Damages

General damages are awarded on a discretionary basis, guided by judicial experience and precedent, whereas special damages require a detailed evidentiary foundation and must be clearly substantiated by the claimant

The overarching objective in awarding such damages is to restore the injured party, as far as possible, to the position they would have been in had the wrongful act not occurred.

The term general damages refer to losses that arise as the immediate, direct, and proximate result of the wrongful act complained of

These damages are presumed by law and typically encompass non-pecuniary harms such as pain and suffering, emotional distress, loss of enjoyment of life, and, in certain cases, loss of future earning capacity due to lasting or permanent injury

General damages are not capable of exact calculation and are usually assessed by the court based on the overall circumstances of the case, applying a broad rule of thumb

Whereas, in contrast, special damages refer to actual, quantifiable monetary losses that, although not necessarily a direct or inevitable result of the wrongful act, arise due to particular circumstances or conditions specific to the case

These may include out-of-pocket expenses, medical treatment costs, loss of income, and other financial losses sustained up to the date of the trial

Unlike general damages, special damages must be specifically pleaded in the plaint and strictly proved through credible evidence, such as receipts, medical bills, salary records, or expert testimony.

The general damages are governed by the rule of thumb whereas special damages are required to be specifically pleaded and proved

General damages are those which the law implies even if not specially pleaded, which includes compensation for pain and suffering and the like, and if the injuries suffered are such as to lead to continuing or permanent disability, compensation for loss of earning power in the future

Special damages are explained as actual but not necessarily the result of injury complained of

Special damages mean some specific item of loss which the plaintiff alleges is the result of the defendant's negligence in the particular case, although the law does not presume it to flow from the negligence as a matter of course

Special damage consists of out-of-pocket expenses and loss of earnings incurred down to the date of trial and are generally capable of substantially exact pecuniary assessment

The basic principle so far as loss of earnings and out-of-pocket expenses is concerned is that the injured person should be placed in the same financial position, so far as can be done by an award of money, as he would have been had the accident, not happened

In simple words, the damages are intended to put a person in the same position as he would have been in, had he not received the injury.

Increase in the cost of construction and prices of medical equipment, furniture and fittings, mesne profits and mental torture

Respondent/plaintiff instituted suit for recovery of general and special damages

Trial Court decreed the suit while granting both types of damages, which was concurred with by the first appellate court

Validity

Plaintiff was required to mention full particulars of all special damages, he was claiming, in his pleadings and prove them in the trial later on

Award of mesne profit and general damages i.e. mental torture and hardship pleaded in the plaint were finally awarded to the plaintiff, which had attained finality having not been challenged before the Supreme Court

Controversy before High Court was related to only award of special damages i.e. increase in the cost of construction and prices of medical equipment, furniture and fittings

In absence of mandatory details about the actual loss to the plaintiff, there was virtually nothing on record to quantify the damages allegedly suffered by the plaintiff with the amount he was claiming and decreed his suit as prayed

Principle that damages were intended to put a person in the same position as he would have been in had he not received the injury was not in the given facts and circumstances attracted for want of necessary description of actual loss suffered by the plaintiff

Plaintiff had brought on record no evidence that he had actually suffered/spent any expenses either on construction of the 1st floor of the hospital or on purchase of medical equipment, furniture and fittings to measure damages with the amounts he was claiming

Plaintiff had failed to adduce any evidence indicating that he incurred out-of-pocket expenses with difference in prices between the year 2003 and the year 2007/2008 on both counts i.e. construction of the 1st floor of the hospital or purchase of medical equipment, furniture and fittings

Relief of special damages could not be given on the basis of hypothesis or presumption of the loss the aggrieved person had either suffered or was likely to suffer in future, and which he had actually not incurred in reality

Plaintiff had failed to establish his entitlement for special damages

Second Appeal was partially allowed,in circumstances, and impugned judgments were set aside dismissing the suit of the plaintiff to the extent of such reliefs.

