The seller had failed to deliver the vessel he had sold by the delivery date. The buyer cancelled and requested return of his deposit, also claiming damages because the vessel was worth $500,000 more on the delivery date than she had been when the contract was made. At first instance, Staughton J found that a reasonable buyer would have offered, after cancellation, to take the vessel after all and that his loss was attributable to his own unreasonable conduct in failing to make such an offer (which would have been accepted by the seller).
Held: The buyer’s appeal succeeded. Mitigation and causation are really two sides of the same coin and ‘Whether a loss is avoidable by reasonable action on the part of the plaintiff is a question of fact not law. This was decided in Payzu v Saunders.’
The onus of proof on the issue of mitigation is on the defendant: ‘A plaintiff is a under no duty to mitigate his loss, despite the habitual use by the lawyers of the phrase ‘duty to mitigate’. He is completely free to act as he judges to be in his best interests. On the other hand, a defendant is not liable for all loss suffered by the plaintiff in consequence of his so acting. A defendant is only liable for such part of the plaintiff’s loss as is properly to be regarded as caused by the defendants’ breach of duty.’
As to Strutt v Whitnell, if the House of Lords ever considered it, they might hold that the judgments confused the proposition that a party deciding whether to rescind or affirm a contract need have no regard to considerations of mitigation with the proposition that, once such a decision had been made, the principles of mitigation apply.
Questions concerning whether or not claimants have acted reasonably in order to mitigate injury and loss are questions of fact for the court.
Sir John Donaldson MR
[1983] 1 Lloyd’s Rep 605
England and Wales
Citing:
Appeal from – Sotiros Shipping Inc v Sameiet: The Solholt 1981
The seller did not deliver the vessel by the contractual date for delivery. The buyer exercised his right to cancel and to recover his deposit. He also claimed damages because the vessel was worth $500,000 more on the delivery date than she had been . .
Not approved – Strutt v Whitnell CA 1975
The house sale contract provided for vacant possession on completion, notwithstanding that it was in fact occupied by a protected tenant who in the event declined to leave. The vendor offered to accept a reconveyance of the house, but that offer was . .
Cited – Payzu Limited v Saunders CA 1919
The innocent plaintiff buyers had been found to have failed to mitigate their damages because they had not accepted an offer from the defendant sellers (who were in breach of contract) to supply goods on cash terms, the contract having originally . .
Cited – British Westinghouse Electric and Manufacturing Co v Underground Electric Railways Co (London) Limited HL 1912
The plaintiffs purchased eight steam turbines from the defendants. They later proved defective, and the plaintiffs sought damages. In the meantime they purchased replacements, more effective than the original specifications. In the result the . .
Cited by:
Cited – Peregrine Systems Ltd v Steria Ltd CA 14-Mar-2005
The claimant provided computer software to the defendants. The defendants appealed dismissal of their defences arguing that the system had failed.
Held: No repudiatory breach was established, and moreover Steria had elected to affirm the . .
Cited – Standard Chartered Bank v Pakistan National Shipping Corporation; Seaways Maritime Limited; Oakprime International Limited; Arvind Mehra and Sgs United Kingdom Limited CA 26-Jan-2001
As part of its attempt to mitigate its loss caused by deceit perpetrated in relation to it by the defendants, the claimant bank presided over the sale of a cargo of bitumen in Vietnam. To do this, it sent one of its officers, to Vietnam on two . .
Cited – Samuels and Another v Benning CA 22-May-2002
. .
Cited – Copley v Lawn; Maden v Haller CA 17-Jun-2009
The parties had been involved in a road accident. The insurer for the liable party offered a car for use whilst the claimant’s car was being repaired. The claimants had rejected that offer, and now appealed against a refusal to award them the cost . .
Cited – Thornton v Telegraph Media Group Ltd QBD 16-Jun-2010
The claimant said that a review of her book was defamatory and a malicious falsehood. The defendant now sought summary judgment or a ruling as to the meaning of the words complained of.
Held: The application for summary judgment succeeded. The . .
Cited – Borealis Ab v Geogas Trading Sa ComC 9-Nov-2010
The parties had contracted for sale and purchase of butane for processing. It was said to have been contaminated. The parties now disputed the effect on damages for breach including on causation, remoteness, mitigation and quantum.
Held: The . .
Lists of cited by and citing cases may be incomplete.
Contract, Damages
Updated: 20 December 2021; Ref: scu.223526