Landlord and tenant –– Derogation from grant –– Breach –– Lease of kiosk near exit to underground station –– Exit closed for long hours –– Whether derogation from grant –– Whether damages payable on “no-transaction” basis –– Whether set-off for increased profits from bureau at same station
By two leases dated 21 January 1991, the claimant respectively held five-year terms of a kiosk and a bureau in an underground station. The kiosk was sited near the exit and was let for the purpose of the sale of cold food and drinks. The kiosk was not sited in the principal business thorough that fronted the station. The exit was only open for part of the day as the defendant otherwise used the main entrance as an exit. The bureau was sited near the entrance. The claimant closed the kiosk in February 1994, contending that they were unable to trade successfully because the defendant denied passengers access through the exit for a large proportion of the time during which the station was open. The claimant sought damages for derogation from grant. The defendant accepted that by shutting the exit for three-quarters of the time the station was open, there would be derogation unless: (i) by the lease, it was entitled to shut the exit; (ii) there was something in the surrounding circumstances at the date of the grant that justified the action; or (iii) the functioning of the station at the time the lease was negotiated and granted had not changed. The defendant also contended that there should be set-off against any damages for lost profits the extra profits made at the bureau because of additional custom when the exit was closed and the entrance was used for that purpose.
Held: There was derogation from grant. Because the exit was closed, except for the morning rush hour, the kiosk was deprived of a number of potential customers. A clause in the lease, which provided that the tenant could not object to the carrying out of the defendant’s undertaking, did not entitle the defendant to close the exit for the relevant hours. The surrounding circumstances at the time of the grant indicated that it was contemplated by the parties that the exit would function as such during the time the station was open (subject to the possibility of it being shut in the evenings and at weekends). Damages could not be assessed on a “no transaction” basis and the additional profits made in the bureau have to be set-off against the damages, together with arrears of rent.
The following cases are referred to in this report.
Aldin v Latimer Clark, Muirhead & Co [1894] 2 Ch 437
Browne v Flower [1911] 1 Ch 219; [1908-1910] All ER 547
C&P Haulage v Middleton [1983] 1 WLR 1461; [1983] 3 All ER 94
Chartered Trust plc v Davies [1997] 2 EGLR 83; [1997] 49 EG 135
Harmer v Jumbil (Nigeria) Tin Areas Ltd [1921] 1 Ch 200
Haviland v Long [1952] 2 QB 80; [1952] 1 All ER 463
Hayes v James & Charles Dodd (a firm) [1990] 2 All ER 815
Hussey v Eels [1990] 2 QB 227; [1990] 2 WLR 234; [1990] 1 All ER 449; [1990] 1 EGLR 215; [1990] 19 EG 77, CA
Johnston & Sons Ltd v Holland [1988] 1 EGLR 264
Leech v Schweder (1874) 9 App Cas 463
Lloyd v Stanbury [1971] 1 WLR 535; [1971] 2 All ER 267; (1971) 22 P&CR 432
Lyttleton Times Co Ltd v Warners Ltd [1907] AC 476
Molton Builders Ltd v Westminster City Council (1975) 30 P&CR 182; [1976] 1 EGLR 150; 238 EG 411, CA
Myers v Catterson (1889) 43 ChD 470
Oceanic Village v Shirayama Shokusan Co Ltd [2001] EGCS 20
Petra Investments Ltd v Jeffrey Rogers plc (2001) 81 P&CR 21; [2000] L&TR 451; [2000] 3 EGLR 120Port v Griffith [1938] 1 All ER 295
Rose (Frederick E) (London) Ltd v William H Pim Junior & Co Ltd [1953] 2 QB 450; [1953] 3 WLR 497; [1953] 2 All ER 739; [1953] 2 Lloyd’s Rep 238, CA
Southwark London Borough Council v Mills; Baxter v Camden London Borough Council (No 2) [2001] 1 AC 1; [1999] 3 WLR 939; [1999] 4 All ER 449; (2000) 32 HLR 148; (2000) 79 P&CR D13; [1999] 3 EGLR 35; [1999] 45 EG 179
This was the hearing of a claim by the claimants, Mr and Mrs Andrew Platt and Seven Day Change Ltd, against the defendant, London Underground Ltd, for damages for derogation from grant.
Catherine Taskis (instructed by Landau Zeffertt Dresden) appeared for the claimants; Richard Harrison (instructed by the solicitor to London Underground Ltd) represented the defendant.
Giving judgment, NEUBERGER J said: This is a claim for damages brought by Mr Andrew Platt and his wife and their company, Seven Day Change Ltd (the claimant), against London Underground Ltd (LUL) for damages suffered as a result of LUL’s alleged derogation from grant.
Outline
The claim arises under a lease granted to the claimant by LUL on 21 January 1991 for a term of five years, from 25 December 1990 (the lease). The lease related to a kiosk (the kiosk) situated within Goodge Street Underground Station (the station). The station has two entrances, both of which are on the west side of Tottenham Court Road, London W1. Within the station ground-floor area, there are four lifts carrying passengers to and from the platforms. Each of the lifts has two sets of double doors, so access can be obtained to or from the lifts by means of either entrance at ground-floor level. The northern entrance (the entrance) is the only way into the station for members of the public. It contains the ticket-purchasing facilities, and it is open at all times when the station is open, around 19 hours per day, Monday to Saturday, and 17 hours on Sunday. The southern entrance (the exit) is open only part of the day, when it can be used by members of the public as a way out of the station only. When the exit is open to the public, both sets of lift doors open (presumably, the southern doors a short time before the northern doors). Passengers leaving the station should then pass through the southern lift doors and leave through the exit. Passengers wishing to travel by the underground enter through the entrance, purchase their tickets and get access to the lift through the northern lift doors. The entrance is used as a way out for passengers in two circumstances. First, by all passengers leaving the station when the exit is closed to the public: second, even when the exit is open, it is used by some, I suspect relatively few, passengers who choose to leave the lift through the northern doors.
There are a total of eight automatic ticket barriers (known as UTS gates) in the station. These are the gates through which passengers gain access to or from the platforms (via the lifts) with the use of their tickets. There are five UTS gates in the entrance, and three in the exit. The three UTS gates in the exit can be set only to let passengers out of the station. Of the five UTS gates in the entrance, two can be set only to let passengers into the station: three are either way, albeit one of them is always set to let out passengers. The other two, presumably, are normally set to let passengers in when the exit is open, but either or both of them is reversed when the exit is closed. Access to or from the station from the street through the entrance or the exit can be blocked off by closing concertina gates, known as Bostwick gates.
