"76. In the premises, the actionable threats of patent infringement proceedings and/or breaches of statutory duty (individually or together) caused the exclusion of the Worldeez product line from the relevant markets and its eventual demise. But for the aforesaid threats/breaches by MGA, the Worldeez product line would have enjoyed a successful launch, initially in the UK and Ireland, and would have gone on to generate significant sales in the UK and globally, including in the United States and other English speaking territories, such as Canada and Australia, not least given the generally close links between toy trends experienced in those markets and the international appeal inherent in the Worldeez design theme. 77. Accordingly, as an intended and/or foreseeable consequence of the conduct on the part of MGA pleaded above, Cabo has suffered loss and damage including in the form of lost profits in respect of: (a) Lost sales to toy traders, including but not limited to the UK Launch Retailers and other toy traders identified at paragraph 53(e) above, which cancelled existing orders and/or declined to take supplies of Worldeez as a result of the infringements and/or threats which form the subject-matter of the Competition Law and Threats Claims, or any of them. (b) Lost sales and licensing revenues resulting more generally from the foreclosure of Worldeez and its ultimate demise. For the avoidance of doubt, this head of claim is not confined to losses in the UK and Ireland but also extends to lost profits in other jurisdictions which were consequent on the foreclosure/demise of Worldeez. 78. Whilst the quantum of losses suffered by Cabo will be the subject of expert evidence, Cabo will say at trial that it would have captured a significant share of sales made by MGA around the world which, according to an article by The Atlantic Magazine of 29 November 20182, amounted to more than 800 million units of LOL products by November 2018 since their launch in late 2016. Cabo currently estimates its losses from lost direct sales alone (excluding licensing revenues) to be in excess of£170 million . Cabo will therefore seek disclosure from MGA as to its sales of LOL products to inform its assessment of the market opportunity that would have been available to Worldeez products but for the infringements pleaded herein."
"As a result, Cabo would have gone on to become a successful toy business able to leverage valuable intangible assets developed through the success of the Worldeez product line, including the relationships that it would have formed with retailers and the reputation it would have established for the development, production and supply of toys." ii) Second, a new paragraph 77A in the following terms: "
"In addition, Cabo will say that it would have gone on successfully to develop and market other product lines beyond Worldeez."
"The claim for damages shall be struck out unless within seven days of the date of this Order the Claimant files and serves a Re-Amended Particulars of Claim with the following amendments: (1) After 'Cabo has suffered loss and damage' in paragraph 77, omit the word 'including'. (2) After the words 'in the form of lost profits' in paragraph 77, insert the words 'suffered on or before the date of demise of Cabo’s business in January 2018'. (3) After paragraph 77, insert a new paragraph as follows: '77A. In addition, Cabo has suffered loss in the form of the loss of the value of the business (as at the date of the demise of that business in January 2018) that it would have been able to build but for MGA’s actions.' (4) Omit paragraph 78."
"The Judge deals with the authorities from which he obtained the principles that he was to apply from pages 19 to 26 of his judgment. He recognised the overriding principle in the following words: 'The general principle underlying the award of compensatory damages has often been cited from the speech of Lord Blackburn in Livingstone v Rawyards Coal Co(1880) 5 App Cas 25 at 39: the measure is -- "that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation."
"What in my view this case demonstrates is that in relation to the assessment of damages each case depends on its own circumstances, and it is the overriding principle quoted above which is important."
"Mr Milligan relied primarily on the decision of His Honour Judge Raymond Jack QC (as he then was) in UYB Ltd v BritishRailways Board (16 April 1999 , unreported), the facts of which must be carefully considered."
"Mr Brealey submitted that there were important factual differences between UYB Ltd v British Railways Board and the present case, in particular that UYB's night-club business never got off the ground and would in any event have been of a speculative nature. While we fully accept that each case must be judged on its own facts, we do not think that these and other points made by Mr Brealey are sufficient to justify a different approach from that adopted by Judge Jack."
"The wrong sustained by Mr Crehan was the loss of his businesses at The Cock Inn and The Phoenix. But, for the purpose of measuring the damages recoverable, they were not actual businesses. They were hypothetical, in the sense that they had to be treated, contrary to the actuality, as having been free of tie. So they had to be treated, though for a different reason, in the same way as UYB's business. On Park J's approach that faces the court with the immediate difficulty that the measure of damages involves a hypothesis upon a hypothesis: the hypothetical profits of a hypothetical business."
"The judge's basis for assessing loss involved in contrast a continuing assessment of loss for a period of years long after the business had ceased. It was inherently speculative, since it depended on an attempt to derive from the figures previously calculated in respect of years when the business was trading and from analysis of actual events after 1988, potential profits in respect of years when the business was not trading at all. It then also involved an attempt, in the light of those entirely hypothetical matters, to assess the value which the business would have had in 1994, six years after the business had definitively ceased."
