The High Court has emphasised that an award of exemplary damages requires conduct by the defendant which is calculated to make a profit in dismissing an appeal in Yadevinder Singh Hothi v Clive Stokes [2022] EWHC 2161 (Ch), a boundary dispute concerning two residential properties in Windsor owned by the parties.
The claimant succeeded in obtaining a declaration as to the correct route of the boundary. However, its claim for exemplary damages – for the defendant’s high handed and oppressive conduct calculated to make a profit exceeding the compensation payable to the claimant – was dismissed. The parties appealed. The defendant’s appeal as to the position of the boundary was dismissed by the High Court. The claimant cross-appealed the refusal to award exemplary damages on the ground that the judge had misdirected himself in law.
Exemplary damages are exceptional and a departure from the rule that damages are ordinarily compensatory, not punitive (McGregor on Damages 21st Edition). They may be awarded where the defendant’s conduct has been calculated to make a profit for himself and includes cases where the defendant acts with cynical disregard for the claimant’s rights and to gain at the expense of the claimant an object which it could not obtain at all or at a price it would be willing to pay (Rooks v Barnard [1964] AC 1129). What is required is an element of calculation by the defendant, pursuant to which it decides that is more advantageous to act in cynical disregard of the claimant’s rights, in order to achieve its objective, than to act in a lawful fashion. An award of exemplary damages in such cases essentially makes the point that tort does not pay.
Following the defendant’s purchase of his property in 2017 he approached the claimant seeking his agreement to widen the access to his property. The claimant was only prepared to agree this if he could have access across the defendant’s property to the road. This was not acceptable to the defendant and so a fence erected in 2008 remained in place. A dispute arose between the parties about the access in late 2017. The judge found that the defendant deliberately caused damage to the 2008 fence including to the two end posts. He then replaced the 2008 fence some 12 inches further into the claimant’s property. The claimant removed the replacement fence and installed fencing of his own where the 2008 fence had been. The defendant then removed the fencing and replaced it with a new fence. The claimant issued proceedings to establish the correct boundary line.
The judge found that whilst the defendant’s conduct was reprehensible and had no regard to the rights of the claimant, he simply wanted to widen his drive. The judge could not equate that with the necessary degree of financial calculation required to make an award of exemplary damages. On appeal the High Court interpreted the judge as saying that he was unable to find on the evidence the degree of calculation required to found an award of exemplary damages, and reluctantly concluded that it should not interfere with the judge’s decision.
Louise Clark is a property law consultant and mediator
