LAW 748 – DAMAGES & SPECIFIC PERFORMANCE FOR T ANTIA RAHMADHINA ID: 6526978

BREACH OF CONT RACT

QUANTIFYING THE NON-PECUNIARY DAMAGES

FROM BREACH OF CONTRACT

Abstract
When a breach of contract has occurred, the wronged party will seek justice to
the court in order to obtain compensatory damages for any loss caused by the
breach. In providing a fair compensation, it is easier for the court to determine
the economic losses or pecuniary damages that directly connected to the breach
of contract. However, there is another category of damages that is more difficult
for the court to determine, it is the non-economic loss to the breach of contract in
a category of what commonly known as non-pecuniary damages. This non-
pecuniary damages comes in the form of pain, suffering and emotional distress.
The aforesaid difficulty by the court lies within the connection between the breach
of contract and the non-pecuniary damages itself due to the fact that it is not out
of the ordinary for the wronged party to feel such distress when a contract is
breached and since it is a form of non-economic damages, a universal method to
calculate such loss has not been agreed. In addition to that, the court also argued
that non-pecuniary damages would not pass the application of the remoteness test
by the court. Non-pecuniary damages cannot be foreseen and it is considered
unfair for the counterparty to compensate on things that they’re unable to
mitigate. The Addis v Gramophone Co Ltd case also cemented this limitation by
laying down that the non-pecuniary damages rule. The status of non-pecuniary
damages has developed over the years and the fact that damages in the form of
pain, suffering and emotional distress have its own term, showed that such
damages is being acknowledged in a legal perspective. Although it is
unavoidable, non-pecuniary damages have never been less important. Quite often,
the wronged party found themselves in a contract that impacted more on its non-
economic value rather than its economic value such in the case of Jarvis v Swan
Tours Ltd, where holidays did not meet the standard as set out in the brochure.
The economic compensation for Mr. Jarvis was only half of the payment he made
for the holiday and therefore, he appealed for non-pecuniary damages, which as a
result, the court awarded him with more than he was paid due to the horrible
holiday experience that can only be valued with more than just the economic side
of it. In order for the court to give a fair compensation, there has to be a form of

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assessments as a base for consideration made by the court to quantify the non-
pecuniary damages experienced by the wronged party. In general, we can look to
the principle of remoteness, causation and mitigation as a form of assessment.
The court will most likely take consideration of the value of contract itself and
quantify it from there by seeing the difference between price paid and actual
value, although in some cases the court awarded more than that. We will further
discuss on what kind of assessment that has better approach to provide adequate
compensation to non-pecuniary damages.

Introduction: A Background to the Reason Behind Insignificant Development of Non-

Pecuniary Damages Assessment
A contract is a set of rights and obligations between parties that shall be fulfilled and
when they are not fulfilled by one of the party, then a breach of contract has occurred. In a
breach of a primary obligation, the court generally enforces a secondary obligation to the
contract breaker to pay damages of a certain amount of monetary compensation to the other
party. 1 Also known as pecuniary damages, the court must be able to identify and value the
loss that comes from the breach of contract based on some assessments, such as the cost of
cure, difference in value, reasonableness and /or loss of amenity. The importance of these
assessments can be seen in the case of Ruxley Electronics and Construction Ltd v Forsyth
back in 1996. 2 In summary, the case is about the construction of a swimming pool, which
depth was not build in the value as written in the contract. We can agree that based on that
fact, the promisor was clearly in breach of the contract since he did not build the swimming
pool accordingly. The part that makes the case interesting is in the how little the difference in
value that the promisee used as its underlying argument to claim the awards. In the contract,
the swimming pool was supposed to have a maximum depth of seven feet six inches, w hile
the swimming pool was end up build in the maximum depth of seven feet. With only six
inches different, it is crucial for the court to apply the correct assessment in order to provide a
fair award that should be given by the promisor. According to the court, the six inches
difference was not affecting the safety of the swimming pool and the value of the property
itself. As a result, the court cannot assess based on the difference in value. I f the court applied
the cost of curing, the promisor would have to destroy the current swimming pool and rebuild
it, which costing approximately £21,000. However, destroying the current swimming just to

