England and Wales Court of Appeal (Civil Division) Decisions

Court of Appeal

		18 July 1994

1. Giving judgment, Sir Thomas Bingham MR said: On January 26 1993 Judge Jack QC, sitting in Weymouth County Court, refused the plaintiff, Mrs Jaggard, injunctions to restrain continuing acts of trespass and breaches of covenant and awarded her damages in lieu. The plaintiff says the judge should have granted injunctions. This appeal requires the court to consider the principles on which judges should act when deciding whether to grant injunctions or to award damages in lieu.

2. The judge found the facts very fully in his judgment, which is reported in [1993] 1 EGLR 197, so no more than a brief summary of the facts is called for.

3. In Maiden Newton, in Dorset, there is a road, Bull Lane, which runs very roughly in an east-west direction. Off it to the north is a cul-de-sac known as Ashleigh Avenue. This is about 50 yds long and the roadway (excluding the pathway where there is one) is about 15 ft wide. The cul-de-sac was developed in about 1959. There were 10 houses. Nos 1 to 4 lined the western side of the close (on the left as viewed from Bull Lane). Nos 7 to 10 lined the eastern (right hand) side. At the far (or northern) end of the cul-de-sac were a semi-detached pair of houses, nos 5 and 6.

4. When Ashleigh Avenue was being developed and plots sold, covenants were given and taken in the same terms in each case, so as to bind and confer benefits on all the original owners and their successors against and in favour of each other. The avenue was a private road and there was conveyed to each of the original owners not only the numbered plot on which his house was or was to be built, but also the area of roadway immediately in front of that plot, up to the centre of the roadway.

5. Two of these standard mutual covenants are in issue in this case and I quote them:

   (c) No house or building to be erected on any part of the said land shall be used as or for a hotel tavern clubhouse or for the sale of wines spirits ale or beer (for consumption either on or off the premises) or as a hospital or as a place of amusement or resort or as a caravan site or in any manner calculated or likely to be a nuisance or cause annoyance to the Vendors or adjoining owners or residents or the neighbourhood or in any manner otherwise than as a private residence only and no part of the said land which is unbuilt upon shall be used otherwise than as a private garden.

   (d) The Vendors having constructed the said roadway known as Ashleigh Avenue and having laid the sewer therein as aforesaid the Purchasers and their successors in title shall keep the said roadway in good repair to the half width thereof abutting on the property hereby conveyed and consisting of the portion of the said roadway coloured [blue] on the said plan

6. In 1980 the plaintiff and her husband (who has since died) bought and moved into 1 Ashleigh Avenue. In May 1987 the defendants, Mr and Mrs Sawyer, bought and moved into no 5, the house at the north-western end of the avenue. They were a young married couple. Their first child was born in August 1987. Their house had only two bedrooms and they wanted more room. Their first idea was to build on. Then they thought of building a separate house in the garden of no 5. They applied for planning permission in April 1988. But the plaintiff organised a petition to oppose the grant of planning permission and all but one of the other residents in the avenue supported her. The petition referred to the fact that the avenue was a private road, for the use of residents of the 10 existing houses. Planning permission was refused, apparently because there was not enough room to accommodate a second house on the plot of no 5.

7. The defendants had to think again. An alternative solution presented itself. Immediately to the west of Ashleigh Avenue was 13 Bull Lane. This was a property fronting on Bull Lane. Its garden ran northwards, parallel with Ashleigh Avenue, contiguous with the gardens of 1, 2, 3, 4 and 5 Ashleigh Avenue. The owner of 13 Bull Lane was willing to sell a plot of land at the far, northern, end of the garden, abutting on 5 Ashleigh Avenue. The defendants were willing to buy, subject to obtaining planning permission. Their plan was to build a new house, 5A Ashleigh Avenue, on this plot. They proposed that a strip of land, part of the garden of 5 Ashleigh Avenue adjoining its boundary with no 4, should be used as a driveway into no 5A, giving it access to Ashleigh Avenue.

8. The defendants applied for planning permission to develop no 5A in this way and it was granted. But not without opposition. The plaintiff and others made clear their objection to the development, based both on the restrictive covenants and the fact that Ashleigh Avenue was a private roadway. These objections did not prevail. The plot of no 5A was duly conveyed to the defendants. Building work began on June 14 1989.

9. The judge made a number of relevant findings on the period between the grant of planning permission and the completion of the building work:

   (1) The defendants made no secret of their intentions. In May 1989 Mr Sawyer visited the plaintiff and told her that he was going ahead and would start building soon.

   (2) On a number of occasions between February and May 1989 Dorset County Council expressed the opinion that Ashleigh Avenue was a public, not a private, road. Not until July 1990 did the county council change their view. But change it they did and before the judge it was common ground that the road was private, as the plaintiff and other residents had all along contended.

   (3) The defendants were advised that there might be a problem about access. The judge found (at p198F of the report) that:

   Mr Sawyer was aware of the covenants regarding the no 5 land and that he could not build on that land. He does not seem to have appreciated that there might be a problem in using part of the no 5 land as a driveway for no 5A

   And Mr Sawyer was no doubt encouraged by the county council's view that Ashleigh Avenue was not a private road.

   (4) The plaintiff persisted in her view, shared by other residents, that the proposed development of no 5A would be a breach of covenant, entitle the occupier to no right of way over Ashleigh Avenue and involve acts of trespass if the occupier used the avenue for access. On June 13 1989 (the day before work began) solicitors instructed by the plaintiff and others made these points to Mr Sawyer at 5 Ashleigh Avenue and wrote:

   We must therefore ask you to discontinue forthwith any development or proposed development on you[r] land failing which we will be asked to take proceedings in the appropriate court for an injunction to restrain you from developing the land.

10. On June 21 the same solicitors, acting on behalf of the plaintiff and two other named residents, wrote again, this time to the defendants' solicitors, emphatically stating that access to no 5A via Ashleigh Avenue would be a trespass and further stating that an interlocutory injunction would be sought if work were not stopped pending application to the court for a declaration. On July 4 1989 the plaintiff's solicitors wrote to the defendants' solicitors again: in this letter reference was made to Bracewell v Appleby [1975] Ch 408*, a case (discussed below) in which damages were awarded in lieu of an injunction and the letter continued:

    We are giving further consideration to the possibility of seeking an injunction and will be taking our clients' instructions as to that, but we do anticipate that in any event we shall be instructed to seek the alternative remedy that we have advised our clients is available to them.

    This point was repeated in much the same terms in another letter a week later.

    (5) No application for interlocutory relief was made to the court by the plaintiff or anyone else. The plaintiff says that she instructed her solicitors to apply for an interlocutory injunction and they did not do so. But it is not suggested that the defendants knew of these instructions.

    (6) To mitigate the nuisance which builders' traffic would otherwise have caused to the residents of Ashleigh Avenue, the defendants negotiated a temporary arrangement with the owner of an industrial estate lying to the north of the avenue and adjoining no 5A. This arrangement gave the builders access to the building site without using Ashleigh Avenue. There was some discussion between Mr Sawyer and the owner of the industrial estate about permanent access, but the negotiation was not pursued. Nor at the trial was it contended that there was any access to no 5A otherwise than via Ashleigh Avenue and the judge proceeded on the basis that the only access was via Ashleigh Avenue (p199C of the report).

