maki making ng the the contr contrac act t a reas reasona onabl ble e personinhisshoeswouldhavehaddamageofthatkindinmindasnot unlikelytoresultfromabreach.However,SouthAustraliaandTransfield Ship Shippi ping ng are are auth author orit ity y that that ther there e may may be case cases s wher where e the the cour court, t, on examiningthecontrac examiningthecontractandthe tandthecomme commercial rcialbackground background,decidesthatthe ,decidesthatthe stan stand dard app pprroach oach would ould not not refl refle ect the the exp expectat ctatio ion n or int intent ention ion reasonabl reasonablytobe ytobeimput imputedtotheparties. edtotheparties.In Inthosetwoinsta thosetwoinstancestheeffe ncestheeffect ct wasexclusionary;thecontractbreakerwasheldnottobeliableforloss which which result resulted ed from from its breach breach althou although gh some some loss loss of the kind kind was not unlikely.Butlogicallythesameprinciplemayhaveaninclusionaryeffect. If, on the proper analysis of the contract against its commercial back backgr grou ound nd,, the the loss loss was was with within in the the scop scope e of the the duty duty,, it cann cannot ot be regardedastooremote,evenifitwouldnothaveoccurredinordinary circumstances.” 7] IspatIndurstriesLtdvWesternBulkPTE.Ltd
a. Citation:[2011]EWHC93(Comm) b. Relevance:Notrelevant c. BasicFacts:Chart BasicFacts:Charterer erershiredashiptocarrycarg shiredashiptocarrycargofromVizagtoMumbai ofromVizagtoMumbai.. However because of Naxal violence, Vizag cargo was unavailable. Charte Charterer rers s theref therefore ore cancel cancelled led the charte charter r agreem agreement ent.. Owner Owners s tried tried to findalternatefixtureforthevesselbutwereunsuccessful.Ownerssued thecharterersforpaymentforthedayscharterwascontracted–i.e.12 days days + some some allo allowa wanc nce e for for ball ballas asti ting ng in South South Amer America ica wher where e owne owners rs hope hoped d they they had had best best chan chance ce of find findin ing g alte altern rnat ate e fixt fixtur ure. e. Arbi Arbitr trat ator ors s accepted the claim. Ch Cha arterers appealed and claimed that special ial cond condit ition ions s as disc discus usse sed d in the the Achil Achille leas as were were appl applic icab able le to thei their r case case.. Judgeruledagainstit.
35
8] JonesvEnvironcomLtd&Anor
a. Citation:[2011]EWCACiv1152 b. Rele Releva vanc nce: e: The The case case has has many many loop loopho hole les s with with resp respec ect t to inco incomp mple lete te evid eviden ence ce and and the the comm commen enta tary ry,, ther theref efor ore, e, inco incomp mple lete te.. Bett Better er to quot quote e someotherexamples.Ratherthanquotethis.Thereisamplechanceto refute refute it based based on other other reasons reasons not relate related d to remote remotenes ness s or Achill Achillea eas s itself. 9] LansatShippingCoLtdvGlencoreGrainBV
a. Citation:[2009]EWCACiv855 b. Rele Releva vanc nce: e: Not rele releva vant nt.. The The case case conce concern rns s with with inte interp rpre reta tati tion on of (1) (1) whatconstitutesalegitimatelastvoyagefortimecharter,(2)theeffectof penalclause penalclause,, thoughstate thoughstated d inthe in the contra contract ctand and withinconte withincontempl mplati ation onof of theparties,onthefinaldamagesallocatedb theparties,onthefinal damagesallocatedbythearbitrationpanel. ythearbitrationpanel. 10] E.N.E.KosvPetroleoBrasileiroS.A.(Petrobas)
a. Citation:[2009]EWHC1843(Comm) b. Key facts: Ship owners withdrew their ship from a charterparty agre greement ment and resu result ltin ing g time time wast waste ed in com communi munica cattions ions betwe etween en charterer (to reinstate the ship) and owners (to confirm their with withdr draw awal al) ) resu result lted ed in loss loss of days days and and cons conseq eque uent nt cost costs. s. Owne Owners rs conten contende ded dtha that tthe they y were wereind indemn emnifi ified ed ofthese losses losses bya clause clause inthe agreement. It was held that in accordance with the Achilleas, the charterershadnotforeseenthisloss. c. Application:Restricted 11] BorealisABvGeogasTradingSA
a. Citation:[2010]EWHC2789(Comm) b. Basic asic fact facts: s: Geoga eogas s sup supplie plied d cont contam amin inat ate ed gas gas to Borea oreali lis s the thereby reby resu result ltin ing g in dama damage ge to thei their r plan plant. t. Some Some alar alarms ms went went off off duri during ng the the supp supply ly but but Bore Boreal alis is cont contin inue ued d to oper operat ate e the the plan plant t whil while e test testin ing g for for causes.Whencausewasidentifieditshutdowntheplantbutinthemean timetherewassubstantialdamage. c. Mainissues:Thecasewaspleadedontworelevantgrounds: v. Novusactusinterveniens
vi. Remotenessofdamages
36
