“Speculation, prophecies, conjecture and guessing

“Speculation,prophecies,conjectureandguessing‐thetimeforassessmentof

damagesfortherepudiationofcontracts”

SarahCDerrington

∗



INTRODUCTION

The“rulingprinciple”

whichliesbehindanawardofdamagesatcommonlawforbreachofcontractis

thatstatedbyParkeBinRobinsonvHarman:



 The rule of the common law is, that where a party sustains a loss by reason of a breach of

 contract, he is, so far as money can do it, to be placed in the same situation, with respect to

 damages,asifthecontracthadbeenperformed.

This principle has been continually confirmed throughout the common law world,

 together with its

correlativeprinciple,namelythataninjuredplaintiffisnotentitledtobeplacedinasuperiorpositionto

that which he would have been in had the contract been performed.

 This much is, I suggest,

uncontroversial.InalecturegivenattheChanceryBarAssociationConferenceon20January2006,Lord

Scottobservedthatdamagesisanareaofthecommonlawlargely,althoughnotentirely,untouchedby

statutoryreform but some aspects of which are at risk of becoming,if they have not already become,

incoherent. I hope it will not be considered too impertinent of me to suggest that the speech of Lord

ScottinGoldenStraitCorporationvNipponYusenKubishikaKaisha(TheGoldenVictory),

deliveredjust 

over a year after those prescient remarks, has done little to rectify the incoherency. Professor David

McLauchlan has put it rather more plainly, asserting that the current law in this area “is in a dreadful

muddle”.



Thetitleofthispaperistakenfromthejudgme ntofJusticeMcCollinadecisionhandeddow ninAprilof

thisyearinthematterofMcCrohonvHarith

,amatterconcerninganactionbrought againstsolicitors





∗

ProfessorofAdmiraltyLaw,TheUniversityofQueensland

WertheimvChicoutimiPulpCompany[1911]AC301

(1848)1Exch850,855;154ER363,365

Seeforexample,GoldenStraitCorpn vNipponYusenKubishikaKaisha(TheGoldenVictory)[2007]2AC353,[29];

Tabcorp HoldingsLtd vBowenInvestments PtyLtd[2009]HCA 8, (2009)236 CLR 272, [13]; EuropeanBankLtd v

RobbEvansofRobb Evans&Associates [2010]HCA 6, (2010) 264ALR 1, [11];Bank of America CanadavClarica

Trust Company [2002] 2 SCR 601; Joint Insurance Brokers Ltd v ME Joblin Insurances Ltd [2001] 1 NZLR 753; ICI

SwirePaintsLtdvTechiMotorEngineering&TradingCo[2003]3HKC432

The Commonwealth of Australia v Amann Aviation Pty Ltd [1991] HCA 5, (1991) 174 CLR 64, [8] citing  Learned

HandCJinLAlbert&SonvArmstrongRubberCo(1949)178F2d182

[2007]UKHL12;[2007]2WLR691

 David McLauchlan, ‘Some Issues in the Assessment of Expectation Damages’ [2007] New Zealand Law Review

563,629

[2010]NSWCA67

2



for breach of retainer or, alternatively, their duty of care and their fiduciary duty. In discussing the

principlesrelatingtotheassessmentofdamagesbothincontractandin tort,herhonourobserved:



 Thegeneralruleisthat“damagesfortortorforbreachofcontractareassessedasatthedateof

 thebreach”...However,thegeneralruleisnotrigidand“willyieldif,inparticular circumstances,

 someotherdateisnecessarytoprovideadequatecompensation”...Accordingly,thegeneralrule

 will yield if, at the time damages are assessed, the court is aware of new and material facts

 relevant to the assessment because courts prefer actual facts to specul ation, prophecies,

 conjectureandguessing.

Herhonouralsoremarkeduponthepropositionthatthe“ certaintyoftheprincipleconcerningthetime

asatwhichdamagesareassessedhasnowbeeneroded”;referringtothedecisionbothoftheHouseof

Lords in Golden Strait Corporation v Nippon Yusen Kubishika Kaisha (The Golden Victory)

 and the

remarks of Campbell JA in the NSW Court of Appeal in Gagner  Pty Ltd t/a Indochine Cafe v Canturi

Corporation Pty Ltd.

Inthe latter case, Campbell JA appears to have eschewed even the general rule 

saying:



 Itfollowsthat,eventhoughacauseofactionforbreachofcontracthasaccruedatthetimethe

 breach occurs, it cannot now be said that there is an accrued right at that time toreceiveany

 particular sum of damages. That is because it must await trial to decide what is the most



 appropriateway,inlightofeventsthenknown,togiveeffecttothe compensatoryprincipleof



 damages.



ItissuggestedthatsuchstatementsbyAustraliancourtsdolittletoassisttorectifytheincoherencyor

toclearupthemuddleinthis mostcriticalareaofcommerciallaw.Indeed,theytendtoobscurerather

thanilluminateaproperapproachtotheassessmentofdamages.Therecentcasesoftendrawnoclear

distinction between the assessment of damagesin contract on the onehand and in tort on the other.

Whilst there have been many cases which cite The Golden Victory, and indeed earlier cases, for the

propositionthathindsightshouldbeusedintheassessmentofdamages,allofthemwithoneexception,

arecases involvingbreachofadutyofcareorbreachofs.52oftheTradePracticesAct(1974)thelatter

of which, unquestionably, is a statutory economic tort.  Simply by way of example, Gagner Pty Ltd

trading as Indochine Cafe v  Canturi Corporation Pty Ltd,

 was a case concerned with the measure of

damages for water damage causedby the negligence ofthose for whom the appellant was vicariously

liable, Campbell JA referred specifically to The Golden Victory after adverting to counsel’s reminder to

theCourtof

 theendorsementinKizbeauPtyLtdvWG&BPtyLtd(1995)184CLR281at292‐4ofthe

 appropriateness of courts taking account, in assessing damages, of any events that have





Ibid[54]–[56]

[2007]UKHL12,[2007]2WLR691

[2009]NSWCA413,(2009)262ALR691,[51]

Ibid[54]

Emphasisadded

[2009]NSWCA413,(2009)262ALR691

3



 occurredbetweenthetimeofaccrualofthecauseofactionandtrialthatbearuponthedamage

 that a plaintiff has actually sustained, and the pr eferability of relying on facts rather than

 propheciestoassessdamages.

