Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
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MR JUSTICE JACK
Mr Justice Jack :
Introduction
1. In a judgment delivered on 30 October 2008 I found that prior to the three defendants acquiring lodges on the caravan park run by BHL, the first claimant, they had been made promises on behalf of BHL as to the leases that they would have. I found that among other promises they had been promised that they could occupy their lodges during the day in the closed period, though they could not sleep in them at night. I held that BHL, the long lease holder, was to be treated as a constructive trustee of beneficial interests in relation to each defendant’s plot on terms reflecting the promises which had been made; that is, the principles relating to promissory estoppel, or proprietary estoppel – as it is also called, applied with that outcome. It followed that the defendants were entitled to appropriate equitable relief against BHL. In a less complex situation that relief would have been an order that BHL execute leases which reflected its promises. There is now no problem as to that save in respect of the promise I have referred to. But as to that, any occupation of the lodges during the closed period is a breach of the planning permission allowing the site to be used as caravan park, is a breach of the site licence and is a breach of BHL’s lease from Brightlingsea Town Council. It would make BHL liable to criminal prosecution and would also put at risk BHL’s use of the site and with it the defendants’ use of their lodges. The alternative to granting leases which permitted daytime occupation in the closed period is to provide the defendants with monetary compensation. What that compensation might be is not straightforward, and I had not heard full submissions as to the appropriate relief if, as I did, I found in favour of the defendants as to the equity which they claimed. The first defendant, Mrs Morris, had made an application for planning permission, which, if granted, might have led to the disappearance of the problem. I therefore decided that I should defer the decision as to the appropriate relief to be granted to the defendants in satisfaction of their equity. It was ordered on 30 October 2008 that the first and second defendants should issue an application for directions as to the trial of the ‘discretion question’ to be heard at the latest on the first open date in April 2009.
2. I will not otherwise repeat what I set out in my earlier judgment, and for the further background I refer any reader to it. The third defendant was Mr Richard Clark. He died in September 2008. When he bravely gave his evidence the previous July he had been a sick man. His wife, Mrs Patricia Clark, who now uses her maiden name, Robins, has been substituted in his place. The action does not only concern the defendants. For there are a number of other residents at the park who are in similar positions. I refer to the evidence which I summarised in paragraph 29 of my earlier judgment. There are also among those who have lodges or caravans at the park a substantial number who oppose any relaxation of the closed period. Unlike the defendants the majority of lodge owners use them for holiday purposes and have a home elsewhere.
Further events
3. I will next set out the events since my judgment.
4. The planning application which I have mentioned was made on 20 June 2008 and asked for the restriction on daytime use in the closed period to be removed. (This was not the first that had been made. The first was received by TDC on 29 October 2007, and was returned as invalid.) The application of 20 June 2008 was recommended for refusal and was withdrawn in early October 2008 shortly before it was due to be considered. That was apparently because there was no flood risk assessment. On 1 December 2008 a fresh application was made supported by a flood risk assessment. A second application dated 12 December 2008 asked for a variation to permit occupation throughout the year. The applications were refused on 10 March 2009. The grounds of refusal were flood risk, and, as an apparently subsidiary reason, maintaining the holiday character of the park. The Residents Association wanted to appeal against the refusal, but it appears that the agents in whose name the application was made refused to appeal because they were concerned at the risk of an order for costs being made against them. I was told that the flood risk assessment had been heavily criticised.
5. Meanwhile as the 2008/9 closed period approached, in its capacity of housing authority TDC had received 29 approaches for assistance. In an email to Mrs Morris dated 30 November 2008 TDC stated that the park would not be monitored in December 2008, thus saying in effect that no account would be taken of breaches during that month. In a letter dated 16 December TDC stated that enforcement action would be taken early in 2009. Planning contravention notices were served on about 50 units in the park in mid January 2009. Members of the Residents Association had continued to use their lodges during the night in the closed period as well as the day. It has always been accepted that night time use is prohibited: that is what the defendants and other residents were told when they bought their lodges. The Residents Association represents those among the users of the park who want the closed period regime altered. BHL’s solicitors were informed on 29 October 2009 that TDC intended to take action to prevent planning breaches, but was awaiting the outcome of the present hearing before deciding how to proceed.
