#6648 - Forsyth Grant V. Allen - Commercial Remedies BCL

Forsyth Grant v. Allen

Facts

This is an appeal by the claimant Mrs Marcia Forsyth-Grant against the judgment of H.H. Judge Harvey-Clark Q.C., given in the Southampton County Court on March 30, 2007 in an action for trespass and nuisance, arising out of the construction by the defendants of a pair of semi-detached houses on land adjoining the Hotel Picardie at Ventnor on the Isle of Wight, which is owned by the claimant.

In 2002 or 2003, Mr Allen obtained planning permission for the erection on the site of two semi-detached houses which were built in 2006. They have been named Sunrise and Sunset—Sunrise being the house closest to the claimant's hotel. The judge described the overall building in his judgment as an attractive contemporary design with a pitched roof, balconies, decking and open plan rooms all overlooking the sea.

The claimant, however, was bitterly opposed to the development. Apart from the boundary issue, the other matter of concern was the effect which the development would have on rights of light acquired by prescription in favour of the hotel. This was first raised not by the claimant but by Mr Michael Ney, a building surveyor specialising in rights of light who had been instructed by the architect supervising the development. He was of the opinion that it could have an adverse effect on any rights of light enjoyed by the hotel.

In the action, the claimants sought damages and injunctive relief, both in respect of alleged trespasses and the alleged nuisance caused by the infringement of the rights of light.

Question

That left the claim for infringement of the claimant's rights of light. In the Particulars of Claim the claimant originally sought damages for this, but the pleading was then amended to substitute for damages a claim for an account of all the profits which the defendants had made from the infringement of the claimant's rights of light.

Holding

Award of damages on a hypothetical bargain basis

The other relevant line of authority concerns the court's power to award damages in lieu of an injunction. In Wrotham Park Estates Ltd v Parkside Homes Ltd (1974) 1 W.L.R. 798, Brightman J., in exercising the jurisdiction under what was then s.2 of the Chancery Amendment Act 1858, held that, in a case of breach of a restricted covenant, where no real financial loss had been proved, it was, nonetheless, open to the court to calculate an award of damages in lieu of an injunction by reference to the amount which would reasonably have been agreed with the developer for the relaxation of the covenant. The judge set this in that case at 5 per cent of the developer's anticipated profit.

Distinguishing damages on a hypothetical bargain from account of profits

It is, however, important to emphasise that an award of damages on this basis, just as in the cases of trespass and other torts I mentioned earlier, is not the same as an account of profits. In the latter case the court will order the defendant to pay over the entirety of the profit he has earned from his unlawful conduct. In the case of damages, the common law, as explained by Lord Nicholls, requires the defendant to pay only a reasonable sum for the use of the claimant's land or property, and it will be for the court to decide what percentage of the profit ought to be reflected in the award which it makes.

Availability of account of profits for the tort of nuisance

The first ground of appeal advanced by Mr Ley on behalf of the claimant is therefore that the judge was wrong to hold that he could only order an account of profits in exceptional circumstances.

The cases relied on in which the claimant has been able to waive the tort and seek a restitutionary remedy are cases of conversion in which the defendant has misappropriated the claimant's ...