Both inside the exit and inside the entrance there is a kiosk . Each kiosk was let under a separate lease to the claimant by LUL on 21 January 1991. The kiosk was let for the purpose of sale of cold food and drinks. The other kiosk, that in the entrance (the bureau), was let as a bureau de change.
Having opened for business on 14 February 1991, the claimants operated the kiosk for the permitted use until closing it on 20 February 1994. They contend that Seven Day Change Ltd was unable to trade successfully from the kiosk, owing to the fact that LUL denied passengers leaving the station access through the exit for a large
The claimants contend that, by not operating the exit –– by which expression, I mean permitting passengers leaving the station to pass through the southern lift doors and the UTS gates at the exit, past the kiosk and onto the street –– LUL acted in derogation from grant, and that the claimants are entitled to damages. The two main issues are liability and quantum, but there is an additional issue, namely whether there are arrears of rent.
Derogation from grant: principles.
1. It is well established that a landlord, like any grantor, cannot derogate from his grant. To put it in more normal language, as has been said in a number of cases, a landlord cannot take away with one hand that which he has given with the other: see, for instance per Younger LJ in Harmer v Jumbil (Nigeria) Tin Areas Ltd (1921) 1 Ch 200 at pp225-226 and Lord Denning MR in Molton Builders Ltd v Westminster City Council (1975) 30 P&CR 182* at p186.
* Editor’s note: Also reported at [1976] 1 EGLR 150; (1975) 238 EG 411
2. In order to determine whether a specific act or omission on the part of the landlord constitutes derogation from grant, it is self-evidently necessary to establish the nature and extent of the grant: seeLeech v Schweder (1874) 9 App Cas 463 at p467, per Mellish LJ.
3. [The exercise of determining the extent of the implied obligation not to derogate from grant] involves identifying what obligations, if any, on the part of the grantor can fairly be regarded as necessarily implicit, having regard to the particular purpose of the transaction when considered in the light of the circumstances subsisting at the time the transaction was entered into
per Sir Donald Nicholls V-C in Johnston & Sons Ltd v Holland [1988] 1 EGLR 264 at p267M.
4. There is a close connection, indeed a very substantial degree of overlap, between the obligation not to derogate from grant, the covenant for quiet enjoyment and a normal implied term in a contract. Thus, in words that apply equally to an implied term in a contract, Bowen LJ said in Myers v Catterson (1889) 43 ChD 470 at p481, in relation to the derogation from grant principle, that one should give effect to what he called “the obvious intention of the parties, so as to give the transaction between them a minimum of efficacy and value which upon any view of the case it must have been their common intention that it should have”. In Southwark London Borough Council v Mills [1999] 4 All ER 449* at p467F, Lord Millett explained that, to a large extent, the covenant for quiet enjoyment, and the obligation of a landlord not to derogate from his grant amounted to much the same thing.
* Editor’s note: Also reported at [1999] 3 EGLR 35; [1999] 45 EG 179
5. The terms of the lease will inevitably impinge upon the extent of the obligation not to derogate. Express terms will obviously play a part, possibly a decisive part, in determining whether a particular act or omission constitutes a derogation. An express term should, if possible, be construed so as to be consistent with what Hart J called “the irreducible minimum” implicit in the grant itself. However, as he went on to say, a covenant relied upon by the landlord “if construed as ousting the doctrine in its entirety is repugnant… and should itself be rejected in its entirety”: see Petra Investments Ltd v Jeffrey Rogers plc [2000] L&TR 451* at p471.
* Editor’s note: Also reported at [2000] 3 EGLR 120
6. When considering a claim based upon derogation from grant, one has to take into account not only the terms of the lease, but also the surrounding circumstances at the date of the grant as known to the parties: see Chartered Trust plc v Davies [1997] 2 EGLR 83* at 87C per Henry LJ.
* Editor’s note: Also reported at [1997] 49 EG 135
7. One test that is often helpful to apply where the act complained of is the landlord’s act or omission on adjoining land is whether the act or omission has caused the demised premises to become unfit or substantially less fit than the purpose for which they were let: see Browne v Flower [1911] 1 Ch 219 at p225, as per Parker J, and also Aldin v Latimer Clark, Muirhead & Co [1894] 2 Ch 437.
8. However, even that formulation, although helpful, may in many cases be too generous to the tenant. Thus, permitting a competing business to be run from a next-door property was held not to be derogation from grant, see Port v Griffith [1938] 4 All ER 295, but compare Oceanic Village Ltd v Shirayama Shokusan Co Ltd unreported 6 February 2001*.
* Editor’s note: Reported at [2001] EGCS 20
9. The circumstances as they were at the date of the grant of the lease are very important. Thus, in Southwark [1999] 4 All ER 449, the claim failed because it was based upon an alleged defect in the demised premises that existed as at the date of the grant: see, for instance, at [1999] 4 All ER 455 to p456 per Lord Hoffman and at pp467-468 per Lord Millett.
10. However, given that a lease is essentially prospective in operation, the central issue, where the complaint is of activities on the neighbouring premises owned by the landlord, is not merely “the use to which the adjoining premises are put at the date of the tenancy”, but also “the use to which they may reasonably be expected to be put in the future”, per Lord Millett at p468J in Southwark. See also per Lord Hoffman to the same effect at p456C, who, like Lord Millett, relied upon Lyttleton Times Co Ltd v Warners Ltd [1907] AC 476.
11. When assessing what the parties to a contract actually, or must have, contemplated, one should focus upon facts known to both parties, and statements and communications between them. A fact that could only have been known to one party could not, save in very unusual circumstances, be a legitimate part of the factual matrix. A thought locked away in the mind of the parties, or even perhaps of both parties, cannot normally be a relevant factor when assessing the parties’ understanding. In English law, at any rate, contract is concerned with communication as well as mutuality, see Frederick E Rose (London) Ltd v William H Pim Junior & Co Ltd [1953] 2 QB 450.
Undisputed facts
The undisputed facts (including the facts that, to my mind, cannot seriously be in doubt) are as follows.
