Ward v Rowland & Anor

In assessing damages for wrongful exclusion from a tenancy, a claimant is not ordinarily required to bring fresh proceedings against a subsequent purchaser to assert the tenancy and reduce the loss. That is a plea in mitigation, which should be raised by the defendant. Where such proceedings would involve delay, expense and an uncertain outcome, and the defendant obtained a higher sale price by selling with vacant possession, it may be unjust to require the claimant to take that step. Damages may reflect the diminution in value of the tenancy interest where the exclusion is treated as permanent.

The claimant alleged that he held oral agricultural tenancies of two fields. The Derby County Court declared that he had exclusive possession under a tenancy subject to the Agricultural Holdings Act 1986. After the defendants excluded him and sold one field to a third party with vacant possession, the judge awarded £8,460, representing the difference between the field’s value with vacant possession and its value subject to the tenancy.

The defendants sought permission to appeal. They argued that the tenancy was an overriding interest under section 70(1)(k) of the Land Registration Act 1925, so the claimant should assert it against the purchaser and recover only lost profits until the sale. The central issue was whether that course was required in mitigation of damages.

Lord Justice Ward dismissed the defendants’ application for permission to appeal.

1. The lower court had found a subsisting agricultural tenancy and awarded damages for field 19 by reference to the diminution in value caused by the tenancy and the claimant’s exclusion.
2. The defendants’ argument based on section 70(1)(k) of the Land Registration Act 1925 raised an apparent tension: the tenancy was said to subsist, yet damages were assessed on the basis that the exclusion was permanent. The Court of Appeal did not need to determine the statutory overriding-interest issue.
3. The suggested reduction in damages was a plea in mitigation. It had not been pleaded. Requiring the claimant to begin fresh proceedings against the subsequent purchaser would involve delay, expense and an uncertain outcome. The purchaser was not a party to the proceedings and was not bound by the declaration obtained against the defendants.
4. In those circumstances, the claimant was entitled to assume that his exclusion was permanent. The defendants had sold the field with vacant possession and obtained the corresponding higher price. They should not retain that benefit by criticising the claimant for failing to pursue litigation which the defendants themselves had not undertaken.
5. Given the modest amount in dispute and the overriding objectives of saving expense and dealing proportionately with the case, it was unnecessary to adjourn the application for further submissions. The order awarding £8,460 therefore stood.

• Derby County Court: His Honour Judge Wait determined liability in favour of the claimant and subsequently awarded £8,460 in damages.
• Court of Appeal (Civil Division): Lord Justice Ward dismissed the defendants’ application for permission to appeal.