General damages are governed by the rule of thumb, whereas, special damages are required to be specifically pleaded and proved

General damages are those which the law implies even if not specially pleaded, which includes compensation for pain and suffering and the like and, if the injuries suffered are such as to lead to continuing or permanent disability, compensation for loss of earning power in the future

"Special damages" are explained as actual but not necessarily the result of injury complained of

Special damages mean some specific item of loss which the plaintiff alleges is the result of the defendant's negligence in the particular case, although the law does not presume it to flow from the negligence as a matter of course

Special damage consists of out-of-pocket expenses and loss of earnings incurred down to the date of trial and are generally capable of substantially exact pecuniary assessment

Basic principle so far as loss of earnings and out-of-pocket expenses is concerned is that the injured person should be placed in the same financial position, so far as can be done by an award of money, as he would have been had the accident not happened

In simple words the damages are intended to put a person in the same position as he would have been in, had he not received the injury.

Defendant filed an application before the Deputy Commissioner for closing school owned / run by plaintiff alleging it to be illegal and unregistered

Plaintiff took the stance that the said application was filed with mala fide intention to humiliate him in the society and damage his reputation

Validity

In the present case, as per probe by Ehtesab Bureau as well as Education Department, the initial registration of the school was not found in the record and the report made by Education Officer was declared false, thus, it was established that the plaintiff was running school without registration and the application filed on behalf of defendant before the Deputy Commissioner was also to the same effect that the plaintiff was running an unregistered school, so it could not be said that the defendant filed an application with mala fide intention to humiliate the plaintiff in the society and damage his reputation rather the defendant through said application brought the actual situation into the notice of the Deputy Commissioner for legal proceedings

Merely filing of an application before the competent authority for taking legal action could not be termed as malicious prosecution

It was the responsibility of the plaintiff to prove that the application was false and was filed with mala fide intention

For award of decree for general damages, it was the responsibility of the plaintiff to prove by producing cogent evidence that application filed by defendant was false and his school was properly registered and the application was filed just to humiliate him in the society, however the plaintiff failed to place on record any reliable document in support of his contention that the school was registered under law but during inquiry, it was found that the basic registration of the school was not available in the record of the concerned department, thus it cannot be held by any stretch of imagination that the filing of application by the defendant/appellant was an outcome of malice; rather it can safely be held that the defendant through the application brought an illegal action of plaintiff into the notice of concerned authority for which he could not be penalized

High Court set-aside the impugned judgment and decree; consequently, the suit filed by plaintiff/appellant stood dismissed for want of proof

Appeal, filed by defendant, was accepted.

Record revealed that the school of the plaintiff was not closed on the application of defendant/appellant rather after an inquiry the application was disallowed by declaring it as false without inquiring into the matter that whether the school of plaintiff was registered or not

Thus, the question of special damages as claimed by the plaintiff did not arise

Even otherwise, the plaintiff failed to mention in theplaint the calculable exact special damages suffered by him due to action of defendants

High Court set-aside the impugned judgment and decree ; consequently, the suit filed by plaintiff/appellant stood dismissed for want of proof

Appeal , filed by defendant, was accepted.

Special damages are defined as actual loss suffered by a party and a decree for special damages can be granted when the plaintiff succeeds to prove each item of loss with reference to the evidence brought on record

Special damages includes expenses and loss of earning incurred down the date of trial and capable of exact calculation

The general damages includes damage to the reputation and suffering mental torture, nervous shock which cannot be calculated, hence, the same are granted on the basis of thumb impression(sic).

Where plaintiff claims special damages, he must plead particulars of damages he has suffered.

The "general damages" are implied or presumed to have accrued from the wrong complained of, for the reason that they are its immediate, direct or proximate result or such that thus necessarily result from the injury, or such that they did in fact result from the wrong, directly or proximately

The term "special damages" is defined as those which are actual, but not the necessary result of the injury complained of, and which in fact follow it as a natural and proximate consequence in a particular case i.e. by reason of special circumstances or conditions

Such special damages must be specifically pleaded and proved

In a suit for damages, the wrong done to the plaintiff must be proved to be immediate, direct or proximate result of the act, or acts of negligence.