At the date of the grant of the lease, the kiosk would have been perceived to be dependent, for its business, effectively exclusively on passengers leaving from the station through the exit, and it would not, to any significant extent whatever, have been expected to rely or benefit from passing trade in Tottenham Court Road. That is clear from the oral evidence. It was stated by Mr Platt, who had at the date of the grant of the lease considerable experience and success in running kiosk s of a similar nature to the kiosk. It was also apparent from the evidence of Mr Phillip Major, from LUL’s property department, primarily responsible for negotiating the grant of the lease. It was further clear from the evidence of the group station manager, Mr Frederick Fillick, responsible in 1992 for the station, together with other stations. Further, it is supported by common sense. Not only was the kiosk not easily visible from Tottenham Court Road, there were “No Entry” signs in the exit, which, while not directed to entry to the kiosk , would have strongly discouraged anyone thinking of entering through the Bostwick gates into the exit for the purpose of access to the kiosk. In so far as one can rely upon facts after the grant of the lease, it is also clear from the evidence that, in practice, the kiosk obtained no significant trade whatever from passers-by on Tottenham Court Road.
Second, from or shortly after the beginning of the lease, subject to a dispute as to whether the exit was open to passengers during the evening rush hour, from around 4.30pm to 6.30pm on weekdays, it is common ground that the exit was not open to members of the public leaving the station, except during weekdays in the morning rush hour between about 7.30am and 10am. As a result, the kiosk was deprived of
In those circumstances, Mr Richard Harrison, who appears on behalf of LUL, understandably concedes that by shutting the exit for over three-quarters of the time when the station was open, LUL would have derogated from its grant in the absence of one of the following three factors applying. First, that there was something in the terms of the lease that entitled LUL to shut the exit; second, that there was something in the surrounding circumstances at the date of the grant of the lease that justified the action; third, that the functioning of the station at the time the lease was negotiated and granted has not changed. Although he says that he needs only to succeed on one of these factors, he argues that all three factors, in fact, apply. I propose to deal with the arguments by taking the first point, the terms of the lease, and thereafter taking the other two points together.
Terms of the lease
I turn, therefore, to the question of whether the lease justified LUL doing what would otherwise have been derogation from grant. As I have mentioned, the lease was for a term of five years from 25 December 1990 at an annual rent of £20,000. The rent was payable quarterly in advance. The demise was of the kiosk, described as “adjoining the exit to the… station, and shown pink on the plan annexed hereto” (the plan). The grant included the following (the easement):
The right for the lessees and the customers and servants of the lessee of ingress to and egress from the demise premises on foot only over the company’s adjoining station premises in connection with the business of the lessee, but the lessee and the customers and servants of the lessee shall only exercise the right so long as the station premises are open to public traffic, and shall be subject to such regulations as the company, its servants, or agents may from time to time, either verbally or in writing, impose, and also subject to the right hereinafter reserved to the company to close the station premises for so long as it may think fit.
There were reserved to LUL, described in the lease as “the company”, certain rights set out in Part 2 of the schedule. Part 2 of the schedule included this (the reservation):
The right without notice to the lessee at any time to close, lock and bolt the door leading into the company’s station premises for so long as the company may think fit and expedient, and the said doors shall be so fitted and kept so fitted that the company shall be able to close, lock and bolt the same from the said station premises, and for this purpose the keys thereof shall be kept by the company.
Clause 3.15 of the lease restricted the use of the kiosk to “the sale of confectionery, books, magazines, tourist souvenirs and soft drinks… and prepacked sandwiches, cakes, and other like prepacked items of food”.
Clause 5.6 of the lease was a long clause, of which the centrally relevant part was as follows:
Notwithstanding anything herein contained, the lessee shall not be entitled to raise any objection in respect of the construction, working, or carrying on by the company of its present or any future undertaking or works, or any part thereof, or anything arising therefrom in respect of any buildings, erections, or works, which now or may be built, erected, or constructed by the company over, under, adjoining, or near to the demise premises, or the construction, erection, or use thereof, respectively, and the company shall not be responsible to the lessee either under these present or under any public or private statute or at common law for any damage, injury, annoyance or inconvenience, howsoever caused, which may arise in consequence of or in relation to the said buildings, erections, or works, or the working or carrying on by the company of its present or any future undertaking of works.
Finally, I should refer to clause 5.12(b), which was in these terms:
If the station or any part thereof shall be closed and/or the exit gate of the station shall be locked, therefore preventing access to the demise premises for a full day as a result of staff shortages, strikes, or fire hazards, then the lessee will be entitled to rent abatement on a daily period for the period that access to the demise premises is prevented.
The plan showed the entrance, with the word “In” with an arrow, and at the exit, pretty well opposite the kiosk, the word “Out”, also with an arrow. The three UTS gates in the exit were shown on the plan, with arrows indicating that they were to be exits. Two of the five UTS gates in the entrance were shown as entrances by arrows. The other three gates were shown as entrances or exits by double arrows. The four lifts were shown with the arrows suggesting the northern gates were the entrance, and the southern gates were the exit.
Mr Harrison, for LUL, primarily relies upon clause 5.6 as being the term that justifies LUL doing that which they did. I do not consider that argument is well-founded. Understandably, he concentrates on the words “in carrying on by the company of its present… undertaking”. In my judgment, those words do not give LUL what amounts to carte blanche to carry on or manage its undertaking in any way it likes, irrespective of the damage it may or will cause to the business carried on at the kiosk in accordance with clause 3.15 of the lease.
First, it would mean that, carried to its logical conclusion, the claimants would have no complaint if LUL decided to close the access to the exit altogether, or, indeed, if it decided to close the Bostwick gates at the exit permanently. In my judgment, that cannot have been envisaged by the parties. Indeed, it would be repugnant to the whole grant. However, it is hard to identify the dividing line between reducing the opening hours to the extent to which they were reduced and stopping them altogether. If Mr Harrision is right about the proper construction of the clause, then it would cut across Hart J’s “irreducible minimum”, and the clause would be invalid.
Second, it seems to me that a provision such as clause 5.6 has to be interpreted both in a common-sense way and relatively strictly, albeit not unreasonably so. Common sense applies because the lease is a practical document, while the clause indicates that the interests and requirements and duties of LUL have to be given maximum flexibility, this has to be consistent with the interests of the tenant, who was granted rights under the lease. A relatively strict approach to interpretation is appropriate because the clause’s purpose is to cut down a right granted.
Third, as a matter of language, the clause does not refer to the way in which the station is operated, let alone changes in the way it is operated, merely to the carrying on of LUL’s undertaking. In other words, the primary concern of the clause is to ensure that the actual carrying on of LUL’s undertaking at the station, and, indeed, the existence of that undertaking, cannot be objected to. It therefore follows that anything that is inevitably involved in the carrying on of that undertaking cannot be objected to either. But the clause goes no further than that.
