CL

DAMAGES IN CONTRACT
Purpose: To place Pl in position (as far as money can do) as if contract had been performed
(Robinson v Harman)
Onus is on P to prove there is a cause of action, causation and remoteness. Onus on D to prove
Pls failure to mitigate unnecessary losses.
CAUSE OF ACTION:
1) [x] has a cause of action for breach of contract
Must prove actual loss for more than nominal damages (Erie County Natural Gas &Fuel Co case)
Rule: termination of the contract not usually required for P to claim damages (Luna Park v
Tramways)
Exceptions:
Anticipatory breach: -damages only recoverable if contract is terminated (Mason v
Sunbird Plaza)
Claims for expectation damages (loss of bargain damages) -damages only recoverable if
contract is terminated
Ready and willing to perform:
To claim damages for the Ds breach, the P must be ready and willing to perform their side of the
contract (Foran v Wight)

If the K has been terminated: where the P terminates the contract following an
anticipatory breach, the plaintiff need only show that this intention (to perform contract) existed
prior to termination (Foran v Wight)
CAUSATION:
P must show that the loss suffered was in fact caused by Ds breach of contract.
Single cause: but for: but for the defendants wrong would the P had suffered the loss or
damage complained of? (Reg Glass v Rivers Locking System)
REG GLASS v RIVERS LOCKING SYSTEMS

Contract to install security door

Breached it by installing incorrect door

Someone broke in
HELD:

Burglary would not have occurred if the breach had not occurred (but for test)

Multiple causes: March v Stramare: test of ordinary common sense and experience
Contributory negligence: Negligence of Pl can break chain of causation
LEXMEAD (BASINGSTOKE) LTD V LEWIS

P bought towing hitch to tow trailer

He saw that it was damaged but continued to use it

HELD:

P was Contributory Negligent

His own neglect (using something broken) caused his losses

Severed the chain of causation no claim

Apportionment? In Astley: HC held that he apportionment legislation did not allow for a reduction
in damages in any contract case.

Law reform act reversed it.

o wrong means an act or omission that:
Gives rise to a liability in tort for which a defence of contributory
negligence is available at common law; or
Amounts to a breach of a contractual duty of care that is concurrent
and coextensive with that duty of care in tort.
Eg go to dentist to have teeth repaired
Eg. book into hotel: concurrent claim in K and tort implied
term that wont slip and hurt your back.
o Apportionment s 10 CN can completely remove causation or be an
apportionment issue
(1) If a person (claimant) suffered damage partly because of the
claimants failure to take reasonable care (CN) and party because of the
wrong of someone else:
(a) a claim in relation to the damage is not defeated because of
the claimants contributory negligence; and
o (still have a claim despite CN)
(b) the damages recoverable for the wrong are to be reduced to
the extent the court considers just and equitable having regard
to the claimants share in the responsibility for the damage.
o (and damages will be reduced)

Novus actus interveniens:

Test: was the event reasonably foreseeable by def?

MONARCH STEAMSHIP V KARLSHAMNS OLIEFABRIKER

Ship chartered to carry cargo from Venturia to Sweden

Ship not seaworthy. War ready to break out

Government ordered it to unload in Glasgow because of the way

HELD:

No novus actus. They knew of the risk of war. It was reasonably foreseeable


ALEXANDER V CAMBRIDGE CREDIT CORP -

Auditors failed to give proper advice on their financials.

If they had known, they would have put it into receivership

Sued auditors for breach of K

Auditors blamed government- bad economic policies economic policies affected the company, not their failure to
perform their duty
HELD:
Cant say that the continued existence of the company caused the loss.
Actual effect of the economy after the breach of auditors was so big that it wiped away consequences of auditors
breach
To establish causal connection, P need only to show that it was one cause (common sense approach)

REMOTENESS
Test: Hadley v Baxendale: The loss/damage is not too remote if:
First limb
1) Damages arising naturally in usual course of things from breach of Contract itself
Direct loss
Presumed to be in the contemplation of the parties
Second limb

2) Was reasonably supposed to have been in contemplation of both parties at time of

contract as the probably result of the breach of it
Indirect loss
Innocent P to prove that D knew or ought to have known that
damage would be a probably result of breach
o And in contemplation of both parties at the time of the
contract
Mere knowledge is insufficient need an undertaking to bear the
unusual loss (As term of C or orally)

Undertaking to bear the unusual loss may be implied (Robophone

Finance Facilities v Blank)

Factors: what was Ds actual knowledge; payment If D received
something extra as part of the price for performance, it will be
easier to draw the inference that the D has accepted the risk for
unusual losses because the risk is reflected in the price. (premium
for the risk)

HADLEY V BAXENDALE

P owned flour mill. Krank shaft in mill broke. Had to send it away to get replica manufactured. Gave it to a
courier company and they took it to be repaired

Courier company breached K shaft arrived later than contracted

EFFECT: mill had to shut down for 5 days

HELD:

Courier not liable

Courier would not know that a failure to return would cause the loss in production that the plaintiff suffered

D liable for natural, ordinary loss

For others, you to need to show that at the time they agreed, the additional losses were in the contemplation of
the parties

NB: is special circumstances were communicated to P?

LIMB ONE: damages arising naturally in usual course of things from breach of contract itself
LIMB TWO: was reasonably supposed to have been in contemplation of both parties at time of contract as a probable
result of breach


VICTORIA LAUNDRY V NEWMAN INDUSTRIES

Washing and drycleaning establishment had K for supply of boiler

Boiler arrived 20 weeks late. Vic laundry didnt want to accept it.

Vic had secured a contract from the government to dye sheets. They therefore lost out on this contract because
of the boiler.
HELD:

First limb: ordinary losses would have been not being able to wash and dry clothes

Second limb: not satisfied (they wouldnt have contemplate that late delivery would cause them to miss out on
a contract.)


CZARNIKOW V KOUFOS

K was contracted to to ship sugar from Constanza to Basrah. Koufos arrived nine days late.

Sugar prices had fallen.

Czarnikow sued for loss of profits in the sale of the sugar.

HELD:

Loss was recoverable under the first limb of Hadley v Baxendale.

Although Koufos did not know that it was intended that the sugar be sold at Basrah, he did know that Czarnikow was
a sugar merchant and that there was a market for sugar in Basrah. This was enough knowledge for Koufos to have
contemplated that Czarnikow would suffer the loss in question.

Reasonably foreseeable that a delay or a different delivery date would have a lower price.


JACKSON V RBOS

Imported dog chews. Sold to second company who packaged them into different packages.

Both banked at RBOS. Payment was by a letter of credit

RBOS accidentally showed Jacksons client one of their invoices

Jacksons client terminated the contract

Claimed against bank for breach of contract implied confidentiality and

HELD

RBOS negligently exposed info

Another issue: loss of chance of future profits

H PARSON (LIVESTOCK) V UTTERLEY INGHAM

Farmed pigs.

Contracted with Uttley Ingham for machinery (hopper) to store pig nuts.

Hopper was negligently installed didnt leave hatch open. Pig nuts went mouldy. Pigs died.
HELD

Falls under first limb. natural result of feeding toxic food to animals is illness, and perhaps death

Future loss of profits were possibly under the second limb

PANALPINA INTL TRANSPORT V DENSIL UNDERWEAR

D made it clear that it was important that ht goods arrive in Nigeria in time fort he Christmas trade, but there
was no provision in the contract to that effect

Transport underwear to Nigeria. Arrived late on the 21rd of Dec.

Most xmas trade had passed

Q: would they have known Densil would lose huge profits?

HELD

Yes. Second limb.

There must be an undertaking to bear the unusual loss - it need not be a term in the contract an oral
undertaking may be sufficient.

Undertaking to bear the unusual loss may be implied (Robophone Finance Facilities v Blank)
o
If D received something extra as part of the price for performance, it will be easier to draw the
inference that the D has accepted the risk for unusual losses because the risk is reflected in the price.

MITIGATION
Damages can be reduced if :

P failed to take reasonable steps to reduce loss OR

P did actually take reasonable steps, and the loss was actually reduced

NB:

Attempted mitigation that increases loss is recoverable in damages (Simonious Vischer

& Co v Holt & Thompson)
Cost of mitigation is recoverable (irrespective of whether or not it was effective)

What is reasonable?

Accepting an offer to help from D (alternative performance or another contract)

(Payzu v Saunders)
If Ds breach enables the P to obtain benefits not otherwise available, the Ps gain
reduces the Ds liability (British Westinghouse Electric v Underground Electric Railways
Co.) credit for benefits
P not required to accept a new offer of employment from the D if the new job is a at a
lower status, even if at the same pay (Schindler v Northern Raincoat Co)

BRITISH WESTINGHOUSE ELECTRIC V UNDERGROUND ELECTRIC RAILWAYS CO

Made turbines in London underground.

Not powerful enough. Breach of K.

London underground threw them out and bought new ones which worked.

Buying new ones was reasonable mitigation.

But now they put themselves in a better position, so there was not an offset. Couldnt claim future losses. Could
only claim for the period they used them.
PRINCIPLE:

Aim is to put them back in the position they would be in had the breach not occurred.

Here, the new turbines put them in a better position.

P took reasonable steps (replacing the turbines) which reduced the actual loss so the future loss that they
would have otherwise incurred (had they not replaced the turbines) was not recoverable.



PAYZU V SAUNDERS

HELD

Buyer had a credit contract with the seller. Could buy silk. Seller cut of their credit and would only sell on cash.
They 1) repudiated it 2) offered to allow them to pay cash
Reasonable mitigation to accept to buy on cash because then they could have got what materials they needed.
The only loss they were entitled to was the value of the credit facilities (nominal.)

