PROVING THINGS 51: NO EVIDENCE OF LOSS – NO DAMAGES: A LESSON TO SHARE
For the second time today we are looking at the judgment of Mrs Justice Proudman in Abbott -v- RCI Europe  EWHC 2602 (Ch). This time in relation to the failure of the claimants to quantify or prove they had suffered any damages.
“…no attempt has been made to put a figure on the loss it is said that the Claimants suffered”
- The claimants had not pleaded any specific figures for loss or adduced any expert evidence as to their losses.
- The claimants could not rely upon general principles and rely on the defendant’s breach to prove a loss.
- The claimants’ action failed.
The claimants, by way of a test case, brought an action complaining that the defendant was acting in an unfair way in the renting out of timeshares. The judge held that there was “little doubt” that the defendants had acted in breach of contract. However the action failed. It was, in part, statute barred. More fundamentally the claimants failed to prove they had suffered any loss as a result of the defendants conduct.
THE JUDGMENT ON DAMAGES
As to quantum, further information was sought in RCIE’s letter of 27 April 2015 (on the basis that the Claimants’ replies to the Requests for Further Information dated 12 February 2015 were insufficient) and the Claimants replied that damages for breach of contract are claimed on the basis that timeshares were removed from the exchange pool by RCIE for its own commercial benefit causing the Claimants to be unable to get the exchanges they wanted, causing the following pecuniary losses:
“a. The loss of value to the exchange scheme as promised.
b. The loss of use of their own timeshare.
c. The costs incurred each year in finding and arranging alternative holidays or otherwise seeking to mitigate the losses incurred as a result of RCI’s breach of contract.”
“These differences in value will be either a matter for agreement or a matter for expert evidence.”
However, the Claimants have not sought either to agree the differences in value or adduce expert evidence of them. The Claimants said on 4 June 2015 without agreement from RCIE (see the Further Information of the Test Claimants Regarding Quantum) at ,
“In cases where timeshares deposited in the exchange pool have been used without the claimant’s [sic] consent it would be appropriate to award a sum which would have been agreed between the parties in the course of hypothetical negotiations over what would have been agreed to be paid for such use. This would require expert evidence and should be dealt with after the trial on liability.”
“The quantum of the claim for lack of amenity and disappointment will depend on what, if any, holiday was taken in any given year in place of the holiday of choice and the level of frustration and disappointment attendant on being unable, in any given year, to book the holiday of choice.”
“In the event that no loss has been suffered by a particular claimant the following damages are awardable where breach of contract is established.”
And the Particulars go on to cite authority for “damages for breach of contract where there has been benefit to RCI but no loss to the claimant”, “Remedies for breach of trust/fiduciary duty” etc., but again, neither causation nor quantum is pleaded.
Mr Deacon and Mr Wolman rely on damages under Attorney General v. Blake  1 AC 268 for an account of profits for breach of contract. However, the fact that the Claimants have failed to quantify their claim does not mean that it is unquantifiable. The Claimants cannot say, on the one hand, that they have not adduced any expert evidence and on the other, that this is such an exceptional case that damages would be inadequate. In A-G v. Blake, Lord Nicholls said (at p.285),
“Normally the remedies of damages, specific performance and injunction, coupled with the characterisation of some contractual obligations as fiduciary, will provide an adequate response to a breach of contract. It will be only in exceptional cases, where those remedies are inadequate, that any question of accounting for profits will arise. No fixed rules can be prescribed. The court will have regard to all the circumstances, including the subject matter of the contract, the purpose of the contractual provision which has been breached, the circumstances in which the breach occurred, the consequences of the breach and the circumstances in which relief is being sought. A useful guide, although not exhaustive, is whether the plaintiff had a legitimate interest in preventing the defendant’s profit-making activity and, hence, in depriving him of his profit.”
There is no legitimate interest in preventing RCIE’s profit-making activity as the Claimants knew that RCI was a commercial entity. In any event one cannot simply point to profits made by RCIE in relation to rentals of inventory deposited by the Claimants since the Weeks pool operates on a global basis through RCI.
The Claimants also rely on damages under Wrotham Park Estate Co Limited v. Parkside Limited and others  1 WLR 79, namely the sum which might reasonably have been negotiated between a claimant and a defendant. In Abor and another v. Saudi Economic and Development Co (SEDCO) Real Estate Limited and others  EWHC 1414 (Ch), David Richards J said (at ),
“Negotiating damages have not, however, replaced the usual compensatory damages as the primary remedy in damages for breach of contract. It is a basis of assessment available where a breach of contract has been established but the claimant cannot establish any financial loss, assessed on the usual basis, flowing from the breach.”
