The Treatment of Teacher v Calder in AG v Blake

Publication Date01 Mar 2002
DOIhttp://doi.org/10.1111/1468-2230.00378
AuthorDavid Campbell
CASES
The Treatment of Teacher vCalder in AG vBlake
David Campbell*
Introduction
In AG vBlake (Jonathan Cape Ltd Third Party),1the Court of Appeal and the
House of Lords sought to iron out a small but interesting anomaly in the law of
remedies for breach of contract. However, they not merely failed to do so but they
dramatically increased uncertainty about those remedies in general. As part of this,
they have added to the general misunderstanding of the leading British case on
‘efficient breach’: Teacher vCalder,2and it is to this misunderstanding that I
should like to address this note.3
The general issue in Blake is this: when a claimant seeking literal enforcement4
establishes that damages are inadequate but nevertheless is denied the remedy he
seeks, he will be left (partially) uncompensated by an award of damages. If those
damages are nominal, the inadequacy of the claimant’s compensation will be
blatant. Blake is the latest contribution to a response to this problem traceable to
Wrotham Park Estate Co Ltd vParkside Homes Ltd.5In Wrotham Park,a
conveyance of land contained certain restrictions on the development of that land.
The defendant property developer built houses on the land in clear breach of the
restrictions. However, as the court would not grant an injunction which would have
required the demolition of the houses and as those houses did not cause the
claimant any financial loss, the claimant was confined to nominal damages at
common law. Brightman J felt this to be unsatisfactory and ingeniously exercised
his power under Lord Cairns’ Act to award the claimant equitable damages, which
were estimated as the price the claimant would have charged for relaxing the
covenant had the defendant not unilaterally breached but sought that release by
bargaining with the claimant.
These ‘hypothetical release’ damages have attracted considerable academic
attention, in particular because they are a very fertile ground for the advocacy of
ßThe Modern Law Review Limited 2002 (MLR 65:2, March). Published by Blackwell Publishers,
108 Cowley Road, Oxford OX4 1JF and 350 Main Street, Malden, MA 02148, USA.256
* Cardiff Law School and ESRC Research Centre for Business Relationships, Accountability,
Sustainability and Society. I should like to thank Donald Harris and an anonymous reviewer for their
general comments and Laura Macgregor for her invaluable advice about the Scots legal system.
1 [1998] Ch 439 (CA) and [2001] 1 AC 268 (HL(E)).
2 Proceedings at first instance in the Outer House of the Court of Session are reported as a footnote in
(1898) 25 R 661 at 663–667. They will be referred to as OH. Proceedings on appeal to the Inner
House of the Court of Session are reported in (1898) 25 R 661. They will be referred to as IH.
Proceedings in the House of Lords (Scotch Appeals) are reported, inter alia, in [1899] AC 451. They
will be referred to as HL(Sc).
3 The wider issues raised by Blake are examined in D. Harris et al, Remedies in Contract and Tort, 2nd
edn (London: Butterworths, 2002) Ch 17.
4 By ‘literal enforcement’ I mean not only specific performance and injunction but affirmation of
contract when the defendant would prefer termination and seeking cost to complete rather than
diminution in value damages: see ibid pt 3.

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