Thedifficultywiththerea s oning in Gagner PtyLtdtradingasIndochineCafe v Canturi CorporationPty

Ltd, for present purposes, is two‐fold. First, the assertion that it cannot now be said that there is an

accruedrighttodamagesasatthedateofabreachofcontract,isstatedinabsolutetermsanddoesnot 

withstandscrutiny,particularlywhenonehasregardtocaseswheretheapplicationofthemarketprice

rule is appropriate. Secondly, the endorsement in Kizbeau Pty Ltd v WG & B Pty Ltd was made in the

contextofcaseconcerningaclaimforcontraventionofs.52oftheTradePracticesAct19 74,inrespect

ofwhichtheHighCourtsaid[15]:

 Actions base d on s 52 are analogous to actions for torts. It follows that, in assessing damages

 under s 82 of the Act, the rules for assessing damages in tort, and not the rules for assessing

 damagesincontract,aretheappropriateguideinmost,ifnotallcases.

There is nothing in the judgment in Kizbeau Pty Ltd v WG & B Pty Ltd which casts  any light on the

appropriateapproachtotheassessmentofdamagesforbreachofcontract.

The purpose of this paper is  to suggest that the principles relating to the assessment of damages for

breachofcon tractareindeedsettledand,totheextentthatAustraliancourtsconsiderthatthedecision

in The Golden Victory has removed the hitherto certainty that pertained with respect to the time at

whichdamagesareassessed,theyhavebeenmisled.

THEPRINCIPLESRELATINGTOTHEASSESSMENTOFDAMAGESWHEREACONTRACTISREPUDIATED

Itissuggestedthatthereareonlytwolegitimatepurposesfortheawardofdamagesinacivilsuit:oneis

compensationforlossordamagecausedbywrongf ulconduct;theotherisvindication ofarightthathas

beenviolatedbywrongfulconduct.

The breachof contract is a wrong, a failure to comply with legal

obligations for which the innocent party has bargained for and provided consideration.

 The law

respondstothedeficiency oftheperformanceby anawardof damages.Themeasureofdamagescan

differ according to the wr ong but the ruling principle applies nonetheless, qualified by questions of 

causation,remotenessandmitigation. This paper focuses on the wrongfulrepudiationofcontractsfor

performanceovera periodof time,typicallya contractforthe performance ofpersonalservicesorfor

the supply of goods. It is contended that the principles that apply to an award of damages in such

circumstancesaresettled.

1. The repudiation of a contract by one party, if accepted by the other, brings the contract to an

 endandreleasesbothpartiesfromtheirprimaryobligationsunderthecon tract.







LordScott,paperdeliveredtotheChanceryBarAssociationConference,20January2006

FrancisReynolds,‘TheGoldenVictory–AMisguidedDecision’(2008)38HongKongLawJournal333,341

TheGoldenVictory[2007]2AC353,[8]

4



2. The injured party is thereby entitled to vindicate the repudiator’s failure to comply with his

 primary legal obligations by enforcing against the repudiator the secondary obligation to pay

 damages.



3. Thedamagesrecoverablebytheinjuredpartyaresuchsumaswillputhiminthesamefinancial

 positionasifthecontracthadbeenperformed.



4. Theinjuredpartyisentitledtorecoversuchdamagesasarisenaturally,thatis,accordingtothe

 usual course of things, from the breach, or such as may reasonably be supposed to have  been

 within the contemplation of both parties at the time they made the contract as the probable

 resultofthebreach.



As the High Court observed in The Commonwealth  v Amaan Aviation Pty Ltd, the Rule in Hadley v

BaxendaledoesnotdetractfromwhatwassaidinRobinsonvHarman;rather,itis concernedwiththe

question of remoteness and marks out the limits of the heads of damages for which the plaintiff is

entitled to receivecompensation. The HighCourt has also confirmed that the so‐called“two limbs” of

theRuleinHadleyvBaxendalerepresentthestatement ofasingleprincipleandthattheapplication of

that principle  may depend on the degree of relevant knowledge possessed by  the defendant in the 

particularcase.



5. Theinjuredpartyisnotentitled,bytheawardofdamagesonbreach,tobeplacedinasuperior

 positiontothatwhichhewouldhav ebeeninhadthecontractbeenperformedandthepartiesto

 the contract are kept to the benefits and burdens of the contract they have made: the injured

 party recovers no more than the net benefit he would receive under the contract: the

 defendantacquiresnorighttoprofitbyhisbreach.



6. Where there is an available market for the goods or services the subject of the contract ,  the

 normal measure of damages recoverable is the differenc e between the contract rate and the

 market rate for the goods or services;  this is because the injured party has been wrongfully

 deprivedofamarketableasset.



7. Asageneralrule,damagesforbreachofcontractinvolvingamarketable assetareassessedas

 atthedateofbreach;inthecaseorwrongfulrepudiationofacontract,thisisthedateonwhich

 theinjuredpartyacceptstherepudiationandterminatesthecontract.







Ibid

RobinsonvHarman(1848)1Exch850,855,154ER363,365

HadleyvBaxendale(1854)9Exch341;156ER145:TheCommonwealthvAmannAviationPtyLtd(1991)174CLR

64

TheCommonwealthvAmannAviationPtyLtd(1991)174CLR64,perMasonCJandDawsonJat[92],andsee

EuropeanBankLtdvRobbEvansofRobbEvans&Associates[2010]HCA6,(2010)264ALR1,[13]

TheCommonwealthvAmannAviationPtyLtd(1991)174CLR64

TheElenaD’Amico;ss51and52oftheSaleofGoodsAct1896(Qld)

AKASJamalvMoollaDawoodSons&Co[1916]1AC175,CampbellMostyn(Provisions)LtdvBarnettTradingCo

[1954]1Lloyd’sRep65

5



Astheinjuredpartysuffersthelossatthetimeofthedefendant’swrong,thetaskofatribunalis,sofar

asmoneycandoit,toputtheinjuredpartyintothepositionhewouldhavebeenifthedefendanthad

madeimmediate reparation, or reparation at the e arliest timethattheinjuredparty could reasonable

havemadegoodhisloss.Thus,theamountoftheinuredparty’sclaim crystallisesasatthedateofthe

loss,orshortlythereafter,andsubsequent delaywillhaveaneffectonlyontheinterestcomponentof

thefinalaward.Theprinciple ofcrystallisationdoesnot,ofcourse,applyinallcontexts.Mostnotably,it

hasbeenheldnottoapplywherethedefendantowesmoneyinaforeigncurrency

orwheredamages

aresoughtinsubstitutionforspecificperformance.