6. The directions hearing ordered on 30 October 2008 came before me on 29 April 2009. It was ordered that, if the defendants appealed against the refusal of planning permission on 10 March 2009, there should be a stay until the determination of the appeal, and directions were given to take the matter forward if there was no appeal providing for a trial in the Michaelmas term. The object was to get the planning position settled before the further hearing. If planning permission was varied to permit daytime occupation in the closed period, this might well lead to an alteration of the site licence and to an accommodation as to the head lease, and so to the disappearance of the problem. If it was refused, then that would have given the court a firm basis on which to proceed. There was no suggestion at the directions hearing that there was any difficulty in advancing the appeal. It was ordered that Mrs Morris, the first defendant, should copy in the claimants’ solicitors on all correspondence between the agents prosecuting the appeal and TDC. There was no correspondence and so none was provided. Nonetheless the purpose of the order was to keep the claimants informed as to the appeal. It is regrettable that Mrs Morris did not inform BHL’s solicitors that there would be no appeal. They had to wait until the time for appealing had expired. Even then their request for confirmation that no appeal had been made was not answered. What had happened to the appeal was only disclosed following my questions at the present hearing.
7. On 9 June 2009 solicitors for Brightlingsea Town Council wrote to BHL’s solicitors raising the concern that as freeholder the Council could be served with planning enforcement notices and would have to take steps to ensure compliance.
8. On 19 August 2009 Mrs Morris lodged a further application for a variation in the planning permission asking that the closed period should be from 15 January to the end of February in any year. On 21 September 2009 she lodged an application asking for a variation to permit daytime occupation in the closed period. On 3 November TDC wrote to say that the applications contained errors rendering them invalid. It is unfortunate that it took so long for the Council to raise that. By now a decision on the merits of the applications could have been made, or at least should be close to being made. Mrs Morris does not accept the validity of the points belatedly made by the Council. The applications are supported by the same flood risk assessment as was used on the applications of December 2008. It is the aim of Mrs Morris to get a decision on the applications and, if it is adverse, to appeal. The position is now therefore the same as it was at the time of my judgment of 30 October 2008.
9. At a meeting with the TDC in about August 2009 Mrs Morris urged the TDC to serve planning enforcement notices so the residents could appeal against them. In a letter to BHL’s solicitors dated 10 September TDC stated that it intended to issue breach of condition notices under section 187A of the Town & Country Planning Act 1990 on residents who had occupied lodges in the closed period of 2008/9. Breach of a notice is a criminal offence: section 187A(9). It appears, however, that enforcement action has been deferred until the outcome of the present hearing is known.
10. On 7 October 2009 BHL pleaded guilty in the Colchester Magistrates Court to offences relating to breach of the site licence, contrary to section 9(1) of the Caravan Sites & Control of Development Act 1960. The offences related to the occupation of lodges in closed period in early 2009. An absolute discharge was obtained, but an order for costs in the sum of £1,400 was made against the company.
11. On 26 October 2009 solicitors for Brightlingsea served a notice on BHL under section 146 of the Law of Property Act 1925 referring to occupation in the closed period. The letter stated that the breaches were considered to be remediable breaches, and that if BHL failed to remedy them within a reasonable time they would be considered irremediable and a further notice would be served outlining the procedure for forfeiture.
12. On 4 November 2009 the principal solicitor to TDC wrote to the court in connection with the present hearing. The letter referred to the history. It stated that it was likely that any further breaches of the 1960 Act by BHL would be prosecuted. It stated that TDC’s Planning Officers were very unlikely indeed to recommend an amendment to the planning permission, and that they would be seeking authority to enforce the condition, and to prosecute any failure to comply. The letter was copied to the solicitors for BHL. It was copied to Shelter Legal Services acting for the defendants at my request because TDC had had no address for them. I was not addressed as to the status of this letter. It would have been more appropriate for it to have been addressed to the parties so it might be introduced in evidence as they saw fit. The end result would undoubtedly have been the same. Representatives of TDC attended the present hearing.
