“It was common ground between the parties that when the Charterers declared that they did not accept that a binding agreement for a two year extension had been agreed and that they were not going to perform it, there was no suitable timecharter employment for the vessel. The Owners therefore sold the Vessel in October 2007.” (2) Paragraph 23: “…the Charterers [had] accepted that there was no charterparty employment for the vessel at the time in question and that her sale was reasonable.” (3) Paragraph 60: “It was common ground that when the “NEW FLAMENCO” was redelivered to the Owners on28th October 2007 , it would not have been possible for the Owners to conclude an alternative substitute two year time charterparty. The need to sell the vessel was clearly caused by the breach. It was common ground that the sale price achieved was reasonable.” (4) Paragraph 62: “I was advised by counsel for the parties that there was no directly applicable authority on the point. That is perhaps not surprising because it would not be very often that the premature termination of a time charterparty would cause the sale of a vessel…” (5) Paragraph 70: “As I have already commented, in this case it was clear that the necessity for the sale had been brought about by the refusal to perform the two year extension.” (6) Paragraph 73: “Normally vessels will not reasonably need to be sold and would not be sold following the premature termination of a charterparty so that any movement in the capital value of a vessel will not crystallise and will not be relevant to a claim for a net loss of earnings. On the unusual facts of this case, where the Owners acted in reasonable mitigation of damages caused by a breach of a time charterparty by selling the vessel, there was no reason why capital savings could not and should not be brought into account in considering the net loss suffered by the Owners.”
“7-003 The principal meaning itself comprises three different, although closely interrelated, rules. This analysis into three rules, although clearly implicit in the cases, is one which had not, at the first time of writing in the late l950s, been given explicit statement in English law. It is submitted that such a division lends clarity to a difficult topic. The three rules are these. 7-004 (1) The first and most important rule is that the claimant must take all reasonable steps to mitigate the loss to him consequent upon the defendant’s wrong and cannot recover damages for any such loss which he could thus have avoided but has failed, through unreasonable action or inaction, to avoid. Put shortly, the claimant cannot recover for avoidable loss. 7-005 (2) The second rule is the corollary of the first and is that, where the claimant does take reasonable steps to mitigate the loss to him consequent upon the defendant’s wrong, he can recover for loss incurred in so doing; this is so even though the resulting damage is in the event greater than it would have been had the mitigating steps not been taken. Put shortly, the claimant can recover for loss incurred in reasonable attempts to avoid loss. 7-006 (3) The third rule is that, where the claimant does take steps to mitigate the loss to him consequent upon the defendant’s wrong and these steps are successful, the defendant is entitled to the benefit accruing from the claimant’s action and is liable only for the loss as lessened; this is so even though the claimant would not have been debarred under the first rule from recovering the whole loss, which would have accrued in the absence of his successful mitigating steps, by reason of these steps not being ones which were required of him under the first rule. In addition, where the loss has been mitigated other than by steps taken by the claimant subsequent to the wrong, the claimant can again recover only for the loss as lessened, provided that the benefit gained is not to be regarded as collateral. Put shortly, the claimant cannot recover for avoided loss.”
“Clearly there must be no rule. The jury have found that the plaintiff has sustained damages through the defendants’ negligence to the amount of 217l., but it is said that because the plaintiff has received 31l. from the office in which he insured himself against accidents, therefore the damages do not amount to 217l. One is dismayed at this proposition. In Dalby v. India and London Life Assurance Company (4 Bing N.C. 272) it was decided that one who pays premiums for the purpose of insuring himself, pays on the footing that his right to be compensated when the event insured against happens is an equivalent for the premiums be has paid; it is a quid pro quo, larger if he gets it, on the chance that he will never get it at all. That decision is an authority bearing on the present case, for the principle laid down in it applies, and shews that the plaintiff is entitled to retain the benefit which he has paid for in addition to the damages which he recovers on account of the defendants’ negligence.”
“…….when in the course of his business he has taken action arising out of the transaction, which action has diminished his loss, the effect in actual diminution of the loss he has suffered may be taken into account even though there was no duty on him to act.”
