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The case at bar revolves in an issue of obligations and contracts and in a dispute

involving a land previously owned by the petitioner that was sold to the defendant
in a condition that the original planning permission negotiated by the parties shall
be followed. The contract was impaired because the original plan was to only build
72 bungalow houses, but the defendant deviated the plan and resorted to build 77
bungalow houses instead. The petitioner did not seek for an interim injunction to
seek the court’s order to stop the building of the houses but instead they pray for a
collection of sum of money as payment for damages because if they had known the
changes beforehand, they would have increased the value of the sale.

This court in determining as to whether or not the plaintiff has the right to be
compensated considered several jurisprudences to conclude which judgment is
most applicable to the facts of the case. Clearly this case involves a breach of
contract, the court first delved into the most common and basic remedy – to award
damages. However, the court also took into consideration that damages are
intended to compensate a victim for a loss, not to transfer to the victim, if he had
suffered no loss, the benefit which the defendant gained by breaching the contract
(Robinson v. Harman). In this case, there is no proof or even an observation that the
plaintiff has suffered or will suffer any loss. The plaintiffs even accepted that they
have not suffered any damage at all of the nature of damage to adjoining property
owned or occupied by them. The basis of compensation as discussed in the case is
the loss naturally flowing from the breach. So there will be a question on how the
court can assess the amount of damages to be paid, if there is nothing to
compensate, as there is no loss?

The court parked that matter and explored into another point of view saying that
the above rule is not of universal application because there are cases which are
resolved wherein the plaintiff is awarded for damages not because the breach of the
contract placed him in a situation other than in one as if the contract had been
performed but because of the expenditure the plaintiff had wasted because the
contract has not been performed.

Based on the two opinion mentioned, the court is now torn because the basis of
compensation is still loss but it would be unreal to assume that a loss has occurred
so it would be impossible to calculate the damages. In this case what was clear only
is that the defendant will gain. It is not so clear if the plaintiff will lose by agreeing
the building of 77 houses instead of 72. The only scenario mentioned wherein a
plaintiff can recover of the defendant’s gain is in the field of tort – that even if there
is no actual harm, the wrongdoer can be charged (Johnson vs. Agnew). This cannot
be applied in the case at bar for the defendant did not use any property of the
plaintiff because they already bought and own the land in dispute.

The present case was compared to the ruling of the court in the Wrotham Park case
where the court held that in assessing the damages, it would be the amount that
hypothetically the plaintiff would be willing to pay to relax the contract to permit
the defendant to do what it wants to do on the land because of the anticipated
profits for the extra houses built on the land. However, still this case cannot be
applied in the case at bar for the reason that the plaintiffs have neither objected, nor
wished to object, to what the defendants have done as compared to the Wrotham
Park case wherein the plaintiffs objected to building works in breach of covenant as
soon as they learnt of them and, within a month, issued a writ seeking restraining
and mandatory injunctions – this depicts that the plaintiffs in Wrotham would not
have granted the thing that constituted the breach (Wrotham Park Estate Ltd v.
Parkside Homes Ltd). Thus, the Lord Justices concurred in dismissing the case and
the appeal.

I would like to refute and present my dissent on the ruling of the Lord Justices in
this case. A contract is defined as an agreement that is usually between two parties.
Contracts typically outline the rules that each party must follow and if a party fails
to do what they said they would, the other party may be entitled to compensation
(Ryan, 2006). To apply this definition in this case, would mean that there is no loss
necessary for the plaintiff to be able to file for a money claim. What is only necessary
is that the defendant deviated from what was agreed upon in the beginning. It is
notable also that a contract arises from the meeting of the minds, so it would be
unfair if the defendant was enriched at the expense of the aggrieved party (Art. 19,
NCC).

In this case it can be easy to assume that increasing the number of houses to be built
from 72 to 77 would mean enrichment on the part of the defendant. The defendant
herein will increase revenue. In English law, there is what we call the Objective Test
of Enrichment. Under the objective test of enrichment a benefit is valued in an
objective manner such as obtaining the benefit’s value in the market at large
regardless of the value the benefit has to the defendant (Wyong Shire Council vs.
Shirt). This objective value established remains the value of the benefit to the
defendant unless the defendant argues and expresses to rely on subjective
devaluation. In this case, even if others argue that there is no loss on the part of the
plaintiff being them showing no signs of objections in the continuing of building of
the deviated plan, the Bredero Homes was still unjustly enriched in breaching their
first agreement. So if the defendant was enriched, was it on the expense of the
plaintiff? Yes. Remember that a person or an entity does not enter into a contract if
the contract is not in line with his or its thoughts. Once a person or entity enters into
a contract it can be presumed that all of the contents and clauses in the contract are
agreed to by both parties. Meaning to say, what County Council of Surrey & Anor as
plaintiffs want only the first planning permission to be built and not the revised one,
because if had they wanted or had they be willing to allow the building of the
revised planning permission, then it would be right to say, that the contents of the
revised planning permission should have been the contents of the original planning
permission.

