After a long-running litigation in the Isle of Man, DQ's
client, Paracale Gold Limited ("PGL")
succeeded in its claim against George Michael Osborne
("Mr Osborne"). For the avoidance of any
doubt, Mr Osborne is not the United Kingdom's Chancellor of the
Exchequer! In this breach of contract case, DQ succeeded in
obtaining an order for restitutionary damages for PGL.
PGL is the Isle of Man incorporated holding company of two
Philippines subsidiary companies (the
"Subsidiaries") which operate a gold
mine in the Philippines. Mr Osborne acted in various capacities,
including director and chief financial officer, for the
Subsidiaries and the previous holding company.
A term of the agreement reached between PGL and Mr Osborne
following PGL's takeover of the Subsidiaries (the
"Agreement") was that he confirmed he
did not have any claims against the Subsidiaries or the PGL Group.
In breach of that term, Mr Osborne issued proceedings against the
Subsidiaries in the Philippines for compensation for loss of
office. As a consequence, PGL was forced to issue proceedings
against Mr Osborne in the Isle of Man in order to recover the
amount of the initial payment made to him under the Agreement and
its costs of defending the claim issued by him in the
Philippines.
Mr Osborne issued a counterclaim in which he alleged that he was
entitled to breach the Agreement as it had already been breached by
PGL, and that PGL's breach had caused him losses which he
sought to recover. The value of Mr Osborne's counterclaim was
approximately £1 million.
DQ's application for Mr Osborne's counterclaim to be struck
out was successful with His Honour Deemster Corlett describing the
counterclaim as "indefensible".
Following the strike out, the only issue to be determined at the
hearing of the matter was PGL's claim against Mr Osborne for
recovery of its losses caused by his breach of the Agreement.
Following a two day hearing, His Honour Deemster Corlett found in
favour of PGL and made an order for damages against Mr
Osborne.
Restitutionary Damages
The usual measure of damages in a breach of contract case is to put
the parties into the position they would have been in had such
breach not occurred, which would have enabled Mr Osborne to retain
the initial payment made to him under the Agreement. However, His
Honour Deemster Corlett agreed with DQ's submission that doing
so would result in Mr Osborne being unjustly enriched, and so made
an order for restitutionary damages, in order to put PGL into the
position it would have been in had the Agreement never been entered
into. Accordingly, PGL was awarded the full amount of the initial
payment made to Mr Osborne pursuant to the Agreement and its costs
in defending the claim brought by him in the Philippines.
DQ's Expertise
DQ is a leading full service law firm in the Isle of Man advising
on Isle of Man and BVI law. DQ's specialist dispute resolution
lawyers have considerable experience in all aspects of commercial
litigation and are recommended as leading lawyers by Chambers &
Partners and Legal 500. For further information on all dispute
resolution issues please contact Giles Hill or Walter Wannenburgh
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