“I think that this decision illustrates a principle which has been recognized in other cases, that, provided the course taken to protect himself by the plaintiff in such an action was one which a reasonable and prudent person might in the ordinary conduct of business properly have taken, and in fact did take whether bound to or not, a jury or an arbitrator may properly look at the whole of the facts and ascertain the result in estimating the quantum of damage. Recent illustrations of the way in which this principle has been applied, and the facts have been allowed to speak for themselves, are to be found in the decisions of the Judicial Committee of the Privy Council in Erie County Natural Gas and Fuel Co. v. Carroll[1911] AC 105 and Wertheim v. Chicoutimi Pulp Co.[1911] AC 301 . The subsequent transaction, if to be taken into account, must be one arising out of the consequences of the breach and in the ordinary course of business. This distinguishes such cases from a quite different class illustrated by Bradburn v Great Western Ry. Co. (1874) LR 10 Ex 1, where it was held that, in an action for injuries caused by the defendants’ negligence, a sum received by the plaintiff on a policy for insurance against accident could not be taken into account in reduction of damages. The reason of the decision was that it was not the accident, but a contract wholly independent of the relation between the plaintiff and the defendant, which gave the plaintiff his advantage. Again, it has been held that, in an action for delay in discharging a ship of the plaintiffs’ whereby they lost their passengers whom they had contracted to carry, the damages ought not to be reduced by reason of the same persons taking passage on another vessel belonging to the plaintiffs: Jebsen v East and West India Dock Co. (1874) LR 10 CP 300, a case in which what was relied on as mitigation did not arise out of the transactions the subject-matter of the contract. ……. I think the principle which applies here is that which makes it right for the jury or arbitrator to look at what actually happened, and to balance loss and gain. The transaction was not res inter alios acta but one in which the person whose contract was broken took a reasonable and prudent course quite naturally arising out of the circumstances in which he was placed by the breach.”
“Martindale stands on a little different footing. His salary of£1,500 was very low for a man of his ability: and it looks as if he was getting, in addition, a concealed remuneration by a profit on his shares in the company. In the course of the argument Russell LJ worked out the estimated improvement in his equity over the period from August, 1964, to March, 1967, in so far as it was due to his work. It comes to£2,066 . I think that the plaintiff should give credit for that figure in addition to the actual earnings of£3,717 9s. 2d.”
“Finally, there is the question whether any and what deduction should be made from the damage suffered on account not only of his salary earned and expected in the period from Martindale, but also on account of the undoubted fact that the expenditure of the time released to him by the wrongful dismissal has enabled him by his work and management during that time to enhance the value of the half interest in Martindale that he bought for£1,500 shortly after his dismissal. I agree that account should be taken of this, though of necessity a fairly high degree of estimation is involved. The master held that in all the circumstances it was reasonable that the plaintiff should go into Martindale on the terms on which he did, rather than hawk his services around. One of the reasons for saying that it was reasonable is that avowedly the plaintiff was hoping to gain in part by improving by his own efforts the value of his holding as well as, in other part, by a relatively low salary. To the extent that this hope has been fulfilled in the relevant 2⅔ years, it seems right to set it against his loss of salary from the defendants. As to the method of assessment of the extent to which his released time has contributed to the increase in value of his interest, the following calculation leads to the figure of£7,768 mentioned by the Master of the Rolls...”
“In my opinion the master was wrong in requiring the plaintiff to give credit for his investment in Ventilation. He might have invested his money in any other company and made similar profits. It is sheer speculation whether he would do better in Ventilation than in others. I realise that the plaintiff was only at liberty to invest in Ventilation because his employment was terminated. But nevertheless the benefit from that investment was not a direct result of his dismissal. It was an entirely collateral benefit, for which he need not account to his employers.”
