Damages for distortion of framework of garage premises due to vibration during construction of adjoining multi-storey car park–Plaintiffs could not insist on complete and meticulous restoration if less costly and less extensive works produced a result not greatly different–Date at which cost had to be assessed–Damage occurred 10 years before hearing–Effects of inflation–Measure of damage and victim’s duty to mitigate damage must be distinguished–Correct measure cost of repairs when it was reasonably possible to begin repairs, ignoring any question of impecuniosity of claimant–Subsidiary question of dislocation of lessees’ business
This was an
action based on negligence and/or nuisance arising from damage to garage
premises in Rose Lane, Canterbury, during the construction of a multi-storey
car park on adjoining land. The plaintiffs were Dodd Properties (Kent) Ltd, of
St James’s Street, Dover (lessors), and Marlowe Garage (Canterbury) Ltd
(lessees). The defendants were the city council; Truscon Ltd, the main contractors,
of John Adam Street, London WC2; and Frankipile Ltd, the piling contractors, of
Victoria Street, London SW1. The second and third defendants were also joined
as third parties. The damage complained of was some distortion of the framework
of the building resulting from vibration during construction work on the
car-park site. Judgment was against all three defendants, but the third
defendants agreed to indemnify the other two. Liability was admitted, and the
action was tried on quantum only.
R N Titheridge
QC and M McMullan (instructed by Lewis & Dick) appeared on behalf of the
plaintiffs; M Wright QC and T Saunt (instructed by Ponsford & Devenish,
Tivendale & Munday) represented the first defendants; and O B Popplewell QC
and S Desch (instructed by Hewitt, Woollacott & Chown) represented the
second and third defendants.
Giving
judgment, CANTLEY J said that evidence showed that the distortion of the
framework of the building was discoverable by expert measurement, but not by
ordinary observation, and one expert had said he doubted whether even a
surveyor inspecting the building for a prospective purchaser would notice it.
Had the
strength of the building been severely diminished by the distortion of the
steel framework? It seemed to his
Lordship that in the end there was no real dispute about this matter. The
plaintiffs’ structural engineer, S E Wootton, calculated a loss of some five
per cent in the safety factor, but in cross-examination he conceded that there
was no reason thereby to suppose that the safety factor had been rendered
inadequate. His Lordship accepted that, so far as safety was concerned, there
was no need to do anything to the steel framework; and from the evidence of Mr
Knight, the third defendants’ quantity surveyor, and Mr Marshall, consulting
engineer, on behalf of the second and third defendants, he was satisfied that
if the building was dealt with in accordance with their proposals it was as
capable of taking an extra floor satisfactorily as it was before it was
damaged; although they expressed no opinion as to whether it would take an
extra floor satisfactorily, because that was a matter on which no calculation
had been made by them. But so far as the existing building was concerned, it
was as fit for this use as it was before. It was true that owing to a slight
slope in the roof trusses of some one in three hundred there would probably
have to be some slight adjustment in the construction of a new first floor.
His Lordship
accepted the view of Messrs Knight and Marshall that no further investigation
of the foundations was called for. Nothing had gone wrong since 1968.
A plaintiff
was under a duty at common law to mitigate his damage. The plaintiffs were
entitled to the reasonable cost of doing reasonable work of restoration and repair.
They were of course not bound to accept any standard of work for the sake of
saving expense for the defendants, but his Lordship did not consider that they
were entitled to insist on complete and meticulous restoration when a
reasonable building owner would be content with less extensive work which would
produce a result which would not diminish to any great extent the appearance,
life and utility of the building, and when there was a large difference between
the cost of those works and the cost of meticulous restoration. The cost must
be assessed on the basis of the work proposed by Messrs Marshall and Knight.
At what time
must this cost be assessed? It was now
no less than 10 years since the damage occurred, and nothing had been done to
put it right. There had been no further deterioration of the building since
1968. The plaintiffs had been very short of ready cash, and Mr Smith, a
director, said that even if money had been no problem he would not have spent
it on repairing the building before he was sure of recovering the cost from the
defendants. The building was still weather-tight, and it would not in his view,
as a chartered accountant, have made commercial sense to spend such an amount
of money on a building which would not produce any corresponding additional
income. So long as the defendants’ liability was in dispute, even if the
dispute was only as to the amount of compensation, he would not have done any
repairs save such as might be necessary in order to make the building
weather-proof and keep it in operating order. The first plaintiffs (the
lessors) had been operating at a substantial loss from 1967 to 1973. The second
plaintiffs (the lessees) were not impecunious, but had been trading on bank
over-drafts for some years.