13. A pre-trial review was due to be held on 29 October. Prior to this a list of issues was served by Mr Tanney on behalf of BHL. It identified two broad issues: whether there should be a money award or whether there should be an order for the grant of a lease with a term permitting occupation during the daytime in the closed period; and how any money award should be assessed. Mr Cottle provided a list of issues on behalf of the defendants. It identified two broad issues: whether there should be a declaration that the defendants were entitled in accordance with the promises which I had found had been made to them; and as to the adequacy of alternate remedies. Neither counsel thought that a review was required in advance of the trial, and with some reluctance I agreed to dispense with it.
14. The next closed period will begin on Tuesday, 1 December 2009 and will continue until Friday 26 February 2010, excluding 10 days over Christmas and the New Year and weekends. Its observance may create problems for TDC’s housing department.
15. In paragraph 38 of my earlier judgment I set out a procedure to deal with the dispute as to what rent could be charged by BHL. I hoped that this would be the subject of agreement once BHL had provided its figures. But that was not to be and the dispute was referred to a master, as I had provided. However that has not progressed to a conclusion as it should have done because the defendants raised issues of principle which it was said I must determine. Agreement on these was reached very shortly before the present hearing, involving, as I understand it, the abandonment by the defendants of their points. Meanwhile substantial rent has been withheld. There must be a strong suspicion that the defendants are seeking to delay.
16. The present hearing was intended to be the hearing at which the rights of the parties would be finally determined. Evidence was to be called on that basis. No adjournment was sought.
The present position of the defendants
17. I will next outline the position of the individual defendants.
18. Mrs Morris purchased her lodge in February 2002. Paragraphs 18 to 22 of my earlier judgment relate to her. Before buying she told Mrs Pollard that she needed to work in the lodge in the closed season during the afternoon. She lives in the lodge with Mr Roberts, her partner, who contributed £11,505 of the purchase price of £47,995. Each found the relevant monies from the available proceeds of their former matrimonial homes. Mrs Morris now runs a business from the lodge comprising a small advertising magazine which is distributed fortnightly free. She had been unemployed between 2005 and 2008. She is now 59. She receives working tax credit and housing benefit. She has no savings of substance. At the previous hearing she offered an undertaking to the court not to occupy her lodge at night during the closed period. During the 2008/9 closed period she occupied a rented house, an old fisherman’s cottage, in Brightlingsea. She had one bedroom and Mr Foster, the second defendant, had the other. The rent was paid by the Residents Association. Her partner slept in the lodge. That was taking a narrow view of the undertaking she had offered. It was her evidence that she would not have bought her lodge if she had been told she could not use it during the day in the closed period. That is not challenged, and it is also accepted in respect of Mr Foster and Mrs Robins: I refer to page 4 of Mr Tanney’s closing submissions. Mrs Morris does not want to leave the park, but said that if she cannot stay there during the day in the closed period she will have to move. She has been offered a bed during the closed period by Mr Eaton who she describes as ‘linked’ to her magazine. But she cannot use his home during the day. So she will need somewhere to pass the day and to work on the magazine.
19. Mr Foster bought his lodge from another owner in November 2004. Paragraph 25 of my earlier judgment relates to him. He paid £73,000 to the previous owner and a commission to BHL. He was told by Ms Pollard’s successor, Mr Myson, that during the closed period he could come back every day provided he slept elsewhere. Prior to the purchase Mr and Mrs Foster were living on a boat, and initially they slept on it in the closed period. Mr Foster receives a pension credit and has no savings. He is 64. He suffers from osteoarthritis and his lodge is adapted to that. During the closed season 2008/9 he shared a house in Brightlingsea with Mrs Morris as I have mentioned. Mrs Foster slept in the lodge. My remarks about Mrs Morris’ undertaking apply also to him. Mr Foster does not wish to leave the park. He has a dog. He and his wife are able to spend the next closed period with his brother in Maldon.
