1.1. Time of Assessment
Questions of whether to award damages or specific performance are linked intimately to mitigation and specific performance as is seen when the value of the property in question rises between breach and judgement.
1.2. Asamera Oil v. Sea Oil (1979)
Respondent loans appellant shares in a corporation.Shares were to be returned on a certain date which they were not.At the time the loan was due the shares are worth only a small amount versus their initial value.The price of the shares fluctuates widely between the time the loan was due and the action.
Should the respondent have bought more shares at the time of breach to mitigate damages?
Estey, J. “It is very likely that [the appellant] would have foreseen the probable loss to be suffered by [the respondent] on the non return of its property, particularly bearing in mind his activity as a stock broker and his own dealing in Asamera shares. In the absence of a contrary indication he may be taken to have assumed the risk of its occurrence.”
“…recovery of damages for the non-return of shares turns on the theory that only where a breach of contract gives rise to an asset in the hands of the plaintiff will the law require him to mitigate his losses by employing that asset in a reasonable manner.”
“Damages which could have been avoided by the taking of reasonable steps in all circumstances should not and, indeed, in the interests of commercial enterprise, must not be thrown onto the shoulders of a defendant by an arbitrary although nearly universal rule for the recovery of damages on breach of the contract for redelivery of the property…”
“Before the plaintiff can rely on a claim to specific performance so as to insulate himself from the consequences of failing to procure alternate property in mitigation of his losses, some fair, real and substantial justification for his claim to performance must be found. Otherwise its effect will be to cast upon the defendant all the risk of aggravated loss by reason of delay in bringing the issue to trial.”
Swan, Prof. The P sued for specific performance to maximise his claim. Estey, J. says that merely casting the claim in terms of specific performance does not allow the P to escape his duty to mitigate loss. Asamera is inconsistent with White v. Carter. The duty to take steps to mitigate trumps specific performance.
Duty to Mitigate
· Damages which could have been avoided by the taking reasonable steps cannot be claimed by the P.
· Merely casting the claim in terms of specific performance does not allow the P to escape his duty to mitigate loss (duty to mitigate trumps specific performance).
· Conversion will not be followed.
· The court may decide the date when damages are to be assessed.
1.3. Dodd Properties (1980)
D builds car parking garage beside P’s garage and damages building in the process.
Which date is used to determine the cost of doing the repairs?
Final judgement when it makes financial sense.
Megaw, LJ. “…damages are not required by English law to b assessed as at the date of breach.”
“The true rule is that, where there is a material difference between the cost of repair at the date of the wrongful act and the cost of repair when the repairs can, having regard to all relevant circumstances, first reasonably be undertaken, it is the latter tim
pective buyer with a surveyor under which the surveyor agrees to survey a house and make a report on it-and he makes it negligently-and the client buys the house on the faith of the report, then the damages are to be assessed at the time of breach, according to the difference in price which the buyer would have given if the report had been carefully made from that which he in fact gave owing to the negligence of the surveyor. … The buyer is not entitled to remedy the defects and charge the cost to the surveyor.”
He goes on to add inflation to this.
Swan, Prof. Denning is protecting the reliance interest here, not the expectation. The date of assessment is a coded inquiry into the real issue of reliance v. expectation. The court is wrestling with a problem because they do not have the tools to cope with it. The has been changed some what with the introduction of legislation allowing Prejudgement interest (e.g. Courts of justice Act ss. 127-130, see CB 208).
· Where a surveyor makes his report negligently and the client buys the house on the faith of the report, then the damages are to be assessed at the time of breach, according to the difference in price which the buyer would have given if there had been no negligence on behalf of the surveyor.
· The buyer is not entitled to remedy the defects and charge the cost to the surveyor.
· Inflation between the breach and the award may also be added.