SCHINDLER V NORTHERN RAINCOAT CO

Employer purported to terminate employment contract

Wasnt entitled to.

Offered employee another position. Employee didnt take it.

Kept contract on food (affirmed it.)

HELD

Employee had no duty to mitigate. Couldnt say that he should have taken the other job.



WHITE & CARTER V MCGREGOR

Contract with McGregor to put ads on wheely bins.

On day it was due to start, McGregor wanted out. White & Carter put the signs up anyway (affirmed it) and did
it for 3 years.

NB: you can affirm a contract once it has been repudiated if:
o
You have a legitimate interest
o
You dont need the cooperation of the other party
HELD

White & Carter had no duty to mitigate (ie to sell the space to someone else.)


CLEA SHIPPING CORP V BULK OIL INTL

Ship was chartered (2 years). Ship had 2 months repairs. Party who rented it said they didnt want it. Owners
affirmed by fixing it and not renting it someone else
HELD

Unreasonable to affirm it because of the economic circumstances.

there is a line between conduct that is merely unreasonable and wholly unreasonable.

Anticipatory breach

When prior to the date set by the contract for its performance, one of the Ps makes it
clear that its obligations will not be performed.
When theres an anticipatory breach, innocent party can choose:
o Affirm the contract: ignore the anticipatory breach and hold other party to the
contract
No duty to mitigate. Contract remains on foot until time for
performance actually arrives
o Accept repudiation and terminat the contract
Duty to mitigate arises immediately
P can seek damages immediately (date for assessment will be date set
for performance.)

ASSESSMENT OF QUANTUM
To be assessed even if difficult to assess
Date of assessment:

Assessment at date of breach, but flexible

o Not followed if will cause injustice (Johnson v Perez)
Once and for all rule applies periodic payments cannot be given (Todorovic v Walker)

GOLDEN STRAIT CORP V NIPPON

K for charter of ship. Contract to run for 5 years. Had provision: if war broke out between
US and Iran, parties could terminate the Contract.
Chartered breached it: repudiated it.
Owner of ship accepted repudiation.

 Couple of weeks later: war broke out.

Went to arbitration. Court considered the provision.
HELD
P not entitled to the benefit of the rest of the K, only up to the war.

Not claimable: mental distress, hurt feelings, loss of reputation (Addis v Gramophone)
HEADS OF DAMAGE
Mental distress
Rule: no recovery in breach of contract

Except: the object of the contract is to provide enjoyment, relaxation, freedom from
molestation
CASES:
BALTIC SHIPPING v DILLON
Breach of K injured the P both physically and mentally

Ship sank

Generally no claim for lost feelings/ disappointment

HELD

Mental distress flowed form what the K was actually for. The object of the K was enjoyment.

Didnt allow full refund because she had 9 of the 14 days.

JARVIS v SWAN TOURS
Skiing holiday

Went on alpine skiing holiday

Description: amazing things

No house party etc

HELD

Generally no compensation for lack of enjoyment but that is exactly what they contracted for.

He got the bed etc but not the pleasure. awarded damages.

HEYWOOD V WELLERS
Ps solicitor failed, in breach of their retainer, to obtain an injunction which would have restrained a man from
molesting her

Put junior solicitor on a job. Injunction not granted because of the way the solicitors firm dealt with it. Didnt
get the restraining order on someone who was molesting the victim.
HELD

Allowed return of all lawyers fees she got no value. Proceedings useless.

RUXLEY ELECTRONICS AND CONSTRUCTION v FORSYTH
Pool mean to be a of a certain design and depth

Wanted a pool 7ft deep.

Pool only 6ft deep

HELD

Allowed a reduction. Compensated for the fact that youll enjoy it a little less.

FARLEY v SKINNER
Loss of enjoyment surveyor erroneously reprted that the land would not be affected by aircraft noise

Paid $420,000 on property and $100k on improvements. Near airport. Surveyor checked property before he
bought it. Surveyor didnt say the airport would be too loud.
HELD

Awarded $10,000 for distress.

Expectation losses
Purpose: put in position Pl would have been had the contract been properly performed

loss of profits or loss of the bargain

What profit would P have received if the contract had been properly performed?

Even if no net profit would have been generated for the plaintiff, it can still recover
damages for wasted expenditure or reliance damages.
Generally only available once contract has been terminated (Sunbird Plaza v Maloney)

Reliance damages
Ps actual costs or wasted expenditure as a result of relying on the Ds contractual promise

Reubttable Presumption: that the contract would not have been entered into unless
the costs were recoverable. P need only prove that the expenditure was incurred and
that it was reasonable. (Commonwealth v Amann)
Onus then on D to show: the wasted expenditure would not have been recouped under
the contract has it been performed.
o If P made a bad bargain (wouldnt have recouped all losses even if the K was
performed properly) then only entitled to damages for the amount that would
have been earned if it had been properly performed. principle P is not
entitled to be placed in a superior position due to the breach.

Payments made under the contract eg supplying team of workmen ready to work;
costs and damages associated with employing a subcontractor
CAN CLAIM BOTH reliance and expectation losses
o No double recovery allowed

McRAE V CTH DISPOSAL COMMISSION

Mcrae had K with Cth to salvage wreck of ship. They money to Cth (making the wreck theirs.) There was no
wreck.
HELD

Reliance damages for loss incurred for money lost in reliance.

Too difficult to award expectation losses- didnt know how much the wreck would have been worth
o
impossible to value a non-existent thing


COMMONWEALTH V AMANN AVIATION expectation losses

Amann got tender.

Signed Amann to do surveillance along coast of Aus. They had to get train staff etc to do the work. Very
expensive. Cost 5.5-6 million to get started (planes etc.) There were nowhere near ready to start on the
contracted date. Commonwealth terminated the contract, contrary to the contract: provision: to terminate the
K, would first have to engage the other party to show cause.

Amann sued Cth.

Amann did not get any income of out of this. They wanted to claim their losses.

In the first couple of years, they couldnt make a profit. Would only make it if it was renewed.

PRESUMPTION in CORPS LAW: If P proves that theyve incurred expenses, a presumption arises that they
would recover the costs in the contract. D bears the burden to prov that they would not make a profit.

HELD

Cth had not complied with terms of the K.

Court gave pure reliance damages
Couldnt prove theyd make a profit therefore no expectation losses.

Restitution damages

Can get back what you have performed.

D had benefit in circumstances where it would be unjust to allow D to retain it at Ps
expense.
o Solicitors fee returned for bad handling of the case (Heywood v Wellers)
o Awarded an amount for wasted salvage rights (Mcrae v Cth)

Indemnity damages

Purpose: to indemnify against loss.

Damages not part of the contract and not necessary for the performance of the contract
o AN EXAMPLE: new boat has been purchased and because of breach of contract,
negligent mounting of engine, caused personal injury. Claims for personal injury
possible as part of damages.
o CASE OF EXPLODING LIGHTBULB:

Damages awarded where defective light bulb result in death breach of
an implied term. Couldnt sue in tort no negligence alleged or proven.

Loss of an opportunity or chance

If treated as a causation issue then loss only recoverable if on balance of probabilities a

loss would have occurred (50%+) - tort
If treated as assessable head of damage (IN CONTRACT) then it is recoverable even
though the calculation of the loss cannot be precise.

LOSS OF AN OPPORTUNITY OR CHANCE

LUNA PARK V TRAMWAYS ADVERTISING

Advertiser didnt advertise as per contract

HOWE V TEEFY

Race horse leased to P for 3 years

Contract was breached when owner took horse back

Claimed for chance of winning, getting money from betting etc

HELD

Yes. Natural consequences of the breach. Not too remote.

JACKSON v RBOS (dog chew bank mistake case)

Losses for future renewals of the K

HELD

Over time, contract would have minimised and contract would have likely stopped. This reduced the damages
paid for loss of chance.


BURGER KING V HUNGRY JACKS

Contract since early 1970s that Hungry Jacks could sell franchises.

Disputes because Burger Kind terminate the contract.

HELD

Q: whether Hungry Jacks had suffered a loss by not being able to franchise

Yes. Potential loss of royalty income from franchise process.

Gratuitous benefits

P not entitled to damages for loss of benefits which the D not obliged to provide (NSW
Cancer Council v Sarfaty)
Court will look at express and implied terms to determine what P has lost
o Can include tips (Mannhaus v Leon)

Damage to reputation
Traditional view in Addis loss of reputation caused by a breach of K not available.

Addis does not apply to all breaches of K. injured feelings, disappointment, loss of
publicity and loss of goodwill have been compensated.

DAMAGE TO REPUTATION
ADDIS traditional view

Wrongful dismissal case.

Claimed for injured feelings and the fact that it would make it more difficult for him to obtain fresh
employment.
HELD

Not awarded.


FLAMINGO PART V DOLLY DOLLY CREATIONS

Fashion designer made designs for fabric

Contract with textile company stated: only to be used on good material and solely for her.

Dolly dolly took the designs and printed on other bad fabric for someone else

Affected reputation of the fashion house.

HELD

Injury to reputation was compensatable for breach of contract claim.

WHITE V AUSTRALIAN AND NEW ZEALAND THEATRES

White: pantomime artists.

Theatre appointed new producer who wanted to call the shots.

