Vukelic v Hammersmith and Fulham

Damages for private nuisance principally compensate for injury to the claimant’s interest in land. The cost of repairing physical damage is ordinarily primary evidence of loss. Consequential business losses and damage to chattels may also be recovered where they result from the nuisance.

Private nuisance does not provide compensation for personal injury or ordinary distress, anxiety and frustration arising from an abnormal situation. Exemplary damages remain confined to the exceptional categories identified in Rookes v Barnard [1964] AC 1129. Prolonged negligence and indifference, without targeted abuse of power or profit-motivated conduct, do not suffice.

Mrs Vesna Vukelic claimed damages from the Council in connection with water penetration and defective repair works affecting leased restaurant premises. On 8 July 2002 the Council admitted liability for nuisance from 18 August 1997, and judgment was entered for damages to be assessed. The remaining issues included business losses, damage to restaurant equipment and accessories, personal injury, exemplary damages, and the Council’s counterclaim for rent and interest.

The central questions were the proper measure of damages for nuisance, the scope of recoverable consequential loss, whether the claimant had failed to mitigate her loss, and whether the Council’s conduct justified exemplary damages.

1. Damages for nuisance. The court followed the principles stated in Hunter v Canary Wharf Ltd [1997] AC 655. The primary loss was the injury to the value and utility of the claimant’s interest in the Property. The cost of remedial works was the primary measure for physical damage. Because the Property was used for business, consequential loss of profits and related loss caused by inability to use it could also be recovered. Damage to restaurant equipment and accessories was likewise recoverable.
2. Mitigation. A claimant need act only reasonably. The Council bore the burden of showing that Mrs Vukelic acted unreasonably by not reopening the restaurant after the Council said that works were complete. Given the Council’s long delays, poor communication, inadequate workmanship and continuing damp, it was reasonable to wait for proper remedial works. The court applied the principle in The World Beauty [1970] P 144 that reasonable mitigation does not make additional resulting loss irrecoverable.
3. The value of the lost business included both the net profit that would have been earned and rent which the claimant would otherwise have been able to pay. Damages were assessed at £175,000 for business loss, £25,707.45 for equipment, and £6,232 for restaurant accessories, with £8,277.50 interest on past business loss.
4. Personal injury. Following Behrens v Bertram Mills Circus Ltd [1957] 2 QB 1 and McLoughlin v O’Brian [1983] AC 410, ordinary mental suffering caused by the circumstances was not compensable. No damages for personal injury were awarded.
5. Exemplary damages. The court applied Rookes v Barnard [1964] AC 1129. The Council’s conduct, although lamentable, did not amount to oppressive, arbitrary or unconstitutional governmental action, nor conduct calculated to make a profit exceeding compensation. No exemplary damages were awarded.
6. The Council was entitled to rent and contractual interest. After setting off the awarded damages and interest, the net balance payable by the Council to Mrs Vukelic was £88,622.75. The court also indicated that remedial works should be completed to a good standard, including appropriate redecoration and making good damage caused during the works.

This was a first-instance assessment of damages. On 8 July 2002, the court entered judgment for the claimant in respect of nuisance caused from 18 August 1997 and transferred the matter for assessment. The Council abandoned its counterclaim for a contribution to repair costs, but pursued rent and interest.