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Doone Valley Holidays, inquiry for damages
Client: Doone Valley Holidays
Brief
On 29 June 2014 The High Court handed down a judgment in an inquiry for damages in respect of passing off and interference with trade. The claimant, Mr Harman, had developed a holiday business called "Doone Valley Holidays" based on camping and trekking at Cloud Farm in the Doone Valley in Exmoor. This beautiful area of Exmoor is famous through its association with Lorna Doone: A Romance of Exmoor, the novel by Richard Blackmore.
In July 2003 the Doone Valley Holidays business was sold by the defendant, Mr Burge, to Mr Harman and his wife along with a lease to Cloud Farm for a period of 7 years to July 2010. On the expiry of the lease, Mr Harman took steps to move the Doone Valley Holidays business from Cloud Farm. However, Mr Burge took control of the website, and in doing so gave the impression that Doone Valley Holidays business would continue at Cloud Farm. In July 2012 Mr Burge admitted passing off and interference with the Doone Valley Holidays business.
Approach
The law on damages
The judgment gives a helpful summary of the law relating to damages, as applied to this case:
1. A successful claimant is entitled, by way of compensation, to that sum of money which will put him in the same position he would have been in if he had not sustained the wrong.
2. The claimant has the burden of proving the loss.
3. The defendant being a wrongdoer, damages should be liberally assessed but the object is to compensate the claimant, not punish the defendant.
4. The claimant is entitled to recover loss that was (i) foreseeable, (ii) caused by the wrong and (iii) not excluded from recovery by public or social policy.
5. In relation to causation, it is not enough for the claimant to show that the loss would not have occured but for the tort. The tort must be, as a matter of common sense, a cause of the loss. It is not necessary for the tort to be the sole or dominant cause of the loss.
6. An inquiry will generally require the court to make an assessment of what would have happened had the tort not been commited and to compare that with what actually happened. It may also require the court to make a comparison between, on the one hand, future events that would have been expected to occur had the tort not been committed and, on the other hand, events that are expected to occur, the tort having been committed. Not much in the way of accuracy is to be expected bearing in mind all the uncertainties of quantification.
7. Where the claimant has to prove a casual link between an act done by the defendant and the loss sustained by the claimant, the court must determine such causation on the balance of probabilities. If on balance the act caused the loss, the claimant is entitled to be compensated in full for the loss. It is irrelevant whether the court thinks that the balance only just tips in favour of the claimant or that the causation claimed is overwhelmingly likely.
Expert evidence on lost profits
Expert evidence on behalf of the claimant was put forward by Thayne Forbes, of Intangible Business Ltd, based on projected lost profits on lost sales of the Doone Valley Holidays business "but for" the interference of the website. The trial judge, His Honour Judge Hacon, found Thayne Forbes to be a witness doing his best to assist the court. Expert evidence on behalf of the defendant was put forward by David Black of HW Forensic Accountants.
Result
Significant assumptions underlying Thayne Forbes's calculations of lose profits were challenged in court which examined them and made amendments as it considered appropriate, leaving the parties to agree revised calculations. This was then done and included in the judgment. This therefore represents a practical application by the court of the "but for" methodology, by reference to the key underlying assumptions, to calculate a sum of damages.
"Our client, Mr Harman, is pleased that this significant and complex claim has been successfully brought to trial. We worked closely with an able team at Intangible Business, who made a significant contribution to the quantification of lost profits. Thayne Forbes's methodology was largely accepted and used by the trial judge."
Ms Marika Monaghan, instructing solicitor, Mayo Wynne Baxter
Doone Valley Holidays case study