This doctrine applies, when the things that inflicted the damage was under the sole management and control of the defendant; secondly, the occurrence was such that it would not have happened without negligence; and thirdly, there must be no evidence as to why or how the occurrence took place

In such circumstances the defendants have to persuade the court that the accident did not occur on account of their negligence

In simple words, res ipsa loquitur means an inference of negligence in civil proceedings; it permits an inference of a defendant's negligence from the happening of an event and thereby creates a prima facie case of negligence sufficient for submission to a Court

To warrant submission of the inference for the court's consideration, the plaintiff must establish: (i) the event must be of a kind which ordinarily does not occur in the absence of someone's negligence; (ii) it must be caused by an agency or instrumentality within the exclusive control of the defendant; (iii) it must not have been due to any voluntary action or contribution on the part of the plaintiff

However, it is equally important to register that a defendant may rebut the inference of negligence with evidence that tends to cast doubt on the plaintiff's proof; and more importantly, the doctrine permits an inference of negligence to be drawn solely from the happening of the accident

The rule simply recognizes that some accidents by their very nature would ordinarily not happen without negligence

Res ipsa loquitur does not create a conclusive presumption in favor of the plaintiff but merely permits the inference of negligence to be drawn from the circumstances of the occurrence

Mere happening of an accident or injury will not give rise to an inference or presumption that it was due to negligence on the defendant's part, even in a strict liability context

It is insufficient by itself to establish a prima facie case of negligence , or to prove negligence as a matter of law

Stated another way, proof of an accident does not equate with proof of negligence

In an action based on negligence, the maxim res ipsa loquitur is merely a rule of evidence effecting onus; it does not alter the general rule that the onus to prove negligence rests upon the claimant

The doctrine has been applied to situations where a motor vehicle mounted the footpath , where a vehicle struck a pedestrian who was walking alongside the highway , where it was shown that the brake pipe of the vehicle was beyond repair, and where a vehicle of unsound condition was being driven on a poor road on a dark night.

Plea raised by appellant / defendant was that acquittal of respondents / plaintiffs was on the basis of benefit of doubt and was not an honorable acquittal

Validity

Both terms "simpliciter acquittal" and "honourable acquittal" refer to situations where accused is acquitted of charges

Simpliciter acquittal is a basic legal determination based on lack of evidence, whereas honorable acquittal carries a more positive connotation, potentially reflecting broader vindication of innocence or character of accused

Initiation of criminal proceedings despite full and final settlement of appellant / defendant's claim and lack of subsequent legal actions by appellant / defendant after passing of acquittal judgment were significant indicators of malicious intent

Division Bench of High Court declined to interfere in judgment and decree passed by Trial Court (Judge in Chambers of High Court)

Intra Court Appeal was dismissed, in circumstances.

Parties preferred respective appeals; however, the respondent's appeal was accepted, extending interest relief, and the appellant/bank's appeal was dismissed

Validity

Respondent placed sufficient evidence to substantiate that due to appellant's failure to perform its part of the contract within the stipulated time, the respondent suffered losses due to changed circumstances and a tremendous rise in relevant material prices, hence, it was entitled to damages

Appellant failed to lead evidence to negate the respondent's claim

Respondent's evidence remained un-shattered during cross-examination

Trial Court, based on evidence and documents, decreed the respondent's suit, which was maintained by the Appellate Court, which also granted interest declined by the Trial Court

Appellate Court's judgment and decree were well-reasoned and lawful, therefore, there was no reason to interfere in the Appellate Court's findings, which were the result of proper appreciation of evidence and material, as well as conscious application of mind to the case's facts and circumstances, hence, no interference was required by the High Court

Regular second appeals were dismissed, in circumstances.

As such the maxim substantiates precept that law concentrates on proximate cause of loss or damage when adjudicating compensation, ensuring that an aggrieved party is entitled to reasonable compensation, notwithstanding absence of proven actual damage or loss.

As such the maxim substantiates precept that law concentrates on proximate cause of loss or damage when adjudicating compensation, ensuring that an aggrieved party is entitled to reasonable compensation, notwithstanding absence of proven actual damage or loss.