I believe that that view is supported by the reference to building works. The actual building works cannot be objected to as such. However, if they are carried on in a way that is not an inevitable consequence of their existence, and the way in which they are carried on substantially interferes with the business carried on by the claimant at the kiosk, then it seems to me that it could represent derogation from grant.
Fourth, I consider that one can derive support for this view from other provisions in the lease. If the exit gates are closed, or, indeed, if the whole station is closed for certain specified reasons, all of which are effectively beyond LUL’s control, the claimants are entitled to a rebate of rent: see clause 6.12(b). I consider that it would scarcely be consistent with that provision that there should be no right in the claimant to either a rent rebate or damages, if the closure of the exit was due to LUL’s choice. Over and above this, it seems to me that the reservation would be unnecessary if the construction of clause 5.6 urged by Mr Harrison is correct.
I also note that clause 6.12(b) refers not merely to the station, but also to “any part thereof” being closed. It seems to me that, by contrast, the reservation is concerned with the whole station, and nothing less than the whole station, being closed. It would be odd if LUL had, in addition to an express right to close the station premises, an unfettered implied right to close the exit. One can well see how a tenant taking a lease of the kiosk may have been prepared to risk the possibility of the
Finally, there is the plan. Mr Harrison relies upon the double arrows in the three UTS gates in the exit as indicating that the entrance might be used as an exit. I do not think that that takes matters much further. Indeed, if anything, I think that the plan helps the claimant. One of the UTS gates at the entrance was required by safety regulations to be available for passengers leaving the station. Therefore, the fact that one of those gates at the entrance could be used as a means of egress was no indication that the exit would be closed. The three gates capable of being used as entrances or exits would be entirely consistent with LUL retaining an option as to which of the three gates to use as a safety exit. It also would have been sensible because there was always a risk of one, or even two, of the UTS gates failing, as they are electronically controlled; any sensible person in LUL’s position, being required to provide one of the five gates in the entrance as an exit, would have ensured that more than one of them was capable of use for that purpose.
To my mind, anyone looking at the plan to see how the station functioned would have been more likely to have concluded that the entrance was the means of access when the station was open and that the exit was the means of egress when the station was open. That is supported by the arrows, by the unqualified description of “In” and “Out”, and by the arrows showing exits from and entrances to the lifts.
Surrounding circumstances and functions of the station in 1990 to 1991
I turn then to the surrounding circumstances and the position on the ground when the lease was granted. The grant of the lease of the kiosk, and, indeed, of the bureau, arose out of the compulsory purchase by LUL of a property close to the station, at 175 Tottenham Court Road, of which Seven Day Change Ltd was the tenant. In return for not opposing the compulsory purchase order, the claimants asked LUL to grant them the leases of the kiosk and the bureau, and LUL agreed. The negotiations for the leases continued over more than two years, and were conducted through Rapleys, surveyors, and Freeman Box & Co, solicitors, for the claimants, and Mr Major of LUL’s property department, and Mr Ian King, the then solicitor to LUL.
In terms of the evidence of subjective intention, Mr Platt was clear in his evidence that he believed that the exit and the entrance were each intended to function as such virtually the whole time the station was open. He said if he had thought that the exit would be shut for a substantial part of each weekday, the claimants would not have taken the lease in the first place. Mr Major also said that he believed that the exit would function as an exit for the whole of the time that the station was open.
I turn, second, to the correspondence. In a letter of 5 December 1989 to Mr Major, Rapleys said:
I would finally confirm the question raised by my client [ie the claimant] in respect of the apparent closure of one of the entrances to the station on some days…
It is common ground that that was the exit.
and I understand that you will be checking this aspect and reverting back to me as soon as possible.
Mr Major replied a week later:
Finally, I can confirm that to my knowledge Goodge Street Station is open on Sunday, and should remain so.
If he had understood that the exit was not functioning as such on some days, or, indeed, outside rush hours, I consider that Mr Major would have mentioned it. Indeed, if that was what had been understood by Rapleys, it would have been mentioned by them, given the fact that both Mr Major and Mr Platt appreciated that the kiosk’s trade would be effectively entirely dependent upon passengers leaving the station through the exit. I do not think that, in that exchange, one can take the parties as referring to the Bostwick gates, given the evidence on this issue, although it is fair to say that the correspondence could have been more clearly expressed.
The subsequent correspondence shows that Mr Platt continued to be concerned about the exit. In a letter of 20 March 1990 Rapleys wrote to Mr Major about:
the apparent closure of the station at various times, and in particular my client has noticed that the main exit appears to be closed every Sunday. I note that after your initial enquiries you believe that this is a temporary state of affairs, but I am sure you will appreciate that such closures, whether they be on a Sunday or throughout the week, will cause considerable disruption to my client’s business, and effectively he will be unable to trade.
The letter went on to ask for a clause providing for a rebate to the claimant if the exit were closed “as a result of any abnormal reasons such as staff shortages, strikes, fire hazards, etc”. The reply from Mr Major on 2 April 1990 was to this effect:
The station manager has advised me that there have been works going on to this station, which is why it has been closed on Sunday. However, these works are to be completed within the next week, and the station will then be open seven days a week.
The issue was then raised between solicitors. Mr King wrote to Freeman Box:
The Commercial Property Manager –– [Mr Major] –– has been advised by the station master… that the station is generally open on Sundays, and that in fact has only been closed for one Sunday in the last 18 months. The commercial property manager can only surmise, therefore, that as a result that the volume of passengers is much reduced on a Sunday, only one of the entrances to the station is open, which is sufficient to allow comfortable entry and exit from the station.
On 2 November Mr King wrote, referring to the fact that Mr Major had “discussed this question direct with your clients’ surveyor”, and went on to say:
He is going to discuss the question of the closure of the exit gate with the group station manager tomorrow, and hopefully some internal arrangement can be arrived whereby the exit gate will not be closed on Sunday.
Third, there is the evidence of Mr Platt that he had a meeting with Mr Major prior to the grant of the lease, when Mr Major explained how the station would operate. Mr Platt said that during the meeting he was told that the passengers would enter the lifts from the entrance and would leave the lifts through the exit. Although Mr Major did not remember that conversation, I have reached the conclusion that it did take place. It is fair to say that I thought Mr Platt only a moderately reliable witness, in that his memory was not very good and that I think he persuaded himself that some facts were rather more favourable to the claimants’ case than they really were. However, I do not think that he was a dishonest witness, and I am of the view that he is very unlikely to have lied about the meeting. While it is possible that he persuaded himself that it took place when it did not do so, I am bound to say that I think it is unlikely that his self-persuasion would have gone that far.