    (7) In July 1989 a further child was born to the defendants. Living in no 5, they were somewhat cramped.

    (8) Proceedings were issued on August 10 1989. By then the walls and roof of the new house at no 5A were well advanced.

    (9) The differences between the plaintiff and those who shared her view and the defendants gave rise to much ill feeling.

11. The building of no 5A was completed in December 1989 at a total cost to the defendants (including the purchase of the land) of just under £ 76,000. Two months later the defendants sold no 5, reserving access to no 5A, and moved into no 5A. But the atmosphere locally was so bad that in December 1991 they moved out of no 5A and into another house elsewhere. They let no 5A.

12. The action came on for hearing before Judge Jack on May 21 1992 and he viewed the site before the hearing began. The hearing continued on May 22 and July 24. On July 30 the judge sent his written judgment to the parties, but he did not formally give judgment until January 26 1993.

    The judgment

13. The judge held (and it is no longer in dispute):

    (1) that Ashleigh Avenue is a private road;

    (2) that use of the avenue for access to no 5A involved trespass on land owned by the plaintiff, unless confined to the half of the roadway outside her house which she did not own, and necessarily involved trespass on land owned by other residents of the avenue who had not chosen to sue;

    (3) that use of part of the land originally forming part of the garden of no 5 as a driveway giving access to no 5A involved a breach of covenant (c) quoted above;

    (4) that the court may refuse to grant an injunction sought to restrain continuing trespass and breaches of covenant and may in such cases award damages in lieu under section 50 of the Supreme Court Act 1981.

14. The major question before the judge was whether he should, on the facts and on the authorities, exercise his discretion to grant injunctions or whether he should award damages in lieu. He made findings relevant to his decision, which I should quote (at pp198M to 199B of the report):

    It was urged on me that Mr and Mrs Sawyer developed no 5A with the idea of making a quick profit and moving on. I do not accept that. They badly needed a bigger home, Maiden Newton was genuinely convenient for them. No doubt in the atmosphere of the property market of 1988 and 1989 they also hoped that they would do well financially out of the exercise, and it may be that they talked unwisely to some of the residents about that. Mr Sawyer told me that it was still his desire to live in no 5A. In view of what has happened I am more doubtful of that.

    I reject the allegation that Mr Sawyer simply intended to go ahead regardless of the legal position. I find that he believed that the road was public in reliance on the county surveyor's firm view. I do not think that he appreciated the problem of the covenant and the driveway through the no 5 land. I think that he might have shown more care in the investigation of his position. I put that down to his inexperience in a complicated situation. At the important stage in 1989 he was receiving legal advice and it was not suggested, let alone established, that the advice was that he had no right to do what he intended.

    Mrs Jaggard was asked for her reasons for bringing the action and for now pressing the case for an injunction. She answered that she felt that Mr Sawyer was proceeding in defiance of the law and she wanted the law upheld. She was concerned about the additional traffic which no 5A brought to Ashleigh Avenue. I note here that there was no evidence suggesting that it was any more than the light traffic one would expect from the addition of an 11th house. Mrs Jaggard was concerned also that Mr Sawyer would not be contributing to the maintenance of the road. He has always been willing to do so. I find that the reason which weighs with Mrs Jaggard is that Mr Sawyer should not be permitted to behave as she thinks that he has.

15. In declining to grant injunctions the judge was particularly influenced (see p202B of the report) by

    the conduct of the plaintiff and of the defendants and their reasons for acting as they have, the failure of the plaintiff to apply for interlocutory relief, the particular nature of the trespass and of the relevant land, and the fact that if an injunction is granted no 5A will have no access.

16. Instead of injunctions, he awarded the plaintiff damages. He asked himself what the defendants might reasonably have paid for a right of way and the release of the covenant (pp202F and 203D of the report). He held that the defendants should have been prepared to pay not less that £ 6,250. Split among the nine residents (excluding those in no 5), that total yielded £ 694.44 per resident. That is the sum (with interest) which he awarded the plaintiff.

17. The plaintiff challenges the judge's decision, contending that the judge was wrong in effect to license a continuing invasion of her property rights. She had made her legal position (now held to be the correct legal position) plain from the outset. It was for the defendants to resolve any doubt about the legal position by seeking declaratory relief and the plaintiff should not be penalised for having failed to seek interlocutory relief. The defendants took a chance and having been held to be in the wrong had no claim on the court's indulgence. Access to no 5A was, anyway, possible without trespassing on the plaintiff's land if traffic were confined to the half of the roadway outside the plaintiff's house which was more distant from it. Properly calculated, the damages in this case were nominal and that was an additional reason on the authorities for granting injunctions.

18. The defendants support the decision of the judge, essentially for the reasons which he gave.

19. In choosing between these submissions, we have derived the greatest help from the able argument of Mr Richard Drabble, instructed by the Attorney-General as an amicus at a time when it was thought the plaintiff would not be represented.

    The law

20. In considering the legal issues in this case, I should acknowledge at the outset my debt to an illuminating article by Professor Jolowicz: 'Damages in Equity - A Study of Lord Cairns' Act' [1975] CLJ 224.

21. Historically, the remedy given by courts of common law was damages. These afforded retrospective compensation for past wrongs. If the wrongs were repeated or continued, a fresh action was needed. Courts of equity, in contrast, were able to give prospective relief by way of injunction or specific performance. A mandatory injunction would require the defendant to observe a legal obligation or undo the effects of a past breach of legal obligation. A negative injunction would restrain a defendant from committing breaches of legal obligation in future. But these courts could not award damages. This anomaly was mitigated by the Common Law Procedure Act 1854, which gave courts of common law a limited power to grant equitable relief as well as damages. It was further mitigated by Lord Cairns' Act (the Chancery Amendment Act 1858) which gave the Court of Chancery the power to award damages.

22. Section 2 of Lord Cairns' Act provided:

    In all Cases in which the Court of Chancery has Jurisdiction to entertain an Application for an Injunction against a Breach of any Covenant, Contract, or Agreement, or against the Commission or Continuance of any wrongful Act, or for the specific Performance of any Covenant, Contract, or Agreement, it shall be lawful for the same Court, if it shall think fit, to award Damages to the Party injured, either in addition to or in substitution for such Injunction or specific Performance, and such Damages may be assessed in such Manner as the Court shall direct.

23. This enabled the Chancery Court on appropriate facts to award damages for unlawful conduct in the past as well as an injunction to restrain unlawful conduct in the future. It also enabled the Chancery Court to award damages instead of granting an injunction to restrain unlawful conduct in the future. Such damages can only have been intended to compensate the plaintiff for future unlawful conduct the commission of which, in the absence of any injunction, the court must have contemplated as likely to occur. Despite the repeal of Lord Cairns' Act, it has never been doubted that the jurisdiction thereby conferred on the Court of Chancery is exercisable by the High Court and by county courts.