His Lordship
found that the first plaintiffs could probably have raised the money for the
repairs, but this would have increased their annual losses. As a commercial
decision it was reasonable to postpone incurring a very considerable expense
while no harm was being done to the building, and while the three very rich
defendants, with apparently very
liability to make even a contribution. The effect of the delay had, however,
been startling. Inflation had been continuing ever since 1968, but had
accelerated strikingly from 1973 onwards. The cost of doing the work on the
basis which his Lordship had accepted was £10,817 in 1968, over £11,000 in
1970, and £30,327 in 1978.
Mr Titheridge
had argued that the plaintiffs were entitled to have their damages assessed as
at the date of the hearing, as in a personal injury action, subject only to it
being proved against them that they had failed to act reasonably to mitigate
their loss. He relied on the dictum of Lord Collins in Clippens Oil Co v
Edinburgh & District Water Trustees [1907] AC 291 at p 303:
It was
contended that this implied that the defenders were entitled to a measure of
damages on the footing that it was the duty of the company to do all that was reasonably
possible to mitigate the loss, and that if, through lack of funds, they were
unable to incur the necessary expense of such remedial measures, the defenders
were not to suffer for it . . . in my opinion the wrongdoer must take his
victim talem qualem, and if the position of the latter is aggravated
because he is without the means of mitigating it, so much the worse for the
wrongdoer, who has got to be answerable for the consequences flowing from his
tortious act.
This dictum
was referred to with approval (and not disapproval, as stated in the headnote)
in Liesbosch (Dredger) v S S Edison [1933] AC 449, where
Lord Wright said at p 461:
As I think it
is clear that Lord Collins was here dealing, not with the measure of damage,
but with the victim’s duty to minimise damage, which is quite a different
matter, the dictum is not in point.
If it was not
impertinent to agree with Lord Wright, his Lordship would do so.
This principle
enunciated by Lord Collins applied when one was considering the duty to mitigate
damage. However, one must first ascertain the measure of damage before
considering whether the victim had failed in his duty to minimise that damage
so far as he reasonably could. In the case of the destruction of a chattel, the
normal measure of damages was its market value at the time of the loss. That
was the measure of damages applied in Liesbosch, and his Lordship did
not suppose it would have made any difference if the dredger owners had done
nothing to replace it for 10 years, except to keep on trying to save up enough
money to buy another similar dredger, and had not yet saved the cost of one in
a rising market. They would, his Lordship supposed, have recovered the cost of
one at the time of the loss, plus interest on the money they ought to have
recovered 10 years before. That might have bought them another similar dredger,
but it was when the rate of inflation exceeded the rate of interest that it
became important to have damages assessed as at the date of the hearing. A
similar rule as to the measure of damages applied where chattels were damaged,
as opposed to being destroyed, and it was reasonable to deal with the damage by
way of repair.
Philips v Ward [1956] 1 WLR 471 was an action for damages against a
surveyor who made a negligent report about the condition of a house which was
bought by the plaintiff on his advice. The measure of damages claimed for the
plaintiff as the cost of repairing the house was the prices ruling as at the
date of the hearing. In the event the plaintiff was not awarded damages on that
basis, but the difference between the value of the house in its actual
condition when he bought it and the price he had paid for it, but the court
made some observations on the claim for the cost of repairs, which his Lordship
found of assistance. Denning LJ, as he then was, said at p 474:
Another point
arose about the time at which damages should be assessed. The cost of repairs
has risen considerably since the house was bought, and it will cost Mr Philips
a good deal more than £7,000 now to put his house right. The £7,000 is based on
1952 costs, not 1956 costs. The £4,000 is derived from that figure and
represents the difference in value at 1952 prices, not those ruling today. I
think that it is right to assess the damages as at 1952 prices. The general
principle of English law is that damages must be assessed as at the date when
the damage occurs, which is usually the same day as the cause of action arises,
but may be later . . . in the case of continuing damage (as in personal injury
cases) the award for permanent disability can, and usually does, take into
account the fall in the value of money since the accident: but that is because
much of the damage has accrued, and will accrue, since that date.
Romer LJ at p
476 said:
I would only
add that, even if I had been able to accept the principle on which it was
based, I can see no warrant for the plaintiff’s submission that the sum should
be increased so as to reflect the diminution in the value of the pound since
1952.