Mr Major was a good witness, but his evidence did not amount to denying the existence of the meeting. It was merely that he could not recall it. It is clear from his evidence and from the correspondence, that he attended at least one relevant meeting, albeit there is no reference in the correspondence as to whether Mr Platt was there also. In my view, it seems to me more likely than not that there was such a meeting at the station, and that Mr Platt was there. I also believe that, given Mr Major’s evidence, it is not merely possible but likely that he would have discussed the running of the station, substantially in the terms that Mr Platt said he did.
Fourth, I turn to the position on the ground. Mr Fillick, the group station manager of certain LUL stations, including the station, from June 1992 onwards, said that while he was the group station manager the exit was open for about two-and-a-half hours in the morning and two-and-a-half hours in the evening, both during rush hour, from about 7.30-10am and about 4-6.30pm. That evidence was confirmed by Mr Stewart Collins, the duty station manager, again responsible for
There was no direct evidence from LUL as to the position between 1987 and 1992, but there is obvious force in the notion that, if I accept the Messrs Collins’s and Fillick’s evidence, the exit was likely to be open and shut during the same periods between 1987 and 1992, as it had been between 1979 and 1987, and from 1992 onwards, according to this evidence.
The two men were honest witnesses, and plainly competent at their jobs. They were able to point to at least two specific recorded instances when the exit was open in the afternoon rush hour after 1992. That is important, because it is the claimants’ case that it was not so open. It is also right to say that they each recollected specific occasions, albeit they could not be precise as to the date, when the exit was open after 1992 in the afternoons.
However, there are reasons for doubting the accuracy of their evidence. First, as I have said, their evidence did not relate to the centrally relevant period for deciding the extent of the grant and the contemplation of the parties, namely, 1989 to 1991, when the lease was granted. Second, they were not directly involved with the running of the station on a day to day basis, and they would have been unlikely specifically to check the exit at any particular time. Third, between July and October 1991, the UTS Exit gates were described in the station logbook as “powered down”, in other words as not functioning, for reasons normally due to staff shortages, on six different days, at times when one would have expected them to be powered down, on the evidence of Mr Fillick and Mr Collins, namely in the middle of the day. Even in July 1993 the logbook records the exit gates as being closed during the middle of the day, for similar reasons, on two occasions. It is clear that the logbooks are, not surprisingly, incomplete, in that they do not record everything which occurred at the station. But to my mind it is very difficult to reconcile those records with the exit not being open, for instance in 1991, in particular during the day, if the gates were intended not to be functioning during the day.
Fourth, there are photographs that show that, even in 1994, during the middle of the day when the exit was not functioning, consistently with their evidence, and, indeed, with the evidence of the claimants, the UTS gates should have been open for safety, and should not have been closed, as the photographs show. This is of indirect significance, because it emphasises, literally in a snapshot way (albeit on one occasion), that the exit was not functioning, as upon the evidence of Mr Fillick and Mr Collins, it should have been and was functioning.
Fifth, Mr and Mrs Platt, both of whom were involved with the running of the kiosk, (although in a directorial capacity and not on a day-to-day basis), also gave relevant evidence. They said that when they inspected the station for the purpose of seeing how the kiosk could be expected to function, and when they employed people to take pedestrian counts, the exit appeared to be open for the whole day. To some extent that is inference, in the sense that Mr Platt was clear in his evidence that he would not have been prepared to take a lease of the kiosk if the exit had not been functioning all the time during the day, at least during weekdays. That is evidence that seems to me to be supported by the correspondence to which I have referred, and, indeed, by Mr Major’s testimony, albeit indirectly.
On the other hand, this evidence has to be judged against the other evidence of Mr and Mrs Platt, supported by Mrs Adalie Ali, who ran the bureau from the time it was opened until 1999, but who also was concerned on a day-to-day basis with the kiosk. This evidence was to the effect that the exit was never open during the afternoon, even during the afternoon rush hour, from the time the kiosk was open.
The state of the evidence as to the position on the ground, in relation to the questions of the extent of the grant between 1989 and 1991, and for the purpose of assessing the issue of breach after 1991, is thus in an unsatisfactory state. I consider that each of the witnesses were doing their best to help, but more than 10 years have passed and memories fade. Mr Fillick and Mr Collins did not concentrate upon the functioning of the exit, and, to an extent, they have an obvious interest in recollecting and persuading themselves that the station functioned as it ought to have done. Mr and Mrs Platt, and, indeed, Mrs Ali, have, to my mind, persuaded themselves of the fact that the exit was never open after the lease was granted during the afternoon. Therefore, I must approach their evidence with a degree of caution. However, it is fair to say, as I have mentioned, that their evidence is confirmed by the correspondence, at least to an extent.
I have reached the conclusion that, around 1991, when the lease was being negotiated and at the time the lease was granted, the exit opened in a somewhat haphazard way. I am satisfied that sometimes it was open virtually the whole of the day, and, on other occasions, it was open only during the rush hour. It seems to me that for a significant period it would have been open during the whole day, and that is what Mr and Mrs Platt saw prior to taking the lease. Mr Fillick and Mr Collins described the position as it ought to have been from LUL’s operational point of view, but they were not able to say in terms directly from their own knowledge what happened in the period 1989 to 1991.
I also bear in mind that, around that time, the station was being redeveloped and altered. The installation of UTS gates and the compulsory purchase of Seven Days’ other premises in Tottenham Court Road were part of that redevelopment. That would, I suspect, have interfered with the smooth running of the station.
I think that Mr and Mrs Platt would have noticed if the exit had been closed for a substantial portion each week day when they inspected the station. It is, to my mind, inconceivable that it would not have been referred to in the correspondence. But I do accept that upon occasions during the day, possibly for long periods, the exit would have been closed. Although not directly relevant to the question of the extent of the grant, it is right to say that, after 1991, the exit was, I think, always open in the morning rush hours –– that is clear from the evidence. So far as the evening rush hours are concerned, I believe that there was a somewhat haphazard approach to its opening, depending upon the availability of manpower and, possibly, the flow of passengers. In other words, I think that the truth, from 1991 onwards, as to the use of the exit lies somewhere between what I was told by the claimants and what I was told by LUL.
Having considered the relevant factors, what was in the parties’ minds, what was said in correspondence, what was said at the meeting, and the position on the ground, where does this lead so far as Mr Harrison’s second and third points are concerned?