1 Photo Production Ltd v Securicor Ltd [1980] AC 827 (HL) at 848.

2 Ruxley Electronics and Construction Ltd v Forsyth [1996] AC 344.

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add six inches to the depth of an already acceptable and safe swimming pool seemed to be an
unreasonable decision. In a reasonable person perspective, the court decided to give an award
of £2,500 for loss of amenity instead.
The Ruxley case has shown the importance of applying the correct assessment in order
to quantify the correct amount of pecuniary damages. However, the case was also considered
by some of falling under the non-pecuniary damages category. 3 Non-pecuniary damages
consist of frustration, mental distress, injury to feelings, annoyance and loss of reputation.
The consideration that Ruxley case also falls into the category of non-pecuniary damages is
based on the primary obligation of the contract of providing pleasure to the promisee and by
not completing the depth of the swimming pool, the promisor has made the promisee
suffered, resulting the damages awarded in the case as non-pecuniary damages. In general,
the common law does not recognize non-pecuniary damages arising form breach of contract
because according to the rule stated by Halle J, “in an action founded on a breach of contract
the only kind of loss … which is a subject for compensation is a financial loss.” 4 The judges
do not consider other loss that comes in intangible form, namely the non-pecuniary damages.
There are several reasons in which the judges refused to acknowledge the existenc e of non-
pecuniary damages in a breach of contract. In the Ruxley case, Lord Mustill stressed out in
contrast to the notion that award is considered to be non-pecuniary damages by stating the
following:5
The law must cater for those occasions where the value of the promise to the promise
exceeds the financial enhancement of his position which full performance must secure.
This excess, often referred to in the literature as the ‘consumer surplus’ … is usually
incapable of precise valuation in terms of money, exactly because it represents a personal,
subjective and non-monetary gain. Nevertheless where it exists the law should recognize
it and compensate the promise if the misperfomance takes it away.
The statement highlighted that although the loss experienced by the promisee cannot be
valuated in terms of money, it is considered to be a ‘consumer surplus’ instead of a non-
pecuniary loss.
The status of no-damages rule for non-pecuniary damages was first established back
in 1909 in the case of Addis v Gramophone Co.6 The case has been cited numerous times as

3 M Graham and E McKendrick “The Sky’s the Limit : Contractual Damages for Non -Pecuniary Loss”
(2002) LMCLQ 161, at 165.
4 Sunley Ltd v Cunard White Star Ltd [1939] 2 KB 791 at 799.
5 Ruxley above n 3, at 360.
6 Addis v Gramophone Co [1909] AC 488.

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the underlying argument to reject the awarding of non-pecuniary damages. 7 On the other
hand, the case also raised numerous debates and criticism for not recognizing the non-
pecuniary damages since there were cases prior to Addis that settled a form of non-pecuniary
damages. 8 To put in summary, the case is about the dismissal of Addis by his employer,
Gramophone Co. In the employment contract, Gramophone Co must provide six months
prior notice to the employee, namely Addis, in case of dismissal. They indeed provided such
notice, but in the following six months, Gramophone Co employed another person to work in
Addis’ place and therefore, prevented him from working. Other than the obvious breach of
contract, in which Addis losing his salary since he was paid weekly and also from
commission in every trade he’s done, he also felt being humiliated by the harsh and wrongful
dismissal from Gramophone Co. In his argument, this humiliation will cause the loss of his
reputation, lessening his chance of being employed in other places. After the fact, the judges
unanimously decided to give Addis the damages for the lost wages and commission for the
six months’ period that he was unable to obtain due to the attendance of a new replacement.
However, the judges had a different take on Addis’ claim regarding the wrongful dismissal.
Lord Loreburn that acted as the Lord Chancellor in this case stated the following:9
If there be a dismissal without notice the employer must pay an indemnity; but that
indemnity cannot include compensation either for the injured feelings of the servant, or
for the loss he may sustain fro the fact that his having been dismissed of itself makes it
more difficult for him to obtain fresh employment.
This argument made by the Lord Chancellor is then considered as a general rule for non-
pecuniary damages arising from breach of contract. The case has taken out ‘injured feelings’
as a part of the compensation, making non-pecuniary damages to irrecoverable. There are a
lot of criticism regarding the judgment of this case, one of them is stating that the judges did
not specifically questioned on whether damages can be recovered for non-pecuniary loss, but
more on whether the manner of dismissal by the Gramophone Co is a direct consequence
from the breach of contract. 10 If this is true, then the general rule of awarding non-pecuniary

