Damages for breach – Measure of damages

Jet2.com Ltd v S C Compania Nationala de Transporturi Aeriene Romane Tarom SA: Queen's Bench Division, Commercial Court (Judge Mackie QC sitting as a judge of the High Court): 11 October 2012

In March 2012, the court found that the defendant company had breached its aircraft maintenance contract with the claimant (the contract) and was liable in principle for damages (see [2012] All ER (D) 218 (Mar)). In the light of the defendant’s breach, the claimant had to pay a third party (JAT) to do some checks. It had done the remainder itself at a hangar (the hangar), including heavier maintenance services (C-checks) and had deployed some of its permanent staff to the hangar, replacing them with contractors. The parties were unable to agree the quantum of damage.

The issues for determination were, inter alia: (i) how many aircraft the claimant would have asked the defendant to service under the contract; (ii) whether the claimant could recover damages for the costs of the hangar for the specific purpose of the C-checks and the salaries of its redeployed permanent staff; (iii) whether the claimant had appropriately deducted amounts attributable to the costs of materials; (iv) whether it was fair to assume that the checks undertaken by the defendant and JAT would have taken the same man hours and the materials cost the same so that both amounts could be omitted from the calculation of damages; and (v) whether the claimant had financially benefited from reduced maintenance periods at the hangar.

The court ruled: (1) In the season 2007/2008, the claimant would have required the defendant to service five aircraft, in 2008/2009, the defendant would have serviced eight aircraft and six in 2009/2010 (see [21] of the judgment).

(2) The claimant could recover something for costs of the hangar because all the further C-check work resulting from the termination of the contract could not have been accommodated without cost in the existing space. Further, where there had been a particular need to use a proportion of permanent staff who were directly replaced by contract staff in their usual locations, that item ought to be part of the damages recovered by the claimant (see [28], [32] of the judgment).

(3) It was appropriate for the claimant to deduct the cost of materials but, in the ordinary way, the court would expect it to produce evidence of what that had actually been. The claimant’s approach seemed to be flawed and the relevant deduction would be the best estimate of the actual cost of the materials (see [41] of the judgment).

(4) It would be fair to assume that the aircraft checks that had been undertaken by the defendant would have taken on average the same man hours for further work as JAT had in fact taken and that the defendant would have charged the same for materials used in the further work as JAT (see [42]-[44] of the judgment).

(5) In the absence of developed evidence on the point, an adjustment for the reduced maintenance periods would not be made, particularly in circumstances where it was arguable that at least some of the further maintenance time the claimant would have incurred using the defendant might have been caused by breaches of the contract (see [50] of the judgment).

Steven Thompson and Harry Sharpe (instructed by Bird & Bird LLP) for the claimant; Bajul Shah (instructed by Clyde & Co LLP) for the defendant.