This affected their reputation

HELD

Compensation allowed for damage to reputation

Interest

P is entitled to payment when the cause of action arises

If payment is later, then interest for the period between the date on which te loss
acrrued and the date when the judgment takes effect
Purpose: to compensate for being kept out of their money (MBP v Gocic)
Not on all heads of damage not on those that represent loss after date of judgment

Exemplary damages
NOT AVAILABLE FOR BREACH OF CONTRACT

Even where the K has been breached maliciously or intentionally. (Butler v Fairclough)
If there is concurrent claim in torts, courts can award exemplary damages.
o Eg Tort of deceit
o Inducement of breach of contract
o Interference with contract. (Zhu- court awarded exemplary damages for
interference with contract)

TORTS

[1] Limitations of actions

Personal injury: actions for negligence, trespass or nuisance (contract or tort) involving
personal injury or death must be brought 3 years from the date on which the cause of action
arose.

Actions of contract and tort and certain other actions: actions for breach of contracts, or
actions in tort which do not involve personal injury must be brought within 6 years from the
date on which the cause of action arose.
(i)
Time begins to run on the date of the injury or the day the damage arises.

Extension in cases of disability: if Pl suffered from a disability preventing the bringing of an
action, the Pl may bring the action up to 6 years from the date on which the disability ended (or
the person died)

Ordinary actions: if a material fact (of a decisive character relating to the right of action) was
not within the means of knowledge of the Pl until a date after the limitation period has ended,
then the court may extend the limitation period by 1 year from that date.

[1] Cause of action
[x] has a cause of action in negligence for:
Property damage
Personal injury
[2] Causation
To prove causation under the CLA, the breach must be a necessary condition s 11(1)(a) CLA and
it must be appropriate to extend the scope of liability to [the harm caused.] To decide the scope,
the court is to consider whether or not and why responsibility for the harm should be imposed s
11(4). We must use CL tests to determine why responsibility should be extended.

Single cause:
BUT FOR TEST: Would [P]s [specific damage] have happened but for [D]s [wrongful act] on a
balance of probabilities? (Barnett v Chelsea Hospital Management Committee)
Multiple causes:
[D]s negligence need not be the sole cause of the particular harm, it need only be a necessary
condition. (Cox v NSW) In cases with multiple causative factors, Australian judges use test of
ordinary common sense and experience. (March v Stramare)
Proportionate liability: if there are multiple causative factors, the court can apportion liability
to reflect what the court considers just and equitable having regard to the extent of the Defs
responsibility for the loss or damage s 31(1)(a)
Exception: Personal injury claims are not apportionable. Therefore, [x] can only select
one defendant and if more than one person causes the injury, they can claim from each
other.
NOVUS ACTUS INTERVENIENS
[D] will argue that the intervening event [the collision with the ambulance] is an intervening
event that breaks the chain of causation. Therefore, [P] will argue that the subsequent event was
a reasonably foreseeable consequence of [D]s negligent conduct and that [D] is liable for all of
the damage.
Q: Is the subsequent event a reasonably foreseeable consequence of [D]s negligent conduct?
It [is/is not] rf , not fff, that [Ds negligent conduct] would result in [intervening event] as.
Its occurrence wont be sufficient to break the chain of causation if it is precisely the sort of thing
you would expect to happen. (Haber v Walker.)

Chain of causation broken by:

a) A human action that is to be properly regarded as voluntary (by a 3rd party or [P])
Suicide of [P] not truly voluntary as his mental state was such that he had been deprived
of making a free choice. (Haber v Walker)
Not truly voluntary for police officer to lose control of his car during high speed chase
because he was only responding to the danger created by the driver of the vehicle being
pursued. (Hirst v Nominal Defendant.)
Becoming addicted to drugs after primary injury was the voluntary choice of [P] and the
drug pusher (Yates v Jones.)
Alcoholism not caused by primary negligent act as alcohol consumption was truly
voluntary. [D] could be found to have caused it if it was the only way to relieve the pain.
(Havenar v Havenaar)
b) A causally independent event, the conjunction of which with the wrongful act or
omission is by ordinary standards so extremely unlikely as to be termed a coincidence
(Haber v Walker.)
A negligent driver running into a car parked in the middle of the road is not an
independent event; it is reasonably foreseeable in the ordinary course of things. -facts of
March v Stramare
D is not liable merely because [his/her] negligence brought the plaintiff into a position
where the plaintiff encounters an ordinary hazard of life, except where [D]s negligence
imposed a handicap upon [P] meeting that hazard. (Pyne v Wilkenfield).
Tripping over in hospital when recovering from primary damage could have occurred
anywhere and was not caused by [D] (McKiernan v Manhire)
Coincidence = being hit by a golf ball.
[3] Remoteness

In order to recover, [P] must show the damage suffered is not too remote in law.

The [specific damage-eg cuts] suffered by [P] must have been of such kind that the reasonable
man would have foreseen: Wagon Mound No 1. In this case, this [kind physical
injury/psychiatric injury] of damage would be reasonably foreseeable as it is not far fetched or
fanciful that [he/she] would suffer as a result of [Ds wrongful conduct]: (Wagon Mound No 2.)
o

Provided the type of harm is foreseeable, the extent of that harm and the precise manner
in which it occurred is irrelevant: Hughes v Lord Advocate;

Egg Shell Skull Rule: If [P] has shown that the damage is reasonably foreseeable, then [D] is
liable for any consequential damage, which results because of [Ps] peculiarities: Smith v Leech
Brain. The tortfeasor takes his victim as he finds him with all of his/her weaknesses and beliefs.

[4] Mitigation
[x] has a duty to mitigate losses flowing from Ds wrong.
Cost incurred in mitigation is recoverable from [D] if reasonable, even if the attempt
increased the loss.

TEST: what would a reasonable person in [P]s circumstances have done?

Takes into account actual circumstances of P. Previously the hospital deformed his
finger, wife had many unsuccessful treatments, he had anxiety. Held: no unrable failure
to mitigate his damage (Glavonjic v Foster)
P suffering from conditions casued by emissions from smeltering factory. Emissions
ruined his roof. Not fixing roof was no a failure to mitigate (Alcoa Minerals of Jamaica v
Broderick).

What if mitigation provides a benefit?

7yo tractor burnt down. Had to replace tractor and mower urgently to avoid crop losses.
Purchase new tractor. Had to account for the benefit. Circumstances: He was going to
stop farming and sell the tractor. Otherwise it may have been a different outcome. (Hoad
v Scone Motors)

D can give written notice to suggest specified actions P should take to mitigate. Court will
consider if P acted reasonably if he/she did not follow recommendations
Consider if D offered to pay.
Failure to follow can reduce award of damages if unreasonable.

[4] Quantum
Why? To put the P in the position as if the tort had not been committed.

Once-and-for-all rule: you have one chance to submit your claim. No provision for going back.
Award given by lump sum, but period payments available through statutory exceptions
CLA.
Why? Finality in litigation (Fitter v Veal)

Exceptions:
1. Substituted award by appellate (rare)
2. Where there are different causes of action (Brunsden v Humphrey)
3. A continuing tort, eg recurrent nuisance or trespass
4. Statutory exceptions allows installments to be paid s 63 CLA

Date of assessment
Damages assessed by reference to: date on which cause of action arose:
o Date of tort
o Date on which injury occurred/became visible
Court has discretion to fix own date to provide fair compensation
Date of judgment
o Damages for personal injury and defamation normally assessed as at the date of
judgment.
Heads of damage:

Future hospital and medical expenses
Injuries requiring further medical or other services
o Goods and treatment necessary for health and comfort
o Reasonable
o At home or in hospital whatever is fair to both P and D
o Sharman v Evans
Seriously injured in accident. Damaged brain stem. Unconcious for one
month. Could speak/walk and no control over basic bodily functions.
Suffered from epilepsy and struggled to breathe but was unconscious.
REMEDY: would be better to be cared for at home w minor adjustments.
The cost was double what it would cost to be care for in hospital.
CONSIDERATIONS:
o What would be reasonable between P and D
o No real evidence shed be better at home
o The court denied the request and based the remedy n
the cost of the hospital stay only
o REASON:
So its not punitive to D.

Gratuitous services (provided TO the injured person)
Services rendered by a family member without compensation
Would otherwise have been rendered by a professional
P is compensated

Capped by CLA s 59
Griffiths v Kerkemeyer
o Services provided free of charge. If P was not compensated, the D gets benefit
from familys good nature.
o underlying principle that it is a plaintiffs accidentcaused need which is
compensated
Damages calculated at market rate ie not the lost earning capacity of the carer its the need
that is created.
CLA: must have been provided for at least 6 hours a week for at least 6 months (see below)

Damages for gratuitous services provided to an injured person CLA s 59
(1) Damages for gratuitous services provided to an injured person are not to be awarded unless
(a)
the services are necessary; and
(b)
the need for the services arises solely out of the injury in relation to which damages are
awarded; and
(c)
the services are provided, or are to be provided
(i)
for at least 6 hours per week; and
(ii)
for at least 6 months.
(2) Damages are not to be awarded for gratuitous services if gratuitous services of the same kind were
being provided for the injured person before the breach of duty happened.
(3) In assessing damages for gratuitous services, a court must take into account
(a) any offsetting benefit the service provider obtains through providing the services; and
(b)periods for which the injured person has not required or is not likely to require the services
because the injured person has been or is likely to be cared for in a hospital or other
institution.

