Peter Glover takes a look at an exceptional category of case and finds it is not so exceptional after all


It is well known that a proved breach of a certain category of contract will entitle the successful party to recover damages for loss of enjoyment, inconvenience and disappointment - referred to in this article as 'distress damages'. Examples are holiday contracts and those concerning the provision of wedding services.



To what extent does this so-called 'exceptional category' remain exceptional following the decision of the House of Lords in Farley v Skinner [2001] UKHL 49? The claimant instructed the defendant surveyor to report on a house he intended to buy. As part of his instructions, the surveyor was asked to advise on the extent to which the house would be subjected to aircraft noise. The judge at first instance found that in this respect the surveyor had negligently failed to advise accurately. Although he was satisfied that the house, even with the aircraft noise, was worth what the claimant had paid for it, and dismissed the claim for diminished value, he awarded the claimant damages of £10,000 for the 'confounded nuisance' and discomfort arising from the aircraft noise.



The defendant appealed successfully, with the majority in the Court of Appeal concluding that the survey contract, viewed as a whole, did not have as its 'very object' the provision of pleasure, relaxation or peace of mind. Accordingly, it fell outside the exceptional category of contract in respect of breaches of which such damages might be awarded. Dissenting, Lord Justice Clarke did not consider he was bound by authority to view the contract as a whole and if 'the object of a particular part of the contract is to provide peace of mind', distress damages could properly be awarded for breach of that particular part.



The House of Lords found itself, in the words of Lord Steyn, 'deluged with authorities', so that 'the hearings of what was a comparatively simple case took up an exorbitant amount of time'. However, after a careful review of the case law, including the enigmatic award of £2,500 for 'disappointment' approved by the Lords in the case of Ruxley v Forsythe [1996] AC 344, his Lordship ruled that there was 'no reason in principle why the scope of recovery in the exceptional category should depend on the object of the contract as ascertainable from all its constituent parts. It is sufficient if a major or important object of the contract is to give pleasure, relaxation or peace of mind' (emphasis supplied). This reasoning coincidentally provided a safe refuge for the Ruxley award. It was clearly a major or important object of the contract for Mr Forsythe's swimming pool that he would derive pleasure, relaxation or peace of mind from it, and those objects were partially frustrated when it was constructed to a lesser depth than the contract had provided.



In Lord Clyde's opinion, it was wholly artificial to refuse relief just because the instructions concerning aircraft noise were subsumed within a wider-ranging contract which fell outside the exceptional category. This was 'simply to be playing with words'. He could see no reason for distinguishing this case from one where there had been a separate contract to advise on aircraft noise. Notwithstanding the framing of the claim in negligence, he was satisfied the case could be approached as one falling within the exceptional category, entitling the claimant to an award of distress damages.



On any view, these judgments would permit a very significant extension of the right to recover such damages. Of what contract, involving a consumer, whether of goods or services, could it not be said that a major or important object was the provision of pleasure, relaxation or peace of mind? It fell to Lord Hutton to attempt to draw a line. Agreeing with the other judgments, he nevertheless ruled that distress damages would only be available if three criteria were met:

l The matter in respect of which such damages are claimed must have been of importance to the claimant;

l He must have made clear to the defendant the importance he attached to it; and

l The action to be taken in relation to the matter is made a specific term of the contract.



What, if anything, do these criteria add in the context of consumer contracts? It will be apparent that, in any contract involving a consumer, the first two tests are bound to be met. The purchaser of a washing machine, the hirer of a van or the client of a solicitor all expect their needs to be satisfied. This is just one measure of the peace of mind expected to result from such a contract. Pleasure or relaxation may also be in issue. The other party cannot but be aware of that particular object of the contract.



As for the third test, such terms are more likely to result from implication by law than negotiations between the parties. Prime examples would be the implied terms for quality and fitness arising from section 14 of the Sale of Goods Act 1979, section 10 of the Supply of Goods (Implied Terms) Act 1973, and that for care and skill under section 13 of the Supply of Goods and Services Act 1982. These implied terms were enacted by Parliament to protect purchasers, hirers and clients and, by so doing, to give them, if not pleasure or relaxation, at least peace of mind. It is also plain that the loss of peace of mind likely to result from a breach of such a contract must have reasonably been within the contemplation of the parties at the time the contract was made. There can be no argument that damages thus arising were not foreseeable.



It is submitted that distress damages are available in the vast majority of consumer contracts, where it can properly be said that it was a major or important object of the contract that the disappointed party would derive pleasure, relaxation or peace of mind from performance of his obligations by the other party and that the attempts to limit such recovery, arising from Lord Hutton's three tests, are ineffective.

District Judge Glover sits at Dartford County Court