A useful summary in the International Law Office of a decision in England setting out limits on “double-claiming” damages, and the limitations to exemplary damages.
The case concerns a Mr Ramzan, who had a busy Indian restaurant in the UK, with a function room and storeroom upstairs. However, a neighbouring developer had other ideas:
The storeroom was important to Ramzan because it allowed access to a fire escape, which was necessary to allow Ramzan to use the function room. Unfortunately, and unbeknown to Ramzan, the Land Registry plan was incorrect and showed the storeroom as part of the neighbouring property, although there was no access to it from there.
In 1999, builders acting on Brookwide’s instructions broke into the storeroom, removed the wall which had prevented their access, bricked up the wall on Ramzan’s side, disposed of his tools, cut through his alarm cables and destroyed the part of the fire escape which gave him access. This was part of Brookwide’s plan to convert its property into flats. Brookwide proceeded to rent out the first floor, including Ramzan’s expropriated storeroom in the demise.
The District Court hammered Brookwide, but the Court of Appeal was far more lenient.
The original trial judge’s view was that exemplary damages were necessary because:
“The size of the compensation would not in itself deter Brookwide from doing the same thing again if it felt it could get away with it.”
However, the Court of Appeal judge considered, while reducing exemplary damages to 20,000 pounds, that:
“it was rare to award exemplary damages, and that in many cases the fact of making such an award should largely be sufficient”,
in my view a comment of breathtaking naivety.
It was also disheartening to see that the Land Registry would not fix the error on the plan even though there had quite plainly been a mistake. Wragge & Co briefly cover this aspect of the decision here.
The judgment also contains instructive commentary on the circumstances in which damages can be awarded even if no loss has been suffered, and on the risks of failing to produce an expert report until the last minute….ie that the report will be disregarded, which seems in this instance to have cost the developer the chance to challenge the lost profit claimed by Ramzan, although far from outweighing its overall gains on the appeal.
It left me feeling that the “little person”, as opposed in this instance to a corporate cynically appropriating his property presumably because the likely profit outweighed potential penalty, has just had another slapping down in the United Kingdom. One can only hope it will not be swiftly followed in New Zealand, and at least it is not a House of Lords decision.