More and more tenants are using air conditioning to cool their buildings. However, some may discover that they cannot lawfully do so without a licence for alterations from their landlord. The dispute in Eaton Mansions (Westminster) Ltd v Stinger Compania de Inversion SA [2013] EWCA Civ 1308; [2013] PLSCS 257 arose because the tenant of flats within a building installed air conditioning units on the roof without its landlord’s consent. The unauthorised use continued for up to two years, until the flats were sold.
In the litigation that ensued, the landlord sought damages for trespass. The courts usually assess damages for trespass by reference to the price that would have been agreed for the use of the land. The issue for the Court of Appeal in this case was whether the damages should be based on the sum that would have been paid for a permanent licence for the units to remain or, alternatively, for a temporary licence in respect of the period during which the trespass actually occurred.
The tenant argued that the damages should reflect the actual period of trespass and that the court should treat the parties as having negotiated on that basis. To do otherwise would disconnect the licence fee – and, therefore, the damages – from the legal wrong that had occurred. Were the court to uphold the landlord’s claim, it would be requiring the tenant to pay for damage that had never been suffered and rights that had not been acquired.
The landlord accepted that it had suffered no direct loss from the trespass. Nonetheless, it sought substantial damages calculated by reference to what the tenant would have agreed to pay for its consent, ignoring post valuation events. It suggested that the tenant would have paid a six figure sum for a permanent licence for the installation of the units.
The Court of Appeal agreed with the tenant. It accepted that the tenant would not have been interested in a temporary licence. However, this was all that the trespass had achieved. The nature and duration of the trespass was not a valuation event; it dictated and shaped the nature of the valuation exercise.
Therefore, it was wrong to say that the parties would not have known, at the outset, how long the trespass was to last. For valuation purposes, the parties must be treated as having negotiated for a licence that covered the wrong that was actually done – and the tenant should not be required to pay damages for anything more. Consequently, the court upheld the trial judge’s assessment of the damages in the sum of £6,000.
The landlord’s claim for aggravated damages fared no better. Aggravated damages are sometimes awarded to compensate a claimant for injury to his feelings, in circumstances where there are aggravating factors about the case that mean that the claimant would not otherwise be sufficiently compensated for the wrong done. However, the landlord was a company and limited companies are not entitled to aggravated damages because they cannot suffer injury to their feelings. Messenger Newspapers Group Ltd v National Graphical Association [1984] IRLR 397, which suggested otherwise, was wrongly decided.
Allyson Colby is a property law consultant
