Dodd Properties (Kent) Ltd v Canterbury City Council

Where damages for injury to real property are measured by the cost of repair or reinstatement, the general assessment date is not inflexible. The relevant cost is ordinarily that prevailing when repairs can first reasonably be undertaken, having regard to all the circumstances.

If repairs have reasonably not been completed by trial, the costs prevailing at trial are prima facie appropriate. An earlier date applies where the claimant, acting reasonably and consistently with the duty to mitigate, should have undertaken the work earlier. Commercial prudence in postponing substantial expenditure while liability and the necessary works remain disputed may be considered. Financial circumstances are not automatically excluded merely because impecuniosity cannot ordinarily enlarge recovery.

The plaintiffs owned and occupied a garage which suffered structural damage during construction of a neighbouring multi-storey car park. Liability in nuisance was no longer disputed on appeal. The accepted repairs would have cost approximately £11,375 at 1970 prices but £30,327 at the 1978 trial. The occupier's corresponding prospective business-interruption loss was £4,108 or £11,951.

Cantley J held that the appropriate date was 1970, when repairs could first have begun after the risk of further damage had passed. Although postponement until trial was commercially reasonable, he considered financial stringency an inadmissible consideration under Owners of Dredger Liesbosch v Owners of SS Edison (1933) AC 449.

The plaintiffs appealed against the assessment date. The defendants cross-appealed against the full award for prospective business interruption, contending that it should reflect the possibility that repairs would never be undertaken.

1. Appeal allowed unanimously; cross-appeal dismissed. The damages were varied to £30,327 for the building owner and £11,951 for the occupying company, without pre-judgment interest. The plaintiffs received their costs, and leave to appeal was refused.
2. Megaw LJ held that the general rule assessing damages when the cause of action arises is subject to exceptions and qualifications. For repair-cost damages, the true rule is that any material difference in cost must be assessed at the time when repairs can first reasonably be undertaken, having regard to all relevant circumstances. This gives effect to the compensatory principle stated in Livingstone v Rawyards Coal Co (1880) 5 App Cas 25.
3. Donaldson LJ explained that reasonably incurred costs at the date of actual reinstatement are prima facie relevant where work precedes trial. If reinstatement remains outstanding, trial-date costs are prima facie appropriate. Evidence that a reasonable claimant should have reinstated earlier can displace that starting point. The same conclusion may be expressed either as part of the primary measure of damage or as an application of the duty to mitigate.
4. The plaintiffs acted reasonably in waiting until liability and the necessary works had been resolved. They were able to finance repairs but would have incurred a substantial cash-flow burden while the defendants denied liability. That was commercial prudence, not impecuniosity of the kind considered in Owners of Dredger Liesbosch v Owners of SS Edison (1933) AC 449. The case therefore did not require the court to disregard the plaintiffs' financial circumstances.
5. The reasoning in Philips v Ward (1956) 1 WLR 471, that sterling must be treated as constant in value, was no longer good law. The 1970 assessment also failed to restore the plaintiffs to the position they would have occupied without the tort. Trial-date costs were therefore appropriate.
6. The prospective business-interruption award was not discounted. Recovery of present-day repair costs made performance of the work sufficiently probable. Megaw LJ considered that any discount, if legally required, would be trivial and should be disregarded, without deciding the wider legal question.

1. Court of Appeal: The plaintiffs' appeal was allowed unanimously. The damages were varied to £30,327 for the first plaintiffs and £11,951 for the second plaintiffs. The defendants' cross-appeal was dismissed.
2. High Court: Cantley J assessed repair and business-interruption damages at 1970 values and awarded interest, producing a total of £22,974.20. He found that postponement until trial was commercially reasonable but treated financial stringency as irrelevant to the assessment date.