Lord Dunedin

For some reason which is not entirely obvious, students of construction law love writing papers about the distinction between liquidated damages clauses and penalty clauses. Traditionally, it has been relatively firm ground, and in particular, everybody trots out the dicta of Lord Dunedin in Dunlop v New Garage[1].

But all of a sudden, things have begun to change. First there was the decision of the High Court of Australia in Andrews v ANZ. Then there was the follow up decision in Paciocco. Now there’s been the decision from England in Cavendish v El Makdessi.

The short story it is that if you have got one of those old papers, which you might written, or someone else might have written, which trots out the famous dicta of Lord Dunedin, you might as well throw it away. It should go the same way as flared trousers, cheesecloth shirts and your old ABBA LPs. Quite what we have in its place depends somewhat on where you sit in the common law world. Also changed, but not quite gone, is the interesting but still somewhat speculative notion that some time bar provisions, which contain particularly onerous notice provisions, might be circumvented by the equitable doctrine of relief from forfeiture. To get to a discussion of this concept, you will have to read on a bit.

Before getting to these new cases, we should (as in all good funerals) acknowledge Continue reading →