Respondents published a false speech/report in a Daily Newspaper, which caused harm to the reputation, dignity, honor and business of plaintiffs

Plaintiffs claimed damages and Trial Court decreed the suit

Appeal was allowed by setting aside the judgment of Trial Court

Validity

Record showed that the witnesses were not eye-witnesses of the press conference, and their statements being hearsay were not admissible in evidence

For the purpose of damages party was bound to prove the quantum of damages sustained to it by producing trustworthy evidence

Decree for damages could not be granted without proofs

Plaintiff did not take benefit from the testimonies of other side's witnesses

Plaintiff neither produced any person who was present at the time of press conference nor exhibited the copies of newspaper

So far as the loss of business was concerned, none of the witness uttered a single word that as to what was the business of the plaintiff and how he sustained loss and during which period

Plaintiff did not produce any evidence to show that he suffered loss in the business

For special damage the plaintiff was duty bound to prove each item of loss on the strength of evidence

For establishing alleged defamation, the person claiming to have been injured must establish the case that his reputation has been diminished due to action of defendant

Mere assertion in the plaint that on account of act of defendants plaintiff suffered loss could not be sufficient to grant damages

Petitioner had failed to establish any illegality and irregularity in the impugned judgment and decree passed by the appellate Court, warranting interference

Petition being devoid of merit was dismissed, in circumstances.

Respondent/plaintiff sought recovery of damages against appellant/defendant company for disconnecting electricity connection, resulting into loss suffered

Validity

Illusionary, arbitrary, presumptive claim for damages for loss of expected profits and invisible losses was made by respondent/plaintiff

No evidence of loss of reputation or mental anguish was provided at trial

Even if it was considered that the manufacturing unit's witness was not cross-examined, even then it did not appeal to a prudent mind that solely because the manufacturing unit's witness was not cross-examined, it would mean that unproved and unsubstantiated damages claimed could be granted

Claim made by manufacturing unit should have been backed by a record that would provide a benchmark for what was claimed but it was not

By awarding damages as claimed by respondent/plaintiff, Trial Court committed an error as the respondent/ plaintiff was entitled only to recover Rs. 42,078/- for being unable to meet orders which were in the pipeline when power supply was disconnected

There was no yardstick to measure mental anguish but keeping in view suspension of business, Division Bench of High Court awarded symbolic damages of Rs.100,000 for mental anguish and Rs. 100,000 for loss of reputation

Division Bench of High Court modified judgment and decree passed by Trial Court and disallowed remaining damages as claimed by respondent/ plaintiff

Intra Court Appeal was allowed accordingly.

Applicants / plaintiffs sought recovery of damages on the ground that despite purchase of tickets from respondent / defendant Pakistan Railways, they could not travel due to non-availability of coach in which their seats were booked

Suit was decreed by Trial Court in favour of applicants / plaintiffs but damages awarded against Pakistan Railways were reduced by Lower Appellate Court

Validity

Courts have to decide matters in accordance with law and particularly in such claims under tort law on the evaluation of evidence and not on financial condition of government organizations, which are otherwise saddled with law to serve people and not to cause them inconvenience and hardship

With regard to award of damages for mental anguish, torture and inconvenience, no fixed criteria can be laid down

Passengers (applicants / plaintiffs) including family members of one of the passengers, suffered mental anguish and extreme inconvenience when they learned that subject coach having their reservations was not available

Lower Appellate Court did not find any irregularity in evaluation of evidence done by Trial Court but had decided the matters / appeals on completely new and invented consideration, which had no nexus with the facts of the case and could not sustain

High Court in exercise of revisional jurisdiction set aside findings of Lower Appellate Court and restored that of Trial Court

Revision was allowed, in circumstances.

In the absence of any substantial relief being matured, no consequential relief could be claimed, be that damages.

