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casetreasury

Howe v Teefy (1927) 27 SR (NSW) 301

Facts: The defendant (D) leased a racehorse to the plaintiff (P), a trainer, for 3 years. D removed the horse from P after 3 months, breaching the contract. P claimed loss of opportunity to win prize money and to win bets placed by himself on the horse and to make profits supplying information to third parties.


Held: Damages for P were recoverable; chance is a distinct head of loss worthy of compensation. The loss of a chance to put the horse in the competition was a loss of something of value (even if it is somewhat speculative). It did not matter that there were third parties which would render the assessment of damages as unclear (“The presence of contingencies does not render the damages incapable of assessment though it may make the calculation of pecuniary loss sustained incapable of being carried out with certainty or precision”). The correct calculation of damages is not how much P probably would have made in profit from the horse, but how much P’s chance of making that profit was worth.


Questions:

1. Was the loss not too remote? What category of loss of chance applied?


No, P’s damages for prospective winnings cannot be considered too remote. They were within the reasonable contemplation of parties as it was the sole object of the agreement to make money by racing the horse.


The categories of loss of chance included loss of chance to win prize money the horse may have earned, to win money earned from bets on the horse and to earn money by supplying information to third parties.


2. How was P’s lost chance to be assessed? Hint: See Street CJ


In terms of assessing damages for loss of a chance, damages are ascertained by reference to the court’s assessment of the prospects of success of that opportunity had it been pursued. The correct calculation "was not how much he would probably have made...but how much his chance of making that profit...was worth in money”. This is measured by the chance multiplied by the value of the chance.

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