Remedies for Breach

1
Remedies for Breach
Remedies
Equitable remedies
Common law
Damages
Recission
Restitution
Specific Performance
Injunction
Quantum meruit
Anton Piller order
2
Damages

• Main purpose of damages is to enable the innocent
  party to receive MONETARY COMPENSATION.
• Damages are a common law remedy and awarded as of
  right.
• They are calculated on the basis of looking at
  what the position of the plaintiff would have
  been if the contract had been properly performed.
• They are assessed on a once and for all basis at
  the date of breach.

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Damages

• Steps in determining an award of damages

4
Damages

• Causation
• Is there a causal connection between the breach
  and the loss suffered?
• The plaintiff must show that the breach of
  contract by the defendant was the cause of the
  loss.
• The general test used by the courts is the same
  as that used in assessing damages in general
  the but for test
• CASE Alexander v Cambridge Credit Corporation
  Ltd (in rec) (1987)
• Note the but for test is not an exclusive test,
  e.g. there is the common sense test, which was
  approved in
• CASE Chappel v Hart (1998)

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Damages

• Remoteness
• The loss or injury must not be too remote, i.e.
  losses must be reasonably related to the
  contract.
• Hadley v Baxendale (1854) indicates 2 types of
  loss are recoverable
• loss arising from the breach in the usual or
  normal course of things and
• loss arising from special or exceptional
  circumstances where it can be shown that the
  defendant had actual knowledge of the plaintiffs
  needs
• CASE Victoria Laundry v Newman Industries
  1949)
• CASE Commonwealth of Australia v Amann Aviation
  Pty Ltd (1991)

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Damages

• Damages
• The aim of damages is to put the injured party
  back as close to the position they would have
  been in had the breach never occurred.
• Damages are recoverable for provable or economic
  loss as well as
• expectation losses
• reliance losses
• CASE Commonwealth of Australia v Amann Aviation
  Pty Ltd (1991)
• distress and disappointment
• CASE Jarvis v Swan Tours 1972
• CASE Jackson v Horizon Holidays 1975
• CASE Baltic Shipping Co Ltd v Dillon (1993)
• physical injury
• CASE Grant v Australian Knitting Mills Ltd
  1936
• Difficulty in calculation is not a ground for
  disallowing a claim
• CASE Howe v Teefy (1927)

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Damages

• Mitigation of damages
• The plaintiff must take reasonable steps to
  minimise or mitigate their loss. Failure to do so
  can result in a reduction of damages.
• CASE Payzu v Saunders 1919
• Mitigation is a question of fact and the onus of
  proof is on the defendant.

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Damages
Damages
Ordinary (Usual remedy)
Exemplary (punitive)
Nominal (No actual loss suffered)
General
Special
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Types of Damages

• The type of damages that will be awarded will be
  determined by the seriousness of the breach and
  whether the contract has specified the amount of
  damages to be paid in the event of breach
• nominal damages plaintiffs legal rights have
  been infringed but they have suffered no actual
  loss
• CASE Charter v Sullivan 1957
• ordinary damages loss suffered by the plaintiff
  as a result of the breach and can be either
  general or special damages
• exemplary damages punitive and may be awarded
  for non-economic loss
• CASE Jackson v Horizon Holidays 1975

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Types of Damages

• Liquidated damages
• Awarded where a plaintiff is able to sue for a
  specified sum, which must be a genuine or bona
  fide pre-estimate of the actual loss that will
  flow from the breach.
• Unliquidated damages
• Awarded where an injured party has no fixed sum
  in mind and leaves the court to decide the
  amount.
• Penalty
• A threat to ensure performance and not
  enforceable because they are not a genuine
  pre-estimate of the damage that will result from
  the breach
• CASE Dunlop Pneumatic Tyre Co v New Garage and
  Motor Co Ltd 1915

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Equitable Remedies
Equitable Remedies
Recission
Restitution
Specific Performance
Injunction
Quantum meruit
Anton Piller Order

• These are discretionary remedies at equity and
  are only granted where damages are not an
  adequate remedy.

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Equitable Remedies

• Rescission
• A right available to an injured party.
• Does not require the intervention of the court.
• Entitles the injured party to set the contract
  aside and is only available for breach of a
  condition.
• Substantial restoration must be possible as the
  injured party is restored to their
  pre-contractual position.
• The right to rescission is lost if the injured
  party
• continues with the transaction
• fails to act or act within a reasonable time or
• if an innocent third party acquires an interest
  in the subject matter.

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Equitable Remedies

• Restitution
• Is based on the concept of unjust enrichment and
  sometimes referred to as quasi-contract.
• The plaintiff must establish
• the benefit was at the plaintiffs expense
• it would be unjust to allow the defendant to keep
  that benefit or enrichment and
• CASE Pavey Matthews Pty Ltd v Paul (1987)
• the defendant must obtain a benefit or
  enrichment
• the defendant has no defences to rely upon.

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Equitable Remedies

• Restitution can be used if
• the defendant has received a sum of money from
  the plaintiff and there has been a total failure
  of consideration or a mistake of fact
• CASE McCormack v Commonwealth (1984)
• under a mistake of law
• CASE David Securities Pty Ltd v Commonwealth
  Bank (1992)
• under duress or compulsion.
• Restitution makes use of the doctrine of quantum
  meruit
• CASE Pavey Matthews Pty Ltd v Paul (1987)
• CASE Planche v Colburn (1831)
• CASE Sumpter v Hedges 1898

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Equitable Remedies

• Specific Performance
• A remedy compelling performance.
• It is only granted at the courts discretion
  where the court can supervise the implementation
  of the contract.
• It is not available in contracts involving
  personal services because the court is unable to
  adequately supervise the task CASE Ryan v
  Mutual Tontine Westminster Chambers Assoc 1893

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Equitable Remedies

• Injunction
• It is a restraining order which prevents a person
  from breaking a contract.
• It is a discretionary remedy and aims at
  enforcing negative promises.
• It normally cannot be used where it would achieve
  the same result as specific performance.
• CASE Lumley v Wagner (1852)

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Equitable Remedies

• Mareva Injunction
• Prevents the defendant from removing assets from
  the courts jurisdiction.
• CASE Mareva Compania Naviera SA v International
  Bulk Carriers SA, The Mareva 1975
• Anton Piller Order
• Prevents a defendant from disposing of any
  evidence before trial.
• CASE Anton Piller KG v Manufacturing Processes
  Ltd 1976
• Quantum Meruit
• Arises where there has been part-performance, and
  only where it can be implied that payment would
  be made.

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Statutes of Limitations

• An injured party can loose their right to an
  action unless they act within a certain time
  period.
• The statutes of limitations of the States and
  Territories determine the time limits within
  which an injured party must take action.
• Prevents actions remaining open indefinitely.