Respondent/plaintiff after his acquittal from criminal charge, sought recovery of damages for malicious prosecution against petitioner/defendant who had registered criminal case against him

Two Courts below decreed the suit in favour of respondent/plaintiff

Validity

Every case, which ends in acquittal does not ipso facto entitle the acquitted accused to sue for damages, as in that eventuality, damage caused would be beyond repair and criminal justice system would come to a halt

By doing so, aggrieved person would suffer at the hands of incompetent investigation and people would lose courage to register their claims and the same would in turn lead to a chaos

Burden remains on the person, claiming damages, to prove that the charge against him was outcome, of malice and mala fide and that the sole purpose was to tarnish his character and damage his reputation

For malicious prosecution, it was the bounden duty of respondent/ plaintiff to convince Court of competent jurisdiction, that proceedings against him were outcome of malice and mala fide

Petitioner/ defendant charged both rival groups that by itself was sufficient to tell that petitioner/defendant had no mala fide against plaintiff/ respondent, rather he acted with bona fide

If there had he any malice, he would have singularly charged plaintiff/respondent

High Court set aside judgments and decrees passed in favour of respondent/plaintiff, as both the Courts below fell into error and failed to appreciate the issue in its true perspective

Revision was allowed accordingly.

Such is the only tool which can curb the menace.

Loss of human life cannot be measured in terms of coins, however, Fatal Accidents Act, 1855 was enacted to provide compensation to bereaved families for loss occasioned by the death of a person caused by an actionable wrong.

Even fixed amount of damages cannot be granted until and unless quantum of loss or damages actually suffered is proved through sufficient evidence

Damages are firstly to be pleaded and thereafter to be proved by leading reliable, trustworthy and cogent evidence

Damages cannot be awarded on expectation or on hearsay evidence.

Difference between general damages and special damages is that the former is initially quantified by the person making the claim, while the latter is assessed by the Court.

Failure to quantify damages does not mean that a claimant is not entitled to general damages under the rule of thumb when sufficient material is brought on record.

General damages were initially quantified by the person making the claim, while the special damages were assessed by the Court

In majority of instances, claim would be eventually monetary one.

Mental shock, agony and torture implies a state of mind which could be proved only by a positive assertion of one who experienced the same.

For special damages one has to prove loss sustained by him of each and every particular item leading to suffering/damage alleged by him

General damages may also require evidence pertaining to facts as alleged in plaint.

Quantum of general damages can be determined by the Court by looking at the facts of a case.

Special damages can only be awarded when plaintiffs prove the same by leading positive evidence.

General damages were required to be established through cogent and reliable evidence and mere feeling of resentment in one's mind was not sufficient to establish general damages

For person claiming mental torture, agony or damage or injury; initial burden would lie on such person to lead evidence on such point

Determination of general damages for mental torture, agony, defamation and financial losses were to be assessed following the "rule of thumb"; which exercise fell within discretionary jurisdiction of the Court, which had to adjudicate upon facts and circumstances of each case.

Defendant resisted the suit on the plea that plaintiff failed to pay balance consideration amount within due time and defendant faced loss due to such failure therefore plaintiff was not liable to return of earnest money

Validity

Plaintiff failed to bring on record any document and produce any witness which could show that when he did not receive any reply of his first notice from defendant what efforts he had taken to communicate his willingness and readiness to perform his part of obligation under the contract

Plaintiff before filing of suit was well aware of the fact that defendant had sold out suit property to someone else, however, plaintiff did not show any effort either to know name of the new buyer or to implead him as party in proceedings which fact reflected lack of seriousness of plaintiff for seeking specific performance of contract

Party seeking specific performance of an agreement to sell was essentially required to deposit balance sale consideration amount in Court

By making such deposit plaintiff was to demonstrate its capability, readiness and willingness to perform his part of contract, which was an essential pre-requisite to seek specific performance of a contract

Failure of a party to meet such essential requirement disentitled that party to the relief of specific performance, which was a discretionary relief

Defendant failed to substantiate his stance of loss through evidence, therefore, he was not entitled to forfeit the amount paid by plaintiff under the agreement

Plaintiff was not entitled to relief of specific performance of contract but was entitled to refund of his consideration paid by him to defendant

Suit was decreed accordingly.

