Baltic Shipping v Dillon

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Citation: Baltic Shipping Co v Dillon (1993) 176 CLR 344

This information can be found in the Casebook: Paterson, Robertson & Duke, Contract: Cases and Materials (Lawbook Co, 11th ed, 2009), pp. 688-698 [27.160-27.200] or here

Contents

Background facts

  • Respondent (Dillon) made a booking for a cruise with the Appellant (Baltic Shipping Co).
  • The ship sank with the Respondent in it, and the Respondent suffered great physical and mental injury.
  • The Respondent sued, the Appellant at first contested liability (see Baltic Shipping Co v Dillon (The Mikhail Lermontov)) but finally admitted negligence.
  • The Respondent claimed compensation for non-pecuniary loss as well (anxiety, disappointment, loss of enjoyment etc)

Legal issues

Judgment

Mason CJ:

  • "[D]amages for disappointment and distress are not recoverable unless they proceed from physical inconvenience caused by the breach or unless the contract is one the object of which is to provide enjoyment, relaxation or freedom from molestation. In cases falling within the last-mentioned category, the damages flow directly from the breach of contract, the promise being to provide enjoyment, relaxation or freedom from molestation."[1]
    • Since this was such a contract, the Respondent is entitled to recover for non-pecuniary and therefore, the Respondent wins.

McHugh J:

  • Damages for such non-pecuniary losses are not normally awarded.
  • Hamlin v Great Northern Railway Co[2]: damages must be capable of being appreciated or stated specifically, and cannot do that with the non pecuniary losses.
  • However, it is now recognised that "damages for distress or disappointment are recoverable in an action for breach of contract if it arises from breach of an express or implied term that the promisor will provide the promisee with pleasure or enjoyment or personal protection or if it is consequent upon the suffering or physical injury or physical inconvenience."[3]
  • This means, similarly to Mason's conclusion, that damages for non-pecuniary losses are available in contracts whose object is to provide enjoyment, pleasure or freedom from distress or where the distress is consequence upon the suffering of physical inconvenience.

References

  1. (1993) 176 CLR 344, 359
  2. (1856) 1 H.and N.408
  3. (1993) 176 CLR 344, 404
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