The Court of Appeal issued a judgment on 10 September 2008 stating that a manufacturer and seller of goods who lost the goods through the fault of a third party before being able to deliver and sell the goods was entitled to recover the price for those goods as damages for their loss. The case concerned a claim brought by Sony computer Entertainment Europe Ltd against Cinram Logistics UK Ltd Europe in contract, bailment and negligence. Sony has sent a consignment of play cards to Cinram for delivery to a purchaser in the UK. The cards were stolen while in Cinram’s care and Cinram admitted liability for the losses but disputed the amount Sony sought in damages.
Sony claimed damages for the amount at which the cards were to be sold, in other words, the selling price for the goods. Cinram argued that Sony should only be able to recover the cost of producing replacement cards, an amount which would be less than that sought by Sony. The trial court found that Sony had proved on the balance of probabilities that the sales in question had not been replaced by a subsequent sale and therefore they could recover the price at which the cards were to be sold at to the buyer.
The Court of Appeal pointed out that if a defendant (in this case Cinram) wished to argue that a claimant (in this case Sony) minimized his loss by selling substitute or replacement goods then it was for the defendant to prove that this had taken place. It was not for the claimant to have to prove that he had not recouped the profit by a substitute or replacement sale.
Source: Case report, Court of Appeal, Sony Computer Entertainment UK Ltd and Another v Cinram Logistics UK Ltd, 8 August, 2008. http://business.timesonline.co.uk/tol/business/law/reports/article4719845.ece
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