#6667 - Ministry Of Defence V. Ashman - Commercial Remedies BCL

Ministry of Defence v. Ashman

Facts

The second defendant was at all material times a Flight Sergeant in the Royal Air Force and the first defendant was his wife. After they separated she stayed on in the married quarters which they had occupied together. The issue raised by this appeal is the way in which, in such a situation, mesne profits should be calculated. Should they be calculated by reference to the market rent, by reference to the subsidised rent paid by the serviceman so long as he and his family remained in lawful occupation or in some other way?

The property owned by the Ministry of Defence was at 15 Perch Meadow, Halton, about half a mile from RAF Halton. On going into occupation in June 1989, the second defendant signed the certificate by which he acknowledged, firstly, that he was entitled to occupy the property only so long as he remained a serving member of the Royal Air Force, living with his spouse. Secondly, that he would be required to remove his family from the accommodation if he ceased to live with his spouse.

On March 14, 1991, Mrs. Ashman and her husband were given the appropriate notice to vacate the accommodation by May 16, 1991; that notice being given by Mr. Ashman's Commanding Officer in accordance with the certificate which he, the second defendant, had co-signed. The first defendant and the two children did not vacate because they had nowhere to go.

On May 17, 1991, the day after possession should have been given pursuant to the Commanding Officer's notice, a new seven day notice was served on Mrs. Ashman alone. In this notice the Ministry for the first time asserted the right to claim damages for trespass at 108.93 per week. By then Mrs. Ashman had written to the local authority seeking alternative accommodation, but she had no priority. On September 30, 1991, the Ministry commenced these proceedings seeking possession and mesne profits from March 14, 1991, at 108.93 per weeks plus interest.

Holding

Kennedy LJ

But where, as in the present case, the property is not normally let on the open market, and the trespasser only remains in possession because she is in no position to move anywhere else, it seems to me that more assistance as to the proper value to Mrs. Ashman of the use of the property might be gained by looking at what she would have had to pay for suitable local authority accommodation, had any been available, than by focusing on evidence given on behalf of the Ministry as to market rent.

As Mr. Huskinson in the course of his submissions pointed out, if an elderly widow living alone were to hold over possession of a mansion whilst attempting to arrange accommodation more suited to her needs, the Court might conclude that the value to her of the use of the mansion was less than its rented value on the open market.

Accordingly I would allow the appeal and remit the matter to the County Court Judge so that he may decide what was in that relevant period the value to Mrs. Ashman of the use of the property. For the purposes of that hearing Mrs. Ashman might be wise to obtain from the local authority information as to what rent she would have had to pay for three bedroom accommodation for the period from May 16, 1991, to April 4, 1992, had such accommodation been available.

Defendant could have obtained alternate accommodation only if the local authority issued eviction order

Lastly, I must emphasise that the circumstances of this case are unusual. Clearly the quartering charge was well below the open market rent. But from an early stage both the first and second defendant made it clear to the Ministry they would be willing to accept for Mrs. Ashman local authority accommodation which accommodation she was only likely to be offered if the Ministry obtained an eviction order against her as in the end they did. So the Ministry knew how to mitigate what was, in effect, going to be its loss. It is reasonable in this case to measure the value to her of 15, Perch Meadows by reference to local authority rents just as in the Penarth Dock case it was appropriate to consider what the defendant would have had to pay for a berth if he had moved the pontoon elsewhere. In most cases the measure of damages to be paid by the trespasser in residential property will be calculated by reference to the ordinary letting value of property in which the defendant remained as happened in the Swordheath case.

Hoffmann LJ

That leaves only the question of how one values the benefit which Mr. and Mrs. Ashman received. In Swordheath Properties Ltd. v. Tabet [1979] 1 W.L.R. 285 Megaw L.J. said, “in the absence of anything special in the particular case” it will ordinarily be the rating value of the property in the open market.

Subjective Devaluation

In my judgment, however, the law of restitution is not so inflexible. The open market value will ordinarily be appropriate because the defendant has chosen to stay in the premises rather than pay for equivalent premises somewhere else. But such benefits may in special circumstances be subject to what Professor Birks, in his Introduction to the Law of Restitution has conveniently called subjective devaluation. This means a benefit may not be worth as much to the particular defendant as to someone else. In particular, it may be worth less to a defendant who has not been free to reject it.

Mr. and Mrs. Ashman would probably have never occupied the premises in the first place if they had to pay 472 a month instead of the concessionary licence fee of 95. Mrs. Ashman would certainly not have stayed in the premises at the market rate if she had any choice in the matter. She stayed because she could not establish priority need to be rehoused by the local authority until the eviction order had been made against her. Once the necessary proceedings had been taken she was able to obtain local authority housing at 145 a month.

In my judgment, therefore, the special circumstances in this case are created by the combination of two factors. First, the fact that the Ashmans were occupying at a concessionary licence fee. Second, the fact that Mrs. Ashman had, in practice, no choice but to stay in the premises until the local authority were willing to rehouse her. The first factor is important because I think if the Ashmans had voluntarily paid the ordinary market rate, they could not claim the premises had become less to them because they could not find anywhere else to go.

The second factor is important because I do not think the defendant can say the premises were worth less to him than suitable accommodation he could realistically obtain. In the circumstances of this case the value to Mrs. Ashman was no more than she would have had to pay for suitable local authority housing, if she could have been immediately rehoused. Allowing subjective devaluation in circumstances like this case will not cause any injustice to a landlord.

Lloyd LJ

No Restitutionary Damages for saved expense

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