Audio recording 10.1 transcript

The subject of transferred loss, is a very difficult topic. So here, we're thinking about the situations where B brings the claim and sues A for damages. And the question is whether or not B recovers, or can recover for C's loss, or B can only sue for its own loss in situations where it looks like it isn't really B, but C who suffered the loss. So, these difficulties stem from cases such as The Albazero, which was a case about sale of goods. And you can imagine it in that context, it's not uncommon for, let's say me to sell you some grain. And we know at the time of contracting that you're going to sell that grain on. And then they're going to sell that grain on, and it keeps getting sold on and on and on before the time for transport, and during the transport something goes wrong. There's a breach of contract. And I have a contract with you, so you can sue me for breach of contract. But, it looks like you are not the person who's really suffered loss, because you've already sold on the grain. And so, if you do sue me, can you recover for C's loss and in that sort of context, like in The Albazero itself, where it's contemplated at the time the contract was entered into that the loss wouldn't be suffered by B, but by C, then B is able to bring a claim for C's loss. And what seems to have happened is that that principle has been extended now into the context of building on another's land. So, A entered into a contract with B, but building to happen on C's land. And then again, let's say that the builder builds a defective building, can B sue A, the builder? Well, yes, because there's a contract between the two, so there is a claim. But B isn't the one who really suffers loss, if it's on C's property. But in Linden Gardens, Lord Griffiths talked about a broad ground of recovery, where B has suffered a loss, and so when B sues B should be able to recover for B's own loss. Because B hasn't received the performance under the contract which he paid for. And it's important that on this broad ground B recovers money for themselves. So, it's B's own money. Whereas under the narrow ground, or what's become known as the narrow grounds, B would have to account for the money received to C. So that's a good example of transferred loss, where B has to account to C for the damages  received from A. And what's difficult is, it isn't very clear at the moment what the status of the broad ground is. So, in Panatown, the House of Lords splits. But more recently, there seems to be support from the judges in the Supreme Court in Swinfen, and the court of appeal  in Rembrandt for recognizing the broad grounds in English Law. But the problem, or difficulty with accepting that on its face is that in Swinfen and Rembrandt, the judges seem a bit confused in speaking of the broad ground as an example of transferred loss. Which I don't think can be right. I think the whole point of the broad ground is the loss isn't transferred at all, it's B's own loss. And so, given that the judges find this area difficult and the terminology difficult, if you find it difficult, it probably isn't you who's confused, it's the law that's very difficult. And we will turn to this in the question of damages more broadly at the end of the book, and in chapter twenty-seven in particular.

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