“I turn to the question of Ventilation and the plaintiff’s investment therein. I can see no justification for considering this investment as of any relevance to the damage occasioned by the wrongful dismissal. It was an investment of money and nothing more. Its profitability or otherwise cannot be attributed to his release from his obligation to devote his time to the service of the defendants; because such minimal time as he devoted to the affairs of Ventilation cannot seriously be regarded as having been made available to him by his dismissal. It is of course true that during his employment he was barred from such investment in a company carrying on this particular type of business, which is in France in competition with the defendants. But that does not suffice to entitle the defendants to set off any improvement in the value of the plaintiff’s shareholding against his loss of salary and bonus. It is simply a question of turning his private money or credit to account and not his time and work. It is no different from an investment which he could have made during his continued service.”
“It is said to make all the difference that both the future wages of which he has been deprived by the fault of the defendant, and the benefit which has accrued by reason of his disablement come from the same source or arise out of the same contract. This seems to be founded on an idea of remoteness which is, I think, misconceived. Remoteness from the defendant’s point of view is a familiar conception in connection with damages. He pays damages for loss of a kind which he might have foreseen but not for loss of a kind which was not foreseeable by him. But here we are not dealing with that kind of remoteness. No one has ever suggested that the defendant gets the benefit of receipts by the plaintiff after his accident if they are of a kind which he could have foreseen, but not if they are of a kind which he could not have foreseen, or vice versa That the plaintiff may, in consequence of the defendant’s fault, receive benefit from benevolence, or insurance is no more or no less foreseeable or remote than that he may get a benefit from a pension to be paid by his employer. If remoteness has any relevance here it is quite a different kind of remoteness—the connection or absence of connection between the source of the benefit and the source of the wages. But what has that got to do with the defendant? It is rational to make the extent of the defendant’s liability depend on remoteness from his point of view—on what he knew or could or should have foreseen. But it is, to my mind, an irrational technicality to make that depend on the remoteness or closeness of relationship between the plaintiff’s source of loss and source of gain. Surely the distinction between receipts which must be brought into account and those which must not must depend not on their source but on their intrinsic nature.” 34. and at 16H: “A pension is intrinsically of a different kind from wages. If one confines one’s attention to the period immediately after the disablement it is easy to say that but for the accident be would have got £X, now he gets £Y, so his loss is £X-Y. But the true situation is that wages are a reward for contemporaneous work, but that a pension is the fruit, through insurance of all the money which was set aside in the past in respect of his past work. They are different in kind.”
“Nor does causation, I think, really provide an answer. The pension could not have arisen had not the man by the terms of his employment earned it or by his own thrift provided for it outside his employment. That is the real source of the pension. On the other hand, the potential pension thus provided would not have come into play had not the accident occurred. Each is certainly a causa sine qua non and probably each is entitled to be called a causa causans. Strict causation seems to provide no satisfactory line of demarcation.”
“The alternative way in which the first point is put by Mr. Phillips is that Bradburn’s case is simply an illustration of a more general rule that, in assessing damages, one disregards what is collateral. Here it is said the benefit of the insurance is not collateral, for it is specifically provided for by the parties in the contract itself; since the source of the loss and the source of the gain are the same—namely, the contract between the parties—the plaintiffs cannot prove that they have suffered any loss resulting from the way in which the contract has been performed. In my judgment, the answer to that argument is also to be found in Parry v. Cleaver, and in particular in the speech of Lord Reid. There are always two questions, namely, (1) what is the loss which the plaintiff has suffered as a result of the accident (in this case by the total loss of the vessel), and (2) what are the sums which he has received which he would not have received but for the accident. Then comes the question whether sums under (2) can be set off against losses under (1). That depends not on the source of those sums but on their nature.”
