Alfred McAlpine Construction Limited v. Panatown Limited, (2000)
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Alfred McAlpine Construction Limited v. Panatown Limited, (2000)
HOUSE OF LORDSLord Clyde Lord Goff of Chieveley Lord Jauncey of Tullichettle Lord Browne-Wilkinson Lord Millett OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENTIN THE CAUSEALFRED McALPINE CONSTRUCTION LIMITED(APPELLANTS)v.PANATOWN LIMITED(RESPONDENTS)ON 27 JULY 2000LORD CLYDEMy Lords,Panatown employed McAlpine to build a building on land owned by UIPL. The work was defective. Panatown has sought to terminate the contract on the ground of McAlpine's failure in performance. Panatown has suffered no loss. UIPL owns a defective building, which requires a significant expenditure for its repair, and has been unable for a considerable period to put the building to a profitable use. Panatown now seeks to recover, by way of an arbitration, from McAlpine the loss which UIPL has suffered. The appeal thus concerns the circumstances in which the employer in a contract of services may claim from the contractor on the ground of breach of contract damages in respect of a loss which has been suffered by a third party.I find no reason to question the general principle that a plaintiff may only recover damages for a loss which he has himself suffered. But there are exceptions to that principle. One is where the one party expressly enters a contract as agent or trustee for another. The existence of this category of case was recognised in Woodar Investment Development Ltd. v. Wimpey Construction U.K. Ltd. [1980] 1 W.L.R. 277. In such a case the contracting party may be entitled to recover damages for all the loss which his principal has suffered. But a solution along the lines of a formal agency is not available in the present case. Although the Duty of Care Deed expressly records that Panatown was acting on behalf of the building owner, that is UIPL, any relationship of agency was disowned by the respondents. The precise analysis of the relationships which may have existed between the companies associated with the employer remains obscure. The issue in the case has required to be resolved against the unsatisfactory background of that obscurity.The exception which is invoked by the respondents, Panatown, is the one which was identified in The Albazero [1977] A.C. 774. It arose in the context of the carriage of goods by sea but has more recently been developed in the context of building contracts. It may be useful first to consider its antecedents. The decision in The Albazero was plainly heavily influenced by what was seen as the doctrine, or the rule, in Dunlop v. Lambert (1839) 6 Cl. & F. 600. But the use of the word "rule" in such a context may lead to confusion. If anything, Dunlop v. Lambert provides an exception to the general rule, rather then constituting a rule in itself. The trouble may lie in the ambiguity of the word "rule," which may serve both to refer to a principle of general application and to a ruling, or decision, which may truly not be prescribing any general principle. It appears that the case has come to be seen as authority for the proposition that a consignor may recover substantial damages from the carrier where there was privity of contract between the consignor and the carrier, even although the goods were neither his property nor at his risk. Consideration of Dunlop v. Lambert gives rise to a real question whether it propounded any new principle at all.Dunlop v. Lambert concerned the loss of a cargo consisting of a puncheon of whisky while in course of carriage by sea between Leith and Newcastle. The pursuers, William Dunlop and Co., wine and spirit merchants in Edinburgh, shipped the puncheon on board a vessel owned by the defenders. The bill of lading bore that the puncheon was to be delivered to "Robson or his assigns" and that the freight had been paid by the pursuers. The pursuers sent the bill of lading to Robson. They also sent to him an invoice informing him that they had drawn on him by bill at three months, which Robson accepted. The invoice included the cost of the freight and the cost of insurance. After the loss of the puncheon the pursuers shipped to Robson another puncheon, the price of which together with the freight was slightly higher than the cost of the first puncheon, with its freight and insurance. Dunlop advised Robson that if he wished to insure the second puncheon he should do that in Newcastle. Robson stated in a deposition that the first puncheon was to be delivered safely on the quay at Newcastle before he could consider it as his property, that the second puncheon was expressly sent to replace the first, that the bill drawn for the first was renewed on account of the second and that he, Robson, had lost nothing. The pursuers claimed damages against the shipowners on the ground that they were liable to the pursuers in damages for wrongfully failing to deliver the puncheon to Robson. The pursuers stated in their pleadings that they "undertook by their agreement, and were answerable to the said Matthew Robson,...See the full content of this document
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