The High Court has emphasised that an award of exemplary damages requires conduct by the defendant which is calculated to make a profit in dismissing an appeal in Yadevinder Singh Hothi v Clive Stokes [2022] EWHC 2161 (Ch), a boundary dispute concerning two residential properties in Windsor owned by the parties.
The claimant succeeded in obtaining a declaration as to the correct route of the boundary. However, its claim for exemplary damages – for the defendant’s high handed and oppressive conduct calculated to make a profit exceeding the compensation payable to the claimant – was dismissed. The parties appealed. The defendant’s appeal as to the position of the boundary was dismissed by the High Court. The claimant cross-appealed the refusal to award exemplary damages on the ground that the judge had misdirected himself in law.
Exemplary damages are exceptional and a departure from the rule that damages are ordinarily compensatory, not punitive (McGregor on Damages 21st Edition). They may be awarded where the defendant’s conduct has been calculated to make a profit for himself and includes cases where the defendant acts with cynical disregard for the claimant’s rights and to gain at the expense of the claimant an object which it could not obtain at all or at a price it would be willing to pay (Rooks v Barnard [1964] AC 1129). What is required is an element of calculation by the defendant, pursuant to which it decides that is more advantageous to act in cynical disregard of the claimant’s rights, in order to achieve its objective, than to act in a lawful fashion. An award of exemplary damages in such cases essentially makes the point that tort does not pay.
