Report No. 69

8.11. Principles of damages matters of substantive law.-

We have already stated1 that the principles on which damages may be awarded are outside the law of evidence. These are matters of substantive law, and may not necessarily be the same in all countries. German law, for example, does not deny some element of retribution or satisfaction as a motivation for the award of damages. Somewhat similar is the position in Swiss law.2 The principle in these two continental countries-in respect of non-material injury-is that of "mollifying" or giving satisfaction to the plaintiff.

1. Para. 8.2.

2. Stoll Penal purposes in the Law of Torts, (1970) 18 American Journal of Comparative Law 3.

8.12. The principle of full compensation for the wrong committed could include not only out-of-pocket damages (damnum emergens) and loss of profits (lucrum cessans), but also those outlays and expense which are the inevitable consequences of the wrong complained of. What should and should not be regarded as such consequence, is for the substantive law.

8.13. Factors which are, and which are not-to use Lord Denning's phrase1 "uncompensatable", are matters for the substantive law. For example, even in proprietary actions, there is (in England) a disinclination to grant compensation for sentimental attachment of the plaintiff to a piece of property damaged by the defendant.2

1. Hinz v. Berry, (1970) 2 QB 40 (CA).

2. Daorbishire v. Waren, (1963) 1 WLR 1067 (CA).

8.14. As we have already stated, section 12 pre-supposes the existence of the relevant principles, and provides, in effect, that evidence is admissible of facts which may bring those principles into play. We shall indicate the principles below.

8.15. Application will vary.-

The application of the section will vary according to the nature of the cause of action, as well as according to the other circumstances. In actions for breach of contract, for example, apart from the damages which would be awarded for the loss arising naturally from the breach of contract-i.e., according to the usual course of things-damages can be claimed for such loss as may reasonably be supposed to have been in the contemplation of the parties as the probable result of this breach. Hence, the special circumstances under which the contract was made, communicated by one party to the other, might be relevant under section 12.1

1. Compare Victoria Laundry Windson v. Newman, (1946) 2 All ER 806.

8.16. Consequences of breach of contract.-

As to the consequences of breach of contract, the Indian Contract Act1 provides as follows:-

"73. When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.

Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person had contracted to discharge it and had broken his contract.

Explanation.-In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account".

1. Section 73, Indian Contract Act, 1872.

8.17. Section 73, Contract Act analysed.-

According to this section, in estimating the loss or damage for which compensation is made recoverable in cases of breach of contract, the following broad rules are to be followed as guidelines:

(1) Damages recoverable must be such as naturally arise in the usual course of things from the breach of contract; or

(2) It must be damage which the parties knew, when they made the contract, to be likely to result from the breach;

(3) Such damage must in neither case be remote or indirect; and

(4) In both cases, the means which existed of remedying the inconvenience caused by the non-performance of the contract, that is to say, from the breach, must be taken into account.

8.18. Torts.-

In actions for tort also, apart from general damages, special damages can be sought. Evidence required to assess special damages will be particularly relevant under section 12.

8.19. Variety of evidence.-

Evidence useful for determining the amount of damages under section 12 could, therefore, be of wide variety. In cases where a claim is for compensation for death, specialised evidence may, for example, be useful. Preparation of the analysis of gross and net earnings of a deceased person may require the help of accountants. An actuary can give evidence of the life expectancies of the deceased and beneficiaries. Evidence of ordinary witnesses might be required to show the prospects of the deceased increasing or decreasing his income, and the probable benefits that would flow to his family.

Even the evidence of economists as to the cost of living and similar factors may be useful.1 While the court cannot compel a physical examination of a claimant, the health of claimants may be relevant.2 In an English case,3 Phillimore, J., while refusing to speculate on the likelihood of the re-marriage of a widow, suggested that the statistics of the various ages at which women re-marry might be appropriate.

1 Mallett v. Mc Onagle, (1969) 2 All ER 178.

2 Baugh v. Delta Water Fittings Ltd., (1971) 3 All ER 258.

3 Buckley v. John Allen etc. Ltd., (1967) 1 All ER 539.

8.20. Awards in similar cases.-

In assessing the amount of damages, the court can also take into consideration awards in similar cases.1

1 Waldon v. War Office, (1956) 1 WLR 51.

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