d. Relevance:Bothgroundsw Relevance:Bothgroundsweredeclaredtobe eredeclaredtobenotapplicable. notapplicable. i. New cause cause that that interv intervene enes s should should be substa substanti ntiall ally y large large to nullif nullify y the the effe effect ct of prim primar ary y caus cause. e. As quot quoted ed “in “in orde order r to comp compri rise se a novus novus actus actus interv interveni eniens ens,, so breaki breaking ngthe the chain chain ofcau of causat sation ion,, the conductoftheclaimant"mustconstituteaneventofsuchimpact thatit'obliterates'thewrongdoing…"ofthedefendant”. ii. Achilleaswasdeemednotapplicableasthiswasnotaspecialcase asenvisagedbyLordHoffman. e. Applicability:Low 12] TomHoskinsPlcvEMWLaw(afirm)
a. Citation:[2010]EWHC479(Ch) b. Basic Basic Facts: Facts: Solicit Solicitor or advise advised d a client client,, who was in financ financial ial distre distress, ss, on saletransactionofsomepubsandabrewery.Thedelayresultedinlossto theclient.Theclientsuedforprofessionalnegligence.Courtagreedtothe claim.Thequestionsweretwo‐fold.Firstwasthesolicitorresponsiblefor thelossofvalueonsaletransac thelossofvalueonsaletransaction.Seco tion.Secondwasthesolicit ndwasthesolicitorrespon orresponsible sible fortradinglossesincurredbytheclienttokeepthepubsoperativesoas tosellthemasgoingconcern.Thesolicitorsdisputewaswithrespectto fore oresee seeabil abilit ity y of the the type type of the loss loss (tr (tradin ading g loss loss) ) as discu iscuss sse ed in Achilleas.TheCourtheldthatitwasforeseeableandhencesolicitorwas liable. c. Ratio:Courtlooked Ratio:Courtlookedattheobjective attheobjectiveof ofente enteringintothesale ringintothesalecontract contractwas was topreventtradingloss.Clientwasconstrainedtokeeppubsoperating. 13] GBGasHoldingsLtdvAccenture(UK)Ltd&Ors
a. Citation:[2009]EWHC2734(Comm) b. BasicFacts:Gasco.deployedsoftwarebyAccenturethatresultedinlotof errors,pendingorders,misseddeadlines.Settlementamountwasrandom $8million. Accenture contended that the damages were beyond contemplationofthepartiesandhenceitwasnotliable.Itwasheldthat damagesactuallyformpartofthefirstlimbofHadleyvBaxendaleand thusrecoverable. 14] Donoghuev.GreaterGlasgowHealthBoard&Anor.
a. Note:ThisisaScottishsessioncourtdecision.Maynotbequoted.
37
b. Citation:[2009]ScotCSCSOHU_115 c. BasicFacts:Thecauseoftheaccident,asaverredbythepursuer,isthat she slipped on loose stones from the gravel path which had got transferred on to the conc oncrete stairs irs, making ing them sli slippery. The defenders'claimagainstthethirdpartyisthatthepathwassurfacedwith gravelandnotwith gravelandnotwithawearingcours awearingcourseofasphalt eofasphaltwithasurround withasurroundinggrass inggrass area,asspecifiedinthecontractdrawings.Itisacceptedbythedefenders thatthepursuerhasno thatthepursuerhasnodirec directrightofactionagainst trightofactionagainstthe thethird thirdparty(and party(and theref therefore ore that thatthe the thirdpart thirdparty y has noliabilit noliability ytothe tothe pursue pursuer), r), but atthe sametimeitisaverredbythedefendersthatthedamageswouldnothave hadtobepaidortheexpensesincurre hadtobepaidortheexpens esincurredbutforthethirdparty dbutforthethirdparty'smater 'smaterial ial breachof breachofcontr contract.Whatthedefend act.Whatthedefendersarein ersareineffe effectseekingisindemnity ctseekingisindemnity orrelieffromthethirdparty. d. Decision:LordUistsaid“Ihavereachedtheconclusionthatthelosswhich thedefendersclaimfromthethirdpartycannotbecategorisedasaloss whichwaslikelytoarisefromthebreachofcontractaverredorasone whichwaswithinthe whichwaswithinthereas reasonabl onablecontemp econtemplation lationof ofthepartie thepartieswhenthey swhenthey enteredintothecontrac enteredintothecontract.Thewarran t.Thewarrantygrante tygrantedby dbythethirdpart thethirdpartyto ytothe the defend fende ers was was date ated 27 May May 20 2004 04 and the the acci accid dent ent is said said to have have occurredon27April2007.Iacceptthesubmissionforthethirdpartythat thenaturallosshereisthecostofremedyingthefailuretoprovidethe correc correct t surfac surface, e, and not the damage damages s which which the defen defender ders s may have have to paytothepursuerfortheinjurywhichshesustained.Idonotthinkthatit can can be said said that that it was, was, at the the time time that that the the contr contrac act t was was ente entere red d into into,, within within the reason reasonabl able e contem contempla platio tion n of the partie parties s that that the third third party party wouldbeexposedtoliabilityforanaccidentcausedbygravelgettingonto the the stai stairs rs in Apri April l 2007. 2007. The The defe defend nder ers s acce accept pt that that the the pu purs rsue uer r has has no directrightofactionagainstthethirdparty:thatbeingso,Ifinditdifficult toseehowitcanbesaidthatitwaswithinthereasonab toseehowitcanbesaidthatitwaswithintherea sonablecontem lecontemplati plation on ofthepartiesatthetimeofthemakingofthecontractthatthethirdparty was exposi osing itself to liability for an accid cident such uch as that hat whic hich occurred.”