24. The authorities show that there were, not surprisingly, differing approaches to the exercise of this new jurisdiction. In the leading case of Shelfer v City of London Electric Lighting Co Ltd [1895] 1 ChD 287, the operations of the defendant electricity company caused structural damage to a house and nuisance to its occupier. The owner and occupier sought relief by way of injunction. The trial judge refused injunctive relief and awarded damages. His decision was reversed by the Court of Appeal, which roundly rejected the view that wrongs should be permitted to continue simply because the wrongdoer was able and willing to pay damages. But the authority is chiefly notable for the guidance given by A L Smith LJ on the circumstances in which damages may properly be awarded in lieu of an injunction. The passage in his judgment at pp322 to 323 has been cited very frequently, but must be cited again:

    Many judges have stated, and I emphatically agree with them, that a person by committing a wrongful act (whether it be a public company for public purposes or a private individual) is not thereby entitled to ask the Court to sanction his doing so by purchasing his neighbour's rights, by assessing damages in that behalf, leaving his neighbour with the nuisance, or his lights dimmed, as the case may be.

    In such cases the well-known rule is not to accede to the application, but to grant the injunction sought, for the plaintiff's legal right has been invaded, and he is prima facie entitled to an injunction.

    There are, however, cases in which this rule may be relaxed, and in which damages may be awarded in substitution for an injunction as authorized by this section.

    In any instance in which a case for an injunction has been made out, if the plaintiff by his acts or laches has disentitled himself to an injunction the Court may award damages in its place. So again, whether the case be for a mandatory injunction or to restrain a continuing nuisance, the appropriate remedy may be damages in lieu of an injunction, assuming a case for an injunction to be made out.

    In my opinion, it may be stated as a good working rule that --

    (1) If the injury to the plaintiff's legal rights is small,

    (2) And is one which is capable of being estimated in money,

    (3) And is one which can be adequately compensated by a small money payment,

    (4) And the case is one in which it would be oppressive to the defendant to grant an injunction: --

    then damages in substitution for an injunction may be given.

    There may also be cases in which, though the four above-mentioned requirements exist, the defendant by his conduct, as, for instance, hurrying up his buildings so as if possible to avoid an injunction, or otherwise acting with a reckless disregard to the plaintiff's rights, has disentitled himself from asking that damages may be assessed in substitution for an injunction.

    It is impossible to lay down any rule as to what, under the differing circumstances of each case, constitutes either a small injury, or one that can be estimated in money, or what is a small money payment, or an adequate compensation, or what would be oppressive to the defendant. This must be left to the good sense of the tribunal which deals with each case as it comes up for adjudication. For instance, an injury to the plaintiff's legal right to light to a window in a cottage represented by £ 15 might well be held to be not small but considerable; whereas a similar injury to a warehouse or other large building represented by ten times that amount might be held to be inconsiderable. Each case must be decided upon its own facts; but to escape the rule it must be brought within the exception. In the present case it appears to me that the injury to the Plaintiff is certainly not small, nor is it in my judgment capable of being estimated in money, or of being adequately compensated by a small money payment.

25. Many later cases have turned on the application of this good working rule to the particular facts of the case before the court. This case may be said to do the same.

26. In Leeds Industrial Co-operative Society Ltd v Slack [1924] AC 851 doubts about the scope of Lord Cairns' Act were dispelled. At p857 Viscount Finlay said:

    The power given is to award damages to the party injured, either in addition to or in substitution for an injunction. If the damages are given in addition to the injunction they are to compensate for the injury which has been done and the injunction will prevent its continuance or repetition. But if damages are given in substitution for an injunction they must necessarily cover not only injury already sustained but also injury that would be inflicted in the future by the commission of the act threatened. If no injury has yet been sustained the damages will be solely in respect of the damage to be sustained in the future by injuries which the injunction, if granted, would have prevented.

27. The claim for an injunction in Kelsen v Imperial Tobacco Co (ofGreat Britain and Ireland) Ltd [1957] 2 QB 334 arose out of the infringement by the defendants of the plaintiff's airspace by erection and maintenance of an advertising sign above the plaintiff's shop. McNair J did not doubt his discretion to award damages in lieu of an injunction if he saw fit. He regarded the injury to the plaintiff's rights as small and the damages, if capable of being estimated at all, as nominal. He did not regard the grant of an injunction as oppressive to the defendants. He granted an injunction. He proceeded on the express assumption that, if he did not grant an injunction and the defendants' tortious conduct continued, it would be open to the plaintiff to seek further damages in a later action. It does not appear to have been contemplated that the measure of damage could be based on the reasonable fee which the plaintiff could require to permit exhibition of the sign, although the judge was very much alive to the commercial considerations underlying the dispute: see p347.

28. Woollerton & Wilson Ltd v Richard Costain Ltd [1970] 1 WLR 411 involved a trespass into the plaintiff's airspace by the jib of the defendant's crane. No damage was done. But Stamp J regarded the absence of damage as a reason for, not against, the grant of an injunction and held that A L Smith LJ's working rule did not apply in cases of trespass founding a claim for nominal damages only. On the facts, however, he thought it right to suspend the operation of the injunction for a period which would enable the defendants to finish the job for which the crane was required. This decision cannot, in my view, be supported. The working rule formulated by A L Smith LJ cannot be limited in the way suggested; and the fact that a plaintiff has suffered only nominal damage cannot in common sense be a reason for confining his remedy to an injunction if the court is then, by suspending the injunction, to deny him any remedy at all.

29. In Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798 a developer built a number of houses in breach of a covenant restraining him from building save in accordance with a lay-out plan submitted and approved by the plaintiffs. The plaintiffs issued proceedings claiming an injunction shortly after the building work began, but did not seek interlocutory relief and all the houses were complete by the date of trial. The plaintiffs then sought a mandatory injunction requiring demolition of the houses built in breach of covenant. Brightman J refused to grant such an injunction. He said (at p810H):

    Mr Newsom submitted, and I accept, that it is no answer to a claim for a mandatory injunction that the plaintiffs, having issued proceedings, deliberately held their hand and did not seek the assistance of the court for the purpose of preserving the status quo. On the other hand, it is, in my view, equally true that a plaintiff is not entitled 'as of course' to have everything, pulled down that was built after the issue of the writ. The erection of the houses, whether one likes it or not, is a fait accompli and the houses are now the homes of people. I accept that this particular fait accompli is reversible and could be undone. But I cannot close my eyes to the fact that the houses now exist. It would, in my opinion, be an unpardonable waste of much needed houses to direct that they now be pulled down and I have never had a moment's doubt during the hearing of this case that such an order ought to be refused. No damage of a financial nature has been done to the plaintiffs by the breach of the lay-out stipulation. The plaintiffs' use of the Wrotham Park Estate has not been and will not be impeded. It is totally unnecessary to demolish the houses in order to preserve the integrity of the restrictive covenants imposed on the rest of area 14. Without hesitation I decline to grant a mandatory injunction. But the fact that these houses will remain does not spell out a charter entitling others to despoil adjacent areas of land in breach of valid restrictions imposed by the conveyances. A developer who tries that course may be in for a rude awakening.

30. Brightman J did not confine the plaintiffs to nominal damages. He concluded (at p815D) that a just substitute for a mandatory injunction would be such a sum of money as might reasonably have been demanded by the plaintiffs from the developer as a quid pro quo for relaxing the covenant.

