THE HASTIE STABLE DAMAGES for BREACH OF CONTRACT

THE HASTIE STABLE DAMAGES for BREACH OF CONTRACT: Michael Upton, Advocate 1

THE HASTIE STABLE Implement and Damages Implement or Damages A digression: Black Holes and why they weren’t sorted out by c. 1200 2

THE HASTIE STABLE H engages C the family home Title is in the name of W C performs contract defectively H requires to pay for remedial work C’s defence to action for damages: H has a contract but no loss; W has a loss but no contract Alfred Mc. Alpine v. Panatown: H can sue on W’s behalf Abercromby Motors: H has suffered loss if he’d title when the work was done Scottish Enterprise v. Archibald Russel: Ditto if he’s already paid for repairs 3

THE HASTIE STABLE Abercromby Motors: - “if a breach of contract occurs, causing loss that can be measured in financial terms, [B] may recover substantial damages even if that loss has been sustained by [C]; if a loss has been sustained by [C], however, [B] must sue on behalf of that other, and must accordingly account to [C] for the damages recovered. The right to raise an action in this way is deemed by law to exist in any case where the loss resulting from the breach of contract occurs to a person other than the contracting party. ” - Lord Drummond Young 4

THE HASTIE STABLE Law Reform (M. P. )(S. ) Act 1940, section 1 (abridged): “(1)(i) the court may, if it is satisfied that the person against whom such decree was granted is wilfully refusing to comply with the decree, grant warrant for his imprisonment for any period not exceeding six months; (ii) Where the court is satisfied that [he] is no longer wilfully refusing to comply, with the decree, the court shall order immediate liberation (2) the court may, in lieu of granting warrant for imprisonment, recall the decree and make an order for the payment by the respondent to the applicant of a specified sum or make such other order as appears to the court to be just and equitable in the circumstances”

THE HASTIE STABLE “The contract and the breach of it are established. That leads of necessity to an award of damages. It is impossible to say that a contract can be broken even in respect of time without the party being entitled to claim damages - at the lowest, nominal damages. ” - Lord President Glencorse, Webster & Co. v. Cramond Iron Co. , 2 R. 753 6

THE HASTIE STABLE ‘Solatium’ - Damages for non-patrimonial loss Contracts concerning personal, family or social interests - affront, annoyance, anxiety, depression, “a general sense of depression”, disappointment, disruption, disturbance, distress, mental distress, substantial distress, frustration, hurt feelings, injured feelings, inconvenience, irritation, loss of amenity, loss of peace of mind, loss of reputation, mental suffering, nervousness, stress, trouble, upset, vexation and worry. - “The true distinction seems to be between those cases where the likelihood of distress or injured feelings is … reasonably foreseeable at the time of the contract and cases where it is not. ” - Scottish Law Commission, Report No. 174, Remedies for Breach of Contract (1999), para. 3. 3. 7

THE HASTIE STABLE Miller Fabrications v. J. &D. Pierce (Contracts): Ps were to supply steelwork for a building on a given day, shortly before which they said that they wouldn’t unless the Ds provided a banker’s reference, for which the contract didn’t provide. Ds sacked Ps; the Sheriff held that was wrongful repudiation. The Inner House held instead that refusal to perform except on a condition that hadn’t been agreed was anticipatory breach, entitling Ds to rescind; this is so “when a party to a contract unequivocally indicates … [his] intention not to perform the contract” (Mc. Bryde, para. 20 -23); “conduct demonstrative of an intention not to perform fundamental contractual obligations as and when they fell due” is repudiation: Edinburgh Grain v. Marshall Food Group. 8

THE HASTIE STABLE Rescission: Lloyds Bank p. l. c. v. Bamberger (1) Both are absolved from future performance of primary obligations (2) Contract isn’t at an end; innocent party can sue for damages (3) And both can enforce what’s plainly intended to survive: arbitration, jurisdiction, choice-of-law clauses (4) And exclusion & limitation clauses (5) And accrued, unconditional pre-rescission rights; e. g. , rent arrears (6) But advances of the price in a sale (other than deposits) must be returned (7) Whether a clause survives rescission is a matter of parties’ intentions 9

THE HASTIE STABLE Causation of loss What is the test? “the person in search of useful dicta in [the] cases will, by and large, be disappointed. ” Would the pursuer have done other than he did? 10

THE HASTIE STABLE Remoteness & Foreseeability Broken crank-shafts Soya beans & dyers’ boilers Canals, by-passes & aqueducts What did the defender know of the pursuer’s business? 11

THE HASTIE STABLE Was it a “serious possibility” that in drilling an oil well the geological pressures would be miscalculated - wellhead cementing would be defective - there’d be a leak in the hydraulics powering the blow-out preventer’s shear rams - the underwater control panel would be disconnected from the BOP bore ram - the BOP would be disconform to drawings so that the rams couldn’t operate on drill-pipe joints nor when there were construction tools down the pipe - and an explosion would severe communications with the BOP control unit - and also sever the hydraulics of the back-up dead man’s switch - and the deadman switch’s control pod would have a dead battery - oh, and by the way, the gas-escape alarm would be switched off so the crew could get some sleep - ? 12

THE HASTIE STABLE The loss must have been reasonably foreseeable as a serious possibility - not merely reasonably foreseeable as a theoretical risk: “Lord Reid adopted the words ‘not unlikely’ as the test of likelihood … [in] the context of a well-shuffled pack of playing cards [he] described it as ‘not unlikely’ that the top card should prove to be a diamond (the odds being only 3– 1 against); but he considered that most people would not say that it was quite likely to be the nine of diamonds (51 -1 against). He accordingly appears to have contemplated a prospect of 3 -1 against as within the range of ‘not unlikely’; greater odds (though less than 51 -1) might also have been regarded by him as giving rise to a prospect which was ‘not unlikely’. ” 13

THE HASTIE STABLE Remoteness in contract v. Remoteness in delict Concurrent liability 14

THE HASTIE STABLE Date of Assessment of Damages 15

THE HASTIE STABLE Prescription A. M. N. Group Ltd. v. Gilcomston North Ltd. 16

THE HASTIE STABLE Thank you for your attention 17