Gratuitous services (provided BY the injured person) s 59A

(1) Subject to section 59B, damages (section 59A damages) may be awarded to an injured person
for any loss of the persons capacity to provide gratuitous domestic services to someone else (the
recipient) if subsection (2) or (4) applies.
(2)
Generally, the court may award section 59A damages only if it is satisfied of all of the
following
(a) either
(i)
the injured person died as a result of the injuries suffered; or
(ii)
general damages for the injured person are assessed (before allowing for contributory
negligence) at the amount prescribed under section 58, or more;
(b)
at the relevant time the recipient was
(i)
a person who resided at the injured persons usual residence; or
(ii)
an unborn child of the injured person;
(c)
before the relevant time, the injured person
(i)
provided the services to the recipient; or
(ii)
if the recipient was then an unborn childwould have provided services to the recipient
had the recipient been born;
(d)
the recipient was, or will be, incapable of performing the services personally because of the
recipients age or physical or mental incapacity;
(e)
there is a reasonable expectation that, if not for the relevant injury, the injured person would
have provided the services to the recipient
(i)
for at least 6 hours a week; and
(ii)
for a period of at least 6 months;
(f)
there will be a need for the services for the hours and the period mentioned in paragraph (e), and
the need is reasonable in all the circumstances.

Future economic loss and lost earning capacity

Loss of wages and earnings after verdict
Loss of earning capacity not as loss of earnings
Not easily quantifiable
TEST:

(i) Earning capacity has in fact been diminished through negligently caused
injury
eg losing fingers may not affect earning capacity to teach
o (ii) reduction in earning capacity will cause a financial loss
Medlin v State Govt Insurance Commission
o Professor at Flinders uni. A lot of pain after injury. Impossible for him to do his
work. Retirement age at Flinders uni was 65. He decided to retire at 60. Early
retirement was the result of the injury.
Capped under CLA s 54
o 3 times average weekly earnings.
DEDUCTIONS:
o Discount rate ensures the lump sum payment takes into account NPV the 5%
rate- (CLA s 57) is part of an actuarial calculation.
o Vicissitudes of life
Must consider the probability of something happening (Malec v JC
Hutton)
When looking to the future, a chance is taken into account, provided
not trivial, not insignificant
Eg a 10% chance in future that P would become unemployable
in any event
Periods of unemployment, leave, illness, accidents

Superannuation

Cost of alterations to home
P entitled to recover cost of alterations to home to accommodate post-injury position
o Eg wheelchair ramps
Principle: where reasonable
Munzer v Johnston
o M seriously injured in car accident. 44 yo at accident. 48 when at court. Awarded
3.1 mil. Anniverary of her daughters death was coming up. Found drugs in her
system; Property 20ks from nearest town. House on the property was shed-like.
Had outdoor toilet. Bath- theyd raised it 45cm to wash the dogs.
o One option would have been for her to live in Gladestone. Q: should be be allowed
to stay on property? She had already decided to buy a kit home and put it on the
property.
o HELD: not unreasonable to allow her to live on the property even though cheaper
in Gladestone. The barn would suit her needs. She could also build her
hydrotherapy pool. Hydrop pool was 50k. Would be beneficial. Awarded the
projected cost of maintaining that pool. Also paid for hoist to get her in and out of
the hydrotherapy pool.

Loss of amenities and enjoyment of life
Loss of ability to consciously enjoy life to the full or to the extent that P would have
enjoyed it, had it not been for the injury
May include enjoyment and satisfaction you get from work
o Court will not award damages if not aware of the loss
Skelton v Collins
Permanent vegetative state. Alive but not conscious.
Sharman v Evans
Couldnt do anything. Life shortened, reliant on everyone. She
was aware of her loss.

Pain and suffering (past and future)
Includes physical and mental pain
Precise calculation impossible
o Difficulty does not prevent calculation (OBrien v Dunsdon)
o Capped under CLA s 61 and s 62
o

 General damages include pain and suffering and disfigurement

Loss of expectation of life
Lifespan shortened as a result of injury
By how much? Basis of calculation = historical tables of Aus Bureau of Statistics
Awarded for prospective happiness in period by which life has been shortened.
Capped under CLA s 61 and s 62
o non economic loss defined to include loss of expectation of life

Injury scale value
Work out where they fall on the scale. This will tell you the monetary range. Once you
have an injury scale value, theres no room variation of general damages.

Loss of consortium, loss of servitium s 58
Loss of partnership, friendship etc of a spouse.
Not for injured person but for the third party eg husband.
Statutory requirement CLA s 58
o Injured person died as a result of the injuries, OR
o General damages for injured person assessed (before allowing for contributory
negligence) at $30,000+
o Loss of consortium capped at 3 times average weekly earnings.

[4] Defences

Contributory negligence
Contributory negligence can defeat a claim
Reduction of 100% possible
Adjustment to be made right at the end.
TEST: Standard of care required: reasonable person in the position of the Pl, with
consideration of what the person knew or ought to have known CLA s 23(2) (a) and (b)
Volenti
Voluntary assumption of risk
Complete defence
(1) Knowledge (2) understood and accepted the risk (3) participated voluntarily in the
risk

Other CLA:
dangerous recreational activities presumption of awareness of risk, no general duty to
warn of obvious risks, and no liability if an inherent risk materialises.


Exemplary and punitive damages
Available for many claims in tort.

S 52 CLA:
RULE: Exemplary (punitive) and aggravated damages cannot be awarded for a claim for Personal
Injury
Exception: When the personal injury is cause negligently, but intentionally eg banana
peel left on flood hoping theyd slip.

Aggravated damages (PUT AS A HEAD OF DAMAGE)
Awarded to compensate for injured feelings or dignity
Not available for negligently caused personal injury
Available for intentionally caused personal injury; also trespass, false imprisonment,
defamation, assault etc
Actual physical injury may be insignificant although aggravated damages awarded for
injury to feelings or dignity
Plead specifically.


Joint and severally liable? Will depend on their involvement
Konstantiniidis v Foreign Media: liability of 4th defendant reduced because he did not
engage in defamatory conduct
RULE: aggravated damages are assessed on the basis of the particular malice of each
joint tortfeasor (De Reus v Gray)

Exemplary damages
Purpose is punitive
Also intended to deter and stop need for revenge and self-help that threatens peace and
order
Defs conduct to have been high-handed, insolent, vindictive or malicious, cruel, or
showing a contumelious disregard for the Pls rights
Often claimed, rarely awarded
If awarded in addition to compensatory/nominal damages, it will be a windfall
o General rule is that proof of loss is part of the gist of the action, then exemplary
damaged will be parasitic on such compensatory dmages must first satidfy the
host claim
Can have a claim for exemplary damages for negligence (Coloca v BO Australia)
Typically awarded separately to different defendants

XL Petroleum v Caltex Oil
Vandalised smaller petrol stations by putting things in their oil
Business damage was minimal
Exemplary damages awarded - $125,000

SELF HELP REMEDIES

Self help means providing a remedy that does not require judicial intervention (but still must be
within parameters of the law)
Self help and the law
Self-help actions may not breach the law
All of the risks which you attempt to avoid in K can be broadly considered self-help
remedies.
Self help remedies in CONTRACT
Contract may include virtually any terms
Contract terms are subject to rules regarding penalties and statutory provisions
Reasons for contractual remedies:
o Reduce hostility
o Prevention of disputes
o Avoidance of litigation
EXAMPLES OF NEGOTIATED CONTRACT REMEDIES
Progress payment clauses
o Eg pay only once work has progressed eg. building to windowsill height so that
you dont have to spent money until performance has been met.
Liquidated damages (fixed sum, predetermined, a genuine pre-estimate of the loss)
o Eg interest to be paid if late
Court interpreting it?
1. Look at ordinary/natural meaning of the clause
2. Interpret the clause by taking the overall contract into
considerationto establish intention of the parties (wont
consider the clause in isolation
3. Contra preferentum: if ambiguity, interpreted against the
person for whose benefit it was inserted.
o Renting while building a house ie important contract finished b 1st Dec. If not
contractor will pay you the cost of rental to compensate you for the loss you
would have suffered
Right to terminate for serious breach
o Eg a timing is of the essence clause makes any clauses about timing a
condition therefore can terminate for breach
INTERPRETATION OF SELF-CREATED CONTRACTUAL REMEDIES
Aim: to give effect to the intention of the parties
If a term has been designated as a condition, generally seen as a serious term
o But not if result would be so unreasonable that court may decide that it could
not have been the intention of the parties

Schuler v Wickham
Condition that agent visited all of the customers once a week.
Court had to look at how it would interpreted strictly
HELD: although ordinary meaning made it clear that not visiting was a breach,
when they looked at the overall K and all of the things that the agent had to do,
the court said that the clause did not take into consideration reasons that this
couldnt happen (eg sick) so it couldnt be the intention of the parties to require,
without exception, agent to visit every customer.
o Not a condition even though they said it was

Penalty clauses
o Acceptable if a genuine pre-estimate of damages not punitive

Dunlop Pneumatic Tyres v New Garage
Dunlop wanted a minimum (list) price no matter where theyre sold
K said we agree to pay Dunlop 5 pounds for every tube, tyre etc sold in breach
of this agreement by way of liquidated damages and not by way of penalty
IMPORTANT: how to distinguish between liquidated damages
(purpose=compensate) and penalties (purpose=to punish)

1. TEST: what does the purpose appear to be?

Terrify? Ie. Will people perform for fear of paying penalty. If to
coerce/punish penalty. NB: sheer size may indicate that its
a penalty
Is it a genuine pre-estimate of the damage? If yes, liquidated
damages clause.