20. Mr Clark acquired his lodge in May 2002 for £60,000. He had been told by Mrs Pollard that during the closed period they could come back during the day. Initially Mr and Mrs Clark went to
The submissions as to the appropriate relief
21. Mr Cottle’s primary submission on behalf of the defendants was that there should be a declaration that the defendants were entitled to a lease reflecting the promises which the court had found had been made. So the lease would include a term prohibiting occupation of their lodges at night during the closed period but not during the day. He submitted that this was the defendants’ right and to do otherwise would be to rewrite the agreement that the parties had made, which the court could not and should not do. He submitted that, if enforcement measures were taken against BHL, it would be for BHL to negotiate with the defendants for a prohibition of daytime use, that is agree with them sums of money in return for which the defendants would accept the prohibition. He submitted that it was inappropriate for the court to award the defendants compensation.
22. Mr Tanney’s submission on behalf of BHL was that the defendants should be entitled to leases reflecting the promises which had been made save for that as to daytime occupation. He submitted that their equity, or equities, in so far as they related to daytime occupation in the closed period should in the particular circumstances be satisfied by the payment of compensation for the non-performance of the promise, and that there should therefore be a prohibition in the leases on daytime occupation during the closed period. The circumstances he relied on were the prohibitions on daytime occupation in the closed period in the planning consent, the site licence, and the head lease, which might result in enforcement proceedings and criminal proceedings against BHL and also against the defendants if the defendants continued to occupy their lodges in the prohibited daytime hours. He submitted that to make a declaration as asked for by Mr Cottle would put BHL at the mercy of the defendants. If the defendants declined to enter into a lease as Mr Tanney submitted was appropriate, that would leave them with the quarterly tenancies referred to in paragraphs 34 to 38 of my earlier judgment. They would have no security of tenure, and it would be open to BHL to terminate the tenancies.
23. There was some discussion as to the route by which compensation might be awarded if it is right to do so. The direct route is to say that in the circumstances it is the appropriate way to satisfy the defendants’ equity in respect of daytime occupation. The other way is to invoke section 50 of the Senior Courts Act 1981, formerly the Supreme Court Act, which section stands in the place of Lord Cairns’ Act. The second route would involve an intermediate step, namely that the defendants were otherwise entitled to specific performance of the promise before going on to say that, in the circumstances, damages under the section should be awarded. Mr Tanney submitted that because the agreement was unenforceable as an agreement by reason of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, specific performance cannot be granted, and so section 50 is not applicable. Although the court often meets an equity arising through proprietary estoppel by order the grant of an interest in the land, that is not strictly specific performance. I do not think that it is necessary or appropriate to consider this as a case under section 50.
The law
24. I was referred to a number of cases for dicta as to how the court should approach the question of how to satisfy an equity. None of them are close to the present with its unusual facts.
25. In Crabb v Arun District Council [1976] Ch 179 the court was concerned with conduct leading a claimant to believe that he would be granted a right of access to certain land. Lord Denning stated at page 189:
“And we have the question: in what way now should the equity be satisfied? Here equity is displayed at its most flexible, … .”
Scarman LJ stated at page 198;
“There being no grant, no enforceable contract, no licence, I would analyse the minimum equity to do justice to the plaintiff as a right either to an easement or to a licence on terms to be agreed.”
26. The decision of the Court of Appeal in Cobbe v Yeoman’s Row Management Limited [2006] 1 WLR 2964 was over-turned by the House of Lords. Their Lordships held that there was no equity favouring the claimant and did not have to consider those parts of the Court of Appeal’s decision which dealt with the question of how any equity should be satisfied. In the Court of Appeal Mummery LJ considered the appropriate monetary award in paragraphs 69 to 95 of his judgment, looking to see what approach best did justice in the circumstances. Dyson LJ stated in paragraph 126:
“But the fundamental question for the court in each case is to decide what relief justice requires to satisfy the equity. Relevant factors include the nature of the expectation created by the defendant’s conduct; the detriment suffered by the claimant in reliance on the defendant’s representations; the degree to which the defendant’s conduct can properly be said to be unconscionable; and the need for some proportionality between the claimant’s expectation and his or her detriment.”
27. In McGuane v Welsh [2008] EWCA Civ 785, [2008] 3 EGLR 45, the defendant had in effect swindled the claimant out of the flat for which he had obtained a long lease as a statutory tenant. Mummery LJ stated in paragraph 39 of the Court of Appeal’s judgments:
“… I think that the appeal succeeds on the ground that the judge should have taken a broader view in deciding the nature and extent of any equity in Mr Welch and how it should be satisfied. He failed to take into account certain aspects of the circumstances that indicate that it was not unconscionable of Mr McGuane to refuse to transfer the lease to Mr Welch.”
