Car-Wizard Limited v Vixen Surface Treatments Limited

A capital-value assessment is not required for every claim for profits lost through breach of contract. Where the loss concerns a short period while a claimant considers replacing a profit-earning chattel, and evidence permits a grounded estimate of lost profits, the court may assess those profits directly. Capital valuation may be appropriate for long-term projections from a hypothetical business where the uncertainties make a direct profit assessment unduly speculative. The assessment should reflect the compensatory principle and the evidence in the particular case, including costs that would have been incurred.

Car-Wizard Limited succeeded at trial in its claim concerning a defective diamond-cutting lathe supplied by Vixen Surface Treatments Limited. The earlier judgment found that the claimant had lost business but reserved the calculation of damages for further submissions on the existing evidence. The present paper assessment addressed the defendant’s argument that damages had to be measured by the capital value of a hypothetical business, as well as the amount of lost revenue and deductible costs during the nine-month period allowed for considering a replacement lathe.

1. The court assessed damages for the nine-month loss period established in the earlier judgment, using the evidence already before it. The defendant could not reopen the findings about operator costs: the figure had been available for challenge at trial, its expert had worked with it, and it was the only evidence accepted by the court.
2. The defendant’s argument that Crehan v Inntrepreneur Pub Company CPC [2004] EWCA Civ 637 required a capital-value assessment was rejected. That case and UYB Ltd v British Railways Board concerned long-term projections for hypothetical businesses, with substantial uncertainty. Here, the claimant had an existing business and customer base; the loss concerned an additional service and only the period reasonably allowed to consider acquiring another lathe. On that evidence, lost profits could be estimated directly. The court also relied on the principle that the appropriate assessment depends on the circumstances of each case.
3. For trade revenue, the court used customer estimates of wheel volumes and took midpoints where the evidence gave ranges. It found that work from two customers would have begun in mid-April 2021, rather than assuming the latest possible date. It assessed lost trade revenue at £109,080. Retail enquiries were discounted by 20%, producing £3,240 in lost retail revenue. The lost value of alternative repairs was £1,905. Total lost revenue was £114,225.
4. The court deducted £18,513.75 for operator and maintenance costs. As the evidence did not permit reliable calculation of consumables and power, it reduced the resulting profit estimate by approximately 10%. The defendant’s proposed 50% revenue discount was refused: the court had already found on the civil standard that the claimant would have earned the revenue, and the criticisms did not justify halving it.
5. Damages were assessed at £86,140. The court requested a minute of order, preferably agreed.

This was a further first-instance judgment on damages. The court records that its earlier trial judgment, [2026] EWHC 685 (Ch) , found the claim succeeded and reserved the assessment of damages for further consideration on written submissions and the existing evidence.