Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] 1 WLR 277

Key points

  • A contracting party is entitled to only nominal damages where he has personally suffered no loss
  • Lord Denning’s view in Jackson v Horizon Holidays is limited to its specific fact pattern

Facts

  • Wimpey (D) contracted to buy some land from C for £850,000 and paid £150,000 to a third party (T)
  • The contract included a clause allowing termination when statutory authority commences compulsory purchase proceedings
  • Environment secretary commenced purchase and D rescinded the purchase
  • C claimed that D had committed a repudiatory breach
  • Both the High Court and Court of Appeal allowed C to obtain damages for T’s loss based on Jackson v Horizon Holidays

Held (House of Lords)

  • On the facts there was on breach of contract
  • In obiter, if there had been a breach, C would not have been awarded with damages for the loss of £150,000 suffered by T

Lord Wilberforce

On Jackson v Horizon Holidays

  • I am not prepared to dissent from the decision
  • It might be a broad decision on the measure of damages per James LJ or it might an example of a type of contract which includes persons contracting for family holidays, ordering meals in restaurants, or hiring taxi for a group which call for special treatment

Current case

  • Jackson is not applicable
  • Only nominal damages could be awarded

Lord Keith

On Jackson v Horizon Holidays

  • The case does not lay down any rule of law regarding recovery of damages for the benefit of third parties, but there may be a class of cases where third parties gain indirectly by virtue of contract where their deprivation of that gain is no more than a consequence of the loss suffered by one of the contracting parties
  • In that situation the damages recoverable by contracting party can take into account expense incurred by him in replacing by other means benefits of which third parties have been deprived or mitigating the deprivation of third parties

Lord Scarman

Exception where loss of third party is recoverable

  • It is open to the House to declare that a contracting party may rely on the fact that he required to make payment to a third party as prima facie evidence that the measure of his loss in the event of non-payment is the benefit he intended for third party