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Tort damages · Remedies module 3

The idea

Tort damages restore the position the plaintiff held before the wrong. Contract looks forward to the promised position and tort looks back. Most of the marks in this module sit in matching the measure to the thing harmed. Land, goods and misstatements each carry their own measure, and the remoteness test changes with the tort sued on. This is because tort is a family of wrongs rather than a single cause of action. Examiners plant two figures in the facts, usually a rebuilding cost against a diminution in value. The strong answer picks between them by naming the interest the plaintiff held in the thing. It then states the award as a dollar figure and the minimum the plaintiff recovers even on the losing view.

Some rules carry a small icon marking the structure the rule takes. The icon is a reading aid and nothing more. The facts of the cases and the words of the rules do the work.

Attack plan

1. First identify the tort and the thing harmed. The measure and the remoteness test both turn on this choice. Negligent damage to land, conversion of goods and a fraudulent misstatement each start the analysis in a different place. A problem with two properties or two chattels gets each one taken separately.
2. Choose the measure. For land the choice is between diminution in value and reasonable reinstatement. Reinstatement is favoured where the plaintiff holds the land as a home or for a use money cannot replicate, and diminution is the usual measure for investment property. For goods the measure is market value at the date of the wrong plus consequential losses, and a plaintiff deprived of a chattel may also recover the reasonable cost of hiring a functionally equivalent substitute. For deceit the measure is the price paid less the real value received, together with all consequential losses flowing directly from the fraud.
3. Fix the date of assessment. Damages in tort are assessed generally at the date of the wrong. State the date and take the market value or the diminution as at that date.
4. Apply the remoteness test the tort attracts. Negligence asks whether the damage was of a reasonably foreseeable kind, with the kind framed broadly. Trespass is unsettled between natural and probable consequence and reasonable foreseeability, so both tests are stated and applied. Deceit carries no foreseeability limit at all.
5. Run contributory negligence and mitigation. Contributory negligence reduces damages as the court thinks just under s 26(1) of the Wrongs Act 1958 (Vic) and may extinguish them under s 63. Neither applies to deceit or the other intentional torts. Mitigation surfaces most often in the substitute hire cases, where the fight is over whether the replacement was reasonably equivalent.
6. Conclude with a dollar figure. State the award, the fact that drove it and the minimum the plaintiff recovers even on the losing view.

Cases at a glance

Case	In a line
Livingstone	The source of the general measure. Damages in tort place the plaintiff in the position as if the tort had not been committed
Evans	A family home was undermined by the defendant's works. Reinstatement was awarded because the owners held the property as their home rather than an asset
Pantalone	A rebuilding award was refused. The value of the property lay in the land rather than the building, so diminution was the reasonable measure
Butler	A producer's eggs were converted. The measure was the price the producer would have received for them
Arsalan	Prestige car owners lost the use of their cars. The reasonable cost of hiring prestige substitutes was recoverable as loss of the amenity of use
Toteff	A business was bought on the strength of fraudulent takings. The buyer recovered the price paid less the real value received
Doyle	The deceit measure at full width. The plaintiff recovers all the actual damage directly flowing from the fraudulent inducement
TCN	Spigelman CJ stated the trespass test. Consequential loss is recoverable if a natural and probable consequence of the trespass
Mayfair	An unforeseeable fire followed a trespass to a car. The loss was not recoverable, on the view that reasonable foreseeability governs even intentional property torts
Wagon Mound	The remoteness test in negligence. The defendant answers for damage of a reasonably foreseeable kind
Metrolink	Redlich JA stated the negligence test. The kind of damage is framed broadly
Musca	Deceit supported an award of exemplary damages. A supplementary authority for how far the fraud measure reaches

The rules

R23 · What is the general measure of damages in tort? Damages in tort place the plaintiff in the position as if the tort had not been committed, assessed generally at the date of the wrong. Livingstone. Open every tort damages answer on this measure. The choice for the particular thing harmed comes next.

