From: Jason W Neyers <jneyers@uwo.ca>
Sent: Wednesday 14 February 2024 19:52
To: robert.stevens; obligations
Subject: RE: Unforeseen Damage in the Supreme Court
On an
unrelated matter, I found the discussion as to who has burden in relation to
legal causation/remoteness interesting/thought provoking. Is the court
confusing the tactical burden with the legal burden?:
61. As regards legal causation (by which we mean the question whether an
intervening event subsequent to the tort has broken the chain of causation
between the tort and a particular loss), the authorities do not speak with one
voice. But the weight of authority supports the view that here too the burden
is on the defendant. This was clearly stated by Lord Haldane and Lord Dunedin
in The Metagama (1927) 29 Ll L Rep 253, 254, 256. An opposite view was
expressed by Lord Sumner in Owners of SS Singleton Abbey v Owners of SS
Paludina [1927] AC 16, 25-26, which was followed by Lord Merriman P in The
Guildford [1956] P 364, 370, without attempting to resolve the divergence
of opinion in the House of Lords. However, in subsequent ship collision cases
courts have consistently preferred the view taken in The Metagama that,
once it is shown that loss was in fact caused by the defendant s tort, the
burden is on the defendant to establish that a subsequent event operated as a
new intervening cause: see eg The Fritz Thyssen [1967] 2 Lloyd s Rep
199, 202-203; The Lucile Bloomfield [1967] 2 Lloyd s Rep 308, 313; The
Zaglebie Dabrowskie (No 2) [1978] 1 Lloyd s Rep 573, 574. This view is also
supported by the decision of the Court of Appeal in Philco Radio and
Television Corpn of Great Britain Ltd v J Spurling Ltd [1949] 2 All ER 882.
62. There is a surprising absence of authority on the question of who
has the legal burden of proof in relation to remoteness. But, as a principle
which cuts back the right to recover damages for loss that has been factually
caused by a tort, remoteness plays an analogous role to the duty to mitigate,
contributory negligence and, on what we think is the better view, the concept
of an intervening cause. Logically, therefore, the legal burden of proof must
likewise lie on the defendant to plead and prove that loss which was in fact
caused by the defendant s tort is nevertheless irrecoverable because it is too
remote. As discussed above, in relation to the tort of negligence, this
requires showing that the loss suffered was not of a type that was reasonably foreseeable.
63. The underlying
justification for this approach rests, as we see it, on considerations of both
fairness and efficiency. Once it has been proved that the defendant has
committed a wrong which has caused loss to the claimant, it is fair to place
the onus on the wrongdoer to show a good reason why the wrongdoer should not be
liable to compensate the victim for the full extent of the loss caused. In
addition, it would be unduly burdensome to require a claimant who has proved
that the defendant committed a tort which has caused the claimant loss to have
to anticipate ways in which it might nevertheless be said that the defendant
should not be held legally responsible for the loss and rebut them. It is far
more efficient, as well as just, to place the burden on the defendant to make
such a case.
64. Here, as generally, the rules of pleading are a good guide to where
the burden lies in accordance with the principle that the person who asserts
(and not the person who denies) must prove: see, eg, Imperial Smelting Corpn
Ltd v Joseph Constantine Steamship Line Ltd [1942] AC 154, 174. It is not
the practice, when pleading claims for the remedy of damages for the tort of
negligence, for claimants to allege that losses claimed were of a reasonably
foreseeable type any more than it is the practice for claimants to plead that
they took all reasonable steps to mitigate the loss, or that they were not
contributorily negligent, or that no intervening cause broke the chain of
causation. In all these cases, in our view, the pleading practice is an
accurate indication that the defendant bears the burden of proof.
Jason Neyers
Professor of Law
Faculty of Law
Western University
Law Building Rm 26
e. jneyers@uwo.ca
t. 519.661.2111 (x88435)
From: Robert Stevens <robert.stevens@law.ox.ac.uk>
Sent: Wednesday, February 14, 2024 1:42 PM
To: obligations <obligations@uwo.ca>
Subject: Unforeseen Damage in the Supreme Court
An
interesting case on remoteness of loss decided by the UK Supreme Court today: Armstead
v RSI [2024] UKSC 6, rightly overturning a decision of the Court of Appeal.
Lords Leggatt and Burrows give the lead judgment, with which Lord Richards and
Lady Simler concur, with a brief concurrence by Lord Briggs.
https://www.supremecourt.uk/cases/uksc-2022-0100.html
A car was
hired by the claimant, and negligently damaged by the defendant. Under the
terms of the agreement between the claimant and the hire company, the claimant
is liable for costs of repairs, and to pay a daily hire rate up to a maximum of
30 days for every day the vehicle is being repaired. The claimant herself never
incurred any costs of repairs nor did she ever suffer any loss of use during
the period of hire. Could the claimant recover as damages her contractual
liability to the hire company for its costs of repairs and loss of use?
The court
correctly concluded that the claimant had title to the car by virtue of her
possession and could therefore recover for any loss she suffered as a result of
the defendant s negligent damage of the vehicle (disapproving of statements in
the Court of Appeal to the contrary). Such consequential loss included her
contractual liability to the hire company.
The more
difficult remaining question was whether the consequential loss that she
suffered, by virtue of her contractual liability to the hire company for the
loss of daily use during repairs, was too remote. Lord Leggatt and Burrows
state (at [47](ii)]
just as loss of use to the claimant is
reasonably foreseeable and not too remote, so is the contractual liability of
the claimant to pay damages for loss of use to the hire company.
However,
this must be doubtful. If I damage a car, it is reasonably foreseeable by me
that the owner will repair it and that they will be unable to use it while it
is repaired. One would have to be very perspicacious indeed to be able to
reasonably foresee that the car was being hired, and that the terms of the hire
would have a clause requiring the hirer to pay a sum for loss of use on a daily
rate.
But,
although the claimant s unusual actual loss was not foreseeable, it should
still be recoverable so long as no higher than the ordinary loss that would be
foreseeable, that she did not herself personally incur (under Cory v Thames
Trains), so long as not ruled out for any other reason such as the rules on
mitigation. Such (ordinary) foreseeable loss is the cost of repairs and the
loss of use whilst they re being carried out.
If
therefore the liability under the contract with the hire company is a genuine
pre-estimate of the loss following from not having a car for that number of
days, it should be recoverable. This is because it would be no more than the
reasonably foreseeable loss in the ordinary case.
But, what
if the clause were unenforceable, perhaps because a penalty or for any other
reason? Could damages for loss of use of the vehicle still be recovered by the
hirer? Lord Leggatt and Lord Burrows state (in obiter dicta) that it
could be (at [72]) but here their reasoning is obscure.
If the
clause is unenforceable, the claimant will suffer no consequential loss from
the loss of use during repair. The hire company will, but they are not the
claimant.
The better
answer is that if someone negligently damages a car I have title to, I am
entitled to general damages. If it is destroyed, that is measured by its market
value, but here that is best calculated as being the reasonable costs of
repairs plus a sum reflecting the loss of use during such repairs. Both should
be recoverable regardless of whether the claimant actually suffers any
consequential loss themselves (The Mediana, Burdis v Livsey).
Alternatively,
it may be that in some cases the hire company could recover for loss of use of
the car from the hirer independently of the offending clause, because the hirer
was in breach of another valid obligation, so that consequential loss is still
suffered by her.
Rob
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