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Damages

How much?

Tamares (Vincent Square) Ltd v Fairpoint Properties (Vincent Square) Ltd
[2007] EWHC 212 (Ch)
(Gabriel Moss QC sitting as a Deputy High Court Judge)

In this second stage of the case the High Court judge had to decide how much to award in lieu of an injunction. In doing so the judge reviewed the earlier cases and summarised the principles to be applied. The judge at para 22:
    "I would deduce the following principles from these cases in relation to the assessment of damages for loss of the ability to prevent an infringement of a right to light at the point just before any infringement takes place:

    (1) The overall principle is that the Court must attempt to find what would be a 'fair' result of a hypothetical negotiation between the parties.
    (2) The context, including the nature and seriousness of the breach, must be kept in mind;
    (3) The right to prevent a development (or part) gives the owner of the right a significant bargaining position.
    (4) The owner of the right with such a bargaining position will normally be expected to receive some part of the likely profit from the development (or relevant part);
    (5) If there is no evidence of the likely size of the profit, the Court can do its best by awarding a suitable multiple of the damages for loss of amenity;
    (6) If there is evidence of the likely size of the profit the court should normally award a sum which takes into account a fair percentage of the profit;
    (7) The size of the award should not in any event be so large that the development (or relevant part) would not have taken place had such a sum been payable;
    (8) After arriving at a figure which takes into consideration all the above and other relevant factors, the Court needs to consider whether the 'deal feels right'."
Applying the principles the judge calculated the award by taking a one-third split of the profit arriving at a figure of £58,166. However, having regard to the modest nature of the infringement he reduced the figure to £50,000 to reach a "fair result". That figure was substantially more than the sum available for loss of amenity but in terms of the price to be paid for avoiding an injunction "the deal felt right"!.

The statement of principles may be helpful and may be accurate although the concept of the "deal feeling right" is hardly very judicial; and the sum awarded seems awfully large. In Regan the Court of Appeal, when determining whether or not to grant an injunction, thought that a figure of £5,000 was large!


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