“…the information which would allow us to assess the profits RCI has made or “the fruits of their wrongdoing is exclusively in the hands of RCI. We await a satisfactory conclusion to the disclosure process.”
“…The reference to the “value of the lost timeshare and damages for distress/disappointment” is simply not sufficient.
…it cannot be correct that it is not possible for your clients to provide particulars of the value of their own timeshare(s) until the Defendant has provided further information with respect to the operation of the exchange system…”
Further, by  of an order dated 16 March 2016 of HHJ Keyser QC, sitting as a judge of the High Court, the Claimants were permitted to “file and serve a Reply, limited to matters raised by the amendments to the Defence”. However, the Reply deals with other matters such as an allegation that RCI was not “transparent, open and fair” with its members: see  of the Replies. Thus this has become a case that RCIE was not transparent with its members but I do not see how that relates to the causes of action. Although I see Mr Deacon’s point, I agree with Mr Graham QC that RCIE was thereby deprived of the opportunity to disclose documents or submit evidence dealing with the extent to which members were informed about rental of premium inventory.
The proving things series
- Proving things 1: Civil Evidence Act notices will not cut it
- Proving things 2: evidence to support a claim for damages must be pitch perfect.
- Proving things 3: the complete absence of evidence means the court will not speculate
- Proving things 4: Witnesses who just aren’t there.
- Proving things 5: witness statements and failing on causation.
- Proving things 6: “That’s what I always do” & proving causation.
- Proving things 7: If you don’t prove a loss you don’t get an order.
- Proving things 8: a defendant must prove that a failure to wear a seatbelt made a difference.
- Proving things 9: the role of experts
- Proving things 10: “He said, she said”: the difficulties of recollection.
- Proving things 11: Lies, damn lies and…
- Proving things 12: That oral contract is not worth the paper its written on.
- Proving things 13: Loss, there was no loss.
- Proving things 14: proving mitigation of loss
- Proving things 15: damages and evidence: going back to College
- Proving things 16: if you don’t prove it you don’t get it.
- Proving things 17: Heads of damage that were “entirely bogus”
- Proving things 18: Damages; Car hire; Proof & Summary Judgment
- Proving things 19: prove service or you could be caught out.
- Proving things 20: allegations of improper conduct have to be prove
- Proving things 21: when the whole process of investigation is flawed
- Proving things 22: damages, mitigation part 36 (and bundles).
- Proving things 23: serving important evidence late
- Proving things 24: Damages & the “But for test”: when it gets really complexProving things 24: Damages & the “But for test”: when it gets really complex
- Proving things 25: Attempts to smuggle in witness statements do not help (and carry no weight).
- Proving things 26: distinguishing between what you can remember and what you now think you did.
- Proving things 27: Burdens of proof, hearsay evidence and… attempted murder.
- Proving things 28: make unwarranted personal attacks and use a “mud-slinging” expert: that always ends well.
- Proving things 29: Make sure the witness evidence deals with the relevant issues
- Proving things 30: Office Gossip Proves Nothing: The importance of the source of information and belief.
- Proving things 31: witnesses tend to remember what they want to remember.
- Proving things 32: Damages claim struck out as unsustainable: application to amend refused.
- Proving things 33: causation and the burden of proof in claims against solicitors.
- Proving things 34: There is no primer for scuttlers: when your ship doesn’t come in.
- Proving things 35: Reconstruction, documents & memory.
- Proving things 36: credibility and contemporaneous documents.
- Proving things 37: An approach to damages that was “fundamentally deficient throughout”.
- Proving things 38: Proving inability to pay on a security for costs application.
- Proving things 39: You can spend £10 million in costs and still not prove your case.
- Proving things 40: No evidence – no loss.
- Proving things 41: Proving damages – you are not going to get a second bite of the cherry.
- Proving things 42: silence does not prove inducement.
- Proving things 43: How the Court decides: a Primer.
- Proving things 44: Findings of Fact, Walter Mitty and Witness Training.
- Proving things 45: If you can’t prove loss the defendant is going to get summary judgment.
- Proving things 46: Late theories advanced by experts rarely help.
- Proving things 47: Fire in the loft: it wasn’t the mouse man at all.
- Proving things 48: valves, floods, models and causation.
- Proving things 49: it is difficult to prove damages when the opinion evidence in your witness statement has been struck out.
- Proving things 50: to prove breach of contract you first have to prove that there was a contract.