8. Thecrystallisationprincipleisdisplacedwherespecificperformanceissought.



Specific performance is usually sought in cases where there is no available market. In such cases the

injured party’s legitimate interest in actual performa nce justifies his failure to seek a substitute in the

marketandsoalaterdatemaybeusedtovaluetheremedyforbreach.

8. Itispermissibletotakeintoaccountlatereventsthatare“predestined”or“inevitable”

butnot

 todiscountfor“vaguepossibilities”orthepossibilityofthecontractbeingfrustrated.

Thequestioninsuchcasesiswhether,asatthedateoftheacceptanceoftherepudiation,thevalueof 

the injured party’s rights was capable of being rendered less valuable or valueless because of events

which,atthatdate

,werepredestinedtohappen.Itisnotaquestionoftakingintoaccountlaterevents

whichhadnotyetmaterialisedasatthedateofacceptanceoftherepudiation.

9. Only if the contractcannot be valued directly as a marketable asset is recourse requiredto be

 had to an estimate (viewed retrospectively as at the date when the exchange of value for

 compensation is effected) for thelikely future earnings, discountedfor the acceleration of cash

 flow.



THEGOLDENVICTORY

ItisperhapshelpfultobeginwiththedecisionthathasbeencitedbyAustraliancourtsashavingeroded

thecertaintyoftheprincipleconcerningthetimeatwhichdamagesareassessed.TheGoldenVictory



was a decision involving,  essentially, a contract for services to be supplied over a period of 7 years. It

concerned the breach of a  time charterparty, which contained a clause giving either partythe right to

cancel in the event that war or hostilities broke out between two or more of a number of named

countries in cluding the US, the UK and Iraq. On 14 December 2001, the charterers repudiated the

charterbyredeliveringtheshiptotheownerswho,on17December,acceptedtherepudiation andthen





MiliangosvGeorgeFrank(Textiles)Limited[1976]AC443

RadfordvDeFroberville[1977]1WLR1262

 Maredelanto Compania Naviera SA v Bergbau‐Handel GmbH (The Mihalis Angelos) [1971] 1 QB 164, Tele2

InternationalCardCompanySAvPostOfficeLtd[2009]EWCACiv9,[2009]AllER(D)144

M.Mustill,‘TheGoldenVictory–SomeReflections’,(2008)124LawQuarterlyReview570,585

TheGoldenVictory[2007]2AC353

6



claimeddamagesinrespectoftheamountoftimethatwouldhavebecomeduetothemforthewhole

of the remaining part of the charter, less amounts they could have earned by substitute employment.

There was, at the time, some 4 years of the charter left to run. The charterers argued that on the

outbreakofwarbetweentheUSandIraqon20 March 2003, they would have exercised their right to

cancel under the “war clause” such that the owners should only be entitled to damages between the

dateoftheowners’acceptanceoftherepudiationandthetimewhenchartererswouldhavecancelled.

Priortothe decisioninThe Golden Victorywhathadapparentlybeenunclearwas whethertheinjured

party’slossistobeassessedasofthedatewhenhesufferstheloss,inlightofwhatisthenknown,orat

alaterdatewhentheassessmentistobemadeinthelightofsuchlatereventsasmaythenbeknown.

TheprinciplessaidtobesettledbythemajoritydecisioninTheGoldenVictoryare:

1. the repudiation of a contract by  one party, if  accepted by the other, brings the contract to an

endandreleasesbothpartiesfromtheirprimaryobligationsunderthecontract;



2. the injured party is entitled to recover damages  from the repu diator to compensate him for

suchlossastherepudiator’sbreachhascausedhimtosuffer;



3. thedamagesrecoverablebytheinjuredpartyaresuchsumaswillputhiminthesamefinancial

positionasifthecontracthadbeenperformed;



4. an injured party may not, generally, recover damages against a repudiator for loss which he

couldreasonablyhaveavoidedbytakingreasonablecommercialstepstomitigatehisloss;



5. wherethereisanavailablemarket,theinjuredparty’slosswillbecalculatedontheassumption

that he has, on or within a reasonable time of accepting the repudiation, taken reasonable

commercial steps to obtain alternatively employment for the vessel forthe best consideration

reasonablyobtainable,

(therationaleforthispropositionbeingthatthereisnodutyowed to

thewrongdoerbutfairnessrequiresthattheinnocentpartyshouldnotordinarilybepermitted

to rely on his own unreasonable and uncommercial conduct to increase the loss falling on the

repudiator:KochMarineIncvD’AmicaSocietadi Na vigazionerAce(TheElenaD’Amico)[1980]1

Lloyd’sRep75[10]);

6. an injured party can recover damages for loss of a chance of obtaining a benefit and the

difficultyofaccuratecalculationisnot abartorecovery.



Noneoftheseprinciples,eitheraloneorincombination,appearsparticularlycontroversial.However,in

purportedreliance  ontheseprinciples, theHouseofLordsresolvedthatdilemma astowhen

damages

ought to be assessed in the following manner. It was accepted that, as a general rule, damages for

breachofcontract are assessedasatthe dateofthebreach.

However,it was alsoheldthat the rule

should not be applied mechanistically in circumstances where assessment at another date may more





Ibid[8]

Ibid

Ibid[9],[29],[32],[57]

Ibid[10]

Ibid[10],[57]

Ibid[21]

7



accuratelyreflecttheoverridingcompensatoryrule.

Suchrelevantcircumstanceswereconsideredby

theirLordshipsandincluded:

1. wherethecourtmakinganassessmentofdamageshasknowledgeofwhatactuallyhappenedit

need not speculate about what might have happened but should base itself on the known

facts



2. if a contract for performance over a period of time has come to an end by reason of a

repudiatory breach but might, if it had remained on foot, have ter minated early  on the

occurrence of a particular event, the chance of that event happening must be taken into

accountinanassessmentofthedamagespayableforthebreach



3. If it is certain that the event will happen, damages must be assessed on that footing.

 If the

contractwouldinevitablyhavecome to anendearlierthanits duedateanyway it is rightthat

the damages should be limited accordingly, regardless of whether or not the event was

predestinedatthedateoftherepudiation.Therefore,asuperveningeventiscapableoflimiting

themeasureofdamages.



Having taken such circumstances into account, their Lordships held that the rate at which the

hypotheticalnewcharteristobefixedisthatpertainingasatthedateoftherepudiation.Thisaccords

withthegeneralrulethatdamagesaretobeassessedasatthedateofbreach.However,theduration

oftheperiodforwhichdamagesarepayableisnotsofixed.Thustheshipownerscouldnotknowwhere

they stood when their right to damages accrued: the value ofthatright fluctuated in the light of later

eventsforwhichtheywerenotresponsibleandwhich,whentherightaccrued,wereamerepossibility. 

