The Mediana (Owners of the Mediana v Owners of the Lightship Comet)

Facts

The steamship Mediana negligently collided with the lightship Comet, which was owned by Trinity House and moored in position to warn shipping, and sank her. Trinity House kept a spare lightship for such occasions and used it to replace the Comet, so that the service was maintained. It claimed damages for the loss of the Comet, including compensation for the loss of her use, although it had suffered no additional expense or loss of profit as a result because the spare vessel would otherwise have been idle.

Issue

Whether the owner of a chattel negligently destroyed or damaged, who loses no profit and incurs no extra expense because he has a substitute available, can recover substantial damages for the loss of the use of the chattel.

Held

The owners of the Comet were entitled to substantial damages for the loss of use of the lightship, and not merely nominal damages.

Ratio

• The loss of the use of a chattel is itself a head of damage for which the owner of the chattel is entitled to compensation, and the owner is not confined to nominal damages because he has suffered no consequential financial loss.
• The fact that the owner has a spare chattel available to take the place of the one lost does not relieve the wrongdoer of liability for the loss of use, since the owner is entitled to treat the spare as his own property for his own purposes.

Key reasoning

• The owner has been deprived of something of value, the use of his property, and the wrongdoer should not benefit from the owner's foresight in keeping a substitute, which had a cost of its own to maintain.
• The principle applied in The Greta Holme [1897] AC 596, where damages were awarded for the loss of use of a dredger although its owners made no profit from it, was not confined to profit-earning chattels and applied equally to a vessel used for public purposes.

Where it fits in the module

On the FHS Tort list under remedies in property torts. The Mediana shows that the law of damages for interference with chattels does not require proof of consequential loss, and it is the basis of the debates over the measure of damages for loss of use, whether this is compensation for a real loss or reflects the value of the right interfered with. It leads to the user principle in Strand Electric, to negotiating damages in cases such as Attorney General v Blake [2001] 1 AC 268 and Morris-Garner v One Step (Support) Ltd [2018] UKSC 20, and invites reflection on the line between compensation and restitution.

Criticisms

• Awarding substantial damages for loss of use where the owner suffered no financial loss blurs the line between compensation and restitution or punishment, since the claimant receives a sum without a corresponding loss, and the measure by reference to hire rates or capital cost is rough.
• The decision lets liability depend on whether the owner happens to hold spare capacity, which rewards owners with surplus assets and makes the amount recoverable vary with matters outside the wrongdoer's control.
• The case leaves the measure of damages for loss of use uncertain, whether by cost of hire, running costs of the spare, or return on capital, which gave rise to later disputes.