Lloyd's Maritime and Commercial Law Quarterly
RESTITUTION OF PASSENGER FARE
The Mikhail Lermontov
The Mikhail Lermontov
1 raises important and difficult questions for the law of restitution. The High Court of Australia finally determined that the unfortunate Mrs Dillon could show no restitutionary cause of action to recover her fare2 from Baltic. Two principal reasons were given. First, although the consideration for her payment had failed as a consequence of the sinking of the ship, it had failed only in part, not in total, because she had enjoyed the benefits of eight days cruising before disaster struck. Secondly, a restitutionary claim could not, for one reason or another, be combined with a compensatory award of damages for breach of contract. On discharge of the carriage contract, Mrs Dillon therefore had a choice of claiming compensatory damages, or restitution of her fare, but not both.
The restitutionary issues raised by the case therefore fall neatly into two groups: one comprising questions about the nature and logic of the requirement that, in order to ground relief, a failure of consideration must be “total”; the other raising concerns about the appropriate relationship between contractual and restitutionary remedies in cases where contracts are discharged for breach.
1. Baltic Shipping Co. v. Dillon (The Mikhail Lermontov) (1993) 111 A.L.R. 289. For the facts and discussion of the damages point, see Hetherington, supra, 289.
2. Part of the fare, representing the six days lost through the disaster, had been voluntarily returned by Baltic. The court nonetheless considered Mrs Dillon’s entitlement to the sum for the full 14 days.
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