Date: Wed, 12 Oct 2005 12:02:11 -0400

From: David Cheifetz

Subject: Contribution - damage vs damages

Andrew,

I quickly reread portions of Lord Bingham's and Lord Steyn's speeches. That reminded me that I had trouble with the analysis in Royal Brompton. I still do. I recall reading a spate of complaints about it in the case commentaries on some barristers' Chambers' web sites.

The damage / damages problem isn't one I usually need to worry about. Ontario's legislation uses damages and, for the most part - cases such as the Alberta CA decision referred to Royal Brompton aside - Canadian courts (even from the provinces using versions of the old form of English statute) don't (usually) twist themselves into the RB analytical pretzel. I've assumed the judges (and lawyers), here, generally miss or ignore the damage / damages distinction. If so, that's one for the colonies.

I realize the English legislation uses damage not damages - that usage didn't have to force the courts to go back to the traditional damage / damages distinction if doing so would be contrary to the remedial purposes of the legislation - but it seems to me that the RB analysis flips the traditional damage / damages distinction on its head. Or ignores it despite the HL's claims to be adhering to it. The analyses in RB seems to turn on the nature of the cause of action alleged against architect and contractor. If one is looking at the cause of action, isn't one looking at the damages (pl) - the way law characterizes the loss, injury, harm, whatever - rather than the damage (sg) itself? Damages (pl) is what the successful plaintiff is awarded for compensable injury. Damage is the injury that was sustained - and not just the compensable harm. Injury which is also caused by the injured person makes the last point clear. The injured person's damage - injury - is the entire injury, not just the portion which isn't the injured person's 'share'.

Regarding the delay claims, the only way the result makes sense, to me, is to assume the contractor's delay was never a breach of the contract because (1) the delay wasn't on account of any other improper performance of the contract and (2) in any event the architect granted the extensions. (I haven't taken the time to go back through the HL and lower level reasons to see why performance was delayed.) That is, the hospital's right to obtain liquidated damages for the delay - or to offset any amount it might be entitled under the delay clause against whatever amount it otherwise owed the contractor - never arose because the architect extended the time for completion and the hospital had no other basis for refusing to pay the invoiced amounts to the contractor.

If we make that assumption, then the contractor's delay was never a cause of any damage, in extra construction expense - a position I think explicit in portions of Steyn's speech: see paragraph 23 - "The Contractor committed no wrong by retaining the money until the extension of time had been set aside in an arbitration". Essentially, the contractor complied with contract's time provisions - albeit only because of the architect improperly granted the extensions - and the hospital's claim lay solely against the architect for improperly granting extensions. The existence of the contractual extension provision means that delay of itself isn't a breach, where the contractor asks for an extension, until the architect decides whether to grant the delay. That's a very tendentious analysis, though, if the delay was due to improper performance of the contract so that the architect shouldn't have granted the extension.

If there was some sort of relevant misconduct which resulted in the delay, however, then the contractor was fortunately "saved" from liability - from having to pay the delay penalty - for the delay by the architect's subsequent mistake(s) in improperly granting the extensions. (The contractor's liability was, in Charles Mitchell's terms, pre-empted". It was, however, a liability which would have inevitably arisen but for the architect's mistake.)

I haven't gone back through the reasons to see why performance was delayed up to the point that the extensions were granted. But, assuming the delay was because of some action on the part of the contractor which was improper performance, wasn't the hospital's damage (loss) the loss that it sustained; that is, the loss was the extra amount it paid for the building that it wouldn't have paid if the contractor and architect hadn't made mistakes. Looked at that way, didn't the mistakes of both the contractor and architect result in the extra payments (whether delay or hydrolite) so result in the same damage?

I was equally puzzled by the disposition of the hydrolite claim. Mistakes were made regarding the floor slab work by both contractor and architect. The result was extra expense to repair the problem. Isn't that the same damage? It might not be the same damages - depending on how one characterizes the cause of action (which is what Steyn did in para 32) so what am I missing?

As an aside:-

Lord Steyn took comfort in the analysis from the Alberta CA case where A was injured in a car accident the fault of B, her lawyers missed the limitation period, A sued the lawyers, the lawyers claimed contribution from B, and the court struck out the contribution claim on the basis that it wasn't a claim for the same damage. The Alberta analysis is a non-sequitur. It doesn't follow from the fact that we calculate the amounts recoverable, for the injury, differently in the action against the lawyers than the injured person, that the injury (the damage) is different. In both cases, the basis of the claim was the woman's physical injuries. Her claims against both lawyers and driver were ultimately based on those injuries. If they had no value, the actions would have failed. To me, it's not a relevant basis for distinction that the amount of damages recoverable from the lawyers would, ultimately, be valued on the basis of the value of the claim against the negligent driver discounted by the possibility of the action failing. In both cases, one is determining the value of the injury; that is, the damage sustained by the injured person.

