England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		28th October 2008

Mr Derek Sweeting QC:

Introduction

1. The Claimant, Mr Haysman, lives in a detached house in Rickmansworth. A number of rooms in his home are furnished and decorated in a style which is authentic to the 1960's or early 1970's. The house is registered with a film location agency.
2. In 2007 the Defendant, a Film Production Company, identified Mr Haysman's property as a potential location for a film with the working title "Flashbacks of a Fool".
3. The parties entered into a Film Location Agreement dated the 2^nd May 2007 ("the Agreement"). Preparation and filming in the property took place between the 9^th and 14^th July 2007.
4. Mr Haysman's claim arises from damage caused to both the interior and exterior of the property by the Defendant. There is no issue that damage occurred; breach of the Agreement is admitted in the Defence. The dispute relates to the amount and nature of the loss which is recoverable.
5. Clause 6.1 of the Agreement provides:

"The Company shall indemnify the owner in accordance with the terms and conditions of the Company's insurance cover for the film, against any loss or damage to the location and personal injury or death to any person resulting solely and directly from a negligent act or omission by the Company and/or its agents or employees in connection with the Company's use of the location under this Agreement."

6. Notwithstanding the reference to or incorporation of the terms and conditions of the insurance cover neither the Claimant or Defendant has sought to argue that there are any such terms or conditions which fall to be considered in construing the contractual indemnity for the purpose of these proceedings.
7. In the course of argument the Claimant also sought to rely on Clause 4.1 of the Location Agreement which provides that:-

"The Company shall have the right to make changes, additions and alterations in and to the location, including the interior and exterior as the owner and Company shall mutually agree in good faith. Any agreed modification shall be of a temporary nature and the Company shall, if required, after the Company's final use restore the location to the condition of the location prior to the commencement of the Period, fair wear and tear accepted."

8. Modifications were, it appears, made to the interior of the property for the purpose of filming as set out in a document from the "Art Department" dated the 1^st May 2007. There are no complaints that these modifications were not reversed and, in my view, Clause 4.1 does not impose a wider and more general obligation to restore the property to its condition prior to filming. A breach of Clause 4.1 was not in fact alleged in the Particulars of Claim and was not, accordingly, the subject of the admission made in the Defence. This clause is however relevant to any consideration of the overall nature and object of the Agreement.

Driveway Repairs

9. Whilst filming took place inside the property a number of large and heavy equipment vehicles were parked on the driveway. It was unable to support their weight and damage was caused; principally in the form of depressions in the tarmac surface.
10. It was not in issue at trial that the appropriate remedial scheme involved the resurfacing of the entire driveway. An "estimate" was obtained from Marshall K Paving Contractors dated the 21^st July 2008, in the sum of £17,500 for the repair of the driveway and £500 in respect of damage to an adjacent wall.
11. The estimate was silent as to whether or not VAT was included and did not give the contractor's VAT registration number. By an e-mail dated the 6^th August 2008, to the Claimant's solicitor, the Defendant's solicitor asked for the registration number and for details of what precisely was included in the sum of "£17,500 + VAT".
12. The Contractor provided his VAT registration number on the 8^th August by e-mail and a revised estimate was produced showing that the original sums were exclusive of VAT. It is not in issue that Marshall K Paving Contractors Limited is registered for VAT and so obliged to charge and account for VAT on the work which is the subject of the estimate.
13. The Defendant contends that there is "a general rule" that if VAT is not mentioned the sum quoted is the full price payable and relies upon Hostgilt Limited v Megahart Limited (1997) 77 P&CR D34. However that case, and the passage at paragraph 781 of Emden's Construction Law to which I was also referred, establish only that in a concluded contract the question of whether a sum includes VAT is a matter of construction of the agreement.
14. In the present case Mr Haysman could not hold the Contractor to carry out the work for a total payment of £18,000. There is no evidence that he entered into an agreement on the basis of the original estimate, which has now been revised to show that VAT is to be added. Since no issue is taken with the reasonableness of the estimate it is the VAT inclusive figure which is the measure of his loss.
15. Irrespective of whether VAT is recoverable the Defendant also submits that the cost of repair should be discounted to reflect an improvement or betterment in the condition of the driveway once it is reinstated.
16. It is common ground that prior to any damage caused by the Defendant there were areas of concrete patching on the driveway and parking area. These resulted from repairs to damage caused by a crane which had been positioned at the front of the house in the Summer of 2004 in order to lift a hot tub into the rear garden.
17. The Defendant's contention was that once the repair work is carried out the Claimant will have a driveway that, both in terms of its appearance and its fabric, will no longer be a patchwork of repairs. Thus it was argued that the cost of the 2004 repairs, adjusted upwards by reference to the Retail Prices Index, should be deducted from the claim in respect of the driveway.
18. The Claimant's Counsel submitted that this approach was incorrect because :-

(a) The driveway was not in a state of disrepair; it had been properly and effectively repaired in 2004;

(b) A deduction would mean that the Claimant was paying twice for the work carried out in 2004;

(c) The Claimant has no choice in the remedial work and was not adding anything but simply restoring the driveway to the serviceable condition it was in prior to the damage;

(d) To the extent that there might be some improvement in its appearance or even in its structure this was the inevitable consequence of the repairs and, citing the remarks of Cross LJ in Harbutt's Plasticine Limited v Wayne Tank and Pump Co. Ltd [1970] 1 QB 447 at 476, a new for old deduction was not appropriate.

