England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE DERBY COUNTY COURT
(His Honour Judge Wait)

		Royal Courts of Justice Strand London WC2
		Monday, 27th May 2002

1. LORD JUSTICE WARD:This is an application by the unsuccessful defendants for permission to appeal against the order made by His Honour Judge Wait in the Derby County Court on 4th January 2002, when he awarded the claimant damages quantified in the sum of £8,460, which arose in the following circumstances.
2. The claimant is a farmer, whose case it was that he had been granted oral agricultural holding tenancies of two fields by a Mr Poyser. Mr Poyser died and the administrators of his estate sold those fields to the defendants. The defendants took the view that the claimant had no more than a licence, which they then purported to terminate, and consequently they locked the gates to the relevant fields and excluded the claimant from them. He brought a claim for damages for breach of the covenant of quiet enjoyment of the tenancy, which he alleged was good as against the defendants, and for trespass. That issue was resolved by Judge Wait on 20th November, when, on the preliminary issue of liability, it was found and declared that:

"Pursuant to agreement entered into between the Claimant and Mr Poyser in 1986 the Claimant was at all material times and remains entitled to exclusive possession of Fields 1 and 19 ... and he occupied the same pursuant to a tenancy granted in accordance with and subject to the Agricultural Holdings Act 1986."

3. The matter then went over for the assessment of damages. Damages in respect of field 1 were awarded on the basis of the loss of profit suffered by the claimant as a result of his exclusion from field 1. But in the case of field 19 the position was different. That field was sold on by the defendants on 10th November 2000 to a Mr White. There seems to be no real certainty as to whether (and, if so, when) the claimant came to know of it, but the case is put before me on the basis that he must have known by at least April 2001, when there was discovery and disclosure in this action. The judge awarded damages for field 19, accepting the claim that the method of assessment was to take the value of the field if sold with vacant possession and the value if sold subject to the tenancy. That was eventually worked out by the expert valuer to be the sum of £8,460, for which judgment was entered.
4. Mr De Waal, for whose submissions I am indebted, submits that the wrong means of quantifying damages was adopted. He submits that because the judge had found a subsisting agricultural tenancy, then, although incapable of registration because it was for a term of less than 21 years, it was nonetheless an overriding interest within section 70(1)(k) of the Land Registration Act 1925. Consequently, Mr White, the new owner, acquired the land subject to that overriding interest. It is argued that the claimant is entitled to assert his tenancy against Mr White and should do so, and he is therefore entitled only to the loss of profit from the time of his dispossession until the time of the sale in November 2001, although Mr De Waal would, I think, concede a short further period giving him reasonable time to enforce his rights of occupation.
5. The judge dealt with the matter in this way. He said at p.2 of his very short judgment:

"In this case, the value of the claimant's interest in the land sold by the defendants can be and has been valued by Mr Hopkinson, the joint expert. The defendants in this action are not in a position to permit the claimant to re-enter the land and to continue his quiet enjoyment of the tenancy. They would have to require him to take further action.

The defendant could have taken that further action himself earlier in these proceedings. The defendants could have joined the third party. The defendants could, following the declaration, themselves have sought to recover possession of the land on behalf of the claimant but they have done nothing to mitigate the loss and it ill behoves them, in the circumstances, to criticise the claimant for failing to do so. In my judgment, as far as they are concerned, they are not in a position to permit the claimant to re-enter the land and having regard to their conduct, it would be quite improper to require the claimant to take further steps; incur further delay and further expense; and face the risk, having done so, of taking further action against defendants who have shown some hostility to him in seeking to recover the costs and further expenses they will by then have incurred."

6. The judge proceeded upon a basis with which the defendants cannot quarrel: that when they sold the land on to Mr White (a) they sold it without the knowledge of the claimant; (b) they sold it with vacant possession; and consequently (c) they sold it with the enjoyment of a price for the land sold with vacant possession as opposed to the diminished price which would have been obtained had they sold it subject to the tenancy. As the judge said:

"They obtained a significantly higher price than would have been the case if it had been sold subject to the tenancy."

7. I see the force of the submission made by Mr De Waal that the judgment bears a fatal inconsistency in that on the one hand the tenancy is found to subsist, yet on the other hand damages are being awarded on an assumption that effectively the tenancy has come to an end and the exclusion is permanent. I am troubled by that point; but then I have to look to the alternative way in which this case can and, in my judgment, should be viewed. This is a claim for damages, and the nature of the plea to reduce those damages is that the claimant failed to mitigate his loss by taking action against the new purchasers, of whom he did not at first even know, in order to assert as against them the tenancy right which he claims as against the defendants. This is, in my judgment, a plea in mitigation of damages which was not made on the pleadings and, as the judge himself put it, it ill behoves the defendants to criticise the claimant for failing to do what they failed themselves to do.
8. The consequences of the defendants' action is that they have secured for themselves an unjust enrichment of the difference in price which one assumes to be about the same as the amount of the damages. For Mr Ward to begin a fresh action against the owner, Mr White, would involve him in a law suit with delay and expense and an outcome which is not necessarily to be assumed to be the same as that which he has enjoyed against the defendants because Mr White was not a party to this litigation and is not bound by it. I agree with the judge that he should not be called upon to mitigate his damages in that way. He was entitled to assume that his exclusion was permanent, and there is nothing in the papers to indicate that that is not in fact what has actually happened; that is to say, there was nothing before the judge to indicate that he had sought to re-occupy field 19. On the contrary, it seems that the inference is that he has accepted that he is not going back on to field 19. In those circumstances he is the one who has suffered the diminution of £8,460 and the defendants should not cling on to that amount of money to which they would not otherwise be entitled.
9. I have given anxious consideration to adjourning this matter in order to invite the defendants to respond to it before granting permission to appeal. I have concluded against doing so. The amount in dispute is only in the region of £5,000. I am not saying that that is an insignificance sum of money to the parties in this case, but it is, in the grand scheme of things, not a vast amount of money; and, bearing in mind the overriding objectives of saving expense, dealing in ways which are proportionate to the amount of money involved, the importance of the case, the complexity of the issues and the financial position of the parties, it is, in my judgment, time that this litigation came to an end. I readily appreciate the point of interest for the Chancery lawyers, but for the parties it is time that this matter is put to bed. I am fortified in that conclusion by noting that Lady Justice Arden dismissed the application on paper, and I see no real reason to disagree with her conclusions.
10. So with thanks to Mr De Waal, I would nonetheless dismiss this application.
Order: application for permission to appeal dismissed.