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VIII. SUMMARY OF IMPACT OF ACHILLEAS ON SUBSEQUENT DECISIONS
1. The genera generally lly accept accepted edeff effect ect of the decisio decision n (priorto (priorto the Sylvia Sylvia Shippin Shipping g case) case) was was that that it adde added d an addi additi tion onal al requ requir irem emen ent t to esta establ blish ishin ing g "fir "first st limb limb" " loss loss.. FollowingTheAchilleas,arguablyaclaimanthadtodemonstrateboth(i)thatthe lossinquestionwasnotunlikelytohappen lossinquestionwasnotunlikelytohappenin intheordina theordinarycourseofthingsand rycourseofthingsand wasthereforeinthereasonablecontemplationofthepartieswhentheyentered intotheirbargain,and(ii)thatthedefendantassumedtheriskofsuchloss. 2. Thedecisionin ThedecisioninSlyvia SlyviaShippinghelpfu Shippinghelpfullyclarif llyclarifiestheuncerta iestheuncertaintycreat intycreatedbythe edbythe Hous House e of Lord Lords' s' deci decisi sion on in The The Achi Achill llea eas. s. The The appl applic icat atio ion n of The The Achi Achill llea eas s decisi decision on is now restri restricte cted d to cases cases where where except exception ional al circum circumsta stance nces s justify justify a requirementthatthepartyseeking"firstlimb"damages(whichareassumedto ariseintheordinarycours ariseintheordinarycourseofthings)alsodem eofthings)alsodemonstr onstratethat atethatthepartyinbreach thepartyinbreach ofcontractassumedresponsibilityforthelossinquestion.Inthevastmajorityof case cases, s, clai claima mant nts s will will not not have have to demo demons nstr trat ate e that that the the defe defend ndan ant t acce accept pted ed liabilityforthelosssuffered. 3. As prev previo ious usly ly,, part partie ies s need need to cons consid ider er care carefu full lly y the the exte extent nt to whic which h thei their r contra contract ct exclud excludes es liabil liability ity for certai certain n types types of loss. loss. For exampl example, e, it is common common that that part partie ies s will will seek seek to excl exclud ude e liab liabil ilit ity y for for loss loss of prof profit it.. Howe Howeve ver, r, it is a common common drafti drafting ng error error that that exclus exclusion ion of liabil liability ity clause clauses s are ambigu ambiguous ous as to whetherliabilitybothfor(i)profitarisingintheordinarycauseofthings(i.e.,a "firstlimb"loss),and(ii)profitarisingbyreasonofspecialcircumstanceswithin the the part partie ies' s' know knowle ledg dge e (i.e (i.e.,., a "sec "secon ond d limb limb" " loss loss,, comm common only ly refe referr rred ed to as "consequentialloss")isexcluded.Bydefininglostprofitasa"consequentialloss," suchclausesoftenonlyexcludeliabilityforsecondlimblostprofit.Lostprofit, whicharisesintheordinary whicharisesintheordinarycourseofthings,isnotconstrue courseofthings,isnotconstruedas"conseque das"consequential ntial loss"andisthereforegenerallynotexcludedbysuchlanguage. 4. Theeffectandtrueintentofsuchexclusionclausesandtheproperinterpretation of"consequentialloss"inthiscontextisanotherareaofthelawonremotenessof damagesthatrequiresfurtherconsiderationbytheSupremeCourt.Inanyevent, careshouldbetakenwhenincluding"boilerplate"exclusionofliabilityclauses whichmayhaveunintendedconsequencesifnotcarefullydrafted.
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ABOUTME
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