31. Facts almost indistinguishable from the present came before the court in Bracewell v Appleby [1975] Ch 408. In that case, as in this, the plaintiffs voiced their objection before building work began, but did not issue proceedings until after. Application was made for an interlocutory injunction, but not until after the new house had been finished and then it was refused. At trial the plaintiffs sought an injunction which Graham J was unwilling to grant. He acknowledged that an injunction would not require the new house to be pulled down, but it would make it uninhabitable. Instead, he awarded damages in lieu, holding (in accordance with the approach of Brightman J in Wrotham Park) that the defendant should be liable to pay an amount of damages which in so far as it could be estimated would be equivalent to a fair and proper price payable for the acquisition of the right of way in question: p419D.

32. In John Trenberth Ltd v National Westminster Bank Ltd (1979) 39 P & CR 104* Walton J echoed doubts already expressed in Charrington v Simons & Co Ltd [1971] 1 WLR 598† at p603 about the correctness of Stamp J's suspension of the injunction granted in Woollerton & Wilson, but asserted with emphasis that the absence of damage, far from being a reason why an injunction should not be granted, was the very reason why it should: p107.

33. It was the unlawful parking of vehicles in their yard which founded the plaintiffs' claim for relief in Patel v W H Smith (Eziot) Ltd [1987] 1 WLR 853. The Court of Appeal held that prima facie a landowner whose title is not in issue is entitled to an injunction to restrain trespass on his land whether or not the trespass harms him: p858E. But the court accepted that there would be exceptional circumstances in which the court would not think it appropriate to grant an injunction: pp859D and 863C.

34. Trespass to the plaintiffs' airspace by crane jibs was again the ground of complaint in Anchor Brewhouse Developments Ltd v Berkley House (Docklands) Developments Ltd (1987) 38 BLR 82. Founding himself on Woollerton & Wilson, John Trenberth and Patel, Scott J held that prima facie, and in the absence of special circumstances, the plaintiffs were entitled to an injunction. He held that there were no such circumstances and so held that the plaintiffs were entitled 'as of course' to injunctions to restrain continuing trespass: p105. He described Bracewell v Appleby as 'an odd case' (p101) and said:

    I find some difficulty with Bracewell v Appleby mainly because, as it seems to me. the learned judge regarded the damages he was awarding as a once and for all payment. But it was, as I see it. not within the power of the judge to produce that result. Whether or not an injunction were granted, the defendant's use of the right of way would, after the judgment as well as before, represent trespass unless and until he were granted a right of way. The judge could not by an award of damages put the defendant in the position of a person entitled to an easement of way. So assuming, which is not clear from the case, that there had not been some agreement by the plaintiffs to treat the damages as entitling the defendant to a right of way, the defendant's subsequent use of the private road would have constituted a continuing trespass. A succession of further actions for damages could have been brought. In those circumstances it seems to me very difficult to justify the withholding of the injunction. By withholding the injunction the court was allowing a legal wrong to continue unabated. Nonetheless Mr Moss is entitled to refer to the case as one in which an injunction was refused.

35. I, for my part, find some difficulty in these observations of Scott J. It is of course true that the court cannot, on an application of this kind, revoke a covenant or grant the defendant a right of way. But if the court, in exercise of its jurisdiction derived from Lord Cairns' Act, instead of granting the plaintiff an injunction to restrain the defendant's apprehended future unlawful conduct, awards the plaintiff damages to compensate him for that conduct, it seems to me that a succession of future actions based on that conduct would, if brought, be dismissed or struck out, since a plaintiff could not complain of that for which he had already been compensated.

36. Mention should finally be made of Surrey County Council v Bredero Homes Ltd [1993] 1 WLR 1361*. Two local authorities sold land to a development company. It had planning permission to build 72 houses and covenanted to carry out the development in accordance with that planning permission. In breach of covenant the company built 77 houses. The trial judge held that the local authorities were entitled to nominal damages only. The Court of Appeal upheld that decision. Fundamental to the judgment of Dillon LJ, as I read it, is his conclusion that the plaintiffs had never sought an injunction but only common law damages, not damages in equity under Lord Cairns' Act: see pp 1364A and 1368G. It therefore followed that since the plaintiffs' damages were to be assessed on ordinary common law principles and since they could show no damage, only nominal damages could be awarded. The learned lord justice questioned whether Wrotham Park was consistent with Johnson v Agnew [1980] AC 367†, but thought it unnecessary to reach a conclusion since Wrotham Park was a case falling under Lord Cairns' Act and the case before the court was not: p1367B. He was not willing to countenance the possibility of awarding, as common law damages, the gain which the defendant had earned by his breach of contract: p1367E.

37. Steyn LJ agreed. He reviewed the familiar bases of compensatory damages in contract, based on loss of bargain and costs incurred: p1369B. He then referred to a third principle protecting the innocent party's restitutionary interest, observing that Wrotham Park was 'only defensible on the basis of the third or restitutionary principle': p1369F. The plaintiffs' argument that Wrotham Park could be justified on the basis of a loss of bargaining opportunity was, in his view, a fiction: p1369G.

    The object of the award in the Wrotham Park case was not to compensate the plaintiffs for financial injury, but to deprive the defendants of an unjustly acquired gain.

38. The lord justice was unwilling to extend the range of restitutionary remedies as the court had been invited to do: p1370H.

39. Rose LJ agreed with both the preceding judgments, but gave a brief judgment of his own distinguishing Wrotham Park on the ground that damages had there been sought in equity whereas the only claim for damages in the instant case was at common law: p 1371C--G.

40. The court's approach to restitutionary damages in this case has provoked some regretful comment (see Professor Birks: 'Profits of Breach of Contract' (1993) 109 LQR 518) and it may be (as suggested: p520) that these judgments will not be the last word on that subject. But the court plainly treated the case as one not falling under the principles derived from Lord Cairns' Act. I cannot, however, accept that Brightman J's assessment of damages in Wrotham Park was based on other than compensatory principles. The defendants had committed a breach of covenant, the effects of which continued. The judge was not willing to order the defendants to undo the continuing effects of that breach. He had therefore to assess the damages necessary to compensate the plaintiffs for this continuing invasion of their right. He paid attention to the profits earned by the defendants, as it seems to me, not in order to strip the defendants of their unjust gains, but because of the obvious relationship between the profits earned by the defendants and the sum which the defendants would reasonably have been willing to pay to secure release from the covenant. I am reassured to find that this is the view taken of Wrotham Park by Megarry V-C in Tito v Waddell (No 2) [1977] Ch 106 at p335D when he said:

    Brightman J resolved the difficult question of the appropriate quantum of damages by holding that the plaintiffs should recover 5 per cent of the defendants' expected profit from their venture. In Bracewell v Appleby, Graham J applied the same principle where the right in question was not a consent under a restrictive covenant, but an easement of way.

