This is not the first, and I daresay will not be the last, occasion on which this court is troubled with interlocutory appeals in a very substantial piece of litigation that is proceeding in the Commercial Court. In what follows I say the very minimum about the history and background that is necessary to understand this judgment. Anyone who seeks more information on that subject can find it in paragraphs 2-16 of the judgment delivered by the Vice-President of this court in a previous appeal between the same parties, recorded at [2005] EWCA Civ 1602.

The action is brought by Chase, as I will call the claimants, for a declaration of non-liability in respect of allegedly fraudulent and negligent investment advice given to the respondent defendants. “Springwell”, the party impleaded, is a corporate vehicle created by the Polemis family for the holding and management of profits that flowed from the family’s shipping business. It is the effective claimant in the action, in which it makes two claims that are relevant to the present appeal.

First, Springwell contends that Chase’s poor management and advice caused the Springwell investment portfolio that had been entrusted to Chase to decline in value by some US$ 280 million. All of that sum is claimed as damages, together with interest. Second, Springwell alleges that it had been the family’s intention from the early 1990s, as Chase knew, to undertake a substantial rebuilding programme for its fleet, funds being accumulated in Springwell against the time when it became commercially appropriate to take that step. That time arrived in 1999 but, as pleaded in §264 of the Amended Defence and Counterclaim,

It does not need to be said that every allegation and assumption on which this claim rests is the subject of the most strenuous dispute between the parties. We are here not concerned with that, but with Chase’s application to strike out the whole of this, “shipping losses”, claim. That application was rejected by the judge on three grounds, the first two of which are not the subject of appeal to this court though Chase by no means concedes them. First, on remoteness of loss, the judge considered that too many factual issues were raised to permit of summary disposal. Second, the judge rejected an argument that, since the projected vessels were not to be owned by Springwell itself, but by one-ship companies, Springwell suffered no loss by the failure of those vessels to eventuate. I mention that point in a little more detail, because it featured in Mr Hapgood QC’s argument before us. I have to say, however, that it cannot affect the issue that we have to decide. The evidence indicates, and for the purpose of this appeal we certainly have to assume, that “Springwell” was the treasury company of the Polemis family or group; that the expenditure on the ships would be provided by the family through that company; and that the family, again through that company, would receive the profits from what were purely instrumental one-ship companies.

The judge’s third ground is appealed. Chase argued that to permit claims both for the diminution of the value of the portfolio and for the shipping losses would amount to double recovery. That objection was put in a number of ways, but the nub of Mr Hapgood’s argument was that in order to secure the shipping profits Springwell would have had to divest itself of the portfolio, as the price that Springwell had to pay for those profits. It could not therefore both claim to be put in the same position as it would have been in had it had a proper portfolio, that being the first claim referred to in §3 above; and also claim the shipping losses, which on its own case would only have accrued to it if it had had a proper portfolio, something for the loss of which it had already been compensated under the first head of claim.

It is fair to say that in the middle of the very elaborate and varied arguments put to him the judge may have wrongly assumed that Mr Hapgood was not pressing that case, but rather concentrating more on the distinction between Springwell and the one-ship companies that is mentioned at the end of §4 above. Mr Hapgood however properly acknowledged that complaints that he had not been fully understood below could not be the basis of his appeal. We have to decide the matter solely on the basis of whether Springwell’s pleading did assert, or indeed permit, double recovery.

The compensatory principle is not in doubt, but when it is alleged that claims overlap with each other to the extent that they infringe that principle it is necessary to look carefully at the basis of each claim, and at whether two lots of compensation are indeed claimed for the same loss. I am satisfied that that is not this case, though the limits of the shipping losses claim will need careful scrutiny in due course. Before explaining why I come to that conclusion as to the nature of the shipping losses claim I must shortly address two cases that were shown to us as parallels to the present case.

Cullinane v British “Rema” Manufacturing [1954] 1 QB 292 is a much discussed, but perhaps less frequently cited, decision in which this court had to disentangle a claim for breach of warranty of performance of equipment that was based partly on expenditure wasted in installation, and partly on loss of the profits that would have been achieved if the machine had performed as warranted. Evershed MR pointed out that a claim for the whole of the capital loss and expenses, thus putting the plaintiff in the same position as if he had never made the contract at all, would be inconsistent with, alternatively wholly overlapped with, a claim for the profits that would have been made had the machine been available for use. Those were, in effect, two different ways of expressing in financial terms the damage caused by the breach of warranty. The claimant can chose which of the two measures to adopt, but as they are alternative measures of quantifying the same loss cannot assert both: see per Lord Denning MR in Anglia Television v Reed [1972] 1 QB 60 at pp 63H-64A. But our case is different. The shipping losses spring from Springwell’s inability to make investments that, on its pleaded case, would have increased the value to it of the portfolio. They are therefore not, or at least not wholly, a form of quantification in money terms of the damage to the portfolio, but an additional head of loss caused to Springwell by its being deprived of the ability to use the portfolio.

Nor is it correct to argue, as Chase did, that that way of putting Springwell’s case assumes that Springwell in order to make the shipping profits would have to “give away” the portfolio, with the same effect as in the first complaint that Chase took the portfolio from Springwell. Rather, Springwell in dealing with the portfolio would not give it away but would trade or use it, in accordance with the group arrangements referred to at the end of §4 above. The extent of that trade was inhibited by Chase’s fault.

Second, we were taken to Primavera v Allied Dunbar [2003] PNLR 12. That case is also different from this, for much the same reason as I would distinguish Cullinane. The claimant complained that because of inadequate advice he had not had a sufficient fund in 1995 to pay off his loan. He was awarded damages assessed as at 1995 to make up the shortfall in the fund, but also claimed payments that he had made thereafter to service that loan. But, this court held, he had already been compensated for the continued existence of, and need to service, the loan by the damages assessed as at 1995, plus interest. To award him the claimed payments would have been to value the failure to maintain the fund twice over. The case cannot help in a case such as ours, where the separate complaint about the shipping losses does not seek to quantify the failure to maintain the value of the fund, but complains additionally of the lack of availability of the fund for further trading.

In truth, the present case is a simple one. Because, on Springwell’s pleaded case, Chase knew of the family’s intentions in relation to the ships, frustration of those intentions is a separate head of loss under the second limb of Hadley v Baxendale. At least since the judgment of Brightman LJ in Wadsworth v Lydall [1981] 1 WLR 598 at p 603F, approved in the House of Lords in President of India v La Pintada Compania [1985] 1 AC at p 126E, the fact that the complaint is of unavailability of funds is not a necessary bar to recovery. There are of course other issues, particularly of quantification. Mr Brindle agreed, or at least did not dissent from the proposition, that in quantifying the overall claim there would have to be brought into account the interest payable on the claim for loss of value of the portfolio; though he asserted that the shipping losses far surpassed in amount any such interest payment.

These, and no doubt many other, issues are for the future. As to the present issue, of whether any of the shipping losses are recoverable at all, I have no doubt that the case is not one for striking out. I would dismiss the appeal.

For those reasons, which are substantially those of my Lords, I agree that the appeal should be dismissed.