HELD: difficult to determine loss arising from each particular tyre sold. HELD: this was a
genuine pre-estimate, especially if lots of tyres are being sold below the list price.
LIQUIDATED DAMAGES VS PENALTY CLAUSES
o Withholding: If youre taking away more than you would receive, likely a penalty
o Fixed charge: if no matter whether the breach is big/small youll be charged $80, then
pure penalty because its not linked with what actual loss is likely to be incurred.
o If its outrageously high prob a penalty (not a genuine pre-estimate of the loss)

SELF HELP REMEDIES IN TORT
Abatement of nuisance
o Privilege of abatement (do something to stop it within parameters of the law)
o Only what is necessary to avoid the harm
o On own land
o If on land of the creator the nuisance possible trespass and would need strong
justification
o Requies notice to the owner
Unless immediate danger to life or health making it unsafe to wait
(Traian v Ware)
o Need not wait for loss to occur can be pre-emptive
o But need to be careful because you need proportionality
o Abatement damages before can be claimed, but probably not for damages AFTER
abatement (because once you abate youve taken away the loss)

Traian v Ware
o Went onto neighbours land and broke the bank because it was damming up the
water.
o HELD: self help remedy had been used high-handedly. D could have contacted P. P
could have channelled the water elsewhere. The lack of notice meant it was a
trespass to property.
o Principle: only reasonably measures which are necessary to avert the
harm/avoid the loss (proportionality) can be taken.
Abatement:
1. Give notice
2. The cost is born by the person abating
a. BUT if youve acted to mitigate, you may claim the cost
3. Must be reasonable
4. Cant do significant damage
5. Avoid force
6. If entering someone elses land, must have good reason.

Tort- trespass
o Evict uninvited intruders/trespassers
o May use reasonable force to achieve that purpose
Person who takes these steps must prove:
1) there was a trespass
2) the steps taken were reasonable (what is rable depends on facts)
o Proportionality is important
o Should ask them to leave first
o Defensive action against trespassers
o Intention is important
Deterrent or retributive?
o

Would depend on the nature of the attack, whtehr it is propery or person

attacked, and currently applicable legal and social standards as to degree to
which property may be protected

Bird v Holbrook Shooting guy who was stealing his bulbs
Tulips reached exhorbitant prices
Farmer had trouble with people stealing his bulbs
He set up a spring gun whoever tripped the wire would be shot by
pellets (it wouldnt kill them)
HELD: not a valid self-help remedy. Problem: the degree of force used but
mostly the purpose:
o If it was a deterrent it would have been visible.
o Here- punitive (retributive)
o Taking law into own hands. It was malicious.
Principle: self help remedy has to commensurate with what would be a
legal penalty. Cant inflict more harm that what would be a legal remedy.

Squatters
o Can also evict persons in possession of property and squatters
o Can use force that is reasonably necessary
o Persons with some lawful right/previous lawful right
o Need to use legal process
o Chattels or good that can harm property or inhabitant/owner
o Eg Frisbee in neighbours yard.
o Reason for trespass is it serious? What is socially acceptable? Circumstances
will determine what is reasonably necessary and then what is proportionate.
Tort- defence against trespass to person
o Can defend against attack with force but not a greater degree of force than is reasonable
when protecting human life
o What is reasonably necessary?
o Question of proportionality
o Self-defence defences can be rejected if force is excessive
o Fontin v Katapodis
o Argument in hardware shop.
o Katapodis accused F of stealing something that he didnt.
o F hit Katapodis with a stick. Other employee came to help. Katapodis took a
piece of glass to defend himself which caused harm to F.
o HELD: not proportionate. Not acceptable self help remedy.
o Underhill v Sherwell
o Her injuries indicated some sort of force
o He has to show that it was reasonable in the circumstances.
o

Specific Performance
What is it? Order from court that directs a party to perform the agreement.

It can be a threatened or actual breach.

Narrowly:
Executory contracts

In a wider sense:
Executed contract
Contract with consideration

Available if:
1. An agreement (TEST 1)
2. Breach or threatened breach of agreement by Def (TEST 2)
o But contract cant be terminated
3. CL damages would be an inadequate remedy TEST 3
4. No discretionary defence or denial to disentitling relief. TEST 4

[ELE 1]: Agreement
Either:
1) Agreement that is enforceable

2) Unenforceable agreement that can be made enforceable by doctrine of Part Performance (in
equity)

Unenforceable if:
K is uncertain
K has been rescinded by the Pl

Doctrine of Part Performance:
Transaction unenforceable at law or under a statute may be enforced if equitable doctrine of
part performance has been satisfied.
o Eg: where there is an oral agreement that has to be in writing through statutory
requirement
Purpose of doctrine: enlarge part performance to full performance
o Mainly applies to land.

Maddison v Alderson housekeeper on farm
o A had oral agreement with housekeeper, M, that he would give her a life estate in
the farm
o She would then work for free
o He didnt leave it in his will
o AT CL: had to be in writing
o PART PERFORMANCE:
Evidence of existence of K
HELD: living on a farm and working for free is not part performance.
Actions must be unequivocally referrable to the promise. That was not
the only reason she performed the services.

Kouri v Kouri selling house to brother
o 7 brother and sisters.
o Some of them bough a house. 2 lived in it.
rd
o 3 sold his ownership to his brother, B (who paid him).
o All done orally, not in writing.
o B also repaid some loans his brother had to get the house.

o
o

He didnt get the house

HELD: he did not perform the actions of an owner

[ELE 2]: Breach or threatened breach of agreement by def
[X] has [breached/threatened to breach] the agreement by []

K must not be terminated:
[X] has terminated the K by [], therefore specific performance is not available.

[ELE 3]: CL damages would be inadequate
Damages are inadequate if they cannot satisfy the demands of justice. Justice to a promisee may
require that a promisor perform what he has promised (Zhu v Treasurer of NSW).

Sale of racehorse
Publication of an apology
Contract to settle litigation
Land
o Equity always ordered SP for contracts for sale of land
No real substitutes, land may have a peculiar and special value (Adderley v
Dixon)
o Remedy usually has to be available to both purchaser and vendor (mutuality)
Money
o Damages generally adequate for breach of K to pay money
o Except
If purchaser can obtain SP, then the vendor can also obtain SP
If damages inadequate (some indemnity contracts, security contracts,
contracts for payment of money and land)
(Loan Investment Corp. v Bonner)
o Combo of sale of property and a loan attached
o Breach: failure to grant a loan
o HELD: no SP because they were so interlinked
rd
Agreements to pay money to 3 parties (privity doctrine)
Coulls v Bagots Executor and Trustee Co
o Agreement to quarry a property and would pay for the
rights when did did privity prevent her from claiming?
o HELD: she was a third party
Beswick v Beswick
o Uncle sold his business to nephew in exchange for sale of
business. Agreed to pay him an amount each month for
the rest of his life.
o After uncle died, would have to pay wife 5 pounds every
week.
o She sued because she was the executor of the estate.
o HELD: No. Not because she didnt follow the right process
but because he had passed away. (agreement was to pay
the husband.)

Goods (personal property, chattels)
o Generally, contracts for sale of goods not specifically enforceable
o Except
If article is of unusual beauty, rarity or distinction (original painting,
vintage) damages will be inadequate

Not inadequate if: supply is merely low (temporarily)

Cook v Rodgers
o Sale of car after WW1
o HELD: mere temporary unavailability of car did not mean
that damagers were inadequate
Dougan v Ley
o K for sale of taxi after WW1. Vehicles were rare.
o Taxi license was attached to the car had to buy vehicle
with license (licenses were rare and hard to come by)
o HELD: taxi unique. Damages not an adequate remedy
Doulton Potteries v Bronotte [FIX THIS]
o Dye.
o Breach: repairer and Doulton
o HELD: mandatory injunction because dye was
irreplaceable. If you wanted to make a copy you reduced
it.

Personal services
Damages may not be adequate if the services of a particular person are required.
Often not possible to obtain SP because of discretionary factors.

-slavery: forcing someone to work for someone else.
Intellectual property
These rights are unique
Contracts concerning patents, designs, copyright or trade marks are specifically enforceable
if damages are inadequate
Goodwill and business assets
Chattels with business value SP possible
Stocks, shares and securities
SP not available unless a type of share is not readily available on the market




[ELE 4]: No discretionary defence of denial to disentitling relief

[1] Continuing supervision: courts may refuse order of SP if the continued performance o the K will
require continuous supervision of the court

Ie its likely the dispute would continue and the SP would not solve the problem
o Carrying on a business:
Courts will not order a business to be carried on over an extended period
of time (Cooperative Insurance Society ltd v Argyll Stores)
o Building and repair covenants:
Courts do grants orders of SP in building and repair covenant cases despite
the need for supervision provided the terms of the order is precise
(Cooperative Insurance Society ltd v Argyle Stores)
A entered into lease with company who owned shopping centre for
35 years
After 15, close up shop (breaking K). They were head tenants
when they left, it affected the income for other tenants.
P wanted SP to make A open up their store
Here, damage may be inadequate
Must think about the practicality of this order can you calculate
the $$ effect on other tenants?
HELD:

o
o
o

If we order them back in, the K doesnt say exactly what

is considered trading for it to be performed.
Considered burden on the D, compared with the loss the
landlord has suffered.
SP NOT granted.

Effect of ignoring an order for specific performance: contempt of court

[2] Personal services: Courts traditionally do not award SP for breach of K for personal services
Reasons:
Would require constant supervision of the court
May compel unwilling parties to maintain personal cooperative relations
Difficult to enforce because performance of personal service contracts involve matters of
personal opinion and taste (eg. not performing it to the best of their ability) (Lumley v
Wagner).

