References:  1 WLR 1262
Coram: Oliver J
A contract was made for the sale of a plot of land adjoining a house belonging to the plaintiff (the vendor) but occupied by his tenants, under which the defendant (the purchaser) undertook to build a house on the plot and also to erect a wall to a certain specification on the plot so as to separate it from the plaintiff’s land. The plaintiff obtained judgment against the defendant for damages for breach of contract by reason of her failure to erect the dividing wall, but an issue arose as to the measure of the damages. The defendant having failed to build the dividing wall on the land purchased from the plaintiff, the plaintiff proposed to build a dividing wall on his own land, and claimed the cost of doing so from the defendant; whereas the defendant maintained that the appropriate measure of damages was the consequent diminution in the value of the plaintiff’s property, which was nil.
Held: The court described the distinction made in the Liesbosch between a plaintiff’s capacity to mitigate his loss and his duty to do so: ‘No doubt the measure of damages and the plaintiff’s duty and ability to mitigate are logically distinct concepts (see for instance, the speech of Lord Wright in Liesbosch (Dredger) v SS Edison (Owners)  AC 449, 456-469). But to some extent, at least, they are mirror images . .’ A contracting party should not use the remedy of damages to recover ‘an uncovenanted profit.’ However: ‘If [the plaintiff] contracts for the supply of that which he thinks serves his interests – be they commercial, aesthetic or merely eccentric – then if that which is contracted for is not supplied by the other contracting party I do not see why, in principle, he should not be compensated by being provided with the cost of supplying it through someone else or in a different way, subject to the proviso, of course, that he is seeking compensation for a genuine loss and not merely using a technical breach to secure an uncovenanted profit.’ It was for the plaintiff to judge what performance he required in exchange for the price. The court should honour that choice.
Oliver J said: ‘In the instant case, the plaintiff says in evidence that he wishes to carry out the work on his own land and there are, as it seems to me, three questions that I have to answer. First, am I satisfied on the evidence that the plaintiff has a genuine and serious intention of doing the work? Secondly, is the carrying out of the work on his own land a reasonable thing for the plaintiff to do? Thirdly, does it make any difference that the plaintiff is not personally in occupation of the land but desires to do the work for the benefit of his tenants?’
This case cites:
- Cited – Liesbosch Dredger (Owners of) -v- Owners of SS Edison, The Liesbosch HL ( AC 449,  All ER Rep 144,  149 LT 49, Bailii,  UKHL 2)
The ship Edison fouled the moorings of the Liesbosch resulting in the total loss of the dredger when it sank. It had been engaged on work in the harbour under contract with the harbour board. All the owners’ liquid resources were engaged in the . .
- Cited – Jackson -v- Horizon Holidays Ltd CA ( 1 WLR 1468, Bailii,  EWCA Civ 12,  3 All ER 92)
A family claimed damages for a disappointing holiday. The generous measure of damages given to the father was that the father was being fully compensated for his own mental distress, but the rule of privity of contract operated to bar the claim for . .
- Cited – Tito -v- Waddell (No 2); Tito -v-Attorney General ChD ( Ch 106,  3 All ER 129,  3 WLR 972)
Equity applies its doctrines to the substance, not the form, of transactions. In respect of the rule against self dealing for trustees ‘But of course equity looks beneath the surface, and applies its doctrines to cases where, although in form a . .
This case is cited by:
- Cited – Lagden -v- O’Connor HL (House of Lords,  UKHL 64, Bailii, Times 05-Dec-03,  1 AC 1067,  1 All ER 277,  3 WLR 1571,  Lloyd’s Rep IR 315,  RTR 24)
The parties had been involved in a road traffic accident. The defendant drove into the claimant’s parked car. The claimant was unable to afford to hire a car pending repairs being completed, and arranged to hire a car on credit. He now sought . .
- Approved – Dodd Properties (Kent) Ltd -v- Canterbury City Council CA ( 1 WLR 433, Bailii,  1 All ER 928,  EWCA Civ 4)
The defendants had, in the course of building operations, caused nuisance and damage to the plaintiff’s building. The dispute was very lengthy, the costs of repair increased accordingly, and the parties now disputed the date at which damages fell to . .
- Cited – Alfred Mcalpine Construction Limited -v- Panatown Limited HL (Times 15-Aug-00, House of Lords, Gazette 05-Oct-00, Bailii,  UKHL 43,  4 All ER 97,  3 WLR 946,  1 AC 518)
A main contractor who was building not on his own land, would only be free to claim damages from a sub-contractor for defects in the building where the actual owner of the land would not also have had a remedy. Here, the land owner was able to sue . .
- Cited – Golden Strait Corporation -v- Nippon Yusen Kubishka Kaisha (‘The Golden Victory’) HL (Bailii,  UKHL 12, Times 30-Mar-07,  2 Lloyds Rep 164,  Bus LR 997,  3 All ER 1,  2 AC 353,  1 CLC 352,  2 WLR 691,  2 All ER (Comm) 97)
The claimant sought damages for repudiation of a charterparty. The charterpary had been intended to continue until 2005. The charterer repudiated the contract and that repudiation was accepted, but before the arbitrator could set his award, the Iraq . .
- Cited – Johnson -v- Agnew HL ( AC 367,  2 WLR 487,  1 All ER 883)
The seller had obtained a summary order for specific performance of a contract for the sale of land against the buyer.
Held: The breach was continuing and was still capable of being remedied by compliance with the order for specific . .
- Cited – Alcoa Minerals of Jamaica Inc -v- Herbert Broderick PC (Times 22-Mar-00, Bailii, PC, PC,  1 AC 371,  UKPC 11, (Appeal No 68 of 1998))
(Jamaica) Damage had been caused to the claimant’s property, but, because of his lack of funds, he was dependent upon the receipt of the damages to carry out the works of repair necessary. By the time the matter came to trial, inflation meant that . .
- Cited – Ruxley Electronics and Construction Ltd -v- Forsyth HL (Independent 12-Jul-95, Gazette 06-Sep-95, Times 03-Jul-95,  1 AC 344,  3 WLR 118, Bailii,  UKHL 8,  CLC 905,  3 All ER 268)
The appellant had constructed to build a swimming pool for the respondent, but, after agreeing to alter the sepcification to construct it to a certan depth, in fact built it to the original lower depth, Damages had been awarded to the house owner . .