Loss of enfranchisement rights — Basis is loss of value attributable to value of freehold — Breach in 1983 — Compromise with landlords in 1987 — Whether value of compromise to be deducted — Whether increase in values to trial date to be deducted — Whether 1983 or 1987 values — Damages assessed on 1987 values
The plaintiff was the lessee of a dwelling-house at 8 Vale Close, Maida Vale, London W9, under an 88-year lease from December 25 1928 at a rent of £50 pa. In May 1983 the plaintiff engaged the defendant solicitors to obtain for her an extended lease under the Leasehold Reform Act 1967. After obtaining a certificate reducing the rateable value of the premises on account of improvements, in November 1984 the defendants served on the landlords a notice claiming an extended lease. That notice was out of time and it was not disputed by the defendants that they were liable to the plaintiff; the issue concerned the measure of damages. This arose because the plaintiff commenced two sets of proceedings with a view to mitigating her loss. In one she sought a determination as to which works were works of improvement under para 2(3) of Schedule 8 to the Housing Act 1974; in the other she sought a declaration under section 20 of the 1967 Act. In February 1987 each was dismissed with costs.
In July 1987 the landlords agreed to grant the plaintiff an extended lease but she lost the right to acquire the freehold. It was agreed that the plaintiff acted reasonably in instituting the legal proceedings and that she was entitled to £16,654 in respect of legal costs and interest. The plaintiff sought £158,314 for the loss of the benefit of enfranchising; the defendants contended for £10,814 and that in assessing the loss of the value of the freehold, the benefit of the compromise with the landlords in 1987 should be deducted as well as the increase in values between July 1987 and June 1990.
Held The measure of damages for the loss of the right to enfranchise was £49,900.
Damages must normally be assessed at the date of the breach. But for the litigation the plaintiff pursued, her loss on the date of the breach in 1983 would have been £77,700. It was reasonable to undertake the litigation. If the defendants are to have the benefit of the compromise with the landlords in July 1987, that is the proper date for assessing damages as that was the first moment the plaintiff could have sold her interest or purchased the freehold of a similar house. It would be wrong in principle to use values in 1983 and then subtract from them the increased values in 1987 relating to the compromise settlement. Accordingly, the loss of the right to acquire the freehold must be assessed on July 1987 values.
Ogle v Vane (Earl)
(1867) LR 2 QB 275 applied.
Roger Ter Haar (instructed by Cumberland Ellis Peirs) appeared for the plaintiff; and Martin Pascoe (instructed by Barlow Lyde & Gilbert) appeared for the defendants.