The position on the ground, so far as the closing of the exit is concerned, was erratic. That could be said to assist LUL in that it shows that the claimants took the risk that the exit might continue to be operated in that way, or in virtually any way. Further, the fact that, on some days prior to the grant of the lease, the exit was operated as it came to be operated on the great majority of days after the grant of the lease, ie open either during morning rush hours only, or during morning and evening rush hours, could be said to show that there was no change to the status quo following the grant of the lease. That would plainly be a powerful point in favour of that state of affairs not being derogation from grant.
However, I have reached the conclusion that the surrounding circumstances do not assist LUL. One is primarily concerned with what was contemplated by the parties at the date of the grant of the lease so far as what would thereafter occur on the adjoining land, and not so much with what was actually occurring on the adjoining land at that time, although, in most cases, the latter will govern the former. Further, what is of central relevance is not so much what was locked in the minds of certain LUL personnel, or, indeed, in the minds of the claimants’ personnel, but what actually passed between them. The meeting that Mr Platt recollected and that Mr Major did not, indicates that each of the principals in the negotiations not merely contemplated, but communicated their contemplation, that the exit would be part of the station operation while the station was open. This was the natural inference from what was said by Mr Major to Mr Platt, especially when one takes into account that both he and Mr Platt considered that the exit being fully operational was essential to the satisfactory running of the business at the kiosk.
The correspondence is at times unhappily worded; I suspect that this is primarily because the solicitors concerned may not have inspected the station when negotiating the lease. However, I think that the concern that was expressed about the close of the exit on Sundays, ie closure of the exit during a non-working day, demonstrates that the parties primarily responsible for the negotiation, (whether communicating directly or through surveyors or solicitors), intended and expected that the station, and in particular the exit, would be open during the whole of weekdays. It would be extraordinary, in the light of the evidence I have heard, for the parties to be discussing a concern about the exit being closed on a Sunday if they thought that there was any possibility of the exit being closed during the weekdays, and, in particular, any possibility of it being closed during afternoon rush-hour periods.
Third, when considering the position on the ground, one also has to bear in mind that the station was in the process of being redeveloped to an extent, or had been redeveloped, as LUL obviously knew, because they were responsible for the redevelopment, and as the claimants knew, partly because they visited the site and partly because it was the cause of the compulsory purchase order of 75 Tottenham Court Road. These works included redesign of the entrance and the exit, including the installation of the UTS gates. I have not had detailed evidence as to what work was done when, but it seems to me that where the property concerned is being redeveloped or altered to some extent, particularly when the alterations are concerned with its functioning, then what was going on prior to the alterations is of rather less assistance, when considering the contemplation of the parties, than where there is no redevelopment contemplated going on or just completed.
Accordingly, I consider that it was contemplated by the parties that the exit would function as such during the time the station was open (subject to the possibility of it being shut in the evenings and at weekends). For the reasons I have already given, I think that my conclusion is consistent with the lease plan, albeit that is a relatively small point.
Conclusion on derogation from grant
It therefore follows that, in my view, the closure of the exit during the currency of the lease did amount to derogation from grant on the part of LUL. Before turning to damages, I should deal with two points. First, LUL rely upon the fact that there were no complaints by the claimants of the closure of the exit; this is understandably said to cast light upon what the parties must have intended at the date of the grant of the lease. I think there are two answers to that. First, I consider that there were complaints by the claimants to LUL staff at the station, albeit they were not recorded. Indeed, as Mr Major very fairly accepted, he received complaints from Mrs Platt on the telephone. Second, although the complaints were not pushed for as long or as hard as one might have expected, it appears that this was because the claimants were advised by their solicitors at the time that there was no legal basis for their complaints. That is supported by the fact that these proceedings were brought after the claimants had changed solicitors.
The second matter I should mention is that there was some discussion and evidence about the partial closure of the Bostwick gates when the exit was closed to passengers. I do not think that that takes matters any further in this case. As I have mentioned, the amount of trade that the kiosk would be expected to get, and the amount of trade it actually got, from Tottenham Court Road, rather than from passengers leaving the station, was minimal. Therefore, I think the closure of the Bostwick gates takes matters no further.
Damages: Introductory
There are two primary issues regarding damages. First, the actual loss that the claimants suffered as a result of reduced trade at the kiosk. Second, whether those damages should be reduced or even wiped out by the alleged concomitant extra profit made at the bureau. As to the first point, Mr Platt, who is an accountant by training, has prepared some figures for the trading period, suggesting that the claimants suffered a loss of just over £20,000 for the period from the start of trading to 31 August 1991, and for the subsequent four years to 31 August, some £23,500, £25,800, £28,100 and £24,000, and for the period ending 24 November 1995, £9,045. The claimants contend that these figures represent their damages. First, they say they are entitled to damages representing the whole of this loss, on the basis that they are entitled to elect for damages on a “no-transaction basis”, as opposed to a “successful transaction basis”: see the discussion in Hayes v James & Charles Dodd (a firm) (1990) 2 All ER 815. Alternatively, they say that even on a successful transaction basis, they are entitled to recover the whole of their loss, because the business at the kiosk would at least have broken even if there had been no derogation. The claimants base this latter contention upon Mr Platt’s assessment in the period leading up to the time the lease was taken, which, they say, can be relied upon, because Mr Platt had been successful in all his similar enterprises in the past.
LUL contends that it is not open to the claimants to rely upon a no-transaction basis, and it further contends that, based upon figures it has produced, including, in particular, a record of the number of people leaving the station on certain days, the loss is very much less than that for which the claimants allege. The figure put forward by LUL is £5,277. LUL also contends, over and above this, that the loss suffered by the claimants in the kiosk was more than compensated for by the extra profit they made at the bureau. This is on the basis that, although it is accepted that the claimants lost potential customers in the kiosk because many passengers who would have left the station through the exit in fact left through the entrance, the bureau gained the benefit of all those potential customers that it would otherwise not have had. The claimants deny that LUL is entitled to take into account any extra profit that they might have made at the bureau as a matter of principle, and, in particular, because the claimants are claiming damages on a no-transaction basis.
I propose to consider first the legitimacy of setting off the concomitant profits at the bureau against any loss of profit suffered at the kiosk. I shall then turn to consider whether it is open to the claimants to base their claim upon a no-transaction basis, and I will then turn to the figures.