    I find great difficulty in seeing how these cases help Mr Macdonald. If the plaintiff has the right to prevent some act being done without his consent, and the defendant does the act without seeking that consent, the plaintiff has suffered a loss in that the defendant has taken without paying for it something for which the plaintiff could have required payment, namely, the right to do the act. The court therefore makes the defendant pay what he ought to have paid the plaintiff. for that is what the plaintiff has lost. The basis of computation is not, it will be observed, in any way directly related to wasted expenditure or other loss that the defendant is escaping by reason of an injunction being refused: it is the loss that the plaintiff has suffered by the defendant not having observed the obligation to obtain the plaintiff's consent. Where the obligation is contractual, that loss is the loss caused to the plaintiff by the breach of contract.

41. I can see no reason why a judge should not assess damages on the Wrotham Park basis when he declines to prevent commission of a future wrong.

    The present case

42. The judge recognised that a plaintiff who can show that his legal right will be violated by the defendant's conduct is prima facie entitled to the grant of an injunction. He accepted that the court will only rarely and reluctantly permit such violation to occur or continue. But he held that this case fulfilled the four tests laid down by A L Smith LJ in Shelfer to bring this case within the exception. The real question in this appeal is whether that judgment is sustainable.

    (1) He regarded the injury to the plaintiff's right as small. This is, in my view, so. It is not suggested that the increase in traffic attributable to the existence of no 5A will be other than minimal, or that the cost of keeping up the road will be significantly increased. The defendants have in any event offered throughout to contribute to the cost of upkeep and are willing, if a draft is tendered to them, to execute a deed binding themselves by the same covenants as other residents of the avenue. It is not suggested that the driveway to no 5A impairs the visual amenity of the plaintiff's house or affects its value. There is of course a violation of the plaintiff's strict legal right, but that will be so in any case of this kind.

    (2) The judge considered the value of the injury to the plaintiff's right as capable of being estimated in money. He based himself on the Wrotham Park approach. In my view, he was justified. He valued the right at what a reasonable seller would sell it for. In situations of this kind a plaintiff should not be treated as eager to sell, which he very probably is not. But the court will not value the right at the ransom price which a very reluctant plaintiff might put on it. I see no error in the judge's approach to this aspect.

    (3) The judge held that the injury to the plaintiff's legal right was one which could be adequately compensated by a small money payment. I agree, and I do not think this conclusion can be faulted.

    (4) The judge concluded that in all the circumstances it would be oppressive to the defendants to grant the injunctions sought. Most of the argument turned on this condition and in particular on the significance which the judge attached to the plaintiff's failure to seek interlocutory relief.

43. It is important to bear in mind that the test is one of oppression, and the court should not slide into application of a general balance of convenience test. But oppression must be judged as at the date the court is asked to grant an injunction, and (as Brightman J recognised in Wrotham Park) the court cannot ignore the reality with which it is then confronted. It is relevant that the plaintiff could at an early stage have sought interlocutory relief, which she would seem very likely to have obtained; but it is also relevant that the defendants could have sought a declaration of right. These considerations are not decisive. It would weigh against a finding of oppression if the defendants had acted in blatant and calculated disregard of the plaintiff's rights, of which they were aware, but the judge held that this was not so, and the plaintiff's solicitors may be thought to have indicated that damages would be an acceptable remedy. It was suggested that an injunction restraining trespass on the plaintiff's roadway would not be oppressive since the occupiers of no 5A could use the other half of the roadway outside the plaintiff's house, but this would seem to me unworkable in practice, a recipe for endless dispute and a remedy which would yield nothing of value to the plaintiff. It was suggested that the occupiers of no 5A could be restrained from using the driveway over the land formerly part of no 5 for vehicular access, while access on foot would be permitted. But this, as it seems to me, would impose inconvenience and loss on the occupier and owner of no 5A without upholding the plaintiff's right or yielding any practical benefit to her. As section 84 of the Law of Property Act 1925 makes clear, restrictive covenants cannot be regarded as absolute and inviolable for all time. The judge was, in my view, entitled to hold on all the facts before the court at trial that the grant of an injunction would be oppressive to the defendants and I share that view.

44. The only argument pressed on damages was that the only damages properly awardable on compensatory principles would have been nominal and that therefore an injunction should have been granted. As already indicated, I think that the Wrotham Park approach was appropriate even on pure compensatory principles and the judge followed it correctly.

45. One cannot but regret that this dispute among neighbours should have escalated as it has. Having heard the argument in full it would be futile to deny the plaintiff the leave to appeal and the extension of time which she seeks. But I am of the clear opinion that the appeal must be dismissed.

46. Kennedy LJ agreed and did not add anything.

47. Also agreeing, Millett LJ said: This appeal raises yet again the questions: what approach should the court adopt when invited to exercise its statutory jurisdiction to award damages instead of granting an injunction to restrain a threatened or continuing trespass or breach of a restrictive covenant? and if the court accedes to the invitation on what basis should damages be assessed?

48. Before considering these questions, it is desirable to state some general propositions which are established by the authorities and which are, or at least ought to be, uncontroversial.

    1. The jurisdiction was originally conferred by section 2 of the Chancery Amendment Act 1858, commonly known as Lord Cairns' Act. It is now to be found in section 50 of the Supreme Court Act 1981. It is a jurisdiction to award damages 'in addition to, or in substitution for, an injunction or specific performance'.

    2. The principal object of Lord Cairns' Act is well known. It was described by Turner LJ in Ferguson v Wilson (1866) 2 Ch App 77 at p88. It was to enable the Court of Chancery, when declining to grant equitable relief and leaving the plaintiff to his remedy at law, to award the plaintiff damages itself instead of sending him to the common law courts to obtain them. From the very first, however, it was recognised that the Act did more than this. The jurisdiction of the Court of Chancery was wider than that of the common law courts, for it could give relief where there was no cause of action at law. As early as 1863, Turner LJ himself had recognised the potential effect of Lord Cairns' Act. In Eastwood v Lever (1863) 4 De GJ & SM 114 he pointed out that the Act had empowered the courts of equity to award damages in cases where the common law courts could not. The Act, he said, was not 'confined to cases in which the plaintiff could recover damages at law'. Damages at common law are recoverable only in respect of causes of action which are complete at the date of the writ; damages for future or repeated wrongs must be made the subject of fresh proceedings. Damages in substitution for an injunction, however, relate to the future, not the past. They inevitably extend beyond the damages to which the plaintiff may be entitled at law. In Leeds Industrial Co-operative Society Ltd v Slack [1924] AC 851 the House of Lords confirmed the jurisdiction of the courts to award damages under the Act in respect of an injury which was threatened but had not yet occurred. No such damages could have been awarded at common law.

    3. The nature of the cause of action is immaterial; it may be in contract or tort. Lord Cairns' Act referred in terms to 'a breach of any covenant, contract or agreement, or against the commission or continuance of any wrongful act'. The jurisdiction to award damages in substitution for an injunction has most commonly been exercised in cases where the defendant's building has infringed the plaintiff's right to light or where it has been erected in breach of a restrictive covenant. Despite dicta to the contrary in Woollerton & Wilson Ltd v Richard Costain Ltd [1970] 1 WLR 411 there is, in my opinion, no justification for excluding cases of threatened or continuing trespass on the ground that trespass is actionable at law without proof of actual damage. Equitable relief, whether by way of injunction or damages under Lord Cairns' Act, is available because the common law remedy is inadequate; but the common law remedy of damages in cases of continuing trespass is inadequate not because the damages are likely to be small or nominal, but because they cover the past only and not the future.