Mental shock, agony and torture implied a state of mind which could only be proved by a positive assertion of one who experienced the same.

Circumstances in which a police official could be held civilly liable for his conduct and the test on basis of which such conduct was to be assessed stated.

Police officer employed by the city, who had been designated as an inspector by the transport authority responsible for the subway system, ordered her several times to hold the handrail, since the authority taught police officers that holding the handrail was an obligation under a by-law

Appellant refused to comply and to identify herself, where after the police officer arrested her and searched her bag

Police officer gave the appellant two separate fine tickets, one for disobeying a pictogram indicating that the handrail should be held, which the transport authority had posted near the escalator pursuant to its by-law, and another ticket for hindering the police in their duties

After being acquitted in the Municipal Court, the appellant instituted a civil liability action against the police officer, his employer and the transport authority, contending that the arrest was unlawful and unreasonable and that it constituted a fault because holding the handrail was not an obligation under the by-law, but simply a caution/warning

Trial judge dismissed the action, finding that the police officer had not committed any civil fault and that it was the appellant who had behaved in an inconceivable manner by refusing to comply with the officer's order

Court of Appeal affirmed the decision of the trial judge

Held, that the police officer committed a civil fault by ordering the appellant to identify herself and by arresting her and conducting a search based on a non-existent offence, namely disobeying the pictogram indicating that the handrail should be held

Reasonable police officer in the same circumstances would not have concluded that disobeying the pictogram was an offence under a by-law, and would necessarily have doubted the existence in law of the offence and, as a result, would not have required the appellant to identify herself so that she could be given a fine ticket

Such an officer would certainly not have arrested her if she refused, but would instead have allowed her to continue on her way

Before depriving the appellant of her liberty, the officer had to ensure that there was valid legal justification for his actions

Reasonable police officer would have concluded that the pictogram simply advised users to be careful, despite the training received

Police officer's conduct necessarily constituted a fault insofar as it resulted from an unreasonable belief in the existence of an offence that did not exist in law

As principal, the city was also bound to make reparation for the injury caused, [pursuant to Arts. 1463 & 1464 of the Civil Code of Quebec, 1994], because it was not in dispute that the police officer was acting in the performance of his duties when the fault was committed, even though his conduct was also unlawful

Transport authority had no public law immunity

Legal person established in the public interest may be civilly liable if it made an error of law in implementing its own regulations or by-laws

In the present case, the training provided to police officers by the transport authority was part of the implementation of a by-law

In this respect, the transport authority committed a direct fault in the implementation of the by-law by providing training that suggested to police officers called upon to enforce its by-laws that holding the handrail was an obligation

Once the transport authority undertook to provide police officers with training, it had to ensure that the training would be appropriate and that it would reflect the law

If the police officer was at fault for believing that holding the handrail was an obligation, the transport authority was equally at fault for misinterpreting the by-law and providing training accordingly

Transport authority was also liable as mandator for the police officer's fault

Designation of a police officer as a subway inspector created a legal relationship analogous to that of mandate (within the meaning of Art. 2130, para. 1 of the Civil Code of Quebec, 1994), in which a public transit authority may incur civil liability to a third person

In enforcing the by-laws of a public transit authority, a police officer ipso facto represented that authority in the performance of a juridical act, which must be interpreted broadly

Appellant was entitled to refuse to obey an unlawful order and therefore committed no fault that would justify an apportionment of liability

Unless a statutory provision or common law rule clearly imposed it, there was no obligation to identify oneself to, or indeed to cooperate with, a police officer

Similarly, the appellant could not be faulted for not doing anything to mitigate the injury she suffered

Reasonable, prudent and diligent person was not under an obligation to obey an unlawful order

In a free and democratic society, no one should accept or expect to be subjected to unjustified state intrusions

Interference with freedom of movement, just like invasion of privacy, must not be trivialized

Appellant suffered minor bodily injuries, but also above all, moral injury as a result of her unlawful arrest, the force used against her and the unreasonable search of her personal effects

Compensation for suffering, anguish and humiliation had to be awarded in the present case

Appellant was awarded $20,000 with interest in damages, with the transport authority and the police officer, each liable to pay 50% of said amount

Appeal was allowed accordingly.