Damages: set-off
It is well established that if a defendant has breached his contract with a claimant, the claimant is entitled to damages based upon the principle that the amount of damages is meant to put him back, so far as money can, in the position in which he would have been had no breach of contract occurred. Thus, if there had been no breach under the lease, in the sense that the exit had not been closed, the kiosk would have had more potential passing trade because people who were leaving the station when the exit was closed would have gone through the exit, but did not do so. However, at least in terms of passing trade, what the claimants lost as tenants of the kiosk, they gained as tenants of the bureau. Accordingly, I think that subject to there being any principle of law or any authority against the proposition, at least if the claimants’ claim were based upon loss of profit at the kiosk, LUL would be entitled to require any extra profit the claimants made at the bureau to be credited against that loss of profit. The fact that the set-off, if I may call it that, being relied upon is money received by the tenants acting in a different capacity, namely as tenants of the bureau, does not seem to me to call that conclusion into question. The claimants are the claimants; they are the same people. The fact that a different result might have been obtained if the lease of the bureau had been taken in the name of another company seems to me to be irrelevant. One is concerned with the facts as they are, not with the facts as they might have been.
Miss Catherine Taskis, who appears on behalf of the claimants, relies upon a passage in Chitty on Contracts 28th Edition para 27.095:
Advantages gained by the claimant from wholly independent transactions, especially those entered into before the defendant’s breach of contract, as for example, a sum due under an insurance policy, cannot be relied on in mitigation of loss arising from the defendant’s breach.
The passage goes on to refer to Haviland v Long [1952] 2 QB 80 as an example.
It is to be noted that this is under the heading of Mitigation of damage. As was said by Mustill LJ in Hussey v Eels [1990] 2 QB 227* at p232D-E, although an argument based upon mitigation is very similar to an argument based upon the claimants’ loss viewed as a whole, the two are different concepts and involve different principles. Further, it seems to me that the decision in Haviland v Long is not really in point. That case was concerned with a tenant who was in breach of a repairing covenant at the end of his lease. Prior to the end of the lease, the landlord had entered into an agreement with a third party to take a new lease of the premises, the third party agreeing to carry out the necessary repairs, provided the landlord accounted for an appropriate sum out of the damages he obtained from the tenant for the disrepair. The court held that in relation to a claim by the landlord against the tenant, the tenant could not rely upon the new contract, because of the principle of res inter alios acta. It seems to me that the essential point in that case was that there was a separate contract between the landlord and a third party, which had nothing to do with the contract between the landlord and the tenant, ie the lease, and, further, it was obvious that the incoming tenant would have given less to the landlord for the premises out of repair than premises in repair.
* Editor’s note: Also reported at [1990] 1 EGLR 215; [1990] 19 EG 77
Miss Taskis also relies upon Hussey v Eels itself. In that case, owing to a misrepresentation by the vendor, a purchaser overpaid for a house. The purchaser was held entitled to recover the amount by which it had overpaid, notwithstanding the vendor’s argument that the purchaser had suffered no loss, because he subsequently sold the house at a profit to a developer. The basis for rejecting that argument is to be found at the end of the judgment of Mustill LJ. He said at p241B:
Ultimately, as with so many disputes about damage, the issue is primarily one of fact. Did the negligence which caused the damage also cause the profit –– if profit there was? I do not think so. It is true that in one sense there was a causal link between the inducement of the purchase by misrepresentation and the sale two-and-a-half years later, and the sale represented a choice of one of the options with which the plaintiffs had been presented by the defendants’ wrongful act… It seems to me that when the plaintiffs unlocked the development value of their land they did so for their own benefit, and not as part of the continuous transaction of which the purchase of the land and bungalow was the inception.
As I see it, in this case, the very event that foreseeably caused damage to the claimant in the kiosk potentially increased the claimants’ profits at the bureau. The closure of the exit meant that the passing trade was lost by the kiosk and was gained by the bureau. Further, the contracts under which the claimants respectively lost and gained were entered into on the same day between the same parties and were part of the same overall transaction, namely relocating the claimants’ business from 75 Tottenham Court Road as a result of the compulsory purchase order.
Damage on a no-transaction basis
The second question is whether the claimants are entitled to claim on a no-transaction basis. If they are, then this would avoid their having to face the contention that on their primary measure of damages they may have to suffer a discount because they would have suffered a loss anyway, and it would also give them a different argument for contending that any concomitant profit made at the bureau should not be taken into account.
Miss Taskis puts the claimants’ case as follows. The claimants are claiming not to be put in the position they would have been had their contract been performed, but to be put into the position they would have been in had the contract never been made. In relation to such a claim, expenses incurred in part performance of the bargain are properly recoverable, as they would not have been expended had the contract never been made. Thus, in McGregor on Damages (16th ed) there is at para 49:
[A claimant may elect to claim compensation on this measure, and may do so even where no bargain had in fact been lost –– see Lloyd v Stanbury (1971) 1 WLR 535,] where… [a claimant] who had contracted to purchase a farm, [but could show no loss of bargain was allowed to recover] conveyancing expenses… [and the] costs of removing… .furniture to the farm.
In my judgment, this argument runs into difficulties, both on the pleadings and as a matter of law.
So far as the pleadings are concerned, having pleaded the alleged derogation from grant and the consequences, the claimants then say (so far as relevant for present purposes):
Seven Days carried on the trade of a sweet kiosk in the kiosk pursuant to the kiosk lease. As a consequence of the [derogation from grant complained of], that business suffered trading losses over the period of the kiosk lease amounting to £130,582.
There is no allegation anywhere in the statement of claim that the claimant would never have taken the lease if they had known the true position, or that there had been a misrepresentation as to what the position was, or that there had been a repudiatory breach. In my view, a sensible reading of the pleadings is that the claim was not based on a no-transaction basis. Also, so far as the claimants’ witness statements are concerned, there is no suggestion that that was the basis of the claim. The only way in which it could be presented was upon the evidence given by Mr Platt outside his witness statement, largely relying upon a question, perhaps incautiously put by me, namely that he would not have taken the lease if he had known that the exit would be closed for most of the time that the station was open.
Quite apart from this, it seems to me that the cases referred to, at least in the body of the text in para 47, and, indeed, in paras 48 to 52, of McGregor, involve the defendant refusing or being unable to perform substantially the whole of his obligations, and/or the claimants having not performed their part of the contract. Lloyd v Stanbury* is just such an example.
* Editor’s note: Reported at [1971] 1 WLR 535
I should also refer to the discussion on the no-transaction basis in Chitty on Contracts (28th ed) vol 1 para 27.065:
In a limited number of situations, where the claimant claims that he would not have entered into a particular transaction but for the defendant’s negligent advice (or failure to advise), his damages have been assessed at the amount needed to restore him to the position he would have been in if he had never entered into the transaction.