    4. The power to award damages under Lord Cairns' Act arises whenever the court 'has jurisdiction to entertain an application' for an injunction or specific performance. This question must be determined as at the date of the writ. If the court would then have had jurisdiction to grant an injunction, it has jurisdiction to award damages instead. When the court comes to consider whether to grant an injunction or award damages instead, of course, it must do so by reference to the circumstances as they exist at the date of the hearing.

    5. The former question is effectively one of jurisdiction. The question is whether, at the date of the writ, the court could have granted an injunction, not whether it would have done: City of London Brewery Co v Tennant (1873) 9 Ch App 212. Russell LJ put it neatly in Hooper v Rogers [1975] Ch 43 at p48 when he said that the question was 'whether the judge could have (however unwisely) made a mandatory order'. There have been numerous cases where damages under Lord Cairns' Act were refused because at the date of the writ it was impossible to grant an injunction or specific performance: for one well-known example, see Lavery v Pursell (1888) 39 ChD 508. The recent case of Surrey County Council v Bredero Homes Ltd [1993] 1 WLR 1361 appears to have been a case of this character.

    6. It is not necessary for the plaintiff to include a claim for damages in his writ. As long ago as 1868 Lord Chelmsford LC held that damages may be awarded under Lord Cairns' Act 'though not specifically prayed for by the bill, the statute having vested a discretion in the judge which he may exercise when he thinks the case fitting without the prayer of the party': Betts v Neilson (1868) 3 Ch App 429 at p441. It would be absurd as well as misleading to insist on the plaintiff including a claim for damages in his writ when he is insisting on his right to an injunction and opposing the defendant's claim that he should be content to receive damages instead. By a parity of reasoning it is not, in my opinion, necessary for a plaintiff to include a claim for an injunction to order to found a claim for damages under the Act. It would be absurd to require him to include a claim for an injunction if he is sufficiently realistic to recognise that in the circumstances he is unlikely to obtain one and intends from the first to ask the court for damages instead. But he ought to make it clear whether he is claiming damages for past injury at common law or under the Act in substitution for injunction.

    7. In Anchor Brewhouse Developments Ltd v Berkley House (Docklands) Developments Ltd (1987) 38 BLR 82 at p87 Scott J granted an injunction to restrain a continuing trespass. In the course of his judgment, however, he cast doubt on the power of the court to award damages for future trespasses by means of what he described as a 'once and for all payment'. This was because, as he put it, the court could not by an award of damages put the defendant in the position of a person entitled to an easement; whether or not an injunction were granted, the defendant's conduct would still constitute a trespass; and a succession of further actions for damages could accordingly still be brought. This reasoning strikes at the very heart of the statutory jurisdiction; it is in marked contrast to the attitude of the many judges who from the very first have recognised that, while the Act does not enable the court to licence future wrongs, this may be the practical result of withholding injunctive relief; and it is inconsistent with the existence of the jurisdiction, confirmed in Leeds Industrial Co-operative Society Ltd v Slack, to award damages under the Act in a quia timet action. It is, in my view, fallacious because it is not the award of damages which has the practical effect of licensing the defendant to commit the wrong, but the refusal of injunctive relief. Thereafter the defendant may have no right to act in the manner complained of, but he cannot be prevented from doing so. The court can, in my judgment, properly award damages 'once and for all' in respect of future wrongs because it awards them in substitution for an injunction and to compensate for those future wrongs which an injunction would have prevented. The doctrine of res judicata operates to prevent the plaintiff and his successors in title from bringing proceedings thereafter to recover even nominal damages in respect of further wrongs for which the plaintiff has been fully compensated.

49. It has always been recognised that the practical consequence of withholding injunctive relief is to authorise the continuance of an unlawful state of affairs. If, for example, the defendant threatens to build in such a way that the plaintiff's light will be obstructed and he is not restrained, then the plaintiff will inevitably be deprived of his legal right. This was the very basis upon which before 1858 the Court of Chancery had made the remedy of injunction available in such cases. After the passing of Lord Cairns' Act many of the judges warned that the jurisdiction to award damages instead of an injunction should not be exercised as a matter of course so as to legalise the commission of a tort by any defendant who was willing and able to pay compensation. In Shelfer v City of London Electric Lighting Co Ltd [1895] 1 ChD 287 Lindley LJ said at p315:

    But in exercising the jurisdiction thus given attention ought to be paid to well settled principles; and ever since Lord Cairns' Act was passed the Court of Chancery has repudiated the notion that the Legislature intended to turn that Court into a tribunal for legalizing wrongful acts; or in other words, the Court has always protested against the notion that it ought to allow a wrong to continue simply because the wrongdoer isable and willing to pay for the injury he may inflict.

50. And in Cowper v Laidler [1903] 2 Ch 337 Buckley J said at p341:

    The Court has affirmed over and over again that the jurisdiction to give damages where it exists is not so to be used as in fact to enable the defendant to purchase from the plaintiff against his will his legal right to the easement.

51. Mrs Jaggard is, therefore, in good company when she says in her skeleton argument (prepared when she was acting in person):

    What the judge has in effect done in his judgment is to grant Mr and Mrs Sawyer a right of way in perpetuity over my land for a once and for all payment. I do not understand how the court can have power to produce such a result as it effectively expropriates my property … Ashleigh Avenue is a private roadway and the judge has turned it into a public highway. Surely he does not have jurisdiction to do this?

52. It will be of small comfort to her to be told that the jurisdiction is undoubted, though it is to be exercised with caution. What does need to be stressed, however, is that the consequences to which Mrs Jaggard refers do not result from the judge's exercise of the statutory jurisdiction to award damages instead of an injunction, but from his refusal to grant an injunction. Lord Cairns' Act did not worsen the plaintiff's position, but improved it. Thenceforth, if injunctive relief was withheld, the plaintiff was not compelled to wait until further wrongs were committed and then bring successive actions for damages; he could be compensated by a once and for all payment to cover future as well as past wrongs. Of course, the ability to do 'complete justice' in this way made it easier for the courts to withhold the remedy of an injunction, and it was therefore necessary for the judges to remind themselves from time to time that the discretion to withhold it, which had existed as well before 1858 as after it, was to be exercised in accordance with settled principles; that a plaintiff who had established both a legal right and a threat to infringe it was prima facie entitled to an injunction to protect it; and that special circumstances were needed to justify withholding the injunction.

53. Nevertheless references to the 'expropriation' of the plaintiff's property are somewhat overdone, not because that is not the practical effect of withholding an injunction, but because the grant of an injunction, like all equitable remedies, is discretionary. Many proprietary rights cannot be protected at all by the common law. The owner must submit to unlawful interference with his rights and be content with damages. If he wants to be protected he must seek equitable relief and he has no absolute right to that. In many cases, it is true, an injunction will be granted almost as of course; but this is not
    always the case and it will never be granted if this would cause injustice to the defendant. Citation of passages in the cases warning of the danger of 'expropriating' the plaintiff needs to be balanced by reference to statements like that of Lord Westbury LC in Isenberg v East India House Estate Co Ltd (1863) 3 De GJ & SM 263 at p273 where he held that it was the duty of the court not

    by granting a mandatory injunction, to deliver over the Defendants to the Plaintiff bound hand and foot, in order to be made subject to any extortionate demand that he may by possibility make, but to substitute for such mandatory injunction an inquiry before itself, in order to ascertain the measure of damage that has been actually sustained.