“Applying that reasoning to the present case, the question is whether the insurance proceeds are to be regarded as different in kind from the loss which the plaintiffs have suffered by reason of the defendants’ breach of contract. It seems to me that the answer to that question must be “Yes”
“Secondly, the loss caused by disturbance on compulsory purchase and the payment of regional development grant are different in kind. The loss on disturbance flowed from the fact that the landowner had been forced to give up occupation of his land and premises as a result of the acquisition of his interest. The regional development grant was paid in respect of part of the expenditure incurred when moving into new premises”
“On the facts of this case, there is no dispute but that Palatine incurred disturbance expenditure in the amount, I think, of£147,478 , although the precise figures do not matter, and that this expenditure would not have been incurred but for the compulsory purchase. There is also no dispute that some of this expenditure attracted regional development grant. The sole question in dispute is whether the disturbance loss is properly to be regarded as being the disturbance expenditure as abated pro tanto by the regional development grant. If it is, then the amount of the compulsory purchase price can only take account of the disturbance expenditure so abated, as otherwise it would amount to over-compensation and offend against the principles enunciated in Horn’s case. If it is not, the compulsory purchase price can take account of the full disturbance expenditure since that, and not the abated sum, represents the disturbance loss. It is at this point that it is necessary to take a closer look at the nature of a regional development grant, just as the House of Lords took a closer look at the nature of a police pension in Parry v. Cleaver [1970] A.C. 1. A regional development grant is not paid in compensation for dispossession or disturbance. It is payable whether or not there is a change of ownership or location, so long as it relates to expenditure of a relevant kind incurred in a relevant geographical area. It is therefore different in kind from compensation for disturbance. Indeed it is not compensation at all. Regional development grants are, as one of the Department of Industry booklets rightly describes them, “Incentives for Industry in the Areas for Expansion.”
“In the course of his argument in support of the notion thus briefly conveyed by the judge Mr. Burton advanced two distinct propositions. 1. The plaintiffs owed a duty towards the defendants to mitigate the loss resulting from their purchase of the house in reliance on the misrepresentation; the sale to the developers was a performance of this duty; the result of this mitigation was to be taken into account in computing the loss. 2. Whether the re-sale was mitigation or not, the fact is that when the plaintiffs’ dealings are regarded as a whole it can be seen that they have suffered no loss. Very often it happens that no distinction need be drawn between these two ways of approaching the problem: they raise the same issues of fact and lead to the same conclusion, and are often treated together under the same heading of “mitigation.”
“I have dealt with the authorities at some length, because it was said that in one direction or another they provided a direct solution to the present problem. For the reasons already stated, I do not see them in this light. Ultimately, as with so many disputes about damages, the issue is primarily one of fact. Did the negligence which caused the damage also cause the profit—if profit there was? I do not think so. It is true that in one sense there was a causal link between the inducement of the purchase by misrepresentation and the sale 2½ years later, for the sale represented a choice of one of the options with which the plaintiffs had been presented by the defendants’ wrongful act. But only in that sense. To my mind the reality of the situation is that the plaintiffs bought the house to live in, and did live in it for a substantial period. It was only after two years that the possibility of selling the land and moving elsewhere was explored, and six months later still that this possibility came to fruition. It seems to me that when the plaintiffs unlocked the development value of their land they did so for their own benefit, and not as part of a continuous transaction of which the purchase of land and bungalow was the inception.”
“In the present case counsel for the defendants sought to distinguish the decision of this House in Parry v. Cleaver [1970] A.C. 1 on the ground that the defendants are in the triple position of employers, tortfeasors and insurers. In my opinion this makes no difference to the principle that the plaintiff has bought his pension which is, in the words of Lord Reid, at p. 16, “the fruit, through insurance, of all the money which was set aside in the past in respect of his past work.”
“The general issue is in my view appropriately stated as being whether any profit or loss arose out of or was sufficiently closely connected with the breach to require to be brought into account in assessing damages. Resolution of that issue involves taking into account all the circumstances, including the nature and effects of the breach and the nature of the profit or loss, the manner in which it occurred and any intervening or collateral factors which played a part in its occurrence, in order to form a commonsense overall judgment on the sufficiency of the causal nexus between breach and profit or loss. Here, if the profit was an element or consequence of the substitute charter (which itself arose naturally out of the situation in which the charterers were placed by the breach), it was appropriate to speak of the profit itself as arising out of, or as a consequence of, the breach. If on the other hand the profit was not an element or consequence of the substitute charter, then the profit did not arise out of or as a consequence of the breach. It was for the arbitrators to form a judgment one way or the other. The arbitrators said that the profit did not arise out of or as a consequence of the breach. The next sentence in their award shows also that they did in the course of their reasoning consider whether the profit was part and parcel of or a consequence of the substitute charter. I see no error of law in their approach or conclusion, and dismiss this appeal accordingly. I would add that it is clear in my view that it would have made no difference to the arbitrators’ conclusion if they had in par. 18 of their award asked themselves expressly in two stages (i) whether the Chusovoy charter arose out of the breach, as they had already held that it did, and only then (ii) whether the profit arose out of the Chusovoy charter, which they clearly concluded that it did not. Any judgment as to what was part and parcel of or arose out of the Chusovoy charter was for the arbitrators to make. Accordingly even if there had been any error or over-compression in the arbitrators’ formulation of the legal test, it was not one which could have had any effect on the outcome. If I had considered there to be any error in law in par. 18, I would have dismissed the appeal on this alternative ground.”
