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GAZETTE
APRIL 1980
sustain a very great loss unless they could obtain new
premises in which to continue business.
Although it appeared to McWilliam J. that no question
of foreseeability arose with regard to the question of
mitigation he was satisfied that: "Any reasonable man in
business circles at the present time must appreciate that, if
property and premises are destroyed and alternative
property and premises have to be obtained the person
obtaining such property or premises will not have money
in a stocking or under a mattress or even in current
account for that purpose, but will either have to apply
money which is bearing interest and so lose such interest
or will have to borrow money and pay interest on the
money borrowed."
In awarding damages to cover the interest paid he
stressed that, whether there was any justification for it,
there was a distinction between the principles governing
an award of damages applicable to interest on money
actually expended on mitigating loss and interest claimed
in other connections as on the amount of a final decree.
He said: "It has not been the practice in Ireland to
award interest on the amount of a decree from the date
when the cause of action arose until the date of the decree
and it has not been argued that I have any jurisdiction to
award such interest. Nevertheless, I have been referred to
English cases in which interest upon the entire decree was
allowed or refused under a discretion to do so given by
the Law Reform (Miscellaneous Provisions) Act 1934.
This Act gave the English Courts discretion to award
interest for any period between the date when the cause of
action arose and the date of judgement. In so far as these
decisions depend on the express provisions of the English
statute they are not relevant to a discussion of the
principles upon which interest may be allowed on the
amount of a decree in Ireland and do not deal at all with
interest on money borrowed to mitigate loss."
One case that would have proved of assistance, if
needed, to McWilliam J. is the New Zealand Court of
Appeal
21
decision in
Taupo Borough Council v. Birnie
22
where the "Edison" was similarly distinguished if not
actually discarded. Here, due to the negligence of the
Borough Council largely flooding occurred in Mr. Birnie's
hotel grounds. The hotel lost a lot of business and
eventually had to be sold by public auction at a
mortgagee's sale. The question before the Court was
whether damages for loss of profits and loss of capital
suffered as a result of the mortgagee's sale were
recoverable. The Court held that the hotel's loss of
accommodation profits was a foreseeable and immediate
consequence of the flooding caused by the Borough
Council's negligence, but as regards the loss of capital head
it was contended that lack of funds was the real cause of the
forced sale and that therefore the head of damage was too
remote. Despite the high authority of the "Edison" the trial
Judge, Haslam J., felt that reasonable foreseeability was
the broad test for remoteness, took judicial notice of the
likelihood that a hotel company operating a hotel in New
Zealand could be expected to have mortgage liabilities and
would depend on the uninterrupted maintenance of its
operations to meet its covenants thereunder and held that
loss on the forced resale (since a mortgagee's forced sale is
likely to produce less than market value) was not too
remote. The Court of Appeal unanimously refused to
disturb this. Cooke J., in a judgement concurred in by the
remainder of the Court said: "There can be no doubt that
impecuniosity is one of the matters to be considered in the
question of reasonable foresight."
l.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
12.
14.
15.
16.
17.
18.
19.
20.
21.
22.
1933 AC 449.
1931 P 230
1932 P 52.
Lords Wright, Tomlin, Buckmaster, Warrington of ClyfTe, and
Russel of Killowen.
Legal Essays,
pp. 96-123.
1967 IR 277.
With whom ó Dálaigh C.J. and Haugh J. agreed.
1961 AC 388 (The Wagon Mound I).
1962 2 QB 405.
1901 2 KB 669.
Tort: Cases and Materials
(1974) p. 192.
1978 2 NZLR 97.
1947 AC 414.
1947 AC 196 at p. 224.
On which see the decisions of Peter Pain J. in
Ichard
v.
Frangoulis
1977 1 WLR 556. Lord Denning M.R. in
H.
Parsons (Livestock) Ltd. v. Uttley Ingham and Co. Ltd.
1977 3
WLR 990. The Court of Appeal in
Esso Petroleum Ltd.
v.
Mardon
1976 2 AER 5, although cf. contra the decision of the
House of Lords in
The Heron 2
1969 1 AC 350. For an inter-
esting Irish High Court decision on this area see Finlay P. in
Hickey and Co. Ltd.
v.
Roches Stores (Dublin) Ltd.
High Court
unrep. 14-7-1976, and the case note by Clark 1978 29 NILO
128.
High Court unrep. 14-11-1978 and 17-1-1979.
1971 1 WLR 1476.
Ibid., p. 460.
Ibid., p. 461.
Re an arbitration between Polemis and Furness Withy and Co
1921 3 KB 560.
Richmond P., Woodhouse and Cooke J.J.
1978 2 NZLR 397.
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