Ireland: Dispute Resolution Update: Damages For Breach Of Contract: Astrology And Economics

Two recent judgments of Mr. Justice Gerard Hogan deal with interesting points arising on how the Court should assess damages for breach of contract. These include the duty on the part of a Plaintiff to mitigate his/her losses, and the ability of the Courts to reduce damages or even refuse them entirely where the Plaintiff has been guilty of fault or contributory negligence.

ADM Londis Plc v Ranzett Limited, Ray Dolan and Annaliese McConnell (No 2) [2014] IEHC 659

This was one of a series of three cases where the High Court dealt with a situation where a franchisor had unlawfully terminated a contractual relationship with a supermarket outlet and had to determine the damages which flowed from this breach.

The Defendants had operated under the Londis franchise for some years. However, by late 2008 they were in a precarious situation where arrears on the trading account with Londis had grown to in excess of €400,000 and their bank was refusing to honour direct debits. The Plaintiff terminated the agreement and sought to have their account discharged. No serious dispute was maintained by the Defendants as to such liabilities and the Court found that the Plaintiff was entitled to judgment in excess of €560,000 in respect of unpaid invoices. However, the Court also found that the Plaintiff had been in breach of contract because of the abrupt termination of the agreement, the closure of the trading account and the de-branding of the premises. The Court found that these breaches had brought about the total cessation of the Defendants' business and the effective destruction of whatever residual value it then had.

Three separate heads of losses arose:

  1. losses resulting directly from the termination of the franchise and the inability of the company to trade during that critical period;
  2. losses flowing from the subsequent forfeiture of the lease of the property; and
  3. losses arising from the exercise of retention of title rights.

While the Court found the Defendant company was heavily undercapitalised and faced a difficult future, nonetheless the effect of the Plaintiff's breach was to deprive it of the opportunity of trading during a critical period and to keep the shop open through securing an alternative source of supply. Notwithstanding the uncertain state of the Irish economy and in particular the retail sector at that time, the Court found that the lease had some residual value and that all things being equal it would have been possible for the Defendants to dispose of it.

Judge Hogan had to decide the value of the company. Evidence was heard that its sale was being contemplated some fifteen months previously for €1.4 million but that this had fallen through. Evidence was also given that 'key money' of €650,000 had been paid for the lease on its acquisition. The Court faced a particular difficulty in that no expert evidence was provided as to the company's value. The Court was of the view that it had very little intrinsic worth over and above the value of the lease, the location of the property and the capacity of the business to generate an income. It felt that economic conditions had changed so radically since the reputed sale that the business should be valued by reference to the lowest multiplier of ten times weekly turnover given in evidence, thereby leading to an award of €420,000 damages under the first two headings.

Insofar as the repossession of stock was concerned, the Court found that because of correspondence from the Plaintiff's solicitors the Defendants could not safely deal with stock until the Plaintiff exercised its reservation of title rights. The effect of this was to leave some €65,000 of stock which the Defendants were unable to sell because of the closure of the store, but the Court also had to consider the conduct of the Second Named Defendant.

Judge Hogan held that in calculating damages he must have regard to the fact that such Defendant was objectively at fault in not immediately permitting the Plaintiff to repossess stock at the first demand from its solicitors. He cited Section 34(1) of the Civil Liability Act, 1961 which allows for damages to be reduced, or even entirely negatived, where a party has been guilty of fault or contributory negligence. He relied on the decision of Kenny J. in Carroll v Clare County Council [1975] IR 221, 227.

He found that the behaviour of the Second Named Defendant was a factor which led to a series of misunderstandings on all sides "and a cascade of events which culminated in the closure of the store, with disastrous consequences for the Defendants".

The issue of damages was considered again by Judge Hogan in the Dundalk Racecourse case below.

Francis Hyland v Dundalk Racing (1999) Limited (No. 2) [2015] IEHC 57

The Plaintiff was a licenced bookmaker and for a long number of years had established seniority to trade from a particular bookmaking pitch at Dundalk Racecourse. The racecourse closed in 2001 and re-opened in 2007 as an all-weather track following huge investment. It then sought a capital contribution of €8,000 from each bookmaker holding a pitch at the racecourse. The Plaintiff and a number of colleagues claimed that this amounted to a breach of the relevant Pitch Rules and therefore a breach of contract.