19. In my view the Claimant is correct. Once it is accepted that the proper and reasonable remedial scheme is that proposed by the Claimant's expert, Mr Turner, and if, as I find, the driveway was previously in a good state of repair then there is no element of improvement for which the Claimant should give credit arising from the carrying out of the remedial work. I note also that a number of the areas of concrete patching had themselves been damaged by the Defendant's vehicles and so would have needed repair whatever scheme had been proposed and adopted.

Non-pecuniary loss

20. The Claimant seeks damages for non-pecuniary loss. As reflected in the Order of Master Eyre of the 13^th March 2008 the Claimant has confirmed that a claim is not made for damages for personal injury.
21. Although there was some reference in the Claimant's Skeleton to anxiety leading to the use of medication, this is not the basis on which this aspect of the claim is or could, in the circumstances, be advanced.
22. The Claimant's case is that non-pecuniary loss is recoverable because it was an important object of this contract to provide the Claimant with peace of mind. In addition or alternatively that he has suffered physical inconvenience as a result of the breach.
23. The Defendant's argument is that the Location Agreement cannot be regarded as falling within the exceptional category of cases, identified by the Court of Appeal in Watts v Morrow [1991] 1 WLR 1421, as elaborated upon by the House of Lords in Farley v Skinner [2002] 2 AC 732, where a claim for non-pecuniary loss may be pursued.
24. Although it might well be said that Mr Haysman was seeking to exploit his home for a commercial purpose it was, nevertheless, his home, as was apparent to the Defendant.
25. I accept Mr Haysman's evidence that his house was maintained in pristine condition and contained period furnishings and furniture of a high specification. It was this pervasive "retro" style which made the property attractive to the Defendant in the first place. It seems unlikely that a film company could obtain the use of domestic premises for filming without some reassurance being given as to what the position would be if temporary modifications had to be carried out or where there was a lack of care which caused damage; that reassurance was to be found in Clause 4.1 and 6.1 of the Contract, the latter of which gave an indemnity. Apart from these clauses and the provisions dealing with the payment of the fee the short contractual document is largely concerned with setting out in detail the rights of the film company and the obligations of the property owner. That in itself may perhaps underline the significance of the Defendant's obligations to reinstate or indemnify as significant features of the bargain from the Claimant's point of view.
26. I think it is both possible and appropriate in those circumstances to regard one of the important objects of the Contract as being to provide peace of mind to the home owner who was permitting his property to be used as a location for a short period.
27. I also find, in accordance with the approach suggested by the learned authors of McGregor on Damages at paragraph 3-030 of the 17^th Edition, that it was within the contemplation of the parties that a failure by the Defendant to reinstate or indemnify in respect of damage would cause anxiety or distress to the home owner and that such loss was recoverable. In that respect this was not an ordinary commercial contract where, as Lord Millett observed in Johnson v Unisys Limited [2003] 1 AC 518 at paragraph 70, "non-pecuniary loss such as mental suffering is not within the contemplation of the parties and is accordingly too remote."
28. In his evidence in relation to this aspect of the claim Mr Haysman explained that the depressions in the driveway would fill up with rainwater which in cold weather would freeze over. He was conscious of the fact that the poor condition of the driveway was immediately apparent to visitors. Although he accepted that the damage to the interior was not extensive and, apart from the hallway, was confined to rooms which were not frequently in use it was nevertheless noticeable in a house that was otherwise maintained to a very high standard. His pride in the appearance of his home had been dented and he had not felt able to go ahead with annual charity events of the sort that he had previously hosted.
29. In my view this evidence also supports the alternative basis on which this element of the claim is articulated, that is to say that Mr Haysman has suffered inconvenience. In Farley v Skinner Lord Clyde (at paragraph 37) declined to explore whether the inconvenience in that case, exposure to aircraft noise, could be regarded as "physical" concluding that "plainly it significantly interferes with his enjoyment of the property. In my view that inconvenience is something for which damages can and should be awarded."
30. Although the inconvenience here is not of the irremediable nature of aircraft noise it has interfered with Mr Haysman's enjoyment of his property and he is entitled to be compensated in damages for this and the inconvenience that he will be put to during the carrying out of the repairs to the driveway and the interior and the redecoration of his home.
31. In Farley v Skinner the award of £10,000 for a situation with which the Claimant was stuck indefinitely was described as being "at the very top end of what could possibly be regarded as appropriate damages." Lord Steyn indicated that "awards in this area should be restrained and modest."
32. In Eiles v London Borough of Southwark [2006] EWHC 1411 Mr. Justice Ramsey, at paragraphs 152-157 of his Judgment, summarised the approach of the Courts in this area and allowed £1,000 for a period of 5 years during which the Claimant had to live in a house where the walls were cracking and subject to investigation.
33. In Iggleden v Fairview New Homes [2007] EWHC 1573 (DCC) the Claimants sought damages in respect of various building defects in their home, mainly water "ponding" on the driveway and a series of unresolved snagging defects to the interior. HHJ Peter Coulson QC described the disruption and inconvenience suffered as being in the mid-range and awarded each of the two Claimants £750 for each year during which it had continued.
34. In the light of the helpful yardstick provided by these cases and having regard to my assessment of the overall degree of inconvenience and upset caused I consider that Mr Haysman is entitled to £1,000 by way of damages for non-pecuniary loss.

