England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
(HIS HONOUR JUDGE HALLGARTEN)

		Royal Courts of Justice Strand London WC2A 2LL Thursday 11 October 2001

1. LORD JUSTICE WALLER: On 10 July 2001 His Honour Judge Hallgarten QC assessed damages for breach of various contracts. The primary point taken before him was that there was an available market for these goods and thus the damages should be assessed by reference to that market which would produce no loss. The judge held that there was not an available market. In addition he held that the claimants could have fulfilled all contracts and thus made a loss by virtue of not being able to fulfil these contracts.
2. Originally permission was being sought to appeal that finding of the judge. I refused leave on that ground and that ground is not pursued orally.
3. The judge then had to assess the damages. The basis on which he was to assess those damages was to attempt to discover what would have been the cost of producing the various items during 1997 so that the cost would be taken away from the contract price in order to calculate the loss of profit which he would award to the claimants. In doing that calculation he ultimately assessed the damages payable at £100,507.76 (being £77.525 principal and £22,982.76 in respect of interest).
4. Originally on paper I refused permission to appeal against the challenge to the way in which the judge calculated damages. It is that aspect which has been pursued by Mr Campbell before me. He takes two points. First, he says that the judge took the standard costs, which were a projection calculated by the claimants for the year 1997 and did not take the current costs which were the actual costs incurred 1998. If he were right on that point, that could make a difference of about £25,000 to the damages claimed. He further takes a point on overtime saying that the judge should have added some notional figure for overtime.
5. The claimants produced certain sets of calculation of their costs. The defendants produced no calculations whatever. On the claimants' calculations they produced a computer print-out which compared what were described as current and what were also described as standard costs of each of the individual items. In each case where one has a current or standard cost, the current costs were in fact higher than the standard costs. Mr Campbell argues that if one adds to the simple fact that the costs were higher, the additional factor that as the employees got more used to manufacturing these items, the more likely it would have been that the costs would go down from 1997 to 1998. In the result, to take the standard costs against the current costs was wrong.
6. Obviously one sees the argument, but the judge had to assess the costs in 1997. The figures which the claimants actually put forward as being the costs of 1997 were those in exhibit CFH 15. The judge clearly had in mind the points which Mr Campbell was taking and also the fact that, at least in one instance, which I suspect is the one which makes the most dramatic difference to the damages that gives rise to this possible £25,000 figure, the judge formed the view that the increase shown between the current and standard was an alarming one, and he formed the view that he was inclined simply to disregard it. He then found that it cast absolutely no light whatsoever on the position that might have existed in 1997.
7. It seems to me that that is a view that judge was entitled to form. I can see no reasonable prospect of success in the Court of Appeal of dislodging that finding.
8. The second point taken by Mr Campbell is that, in addition to not taking the current costs into account as Mr Campbell says the judge should, the judge should have added more for overtime. Mr Campbell argues that in order to produce these items, plus all the items that they were going to sell to other persons, the claimants would have had to employ employees on overtime and that, therefore, should be an additional factor. The judge said in relation to that point:

"Some overtime was, as I understand it, built into the figure, and I am not prepared to increase it any further".

9. If one asks oneself whether there is any reasonable prospect of succeeding in dislodging that finding in the Court of Appeal, the answer is "No". The difficulty for the defendants was that they fought the assessment of damages of claim on their main points, but they did not put in an accountant, no doubt for good costs reasons, in order to put in their own calculation of damages. In that context the judge was entitled to take the figures, have regard to the arguments of Mr Campbell which in my judgment he did, and make the award that he did.
10. Thus, I continue the refusal of permission to appeal on calculation of damages.
Order: Permission to appeal refused.