#6691 - C P Haulage V. Middleton - Commercial Remedies BCL

C & P Haulage v. Middleton

Facts

The defendant is an automobile engineer and repairer. He had been up to the end of 1978 working from a garage, part of his own home. The local authority, however, objected to this use being made of domestic property, and they gave him the appropriate notice to desist. He thereupon urgently looked round for other accommodation.

The plaintiffs in this case, a firm which carried on the business of plant hire, are well known to the defendant, he having done work for them and they having hired machinery to him. Knowing one of the partners, he discussed the terms upon which he might use a yard they had, which had a covered workshop, and which was only used for storage. Eventually they entered, on or about December 15, 1978, into an agreement. This is essentially contained in a document which emanated from the plaintiffs, the material terms of which read:

“Before offering you the use of our yard at Winton Approach we would like you to agree to the following: …Any fixtures you put in are left.

The defendant moved in and began to use the premises for commercial purposes but not until towards the end of 1978. He had to carry out quite a considerable amount of work to make the premises suitable for his purpose. A wall had to be built enclosing the premises, locks had to be fitted, and electricity had to be laid on.

On June 16, 1979, he was still in occupation. The judge concluded — and again this is not challenged — that the licence was for six months with renewal every six months. It could thus be terminated every six months, and he took the view — and this has not been challenged — that a reasonable notice prior to its termination of one month at lest would have been necessary.

Unfortunately there was some misunderstanding or trouble on October 5, 1979, by which time the premises were completed and were being used for the garage work, when the senior partner of the firm had some difficulty in getting oil from a drum which had been moved without his permission. He became very angry, and told the defendant to get out. The locks were changed. The defendant did not take the sensible course of consulting solicitors, who undoubtedly would have advised him to apply for an injunction and appropriate further relief. He accepted the position. He managed to climb in and, with help, moved his essential equipment out of the premises. He went back to his own garage. He told the council about his predicament, and they were very sympathetic. He was allowed to stay where he was — which meant of course he did not pay any rent because it was his property — and he was allowed to remain using the premises, despite the council’s previous objection, for a period of a year.

A defence and counterclaim had been put in which contained the defendant’s claim for the reimbursement of his expenditure on the premises, and it is in relation to that counterclaim that this appeal arises from the decision of Judge Eric Stockdale given on September 13, 1982, at the Watford County Court. In those proceedings, of course, the defendant was in effect the plaintiff suing the plaintiffs for damages for breach of contract, the contract being the licence agreement to which I have referred. His claim amounted to 1,767.51, which covered labour and material used in building the wall, to which I have referred, laying on the electricity and moving or transferring a telephone.

Holding

At the outset of this appeal we raised that point that, having established a breach of contract, the defendant was entitled to judgment. If he could prove no damages beyond nominal damages, then the judgment would have to be limited to nominal damages.

The consequences of this breach of contract were that so far from the defendant suffering any damage as a result of being excluded from the premises ten weeks earlier than would lawfully have been the case thanks to the tolerance of the local authority he had in effect been saved the payment, which was likely to be between 60 and 100 a week, which he would have had to have paid for the use of the plaintiffs' premises. He accordingly came to the conclusion that if he was to award the damages claimed, he would be putting the defendant in a better position than would have been the case if the contract had been lawfully determined.

Reliance Damages and cases of bar bargain

Citing Lord Denning from Anglia Television Ltd. v. Reed [1972] 1 Q.B. 60:

“I cannot accept the proposition as stated. It seems to me that a plaintiff in such a case as this has an election: he can either claim for loss of profits; or for his wasted expenditure. But he must elect between them. He cannot claim both.”

Lord Denning M.R. was not contemplating what has been referred to subsequently as the “bad bargain” case, a case in which a plaintiff has entered into a loss-making contract or, I would include, an otherwise disadvantageous contract.

That is not the approach which the...