Demarco v Perkins

Demarco v Perkins

The claimant is not entitled to special damages representing the cost of obtaining an annulment under section 282(1)(b) because he never had a chance of obtaining such an annulment, and awarding such damages would constitute a windfall not attributable to the defendants’ breach. The only recoverable loss is the value of the lost chance of annulment via the IVA route, which is properly compensated by general damages for non-pecuniary loss (stigma). The award for general damages should be increased to £6,000, discounted by 15% to reflect the chance of failure, resulting in £5,100 plus interest.

Parties
Claimant/appellant: Anthony Ricardo Demarco; Defendant/respondent: Michael Perkins; Defendant/respondent: Bulley Davey (A Firm)
Jurisdiction
England and Wales
Judgment Date
23 January 2006
Procedural Posture
Civil Appeal / Appeal From Queen’s Bench Division, Nottingham District Registry
Outcome
Appeal allowed in part
Legal Topics
Measure of Damages, Remoteness of Damage, Duty of Care, Bankruptcy Annulment, Non Pecuniary Loss
Contract Law Professional Negligence Measure of Damages Remoteness of Damage Duty of Care Bankruptcy Annulment Non Pecuniary Loss

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Parties

Anthony Ricardo Demarco

Claimant/appellant

Michael Perkins

Defendant/respondent

Bulley Davey (A Firm)

Defendant/respondent

Procedural Posture

Civil Appeal / Appeal From Queen’s Bench Division, Nottingham District Registry

Legal Issues

  1. 1 Whether the claimant is entitled to special damages representing the cost of obtaining an annulment under section 282(1)(b) of the Insolvency Act 1986
  2. 2 Whether general damages for non-pecuniary loss (stigma of bankruptcy) are recoverable and in what amount
  3. 3 Whether the damages claimed are too remote or constitute a windfall

Ratio Decidendi

The claimant is not entitled to special damages representing the cost of obtaining an annulment under section 282(1)(b) because he never had a chance of obtaining such an annulment, and awarding such damages would constitute a windfall not attributable to the defendants’ breach. The only recoverable loss is the value of the lost chance of annulment via the IVA route, which is properly compensated by general damages for non-pecuniary loss (stigma). The award for general damages should be increased to £6,000, discounted by 15% to reflect the chance of failure, resulting in £5,100 plus interest.

Court Disposition

Appeal allowed in part

Orders

  • Special damages claim for cost of annulment under section 282(1)(b) dismissed
  • General damages for non-pecuniary loss (stigma) increased to £6,000, discounted by 15% to £5,100