54. When the plaintiff claims an injunction and the defendant asks the court to award damages instead, the proper approach for the court to adopt cannot be in doubt. Clearly the plaintiff must first establish a case for equitable relief, not only by proving his legal right and an actual or threatened infringement by the defendant, but also by overcoming all equitable defences such as laches, acquiescence or estoppel. If he succeeds in doing this, he is prima facie entitled to an injunction. The court may nevertheless in its discretion withhold injunctive relief and award damages instead. How is this discretion to be exercised? In a well known passage in Shelfer v City of London Electric Lighting Co at pp322--3 A L Smith LJ set out what he described as 'a good working rule' that:

    (1) If the injury to the plaintiff's legal rights is small,

    (2) And is one which is capable of being estimated in money,

    (3) And is one which can be adequately compensated by a small money payment,

    (4) And the case is one in which it would be oppressive to the defendant to grant an injunction: --

    then damages in substitution for an injunction may be given.

55. Laid down just 100 years ago, A L Smith LJ's check-list has stood the test of time; but it needs to be remembered that it is only a working rule and does not purport to be an exhaustive statement of the circumstances in which damages may be awarded instead of an injunction.

56. Reported cases are merely illustrations of circumstances in which particular judges have exercised their discretion, in some cases by granting an injunction, and in others by awarding damages instead. Since they are all cases on the exercise of a discretion, none of them is a binding authority on how the discretion should be exercised. The most that any of them can demonstrate is that in similar circumstances it would not be wrong to exercise the discretion in the same way. But it does not follow that it would be wrong to exercise it differently.

57. The outcome of any particular case usually turns on the question: would it in all the circumstances be oppressive to the defendant to grant the injunction to which the plaintiff is prima facie entitled? Most of the cases in which the injunction has been refused are cases where the plaintiff has sought a mandatory injunction to pull down a building which infringes his right to light or which has been built in breach of a restrictive covenant. In such cases the court is faced with a faitaccompli. The jurisdiction to grant a mandatory injunction in those circumstances cannot be doubted, but to grant it would subject the defendant to a loss out of all proportion to that which would be suffered by the plaintiff if it were refused, and would indeed deliver him to the plaintiff bound hand and foot to be subjected to any extortionate demands the plaintiff might make. In the present case, as in the closely similar case of Bracewell v Appleby [1975] Ch 408, the plaintiff sought a prohibitory injunction to restrain the use of a road giving access to the defendant's house. The result of granting the injunction would be much the same; the house would not have to be pulled down, but it would be rendered landlocked and incapable of beneficial enjoyment.

58. In the cases of oversailing cranes and other trespasses to the plaintiff's airspace, on the other hand, the court has not been faced with a similar fait accompli. The grant of an injunction would merely restore the parties to the same position, with each of them enjoying the same bargaining strength, that they had enjoyed before the trespass began. Goodson v Richardson (1874) 9 Ch App 221 was a case of this character. The defendant, being desirous of laying pipes for the supply of water to some houses which he had built, applied to the local highways board for permission to lay the pipes in the soil under the highway. Permission was granted, but he was expressly told that this was subject to the rights of the adjoining owners. He made no approach to the adjoining owners, of whom the plaintiff was one, but began to lay pipes in the soil of their land, whereupon the plaintiff brought prompt action for an injunction. The court granted an injunction, regarding the case as a deliberate and unlawful invasion by one man of another man's land for the purpose of a continuing trespass, to the gain and profit of the trespasser, without the consent of the owner of the land. The injunction required the pipes to be removed; but this involved relatively little cost and could hardly be considered oppressive. The defendant had acted with his eyes open and the injunction merely restored him, after a little expenditure on his part, to the position he was in at the start.

59. In considering whether the grant of an injunction would be oppressive to the defendant, all the circumstances of the case have to be considered. At one extreme, the defendant may have acted openly and in good faith and in ignorance of the plaintiff's rights, and thereby inadvertently placed himself in a position where the grant of an injunction would either force him to yield to the plaintiff's extortionate demands or expose him to substantial loss. At the other extreme, the defendant may have acted with his eyes open and in full knowledge that he was invading the plaintiff's rights, and hurried on his work in the hope that by presenting the court with a fait accompli he could compel the plaintiff to accept monetary compensation. Most cases, like the present, fall somewhere in between.

60. In the present case, Mr and Mrs Sawyer acted openly and in good faith and in the not unreasonable belief that they were entitled to make use of Ashleigh Avenue for access to the house that they were building. At the same time, they had been warned by Mrs Jaggard and her solicitors that Ashleigh Avenue was a private road, that they were not entitled to use it for access to the new house, and that it would be a breach of covenant for them to use the garden of no 5 to gain access to no 5A. They went ahead, not with their eyes open, but at their own risk. On the other hand, Mrs Jaggard did not seek interlocutory relief at a time when she would almost certainly have obtained it. She should not be criticised for that, but it follows that she also took a risk, viz: that by the time her case came for trial the court would be presented with a fait accompli. The case was a difficult one, but in an exemplary judgment the learned judge took into account all the relevant considerations, both those which told in favour of granting an injunction and those which told against, and in the exercise of his discretion he decided to refuse it. In my judgment, his conclusion cannot be faulted.

61. Having decided to refuse an injunction and to award Mrs Jaggard damages instead, the judge had to consider the measure of damages. He based them on her share of the amount which, in his opinion, Mrs Jaggard and the other residents of Ashleigh Avenue could reasonably have demanded as the price of waiving their rights. In this he applied the measure of damages which had been adopted by Brightman J in WrothamPark Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798, a case which has frequently been followed. It would not be necessary to consider this matter further but for the fact that in the recent case in this court of Surrey County Council v Bredero Homes Ltd doubts were expressed as to the basis on which this measure of damages could be justified and whether it was consistent with the reasoning of Lord Wilberforce in Johnson v Agnew [1980] AC 367. It is, therefore, necessary to examine those cases further.

62. In Surrey County Council v Bredero Homes Ltd the plaintiffs claimed damages from the original covenantor, a developer, for breach of a restrictive covenant against building more than 72 houses, and sought to measure the damages by reference to the additional profit which the defendant had made by building the extra houses. Their claim to substantial damages failed. The case is not authority on the proper measure of damages under Lord Cairns' Act, since (as Dillon LJ made clear at p1367C) the plaintiffs' claim was for damages at common law and not under the Act. Unfortunately, he did not make it clear why this was so. At p1364A--B he said:

    The plaintiffs therefore seek damages. They have never sought an interim injunction to restrain the defendant from developing the land otherwise than in accordance with the first planning permission. They never sought an injunction at the trial requiring the defendant to pull down the completed houses. They recognised that there was never any practical possibility of such an injunction being granted.