Denning LJ’s dictum
was followed and applied by Lawton J, as he then was, in Clark v Woor
[1965] 2 All ER 353, an action for damages for breach of a building contract,
where the measure of damages applied was the cost of repairs. The cost of
repairs had greatly increased between the time when the plaintiff first
discovered the cause of action and the date of the hearing some four years
later, but damages were assessed as at the date when the plaintiff first
discovered the cause of action.
No authority
had been cited to his Lordship, and in the very little opportunity he had had
he had discovered none for himself, where a court had considered the time at
which damages were to be assessed in the case of a building damaged and in need
of repair by a tortious act. If there was no authority it might be because no
one had ever before thought to consider that the general principle did not
apply to it. The general principle was that damage must be assessed as at the
date when the damage occurred. In his Lordship’s view, that general principle
applied here. It was not, of course, to be rigidly applied as a rule of thumb,
fixing the time rigidly by the calendar and the clock. Damage might be
concealed by some fault of the wrongdoer, or not reasonably discoverable by the
victim, see eg East Ham Corporation v Bernard Sunley & Sons
[1966] AC 406, and Applegate v Moss [1971] 1 QB 406. Moreover,
repairs could not usually be put in hand at once and at prices ruling at the
very date of the damage. There might have to be inspection, specification and
tenders, and an available contractor might have to be found before the work
could be started. Moreover, the nature and circumstances of the damage might be
such that it would be imprudent and possibly wasteful to begin work without
waiting to ensure that no further damage was going to develop from the same
cause, particularly when the foundations of a building had been disturbed by a
wrongdoer. The appropriate damages were the cost of repairs at the time when it
was reasonable to begin repairs. What time was reasonable must be judged
objectively, and not taking into account such matters as impecuniosity or
financial stringency which, in the words of Lord Wright in Liesbosch,
were extraneous. This seemed to have been the view of Lord Upjohn in the Sunley
case (supra), where he said at p 445:
Where the
cost of reinstatement is the proper measure of damages, it necessarily follows
as a matter of commonsense that in the ordinary case the cost must be assessed
at the time when the damage is discovered and put right, and it is not
suggested here that the building owner delayed the work of repair after
discovery of the defect. So prima facie the damages ought to be assessed
as the actual cost of repair in 1960, ie £21,301.
In the present
case, the damage was discoverable in 1968, but experts on both sides agreed
that it was reasonable not to begin repairs until 1970. Accordingly his
Lordship adopted as the measure of damages the cost of repairs in accordance
with the recommendations of Messrs Knight and Marshall, and
estimated at £11,402 (plaintiffs) and £11,349 (defendants). His Lordship took
the rough-and-ready course of choosing a midway figure of £11,375.
The second
plaintiffs sought damages for loss through dislocation of their business during
execution of the works. The relevant works would be those recommended by Messrs
Knight and Marshall. The period of disturbance was nine weeks, during which the
whole of the second plaintiffs’ premises would not be affected. Mr Popplewell
submitted that it was fundamental to the second plaintiffs’ claim that the
repairs would in fact be done, and suggested that it was not at all certain
that the work would be done; his Lordship was satisfied that in all probability
the repairs would be done.
Mr Titheridge
said that as the second plaintiffs would suffer no loss until the first
plaintiffs began the repairs, their loss at least must be assessed at
present-day prices. But it could not be right that the first plaintiffs, by
postponing their repairs until 1979 or 1984, could increase the second
plaintiffs’ damages, and his Lordship was not going to do this. True each
plaintiff was a separate, independent entity, but it would be unrealistic to
ignore the very close community between them. In this action they had joined
together to claim separate heads of damage resulting from the same wrong. The
basis of the second plaintiffs’ claim was that they were occupiers of the
building, and as such were the natural and primary plaintiffs in so far as an
action for nuisance was concerned. In the course of evidence his Lordship had
learned that the second plaintiffs had a 20-year lease which had 10 years to
run at the date when the damage was discovered, and they had been promised a
new lease for 15 years. Under the lease they were obliged to keep the building
in tenantable repair, and his Lordship had not been informed of any specific
exception to this. It seemed to his Lordship that they could have claimed the cost
of repairing the building in their own right.
In his
Lordship’s view the present claim must be founded on the assumption that the
second plaintiffs were entitled to be compensated for the dislocation of their
business by repairs done within a reasonable time of the accrual of the cause
of action. For the reasons given above, he considered that a reasonable time
had arrived in 1970, and that was the time by reference to which he would
assess their loss. He could not attribute to the defendants loss due to the
fall in the value of money since 1970. The 1970 figure was £3,908, plus a
disputed item of £200, making £4,108.