Consequentlythe“availablemarketrule”wasdisplaced.Therationaleforsuchanoutcomewassaidto

be that considerations of certainty and finality must  yield to the greater importance of achieving an

accurateassessmentofdamages.



LordScottsaid:



 Certaintyisadesideratum,andaveryimportantone,particularlyincommercialcontracts.Butit

 isnotaprincipleandmustgivewaytoprinciple.Otherwiseincoherencyofprincipleisthelikely

 result.

Itistheconclusionofthemajorityastowhendamagesaretobeassessedthathasprovedcontroversial.





Ibid[11],[32]&[57]

Ibid[12],citingBwllfa&MerthyrDareSteamCollieries(1891)LtdvPontypriddWaterworksCompany[1903]AC

426;InReBradbury[1943]Ch35;CarslogieSteamshipCoLtdvRoyalNorwegianGovt[1952]AC292;InReThoars

Dec’d[2002]EWHC2416(Ch.);McKinnnonvESurveyLtd[2003]EWHC475(Ch.);AitchisonvGordonDurham&Co

Ltd (Unreported,Court of Appeal, 30 June 1995)– none of which involved repudiation of acommercialcontract

wheretherewasanavailablemarket

TheGoldenVictory[2007]2AC353,[30]

Ibid[30]&[61]citingTheMihalisAngelos[1971]1QB164

TheGoldenVictory[2007]2AC353,[62]

Ibid[63]

Ibid[38]

8



LordBingham,intheminority,remarked:



 …the majority’s decision undermines the quality of certainty which is a traditional

 strength and major selling point of English commercial law, and involves an unfortunate

 departurefromprinciple.

Heraisedfoursubstantiveobjectionsto themajority’s  judgment,foundedasitwasontheproposition

that the owners would otherwise be unfairly over‐compensated. First – contracts are  made to be

performed, not broken. S econdly,  if on their repudiation being accepted, the charterers had prom ptly

honoured their secondary obligation to pay damages, the transaction would have been settled well

beforetheSecondGulf Warbecameareality.Thirdly,ownerswereentitledtobecompensatedforthe

valueofwhattheyhadlostonthedateitwaslostanditcouldnotbedoubtedthatwhat owners lostat

that date was a charterparty with slightly less than four years to run. Finally, that the importance of

predictabilityandcertaintyincommercialtransactionshasbeenaconstantthemeofEnglishlaw,atany

ratesincethejudgmentofLordMansfieldinVallejovWheelerandhasbeenstronglyassertedinrecent

years.



There has  been a veritable flood of academic commentary provoked by the decision in The Golden

Victory,mostofitdirectedeitherdefendingthecompensationprincipleor,alternatively,lamentingthe

demiseofcertaintyincommercialcases.NeitherapproachtoacritiqueofTheGoldenVictorygoesany

waytoexplaininghow thedecision canbeappliedinpracticeandindeed anuncriticaladoptionofthe

reasoning of the majority in the case might lead to a conflation of the principles relating to the

assessment of damages in contract on the one hand, and for equitable compensation on the other.



What is clear from the decision is that the governing princi ple in contract is the “compensatory

principle”. All of their Lordships agreed with that proposition.

 But their Lordships weredivided as to

the application of the principle. As Professor McLauchlan has elegantly put it:an award that the

minority regarded as being consistent with the compensatory principle wa s  said by the majority to

“offend” it.

 Ultimately what marks the critical difference between the majority and the minority

approachesturnedontwoissues:

 1. whetherthemarketpriceruleorthecompensatoryprincipleshouldbeapplied–

assumingthatthereisaninconsistencybetweenthetwo?and

 2. whetherdamagesshouldbeassessedasatthedateofbreachorthehindsightprinciple

shouldbeapplied?.

So, does The Golden Victory give carte blanche to courts to postpone the date “as at which” the

assessmentofdamagesforbreachofcontractistooccurtothedateoftrial?Theanswer,isofcourse 





Ibid[1]

Ibid[22]–[23]

McCrohonvHarith[2010]NSWCA67,[60]–[63]

TheGoldenVictory[2007]2AC353perLordBinghamat[9],LordScottat[29],LordBrownat[83]

 David McLauchlan, ‘Some Issues in the Assessment of Expectation Damages’ [2007] New Zealand Law Review

563,628

9



“no”. But even confining the decision to the specific facts of the case, it is contended that there is no

inconsistency between the market price  rule and the compensatory principle, i ndeed the market price

rule gives full effect to the compensatory principle. Sir Anthony Mason has observed that the

compensatory principle assumes that damages are to be assessed at an appropriate date and that

happenstobethedateofbreachwherethemarketruleisapplied.Whendamagesareassessedatthe

date identified in accordance with the applicable principle governing the assessment of damages, the

compensatory principle is satisfied.

 Thus, to the extent that the majority concluded that the market

pricerulewouldleadtoovercompensationoftheshipowners,itisconten dedthatthecasewaswrongly

decidedandthatthedecisionoftheminorityistobepreferred.

HEMARKETPRICERULE

Themarketprice ruleismostusuallyinvokedin respectofcontractsforthe saleofgoods. Sections51

and 52 of the Sale of Goods Act 1896 (Qld), and their counterparts throughout the country, give

statutory recognition to the rule. The sections provide that for non‐acceptance and failure to deliver

goodsthe prima faciemeasureofdamages is the differencein marketand contractprices at the time

thegoodsoughttohavebeenacceptedordelivered,subjecttotheexistenceofanavailablemarket.In

thesaleof goodscontext,marketpriceruleisstraightforward.Itcrystallisesdamagesasatthetimeof

breach.Itaccordswiththeprinciplethattheinjuredpartyisentitledtohavehislostrightsvindicatedas

atthedateoftheloss.Subsequentevents,includingwhatstepsth atinjuredpartytakesoromitstotake

thenbecomeirrelevantbecause,havinghadamitigationopportunitywhichisea sily valuedbyreference

to the mark et itself, the injured party is deemed to have assumed the risk of subsequent pri ce

fluctuations.

The market  price rule, however, is not confine d  to the sale of goods context and has

been applied  by analogy to a variety of other situations.

 It applies whenever there is an available

market to make a substitute contract for whatever has been lost on the basis that the injured party

should ordinarily  go out into the market to make a substitute contract to mitigate, and thereby

crystallise,hisloss.