In passing, it's worth mentioning that we, in Canada, were fighting the meaning of the damage / damages distinction in the context of limitation (prescription) period legislation. There, by 2001, the trend was clear that the courts were ignoring the distinction as much as possible to allow the injured person to sue where, otherwise, the injured person wouldn't have a claim against a defendant with assets (or sufficient assets).

For what it's worth, I'm not certain the analysis in the Alberta case would hold up, now, in Canada, because of developments elsewhere - assuming the judges sees the connection. The Supreme Court of Canada 2002 dealt with a 2 year highway traffic limitation period where the statutory provision was "No action may be brought against a person for the recovery of damages occasioned by a motor vehicle after". Essentially, one of the arguments was about the meaning of "damages" in the legislation. This was because there was a line of cases that said the provision didn't apply to claims in contract, only to claims in tort because the causes of action were different, even if the injury sustained by the plaintiff which was the basis of both the tort claim and the contract claim was the same injury. This analysis had allowed owners of cargo to sue truck cargo carriers in contract after 2 years, but within 6, where the cargo was damaged during transportation so not delivered in the condition it was received by the carrier. The stated distinction was that, in contract, the claim was for the failure to deliver the goods in the condition received. It wasn't significant that the damage was caused by negligence in the operation of the truck. The SCC overruled those cases and held one looks to the nature of the injury sustained to decide if it was caused by the use of a motor vehicle in something more than a merely incidental sense.

Regards,

David

----- Original Message -----
From: Andrew Tettenborn
To: David Cheifetz
Sent: Wednesday, October 12, 2005 4:22 AM
Subject: Re: ODG: Re: two employers

Hi David:

On the English law, we've actually said that what matters is whether the damage (sg), not the damages (pl) are the same: see Birse Construction [1996] 2 AER 1, 8, also Royal Brompton [2002] 2 AER 801. Here there was no problem: the claim against both defendants was for flooding caused by the respective wrongs. But I agree there might be difficulties elsewhere.

At 01:58 12/10/2005, you wrote:

Your memory about Bow Valley is right.

The SCC then made the contribution portion of the decision not obiter the next year in another case involving the federal maritime jurisdiction, though this one arose out of a ship (ok, small boat) collision: Ordon Estate (1998) 166 DLR (4th) 193. They applied Bow Valley. Canadian provincial courts aren't paying enough attention to the implications of the analyses in those decisions to Canadian provincial common law. Judges can no longer decline to apply apportionment remedies - contributory fault against the injured person or contribution between wrongdoers - just because they conclude the provincial apportionment statute doesn't apply. They now need to ask themselves whether (1) there is, or ought to be, an analogous common law right and then (2) if there is, what are the consequences.

Getting back to Viasystems -

Not to dice issues too finely but, given the importance (as I understand the cases) that English courts have placed on the requirement in contribution claims, under the Civil Liability Act, for the wrongdoers to be sued for the same damages, shouldn't that issue have been mentioned in some way? Employer 1, who had been hired by the plaintiff, was sued in contract. Employer 2 did not have a contract so it would have been sued in tort. That might have been the same damage but was it the same damages? Shouldn't the issue have been mentioned if only to acknowledge it and dismiss it as taking the case law too far? That the mere fact the causes of action were different didn't produce different damages? Did it not arise because this too formalistic argument has already been contained?

----- Original Message -----
From: "Andrew Tettenborn"
Sent: Tuesday, October 11, 2005 3:10 PM
Subject: FWD: ODG: Re: two employers

Interesting point.

Incidentally, on common law analogues to the statutory rights, didn't the Sup Ct of Canada do something like this in Bow Valley (1998) 153 DLR 4th 385?

If my memory serves me right, a contributory negligence issue arose in the federal maritime (but not ship collision) jurisdiction. Although the provinces all had the usual apportionment and contribution legislation, the federal govt didn't, since it had assumed there was no point (civil rights and obligations being reserved to the provinces). The defendant thereupon brightly said:

"Fine: the common law applies, and CN bars the plaintiff entirely. So I'm off the hook completely."

Certainly not, said the SCC. The old CN rule is a relic of the past: it's time there was a common law apportionment doctrine, and we're going to say there is. I have a feeling they also said, obiter, that they would also be prepared to admit common law contribution between wrongdoers.

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