Cases - Lunn Poly Ltd v Liverpool & Lancashire Properties Ltd
Record details
- Name
- Lunn Poly Ltd v Liverpool & Lancashire Properties Ltd
- Date
- [2006]
- Citation
- EWCA Civ 430
- Legislation
- Keywords
- Easements - Law of Property Act 1925, s. 146 - rights of light
- Summary
-
The appellant was landlord under a commercial lease and the respondent was the tenant. The landlord gave notice of proposed work to block the fire door included in the demise and construct a new door and requested that the tenant carry out the work. The tenant failed to do so and in October 2004 the landlord bricked up the fire door. The tenant brought proceedings for an interlocutory injunction entitling it to reinstate the fire door and restraining the landlord from interfering with it. In November 2004 the landlord served the tenant with notice under section 146 of the Law of Property Act 1925 alleging breach of covenant.
The trial judge held that the lease was liable to forfeiture but granted the tenant relief. He refused the tenant a final injunction and awarded damages in lieu at a figure that might have been reached in a hypothetical negotiation. In doing so he did not take into account that the tenant was in a weakened bargaining position because he was in breach of covenant.
The appellant landlord appealed on, among other things, the issue of damages. The appeal was dismissed. Lord Neuberger explained that there are 3 bases of assessment of damages in lieu of an injunction:
- traditional damages, such as for loss and damage;
- negotiating damages; and
- an account of profits.
All 3 bases are compensatory. It is a misconception that damages awarded in lieu of an injunction are restricted to negotiating damages. Advisers should consider carefully the advantages of each of the 3 heads of damage. Negotiating damages might not be the most beneficial basis of an award, although will usually exceed damages for injury and past loss.