There's no argument about the fact that the sale wouldn't have happened but for the breach. If the ship would have been sold anyway at the relevant time the whole avoided loss argument would have been a non-starter.

But the argument that speculation by a plaintiff for his own account shouldn't affect the defendant's liability either way is a strong one: the plaintiff should be left with benefit or burden, as the case may be. Ships are volatile investments, like securities. In selling the New Flamenco the plaintiffs were taking a punt (a fantastically successful one, as it happens) that charter rates would drop sharply. If they'd been wrong and rates had gone through the roof (together with capital values, which are very dependent on charter rates) they would have borne the loss of appreciation. If so they should have the benefit of having saved themselves the effect of a massive depreciation. If anything, this case seems to me a fortiori to the share benefits in Laverack from investing in the competitor, something the plaintiff there couldn't have done but for the breach: here, if they'd been inclined, the plaintiffs could have made their profitable sale at any time.

Andrew

Like Rob, I think we need to be clear which element of causation (of benefit) we are talking about. The difficulty I am having with the decision is in being sure what the 'factual causation' position (ie the application of the 'but for' test) was on the facts of the case. Although Rob and Andy Summers have said that it was clear that, but for the repudiatory breach by the charterers, the owners would not have sold the vessel (at its high market value), that may be contradicted by Lord Clarke's point (referred to twice at paras 22 and 32 of his judgment) that the owners might have sold the vessel even if there had been no repudiatory breach. That is, irrespective of the breach, they might have sold the vessel with an ongoing charterparty. If factual causation is not satisfied, then plainly one ignores the sale of the vessel and the decision is clearly correct. But if, on the other hand, factual causation is satisfied (ie the ship would not have been sold but for the breach), I find the decision much more difficult to justify. In particular, it is hard to see that the sale of the ship would then be too indirectly related to the breach  (as with eg the shares in the Lavarack case); and I find it difficult to see any convincing analogy to the well-known exceptions where one ignores compensating benefits (insurance proceeds and benevolence).

On a separate and very sad note, members of this list may not have seen (there is an announcement on the Supreme Court's website) the very sad and shocking news that Lord Toulson died yesterday.     

Best wishes,

Andy

 

Professor Andrew Burrows QC (Hon), FBA, DCL

Professor of the Law of England,

All Souls College,

Oxford.      

---

From: David Cheifetz [dcheifetz@gmail.com]
Sent: 28 June 2017 16:57
To: Robert Stevens
Cc: obligations@uwo.ca
Subject: Re: New Flamenco

Dear ​Rob,

"Legal" causation only ever reduces the relevant range of "causes", it doesn't increase it. Indeed, how could it?​"

Cook v Lewis,

Summers v Tice 

are your answer to how could it.

Best,

David

On 28 June 2017 at 12:10, Robert Stevens <robert.stevens@law.ox.ac.uk> wrote:

"Legal" causation only ever reduces the relevant range of "causes", it doesn't increase it. Indeed, how could it?

--

David