This was in their honours opinion no doubt19 because

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Unformatted text preview: quot; Gray, Q.C. relied upon support from Wadsworth v Lydall (1981), examined in Chapter Four, and Sanrod v Dainford (1984). The Court's Judgment Mason CJ. and Wilson J., in a joint leading judgment, dealt with the points asserted by counsel for the accountants in a systematic fashion. They acknowledged early common law hostility to the award of interest,15 and noted the tension in the common law position of prohibition of interest awards on overdue debts and damages from the time of Page v 10 (1989) 171 C.L.R. 125 at 130. [1854] 9 Ex. 341; 156 E.R. 145. 12 (1989) 171 C.L.R. 125 at 131. 13 [1981] 2 All E.R. 401. 14 (1984)54A.L.R. 179. 15 (1989)171C.L.R. 125 at 137. 11 318 Newman (1829), w hich led to the enactment of Lord Tenterden's Act in 1833.17 Then- Honours noted the restrictive circumstances in section 28 of that Act upon which cour were allowed to give interest. Noting that it was upon this ground that the House of Lords had refused relief in London, Chatham & Dover Railway Co. v South Eastern Railway Co. despite being dissatisfied with the (then) state of the law on awards of interest, they further observed that Hadley v Baxendale had been conspicuously absent from the judgment in London, Chatham & Dover Railway case. This was, in their Honours' opinion, "no doubt"19 because the House of Lords in the London, Chatham case had considered that the awards of interest had stood apart in their Lordships' opinion from the general principles of damages. This conspicuous lack of comment on the major damages cases decided in the 19 century on the part of the House of Lords i London, Chatham &Dover Railway was mentioned in Chapter Four. Mason CJ and Wilson J then turned to consider the cases which were decided after World War II which reflected a different judicial approach to the award of interest. succession, their Honours considered Trans Trust S.P.R.L. v Danubian Trading Co. Ltd.20, Wadsworth v Lydall21, and La Pintado22, where the House of Lords approved Wadsworth v Lydall, and ruled that the consequential damage caused by a defendant's action upon which interest was claimed could fall under the second limb of the rule i Hadley v Baxendale. This brought their Honours to the conclusion that the House of Lords in La Pintada had been able to flee the restrictive chains of stare decisis by concluding that London, Chatham & Dover Railway was concerned solely with ike first 16 (1829) 9 B & C 378; 109 E.R. 140. This case was extensively examined in Chapter Four. Civil Procedure Act, 1833 (U.K.), 3 & 4 Will. 4, c. 42, was examined in Chapter Four. 18 [1893] A.C. 429. 19 (1989) 171 C.L.R. 125 at 139. 20 [1952] 2 Q.B. 297. 21 [1981] 2 All E.R. 401. 17 319 limb of the rule in Hadley v Baxendale and not the second. This allowed M a s o n CJ and Wilson J to turn to the issues which would dispose of the case at hand, and apply the second limb of the rule in Hadley's case to the present facts. It is significant to note that the High Court referred to the migration of recovery of opportunity cost from the second limb of the rule of Hadley v Baxendale, to the first limb. M a s o n CJ and Wilson J questioned whether a loss that falls under the second limb of the rule in Hadley23 will always fall under the second limb: [T]he circumstances which are n o w held to attract the second limb in Hadley v Baxendale - take, for example, those in Wadsworth v Lydall - are very often circumstances which in any event would attract thefirstlimb. If a plaintiff sustains loss or damage in relation to money which he has paid out or foregone, w h y is h e not entitled to recover damages for loss of the use of money when the loss or damage sustained was reasonably foreseeable as liable to result from the relevant breach of contract or tort? After all, that is the fundamental rule governing the recovery of d amages, according to thefirstlimb in Hadley v Baxendale24 ... and subject to proximity, in negligence.25 Mason CJ, and Wilson J noted the inconsistencies which arise when the strict division of the limbs of the rule in Hadley are applied: If the distinction between the two limbs is to be rigorously applied in claims for damages for loss of the use of m oney, a plaintiff w h o actually incurs the expense of interest o n borrowed money to replace m o n e y paid away or withheld from him will be entitled to recover that cost, so long as the defendant was aware of the special circumstances, but not otherwise. T he expense must fall within the second limb of Hadley v Baxendale in order to be compensable. It cannot fall within the first limb because the defendant cannot be fixed with imputed knowledge of the plaintiffs financial situation and of his n eed to incur expense by borrowing money. Furthermore, a plaintiff w h o is not compelled to borrow m o n e y by w a y of replacement of money paid away or withheld will not be entitled to recover for the opportunity lost to him, i.e., lost opportunity to invest or to maintain 22 [ 1985]A.C. 104. D amages which are recoverable under the second limb of the rule i...
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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.

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