Thesaleofgoodscasesusuallyconcernbuyerssuingsellersforsometypeofdefectiveperformancebut

themarketpriceruleappliesequallytoabuyerwho declinestoacceptgoods aswasthecaseinJamalv

Moolia Dawood Sons & Co

 and Campbell Mostyn (Provisions ) Ltd v Barnette Trading Co.

 In both

cases,theliabilityofthebuyerwasassessedas at the date of acceptanceofrepudiationbythe seller.





SirAnthonyMason,‘TheGoldenVictory’(June‐August2008)CommercialLawQuarterly3

 Chris Nicoll, ‘The Available Market Rule and Period Charters: Golden Strait Corp v Nippon Kubishka Kaisha’

[2008]TheJournalofBusinessLaw91,93

 WoodstockShipping Co v Kyma CompaniaNavieraSA(TheWave) [1981] 1 Lloyd’s Rep 521 (time charter);SIB

InternationalSRLvMetallgesellschaftCorporation(TheNoelBay)[1989]1Lloyd’sRep361(voyagecharter);Kaines

(UK) Ltd v Osterreichische Warranhadelsgesellscahft Austowaren Gesellscahft m.b.H. [19993] 2 Lloyd’s Rep 1

(contractforthesaleandpurchaseofcrudeoil);Dampskibsselskabet“Norden”A/SvAndreCieSA[2003]1Lloyd’s

Rep287(forwardfreightswapagreement)

[1916]1AC175

[1954]1Lloyd’sRep65

10



Theformercaseconcernedthemeasureofdamagesforbreachofacontractforthesaleofnegotiable

securities.ThePrivyCouncilsaid:



 If the seller retains the shares after the breach, the speculation as to the way the market will

 subsequently go is the speculation of the seller, not of the buyer; the seller cannot recover

 fromthebuyerforlossbelowthemarketpriceatthedateofthebreachifthemarketfalls,nor

 isheliabletothepurchaser fortheprofitifthemarketrises.

Thus, if the market falls, the seller cannot enhance his damages  because he should have mitigated by

resellingonthemarket.Ifheholdstheshares,hespeculatesathisownriskorforhisownprofit.AsLord

Binghamobserved,“Apartyisnot,afterall,obligedtoacceptarepudiation:hecan,ifhechooses,keep

the contract alive, for better or worse.”

 The consequence is that the termination of the contract  by 

acceptanceoftherepudiationhas theeffectofreallocatingthemarketrisktotheinjuredparty.

That

thismustbecorrectisreinforcedbytheconsequenceofthecontraryproposition;namelythatitwould

createincentivesforaninjuredpartytodelay.

ThemajorityinThe GoldenVictorydismissedtheapplicationofthe market priceruleinthe context of

that case (which by analogy with the above cases concerns the person to whom services are being

suppliedrefusingtocontinuetoacceptthem),forthefollowingreasons:

 1. theapplicationoftheso‐called“Bwllfaprinciple”militatedagainsttheapplicationofthe

rule;



 2. theruledoesnotrequirecontingencies–suchasthelikelyeffectofasuspensive

condition(astheyhadcharacterisedthewarclause)tobejudgedpriortothedate

whendamagesfinallycometobeassessed;



3. accountshouldproperlybetakenofacontingencywhichwouldreducethevalueofthe

contractlostevenwerethechanceofithappeningtobelessthan50%providedalways

thatitwasofsomerealandnotjustminimalsignificance,therebydisplacingtherule.



Theattraction oftheso‐called “Bwllfaprinciple”onfacts suchasThe Golden Victoryisclear.Judgesof

allpersuasionshaveadoptedtheoftciteddictumofLordMacnaghtenasjustificationforpostponingthe

dateofassessmentofdamagesuntiltrial:

 Whyshould  helistentoconjecture onamatter whichhasbecomeanaccomplished fact?Why

 shouldheguesswhenhecancalculate?Withthelightbeforehim,whyshouldheshuthiseyes

 andgropeinthedark?





[1916]1AC175,179

TheGoldenVictory[2007]2AC353,perLordBinghamat[22]

SMWaddams,‘TheDatefortheAssessmentofDamages’(1981)97LawQuarterlyReview445,447

TheGoldenVictory[2007]2AC353,perLordScottat[36],LordCarswellat[65],LordBrownat[78]

Ibid,perLordCarswellat[59],LordBrownat[78]

Ibid,perLordBrownat[76]

11



BwllfaandMerthyrDareSteamCollieries(1891)LtdvPontypriddWaterworksCo

concernedaclaimfor

statutorycompensationarisingundertheWaterworksClausesAct1847.Theissuebetweentheparties

waswhetherthecompensationshouldbeassessed,notonthebasisofthevalueofthecoalfieldorthe

coalinquestioninOctober1898,butonthebasisoftheamountwhichtheappellantcouldhavemade

from mining the coal? It was held that the proper basis for the assessment was the profit which the

appellantcouldhavemadefromminingthecoaland,thatbeingso,thearbitratorwasrequiredtotake

intoaccounttheup‐to‐dateevidenceoftheriseinpriceofcoalovertheperiodsinceOctober1898.

The“Bwllfaprinciple”seemstohaverisentoinexplicableprominenceinthecaselawontheassessment

ofdamagesforbreachofcontract.Thecasedoesnotconcernabreachofcontractnoranyother formof 

wrong. As is observed by Professor Reynolds, it is not referred to in any contract text book.

 Indeed,

theirLordshipswerethemselvescarefultodistinguishthesaleofgoodscases.LordHalsburysaid:



 Itwasnotapurchaseofthecoal,norisitanalogoustoapurchaseofthecoal.Itiswhatitis,and

 it appears to me that considering what it is I think the question propounded is solved by the

 statementofwhatitis.

The “Bwllfa principle” in fact has nothing whatsoever to do with the issue which was under

considerationinTheGoldenVictory,norindeedwithanyoftheissuesunderconsiderationinthecases

whichhaveciteditasauthorityforthepropositionthatitisappropriatetopostponetheassessmentof

damages for breach of contract.

 It is suggested the co‐called “Bwllfa principle” is best confined to

history,despitetheeloquenceofLordMacnaghten’sexhortation.

The second ground for dismissing the application of the market price rule is also misconceived. The

majorityassertedthat the contract was subjecttoa“suspensivecondition”,a condition which triggers

the operation of the contract itself, or one of the obligations arising under the contract in certain

circumstances. Again, Professor Reynolds points out the inherent lack of logic in such a

characterisation.