Look at:

[1] Hardship
[2] Clarity with which services has been described (Posner v Scott-Lewis)
[3] Continuous supervision
[4] Whether terms would be too harsh on D if enforced (De Francesco v Barnum)

De Francesco v Barnum
o Dancer: obligations onerous
o She wasnt allowed to get married etc. He had hardly any obligations
o SP wouldnt be granted because of the harsh terms
Lumley v Wagner
o W was opera singer. Promised she would only sing at the Globe and to only play for
this one guy.
o If court ordered her to sing in Lumleys theatre + she was spiteful, she would sing
poorly.
o SP not possible here.

[3] Mutuality: Should be capable of being awarded to both parties

Court is reluctant to do so but has discretion to grant the P SP even though not available to the D
Examples of lack of mutuality:

P has already performed obligations

P has not performed obligations but that breach can be compensated for in damages
D is guilty of fraud or unconscionable conduct

Price v Strange
o P wanted to rent house from S. S was a tenant. P would become sub lessee.
o Deal: in exchange for renta, she would:
Ds obligation: grant sub lessee to price
Prices obligation: to do repairs inside and out
o Before lease was granted, she kicked him out. He had already done the inside.
o She ended up doing the outside.
o She argued: No mutuality nothing left for him to do
o HELD: allowed him in to do the work he thought he was getting sub-lease.
Created an equity against her. It wasnt his fault that he didnt do the
outside: she did that.

ORDERED SP.

[4] Hardship: Reluctant to order SP if it will cause undue hardship or unfairness to the D.

Examples:
1. An unfair or low purchase price for the defendant vendor (Farrell v Bussell)
2. An erroneous valuation fixed the price of the contract (Legal & General Life of Australia v A
Hudson)
3. Enforced removal of a physically disabled defendant vendor with children from property
where she was able to receive help form relative and friends who lived close by (Patel v Ali)
4. The land purchased by the D would be subject to forfeiture (Norton v Angus)
5. The order would expose the defendant to prosecution (Pottinger v Genge)
6. The defendant lessor of a hotel would be required to undertake many costly repairs and pay
taxes without receiving rent or profit for many months while the plaintiff retained possession
(Dowsett v Reid)
7. The defendant would be required to run a business at a loss (Cooperative Insurance Society
v Argyll Stores)
8. The defendant would be forced to become the reluctant proprietor of a brothel (Hope v
Walters)
9. The defendant would be required to maintain a joint venture after an irretrievable
breakdown of relations (Cannavo v FCD)

Longtom v Oberon Shire Council quarry

Farm land. Council had rights to build a quarry. They gave a covenant: would repair and
restore after they had finished.
It was going to cost $360k. Council pleaded hardship
Mere financial hardship not enough.
Something more required.
P couldnt see the quarry from the house. Value of farm unaffected by quarry. No real benefit
to having it filled up.
If claimed in damages, wouldnt get much. Court saw it as a bargaining chip.

[5] Ready and willing to perform:

At all material times, P must be ready and willing to perform the substance of the contract.
Mulkearns v Chandos Developments
P generally shows that P is not able and willing to perform by showing the P is in breach

Must be a breach of an essential term

Green v Somerville

Purchaser of land arrived at settlement without enough money delayed settlement

Allowed to move into property
Agreed on new settlement date
She didnt have the money to pay the interest. She said she wouldnt pay the interest because
she paid rent.
HELD: the fact that relied on an incorrect interpretation of the K didnt make her
unwilling/not ready to perform.
o QUANTUM: paid interest less a deduction for the rent (ie the amount already paid)

[6] Unclean hands:

Unmeritorious conduct

Only conduct that relates directly to the equity (equitable remedy) sought
Examples:

Fraud
Undue influence by the P

Not unmeritorious

Hard bargaining sharp practice

Innocent misrepresentations
Unconscionability

[6] Futility:

If SP futile court may refuse order

o Eg restoring property that will be demolished next month
If D establishes that the performance of the Contract is impossible order of SP refused.

Iambic v Northwind holdings

Not futile to order SP of a K to sell shared in a private company where the purchaser could no
longer afford the agreed price.

[7] Delays:

Mere delay not enough unless it amounts to an:

o Acquiescence
your conduct appears youve accepted the circumstances
o Lache
your delay has caused some sort of injustice

Lamshed v Lamshed

Degree of promptness depends on the nature of case and circumstances.

Waiting 6 years = too long.

Fitzgerald v Masters

Delay of 26 years = not too long.

RECTIFICATION
[1] Written instrument
Incl. deeds, insurance policies, bonds, documents, conveying gifts
[2] Mistake by the parties as to contents or effect
Traditionally
Maralinga v Major Enterprises

Vendor (seller) of property said to auctioneer when you auction my property, these are
the terms Im willing to accept
o I will take the first $75,000 of the purchase price in cash and the balance, I will
grant a mortgage on (I will lend the money to the buyer over a period of 3
years.)
When the K was actually written, the finance option was not reflected in the document.
The house was sold for $155,000 so it was the $80,000 that would have been under the 3
year mortgage.
At the time the contract was signed, it was known that there was a mistake in the
contract. It wasnt a surprise later.
The buyer didnt think that would preclude him from getting the mortgage.
HELD: rectification not granted bc it was a mistake with regard to the effect, not the
contents.

Modern View: It would have also covered that where it was about the effect of the contract.
Commissioner of Stamp

Parties intended that the trust deed had to be amended so the company would become
an income beneficiary.
Document drafted, which made the company a capital beneficiary and the company
incurred some additional duties as a result
It was an issue with the effect of the way it was drafted
HELD: rectification ordered to fix the contract to reflect the true intention between the
parties.

Will provide rectification as remedy for unilateral mistake where defendant takes advantage
unconscientiously of a mistake:

Medsara v Sande (2005)

6 adjoining lots of land (w 6 different owners)

lots bought up and sold to a developer for $5mil.
Although they were individually owned, all of the individual contracts were dependent
on the others.
Put in a call option to the developer- meaning he could call up his option to buy within a
certain period of time. If he didnt do so, the owners had a put option, meaning they
would put it to him to buy the property and he would then be obliged. Both of them were
really protected.
It was important to them that the sale would be concluded by a certain date.
The completion date was a year later than what they had really wanted.
The undertone of this cases is that it was a mistake made by the solicitors.
Developer (M) knew the mistake had been made.
He didnt make the mistake, didnt intentionally do that or deceive them (eg no fraud or
deceit) but you do have unconscionable conduct
HELD: rectification allowed to reflect intention of the parties even though it wasnt a
common mistake.

[3] Intention of the parties as to what instrument should contain at the time of execution

Must how evidence that the written instrument does not reflect true and concurrent intention of
both parties at the time of execution of the contract.
Not the time of negotiation
The term must have been actually agreed upon and either not included or incorrectly
included

Slee v Warke

Option to lease a Victorian hotel

Negotiated that the contract would contain an option to purchase the hotel, but the
purchase had to be completed within the first year of the rental.
The document was incorrectly drafted and it granted the option whenever (not just
within the first year)
Tenant (W) noticed this. She though that the owner of the hotel must have changed his
mind.
At the time of the execution of the contract the two parties did not have the same
intention- the tenants intention was to execute it at any time, whereas the intention of
the landlord remained the same that it should only be exercisable within the first year.
Therefore, because they did not have the same intentionrecificiation not ordered.
Landlord lost out
Need concurrent intention

Antecedent K unnecessary
Previously it was necessary to show an antecedent (often oral) contract but approach now
more liberal.

Jocelyn v Nissen

J and his wife were tenants

Out of this house he ran a car rental business
He ran into financial difficulties and his daughter came to the rescue
She bought the house that he rented so that her dad could keep on running the business
and she and her husband would live in the top part
They made a written agreement (dad and daughter)
At one stage her mother became ill and the father spent more time looking after that.
The daughter became more involved in the business
Made a written agreement that he can continue living in there forever and that she can
take over the car rental business.
Daughter paid for electricity and gas and the father basically lived there for free
Somebody had a look at agreement and told her that she was not obliged to continue
paying gas and electricity. It was not appropriately drafted.
Mr J approached the court and asked for a rectification fo the contract
Daughter argued we had no antecedent oral contract before the written agreement and
therefore you cannot get rectification
HELD: rectification granted because there was some outward expression of the intention
of the parties.
Still have to show the common intention but dont have to show an antecedent
agreement.

NB: Key point in this element: intention must be actual- not presumed and there must be
convincing proof of it.
[4] Discretionary factors

Refused only in exceptional circumstances
NO RECTIFICATION IF:
Contract is incapable of performance
Contract has been fully performed

Intention is illegal
If right to rescission exists, and rescission is preferred by Pl
o Ie walking away from it if its available and the parties prefer it, the court
wont grant rectification.
NB: just because a party didnt read the contract does not mean that rectification is not available.

