Field Common Ltd v Elmbridge Borough Council

Where a structure or surface is placed on another’s land without consent, its continued presence may constitute a continuing trespass, particularly where the trespasser has been asked to remove it. A person may also be liable for another’s trespass where, by creating or maintaining the relevant conditions, he has effectively permitted the trespass. In assessing damages, the court may use a hypothetical negotiation to determine the value of unauthorised use. The exercise must reflect the actual benefit to the defendant, the limited duration and nature of the right, the alternatives available, and the likely willingness of users to pay. It must not be based mechanically on the capital value of a permanent right or on profits which another person obtained.

Field Common Ltd owned land adjoining a private access road serving an industrial estate owned by Elmbridge Borough Council. In 1989 the Council laid a tarmac surface over part of Field Common’s land without consent. Tenants and visitors used the surfaced area as part of the access road.

Lewison J had dismissed the Council’s claim to a prescriptive right of way and ordered an assessment of damages for trespass, including trespasses caused or permitted by the Council. The issues were whether the Council was liable for its tenants’ use, whether the continuing presence of the tarmac was a continuing trespass, and how damages should be assessed for the period within the limitation period.

1. Liability for the tarmac. The continued presence of the tarmac on Field Common’s land constituted a continuing trespass, giving rise to a new cause of action from moment to moment. The reasoning in Holmes v Wilson was applicable. Even if the point were otherwise arguable, it should have been raised at the liability trial rather than at the assessment of damages.
2. Tenants’ trespass. The Council was liable for trespasses which it had caused or permitted. Before the tarmac was laid, ownership of the industrial estate and failure to stop encroachment did not, without more, amount to permission. The tarmac was different. It was laid to improve access for tenants and visitors, made the whole route appear to be one road, and made tenants’ use of the Red Land a virtual certainty. The Council had therefore permitted that use. It was not liable for use by Browns or Travis Perkins after 7 March 2002, when Field Common came under the control of their owner, because that use was attributable to Field Common’s own permission.
3. Measure of damages. The conventional compensatory measure was not the only available measure. Consistently with Attorney General v Blake, Wrotham Park Estate Co Ltd v Parkside Homes Ltd and related authorities, damages could be assessed by a hypothetical negotiation for a licence to retain the tarmac and use the Red Land. The negotiation was assumed to occur at the start of the relevant period between willing and reasonable parties, but it had to be grounded in the real circumstances.
4. The relevant question was what the Council would have been willing to pay for the benefit it obtained, not the profits made by tenants or the capital value of a permanent right. The assessment had to account for the limited seven-year period, the availability of the private road, the differing benefits to different units, the inability to compel existing tenants to pay more, and the Council’s inability to prevent their continued use without appropriate rights from Field Common.
5. The valuation based on capitalising long-term rental flows and applying a percentage reduction was rejected as inappropriate. The court adopted differentiated notional additional rents, discounted them for the likelihood that existing tenants would not pay and that the Council could not prevent unpaid use, and applied the relevant contractual sharing arrangements. No cumulative award could be made for both hypothetical licence value and loss of an opportunity to let the land for parking or storage.
6. The parties were directed to calculate the damages in accordance with those rulings.

This was a first-instance assessment of damages following the liability judgment of Lewison J on 7 November 2005. The judgment under assessment dismissed the Council’s claim to a prescriptive right of way and directed an assessment of damages for trespass.