Hooper v Oates [2013] EWCA Civ 91

In February 2008, Hooper contracted to sell a house to Oates for £605,000 with an agreed completion date of 30 June 2008. Oates failed to complete. Hooper put the property back on the market but failed to find another buyer. Hooper let the property to tenants in 2009 and attempted to sell it again in March 2011. The house failed to sell and Hooper moved back in a few months later. As at the date set for completion, the market value of the property was £600,000. However, by September 2011 it had fallen to £495,000.

The judge at first instance found Oates liable for breach of contract and assessed the damages payable as being the difference between £605,000 and £495,000. Oates appealed arguing that, because Hooper had decided not to sell, damages should be assessed by reference to the value of the property at the date of breach, not at some later date.

The Court of Appeal dismissed the appeal. The purpose of damages for breach of contract was to put the innocent party in the position he would have been in had the other party performed its obligations. In the case of a contract for the sale of land, it was highly unlikely that there would be another buyer waiting in the wings as at the date of breach and there would inevitably be a period of delay until resale during which the value of the property could continue to fall, increasing the loss suffered. Assuming that the innocent party had taken all reasonable steps to mitigate its loss, there was no reason why the loss suffered by a fall in value following the breach should not be properly compensated. The correct measure of damages would in most cases be the difference in value between the contract price and the eventual resale price. The fact that Hooper had eventually decided to retain the property rather than sell made no difference to this and the difference in value should properly be fixed as at the date when Hooper went back into occupation of the property.