England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE MILTON KEYNES COUNTY COURT
(His Honour Judge Kenny)

		Royal Courts of Justice Strand London WC2 Wednesday, 20th June 2001

1. LORD JUSTICE KEENE: This is an application for permission to appeal against the decision of His Honour Judge Kenny at Milton Keynes County Court on 6th February 2001, that being a decision which related to the quantum of damages to be awarded to the applicant. The judge awarded Mr. Fitt £3,000 damages against the second defendant, together with interest of £779.01.
2. Mr. Fitt had purchased in September 1995 a new Discovery Land Rover. The dealer was the first defendant. The finance company was the second defendant and the manufacturer was the third defendant.
3. A problem developed with rust. The judge found that the corrosion was first discovered about 18 months after purchase, ie in early 1997. The corrosion was excessive for the vehicle's age and mileage. The judge found, as I think had been conceded, that the second defendants were in breach of contract as a result. There was an issue at trial as to what remedial measures were required to put good the damage. The applicant's case was that the entire body shell needed to be replaced at a cost of some £9,000. The defendants' witnesses gave evidence that it would be sufficient to cut out and replace the affected parts, that producing a cost of about £3,000-£4,000. The judge, generally speaking, preferred the evidence of the defendants' expert witnesses because he found that the corrosion had never been more serious than a significant cosmetic defect which he said could properly have been remedied at relatively modest cost at some stage in the past. The defendants had made various offers to the applicant but he chose to continue to use the vehicle, with the result that, by the time of the trial in February 2001, it had run up a mileage in excess of 45,000 miles. The judge concluded that rescision of the contract was therefore not available.
4. He expressed the measure of damages as follows:

"The prima facie measure of damages for that breach of contract is the loss of market value, that is to say the difference between the value of the vehicle as it ought to have been and the value of the vehicle as Mr. Fitt received it."

5. However, Mr. Fitt had produced no evidence on that issue of the value of the vehicle as it ought to have been and the value of the vehicle as it was at the appropriate date. As the judge said, he had to find the evidence from somewhere else. The judge took the view that the difference in value should be taken as at the date when the defects were first discovered, in early 1997. By then the vehicle, without the corrosion, would, he found, have been worth about £17,000 to £17,500. That was established and did not seem to be seriously in dispute. More difficult was its market value at that date with the corrosion. The judge was not prepared to use the repair costs as at early 1997 as the diminution in market value, that being something which the defendants had been arguing for. Had he adopted that course, it would have produced a figure of between £1,000 and £1,700 difference in market value. Doing the best he could on the material available, the judge asked what sort of discount an ordinary purchaser would make because of this problem at the relevant date. He concluded that it should be substantial and he assessed the discount at £3,000. Hence his award.
6. It is argued that that discount was too low. It is said that it did not reflect any repair cost estimates, nor did it reflect what the trade would have allowed for a vehicle in that condition. In addition, Mr. Hare, who has appeared for the applicant this morning, contends that the judge's finding of fact as to when the corrosion was discovered was wrong. He says that the applicant's expert, Mr. Skevington, found it in late 1996. Moreover, it is contended by Mr Hare that the judge at trial prevented questioning of the defendants' experts to an extent which was improper.
7. I can deal quickly with the last two points. As to the judge's finding on when the corrosion was discovered, there is no documentary evidence to support the argument being advanced on behalf of the applicant this morning. Nothing that Mr Hare has been able to show me indicates that the judge went wrong. There was oral evidence from Mr Skevington that he had found the corrosion in late 1996 but the judge did not accept that evidence. He heard the witnesses and he gave a rational explanation for why he did not accept the evidence given by Mr Skevington. I can see no basis for a successful appeal on this footing.
8. As for the allegation about the judge's conduct at trial, there is nothing in the grounds of appeal which raises this particular point. There is no evidence before me to that effect. It seems to me that this is a hopeless point to be making.
9. I turn to the main issue, the amount of the discount which the judge did indeed allow for the extent of the corrosion. As a matter of law, damages for breach of contract are aimed at putting the claimant, as far as money can do so, in the same position as if the contract had been performed. When the evidence does not enable the claimant's loss to be precisely quantified, the court will assess damages as best it can on the available evidence (see Tai Hing Cotton Mill Ltd v Kamsing Knitting Factory [1979] AC 91, 106. That was the position in which this judge found himself. He is not criticised for having made the best estimate which he could.
10. Generally, damages are to be assessed at date of breach unless this would cause injustice. Where a claimant does not know of the breach at the time, damages will usually be assessed as at the date when the claimant should reasonably have discovered the breach. That seems to have been the broad approach which this judge was adopting in trying to ascertain when it was that the corrosion was first discovered and then using that as the date at which damages were to be assessed. I note that £3,000 on an uncorroded market value of £17,500 is about a 17 per cent discount. It is not insignificant. It is a relatively substantial discount. It represents a figure roughly double what the judge found it would have cost in early 1997 to have substantially cured the rust.
11. It is not open to the applicant to attack the award on the basis that it did not reflect the repair costs. That would not have produced a higher award of damages. It may be, as has been said this morning, that the vehicle cannot now be repaired for £3,000, but that is approaching the matter at a later date than is appropriate. The applicant has had the use of the vehicle during all the intervening years and has been awarded interest on the capital sum awarded. It is for the claimant in a case like this to produce evidence to establish the level of his loss or damages on a proper market basis. This judge was placed in a difficult position because of the applicant's failure to do that.
12. I do not see that the judge's findings of fact are properly susceptible of challenge. Nor did he go wrong in his approach as a matter of law, bearing in mind the principles which I have outlined earlier. Having considered the evidence about the extent of the corrosion, the cost of repairs at the appropriate date and the market value of a Discovery Land Rover without this problem at that date, the judge made the best assessment that he could of the drop in market value. Mr. Fitt has been very dissatisfied with this vehicle and no doubt with some cause, but I have to say that I can see no real prospect of the full court interfering with the assessment of damages at which the judge below arrived at. For that reason I am going to refuse the application for permission to appeal.
Order: Application refused.