 How can the main obligation in a  seven year time charter containing a war

cancellationclausebeinsomewayconditionalonthenon‐outbreakofwar?ProfessorReynoldsopines

thatthea pproachofthemajoritymakestheactionfordamagesforbreachofcontractlook“somewhat

like an  action for loss of a chance that the contract will not be frustrated or ended for some other 

reason.”



Turningtothequestionof whenaccountshouldproperlybetakenofacontingencywhichwouldreduce

thevalueofthecontractlost,themajorityindicatedthattheirviewswereconsistentwiththoseofthe

minority.HoweverbothLordBinghamandLordWalkerwereclearthatonlyifwarhadbeenconsidered

“inevitable”asatDecember2001 wouldthearbitrator havebeenentitled totakeit intoaccount. The





[1903]AC426

FrancisReynolds,‘TheGoldenVictory–AMisguidedDecision’(2008)38HongKongLawJournal333,336

[1903]AC426,428

 Eg:McCrohon v Harith [2010] NSWCA 67, [56], HTW Valuers (Central Qld) Pty Ltd v Astonland [2004] HCA 54;

(2004)217CLR640,[39],KizbeauPtyLtdvWG&BPtyLtd&McLean(1995)184CLR281,[24]‐[25]

FrancisReynolds,‘TheGoldenVictory–AMisguidedDecision’(2008)38HongKongLawJournal333,336‐337

Ibid

12



view of the majority does not accord with The Mihalis Angelos

 where an exception to the general

principlewasmadeonlyforeventswhichare“predestined”or“inevitable”asatthedateofacceptance

of the repudiation. It must be remembered that The Golden Victory was not a case of anticipatory

breachinanyevent.Itwas anactualbreachofcontract,sorelianceoncaseslikeTheMihalisAngelosis

reallyofnoassistance.

Is there any further justifi cation for eschewing the application of the market price rule? Professors

Carter and Peden of the University of Sydney express the very firm view that The Golden Victory was

rightly decided.

 The authors argue that since the value of a bargain may be affected by unfilled

conditions,andbycontingencieswhichwouldhaveoccurredhadthecontractnotbeenterminated,itis

generally appropriate for such events to be taken into account when assessing damages following

terminationforrepudiation.Thatapproachisreinforcedbythegeneralprin ciplethattheassessmentof

damagesincontractshouldsofaraspossiblereflectrealitiesasestablishedatthetrial.Theyassertthat

suchanapproachisalsoa pplicablewherethereisanavailablemarket.They pointtofourfactorswhich,

intheirview,showthatincasesofrepudiationitisnotinconsistentwiththemarketpriceruleforregard

tobehadtoparticularcircumstances,bearinginmindthattheonusisonthedefendanttoestablishthe

relevanceofthosecircumstances:



 1. Intheassessmentofdamages,certaintycomesfromknowledgeofthebasisonwhich

damageswillbedetermined.Applicationofthemarketpriceruleisafamiliarbasisbut

inthecontextofaclaimfordamagesforrepudiation,assessmentisnecessarilyforward

looking.AlthoughthemarketpriceruleinTheGoldenVictory suggeststhatnormallyitis

sufficienttolooktothepositionandthetimeoftermination,themarketpricewasby

definitionmerelyanestimateoftheshipowners’loss.Butthepursuitofcertainty

cannotjustifyanawardwhich,byrelianceonfalseassumptions,isknowntobevitiated.

Subsequenteventsmaybetakenintoaccountwhenassessingdamagesiftheyprovidea

moreaccurateorreliablebasisforassessmentofaplaintiff’sloss.Althoughexerciseof

thecancellationrightcouldnotbeprovedasafactinthecase,thecircumstanceswhich

wouldhaveenlivenedtherightweresoprovedandcouldnotbeignored.

Withrespecttothelearnedauthors,theflawinthisreasoningmustbethattheonlymatterthatcould

be proved as a fact was that the Second Gulf War had in fact broken out. Whilst it was possible for a

finding to be made that any substitute contract for the remaining balance of the original seven year

term would have also  contained a war cancellation clause, there could not be a finding that the

hypotheticalsubstitutechartererwouldsimilarlyhavecancelledthecontractontheoutbreakofwar.







TheMihalisAngelos[1971]1QB164

 JW Carter and E Peden, ‘Damages following termination for repudiation: Taking account of Later events’, The

University of Sydney, Sydney Law School, Legal Studies Research Paper No.08/91, August 2008,

http://ssrn.com/abstract=1222047



Ibid14‐15

SeecontraTheGoldenVictory[2007]2AC353,perLordBrownat[82]

13



 2. BecausethewarinIraqwasaneventbeyondthecontroloftheparties,andbecause

(fromacommercialperspective)itwascertainthatthecancellationclausewouldhave

beenactivatedandexercised,thecircumstancesinTheGoldenVictorywereanalogous

toproofthatthecontractwouldhavebeenfrustra tedhaditnotbeenterminatedfor

repudiation.Ononeview,asamatterofprinciple,acourtapplyingtheMarketPrice

Ruleatthedateofterminationshouldignoreacontingencysuchasfrustrationor

exerciseofacancellationrightbecausesuchmattershavealreadybeentakeninto

accountbythemarket.Themarkethasassessedthepositionandsincetheawardof

damagesismadeonahypotheticalbasisthepromisorcannotrequiretheawardtobe

discounted.Ifthemarketviewisthatthereisarealpossibilityoffrustrationora

cancellationclausebeingexercise,itwilldependonthecircumstanceswhetherthe

marketpriceishigherorlowerthanitwouldotherwisehavebeen.

There can be no quibble, at least with the latter part of this proposition. Indeed, it describes the

operationofthemarketpricerulepreciselyandreinforcestheviewthatthereisnoneedforacourtto

take account  of later events because the market will have taken those events into account. The

propositionreinforcestheviewthatthedateofacceptanceoftherepudiationisthecorrectdateforthe

assessmentofdamages.

 3. Themajorityclearlyconsideredthatcontingenciescouldbebroughtintoaccountwhen

applyingtheMarketPriceRuleevenifithadnotbeenprovedthatcancellationwas

certaintohaveoccurred.Theauthorscommen tthatperhapssurprisingly,eventhe

minorityregardeditaslegitimatetotakethepossibilityofexerciseofacancellation

rightintoaccount.LordBinghamsaidthathecould“readilyacceptthatthevalueofa

contractinthemarketmaybereducedifterminableonaneventwhichthemarket

judgestobelikelybutnotcertain”.Theauthorscom mentthatsuchanapproachclearly

introducesanelementofuncertaintyintheapplicationofthemarketpricerulewhich

theminoritywasnototherwiseprepar edtocountenance.

