Secure shorthold tenancy — Tenant evicted after five weeks — Assessment of statutory damages — Two other occupants in premises intended for single occupation — Damages assessed on basis of vacant possession after eviction — Whether correct approach — Landlord’s appeal allowed in part
The tenant, M, was granted an assured shorthold tenancy of part of a freehold property at 143 Lincoln Way, Corby. When the premises were disposed of by the council to the appellant’s predecessor in title, it was on the basis of a restrictive covenant prohibiting use, save as a private dwelling in single occupation. M moved into part of the premises on a secure shorthold tenancy of part for six months at a weekly rent of £95 on February 5 1993. When she became the tenant there were already two other occupants of part of the premises. She was evicted by March 11.
At first instance it was accepted, despite disputed evidence, that she had been evicted by her landlord who excluded her from the property and removed her belongings. M contended that pursuant to sections 27 and 28 of the Housing Act 1988 she was entitled to £15,000 as the difference between the value of the landlord’s interest in the property immediately before her eviction (£15,000) and the value of the interest after her eviction (£30,000). The contention was based on the advice of an experienced valuer. The defendant’s valuer assessed the two values at £7,000 and £20,000 respectively. At first instance M was awarded statutory damages of £15,000 plus damages for conversion of her possessions, assessed at £2,379, the latter award not challenged by the appellant landlord. The landlord appealed against the award of £15,000 statutory damages.
Held The appeal was allowed in part.
1. The two valuers, on the basis of instructions received from the two firms of solicitors, assumed vacant possession throughout. That meant that, in assessing the value of the property without M’s assured shorthold tenancy, they treated as irrelevant the existence of the two other occupiers. The nature of that occupation was unknown but it was legitimate to infer that the two occupiers enjoyed some status there.
2. Furthermore, the valuers did not appear to have been interested in the nature of M’s tenancy prior to her eviction who, having only a secured shorthold tenancy of six months’ duration, enjoyed a far from irremovable status.
3. There was no reasoned explanation as to why, even on the basis of the assumption they were making, ie of vacant possession, the presence or absence of M made such a significant difference as they both thought it did.
4. The purpose of the Act was to deprive the landlord of any profit that his wrongful action produced. That involved comparing the value of his interest free of the wrongly evicted tenant’s interest with its value incumbered by that interest.
5. That comparison had necessarily to involve valuing the unincumbered interest on a factual as opposed to a notional basis; otherwise that which the landlord was ordered to pay to the tenant was not the value of the profit occasioned by his wrong but a fine which could be far greater.
6. There was nothing in either section 27 or section 28 to warrant the notional approach and which required or justified disregarding, when making the valuation of the landlord’s interest, the existence of such other residential occupancies as might still subsist on the premises.
7. It was also difficult to see why, in the ordinary way, where premises were let at a rack-rent on a shorthold tenancy, the valuers concluded that the eviction of M should have made such a vast difference to the value of the landlord’s interest given the nature and terms of the tenancy.
8. The tenant was awarded £500 plus interest.
Michael Ellis (instructed by Dean Wilson, of Brighton) appeared for the appellant landlord; Peter Hollingworth (instructed by Wilson Browne, of Corby) appeared for the respondent tenant.
