European Bank Ltd v Evans

In *European Bank Ltd v Evans*, the High Court of Australia considered an appeal concerning the assessment of damages arising from an undertaking as to damages given by the respondent, Mr Evans, to the Supreme Court of New South Wales. The dispute centred on whether losses incurred by the appellant, European Bank Ltd, due to currency fluctuations and interest rate movements, were recoverable under this undertaking. The appellant had been ordered to pay money into court in United States dollars, and it contended that but for this order, it would have converted the funds to euros, thereby avoiding the alleged losses.

The High Court was required to determine the nature and scope of the "usual undertaking as to damages" as contemplated by the Supreme Court Rules 1970 (NSW), specifically in relation to the remoteness of losses claimed. The central legal issues were whether the losses claimed by the appellant flowed directly from the court's order requiring the funds to be held in United States dollars, and whether the *kind* of loss sustained could have been foreseen at the time the undertaking was given, drawing parallels with the principles of contractual remoteness established in *Hadley v Baxendale*.

The Court reasoned that the inquiry into foreseeability under an undertaking as to damages is not whether the specific loss suffered was foreseen, but rather whether the *kind* of loss could have been foreseen. It found that the primary judge had made findings that the loss directly flowed from the order and that the kind of loss could have been foreseen. The High Court concluded that these findings should not have been disturbed by the Court of Appeal.

Consequently, the High Court allowed the appeal with costs, setting aside the orders of the Court of Appeal and dismissing the appeal to that Court with costs.