Sir Peter Gibson stated in paragraph 57:
“That gave rise to an equity and the question that arose for the judge was what was the minimum equity to do justice. In the type of case where the parties have in effect agreed on a bargain, the court will usually give effect to the parties’ expectation by making an order fulfilling that expectation. However, the remedy remains a flexible one, to be applied by the court looking at all the circumstances of the case in the round.”
28. I was also referred to another line of authorities dealing with when damages are appropriate in lieu of an injunction – the usual situation in which section 50 comes into play, and how the damages or compensation should be assessed. I refer to Shelfer v City of London Electric Lighting Co [1895] 1 Ch 287, Leeds Industrial Cooperative Society v Slack [1924] AC 851, Wrotham Park Estate Co Limited v Parkside Homes Limited [1974] 1 WLR 798, Jaggard v Sawyer [1995] 1 WLR 269 and Regan v Paul Properties DPF No 1 Limited [2007] Ch 135 in particular. These cases cover two matters. The first is when it is appropriate where a legal right is being infringed to make an award of damages instead of granting an injunction to prevent the infringement of the right as well as any past infringement. The damages will be awarded as compensation to cover the future infringement of the right. The second matter is the basis on which the damages should be awarded. As to the first it is established that the award of damages instead of an injunction is exceptional, and that the matters set out by A L Smith LJ in Shelfer are a convenient check-list of the matters to be considered, but that all the circumstances have to be taken into account. As to the second, the measure will usually be the amount which the claimant could reasonably have demanded as the price for waiving the right in question.
29. There is a partial analogy with the present case in that BHL is here asking the court to make an award of damages and not to make an order that BHL grant leases to the defendants on the terms of all the promises made to them. I say a partial analogy because the defendants have not established an infringement of a legal right such as trespass or infringement of a right to light, or a breach of covenant. But in any event those cases were not concerned with the situation where the injunction (or its equivalent here in the form of an order that a lease be granted, or the declaration sought by the defendants) would involve the parties in breaches of planning permission and of the site licence and the criminal law. That is, of course, on the basis that the present situation as to planning permission and the site licence do not change. If those problems disappeared, and the problem over the head lease was in consequence resolved, then BHL would not require the defendants not to occupy their lodges in the closed period and there would be no issue to be determined. But if they are not resolved in addition to criminal penalties there is the risk that the park might be closed and the head lease lost, which would defeat the intentions of the defendants as well as BHL. So I do not consider that the principles most recently considered in Regan as to when damages should be awarded in lieu of an injunction are applicable.
30. Mr Cottle cited Financial Services Authority v Rourke, Neuberger J, 19 October 2001 as authority as to when a declaration should be made. There the defendant had accepted deposits without being authorised by the claimant authority and in breach of an injunction. It was held that a declaration that the facts constituted an offence under the Banking Act 1987 was in the public interest. The court’s power to make a declaration involves an exercise of the court’s discretion. I accept that a declaration will often be made where it will serve a useful purpose as between the parties. If a declaration is otherwise appropriate, that would be the case here. I do not think that Rourke’s case assists.
31. Mr Cottle also relied on Attorney General v Blake [2001] 1 AC 268. The appeal concerned the Attorney General’s claim to the monies received by the defendant, George Blake, a member of the Secret Intelligence Service who had spied for the
Discussion and further matters
32. I will next rehearse how the situation originated and how ‘unconscionable’ the conduct of BHL has been. In paragraph 7 of my earlier judgment I set out how it came about that there were no enforceable long term tenancies, or licences, containing the rights of the parties. That was the fault of Mr Hammerton. His conduct was thoroughly unprofessional. It was not however dishonest. I summarised in paragraph 30 of my earlier judgment the evidence of Mrs Pollard and Mr Myson as to what they said to purchasers about use in the closed period. I did not accept that evidence but found that they had made the promises they were alleged to have made. BHL had relied on their evidence. The company is not to be criticised for that. The company accepted that Mrs Morris and Mr Myson had authority on behalf of the company to make such promises (if made), and accepted that it was bound by the promises they had made. In paragraph 30 I also found that the probability was that Mr Hammerton was aware that the lodges were being used in a way that went at least some way beyond his stated policy of turning a blind eye to occasional daytime visits in the closed period. So there is fault on the side of BHL and that fault has led to the current situation. But I do not consider that Mr Hammerton and BHL have behaved in a way which is morally reprehensible save in a low degree. The contrast with the promisors in cases such as Yeoman’s Row and McGuane is plain.
