Rob and I agree that the mitigation principle applies to whether the
claimant terminates, providing there has been a breach, save for one caveat
Rob made to me off-list that mitigation does not apply to damages in lieu.

On the other point, we're into the basic substitutionary damages argument. I
say that (i) courts look at actual loss (up to and beyond the date of trial)
as the starting point, which has no reference to the date of trial and may
be less than the value of goods at the date of trial (e.g. Bence Graphics,
McSherry v Cooper's Creek), (ii) if there was a duty to mitigate, in goods
cases most usually a duty to go to the market for a replacement (hence the
statutory rebuttable presumption), then that cuts back recovery of actual
loss. The date on which the claimant should have gone to the market may be
later than the date of breach, in which case the date of breach is
irrelevant, but will often be the date of breach or as near as makes no
difference. In latent defect cases like Bence there could be no duty to
mitigate so the date of breach is irrelevant (iii) if consequences are too
remote then that also cuts back recovery of actual loss. In sale of goods
cases unless a string sale was contemplated or a defect is latent then most
consequences will be too remote. (iv) Williams and Rodocanachi are
explicable by remoteness or mitigation. (v) Rob's rule would be all over the
case law, with judges frantically looking at the value at the date of breach
even where goods were used in a manufacturing process etc, but they just
don't do that. In Parsons v Uttley Ingham would it have mattered if the
hopper had been massively less valuable with the cap open (to alter the
facts) but it later (after the damage) fell closed and so saved a huge cost
of curing it? Plainly not: the point in that case was no failure to
mitigate, losses through use not too remote, end of story.

But that is a debate for another time. Must get back to work.




Adam Kramer
3 Verulam Buildings
Gray’s Inn, London, WC1R 5NT

 

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-----Original Message-----
From: Robert Stevens [mailto:robert.stevens@law.ox.ac.uk]
Sent: 19 October 2012 10:13
To: obligations@uwo.ca
Subject: RE: Supreme Court of Canada on Specific Performance and Mitigation

Adam states:

"if the claimant
reasonably waits two weeks or two years following breach and then goes to
the market or should have done, the replacement cost is assessed at that
date, even if the loss is then lower than the value at the date of breach"

- What is the authority for this proposition? 

My understanding was that where goods are not delivered, the buyer is
entitled to damages assessed by reference to the difference in value between
the contract price and market price at that time, and that it did not matter
that the consequential losses suffered as a result of the breach were in
fact lower than this figure: Rodacanachi v Milburn (1886) 18 QBD 67, CA;
William Bros v Agius [1914] AC 510, HL.

Where the consequential loss is (unusually) higher than this figure, that is
recoverable, save where this loss is caused by the plaintiff's own failure
to mitigate.

Rob
________________________________________
From: Adam Kramer [adam@kramer.me.uk]
Sent: 19 October 2012 08:54
To: Robert Stevens; obligations@uwo.ca
Cc: 'Stephen Smith, Prof.'
Subject: RE: Supreme Court of Canada on Specific Performance and Mitigation

I think Rob agrees with me (contra Steve, I think) that the duty to mitigate
applies to the decision whether to terminate providing there has been an
actual breach (albeit repudiation has not yet been accepted so as to
terminate).

The question is then one of the facts: has the defendant breached. Whenever
a completion date has been fixed in a sale there will be a breach by
non-delivery of possession or keys or whatever on that date. In Southcott
the closing date was fixed and then extended to 31.1.05 but the claimant
refused to extend further. So clearly there was a breach on 31.1.05, and
this was also a repudiation. Damages started to flow from the breach (the
failure to pursue the development) and the claimant could have mitigated by
terminating and going elsewhere (although clearly it would be too risky to
go elsewhere without terminating as it might end up with two properties),
and it was found unreasonable not to (given that the spec perf claim was
weak and there were other properties just as good). I'm not sure when trial
was but the first appeal was 2010 and the SC case 2012. So the claimant
should have mitigated during that period but did not, and that has
implications for the measure of damages (but not, as we all agree, the
action for a price which is entirely different and to which this argument
does not apply). The SC was right.

As for Rob's answer to Steve, the question the courts and Sale of Goods Act
asks is whether and when the claimant should have gone to the market for a
replacement. This date can vary according to the market, whether the
claimant reasonably pressed the defendant for performance for a while, etc.
Rob's answer simply does not allow for these features. (E.g. if the claimant
reasonably waits two weeks or two years following breach and then goes to
the market or should have done, the replacement cost is assessed at that
date, even if the loss is then lower than the value at the date of breach;
indeed the court does not care about the value or cost at the date of breach
and it is not discussed; and this is not some hidden replacement of
substitutionary damages by lower consequential losses which in any case Rob
says cannot happen.)




Adam Kramer
3 Verulam Buildings
Gray’s Inn, London, WC1R 5NT



Direct dial:
Switchboard:
+44 (0) 20 7269 1101
+44 (0) 20 7831 8441
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-----Original Message-----
From: Robert Stevens [mailto:robert.stevens@law.ox.ac.uk]
Sent: 18 October 2012 17:38
To: Adam Kramer; obligations@uwo.ca
Cc: 'David Campbell'; 'Stephen Smith, Prof.'
Subject: RE: Supreme Court of Canada on Specific Performance and Mitigation

It all depends when the breach occurs.

So, Adam states

"The choice whether to affirm or
terminate occurs after (upon) the breach and the duty to mitigate has
arisen."

I don't think it does because without the acceptance of the repudiation
there is no breach at all. It is writ in water. That is why a repudiation
can be withdrawn. If it were itself a breach without more it could not be.

As to the cases

Asamera v Sea Oil did not concern a repudiation, but an actual breach

Habton v Nimmo concerned a breach of warranty of authority, not repudiation.
And so there was a duty to mitigate from the moment of the wrong.

Dunno about the Saskatchewan one

Steve asks

"If you fail to deliver goods to me and, without having in any way
indicated that I am no longer expecting you to perform, I later sue you, I
will not be given specific performance (unless the goods are unique) and my
damages will be calculated assessed on the basis of the market price as of
the contractual date of delivery. Yet if I did not terminate, then according
to the orthodox understanding of the relationship between termination and
mitigation (as set out by Rob and Andrew), should not damages be calculated
as of the date of judgment?"


The plaintiff is entitled to damages reflecting his right to performance,
assessed at the time of breach (here time of non-delivery). Consequential
loss is irrelevant to this head of damages. If he wishes to argue that he
has loss consequent upon the breach of the duty to deliver on a particular
day over and above the difference in value this is recoverable (although
usually difficult to show where there is a ready market for the goods that
he can avail himself of, ie he either can or should mitigate). Consequential
losses are assessed at time of trial. Termination does not come into it.

I tried to explain the law on timing of damages in sale cases (amongst other
things) in a book chapter edited by one J Neyers. Available to be read here
I see




http://denning.law.ox.ac.uk/news/events_files/A_Golden_Victory_or_Not.pdf=

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