Gilbert & Anor (t/a Woods Farm Christmas Trees) v British Waterways Board

Compensatory damages for tortious damage should place the claimant in the position that would probably have been occupied had the tort not occurred. The court must assess what would probably have happened, with the claimant bearing the burden of proof. A claimant’s loss may remain recoverable where reasonable mitigation would have produced an equal or greater loss. The claimant is not required to adopt an alternative course that would materially undermine its established business model, provided the chosen response was reasonable. Future losses should be discounted for accelerated receipt and appropriate allowance should be made for uncertainty, but the allowance must reflect the evidence.

The defendant accepted liability for flooding from a canal which damaged Norway Spruce plantations belonging to the claimants, who operated a Christmas-tree business. The trial concerned quantum only.

The claimants sought damages for lost sales of thinned trees, the loss of future sales of mature trees, additional harvesting costs and interest. The central issues were the number and saleability of the lost trees, whether the claimants had acted reasonably in over-thinning other plantations rather than buying trees from outside sources, and the appropriate discounts for accelerated receipt and future uncertainty.

1. Measure of damages. The court applied the compensatory principle that damages should place the claimants in the position they would have occupied had the flooding not occurred. The claimants had to establish the probable counterfactual course on the balance of probabilities.
2. Saleability and loss. The destroyed trees were saleable as thinnings and as mature trees. The court accepted that the claimants could have sold the thinnings through their established retail outlet and would have retained residual trees for the market in larger Christmas trees.
3. Mitigation. The claimants reasonably chose to over-thin their own trees rather than buy in substantial quantities from other growers or go without stock. Their own trees were fresher, preserved their commercial reputation and avoided adverse VAT consequences. Since the mitigatory steps produced at least as great a loss as doing nothing, the original loss remained recoverable.
4. Replanting. Clearance and replanting, or interplanting, were not realistic alternatives because they would interfere with the broad-leaved trees and the Woodland Grant Scheme requirements.
5. Assessment. The court awarded £141,802 for lost thinnings, £40,000 for 2005 losses, £3,500 for additional labour, and £113,245 for future losses after discounting for accelerated receipt and applying a 10% allowance for uncertainty. Interest was also awarded. The total damages were £323,941. Costs were left for submissions.