33. It is implicit in my earlier judgment that it would be ‘unconscionable’ for BHL to be permitted to renege on its promise as to daytime occupation. Put in another way, ‘conscience’ requires that it be held to it. I use the words in the way that they are used in the context of equitable relief. Mr Cottle submitted that BHL was now seeking to renege on its promise. The position is that BHL accepts the finding of the court but submits that it should pay compensation rather than having to perform the promise. In short, it accepts the obligation, but disputes the proper consequences.
34. The point is also made against BHL that it has not joined with the defendants to support the planning applications. The reason is apparent, namely that a number, said to be the majority, of owners at the site bought on the basis that it was a holiday site rather than a permanent residence site and do not want the restriction on occupation in the closed period released.
35. It is also necessary to consider the progress of the proceedings. They were commenced by BHL in the Colchester County Court on 10 April 2006. They were transferred to
36. I will next consider how the defendants’ compensation should be calculated, if compensation is appropriate. For the measure of compensation may be relevant to whether it is awarded and it is relevant to how the court should proceed.
37. Mr Cottle’s case as to compensation was set out, or in part set out, in a schedule served in advance of the hearing. As he explained in his closing submissions his primary case was that the defendants should have (1) all the rent that had been paid repaid, and that unpaid released, together with(2) the price paid for their lodges together with the shortfall that would arise on buying a house (so they would get the price of a house but give up their lodges), and (3) such profit as BHL had made on the sale of their lodges to them. If (2) is appropriate I see no basis for awarding (3) in addition. The first two seem intended to put the parties where it is said they would have been if the transaction had not occurred: thus they would not have bought a lodge, they would have bought a house; they would not have paid any rent. Mr Cottle’s first alternative submission as he put it in his closing was that the defendants should get as compensation the proportion of their rent which related to the closed period. His second alternative was that BHL should pay the defendants the costs of their accommodation outside the park during the closed period.
38. Mr Tanney submitted that a measure of compensation based on giving the defendants houses instead of their lodges would result in substantial over-compensation. He submitted that compensation should be assessed by putting a monetary value on the loss of daytime occupation in the closed period and suggested approaches to that. He submitted that the position of each defendant required examination.
39. Mrs Morris’s evidence was that if she had not bought the lodge she and Mr Roberts could have remained in her former matrimonial house in
40. In her evidence Mrs Morris in effect advanced an alternative measure of compensation, namely the cost of moving her lodge to another park with no restrictions. She had made some enquiries of a site in Tendring called Flag Hill. She also referred to a site at New Hall Lodge, but this is not an all the year round site. She estimated that it would cost £63,000 to move her lodge to Flag Hill, of which £50,000 was the price quoted by telephone for the right to move onto a pitch. That may reflect the fact that site owners make a substantial profit on the sale of lodges when persons buy them and come onto the site. That would not happen if Mrs Morris moved her existing lodge, and the £50,000 may be to make up for that. Whether the figure quoted was negotiable was not investigated.
41. The alternative measure is, I consider, the additional cost of securing accommodation for the daytime as well as the night time in the closed period. That would be the difference between the cost of bed and breakfast accommodation (after deducting the cost of breakfast) and renting. It is accepted that the use of a lounge in the daytime in bed and breakfast accommodation is not equivalent: the use would be limited and the lounge could not be used as one’s own. To that difference would be added compensation for the disturbance and discomfort of not being able to use the lodge in the closed period during the day. The cost of renting would have to take account of the fact that properties cannot be rented by the day or the week. The comparison would also have to take account of the fact that there are no bills to be paid, such as electricity, with bed and breakfast.
