In the Court of AppealRichie Rich v Shady Designs

Richie Rich inherited a large amount of money and planned to fulfil his lifelong dream of owning a luxurious home fitted out in the style of 1930s art deco.

He bought a flat in Expensive Mansions, a block of flats house built in London in 1930, but modernised in the 1960s. He contracted with Shady Designs, a renovations company specialising in art deco work, to restore the flat with its original period features. A full specification was agreed for the work, which was to cost £1,758,956.32.

When Shady Designs finished the work, and had been paid the full amount, Richie Rich noticed that some of the work was not exactly as he had requested. The kind of mahogany used for many of the fixed wall cabinets was not of the right kind, and was appreciably lighter in colour. This would cost £82,481.09 to remedy, as the cabinets would have to be removed, disassembled and then reconstructed before being replaced, but the change, if undertaken, would not affect the overall value of the flat.

It transpired that the reason Shady Designs used the lighter mahogany was that although they had obtained mahogany of the correct colour, they had then sold it to a third party who paid a very high price, enabling the company to make a profit of £60,000.

Hastings brought an action for damages against Sunburst Design for the cost of having the mahogany cabinets replaced. He also brought an action for account of profits for the £60,000 profit Sunburst Design made by deliberately reselling the mahogany they should have used in his flat.

In the County Court, Jajay J held:

a) That the action for damages failed as the cost of replacing the mahogany was disproportionate to the benefit to be obtained. Richie Rich was instead awarded damages of £3000 for his loss of amenity.

b) No account of profits should be awarded as the circumstances of this case did not fall within the principles laid down by the House of Lords in AG v Blake.

Richie Rich appeals to the Court of Appeal against both of the above decisions.

NOTE FROM THE MOOT SECRETARIAT

There is no need for a submission of memorials on this Moot Problem.