7 Norton Tool Co Ltd v Tewson [1973] 1 W LR 45; Bliss v South East Thames Regional HA [1987] ICR

700; Whelan v Waitaki [1991] NZLR 74; Ruxley Electronics and Construction Ltd v Forsyth [1996] A C 344;
Hamilton Jones v David [2004] 1 A ll ER 657; Dunnachie v Kingston Upon Hull City Council [2004] 2 All ER
501; Wiseman v Virgin Atlantic Airways Ltd [2006] EWHC 1566.
8 Burton v Pinkerton (1867) LR 2 Ex 340; Hobbs v London and South Western Rly Co (1875) LR 10

QB 111.
9 Addis above n 7, at 491.
10 Nelson Enonchong, “Breach of Contract and Damages for Mental Distress” (1996) 16 Oxford

Journal of Legal Studies 4.

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damages that is mainly derived from this case is in fact consistent from its predecessor, which
currently act as exceptions.
There are other cases following the Addis case that provides a better background on
why the judges created a boundary to the claim of non-pecuniary damages. From the Ruxley
case and the Hayes v James & Charles Dodd case, the judges perceived contracts as a form
of commercial vehicle created between two parties. If injured feelings or mental distressed
are included as a consequence for a breach of contract, then in cases that involves ship owner
claiming unpaid freight or demurrage, those ship owners would be able to claim for non-
pecuniary damages for the mental distress that they’re having as they waited for they
money. 11 This argument also contributes to another argument that non-pecuniary damages,
such as mental distress, are seen as a common consequence that the wronged party must have
felt when the contract that they entered into is breached. By considering non-pecuniary
damages as a form of loss in a breach of contract, the judges would be overwhelmed by non-
pecuniary claims out of any kind of breach of contract. Lord Millet stated in the Johnson v
Unisys Ltd case stated that, “ … so commonly a consequence of a breach of contract that the
parties must be regarded not only as having foreseen it bus having agreed to take the risk of
its occurrence.” 12 Another argument that can be taken out from the case is that while
pecuniary damages are easy to quantify, non-pecuniary damages are not. The methods use to
detect and prove accurate and consistent measurements of a non-pecuniary loss arising from a
breach of contract are almost non-existent.
The cases that were presented above have established the general rule of the common
law that it has not fully accepted the acknowledge ment and awarding of non-pecuniary
damages. Although this general rule is heavily criticized, many judges still use the ratio set
out in the Addis case, creating a more difficult situation for the awarding of non-pecuniary
damages development in the common law. Since the application is heavily limited, it
becomes difficult for lawyers and legal practitioners to understand how the judges conducted
their assessment when they allow such award to happen. There have been some cases over
the years where the court awarded non-pecuniary damages to the wronged party that creates
exceptions to the general rule of awarding non-pecuniary damages. Although these are not
too many cases that apply these exceptions, it provides a better understanding for lawyers and
legal practitioners regarding the assessment o f non-pecuniary loss. The presented cases will
mostly comes from United Kingdom in order to provide a better understanding on the

11 Hayes v James & Charless Dodd [1990] 2 All ER 815 at 823.

12 Johnson v Unisys Ltd [2001] 1 AC 518 at [70].

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application of those exceptions. Moreover, this essay will discuss the underlying assessment
that is used to quantity the intangible character of non-pecuniary loss.