One notes the limited types of case mentioned in that passage, and that the present instance is not such a case. Later in the same paragraph:
It is clearly established that damages may be assessed on the “no transaction” basis when the defendant fraudulently induced the claimant to enter into the transaction, and it is submitted that the same basis may be appropriate where the breach of contract destroys the whole purpose of the transaction into which the claimant entered in reliance on the defendant’s advice.
Again, there is no allegation of fraud here, nor upon the evidence, to my mind, could there possibly be. Although I accept that the closure of the exit for much of the day did cause substantial damage to the business carried on at the kiosk, I do not think one can possibly say, particularly bearing in mind the length of time for which the business was actually carried on, that the whole purpose of the transaction was thereby destroyed.
I would also refer to what is said in para 27.059 of Chitty:
If the claimant fully performed his side of the contract, he would not be entitled to recover from the defendant more than the value of the latter’s performance… [It is the gross return such as the price to which the claimant was entitled under the contract.]
Further, I think Mr Harrison is right to say that Miss Taskis’s argument runs into difficulties in the light of what was said in the
It is not the function of the courts where there is a breach of contract, knowingly, as this would be the case, to put a plaintiff in a better financial position than if the contract had been properly performed.
Second, at p1468D:
I do not consider that a plaintiff is entitled in an action for damages for breach of contract, to ask to be put in the position in which he would have been if the contract had never been made.
Those observations must, of course, be read as subject to the exceptions mentioned in McGregor and Chitty, from which I have quoted, but, as I have mentioned, none of them apply here.
Damages: quantum
I am not by any means convinced that, had the exit gates been open the whole time, as they should have been, the kiosk would have been profitable. Mr Platt’s assessment, without seeing his written assumptions because they have been mislaid or destroyed, seems to me to be a very shaky basis upon which to rest such an argument, but I accept that in the absence of contrary evidence, the court would have to do the best that it could upon the basis of what he says.
LUL have come up with a much more mathematical and apparently scientific assessment to arrive at their much smaller loss, but I think it is riddled with inaccuracies, and, in saying that, I mean no criticism of LUL or anyone acting for it. They are inaccuracies that are quite understandable, and most of them were only shown to be inaccuracies during the course of this hearing.
First, I do not think the exit was open for three hours each morning, during rush hour. I think it was more like two-and-a-half hours. Second, I do not think that the exit was open during all evening rush hours, as seems to be assumed. I would estimate about half the evening rush hours. Third, even when it was open during evening rush hour, it would have been for less than three hours. It would have been between two or two-and-a-half hours. Fourth, a higher proportion of passengers would have gone into the kiosk between 10am and 4pm than during rush hours, because they would have been more likely to buy food during lunchtime and mid-morning than during rush hours, when they would have been in a hurry to get to and from work. Fifth, the amount spent per customer and the profit margin per customer would, in my judgment, have been likely to be higher, possibly significantly higher, between 10am and 4pm, because people would have been more likely to be purchasing sandwiches and cold drinks, which cost more and have higher margins, than during the rush hour.
Sixth, there would have been no significant income and contribution to profits from passing trade along Tottenham Court Road, as seems to have been assumed. Seventh, the extra passing trade during the time the exit was closed could have itself generated further business. Eighth, the calculations are based upon a seven-day week rather than a five-day week. Finally, there is at least one arithmetical mistake that, bearing in mind the detail of the calculations, is scarcely surprising.
In those circumstances, unless the parties are prepared at this stage to agree that I assess damages, I would be uncomfortable, in the light of that evidence, about so doing.
That point is reinforced when one turns to the bureau and the appropriate level of set-off. I have had no hard figures in relation to the business at the bureau. Mr Platt said that one out of a thousand people entering the station used the bureau, and Mrs Platt’s evidence suggested that the average transaction produced about £7.50 profit. However, Mr Platt’s figure of one in a thousand was plucked out of the air, to emphasise that there were not many people who used the bureau, and Mrs Platt’s figure also appeared to me to have been plucked out of the air. The calculations carried out by Mr Harrison based upon these figures did suggest that everything that the claimants lost on the kiosk roundabout they gained on the bureau swings. I think that, upon that aspect also, there were a number of assumptions that were questionable, including similar assumptions that I have already criticised in relation to the assessment of damages on the kiosk .
The claimants are claiming £130,000. It is clear, to my mind, that that figure is likely to be reduced significantly. Furthermore, it is right to record that the claimants were seeking to amend, to put in a case based upon profits they would have made, which could have significantly added to their damages if I had found in their favour. In fact, in the light of my findings so far, I think it is very likely that I would have rejected such a claim on the evidence. The reason I mention it is that Miss Taskis elected not to proceed with that claim, with a view to having the whole matter determined as quickly as possible. That seems sensible, not least from the point of view of costs. The amount at stake is not enormous. Any sum I award today would be certain to be in five figures.
However, I am not happy about determining damages at this stage. If I am asked to do so, I will, particularly if asked by both parties. I leave it to the parties to make submissions as to how matters should proceed on damages. It may be, in the light of the fact that they have had no warning of what I was going to say, that the parties would want time to consider the appropriate course. If, for instance, they were agreed that I should do my best, as I am prepared to do, on the figures, I will provide them with my assessment of the damages based upon specific losses for each year, and of the effect of the set-off. Alternatively, I will give directions, if necessary after argument, as to how the assessment should proceed.
Arrears of rent
Finally, I should deal with the counterclaim for arrears of rent. LUL contend that there are arrears of some £5,000, representing the last payment of rent due under the lease. This is supported by their records. It is supported by the fact that there were apparently communications shortly after the lease expired with LUL’s solicitors. It is also supported by the fact, in a negative way, that the claimants are in no position to deny the debt from their records. On the other hand, the claimants understandably say that if there had been such a claim they would have been notified about it, particularly as LUL was in the habit of acting pretty promptly and aggressively in claiming the rent, if it was unpaid.
The evidence is not entirely satisfactory, but I am of the view that this rent was due. I have no reason to doubt LUL’s records, which were fairly full and were not open to criticism in any other way. It is fairly easy to understand why LUL did not proceed, given the intimation of the claimants’ concerns, which have now matured into this action.
Accordingly, that £5,000, together with interest, will have to be set off against damages that are assessed. Indeed, if LUL persuade the court that the damages are less than £5,000, then that would mean an order going the other way.
