Wynn-Jones v Bickley

Damages in lieu of an injunction for trespass may be assessed by reference to negotiating damages. The court must identify the right that would have been released and estimate the sum that reasonable parties would have negotiated before the breach. The usual valuation date is the date of breach, although the court retains power to depart from it where good reasons exist. The parties are treated as willing negotiators seeking a proper price, not a ransom. The actual conduct of the parties is generally irrelevant. The assessment may take account of the claimant’s gain, the value of the encroached land, the availability of alternatives and the practical context. Mathematical analysis assists but does not determine the result. The final figure is a matter of judgment and must feel right.

The judgment concerned the assessment of damages following an earlier decision refusing Mrs Bickley’s injunction requiring removal of an extension that encroached on her land. The parties had agreed simultaneous transfers of equivalent areas of land, preserving the relevant one-acre covenant. The remaining issue was the sum payable for the value of the encroachment and the benefit obtained by Mr and Mrs Wynn-Jones.

The court considered competing valuation evidence, including the appropriate valuation date, the inclusion of a 1.2-metre access strip, construction costs, the increase in the value of the property and whether mesne profits should be awarded.

1. Jurisdiction and method. The power to award damages in addition to or in substitution for an injunction arose under section 50 of the Supreme Court Act 1981. The court adopted the negotiating-damages approach described in Lunn Poly Ltd v Liverpool & Lancashire Properties Ltd, namely an assessment of what reasonable parties would have negotiated for release of the right.
2. Valuation date. The normal date was the date of breach. That was a presumption rather than an inflexible rule, but no circumstances justified departure in this case. The relevant date was June 2001. Johnson v Agnew was distinguishable because it concerned damages after specific performance of a contract had become impossible, rather than damages in substitution for an injunction.
3. Hypothetical negotiation. The parties were assumed to be willing grantor and grantee seeking a proper price, not a large ransom. Their actual conduct was irrelevant. The court could consider the gain attributable to the encroachment, alternative locations, the value of the land and the wider residential context. Expert calculations were only a starting point: the final assessment involved judgment, and the deal had to feel right.
4. Application. The exchanged land fully satisfied the value of the land taken. The remaining element was the value of that land to the claimants. The 1.2-metre strip formed part of the relevant curtilage and was included in the calculation. The court accepted a property gain of £250,000, deducted £131,000 in anticipated building costs, attributed 25 per cent to the encroached land, and arrived at £30,000. A 50/50 division produced negotiating damages of £15,000.
5. Interest and final award. The court declined to award separate mesne profits, although Horsford v Bird had suggested that possibility. Interest at 6 per cent was awarded on the £15,000 from the hypothetical negotiation date. After deduction of the earlier £3,000 harassment award and £180 interest, the net award to Mrs Bickley was £17,220.

First-instance assessment of damages following the court’s earlier judgment and order in the same litigation. The judgment records that the order was varied by consent by Lewison J on 16 November 2005.