Basis of damages against Trespassing Tenant and cannot be Aggravated in favour of Company Landlord

A recent appeal raised two important points of law where a landlord sought damages against its long residential tenant for damages for trespass for breaking through into chimneys and connecting the flat to huge air conditioning units on the roof being parts of the landlord’s premises not included within the tenant’s demise. They are:

(i) the basic damages here are based on what licence fee the victim would have hypothetically have received had it sanctioned the trespass by way of a licence documeent so would an assessment of trespass damages based on this so called “negotiating basis be based on hypothetical negotiations for a licence fee based on a licence period equivalent to the actual duration of the trespass which has occurred or some other more extensive period (in this case the residue of the tenant’s lease); and

(ii) whether the court can (or should) make an award of aggravated damages in favour of a company.

The case was Eaton Mansions (Westminster) Ltd v Stinger Compania De Inversion S.A. [2013].

On the first point the court ruled that the actual duration of the trespass was to be the basis “It is limited to recovering what Stinger would have paid for the rights which it illegally obtained.

It is said that this point is not covered by authority but it seems to me to follow inevitably from the requirement that the damages awarded should be compensation for the loss suffered in the sense of what the [wrongdoer] has gained from his trespass. That point was clearly recognised by this court in its judgment in Enfield LBC v Outdoor Plus Ltd & Anor [ 2012] EWCA Civ 608 where Henderson J says at [47]:

“The starting point is the admitted trespass which took place for nearly five years, and the function of the hypothetical negotiation is to ascertain the value of the benefit of that trespass to a reasonable person in the position of [the claimant].””

On the issue of aggravated damages the court said it was settled settled law at High Court level that aggravated damages cannot be awarded unless subjective feelings of the claimant had been injured by the defendant’s conduct. This focus on the effect of the defendant’s conduct on the claimant’s feelings would seem to exclude such a claim by a company.

So the appeal failed on both counts.

This blog is posted out of general interest. It does not replace the need for proper legal advice in individual cases.