Negligence of contractor — Premises damaged by fire — Regulated tenants giving up possession — Increase in capital value — Intention of plaintiff — No evidence of intention to reinstate — Evidence of intention to sell for development purposes — Whether measure of damages based on costs of reinstatement — Whether damages to be awarded for nuisance, inconvenience, annoyance or distress — Judgment for plaintiff limited to £136
The plaintiff is the owner of 11 Beechcroft Avenue, London NW1, premises he had acquired for investment purposes. On February 24 1987, through the negligence of an employee of the defendants, a serious fire caused substantial damage to the house. Two regulated tenants, who until that date occupied rooms on the first floor, then gave up possession. Shortly after the fire the plaintiff received an offer for the freehold of £203,000; evidence was given on behalf of the defendants that immediately before the fire, and if certain works of repair and decorations had been carried out, the house could have been sold on long leases for a net total of £140,500.
The plaintiff claimed damages based on the cost of reinstatement and loss of rent in the order of £200,000, together with damages for nuisance, inconvenience, annoyance or distress. The defendants, who admitted liability for negligence a few days before the trial, contended that the appropriate measure of damages was the capital depreciation of the building; however, their negligence increased, and did not depreciate, the value of the building because of the departure of the two rent regulated tenants and therefore no damages were payable.
Held Judgment was given to the plaintiff in the sum of £136 in respect of temporary repairs.
It was clear from the conduct of the plaintiff that within days of the fire he had decided not to reinstate. The evidence showed that he never carried out even the limited reinstatement which he could have afforded. Within a month of the fire he had instructed agents to act for him in making a claim against his insurers for reinstatement and instructed other agents to put the property on the market. The reason for the delay in selling for development purposes was that he hoped to achieve a settlement with his insurers. The evidence of Eric Shapiro BSc FRICS, for the defendants, was that the decision to sell was eminently reasonable and commercially sensible. The plaintiff sought to increase the saleable value of the premises by seeking an established use certificate.
Apart from the sum of £136 for immediate temporary works, the measure of damages should be assessed on basis of capital depreciation. Even if the plaintiff had intended to reinstate, then that intention would have been unreasonable, bearing in mind that this property was not the plaintiff’s home, it was simply an investment. The plaintiff neither claimed nor proved any depreciation in value; the evidence was that the plaintiff had gained from the defendants’ negligence. Damages for loss of rent could not be awarded because part of the capital value reflected the fact that the premises did not contain tenants. Because the interest of the plaintiff in the premises was a commercial one he was not entitled to damages for nuisance or inconvenience.
County Personnel (Employment Agency) Ltd v Alan R Pulver & Co [1987] 1 WLR 916 followed.
Dodd Properties (Kent) Ltd v Canterbury City Council
[1980] 1 WLR 433 and
Hayes v James & Charles Dodd [1990] 2 All ER 815 considered.
Timothy Higginson (instructed by Beller Needleman) appeared for the plaintiff; and Romie Tager (instructed by Lawrence Graham) appeared for the defendants.