In an earlier judgment delivered in February 2014, Judge Hogan found in favour of the Plaintiff. This judgment dealt solely with questions of mitigation of loss and quantum of damages. As a starting proposition, Judge Hogan stated that no matter how glaringly bad the breach of contract on the part of the Defendants, the Plaintiff was nonetheless under a clear duty to mitigate his losses. He suggested that the most obvious way would have been to pay the capital contribution sought but on a without prejudice basis, and commencing proceedings seeking the appropriate declarations that no such sum was lawfully due.

The Court dealt with the history of the dispute and it was clear that both parties had become deeply entrenched in their positions which had led to a bitter and prolonged boycott of the racecourse by the established bookmakers. In the meanwhile their pitches had been given to less senior colleagues.

He concluded that while an important point of principle was involved and while initially he was entitled to take the stand he did, nonetheless objectively it became unreasonable after a certain point for the Plaintiff to refuse to take up the pitch offered by the racecourse. Had he done so, he would have mitigated his losses.

In those circumstances Judge Hogan was prepared to allow the Plaintiff to recover 100% of the losses he had sustained in the first 12 months of the dispute but insofar as subsequent years were concerned he abated the damages by a factor reflecting fault for the purposes of Section 34(1) of the 1961 Act. This deduction was 80%. He relied on the decision of Henchy J. in McCord v The Electricity Supply Board [1980] ILRM 153 and Carroll v Clare County Council referred to above.

The Court then considered the damages to which the Plaintiff was entitled. These were:

  1. The value of the pitch involved.
  2. The claim for loss of profits.

The Plaintiff called evidence from a former official of Horse Racing Ireland ("HRI") who had a particular expertise in the sale and valuation of bookmakers' pitches. The Court noted the effect of the economic depression on discretionary spending and betting in the racing industry. Factors were relied on by the Plaintiff such as the number of such pitches, their proximity to the parade ring, the layout of the betting ring and the nature of the racecourse itself. The Defendants relied on a report from a forensic accountant who gave instances of the sale of certain pitches. In all the circumstances the Court preferred the evidence led by the Plaintiff but discounted somewhat the value sought.

As to the claim for loss of profit a reasonable figure was provided by the Plaintiff for the seven year period involved. Evidence was heard from forensic accountants on behalf of both parties and a comparator was provided as to what the Plaintiff had earned from his pitch in Leopardstown Racecourse. The Court noted that the Plaintiff had frankly stated that he was in a modest way of business and this probably influenced its decision to accept the Plaintiff's own assessment as to the level of profits involved, but to discount it again by 80% for the second and successive years. Judge Hogan noted that John Kenneth Galbraith* thought the only function of economic forecasting was to make astrologers look respectable! By the same token he felt similar difficulties probably attended any attempts by the Court to make a fair assessment of what might have been.


These two very different cases illustrate the difficult, sometimes impossible job facing a Court in assessing damages. Even where there has been a clear breach on the part of a Defendant, the duty on a Plaintiff always remains to mitigate their losses and if they are found to have contributed in any way, the Court will intervene to reduce damages. It is also clear that the Court will respond favourably to a party seeking to advance a claim responsibly. It is noteworthy that in each case there was a certain lack of expert evidence from the successful party, yet the Court went on to make an award of damages broadly in terms of what they were seeking.

The two cases highlight the necessity of seeking sound legal advice from the very commencement of a dispute even where clients may feel themselves to be very much in the right, in order that they may manage their case well and recover all sums properly due to them.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
21 Jan 2018, Seminar, Dublin, Ireland

We are delighted to sponsor Airline Economics Growth Frontiers 2018 Conference taking place in the Shelbourne Hotel in Dublin from 21 to 24 January 2018.

23 Jan 2018, Business Breakfast, Dublin, Ireland

We are pleased to sponsor a Dublin Chamber of Commerce breakfast briefing at 8am on Tuesday 23 January at our offices at South Bank House, Barrow Street, with Vanessa Tierney of Abodoo.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions