Mr Yapp was appointed British High Commissioner in Belize. A year later he was withdrawn from the post and suspended, pending investigation of allegations of misconduct. He then received a writing warning. His suspension was lifted, but he developed a depressive illness and had to undergo heart surgery. He did not in fact receive any other appointment in the Foreign and Commonwealth Office until his retirement.
He commenced proceedings against the FCO, complaining of the withdrawal of his post and the way the disciplinary process was conducted. He said the resulting stress had caused his depressive illness, which both constituted damage in itself, and led to pecuniary loss.
The trial Judge found that the withdrawal of the claimant from his post was both a breach of contract and a breach of the duty of care which the FCO owed him at common law (but dismissed the claims in relation to the disciplinary process.
The FCO appealed against the finding of liability. It further contended that, even if it were in breach, the claimant was not entitled to recover damages for his depression and its consequences on grounds of causation and/or remoteness.
The Court of Appeal (lead judgment: Underhill LJ) dismissed the FCO's appeal against the findings of breach of contract and causation. But it allowed its appeal on the issue of remoteness of the claim for psychiatric injury. There is a masterly survey of the authorities on remoteness at para 79-133. And the judgments are rich in the analysis of the law in this area generally.
In contract, the question is: was the damage in question of kind which was "not unlikely" to result? In tort, was the damage "reasonably foreseeable"? The former test requires a higher degree of likelihood of damage occurring than the latter. It therefore made more sense to start with the claim for the breach of the common law duty of care, since the tortious test of remoteness was more favourable to the claimant.
The Court came to the conclusion that it was wrong to find that it was reasonably foreseeable that the FCO's conduct in withdrawing the claimant from his post without having had the opportunity to state his case might lead him to develop psychiatric illness. According to the Court, it would be exceptional that an apparently robust employee, with no history of any psychiatric ill health, would develop a depressive illness as a result even of a very serious set back at work. The FCO could not have foreseen, in the absence of any sign of special vulnerability, that the claimant might develop a psychiatric illness as a result of its decision. It therefore followed that if the losses were too remote to be recoverable in tort, they were also too remote to be recoverable in contract.