Issuance of wrong meter readings was not disputed by company hence they could not come with the plea that respondent had not suffered mental agony by acts of their officials

Proofs of suffering and agony could not be demanded in shape of written documents but may well be proved by circumstances

Respondent established continuity of wrong actions on part of appellants as well as his approaches for redressal

Company legally could not take an exception to prove bona fide of its actions

Burden was upon company and a failure in such regard would always burden it to bear consequences as failure thereof burdened them to compensate the aggrieved

High Court declined to interfere in order passed by Trial Court and Lower Appellate Court as prima facie there appeared no illegality in judgment and decree of court below

Second appeal was dismissed in circumstances.

Damages are of two kinds; general and special and special damages are awarded only when a party successfully proves actual losses suffered by him/her.

Special damages are awarded only when a party successfully proves actual losses suffered by him / her through positive evidence.

Person claiming general damages relating to mental torture, anguish, distress and defamation; are to be assessed following the Rule of Thumb and the said exercise falls in the discretionary jurisdiction of the court which has to decide it in the facts and circumstances of the case.

To succeed in action for damages on plea of malicious prosecution one has to establish that he was prosecuted by opposite party; prosecution ended in his favour and opposite party acted without reasonable and probable cause; opposite party was actuated by malice, proceedings had interfered with one's liberty, and that it affected his reputation and he suffered damages on account of such prosecution.

Any party who claims damages on account of breach of contract is required under law to establish contract, breach thereof and extent of damages put forward/claimed in a suit for damages.

Special damages are awarded only when a party successfully proves actual losses suffered by him/her.

Person claiming special damages had to prove each item of loss with reference to the evidence brought on record and for general damages relating to mental torture, anguish, distress and defamation and same had to be assessed following the rule of thumb.

Onus of proof for damages lies on shoulders of plaintiff / claimant and without discharging such onus of proof, damages cannot be granted straight away

Even a fixed amount of damages cannot be granted until and unless quantum of loss/damages actually suffered is proved through sufficient evidence.

Special damages are awarded only when a party successfully proves actual losses suffered by him/her.

Qualifying length of service for getting the second gratuity was condonable as only one and half month was short to make the employee entitled for the second gratuity

Claim of employee for gratuity to the extent of Rs. 57,500/- was justified

Employee was entitled for official car and driver along with 270 liters petrol per month right from the start of her employment

Claim of Rs.6,23,040/- for expenses incurred towards car, petrol, driver and maintenance from the period of August, 2002 to July, 2003 had been proved by the employee and she was entitled for the said amount

Department was guilty of breach of contractual obligation due to non-payment of admissible dues and not adhering to the terms of contract employment

Employee had been deprived of her service dues

Department had caused mental anguish and humiliation to the employee

Employee was entitled for damages to the tune of Rs.15,00,000/- in circumstances.

'Negotiating damages' (sum that the claimant could hypothetically have received in return for releasing the defendant from the obligation which he failed to perform)

Scope

Restrictive covenant, breach of

Defendants breaching covenants not to compete with claimant or to solicit its clients

Question as to whether claimant was entitled to damages assessed by reference to amount which would notionally have been agreed in hypothetical negotiation between reasonable parties as price for releasing defendants from covenant obligations, and whether difficulty of establishing financial loss justified award of non-compensatory remedy

Claimant-company provided supported living care for vulnerable children and adults

Defendants, who were a former director and shareholder, and a manager, respectively, of the claimant, agreed to be bound for three years by restrictive covenants prohibiting them from competing with claimant or from soliciting its clients

In breach of the restrictive covenants the defendants set up a business which also engaged in supported living services in the same areas as those where the claimant operated

Claimant brought a claim against the defendants alleging breach of restrictive covenants not to compete with the claimant, solicit its clients or use its confidential information, and produced forensic account reports quantifying the loss which it had allegedly suffered in consequence of the defendants' breaches, the benefits obtained by the defendants and a hypothetical fee for releasing the defendants from the restrictions