“In my view the correct approach would have been to treat both defendants as having suffered the final loss of their business as at February/March 1988…An entitlement to loss measured by reference to the value that the business would have had in 1988, together with interest, is firmly connected with the actual consequences of the council’s breaches on undertaking, namely the demise of the business which the council induced the defendants to take on and continue. It takes into account that it was in 1988 that the defendants were actually deprived of an asset which they could, but for the council’s breaches, either have realised then or have chosen to trade as they wished after that date. It avoids the speculative assessment, relating to their trading over the next six years and their ultimate assumed disposition of the business in 1994, upon which the judge embarked; and it can be rationalised on the basis that such a measure provides compensation sufficient to enable the defendants to have acquired and undertaken any equivalent income-yielding activity they chose after February/March 1988. In my view the judge should therefore have measured loss in this case as at February/March 1988…”
"First, he submits that the loss should simply have been assessed as at the date of closure of the business, i.e. the difference between the value of the business at that date and its notional value assuming there had been no prior breach of contract. Not only does that represent the loss ordinarily and naturally resulting in such a case; he submits that it is also the fairest and most obvious way to take account of the innumerable uncertainties and contingencies which the business would in any event have faced after February 1988, c.f. the approach of Judge Crawford QC sitting as a judge of the High Court, approved by the Court of Appeal in ELO Entertainments 1 AER (Com) 473."
"Whilst acknowledging that, in that case, the Court of Appeal recognised that, in any given case, a choice is open to the judge as to the most suitable way of assessing the future loss (if any) suffered by a trader who is put out of business by another's breach of contract, Mr. Berragan submits that the uncertainties as to future trading in circumstances of open competition and in a declining neighbourhood, together with all the other factors listed by the judge.... were such that the correct approach was not to embark on the totally uncertain exercise in prediction which the judge effected, but to assess the amount by which the capital value of the business and premises was diminished by the breaches of warranty at the time the defendants ceased to operate it in February 1988."
"47. In my view, the judge was wrong to deal with the matter as he did, broadly for the reasons advanced by Mr Berragan. The judge was dealing with the claim of defendants who, on the faith of a contractual warranty had acquired business premises as an investment, albeit for operation as a business. They did not rely upon any additional feature, special characteristic, or future intention made known to the council at the time of their proposed acquisition which might lead the council to assume that the business would be continued and/or disposed of on other than ordinary commercial considerations. 48. The damages recoverable were those which were within the reasonable contemplation of parties in that situation. There is nothing to be gained by seeking to analyse the matter in terms of actual or imputed knowledge or the first and second rule in Hadley v Baxendale (1854) 9 Ex 341. The warranty given plainly related to the extent of the competition which the defendants would be likely to encounter in a business which depended upon the sale of food and drink within its catchment area. It was thus to be contemplated that, if the warranties proved false, the defendants would suffer loss of profits to an uncertain extent and over an uncertain period until the defendants either ceased trading or sold on their business. In those circumstances, as it seems to me, so far as remoteness of damage is concerned, the obvious cut-off point for any claim for loss of profits and the point at which damage fell to be assessed on a valuation basis was the point at which it was reasonable for the defendants, fully apprised of the adverse effects of the breach of warranty, to decide to cease trading and dispose of the business. 49. As to the measure of the damages to be awarded, there was simply no reason not to adopt the normal contractual measure based on the value of the benefit of which the defendants had been deprived as a result of the breaches of warranty. Such value could only be measured at that point by evidence of the value of the defendants' business as at that date, as to which the consensus of the expert evidence was plainly that such value was nil. Thus the measure and the ceiling of the defendants' loss at closure was, on the valuation advanced by Mr Cooper,£65,000 . 50. It seems to me that, by opting to award damages on the basis that, had the warranties been true, the defendants would have traded on indefinitely, thus giving rise to a large claim for continuing loss, the judge (a) awarded a sum beyond the reasonable contemplation of the parties at the time the warranties were given, and (b) ignored the reality that, as from mid-1987, the defendants contemplated disposing of their business rather than continuing it. In those circumstances the approach of the judge involved compensating the defendants for loss of future trade which the defendants had no intention of carrying on."
"Turning for a moment away from damages for deceit, the general rule in other areas of the law has been that damages are to be assessed as at the date the wrong was committed. But recent decisions have emphasised that this is only a general rule: where it is necessary in order adequately to compensate the plaintiff for the damage suffered by reason of the defendant's wrong a different date of assessment can be selected."
"While the general rule undoubtedly is that damages for tort or breach of contract are assessed at the date of the breach ... this rule also should not be mechanistically applied in circumstances where assessment at another date may more accurately reflect the overriding compensatory rule."
"If that method is inapposite, the court is entitled simply to assess the loss flowing directly from the transaction without any reference to the date of transaction or indeed any particular date. Such a course would be appropriate whenever the overriding compensatory rule requires it."