Again,thisobservationseemstoconfusetheissueofuncertaintycreatedbythemarketplace,whichit

is suggested commercial parties are attune to and can readily accept, as compared with uncertainty

createdbyaprincipleoflawthatwould“encouragedefendantsortheiradvisersifawareofittoprolong

proceedingsinthehopethatsomethingmayturnup.”



 4. IftheMarketPriceRuleisnotimmunetodeductioninrelationtohypotheticalevents,it

cannotlogicallybeimmuneinrelationtoeventswhichwouldactuallyhaveoccurred.In

termsofuncertainty,ifevidenceofviewsinthemarket–whichmustnecessarilybe

speculative–astothelikelihoodofeve ntssuchasfrustrationorcancellationmaybe

takenintoaccount,itisdifficulttoseehowthereisanygreateruncertaintyin 

permittingrelianceoneventsinrelationtowhichspeculationisnotneeded.





FrancisReynolds,‘TheGoldenVictory–AMisguidedDecision’(2008)38HongKongLawJournal333,338

14



In this respect, the authors say, it is important ina case like The Golden Victory that the market price

rule is still applied. Only the extent (duration) of its application is qualified. They assert that the rule

merelygeneratesanestimateofhypoth eticallossandthatitisopentothedefendanttoestablishthat

theperiodcoveredbytheawardshouldbereducedbecause thecontractwouldhavebeenfrustratedor

cancelledpriortotheenddateofthecharter.Thus,CarterandPedenconcludethatthemajorityinThe

GoldenVictor y wascorrecttopermitthechartererstorelyonevidenceofeventswhichoccurredafter

termination, including that the contract would have  been cancelled.

 It is contended that this view 

must be wrong and that the only basis for reducing recovery in the circumstances would have been a

finding that a substitute charterer would also havecancelled pursuant to a similar clausecontained in

the substitute, which, as has already been described above, was simply not the case. There was,

therefore,nosufficientreasontodepartfromtheordinaryrulethatdamagesweretobeassessedasat

thedateofacceptanceoftherepudiation.

APRINCIPLEDWAYFORWARD

Is there a sensible way of reconciling these conflicting views, other than simply ignorin g The Golden

Victory?

 It seems that the first step that is required is to identify the content of the contractual 

obligation breached and to accurately categorise the loss or losses in respect of which damages are

claimed.

 In relation to The Golden Victory,  Lord Mustill notes extra‐curially that the conduct of the

charterers was not the case of a repudiatory breach or of a “breach of condition” involving an actual

breach by the charter of such magnitude and kind as to give owners an immediate right to treat

themselvesasfreefromthecontractandtoclaimdamagesforthelossofit.

Insteadtherewas what

his Lordship describes as “renunciation”, which would then have been followed in due course by an

actualbreach intheshapeoffailuretopaythenextinstalmentofhire.Theshipownersdidnotwaitfor

thistohappen;rather they waitedthreedays andthenannoun ced  thatonthe basisofthe charterers’

conduct they were treating the contract as at an end and then claimed damages for breach of

contract.



ThiswaswhathisLordshipdescribesasaninstanceofthealternativeformofrepudiatoryconduct;not

an infringement of any obligation calling for immediate performance, but intimation that breaches

would follow  in the future – that is a wrongful renunciation of the contract. Consequently, it was not

until the 17

 of December when the shipowners accepted the repudiation that an actionable breach

thensprangintoexistence;actionableinthesensethattheshipownersnowhadavestedrightofsuit–

onethatcould  immediatelybeenforcedbyaction fordamagesata time when, butforthepremature

terminationthecharterers’obligationswouldstillhavebeenrunning. 





JWCarterandEPeden,‘Damagesfollowingterminationforrepudiation:TakingaccountofLaterevents’,The

UniversityofSydney,SydneyLawSchool,LegalStudiesResearchPaperNo.08/91,August2008,

http://ssrn.com/abstract=1222047,16

WhichsomewhatsurprisinglyseemstohavebeendonerecentlybytheEnglishCommercialCourt:GloryWealth

ShippingPteLtdvNorthChinaShippingLtd[2010]EWHC1692(Comm),[2010]AllER(D)127

DavidMcLauchlan,‘SomeIssuesintheAssessmentofExpectationDamages’[2007]NewZealandLawReview

563,629

M.Mustill,‘TheGoldenVictory–SomeReflections’,(2008)124LawQuarterlyReview570

Ibid571

15



LordMustillobservesthatthereisnothingnovelaboutsuchananalysisbutwhatwasperhapsunusual

was the discussion of the remedy in The Golden Victory in terms of the general law of damages. He

said:



 ...unlike the position regarding actual breach I do not see how damages for an “anticipatory”

 breachcanbeawardedwithanysemblanceofintellectualrigourwithoutatleastanattemptto

 enquireintowhatwasthebreachtowhichthedama gesareattached,andwhatkindofbreach

 it was, which could be omitted before there was any present obligation  to perform...the

 common law has never succeede d in finding a solution which is both theoretically sound and

 capableofproducingsensibleresultsinpractice.

HisLordshipgoesontoobservethatthecourtshavebeencontenttoemploya“fiction”suchthatinthe

fieldof anticipatory repudiation, abreachwas simplyassumedto haveoccurredwhen therepudiatory

conduct took place. So, at least where there  was an available market for the goods or services the

subject of the contract, those responsible for assessing damages were content to look directly to a

comparisonbetweencurrentmarketpricesorratesandthoseprescribedbythecontract–withoutany

enquiry as to why such a comparison was being made. This “rule‐ of‐ thumb method,” as Lord Mustill

describes it, can no longer, however, be taken for granted eve n in cases where there is an available 

market given that what the majority in  The Golden Victory have advocated is an inquiry into what the

future of the contract would have been but for the repudiation and stipulate that in the interests of

justice,after‐eventsmaybebroughtintoanswerthisquestion.LordMustillrightlyobservesthat:



 Once,howev er,thecourseistakentosearchforamore“just”procedure,thewholeintellectual

 landscape is opened up, not only of damages but also of the fictional breach to which the

 damagesareattached.Thosewhoadvisepartiesonhowtoreactatshortnoticetorepudiatory

 conduct will need to be alert to the fact that the goalposts have been move d a considerable

 distance.

