Southampton Container Terminals Ltd v Schiffahrisgesellsch "Hansa Australia" MGH & Co [2001] EWCA Civ 717 (3 May 2001)

Southampton Container Terminals Ltd v Schiffahrisgesellsch "Hansa Australia" MGH & Co [2001] EWCA Civ 717 (3 May 2001)

Where a chattel is destroyed by tort, the claimant is prima facie entitled to its market or resale value, not the cost of reinstatement, unless it is reasonable to replace it and the cost of replacement is reasonable. In this case, replacement would have been unreasonable and out of proportion to any benefit, so damages are limited to the resale value.

Citation
[2001] EWCA Civ 717
Parties
Claimant/appellant: Southampton Container Terminals Ltd; Defendant/respondent: Schiffahrtsgesellschaft 'Hansa Australia' MGH & Co
Jurisdiction
England and Wales
Judgment Date
03 May 2001
Procedural Posture
Appeal (civil) / Appeal From High Court Judgment of David Steel J Dated 20 July 1999
Outcome
Appeal dismissed
Legal Topics
Measure of Damages, Negligence, Contributory Negligence, Mitigation of Loss, Restitutio in Integrum, Reasonableness of Damages, Costs Orders
Tort Law Commercial Law Measure of Damages Negligence Contributory Negligence Mitigation of Loss Restitutio in Integrum Reasonableness of Damages +1 more

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Parties

Southampton Container Terminals Ltd

Claimant/appellant

Schiffahrtsgesellschaft 'Hansa Australia' MGH & Co

Defendant/respondent

Procedural Posture

Appeal (civil) / Appeal From High Court Judgment of David Steel J Dated 20 July 1999

Legal Issues

  1. 1 Whether damages for destruction of a chattel (crane) should be assessed on the basis of reinstatement cost or resale value
  2. 2 Whether the judge erred in his order as to costs following an offer to settle

Ratio Decidendi

Where a chattel is destroyed by tort, the claimant is prima facie entitled to its market or resale value, not the cost of reinstatement, unless it is reasonable to replace it and the cost of replacement is reasonable. In this case, replacement would have been unreasonable and out of proportion to any benefit, so damages are limited to the resale value.

Court Disposition

Appeal dismissed

Orders

  • Damages limited to resale value of crane (£665,000) plus ancillary losses, subject to 15% reduction for contributory negligence
  • Costs order of first instance (defendants to pay claimants' costs up to 17 June 1999, claimants to pay defendants' costs thereafter) upheld