Exceptions to the General Rule of Non-Pecuniary Damages

Although the general rule of awarding non-pecuniary damages from the Addis case is
still generally accepted, there are exceptions to the case in which the court may have the
ability to award non-pecuniary damages. There are three exceptions from the general rule in
Addis case. 13 First is as long as the plaintiff can proof the direct connection between the non-
pecuniary loss that they suffered with the breach of the contract, its form, being intangible,
shall not prevent the judges to award non-pecuniary damages. Second is when the very object
of the contract is in fact to provide a form of pleasure and enjoyment. The third exception is
when real physical inconvenience suffered by the plaintiff was as a result of a breach of
contract. We will first discuss the second and the third exception before we go to the first
exception.
The second exception usually emerged in what is known as ‘holiday’ cases, cases that
comprised of people being dissatisfied of their holiday tour package because it ended up to be
really different from what were promised by the travel operators. Take for example the case
of Jarvis v Swans Tours in 1973. 14 In this case, Mr. Jarvis and his wife bought a holiday
package to Switzerland from Swans Tours, where they’re going to spend their Christmas.
However, the holiday did not go as planned because most of the things that was promised in
the holiday package brochure were not as expected in reality. As a result, the couple end up
wasted their two weeks of vacation to a terrible holiday. There are two claims made by the
plaintiff, first was for the cost of the holiday itself and second was for two weeks salary,
which he would’ve obtained instead of the inconvenience and loss that he had to go through.
The judges was previously only awarded Mr. Jarvis with half of the total amount of the first
claim and denied the second. However, Lord Denning in the court of appeal turned this
judgment and awarded Mr. Jarvis with of both claims by stating the following argument:15
One such case is a contract for a holiday, or any other contract to provide entertainment
and enjoyment. If the contracting party breaks his contract, damages can be given for the
disappointment, the distress, the upset and frustration caused by the breach. I know that it

13 Francis Dawson, “General Damages in Contract for Non -Pecuniary Loss” (1983) 10 New Zealand
Universities Law Review 232 at 242.
14 Jarvis v Swans Tours [1973] 1 QB 233.
15 At 238.

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is difficult to assess in terms of money, but it is no more difficult than the assessment,
which the courts have to make every day in personal injury cases for loss of amenities.
He also considered that the limitation of non-pecuniary damages could only be awarded when
there is a physical inconvenience to be out of date. It would be unfair for Mr. Jarvis if the
court only awarded him with only the cost of holiday package because he lost more than that.
Instead of enjoyment, Mr. Jarvis and his wife had to suffer to a holiday that was supposedly
providing them with pleasure and happiness. The argument set out in this case becomes a
benchmark for future cases such as the Heywood v Wellers case regarding a woman, namely
Mrs. Heywood, who engaged the service of a firm, namely Wellers, to provide her with legal
assistance in order to protect her from molestation that failed miserably as the firm unable to
provide adequate legal assistance.16
The third exception is derived from the case of Hobbs v London and South Western
Co in 1875. 17 In this case, the London and South Western Co, a railway company, was unable
to take its passengers, a family that consists of Mr. Hobbs, his wife and two children, to their
destination. They end up had to walk for quite distance in the cold weather and as a result,
Mr. Hobbs’ wife became sick for a few days and unable to help him to work, causing the
family loss any income that they may get. The court decided to award Mr. Hobbs’ claim of
the non-pecuniary damages for the inconvenience that he and his family had to experience
because this is seen as a direct result of the train inability to take them to its supposed
destination. 18 However, Mr. Hobbs made another claim in relation to his wife sickness and
this claim was regarded as too remote by the judges and therefore dismissed. 19 The judgment
in this case, having been prior to the existence of Addis case, served as a reminder of the
ever-changing condition of the common law and that the general rule of awarding non-
pecuniary damages is not as limited as it seems. It also served as a critique to the Addis case
as this case acknowledges non-pecuniary loss in a breach of contract.
The judgment in this case is then being used in the case of Farley v Skinner in 2000.20
The case is about Mr. Farley, who apparently interested in a property located in Surrey,
which then asked Mr. Skinner to provide his service of surveying the property for him. One
of the main features that he was looking for in the property is the level noise in the area,
knowing the property is located near the Gatwick airport. Mr. Skinner conducted the survey

16 Heywood v Wellers [1976] QB 446.

17 Hobbs v London and South Western Railway Co (1875) LR 10 QB 111.
18 At 115 per Cockburn, CJ.
19 At 122 per Blackburn, CJ.
20 Farley v Skinner [2000] TCLR 6.

