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Damages - account of profits

This page refers to two cases that deal with a claim for an account of profits (sometimes known as "restitutionary damages") - one in trespass and the other in nuisance arising out of an interference with the right to light. In neither case was the claim successful.

See also damages in lieu of an injuntion.


Trespass

Severn Trent Water Ltd v Barnes
[2004] EWCA Civ 570; [2004] 26 EG 194

The claimant was awarded £500 for loss of a bargaining opportunity after a trespass by a water authority but was refused damages equivalent to loss of development value (£100,000) and "restitutionary damages" ie. the price for the benefit obtained by a defendant for the wrongful use of the claimants property in circumstances where no injunction was sought. There is a useful discussion in the case of the applicable principles.


Breach of right to light

Forsyth-Grant v Allen
[2008] EWCA Civ 505

Summary

As the law currently stands, it is not possible to claim an account of profits in a right to light case.

Facts

The case concerned a residential development that interfered with the rights to light enjoyed by a hotel. The hotel owner (the claimant) had vehemently objected to the development on a number of grounds. On the appeal, the only outstanding matter related to the rights to light. The defendant developer had tried to negotiate with the claimant in relation to the development so as to minimise the loss and subsequently an appropriate sum for damages. However, those approaches had been rebutted by the claimant.

First instance

At the trial, the county court judge awarded the claimant £1,848.63 in respect of the nuisance, i.e. the infringement of the rights of light enjoyed by the hotel. That sum represented the financial loss to the claimant of the infringement. He rejected a claim for an account of all the profits which the defendants had made from the infringement. The claimant appealed against that decision.

Held

The appeal was dismissed. The claimant was not entitled to all the profits made by the infringement. The award was to be based on her loss. There was an interesting discussion in the case on the recent developments in this area of law, but the key points for the purposes of this case were perhaps best summarised by Toulson J at paras 38 and 39:
    "Infringement of a right to light is part of the law of nuisance. For nuisance, as for tort generally, the standard pecuniary remedy is damages, and the measure of damages is the amount required to place the injured party in the same position as if he had not sustained the wrong. Depending on the circumstances, this would usually be assessed either by the diminution in the value of the land or, where this can reasonably be achieved, by the cost of work to remedy the nuisance. On the facts of this case the latter alternative does not arise. But damages may, in an appropriate case, be calculated by what the claimant could reasonably have bargained for, adopting what has been referred to in the authorities as the 'user principle'…

    In the present case there was every reason not to give the appellant compensation on the basis of what she could have bargained for, because the respondent had been willing to bargain but she refused his invitation to do so. Since she refused that opportunity I cannot see, as a matter of justice, why she should be entitled to any greater remedy for the infringement of her rights to light than damages for loss which she actually suffered as a result of the infringement and which the judge assessed."

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