Loss of Earnings

35. The Claimant seeks damages in respect of his loss of earnings as a result of having to attend his property in connection with its damaged condition when he would otherwise have been working.
36. Mr Haysman is the Managing Director of a glazing company in which he has a 94% shareholding. He is also a sole trader in a off-shoot business which carries out emergency glazing repairs. But for various tax advantages his self-employed business would be carried on within his company and my impression is that for all practical purposes the two businesses work together rather than making competing demands on his time. He is mostly engaged on his company's business.
37. The company has 9 full-time staff with a number of others who are regular but self-employed. Mr Haysman goes to see customers and carries out surveys for the installation of double glazing. Although his son is also able to price jobs Mr Haysman is the customer face of the company and, in effect, its sales force. The emergency work carried on as a sole trader also requires his experience and expertise even if the work itself is carried out by others.
38. Mr Haysman has a secretary who is responsible for organising his appointments. Although he accepted that some of his work was and could be carried out in the evenings, his normal goal was to fill up his daytime appointment slots. I heard some evidence from his sister, Julia Taylor, who in addition to cleaning Mr Haysman's home twice a week, would wait in for deliveries and repair and maintenance visits. That is consistent with Mr Haysman's contention that he was generally working during the day and not free to be at home.
39. Mr Haysman estimated that he had spent 11¹/ ₂ days dealing with surveyors, loss adjusters and others in relation to the damage to his home and gave a rough breakdown of how the time was allocated. This was not put in issue directly in the Defendant's counter-schedule and it was indicated in cross-examination that it was not to be the subject of any challenge as an estimate of lost time.
40. Mr Haysman's income from his company is in the form of an annual dividend which is, of course, paid to him in his capacity as a shareholder. He indicated that the dividend was in fact intended to represent his remuneration out of profits which would only be earned if he was able to work. The claim for lost earnings was then quantified by aggregating his income from both businesses to produce a rough annual income over the three years leading up to 2007 and then arriving at a daily figure. It was accepted in closing argument that this should be calculated net rather than gross and that the net figure was £538.20 per day based on a gross figure of £780. There was no evidence to support the anticipated higher gross figure for the year April 2007 – April 2008 which had originally been advanced.
41. Counsel for the Claimant characterised the claim as being analogous to a company's claim for lost management time and in particular to the principle that in overall terms the employees of a commercial business are taken to generate revenue which is at least equal to the cost of employing them. (See Aerospace Publishing v Thames Water [2007] EWCA Civ 3).
42. The Defendant advanced a number of arguments in relation to this head of loss which were in summary that:-

(a) The claim was really one for inconvenience and distress rather than a separate and foreseeable loss.

(b) The Claimant had not proved that any loss had been suffered.

(c) If there was a loss the Claimant had failed to mitigate.

