Topic 2: Contract Equitable Damages Flashcards
What is the source of Equitable damages?
- s62 of the Equity Act. Although the act has been repealed, the act repealing it contains a provision saying jurisdiction of courts to award damages under Equity Act continues.
What are equitable damages?
These are damages that are available in SUBSTITUTION or in ADDITION to Specific Performance or an Injunction.
They are in AID of LEGAL rights.
What is the difference between equitable compensation and equitable damages?
- Equitable compensation is in response to a breach of EQUITABLE duties such as breach of trust or fiduciary duty.
- Equitable damages is in response to a breach of COMMON LAW obligations or duties, and act in AID of legal rights.
When are equitable damages available?
- In addition to SP or an injunction; or
- Where the jurisdictional requirements are met for SP or an injunction, however SP or injunction has been ruled out on a discretionary factor.
How to assess equitable damages?
Where they are in substitution of Specific Performance or an injunction, the aim of SP or injunction was to put P in position they would have been in had contract been performed.
Therefore because equitable damages are a SUBSTITUTION, equitable damages are calculated at the date of the judgment as this is the position the P would be in.
For example a sale of land that appreciates in value since the breach.
CL damages would not include the appreciated value, however equitable damages are assessed at date of judgment therefore include that value: Wroth v Tyler (UK Authority)
Can Equitable damages be calculated differently from CL damages?
It can be calculated by reference to D’s profit or saving made by breaching:
1. Jaggard v Sawyer
What are the facts of Jaggard v Sawyer?
- Sawyer (D) lived on a particular block in a cool dissect. The road was privately owned.
- D’s contract contained a restrictive covenant that no part of the land on his block that hadn’t been built on could be used otherwise than as a garden.
- D wanted to build an extension but the other inhabitants of Ashleigh Avenue objected.
- D then negotiated with his neighbour behind him on Bull Lane to subdivide his land and sell the rear part to D so D could build a house, thereby not breaching the covenant.
- However, he still had to build a driveway from the current lot to the rear lot. This contravened the covenant.
- Jaggard brought an action for breach of covenant using land otherwise than as a garden.
- She sought an injunction to restrain D
What was the decision in Jaggard v Sawyer?
- Trial judge refused injunction taking into account:
P’s conduct - was troublesome, no loss of amenity, only one additional traffic, only brought action to uphold law.
D’s Conduct - he hadn’t acted in disregard, he believed Ashleigh Ave was public not private. - So awarded P nominal damages.
COA:
- P could recover equitable damages in substitution for the injunction, measured by reference to what THE PLAINTIFF COULD HAVE DEMANDED FROM THE D AS A FEE FOR RELAXING THE RESTRICTIVE COVENANT, following Wrotham Park Estate.
What was the issue in calculating equitable damages by reference to what the P would have charged for a fee?
There were two views:
- Compensatory view - measure of damages to compensate P for loss of opportunity
- Restitutionary view: measure of damages by reference to what D saved.
COA defended compensatory view because it has to be in line with Robinson v Harman.
However problem:
If it was compensatory and it’s to put P in position if breach not occurred, that would be that D would not have breached covenant and hence not built driveway hence wouldn’t have negotiations.
nevertheless courts said: we look at saving (or profit) D has made, because IT’S THE BEST EVIDENCE of a fee D would have been willing to pay to secure relaxation. In that way it has connection to measuring loss suffered by a loss of opportunity.
