Removal of planning condition abolished claimants’ loss

In the Court of Appeal case of Bacciottini & Anor v Gotelee and Goldsmith (A Firm) [2016], the appellants had acquired a residential property in May 2007. The respondent solicitors had negligently failed to advise them that there was a planning restriction attached to the property restricting it’s residential use. Later, after the purchase had been concluded, the appellants successfully secured the removal of the planning restriction.

The appellants claimed the sum of £100,000 (with interest) being the difference between the value of the property in May 2007 without the planning restriction and the value of the property at that date with the planning restriction.

But the trial Judge merely awarded the appellants damages of £250, being the cost of the application to the local authority to remove the planning restriction.

Dismissing the appellants’ appeal, the Court of Appeal said the measure of damages ordinarily is:

“….that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been if he had not sustained the wrong for which he is now getting his compensation or reparation.”

(Lord Blackburn in Livingstone v Rawyards Coal Co.(1880)).

The Court of Appeal in Bacciottini said the core principle set out in Livingstone v Rawyards Coal Co. (cited above) would determine the outcome of the appeal.

In The New Flamenco [2015] Longmore LJ of the Court of Appeal had said:

“The important principle which emerges from these citations is that, if a claimant adopts by way of mitigation a measure which arises out of the consequences of the breach and is in the ordinary course of business and such measure benefits the claimant, that benefit is normally to be brought into account in assessing the claimant’s loss unless the measure is wholly independent of the relationship of the claimant and the defendant. That should be a principle sufficient to guide the decision of the fact-finder in any particular case.”

Mr Bacciottini and Ms Cook had had no realistic option but to make an application for the planning condition to be lifted by way of mitigation. That was the course that any sensible owner and occupier in their position would have taken.

So the act of mitigation, in applying to the council to get the restriction removed, which generated the benefit, “arose out of or was sufficiently connected with [the solicitors’] breach [of duty to the appellants as] to require [it] to be brought into account in assessing damages.” (Mance J in The Fanis [1994].)

By reason of the subsequent removal of the restriction the appellants had suffered no loss and there was nothing in respect of which they could require to be compensated.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.