R24 · Is the measure for tortious damage to land reinstatement or diminution in value? For tortious damage to land the plaintiff recovers diminution in value or reasonable reinstatement and reinstatement is favoured where the land is held as a home or for a use money cannot replicate. Evans; Pantalone. Trap. Assuming reinstatement is always available. Evans rests on the plaintiff's legitimate interest in the particular property. For investment property the usual measure is diminution in value (Pantalone). Examiners have asked for the comparison with Bellgrove expressly.

R25 · What is the measure of damages for conversion or destruction of goods? For conversion or destruction of goods the measure is market value at the date of the wrong plus consequential losses not too remote. Butler. Fix the market value at the date of the wrong first. Each consequential loss then passes remoteness on its own.

R26 · Can a plaintiff recover the cost of hiring a substitute while deprived of a chattel? Damage to a chattel includes loss of the amenity and use of that chattel so reasonable costs of hiring a functionally equivalent substitute are recoverable subject to mitigation. Arsalan. Trap. Overlooking Arsalan. Loss of the amenity and use of a chattel is now a recognised head of damage. The contest concerns whether the substitute hired was reasonably equivalent, not whether the plaintiff needed one.

R27 · What is the measure of damages for deceit? For deceit the prima facie measure is the price paid less the real value received together with all consequential losses flowing directly from the fraud. Toteff; Doyle. Trap. Underestimating the deceit measure. Deceit carries no foreseeability limit, attracts no contributory negligence reduction, and can support exemplary damages (Musca). Where the fraud is clear, examiners have said negligent misstatement is not even worth mentioning.

R28 · Which remoteness test governs consequential loss in trespass? In trespass consequential loss is recoverable if a natural and probable consequence of the trespass. The competing version is that reasonable foreseeability governs even intentional property torts. State both tests and apply both, because the law is unsettled. TCN (Spigelman CJ); Mayfair. Trap. One remoteness test for all torts. Past papers have twice demanded TCN against Mayfair run side by side with a preference. The policy tension is deterrence against coherence. Deterrence favours wider liability for intentional wrongdoers. Coherence favours one test for all torts.

R29 · What is the remoteness test in negligence? In negligence the defendant answers for damage of a reasonably foreseeable kind with the kind framed broadly. Wagon Mound; Metrolink (Redlich JA). The framing of the kind usually decides the dispute. Argue how broadly the kind is drawn before applying the test.

R30 · When does contributory negligence reduce tort damages? Contributory negligence reduces damages as the court thinks just under s 26(1) Wrongs Act 1958 (Vic) and may extinguish them under s 63 but has no application to deceit or other intentional torts. Section 26(1) and s 63 of the Wrongs Act 1958 (Vic), no case cited in the registry. Classify the tort before apportioning. Deceit and the other intentional torts take no reduction for contributory negligence.

The flowchart

The tort damages flowchart runs the attack plan as a single page of decisions, from the tort and the thing harmed through the measures to the limits. It ships with the Remedies flowcharts page at /remedies/flowcharts. Until that page is live the chart sits in Remedies Flowcharts (the companion document to the schematic).

A worked example, dissected

Dušan built a mudbrick house in Warrandyte by hand forty years ago and has lived in it ever since. Two doors up he owns a weatherboard rental his accountant calls a yield play, and a negligent excavation on the uphill block moved the slope beneath both. Rebuilding the mudbrick house costs $780,000 against a $190,000 diminution in value. Rebuilding the weatherboard costs $410,000 against $95,000, and the insurer has offered the two diminution figures alone.

The full problem, with its Pass answer, H1 answer and examiner's comments, is Problem 1 of the tort damages drill bank on the practice page.

Practise this module

Ten drills in the tort damages bank cover every rule above, and the exam tier runs the module inside integrated scenarios. Start with the quick drills on choosing the measure for the thing harmed, then attempt the bank blind.

Practise this module →