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and delivers a report to Mr. Farley that stated the level noise in the property’s area is of no
disturbance. After reading this, Mr. Farley buy the property and renovate it. Unfortunately,
the level of noise in the property’s area is in fact noisy and disturbing. Having felt being
fooled by the Mr. Skinner, Mr. Farley submitted a claim for the loss of the value of the
property and general damages or non-pecuniary damages in the form of distress and
inconvenience. The judges from different level have different response to this case. They all
only agreed to dismiss the first claim for the loss of the value of the property. The lower court
and the House of Lords agreed to award Mr. Farley with non-pecuniary damages, while the
court of appeal disagree disagreed with the judgment of the lower court. The court of appeal
applied the test of the first exception, stating that the object of the contract was not to provide
enjoyment or pleasure, therefore what happened to Mr. Farley was not considered as
exception and subject to the general rule of non-pecuniary damages in the Addis case. 21 The
House of Lords then overturn this judgment as they applied a different exception to the case,
the physical inconvenience exception. The judges acknowledged the judgment made by the
court of appeal that the object of the contract was not to provide pleasure or enjoyment, but
there is a physical inconvenience that Mr. Farley experienced as a direct result from Mr.
Skinner inability to provide the correct information on the level of noise of the property’s
area. 22 The exception in that is applied in the Farley v Skinner case provides a more lenient
approach by the court towards awarding non-pecuniary damages in a breach of contract
compared to the first exception that only applies to the object of the contract is to provide
enjoyment and pleasure.
One of the criticism to the current exceptions applied by the judges is that the
exceptions are too narrow when it comes to deal with ‘less apparent’ non-pecuniary losses
such as anxiety and mental distress. Apparently such approach is still followed widely,
including New Zealand. New Zealand mainly relies on the application of remoteness test, the
exception set out in the Watts v Morrow case when awarding non-pecuniary damages, and the
distinction of commercial contracts in receiving non-pecuniary damages. 23 There are some
inconsistencies in application because the judges has delivered different argument in defining
the key points of cases in awarding or not awarding non-pecuniary damages. It even as
further as contradicts with the other principle. Take for example in the case of Cotterell &
Thomas v Windsor where the judges awarded the plaintiff $6,000 in general damages for

21 Skinner v Farley [2000] Lloyds Rep 516.

22 At [85] per Lord Scott.
23 Renee Holmes, “Mental Distress Damages for Breach of Contract” (2004) 35 VUW LR 687 at 695-

696.

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mental distress for a breach of property contract. Take for example the case led by Cooke P
in Mouat v Clark Royce. 24 The case revolves around a widower that obtained an inadequate
legal advice from a firm, namely Clark Royce. The widower request to be awarded in general
damages as she suffered mental distress as a result of the inadequate legal advice. Cooke P in
his judgment in this case dismissed the widower claim under the reason that the award that
she will receive already covered the general damages. 25 He then continued his reason by
differentiating the contract as a commercial contract, leading to the argument that d istress is
expected in a breach of commercial contract. 26 This argument of course has been objected
because the wronged party does not accept the risk of mental distress or anxiety as much as
they do not accept the risk of other damage. 27 On the other hand, there is the case of Hames v
Gray led by Pankhurst J who awarded $3,000 for mental distress as the outcome for a breach
of deer farming business purchase contract that was not considered as commercial contract. 28
After reading the cases above that become the background to the second and third
exceptions, we can see that although the judges elaboration on the background of those
exception were not clear enough, the judges probably chose those exceptions because both
exceptions are apparent in characteristic with an obvious indication to the connection
between the non-pecuniary losses and the breach of contract. 29 By acknowledging that these
exceptions are in fact apparent and obvious in character, then the judges should not detest its
existence in a breach of contract. There is a this fear that if non-pecuniary loss is being
awarded and not differentiated from the pecuniary loss, it will open a floodgate of
inexplicable non-pecuniary damages amount. This fear does not make any sense because civil
law country, such as France, has acknowledged the awarding of non-pecuniary damages from
a breach of contract by applying full compensation principle to any loss out of a breach of
contract and these awards are modest compared to pecuniary damages. 30
Opposing the floodgate argument is the first exception to the general rule of awarding
non-pecuniary damages. The second and third exceptions take small parts of the first
exception by acknowledging the non-pecuniary loss. It also highlights the importance of
setting aside the intangible characteristic of the non-pecuniary loss in order to award damages

24 Mouat v Clark Royce [1992] 2 NZLR 559.

25 At 568 per Cooke P.
26 At 569 per Cooke P.
27 Enonchong above n 11, at 630.
28 Hames v Gray (24 July 2000) HC Dun AP3/00.
29 Enonchong above n 11, at 634.
30 Solene Rowan Remedies for Breach of Contract: A Comparative Analysis of the Protection of

Performance (Oxford University Press, New York, 2012) at 125-126.

