The courts are now willing and in some respects

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: just paradigm has been vindicated. This starkly contrasts with the slippery slope fallacies anticipated. The intrinsic characteristic of the common law's case-by-case incremental evolution, though, may still hinder a systematic development in this area. Some aspects of apparent oscillation are to be expected with an issue which is determined on evidence. The recovery of opportunity cost has not been completely relegated to a rule of evidence in any event, being still governed within the legal framework assigned by the courts to govern all recovery of damages. The issue of remoteness, therefore, will remain a formidable obstacle to any plaintiff seeking recovery of opportunity costs. In addition, the issue of causation still remains clouded in some respects. Whether the courts will continue to refine the rule in Hungerfords, or whether they may narrow its application in future cases breeds uncertainty. The historic relic of hatred for usury, the entrenched 85 Beloit Canada Ltd. v Valmet Oy (1995) 61 C.P.R. (3d) 271 at 287-288, cited in LED Homes Pty. Ltd. Eagle Homes Pty. Ltd. [1999] F CA 584 at p. 56. 340 reluctance o f the c o m m o n l aw to e mbrace changes from surrounding commercial environment and economic theory, and the manifest injustice which has been perpetrated upon plaintiffs by unscrupulous defendants have all been modified to incorporate consideration of the opportunity cost of the use of money. The courts are now willing, and in some respects anxious, to receive evidence of a tangible nature where a plaintiff can overcome the prohibition on opportunity cost recovery from the late payment of a debt or damages by a defendant. There is still a difference in the way the courts assess damages in relation to losses in tort, as opposed to losses in contract. A plaintiffs tor action which alleges and proves a defendant's deceit may also be viewed with a higher level of acrimony by judges86 who may be more willing to award remotely intangible opportunity costs. The changing view of the limits of the concept of restitution in damages may also continue to add some uncertainty. 86 Sellars v Adelaide Petroleum N.L. (1994) 179 C.L.R. 332; also see the passage by Seddon and Ellinghaus 1997 pp. 776-8. 341 C HAPTER TEN — C ONCLUSION Opportunity cost is a real cost determined by the next most profitable alternative available for an investment. It is always time-oriented. Indeed, the time value of money is at the heart of economic and financial theory. Opportunity cost can be portrayed as th difference between what 'would-have-been' and 'what is/was' in the plaintiffs financial position. Despite the fundamental need in economics/finance to incorporate consideration of the time value of money, prior to 1989 opportunity cost had no credible recognition in the common law courts, other than simple statutory interest. Thus, plaintiffs were prevented from recovering the opportunity cost of funds withheld from them by defaulting defendants. In 1989, the topography of damage recovery was substantially altered. Opportunity cost may now be recoverable in the common law courts under an action for the loss of the use of a sum of money. On this view, money has value in use and the wrongful unrecompensed withholding of a sum of money inflicts a real loss to plaintiffs who could otherwise use the funds for profitable investment or trading purposes. The courts now recognise the economic measure of opportunity cost as a real cost to plaintiffs. The foundational change which took place through Hungerfords v Walker has dramatically delimited consequential damage recovery involving capital sums withheld from payment. Opportunity cost does not only encompass capital placements, though, for lost profits in intellectual property disputes have proved to be leading cases in the acknowledgment of economic theory in the courts. Opportunity costs in common law, subsequently, are enjoying greater prominence in a wide variety of cases where the evidential burden can be met. Although in 1989 the High Court of Australia recognised the common law action for the loss of the use of money, there are still daunting barriers to universal recovery of 342 opportunity costs which linger within the c o m m o n law recovery paradigm. C o m m o n law still maintains its ancient heritage. In the methodology of the modern court system which originated in the ecclesiastical influence of both the doctrine and personnel of the chur the most salient feature of the common law refusal to award opportunity costs originated in the church's hatred of usury. Usury, connoting the use of an asset or sum of money, was an invidious practice in the eyes of the church. The church assumed the same philosophical position as the ancient writers, especially Aristotle, who tolerated traders as performing an unpleasant but necessary social practice. In contrast, usurers, those who lent money in return for an interest component in addition to the capital sum, were considered the lowest for...
View Full Document

This note was uploaded on 09/03/2012 for the course LAW 1501 taught by Professor Garva during the Three '12 term at University of Adelaide.

Ask a homework question - tutors are online