White Arrow Express Ltd v Lamey's Distribution Ltd
| Jurisdiction | England & Wales |
| Judge | Sir Thomas Bingham MR,Rose,Morritt L JJ |
| Judgment Date | 15 June 1995 |
| Date | 15 June 1995 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal.
Sir Thomas Bingham MR, Rose and Morritt L JJ
Geoffrey Tattersall QC and Stephen Stewart (instructed by Jacobsens) for the plaintiffs.
Nigel Inglis-Jones QC and David Westcott (instructed by Toller Beattie) for the defendants.
The following cases were referred to in the judgments:
Cresswell & Ors v Board of Inland RevenueICR [1984] ICR 508.
Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) LtdELR [1914] AC 689.
Hoenig v IsaacsUNK [1952] 2 All ER 176.
Jackson v Horizon Holidays LtdWLR [1975] 1 WLR 1468.
Jarvis v Swans Tours LtdELR [1973] QB 233.
Livingstone v Rawyards Coal CoELR (1880) 5 App Cas 25.
Miles v Wakefield Metropolitan District CouncilELR [1987] AC 539.
Mondel v SteelENR (1841) 8 M & W 858; 151 ER 1288.
National Coal Board v GalleyWLR [1958] 1 WLR 16.
Robinson v Harman (1848) 1 Excl 850; 154 ER 363.
Royle v Trafford Borough CouncilUNK [1984] IRLR 184.
Sim v Rotherham Metropolitan Borough CouncilELR [1987] Ch 216.
Sunley (B) & Co Ltd v Cunard White Star Ltd [1940] I KB 740.
Contract — Breach — Damages — Contract for enhanced service — Basic service supplied — Claim for damages for failure to provide enhanced service — Whether more than nominal damages recoverable — Whether loss could be calculated by reference other than to the open market.
This was an appeal by the plaintiffs against the decision of the judge who had held, on hearing a preliminary issue of law, that the plaintiffs were not entitled to recover more than nominal damages for a partial failure to provide service.
The plaintiffs carried on a mail order business. In 1989 they renewed their agreement with the defendants who were road transport contractors. The defendants agreed with the plaintiffs to deliver ordered goods, which had to be collected from the supplier and delivered to the customers. If the goods were rejected by the customers the defendants had to pick up the goods and return them to the supplier. Rates were agreed which were to remain in force for one year for all deliveries, abortive deliveries, collections and abortive collections. The plaintiff alleged that the defendant had acted in breach of the agreement by failing to operate within the agreed criteria for deliveries and collections. The plaintiffs had paid the contract price in full and claimed damages on the basis that they had overpaid as part of the service had not been provided. It was common ground that the defendant had provided a basic level of service. It was for the “enhanced service” which the defendant had for additional consideration undertaken to supply, that the plaintiff claimed.
The judge hearing the preliminary issue of law, on the assumption that the defendants acted in breach of the agreement, held that, on the case as pleaded, the plaintiffs were entitled to no more than nominal damages. The plaintiffs appealed.
Held, dismissing the appeal:
An innocent party who had contracted for a service and received a sub-standard service was in principle entitled to more than nominal damages. Although the plaintiffs had attempted a sophisticated calculation to establish their loss it was on the basis of the price paid for the part of the contract not received, not what the service would have cost on the open market. It was not a separate and identifiable head of damage because it did not establish what the plaintiff would have had to pay to receive the service not performed. Therefore the plaintiffs could not prove any actual loss on the pleadings and the court could not properly award more than nominal damages.
Bingham MR: This appeal raises a short but elusive issue on the recovery of damages for breach of contract. It arises from the determination of His Honour Judge Kershaw QC, sitting as the mercantile judge in Manchester, of a preliminary issue of law.
The issue of law was:
“On the assumption that:
(a) paragraphs 1, 2, 3 and 4 of the re-re-amended statement of claim (including all the subparagraphs thereof) are true; and
(b) the defendants acted in breach of the agreement in that they failed to operate the agreed criteria for deliveries and collections as particularised in the report appended to the re-re-amended statement of claim,
are the plaintiffs entitled to recover damages other than nominal damages from the defendants under para. 5.2 thereof?'
The answer given by the judge was:
“The plaintiffs are not entitled to recover damages other than nominal damages from the defendant under para. 5.2 of the re-re-amended statement of claim.”
Against that ruling the plaintiffs appeal.
The second and third plaintiffs (who alone are relevant) carry on a mail order business: that is, they issue catalogues offering goods for sale and solicit written orders directly from members of the public and through agents. When ordered, goods have to be collected from the supplier and delivered to the customer or agent. When, from time to time, goods are for any reason rejected by the customer or agent they have to be collected from the customer or agent and returned to the supplier.
The defendants are road transport contractors who have for some years delivered and collected goods sold by the plaintiffs. In the spring of 1989 the plaintiffs and the defendants made a new agreement. It was to run from 6 March 1989. Rates were agreed (to remain in force for a year) for all deliveries, abortive deliveries, collections and abortive collections. Detailed terms were agreed concerning the giving of notice to customers before delivery; the making of certain deliveries to rooms chosen by the customer; the attempts to be made to deliver before aborting the delivery; the inspection of goods by customers; the removal of packaging from customers' premises; the dress of delivery crews; the giving of notice to customers before collection; the recording of collection; the responsibility for and handling of claims; the collection of goods from suppliers; and the duty of the defendants to take care of goods and not to deliver apparently defective goods.
These, in summary and so far as relevant to the preliminary issue, are the facts pleaded in para. 1-4 inclusive of the re-re-amended statement of claim and assumed to be true. The preliminary issue further assumes (as alleged in para. 5.2 of the pleading) that the defendants acted in breach of the 1989 agreement by failing to operate the agreed criteria for deliveries and collections as particularised in a report dated 19 September 1991 commissioned by the plaintiffs and entitled “Evidence relating to our claim against Lameys Distribution Ltd”. The breaches complained of related to pre-advice of deliveries and the timing of deliveries and collections. As a result of these breaches the plaintiffs claimed that they had suffered loss and damage “as set out in subpara. 7.4 of the report”.
Subparagraph. 7.4 of the report set out three alternative bases of claim by each of the second and third plaintiffs. These figures were reproduced in the pleading as the particulars of the plaintiffs' claim for damages, which is alone...
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