LORD REED: (with whom Lady Hale, Lord Wilson and Lord Carnwath agree)
1. This appeal raises an important question in relation to the law of damages: in what circumstances can damages for breach of contract be assessed by reference to the sum that the claimant could hypothetically have received in return for releasing the defendant from the obligation which he failed to perform? Damages assessed on this basis, sometimes described as Wrotham Park damages, after the case of Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798, have attracted considerable debate, both judicial and academic. That debate, and the confused state of the authorities, have reflected a lack of clarity as to the theoretical underpinning of such awards, and consequent uncertainty as to when they are available. This is the first occasion on which the issue has come before the highest court for decision, although there was some discussion of Wrotham Park in Attorney General v Blake [2001] 1 AC 268. In engaging with this issue, the court has had the assistance of strongly argued submissions by counsel, supported by extensive citation of case law and academic scholarship.
2. It is necessary to recognise at the outset that the term “Wrotham Park

damages” has been used rather loosely in the authorities, as Lord Walker of
Gestingthorpe observed in Pell Frischmann Ltd v Bow Valley Iran Ltd [2009] UKPC 45; [2011] 1 WLR 2370, para 46. He referred in particular to the failure to distinguish clearly between its use, on the one hand, to describe every type of compensatory damages which exceed the actual financial loss to the claimant, and, on the other hand, damages awarded in lieu of specific performance or an injunction under the jurisdiction created by section 2 of the Chancery Amendment Act 1858
(“Lord Cairns’ Act”); and, in the latter context, between non-proprietary breaches
of contract, and those involving the invasion of a property right.
3. This judgment will abjure the use of the term “Wrotham Park damages”.

Although it will be necessary to consider the case of Wrotham Park, it is a source of potential confusion because of the opacity of its reasoning, and it can now be regarded as being of little more than historical interest. Instead, this judgment will
use the expression “negotiating damages”, introduced by Neuberger LJ in Lunn Poly
Ltd v Liverpool & Lancashire Properties Ltd [2006] EWCA Civ 430; [2006] 2
EGLR 29, para 22.
4. In Pell Frischmann, Lord Walker listed what he regarded as “the most illuminating” of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading One Step (Support) Ltd v Morris-Garner

Details

AGLC: One Step (Support) Ltd v Morris-Garner [2018] UKSC 20
Case: [2018] UKSC 20
Decision Date

CaseChat Overview and Summary

The case of One Step (Support) Ltd v Morris-Garner was heard by the UK Supreme Court, with the appeal being dismissed. The primary issue before the Court was the availability of "negotiating damages" in cases of breach of contract. Negotiating damages are those assessed by reference to a hypothetical negotiation between the parties, for the amount that might reasonably have been demanded by the claimant for releasing the defendant from their obligations. This type of damages is often referred to as Wrotham Park damages, following the case of Wrotham Park Estate Co Ltd v Parkside Homes Ltd.

The Court considered the legal principles governing the award of negotiating damages, and concluded that such damages could be available in cases where a party is in breach of contract, provided certain conditions are met. The Court held that negotiating damages may be appropriate where the breach was deliberate, the claimant would have difficulty establishing financial loss, and the claimant had a legitimate interest in preventing the defendant's profit-making activity in breach of contract. However, the Court also stressed that the award of negotiating damages should be approached with caution, and the amount awarded should be carefully considered to ensure it is just and fair.

In the present case, the Court of Appeal had upheld the trial judge's finding that negotiating damages were available. The Supreme Court agreed with the Court of Appeal's decision, and held that the award of negotiating damages was justified in this case. The Court emphasised that the assessment of negotiating damages should be based on a fair and reasonable hypothetical negotiation, taking into account all relevant factors, including the economic value of the right infringed and any other circumstances that may affect the value of the right.

In summary, the Supreme Court's decision in One Step (Support) Ltd v Morris-Garner provides guidance on the availability and assessment of negotiating damages in cases of breach of contract. The Court held that such damages may be appropriate in certain circumstances, but their award should be approached with caution and carefully considered to ensure it is just and fair.

Orders