“In my view the authorities to which I have referred establish two relevant propositions. First, the relevant question is whether the negligence which caused the loss also caused the profit in the sense that the latter was part of a continuous transaction of which the former was the inception. Second, that question is primarily one of fact.”
“Mr Baker submitted that it was wrong in law to take into account the earnings of the vessel after the date on which the vessel would have been notionally redelivered under the original charterparty. As I have already observed the owners are to be compensated for the contractual right they have lost and therefore what has to be valued is the value in monetary terms of the right to earn hire up to and not beyond the notional date of redelivery, less such benefits as have been obtained by action taken to mitigate that loss. There is no reason in principle to limit the type of benefit which may be taken into account. The approach of Bingham J. in TheConcordia C shows that when assessing the monetary value of the benefits obtained as a result of action taken to mitigate the owners’ loss it may be appropriate to reduce the recoverable damages by benefits other than the hire earned on a substitute voyage during the period ending with the notional date of redelivery. That is also shown by the statement of principles by Staughton LJ in The Noel Bay. Where such other benefits have been obtained (eg where the vessel is redelivered after the substitute voyage in a location where she is better placed for future employment) it will be a matter for the fact-finding tribunal to assess the monetary value of such benefits. Depending on the nature of the benefit and the approach taken to valuation it may be necessary to take into account earnings after the notional date of redelivery. Thus the mere fact that such earnings have been taken into account does not necessarily mean that the tribunal has erred in law.”
“[29]. The argument that the claimants cannot recover the full cost of repair to RSAI because they must mitigate their loss by having the repairs done at a lower cost is wrong because mitigation is not relevant in respect of this “direct” loss. As we have already pointed out, the loss to a claimant whose chattel has been damaged by the negligence of another is immediate. That loss cannot be “mitigated” by having the chattel repaired free or for a lower cost, because it is not the cost of repairs that constitutes the loss; the loss is the diminution in value of the chattel.”
“the insurers provide a benefit to the policyholder who has obtained the use of a substitute car and provided it is at a reasonable rate and was reasonably incurred to cover the cost of the use of the damaged car, it is recoverable. 49. Because the policy provided that the policyholder could have a replacement vehicle at no charge if he elected to use the RSAI scheme, there is no question of “mitigation” by the exercise of that option. Mitigation concerns actions taken to reduce loss after the tort (or breach of contract) has occurred. Here the claimant is exercising rights for which he had contracted (and paid for) before the tort occurred. Exercising that contractual right is not “mitigating” the loss of use of the damaged vehicle.”
“As the learned justices in the High Court are careful to state, it is impossible to devise a principle so general as to be capable of covering the great variety of benefits from one source or another which may come to an injured man after, or because, he has met with an accident. Nor, as was said by Dixon C.J. in Espagne’s case (1961) 105 C.L.R. 569, is much assistance to be drawn from intuitive feelings as to what it is just that the wrongdoer should pay. Moreover, I regret that I cannot agree that it is easy to reason from one type of benefit to another.”
“The absence of authority for a claim by defendants like this, which yet if well founded must have arisen in many cases, affords a strong presumption against its having any legal foundation. It is true that there must be a first instance in every claim, and that ingenuity often for the first time suggests a point which has escaped observation, and which yet, when brought to the test of argument, is found to be a sound one. But this is a point which must have arisen so frequently that it is to us incredible that, if sound, it never should have been taken.”