LECTURE 16 - REMEDIES 2 - CONTRACT Non-Compensatory Damages (accounting for profits from breach of contract) - There are cases in which the defendants breach of contract causes no loss to the claimant, but the breach enables the defendant to make profit. - The court may order the defendant to account to the claimant for the profits obtained from the breach of contract (in very limited and exceptional circumstances). Attorney General v Blake - The H o L emphasised the exceptional nature of the award. - The defendant could not be allowed to keep the rewards of his treachery. - The award was necessary to achieve justice and deterrence. - The government had a legitimate interest in preventing disclosure of the secrets. o Effect of AG v Blake - Esso Petroleum Co Ltd v Niad [2001] - Niad charged its customers more than was required under the terms of the agreement it had with Esso. - The court stripped Niad of the gains it had made from the breach of contract. Hypothetical Bargain Measure of Damages - The greatest impact of AG v Blake has had upon the law of contractual remedies is to be find in the wider availability of hypothetical bargain measure of damages. Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] - explicitly approved in Blake. - o The owner of an estate sold a parcel of land to a developer, with a covenant that the developer did not build on the land without the approval of the owner of the estate. The covenant was registered as a charge on the land under the Land Charges Act 1925, as a Class D charge. The developer built on the land around it but left an area undeveloped before the patch of land was sold to a local authority in 1955 and sold on again in 1971 with approved planning permission. The plaintiff issued an injunction to prevent the construction upon the land and the defendant proceeded to build on the land. o The court was required to establish two key points. The first was whether the restrictive covenant had passed with the land and was therefore enforceable by the plaintiff. The second was if the covenant was enforceable, whether damages could be claimed by the plaintiff as a result of the land being built upon. It was important for the court to consider the nature of the prohibition on the land and whether the benefit of the covenant could be identified. o The covenant could be enforced as it was sufficiently defined and registered with the land. However, it would be difficult and unjust to demolish the roads
and houses that had already been developed. Therefore, the court ordered that damages should be granted. In terms of measuring damages, the court held that the sum should equate to an amount that would have been able to reasonably relax the covenant - In AG v Blake, Lord Nicholls referred to Wrotham Park with approval and said: o