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fairly and also served in support of making the non-pecuniary losses to be more apparent.
The court never has any problems in quantifying other things that probably has more
economic value, but difficult to calculate. 31 Therefore, the court should not use the
intangibility of non-pecuniary losses as a reason to withhold the development of a warding
non-pecuniary damages. The award is made not to compensate losses, but more on the state
of affairs in order to cover damages other than pecuniary losses. 32 This state of affairs
argument may enlighten our understanding on the judges’ ground to quantify the amount of
non-pecuniary damages that will be discuss in the next section.

Assessments to Quantify Non-Pecuniary Damages

It is already difficult to determine the background reason of awarding non-pecuniary
damages based on the above cases that we have previously discussed. Therefore, it becomes
more difficult to understood how the judges determine the amount of non-pecuniary damages
when they finally awarding it. The argument that the non-pecuniary damages cannot be
recoverable because of its characteristic is to be heavily criticized, as the court never had a
problem before when quantifying intangibles that are not non-pecuniary loss. It is Lord
Mustill who set out the opposing argument to the intangibility and unquantifiable issue of
non-pecuniary damages in the Ruxley case by stating the following:33
… the test of reasonableness plays a central part in determining the basis of recovery, and
will indeed be decisive in a case such as the present when the cost of reinstatement would
be wholly disproportionate to the non-monetary loss suffered by the employer. But it
would be equally unreasonably to deny all recovery for such loss. The amount may be
small, and since it cannot be quantified directly there may be room for difference of
opinion about what it should be. But in several fields the judges are well accustomed to
putting figures to intangibles, and I see no reason why the imprecision of the exercise
should be a barrier, if that is what fairness demands.
If applied, Lord Mustill argument would help the English court to be more open minded in
awarding non-pecuniary damages and to also recognize that the value of a contract is not as
of economic value, but also higher that comes in the form of contractual performance and
satisfaction. 34 Similar argument was also raised in Chaplin v Hicks case that while

31 Chaplin v Hicks [1911] 2 KB 786 at 792.

32 Andrew Tettenborn, “Non-Pecuniary Loss: the Right Answer, but Bad Reasoning” (2003) 2 J.
Obligations & Remedies 94 at 102.
33 Ruxley above n 3, at 361.
34 Adrian Wong, “Damages for Non-Pecuniary Losses in Contract Law: A New Horizon” (1998) 19

Sing L.R. 77 at 96.

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highlighting one of the method of quantifying pecuniary damages is through the difference
highlighted that in the light that such method is inapplicable, it should not relieve the
wrongdoer of the necessity of paying damaged for the breach of contract. 35 Difficulties in
quantifying or determining the non-pecuniary loss should be use as a reason to provide any
sort of remedy or recovery to the wronged party to the best effort that the judges can do in
light of the available information and evidence. 36
Lord Mustill argument in the Ruxley case has opened the world of possibilities for
judges in awarding non-pecuniary damages. Let’s start with the damages awarded in the
Chaplin v Hicks case.37 This case involves a photography competition that was held by a
magazine. The applicant in this case sent her photo to the magazine and was selected as the
top 12 who will win the competition. The winner of the competition would be awarded with
an engagement for three years at 5l. a week, 4l. a week or 3l. a week, according to their
wining position. There was a condition that has to be met by the applicant in order for her to
win the competition and that was she has to attend a meeting with the magazine that she was
unable to attend due to her location at the time the invitation was sent. As a result, she didn’t
win the competition and therefore, she sued the magazine to recover damages on the ground
that by reason of the applicant’s breach of contract she had lost the chance of selection for an
engagement. The jury in this case awarded her with 100l for that missed opportunity under
the grounds that the defendant did not take reasonable means to give the plaintiff an
opportunity of presenting herself for selection. 38 This explanation is hardly enough to come
into the conclusive amount. The judges only explained that, “I think that, where it is clear that
has been actual loss resulting from the breach of contract, which it is difficult to estimate in
money, it is for the jury to do their best to estimate; it is not necessary that there should be an
measure of damages in each case.” 39 In this case, the judges has shied away from the
reasoning in the amount that the jury has awarded because it is not their duty to determine
such amount, but it is their duty to provide reasoning to reach such number, which is not
enough in this case (if the jury relied to the loss opportunity of being engaged in the
magazine, they should come to the number between 144 l. to 240l.). The judges admit that
there was no certain method used in quantifying the amount of award given to the applicant

35 Chaplin v Hicks [1911] 2 KB 786, at 792 per Lord Mustill.

36 Dunk v George Waller & Son Ltd [1970] 2 WLR 1241, at 1246 per Karminski LJ.
37 Chaplin above n 37.
38 At 788.
39 At 795 per Fletcher Moulton LJ.