Trial judge found that the defendants were in breach of the competition and solicitation covenants and held that, since it would be difficult for the claimant to identify the financial loss which it had suffered by reason of the defendants' wrongful competition, it would be just for the claimant to have the option of recovering damages for 'such amount as would notionally have been agreed between the parties, acting reasonably, as the price for releasing the defendants from their obligations', or alternatively 'ordinary compensatory damages'

Claimant elected for damages on the former basis and a hearing on quantum was fixed

Defendants appealed and the Court of Appeal dismissed the appeal, holding that damages based on a hypothetical release fee were available whenever that was a just response, and it was a matter for the judge to decide, taking into account, if he wished, the difficulties which the claimant would have in establishing damages on the ordinary basis

Held, that 'negotiating damages' could be awarded for breach of contract where the loss suffered by the claimant was appropriately measured by reference to the economic value of the right which had been breached, considered as an asset

Imaginary negotiation involved in calculating such "negotiating damages" was merely a tool for arriving at that value and did not in itself make them fundamentally incompatible with the compensatory purpose of an award of contractual damages

Real question was as to the circumstances in which that value constituted the measure of the claimant's loss

In context of present case, such negotiating damages could be awarded for the breach of contract which had resulted in an identifiable loss equivalent to the economic value of the right which had been breached, considered as an asset, even in the absence of any pecuniary losses which were measurable in the ordinary way, since the claimant had in substance been deprived of a valuable asset, and the defendant had taken something for nothing, for which the claimant was entitled to require payment

Trial judge had been mistaken in considering that the claimant had a right to elect how its damages should be assessed, and in supposing that the difficulty of quantifying its financial loss justified the abandonment of any attempt to quantify it

Further the Court of Appeal had been wrong in treating, inter alia, the difficulty of establishing precisely the claimant's financial loss as justifying an award of a monetary remedy which was not compensatory

Basis on which damages were awarded could not be a matter for the discretion of the primary judge

Although the loss in the present case was difficult to quantify, it was a familiar type of loss for which damages were frequently awarded and it was possible to quantify it in a conventional manner, accordingly, the hearing on quantum ordered by the Trial judge should proceed, not for an assessment of the amount which would notionally have been agreed between the parties as the price for releasing the defendants from their obligations, but for the judge to measure, as accurately as possible, the financial loss which the claimant had actually sustained

Issue of how that assessment was best carried out was for the Trial judge to consider

If evidence were led in relation to a hypothetical release fee, it was for the judge to determine its relevance and weight, if any, although such a fee was not itself the measure of the claimant's loss in a case like the present one

Appeal was allowed accordingly.

Damages based on a notional release fee may be awarded in three categories of cases; first, where the claimant had an interest, such as a property right, which extended beyond financial reparation; second, where the claimant would be entitled to the specific enforcement of his right, and the notional release fee was the price of non-enforcement, and third, where the notional price of a release may be relevant as an evidential technique for estimating the claimant's loss, such as in cases of patent infringement.

Such damages were intended to place the claimant in the same position as he would have been in had the contract been performed

Such damages were therefore normally based on the difference between the effect of performance and non-performance upon the claimant's situation

Where the breach of contractual obligation had caused the claimant to suffer loss, that loss should be measured or estimated as accurately and reliably as possible

Law tolerated imprecision, and there were different legal principles which could assist in estimating the claimant' loss

Contract law damages could not be awarded merely for the purpose of depriving the defendant of profits made as a result of the breach, except in exceptional circumstances

Contract law damages were not a matter of discretion; they were claimed as of right and were awarded or refused on the basis of legal principle.

Said defence barred an otherwise valid action in tort on the basis that the plaintiff had engaged in illegal or immoral conduct and, therefore, should not recover

Grounded in public policy, defence of illegality was available in very limited circumstances, only where it was necessary to preserve the "integrity of the justice system"

Integrity of the justice system would only be compromised where a damage award in a civil suit would, in effect, allowed a person to profit from illegal or wrongful conduct, or would permit an evasion or rebate of a penalty prescribed by the criminal law.