42. The measure based on buying a house might seem to put Mrs Morris in a substantially better position than she would otherwise have been in. It takes no account of the need for a mortgage, and of her difficulty in sustaining a mortgage. However, so far as present values are concerned, there is a price list among the papers for lodges at New Hall giving prices between £125,000 and £189,000. So the current price of a lodge may not be much different from that of a house. That measure takes no account of her agreement not to stay over night in the closed period. The measure based on moving to a site without occupation restrictions would also give Mrs Morris the benefit of staying over night.
43. I have not so far mentioned the evidence of the joint expert, Mr David Gale-Hasleham. It was his view that there was no difference in the value of Mrs Morris’s lodge with the benefit of day occupation in the closed period and without. However there is a considerable difference to Mrs Morris. It was not contended by BHL that the measure of damage should, on the basis of Mr Gale-Hasleham’s evidence be nil.
44. In my judgment the appropriate measure of compensation is to be decided by asking what the compensation would be being awarded for. It would be awarded for Mrs Morris not being able to use her lodge during the day in the closed period, instead of being able to do so. That is to be considered in the context that her lodge cannot be used at night in the closed period. The cost of a house or of moving to another site might be the appropriate measure if her claim was for breach of contract or in misrepresentation. But those are not what the court is concerned with. I conclude that the appropriate measure of compensation is that which I have set out in paragraph 41, which I can identify as the additional cost of accommodation measure.
45. I consider that this conclusion as to the measure of compensation would also fit the circumstances of Mr and Mrs Foster.
46. Mrs Robins is in a different position. She stated that unless she and her grandson can remain overnight in the closed season they must be rehoused. That is not the outcome she seeks, but it seems inevitable. She is being forced to move by the bar on overnight occupation regardless of the position as to day time occupation. So she can not claim compensation for being forced to move. Nor has she ever moved out in the closed period since her grandson came to live with her. I have concluded that in her case there is no basis therefore for awarding her any compensation.
47. I turn to whether a declaration is appropriate. Mr Cottle’s argument comes to this. At the moment it is unclear what the outcome as to planning permission will be and what TDC will do in the future, both immediately and in the longer term. As between BHL and the defendants the declaration will entitle the defendants to occupy their lodges in the daytime in the closed period. If that puts BHL in difficulty, then they will have to resolve the difficulty by buying out the defendants’ rights to daytime occupation. That recognises that there will have to be a financial solution if the planning route fails, but asks that it should be left for the parties to negotiate rather than that an amount be determined by the court. That would enable the defendants to extract whatever they could which fell short of forcing BHL to close the park. Mr Tanney submits that the court should determine the appropriate compensation.
48. Mr Cottle also submitted that, if BHL was not required to perform its promise, it would have sold the lodges by fraud because it was not performing a promise on the strength of which the lodges were bought, and he referred to the Fraud Act. The tort of deceit requires that a misrepresentation of fact was made, which was false and known to be false. Mr Cottle cannot bring the case within that. In paragraph 65 of my earlier judgment I had dealt with the defendants’ claims for damages for misrepresentation. I said that those claims failed because what Mrs Pollard and Mrs Myson had said were promises as to the future and not representations of fact. I recorded that it was not alleged that Mrs Pollard and Mr Myson did not give honest and accurate statements of what their intentions were at the time.
Conclusions
49. If the problems with planning, the site licence and the head lease are not resolved, the parties and the whole future of the site will be at risk if the defendants continue with day time occupation in the closed periods. So as Mr Cottle’s submission implicitly accepts, it is not appropriate in the circumstances as they are now that there should be an order entitling the defendants to a lease without a daytime prohibition for the closed period: if nothing changes there will have to be a financial resolution, that is, compensation. Second, I am satisfied that in the circumstances as they now are it is not appropriate to make a declaration as Mr Cottle submits I should. It is not appropriate to put BHL at the mercy of the defendants: the court should resolve the dispute. However, if the defendants obtain the planning permission they seek, that may lead to the amendment of the site licence by TBC and an agreement with Brightlingsea as the landlords. Then the difficulty will disappear. There should therefore be a declaration that the defendants are entitled to a lease giving effect to the promises made on behalf of BHL save that it will prohibit closed period daytime occupation. There will be a term to remove that prohibition if such occupation becomes permissible in accordance with the planning permission relating to the site, in accordance with the site licence, and will not constitute a breach of the head lease. The court should determine the manner in which the compensation to which the claimants are entitled is to be assessed. That has been done. But I cannot assess it now because term to which I have referred may come into operation, which would radically affect the appropriate compensation. This by itself would leave the defendants without compensation to cover the period which will elapse before the defendants’ application for planning permission and any appeal has succeeded or failed, and the compensation issue can be finally concluded. So an award of compensation on an intermediate basis is necessary if the defendants are not able to occupy their lodges in the meanwhile. It would then be for either party to apply to the court to determine figures for final compensation on the basis which has been decided. This is an unusual, probably unprecedented course. But the situation is unusual and unprecedented as far as is known, and I do not see any other satisfactory way forward.