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as being used in ‘other’ cases that frequently occurred (such as pecuniary damages), 40 which
actually in accordance with what Lord Mustill has set out in the Ruxley case.
How about non-pecuniary damages arising from physical inconvenience or the object
of the contract? Knowing that these are the exceptions to the general rule of awarding non-
pecuniary damages and more ‘apparent’ in characteristic, it should be easier for the judges in
providing explanation to reach the conclusive award. In the case of Hobbs v the London &
South Wester Railway, the judges awarded the Mr. Hobbs 8l. for the inconvenience that he
and his family has to suffered by having to walk home, instead of awarding the 20l. for the
wife’s illness and its consequences. 41 The reason they did not awarded for the medical
recovery is that the damages are just too remote, which is peculiar because if the wife is not
sick at the end of the day, such physical inconvenience probably existed but not as much as
bothersome to be claimed. In the subsequent claim made in the Farley v Skinner case, the
judges awarded Mr. Farley for the inconvenience that he experienced due to the aircraft noise
of £10,000, but not the lost differentiation of the property’s price. 42 Lord Scott argued that
there are two ways in which Mr. Farley can claim, first he could claimed for being deprived
of the contractual benefit or he could claimed as having consequential loss on breach of
contract as set out in Watts v Morrow case, but he cannot claimed for both as it will be double
recovery. 43 The judges chose to apply the first approach and end up with £10,000 award for
physical inconvenience only. Although it’s only obiter in the case, the judges stated
numerous times in their judgment that the award amount should be modest and that there has
to be some sort of middle grounds that they can achieve by referring to the judgment made in
the Ruxley case and also an accepted general principle in previous case. 44 Again, there is no
specific method that the judges made in quantifying the number of the award. However, there
is something in common from both cases is that the judges end up giving the ‘middle’
numbers when being faced with the maximum award threshold set out in the relevant cases.
In the Watss v Morrow case, a similar approach is also chosen. 45 The case resolves
around the Watts couple that bought a property under the surveyor’s report made by Morrow.
Unfortunately, the content of the report was not in conformity with the reality since the Watts
couple has to conduct some renovation to the property that cost more than what should have
just the cost of the property itself. They claimed £33,961 for the cost of the repairs together

40 Ibid.
41 Hobbs above n 19.
42 Farley above n 22, at [56].
43 Farley above n 22, at [109].
44 Farley above n 22, at [110]; Perry v Sidney Philips & Son [1982] 1 WLR 1297.
45 Watts above n 15.

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with £4,000 to each plaintiff for distress and inconvenience. The judges dismiss the first
claim, but not entirely as it was the grounds for calculation that was wrong, but not the
damages itself. The judges changed the awards to £15,000 instead of the £33,961 under the
diminution rule, which is an accepted rule set out in the Philips v Ward case. 46 On the non-
pecuniary damages that the plaintiff’s has claimed, the judges dismissed it entirely and
replaced it with only £750 under a different set of grounds by stating that:47
The proper approach is to fix a modest sum for the amount of physical discomfort
endured having regard to the period of time over which it was endured. I would not take
into account, as did the judge, in fixing the general damages, anything in respect of the
expenditure on a holiday in Scotland.
He continued by diminishing the differentiation between the damages awarded. Again, the
reason that the judges reduced the amount of non-pecuniary damages is because the amount
is not modest, for being too large. One point of criticism against the reduced award is that
although the judges provide a long and elaborate explanation in how the claim for distress
and inconvenience made by the plaintiff does not fall under either exception, the judges still
acknowledge its existence by awarding a form of damages. This probably the background on
why the judges reduce the amount of award in this case.
To this point, we can conclude that modesty seems to be the underlying reason in
quantifying the amount of award given for non-pecuniary damages. The judges will not
award an extensive amount of award that will exceed the amount of pecuniary damages. This
kind of approach is probably being affected by the current general rule of non-pecuniary
damages and also to reduce people’s expectation when claiming such damages in the future.
There is another explanation that probably will provide a better understanding on the
underlying reason for the amount awarded by the judges. The key is that damages exist, not
to reimburse loss as such, but to indemnify a claimant for a particular state of affairs, for
having lost something in respect of the fact that he has been deprived of some particular asset
or benefit. 48 So when the judges perceived the damages awarded in the economical sense is
already enough to recover such benefit, then any other kind damages would not be necessary
to be added or put in a large amount.

