Malmesbury & Ors v Strutt & Parker (a partnership) & Anor

Where the correct measure of damages is reasonably arguable on appeal, the court may direct an assessment on both competing bases. The decision should balance the likely additional costs and court time against the interests of justice, including the risk of delay and the need for a further assessment if the appeal succeeds. This may justify making an alternative assessment on a basis already held to be legally incorrect, particularly where both exercises substantially overlap and the appellate issue is a real one.

The ruling followed an earlier judgment in the same action concerning the assessment of damages. The court had held, in accordance with Court of Appeal authority, that damages should ordinarily be assessed by reference to the difference in value at the transaction date rather than likely lost income. The claimants sought evidence and findings on both bases because permission to appeal was plainly appropriate and the issue was realistically arguable. Strutt & Parker opposed that course. The central question was whether the court should undertake an alternative assessment on the competing measure at the same hearing.

1. Assessment on alternative bases. The court directed that damages be assessed both by reference to the value difference at the transaction date and by reference to likely lost income, even though it had held the former to be the correct measure.
2. Balancing the practical considerations. The court considered that both exercises would substantially overlap. The additional hearing time and costs would therefore be less than double those of a single exercise. Conducting both assessments would enable the parties and the Court of Appeal to identify the practical difference between the competing measures, avoid delay, and reduce the risk of a second assessment after a successful appeal.
3. Interests of justice. It was a sensible and practical course to make an alternative finding where the appellate issue was a real possibility. The approach was comparable to making alternative findings at trial where the selected legal basis might later be held wrong.
4. Costs. The question of an interim payment on account of costs was left outstanding pending the conclusion of the application for an interim payment on account of damages. The parties were referred to Civil Procedure Rules 1998, rule 44.3(8).

The judgment describes an earlier ruling in the same action, in which the court selected the transaction-date value difference as the correct measure of damages. The present ruling directed that the damages assessment should also address likely lost income to facilitate any appeal.