Gamerco SA v ICM/Fair Warning (Agency) Ltd and Another
| Jurisdiction | England & Wales |
| Judgment Date | 31 March 1995 |
| Date | 31 March 1995 |
| Court | Queen's Bench Division |
Queen's Bench Division
Before Mr Justice Garland
Contract - frustration - discretion to order offset for expenses
Where a contract was discharged by frustration and a plaintiff was entitled to recover advance payment by virtue of section 1(2) of the Law Reform (Frustrated Contracts) Act 1943, the proviso to that section gave the court a broad discretion to make a deduction to offset a defendant's expenses incurred before the time of discharge, or for the purpose of the performance of the contract. The court was not obliged to incline towards either total retention by a defendant of sums paid nor equal division of losses.
Mr Justice Garland so stated in the Queen's Bench Division on a finding that a contract between the plaintiff, a Spanish pop concert promoter, and the second defendants, Missouri Storm Inc, the corporate persona of the group Guns 'n' Roses, to perform at Vincente Calderon Stadium in Madrid on July 4, 1992 was frustrated by the actions of the Madrid public authorities in prohibiting all public activity in the stadium when structural defects were discovered and revoking the authorisation for the concert to proceed.
The plaintiff was entitled to recover advance payment made of $412,500. The second defendant sought to offset expenses paid against that sum under the proviso to section 1(2) of the 1943 Act.
Mr Charles Flint for the plaintiff; Mr Timothy Sewell for the defendants.
MR JUSTICE GARLAND said that there had been no reported case on the operation of section 1(2) except obiter remarks in BP Exploration Co (Libya) v Hunt (No 2)WLR ((1979) 1 WLR 783, 800).
The proviso had to be read with subsection (3) to (6). Subsection (4) was relevant in the present case.
The following had to be established in an approach to the proviso: that the defendants incurred expenses paid or payable; before the discharge of the contract; in performance of the contract (not applicable in the present case); or for the purpose of the performance of the contract; that it was just in all the circumstances to allow them to retain the whole or any part of the sums so paid or payable.
The onus lay on the defendant. It was in the broad sense his case to be made out: see Lobb v Vasey Housing Auxiliary ((1863) VR 239) under the corresponding Victorian Act in terms similar to the 1943 Act.
There were various views advanced as to how the court should exercise its...
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Robert Purvis Plant Hire Limited V. David Farquhar Brewster+alex Kinloch Brewster+the Firm Of Alex Brewster & Sons
...his submissions on frustration, as well discussing the cases mentioned above, referred to Gamerco SA v I.C.M./Fair Warning (Agency) Ltd [1995] 1 WLR 1226 and McBryde, The Law of Contract in Scotland (3rd ed), chapter 8 on the construction of contracts and paragraph 23.18 on specific impleme......
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Frustration
...as to whether the English legislation is amenable to an interpretation of this kind, see Gamerco SA v ICM/Fair Warning (Agency) Ltd , [1995] 1 WLR 1226 at 1237 (QB), Garland J; BP Exploration Co (Libya) Ltd v Hunt (No 2) , [1979] 1 WLR 783 at 800 (QB), Goff J, aff’d [1981] 1 WLR 232 (CA), a......