46 At 1439 per Ralph Gibson LJ; At 1445 per Bingham LJ.

47 At 1443 per Ralph Gibson LJ.
48 Tetternborn above n 33, at 102-103.

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Conclusion
We can conclude that currently there is inconsistencies laid out by the judges in
common law countries when establishing awards for non-pecuniary damages. The same also
applied to the method being used in quantifying the amount of award for non-pecuniary
damages. In cases that we have discuss above, it feels like the judges are taking the high route
of avoiding to tackle the real issue of acknowledging that non-pecuniary damages is indeed
recoverable without strict limitation. This can be seen in the amount of award in the cases
that was not clear enough from they derived from. Although we can find some common
thread at the end, but the judges never set out a clear explanation about it in their jud gment to
explain this issue. One thing that can be agreed is that the approach that they have taken is in
accordance with the method they have used in determining the award for non-pecuniary
damages, leaving a room of interpretation for a loss that is considered to be intangible and
unquantifiable. We can agreed that the current excep tions applied to the current general rule
of non-pecuniary damages are clearly ‘apparent’ in character, which may have been a way for
the judges to see and provide a more consequential result to non-pecuniary loss. It is probably
best to leave the situation of awarding non-pecuniary damages as it is, but a more direct
approach in determining and quantifying non-pecuniary damages would create a more
consistent result out of the cases.

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Bibliography

A. Cases
1 New Zealand
Hames v Gray (24 July 2000) HC Dun AP3/00.
Mouat v Clark Royce [1992] 2 NZLR 559.
Whelan v Waitaki [1991] NZLR 74.

2 United Kingdom
Addis v Gramophone Co [1909] AC 488.
Bliss v South East Thames Regional HA [1987] ICR 700.
Burton v Pinkerton (1867) LR 2 Ex 340.
Chaplin v Hicks [1911] 2 KB 786.
Dunk v George Waller & Son Ltd [1970] 2 WLR 1241.
Dunnachie v Kingston Upon Hull City Council [2004] 2 All ER 501.
Farley v Skinner [2000] TCLR 6.
Hamilton Jones v David [2004] 1 All ER 657.
Hayes v James & Charless Dodd [1990] 2 All ER 815.
Heywood v Wellers [1976] QB 446.
Hobbs v London and South Western Rly Co (1875) LR 10 QB 111.
Jarvis v Swans Tours [1973] 1 QB 233.
Johnson v Unisys Ltd [2001] 1 AC 518.
Norton Tool Co Ltd v Tewson [1973] 1 WLR 45.
Photo Production Ltd v Securicor Ltd [1980] AC 827.
Ruxley Electronics and Construction Ltd v Forsyth [1996] AC 344.
Sunley Ltd v Cunard White Star Ltd [1939] 2 KB 791.
Watts v Morrow [1991] 1 WLR 421.
Wiseman v Virgin Atlantic Airways Ltd [2006] EWHC 1566.

B. Books and Chapters in Books

Solene Rowan Remedies for Breach of Contract: A Comparative Analysis of the Protection of
Performance (Oxford University Press, New York, 2012).

C. Journal Articles

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Adrian Wong, “Damages for Non-Pecuniary Losses in Contract Law: A New Horizon”
(1998) 19 Sing L.R. 77.
Andrew Tettenborn, “Non-Pecuniary Loss: the Right Answer, but Bad Reasoning” (2003) 2
J. Obligations & Remedies 94.
Francis Dawson, “General Damages in Contract for Non-Pecuniary Loss” (1983) 10 New
Zealand Universities Law Review 232.
M Graham and E McKendrick “The Sky’s the Limit: Contractual Damages for Non-
Pecuniary Loss” (2002) LMCLQ 161.
Nelson Enonchong, “Breach of Contract and Damages for Mental Distress” (1996) 16 Oxford
Journal of Legal Studies 4.
Renee Holmes, “Mental Distress Damages for Breach of Contract” (2004) 35 VUWLR 687

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