 EQUITABLE COMPENSATION

Eg. if you wanted to donate coins to someone and we give them to Louise for that persons
benefit. Louise does something different with the money. Here, theres no contract, its not a tort,
no statutory breach buuut its a breach of a fiduciary duty
Exclusive jurisdiction

Eg. misapplication of trust assets

Breach of trust

Youyand v Minters (breach of trust)

Minters held half a mil on trust for Y

Idea: they would subscribe to shares in a company with that (so they would be the
trustee or agent when they bough the shares)
They released the amount for the purchase of the shares in two instalments. They did
that without getting any security for the money they paid over
Breach of trust
HELD: equitable compensation
o It was because of the actions of minters that the money was lost

[1] Does the court have jurisdiction for Specific Performance or injunction?
They can be awarded in the place of or in addition to SP or injunction
[2] Discretionary factors
Equitable damages not awarded as a matter of right.
Sayers v Collyer

Contract between the two for the rental of premises

D not allowed to use the premises for the purposes of a bottle shop
He did.
For 3 years, the plaintiff didnt complain he even bought beer from there
Breach of K.
Possibly a negative covenant in the contract (could get an injunction)
HELD: court did grant injunction because of the acquiescence accepted the breach and
done nothing about it. That ruled out equitable damages for the same reason

Court can award both

Can be awarded in addition to specific relief but duplication of relief to be avoided

(Grant v Dawkins)

Can award equitable damages instead of specific relief

Eg if specific relief has become impossible during the litigation process
Damages can be awarded in substitution for an injunction, IF: (Shelfer v City of London
Electric Lighting Co)
1.
2.
3.
4.

Pls injury to legal rights is small

Injury is capable of being estimated in money
Injury can be adequately compensated by a small money payment
Would be oppressive on D in the case to grant an injunction

[3] Wrongful act

Equitable damages can be awarded for any wrongful act

Torts

Breaches of statutory prohibitions

Equitable wrongs
o Authorities recognize a jurisdiction for breach of confidence where the duty of
confidence was purely equitable in nature.

Future loss/injury about to happen

Industrial Carpet Society v Slack

Building buildings which would cut out the light when they were completed
Ie. A right to light case but the buildings were under construction
cant claim in CL because
Can claim in equity.

[3] Assessment of damages

Follows CL principles of assessment in concurrent/auxiliary jurisdictions (Johnson v Agrew)
Governed by the compensation principle: to put P back into the position he would have been in
had it not been for the wrong
Qualification: damages can be awarded under Lord Cairns Act even where damages at CL not
available.

RESCISSION
What is it? Reversal of a transaction so that each party is restored to its original position.
In CL (for contracts) and in Equity (gifts etc)
Available if:
5. Contract (TEST 1)
6. Vitiating factor in formation (TEST 2)
7. An election to rescind the contract TEST 3
8. There are not bars to restitution (restitutio in integrum) TEST 4
[ELE 1]: Contract
[x] and [y] had a contract.
[ELE 2]: Vitiating factor
[z vitiating factor] is a wrong recognised in equity, which renders the contract voidable.
Misrepresentation
Mistake
Duress pressure eg holding gun to your head
Undue influence overbearing manner to persuade someone
Unconscionable dealing letting someone with a disability be taken advantage of
[ELE 3]: Election to rescind
(i) choice available:
[x] may choose to:
terminate and claim damages; or
rescind and obtain restitution
As [x] [was] aware of the [facts allowing the rescissionvitiating factor of] and of [his/her] right to
rescind, [he/she] [may] elect to: rescind and obtain restitution. (or alternatively may terminate and
claim damages)
NB: you may be held to have elected to affirm even if you didnt have knowledge of your right to
terminate. (Khoury v Government Insurance Office of NSW) CL 205
(ii) election:
If [x] chooses to rescind:
[he/she] extinguishes the right to enforce contract or claim damages
If [x] doesnt elect to rescind or terminate:
affirmation of the contract extinguishes [his/her] right to rescind it.
o Actions can amount to affirmation
The words/conduct of election must be unequivocal. Once made it is irrevocable. (Sargent v ASL
Developments) CL 204
(ii) timing: immediate rescission not necessary (as long as they havent affirmed before they try to
rescind)
[ELE 3]: Restitutio in integrum bars to rescission restoration to precontractual position
Rescission relieves parties of obligations yet to be performed under the transaction, and reverses
anything done under the transaction.
Not possible if (bars to rescission)
Property has been destroyed or has deteriorated
Property passed under the contract has been acquired by a bond fide 3rd party (because they
have acquired property rights in it.)
Scope of rescission
Complete restitution is not possible because [piano broken/business doesnt exist] so will not be
ordered under Common Law.

However, if substantial restitution can be obtained, partial rescission may be ordered in equity where
that is necessary to achieve what is practically just between the parties. (Maguire v Makaronis)
Rule: the court will limit the transaction to the extent that [P] would have been willing to enter
it even without the misrepresentation (Vadasz v Pioneer Concrete).
Timing: restoration will be done as a the date of judgment, not as a the date of election (Alati v
Kruger.)
In equity:
Alati v Kruger shop case
o K bought fruit business (ele 1 contract to sell)
o A misrepresented the potential turnover and didnt mention that a supermarket was
about to open across the road (ele 2 vitiating factor)
o Made on average 30 pounds/wk rather than 100 pound/wk
o K had to close it down
o When applied for rescission there was no business that could be returned (restitutio
in integrum not possible at CL)
o HELD:
the business closing was not Krugers fault
QUANTUM:
take back the business and the money paid for it
deduct stock sold to third parties and the profits made
can make allowances for deterioration
OSullivan v Management Agency and Music
o O was a musician. Had K with MIM (ele 1 contract)
o MIM made many misreps about the contract (ele 2- vitiating factor)
o When applied for rescission, contract had been performed (restitutio in integrum not
possible at CL)
o HELD:
Rescission still possible
QUANTUM: got back the copyright in his songs and the master tapes. MIM
had to account for their profits but were given credit (incl small profit
element) for their skill and labour in promoting the claimant and making a
significant contribution to his success.
Vadasz v Pioneer Concrete
o V was a company director
o Was asked to give a guarantee on company debts otherwise supplier would not
continue to supply (ele 1- contract)
o He thought he was just guaranteeing future debts (ele 2 vitiating factor: mistake)
o The contract covered past and future debts
o HELD:
The court only rescinded the contract to the extent of past indebtedness
He had promised to guarantee the future debts so he couldnt have his cake
and eat it too ie wouldnt rescind it all
Maguire v Makaronis
o Maguire was Maks solicitor, who were buying a poultry farm
o Maguire provided a link between Maks and the Commonwealth bank
o Maguire set up a deal for them to get a mortgage
o Maguire was a nominee (essentially acting for the bank)
o Problem: a solicitor advising a client cant become a party to the loan transaction and
he didnt disclose it.
o HELD:
Entitled to rescind.
Loan couldnt be set aside because Maks would get a windfall.
So rescinded on term: mortgage to be repaid with interest.
Court rescinded the mortgage but put an obligation on them to pay back the
amount they borrowed.

RESTITUTION
What is it? A cause of action outside contract, tort or equity and a remedy
Basically a profit-based/disgorgement remedy.
Examples of restitutions for wrong
Mistaken payment (CoA in restitution)
o Remedy=give the money back (restitution)
Breach of confidence leading to profit (CoA in equity)
o Possible remedy = give up profits made (restitution/account of profits)
Account of profits are for equitable wrongs (wk 11 lecture)
Trespass leading to profit (CoA in tort for trespass to land)
o Possible remedy = give up the profits made (restitution)
Restitutionary causes of action
Money had and received
Mistaken payments
Payments made under duress
Money paid and consideration failed totally (in a contract)
Quantum Meruit
Claim for payment as much as it was worth or reasonable value of services received
where contract cannot be enforced.
Restitution as a remedy
A remedy for causes of action in restitution
Also for certain torts certain recognised categories
Common law wrong
o Eg property wrongs
Such as in torts trespass, detinue
o Unclear- fraud? Defamation? Assault?
PROPERTY WRONGS
Pl can choose to have damages assessed on a restitution basis instead of a compensatory basis.
[ELE 1]: [Def] must have been enriched at the expense of [Pl]
It is irrelevant that [P] has not lost anything.
[ELE 2]: Quantum
Gain from unauthorised use of equipment (trespass to goods)
Rule: if theres no loss to P, restitution can be measured as equivalent rental of such a piece of
equipment, which is the saved expense (Olwell v Nye & Nissen Co)
Gain from trespass to land
Rule: if theres no loss to [P], restitution can be calculated by measuring the benefit to [D], which is
the saved expense (Penarth Dock Engineering v Pounds)
Quantum: is normally calculated by the market value of rent for the period of the trespass (Penarth
Dock Engineering v Pounds).
Exception: if the market value is unjust in the circumstances, the court may make a subjective
devaluation (Ministry of Defence v Ashman)
Gain from trespass to goods (detinue)
Rule: P is entitled to the value of the benefit to the D without P having to prove any loss.
NB: it is irrelevant that the goods retained may not have been hired out for the entire time if D did have
them in his possession (as this is the loss to the P- and would be considered in an action for tort, but
this is an action for restitution.) (Strand Electric & Engineering Co v Brisford)
Olwell Nye & Nissen Co

Plaintiff sold their business to the D but terms of sale: P to retain ownership of egg-washing
machine. P stored in a space next to the premises occupied by D.
D took it out of storage without Ps knowledge and used if or the next 3 years.
Tort: trespass to property
No loss to P there was no damage to the machine and he could still wash his eggs with it
HELD: even though there was no damage
o BASIS OF CALC:
D made a saving in labour costs and not having to hire it from elsewhere by
using the egg washing machine
the loss lies in the very essence of property- its exclusive use
Awarded 10 pounds a week