43. There is, in my view, no difficulty in principle in concluding that the parties to this contract would have contemplated that if damage was caused to the Claimant's home, or there was a failure to indemnify in respect of such damage, that the Claimant would have to devote time and effort to remedying the problems caused and might incur financial loss as a result. Such loss is distinct from non-pecuniary loss compensatable by General Damages.
44. The Claimant did not adduce any specific evidence that any appointments had been cancelled, opportunities lost or that there was any discernable dip in his income during any particular period. He accepted that he was not an employee as such and that his absence from work for a number of hours did not necessarily mean that he had lost equivalent income. He also agreed that his appointments would be arranged to suit his availability.
45. Whilst, against this background, there is force in the Defendant's argument, a period of 11¹/₂ days, or over two working weeks, is nevertheless a substantial time for the key player in a business to be absent. Equally I accept the premise of the Claimant's case that over any extended period the ability of the Claimant's business to generate a profit depends upon his attendance and input. It is also clear that his own income is directly linked to the performance of his businesses.
46. Where the Court is satisfied that loss has occurred difficulties of assessment are not, of themselves, a bar to recovery (see Simpson v London and North Western & Rly Co (1876) 1 QBD 274). Although the method adopted to identify a daily rate is necessarily imprecise it is a reasonable one in the circumstances. However I do not think that all of the period of 11¹/₂ days represents loss. There was opportunity to rearrange the Claimant's schedule which would have been taken where possible. The Claimant had others who were dealing with enquiries on his behalf and managing his time. My impression is that his is a well run and successful business. There is no suggestion that all of the time lost occurred as a single block. In the absence, in particular, of any evidence of specific work being lost I think it appropriate to assume that steps were taken to minimise the effect of Mr Haysman's absence. I think a fair approach would be to assume that such steps were as effective as often as they were not. Allowing for this and the other difficulties of assessment I conclude that approximately half of the time identified, or 6 days, should be regarded as lost. The Claimant is therefore entitled to £3,229.20 under this head.

Security

47. The Claimant seeks £2,707 for the cost of providing a security guard during the period when remedial work is to be undertaken at his home. The claim is put forward on the basis that it is a necessary precaution because of the value of the fixtures and fittings within the property and would have been within the contemplation of the parties when contracting.
48. I do not agree. It would not normally be anticipated that a domestic builder or decorator would be supervised by security personnel. Mr Haysman's evidence was that he had satisfied himself that both of the contractors who are to carry out remedial work to the interior and exterior are reputable and experienced. He also believed that they had insurance.
49. There was no evidence to suggest that the fixtures and fittings would in fact be at risk from the contractors or to explain how the presence of a security guard would, realistically, address any such problem. As far as third parties are concerned the house is hardly likely to be more vulnerable when contractors are working there.
50. I conclude that the employment of security services is not a necessary or reasonable measure, it is not a loss which flows from the Defendant's breach and was not a foreseeable consequence of that breach.

Loss of a chance

51. The Claimant seeks damages for the lost opportunity of entering into at least one other Film Location Agreement in the period since the Defendant caused damage.
52. Mr Haysman's evidence was that his property was already registered with a Film Location Agency when he purchased it and had been used in the past, or at least so he understood, for filming.
53. Prior to the agreement with the Defendant Mr Haysman had entered into one Location Agreement with Granada Television and had been offered a further opportunity by a cosmetics company but had not been able to proceed because of his holiday commitments. Some two days after the Defendant had finished filming the house was visited by another Production Company in connection with a film set in the 1960's. That company did not take the matter any further. Mr Haysman was not able to identify the company involved. Its reasons for choosing not to use his home for filming must be a matter of pure speculation.
54. It may well be that Mr Haysman could establish as a matter of reasonable inference that he had every prospect of obtaining a further Film Location Agreement in the period from July 2007 to date. However the real issue is whether it was the Defendant's breach which caused him not to be able to do so.
55. Mr Haysman's evidence was that soon after the Defendant completed filming he instructed his Location Agency not to promote his home; in other words he took it off the market as a potential location. The reasons given in his witness statement were that he did not wish the Defendant to blame subsequent hirers for the damage it had caused and did not think that anyone would wish to hire his property in its damaged state. These reasons are not perhaps entirely consistent. The former would also involve drawing a conclusion as to the Defendant's likely conduct which is simply unavailable to me on the evidence whilst the latter could only properly be tested by making the house available for hire. The damage to the interior of the property was, judging by the photographs, very far from being so extensive and of such a nature as to make it obvious that it could not be used as a location.
56. In July of this year Mr Haysman had a change of mind and once again offered his home as a location notwithstanding its unremedied state. By early August he had agreed with the BBC that his back garden would be used for the filming of the dramatisation of a romantic novel.
57. In these circumstances the immediate reason for the lack of any Location Agreement in the 12 month period after the Defendant had filmed is that the Claimant chose not to make his home available for filming rather than that the Defendant's breach prevented him from doing so. It follows that I conclude that the Claimant has not established that he is entitled to damages for the loss of a chance of using his home as a location.

Conclusion

58. The sums awarded in this Judgment total £25,379.20. To this must be added the agreed sums of £100 for a lost decanter stopper and £53,462.50 for the cost of redecoration. The Claimant is therefore entitled to Judgment for £78,941.70 exclusive of interest in respect of which I invite further submissions if agreement cannot be reached.

CLAIM NO: HQ07X04187

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

B E T W E E N:

GLEN HAYSMAN

Claimant

-and-

MRS ROGERS FILMS LIMITED

Defendant

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J U D G M E N T

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