63. If this is to be understood as meaning that the plaintiffs were confined to their remedy at law because they had not included a claim to an injunction in the writ, or because there never was any practical possibility, whether at the date of the writ or at the date of the trial, of obtaining an injunction, then I cannot agree with it. But examination of the facts stated in the headnote reveals that the defendant had disposed of all the houses on the estate before the plaintiffs commenced proceedings, and that the purchasers were not joined as parties. Any claim to damages under Lord Cairns' Act must have failed; at the date of the writ the court could not have ordered the defendant to pull down the houses, since this was no longer something which was within its power to do.

64. Unfortunately, however, Dillon LJ cast doubt on the correctness of the measure of damages which had been adopted by Brightman J in Wrotham Park Estate Co Ltd v Parkside Homes Ltd,a case which was decided under Lord Cairns' Act. At p1366H he said:

    The difficulty about the decision in the Wrotham Park case is that in Johnson v Agnew [1980] AC 367, 400G Lord Wilberforce, after citing certain decisions on the scope and basis of Lord Cairns's Act which were not cited to Brightman J, stated in the clearest terms that on the balance of those authorities and on principle he found in the Act no warrant for the court awarding damages differently from common law damages.

65. Johnson v Agnew concerned a contract for the sale of land. The vendor obtained a decree of specific performance with which the purchaser failed to comply. The vendor's mortgagees then sold the land. The vendor was compelled to return to the court and ask it to dissolve the decree and award her damages instead. At first instance she was refused damages, but in this court she was awarded damages under Lord Cairns' Act by reference to the value of the land at the date when specific performance became impossible. An appeal by the purchaser to the House of Lords failed. Before the House of Lords neither party argued that the measure of damages under Lord Cairns' Act differed from the measure of damages at common law: see [1980] AC pp379B--C; p387A, F. The vendor placed no reliance on the wording of section 2 of the Act which provided that damages might be assessed 'in such manner as the Court shall direct' which, as Lord Wilberforce explained, referred only to procedure. Where the parties differed was whether the damages, whether at common law or under the Act, had invariably to be measured by reference to the value of the land ascertained at the date of the breach of contract.

66. In the course of his speech Lord Wilberforce (at p400E--F) referred to the view expressed by Megarry J in Wroth v Tyler [1974] Ch 30 that the words 'in substitution for a decree of specific performance' allowed the court to assess damages under the Act as on the date when specific performance could have been ordered, that is to say as at the date of the judgment of the court, and said that if that was intended to establish a different basis from that applicable at common law then he could not agree with it.

67. This statement must not be taken out of context. Earlier in his speech Lord Wilberforce had clearly recognised that damages could be awarded under Lord Cairns' Act where there was no cause of action at law, and he cannot have been insensible to the fact that, when the court awards damages in substitution for an injunction, it seeks to compensate the plaintiff for loss arising from future wrongs, that is to say, loss for which the common law does not provide a remedy. Neither Wroth v Tyler nor Johnson v Agnew was a case of this kind. In each of those cases the plaintiff claimed damages for loss occasioned by a single, once and for all, past breach of contract on the part of the defendant. In neither case was the breach a continuing one capable of generating further losses. In my view, Lord Wilberforce's statement that the measure of damages is the same whether damages are recoverable at common law or under the Act must be taken to be limited to the case where they are recoverable in respect of the same cause of action. It cannot sensibly have any application where the claim at common law is in respect of a past trespass or breach of covenant and that under the Act is in respect of future trespasses or continuing breaches of covenant.

68. Accordingly, I am of opinion that the judge was not precluded by the decision of the House of Lords in Johnson v Agnew from adopting the measure of damages which he did. It is, however, necessary to notice the observations of Steyn LJ in Surrey County Council v Bredero Homes Ltd (supra)at p1369F where he said:

    In my view Wrotham Park Estate Co Ltd v Parkside Homes Ltd …isonly defensible on the basis of the third or restitutionary principle … The plaintiffs' argument that the Wrotham Park case can be justified on the basis of a loss of bargaining opportunity is a fiction.

69. I find these remarks puzzling. It is plain from his judgment in the Wrotham Park case that Brightman J's approach was compensatory, not restitutionary. He sought to measure the damages by reference to what the plaintiff had lost, not by reference to what the defendant had gained. He did not award the plaintiff the profit which the defendant had made by the breach, but the amount which he judged the plaintiff might have obtained as the price of giving its consent. The amount of the profit which the defendant expected to make was a relevant factor in that assessment, but that was all.

70. Both the Wrotham Park and Bredero Homes cases (unlike the present) were concerned with a single past breach of covenant, so that the measure of damages at common law and under the Act was the same. Prima facie the measure of damages in either case for breach of a covenant not to build a house on neighbouring land is the diminution in the value of the plaintiff's land occasioned by the breach. One element in the value of the plaintiff's land immediately before the breach is attributable to his ability to obtain an injunction to prevent the building. Clearly a defendant who wished to build would pay for the release of the covenant, but only so long as the court could still protect it by the grant of an injunction. The proviso is important. It is the ability to claim an injunction which gives the benefit of the covenant much of its value. If the plaintiff delays proceedings until it is no longer possible for him to obtain an injunction, he destroys his own bargaining position and devalues his right. The unavailability of the remedy of injunction at one and the same time deprives the court of jurisdiction to award damages under the Act and removes the basis for awarding substantial damages at common law. For this reason, I take the view that damages can be awarded at common law in accordance with the approach adopted in Wrotham Park, but in practice only in the circumstances in which they could also be awarded under the Act.

71. This may be what Steyn LJ had in mind when he said that the loss of bargaining opportunity was a fiction. If he meant it generally or in relation to the facts which obtained in the Wrotham Park case, then I respectfully disagree. But it was true in the circumstances of the case before him and not merely for the reason given by Rose LJ (that the plaintiffs did not object to the extra houses and would have waived the breach for a nominal sum). The plaintiffs did not bring the proceedings until after the defendant had sold the houses and was no longer susceptible to an injunction. The plaintiffs had thereby deprived themselves of any bargaining position. Unable to obtain an injunction, they were equally unable to invoke the jurisdiction to award damages under Lord Cairns' Act. No longer exposed to the risk of an injunction, and having successfully disposed of the houses, the defendant had no reason to pay anything for the release of the covenant. Unless they were able to recover damages in accordance with restitutionary principles, neither at common law nor in equity could the plaintiffs recover more than nominal damages.

72. In the present case Mrs Jaggard brought proceedings at a time when her rights were still capable of being protected by injunction. She has accordingly been able to invoke the court's jurisdiction to award, in substitution for an injunction, damages which take account of the future as well as the past. In my view, there is no reason why compensatory damages for future trespasses and continuing breaches of covenant should not reflect the value of the rights which she has lost, or why such damages should not be measured by the amount which she could reasonably have expected to receive for their release.

73. In my judgment, the judge's approach to the assessment of damages was correct on the facts and in accordance with principle. I would dismiss the appeal.

    Appeal dismissed.

The electronic text of this judgment was provided by Estates Gazette, whose assistance is gratefully acknowledged.