Penarth Dock Engineering v Pounds

P sold a pontoon to D
Terms of contract: pontoon to be moved away from the berth. D didnt move it away.
Claim brought in trespass for mooring the pontoon onto Ps property
No loss to P
HELD: even though there was no damage D infringed Ps exclusive right of use to land
o BASIC OF CALC:
How much they would have to pay elsewhere.
LJP Investments v Howard Chia Investments
2 adjoining properties
Asked permission from P to let scaffolding hang over. P said he would let them for $30,000
D did it anyway without paying
No loss to P
HELD: initial amount quotes indicated the value that P placed on the infringement of his
right.
o BASIS OF CALC:
If D had not infringed Ps right, D would have had to build a smaller a
building or build further away from the fence.
Edwards v Lees Administration
P had part of cave on his property. So did D. But D had entrance.
D capitalised on this by building hotel and running tours.
P wanted compensation for trespass.
HELD:
o Rental not appropriate way to calculate the restitutionary remedy because rental
implies a long period of occupation. Here, he just trespassed at regular intervals.
o BASIC OF CALC:
Real profits D made out of using their cave.
Brochures advertised all 31 caves, 12 of which were under Ps property
Remedy based on the licence- amount to be paid to waive the trespass.
Awarded cave profits proportionate to the number of the seeds under Ps
property
Ministry of Defence v Ashman
A married a guy who work for the RAF so they stayed in the RAF accommodation
He left her and she stayed on. Had nowhere else to go.
She didnt pay rent for the time she stayed there (she did eventually move on.)
RULE: claim damages for loss (in trespass) or what the defendant benefitted
HELD:
o BASIC OF CALC:
it wasnt the reduced rate they would normally charge the RAF staff, but the
market value (because this is what she would have had to pay elsewhere.)
in actual fact, she was eligible for housing commission so they
used a low rate.
Strand Electric & Engineering Co v Brisford

D detained and used for its own purposes the Ps switchboards, which P otherwise hired out
for profit.
HELD:
o BASIC OF CALC:
Market hiring charge for the whole 43 weeks of detention, without any
deduction for the likelihood that the goods would otherwise have been left
unhired for part of that time.

ACCOUNT OF PROFITS
What is it? Restitutionary in nature disgorge a benefit (alternative to damages), and prevent unjust
enrichment.
Equitable remedy.
EXCLUSIVE JURISDICTION
Breach of trust or fiduciary duty
Breach of confidence
Trustee or judiciary to account for the entire profit made by reason of the breach (Consul Development
v DPC Estates)
1.
2.
3.
4.
5.

Is not penal or punitive

An equitable allowance as remuneration for work and skill (as long as not dishonest)
a. Only granted in cases where award of account of profits could not have effect of
encouraging trustees to put themselves in a position of conflict of interest.
If trustee makes profit entirely by misapplication of trust money, beneficiary entitled to the
entire profit
If profit made partially from trust money beneficiary entitled to profit pro rate
If property purchased, account to be made even before property intended to be sold to realise
the profit
Scott v Scott

6.

Mother died
Left a will: house in which te husband and children were staing was to be
placed in trust with her husband having the right to stay in the house untl
his death and then the assts would dissolve to the children.
Husband remairre,d and sold the house
It was that house that had to be accounted for because the money from that
house was used

Acquisition of a business and its operation allowances to be made for skills, effords property
and resources of the Def.

AUXILIARY JURISDICTION
Infringement of intellectual property rights
[ELE 1]: An injunction must be capable of being awarded
[ELE 2]: Account limited to profits derived from Defs knowing infringement of Ps rights.
Colbeam Palmer
Awarded even though injunction not possible
Trademark stolen
During litigation, he assigned the trademark his right in trademark expired
HELD: entitled to account of profits. Granted for period of time there was a knowing
infringement
[ELE 3]: A discretionary award - discretionary factors apply
[ELE 4]: Assessment of quantum: deductions
Even if notoriously difficult and not capable of mathematical exactitude still needs to be awarded
this remedy.
Court will consider deductions:

1.

Costs of the Def for manufacture and sale (Peter Pan Manufacturing Corp v Corsets
Silhouette
a. Def bears onus
b. Costs of materials, wages other solely referable to manufacture and sale:
i. Not costs of overheads if unused capacity utilized
ii. Costs of overhead if opportunity to manufacture non-infringing goods
forgone (Colbeam Palmer v Stock Affiliates)

Peter Pan

Manufactured corsets
They had particulr way they manufactured.
During a visit to the US and they revealed some of their dieas in confidence
Silouhette manufactured these U25 and U15
Infringed
Made it clear how you would define profit: income derived from the business, less the cost.

You have to look at what portion of the profit the D is entitled to keep. Can deduct the cost of
manufacture

2.

Part of the profit that Def is entitled to keep

Apportionment of profits between owners and infringers
RULE: if another persons IP is used, accountable for any profits made attributable to use of
anothers property (Colbeam Palmer v Stock Affiliates)
TEST:
1) What is entire profit from sales of infringing goods?
2) What part of the profit is attributable to infringing use of the mark?

Dart Industries v Dcor Corp all sales attributable to infringement

Household canisters that they manufactured

Distinguished their idea because it had a push button on the lid. It was stolen by Dcor Corp.
The court stripped all of the profits stripped 100%. No apportionment for the fact that a part
of the product was infringed.

TPA
[ELE 1]: Does TPA apply?
[x] is a corporation.
REMEDY: s 82(1)
[1] Loss or damage
eg. loss of money/lawnmower didnt work
any monetary, physical, economic loss (wider than tort), personal injury or
death
Must show worse off
Marks v GIO Aus Holdings:

False rep that interest rate would be made at x%

Actually allowed variable interest rate to be made
D won the case because no loss was sustained because
that was still the best loan available.

[2] By the conduct of another person

[3] Conduct in contravention of relevant provisions of Act
Purpose: place Pl in position that he would have occupied if wrong not committed.
CL principles imported:

Compensatory
Causation
Remoteness
Mitigation
CN: - s 82(1B)
o Damages can be reduced proportionately unless D acted intentionally or fraudulently
o No apportionment in Personal Injury or death claims
o Ps gross negligence can sever the link between contravention and the Ps loss.

REMEDY: Damages - s 87

ELEMENTS OF BOTH:
o Cause of action
Resctrictive trade practices, unconscionable conduct, misleading and
deceptive conduct, other consumer protection issues
o Causation
Practical or common-sense approach (March v Stramare)
If theres an intervening cause sufficient if Ds contravention was a
cause (need not be the sole cause)
S 82: right to a remedy
S 87: discretionary
o Damage not too remote
Damages for misleading and deceptive conduct usually similar to those of
tort of deceit
TEST: All directly caused losses
Entitled to recover all loss flowing directly from the
deceit/contravention of the TPA
Likely test: reasonably foreseeable in a general way not sure if
different from CL test
Pure economic loss is recoverable irrespective of damage to person or
property
o Reasonable steps taken to mitigate damage
Duty on P to mitigate the loss or damage
o Contributory negligence
Mere CN is not sufficient to affect claim against D

Needs to be grossly unreasonable conduct or gross negligence

or extraordinary stupidity
Apportionment possible to the extent the court thinks is just and equitable

s 87: provides additional cause of action and remedies

S 87(1) orders as court thinks appropriate

o Much broader smorgasboard or remedies
o Eg rescission, dismantling contracts

Difference under 87:

Can give any order

Its discretionary
For loss actually suffered and likely to be suffered
Can be for part of a loss

S 82
Creates both a right and a remedy
Damage is the gist of the action
Gives a right to complete recovery of loss or
damage
Does not have the ability to reduce or prevent
likely loss

s 87
All remedies are discretionary but discretion is
wide with remedies not available under CL or
Equity
Order can be made for loss suffered but also loss
likely suffered
Relief may be given to only compensate for part
of the loss or damage

ASSESSMENT OF DAMAGES (FOR BOTH)

Put P in same position as would have been has breach of Act not occurred
No double recovery
Lump sum rule does not necessarily apply
Structured settlements s 87ZC
Date of assessment: likely date of breach or date of damage
o And all matters known at a later date
o Because in many instances the loss only occurs after the contravention (so would be
taken from the time that loss occurs)
Expectation loss not available
Loss of opportunity can be recovered
Mental stress
Reputation
o In actions similar to passing off and defamation
Interest
o Possible
Exemplary and aggravated damages s 87ZB
Limitation period: 6 years from the date of cause of action accrued

TORT OF DECEIT
Tantamount to fraud
1) Factual misrepresentation
2) Person who made the misrep knew it was false
a. Recklessly indifferent to the truth

b. No belief in the truth

3) Intended P to rely on it
4) P did rely to his detriment.
REMEDY: RESCISSION

Rescission for vitiating factor in contract formation s 87(2)(ba)

o Through an order refusing to enforce any or all o the provisions of a contract made in
contravention of the TPA
o Guided by equitable principles of rescission
NB: s 87 is very flexible. Can combine damages order with order for rectification; can
dismantle contractual arrangements; can vary part of the contract, can return property; can
repair goods or services; can make order against 3rd parties

REMEDY: SPECIFIC PERFORMANCE

Mandatory injunction s 80(5) only possibility

o Where loss has been suffered or is likely to be suffered.
Object is to compensate, prevent or reduce the loss (different from equitable remedy)

REMEDY: INJUNCTIONS

S 80
Prohibitory and mandatory
Aim is protection of the public
Any person can apply for an injunction
Order can be given irrespective of whether or not damages would be adequate
Equitable principles not relevant

REMEDY: Mareva order

Available under s 87A