The above-mentioned contention could be easily described already as a loss of the


plaintiff. It might not be a physical loss at instant, but it is considered a loss because
had they known that Bredero Homes would deviate from the original planning
permission to increase revenue, they would have taken advantage and also
increased their selling price. The other test of enrichment is the Subjective Test of
Enrichment. Under the subjective test of enrichment, defendant is authorized to
show his personal characteristics to discover whether the benefit conferred is less
than the ordinary market value regardless of the fact that the benefit has a market
value i.e. defendant had been objectively benefited (Doubleday vs. Kelly). Hence,
under the subjective test of enrichment the actual value the benefit has to the
defendant is identified and valued. Under subjective devaluation, it is not important
in the case of particular individual that other people choose to have the benefit or
create a demand for it. As a matter of fact, the rationale of subjective devaluation lies
in establishing whether the defendant desired or wished for the benefit. In this case,
the defendant wanted to be benefited (Law Teacher, 2013). They didn’t show any
evidence in the court that the reason that they pushed through with the revised
planning permission is because of an error or for public safety or that the deviation
is inevitable.

As explained, the loss cannot only be considered as a loss that can be a source of
claim if it is instant or physical – there is also a concept called remote loss. In
remoteness of loss, the aim of damages is to put him in the position he would have
been had the contract been properly performed. In the case, the loss suffered by the
plaintiff was remote. It cannot be determined at first glance or at first instance, it
can only be determined by going through the reasons why the contract was made in
the first place. This was a process not done by the courts.

This is why I stand my dissent that the plaintiff’s complaint is meritorious and that
they should be awarded of damages. Damages are the payment in one form or a
remedy which is provided by the common law to provide financial compensation or
loss or debt where there has been a breach of contract (The Legal Dictionary). The
main purpose there is damages in a breach of contract is because there is a need to
protect the promisee’s expectation interest and in the promisor’s performance.
However, it should be noted that contractual damages are not means to be a
punishment for the party who has fails to perform the agreements which are in the
contract. The defendant’s ability to pay in ensuring the measure of damages does
not consider by the court. When there are cases which make the party unable to
perform the agreements made in a contract, the plaintiff who is the person who
brings suit in the court which is opposed to the defendant would have expectation
interest which is measured by difference - money damages. The difference between
the contract price and the cost of construction by another builder would be the
general measure of damages. In this case I believe that the proper amount of
compensatory damages that Bredero Homes should pay is that amount that the
plaintiff is willing to be paid for, and that the defendant is willing to pay, if at the
time of the creation of the contract, the contents of such contract are those in the
revised planning permission.

To conclude, this land mark case decided in 1993 provided a doctrine that was used
to decide many cases from the time of the promulgation of its judgment and to be
upheld in the courts in the next generations. The doctrine in this case is that if there
is no loss, no compensation should be given to the aggrieved party in a breach of
contract (Briggs, 2016). This is a doctrine that I do not have the same opinion of. A
contract in law terms is defined as an agreement that legally binds the parties. A
party to contract is bound because he has agreed to be bound. For a valid contract to
exist between the plaintiff and Bredero Homes, it must be shown that there has
been an offer and that that offer has been accepted. In this case, Bredero Homes
made a money offer and the plaintiff accepted. In addition to that, there must be an
intention from both parties to create legal relations and consideration. So in order to
conclude that there is a contract giving rise to enforceable obligations, we must first
identify the existence of a binding agreement between the parties. A contract to sell
is the binding agreement. A condition in the selling terms is also a binding
agreement. The moment that was broken by the Bredero Homes, a loss had already
happen. This lost is a tangible lost on the part of the plaintiff which the court did not
see. And it is saddening because this loss is an important one – the loss of belief in
the binding character of contracts. Ironically, this is why contracts exist in the first
place – to make sure that the terms of agreement will bind all of the parties.
However, in this case, the binding character of the contract to sell and the conditions
of sale were not even upheld.

Citations:
1. Robinson v. Harman 154 E.R. 363 (18 January 1848)
2. Wrotham Park Estate Co. Ltd v Parkside Homes Ltd [1974] 1 W.L.R. 798 (19
October 1973)
3. C Mitchell, 'Johnson v Agnew (1974)' in C Mitchell and P Mitchell (eds),
Landmark Cases in the Law of Contract (Hart, Oxford 2008) ch 12, 351-373
4. Ryan, Fergus (2006). Round Hall nutshells Contract Law. Thomson Round
Hall. p. 1.
5. Wyong Shire Council v. Shirt [1980] HCA 12
6. Doubleday v. Kelly [2005] NSWCA 151
7. Law Teacher. (November 2013). The Concepts Of Unjust and Unjustified
Enrichment. Retrieved from https://www.lawteacher.net/free-law-
essays/contract-law/the-concepts-of-unjust-and-unjustified-enrichment-
contract-law-essay.php?vref=1
8. Surrey County Council v Bredero Homes Ltd [1992] 3 All E.R. 305
9. The Legal Dictionary Copyright © 2003-2018 Farlex, Inc
10. Black’s Law Dictionary
11. Art. 19 Civil Code of the Philippines
12. Briggs, A. (January, 2016) OXFORD - Myanmar Law Programme Lectures on
The Law of Contract “Compensation When One Party Fails or Refuses to
Perform”. University of Oxford, Faculty of Law

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