50. One aspect of the last paragraph requires elaboration, namely whether the defendants should be permitted to occupy their lodges in the daytime in the closed period while the planning applications are unresolved? Mr Cottle submitted that they should and that while the applications were outstanding it was unlikely that any enforcement measures would proceed. That is not the tenor of TDC’s letter of 4 November 2009. The site licence is not subject to any application to vary it, and TDC may or may not see it as related to the planning permission. However I do not think that it is necessary or possible to reach any definite conclusion as to what TDC will do in the intermediate period. It is, however, in my view crucial that the defendants may not remain in their lodges overnight and so they have to seek alternative accommodation in any event. I conclude that they should not occupy their lodges at all during the closed period but should receive compensation. The law relating to the site as it stands at present will then be being complied with.
51. It would not be reasonable for the court to expect the defendants to be able to make arrangements immediately. Further the precise terms of the lease to be offered to the defendants remain to be agreed or determined in default of agreement. So the scheme or regime provided for by this judgment should not take effect until after the Christmas and New Year break in the closed period. Mrs Robins is in a particularly difficult position, and I would not expect her to do any more than she can, and it may be that the two councils will take a similar view.
52. BHL has agreed the terms of a proposed lease with Brightlingsea Town Council, which may be offered to the defendants without objection. Mr Cottle raised one major objection and said that he needed time to consider it in more detail. He should have that time. I will set dates for the provision of written submissions. The provision objected to by Mr Cottle was clause 9. It would enable BHL to move lodges in certain circumstances. I can see the sense of the clause from BHL’s view point. However it is not something that the defendants have ever agreed to. They were promised long leases of the sites, which implied undisturbed possession. In my view the proposed clause goes beyond anything that BHL is entitled to.
Interim compensation
53. Mrs Morris’s statement of 5 November 2009 refers to two properties in Brightlingsea which may be rented for £599 per month. One of these is a three bed-roomed property, and the other is likely to be also. Mrs Morris has not looked at the cost of smaller flats. In the last closed period she and Mr Foster shared a small house costing £30 per night for 44 nights. That would be £900 per month. This had two bedrooms with inadequate beds. BHL has provided a schedule of the cost of bed and breakfast accommodation which shows that the costs of a double room is about £60 per night including breakfast, say £50 per night without breakfast. For 42 nights that comes to £2,100. The closed period runs over the months of December, January and February. Even taking the cost of renting as £600 per month, the total, £1,800 is less. Of course with bed and breakfast there are no bills to pay, which makes a substantial difference. In fact, however, Mrs Morris has arranged to stay with a friend during the present closed period and so she will incur no costs for overnight accommodation. Making the best assessment that I can on somewhat inadequate information, I think that Mrs Morris should receive £300 per month for January and February 2010 towards the cost of some daytime accommodation where she can, among other things, produce her magazine, together with £200 per month for the loss of the convenience of being able to use her home. The total is £1,000. That should be paid within 7 days of the delivery of this judgment. Over 3 months that would come to £1,500. That sum would be payable on 1 November until the final compensation has been determined.
54. Mr and Mrs Foster are able to stay with his brother during the coming closed period. They should have the same £400 for the loss of the convenience of using their home payable within 7 days of the date of delivery of this judgment. The equivalent figure of £600 would be payable on 1 November until the final compensation is awarded.