His Lordship further points out that many of the cases  referred to by the Appellate Committee in The

Golden Victory had nothing to do with breaches of contract that were, by orthodox reasoning “real” 

breaches.Inhisopinion,nonehadanything useful to sayabouttheprobleminthe case which was, in

essence, how to carry forward into reasoning about damages the alternative concepts of a fictional

breachofarealobligationandrealbreach of a fictional obligation.

“Pilingupcaseswhicharenotin

pointonlyservestoobscure.”



HisLordshipthereforesuggeststhatthebetterapproachistostartwithablankslateandtoanalysethe

authoritiesinrelationtoanticipatorybreach.Insodoing,onearrives, he suggests,attwo possibilities.

First, to push the repudiation date back in time to the contractual  due date for performance, so that





Ibid

Ibid572

Ibid583

Ibid

16



obligationandbreachareunited“asat”thatdate,withdamagescomputedaccordingly.

LordMustill

considers that whilst attractive at first sight, such an approach does not work because it does not

accountfortheimmediaterightofsuit,andalsoentailsthatthepartiesmustremaininlimbountilthe

due date, a date which in a conditional contract  may never arise. The second possibility is that the

doctrinenotionallypullstheobligationforwardintimesothatitwillbethere;readytobebroken,when

therepudiationtakes place.Butnoexplanationhasbeengivenofhowtheobligationcouldbecurrently

aliveaheadofthetimeprescribedforitbythecontract.Hesaysthattheefforttoextractfromthecases

a firm intellectual footing for deducing a measure of damages ends in failure. The concept of 

anticipatory breach cannot be rationalised, but must be seen as a piece of positive law, firmly

established but not anchored in or deducible from the ordinary course of the law of contract. Theact

canbecalledabreachifonewishes,butitmustalwaysbekeptinmindthatthisisnotwhatitreallyis,

and it follows that applying mainstream damages law to this arbitrary concept will not yield reliable

results.



Rather,itshouldbeinquired,whatisthefinancialimpactofthe“breach”?Theansweris:nonedirectly,

forthedirectconsequenceissimplytogivethepromiseeandoption,eitherto‘accept’thecontractas

terminatedortoleaveitinbeing.Theconsequenceofterminationisthatthepromiseecannolonger

count on its future net benefits, and it is the value of these which the promise should be entitled to

recoupinexchangeforhispreviouslypre‐existingcontractualrights.



Lord Mustill saysthatwe therefore arrive at the position from which the courts began their inquiry in

The Golden Victory  but via a different route: one which leaves its mark on the approach to damages,

making it inevitable that the valuation of the lost rights should be performed as at the date  of the

acceptance.



How should such a conclusion be applied in practice?Lord Mustill  says that this must depend onthe

natureofthecontractualrightswhichthepromiseehaschosentoabandon.InTheGoldenVictorythese

wereembodiedinatimecharter,whichisaformoffinancialinstrumenthavingacapitalvaluewhich,if

therewasanavailablemarket(asthearbitrators foundtheretobe),canbeascertaineddirectlythrough

direct expert evidence. Such evidence will value the contract “warts and all”, taking into account any

known factors which would tend to depress  its value, such as the presence of a termination  clause,

coupledwith  amarketestimationofthechance thatevents maybringthe clauseintoplay.Itisonlyif

the contract cannot be valued directly as a marketable asset that recourse would be required to an

estimate (viewed retrospectively as at the date when the exchange of value for compensation is

effected)forthelikelyfutureearnings,discountedfortheaccelerationofcashflow.



LordMustill’sconclusion,applyingthisreasoning,wouldaccordwiththatoftheminorityinTheGolden

Victory.Inhisopinion,thisreflects notjustaccuratelegalreasoning,butalsothejusticeofthecase:





Ibid584citingCockburnCJinFrostvKnight(1872)LRExch111

Iibid

Ibid

Ibid585

17





 Thepromiseemust make uphismindrapidlyif heisnot tolosehis righttoterminate,andfor

 thispurposeheneedsasstablealegalandeconomicbaseaspossibleforputtingfigurestothe

 potential risks and benefits which he is called on to weigh up. Direct recours e to the current

 marketvalueofthecontractinitsentiretyyieldsamuchquickerandmorepredictable outcome

 thanthecumbrousprocessofspeculatinghowthecontractislikelytoturnoutinthelong‐term

 future, especially if as was implicit in the opinion ofthe majority, the outcome willdepend on

 whenthevaluationisperformedtherebyexposingthepartiestothehazardsofthearbitrator’s

 diaryorthejudge’slist.



Lord Mustill makes clear that in arriving at the same conclusion as the minority, he regarded the

argumentsrelatingtocertaintyandconvenienceasreinforcement ofthatconclusion,ratherthanasthe

principalmotiveforit.



CONCLUSION

Aswasindicatedattheoutset,itdoesnotseemthat,onaproperanalysisofthelaw,thereisanyreal

disputeaboutthepri nciplesthatareapplicabletotheassessmentofdamagesinthecaseofrepudiation

of a contract, including the principles that concern the time for the assessment of those damages.

Rather,thecourtsseemtohavebecome somewhatblindedbytheopportu nitiesthathaveapparently

openeduptothemsuchthattheymaynolongerbe“gropingaroundinthedark”butinstead“blinded

bythelight”.



Onethereforestarts from theprinciple inRobinson vHarmanandthen asks, ‘Whatisthevalueofthe

future net benefits that the inj ured party has lost?’ If these future net benefits are marketable, an

injured party has the opportunity of replacing those net benefits in the market. There is  therefore

nothing unjust about measuring the loss by the cost of replacement of those net benefits at the time

whentheinjuredparty had a reasonableopportunitytomakesucha replacement.Subsequent events

and apparent offsetting gains are irrelevant to the exercise of quantifying loss because termination of

the contract by acceptance of a wrongful repudiation has the effect of reallocating market risk to the

injuredparty.



Ibid

Itmightbeobservedthattheobfuscationofcertaintyinrelationtotheassessmentofdamagesisnotconfined

tocontractcases.Intheareaoftheassessmentofdamagesintortonecanwitnesstheslowandagonisingdeath

oftheruleinPottsvMiller.Inrelationtothatrulethecertaintyoftheassessmentofdamagesbyreferencetothe

marketasatthedateofanacquisitionofanassetinducedbymisrepresentationisbeingerodedbyreferenceto

subsequentoutcomes;SeeManwellandPtyLtdvDames&MoorePtyLtd(2002)AustContractR90‐141.