Stadium Capital Holdings (No 2) Ltd v St Marylebone Property Company Plc Clear Channel UK Ltd

Damages for trespass are flexible and may be assessed by the user principle: the court considers the benefit obtained from the defendant’s use of the land, commonly by valuing a hypothetical licence fee. A sum equal to the defendant’s entire profits is at the exceptional upper end and may resemble an account of profits; it cannot be adopted merely by accepting a headline figure. The parties must provide material enabling assessment of competing bases, including apportionment, expenses and any negotiated fee. Where a late quantum application exposes an inadequate trial record, the appeal may be allowed and the assessment reconsidered without pre-selecting the measure.

The appellant, lessee of premises adjoining a development site, appealed a Chancery Division award of £313,972.70 in damages for trespass caused by an advertising hoarding occupying the respondent freeholder’s airspace. The award represented the whole fee income for 2005–2008. Permission was limited to quantum: the appellant abandoned a ground concerning Law of Property Act 1925, section 62, and argued that the award was excessive, including because the hoarding was attached to its wall and expenses should be deducted. The central issue was whether the judge should have adjourned or split the trial to permit proper evidence on the basis and amount of damages.

1. Appeal allowed. The appellant abandoned the ground concerning section 62 of the Law of Property Act 1925. The only issue was the assessment of damages.
2. Peter Smith J held that trespass is actionable per se and that damages may be assessed flexibly on a restitutionary or user basis. The court may consider the benefit obtained by the trespasser, rather than merely the claimant’s loss. The usual approach in the authorities was a reasonable hypothetical licence fee. Penarth Dock Engineering Co Ltd v Pounds [1963] 1 was identified as the starting point. The possible use of a negotiated licence fee was associated with Wrotham Park v Parkside Homes [1974] 1 WLR 798 and later authorities, including WWF World Wide Fund for Nature (Formerly World Wildlife Fund) & Anr v World Wrestling Federation Entertainment Inc [2007] EWCA Civ 286 and Experience Hendrix LLC v Purple Haze Records Ltd & Anr [2007] EWCA Civ 501.
3. The judge’s award of the entire fee income was at the highest end of restitutionary damages. Sullivan LJ considered an award of that kind indistinguishable from an account of profits, which was an exceptional remedy under Attorney General v Blake [2001] 1 AC 268. The court nevertheless left open whether a 100 per cent award could be justified in an appropriate case, and whether deductions, a negotiated fee or a profit share should be used.
4. The appellant had failed at trial to provide evidence addressing apportionment, expenses or any alternative measure. Despite that failure and the lateness of the application, the trial judge should have considered an adjournment or split trial because the material was insufficient to assess the difficult quantum issue properly. The appropriate basis of damages was not determined on appeal and remained open. The argument based on attachment to the wall was unnecessary to decide and was regarded by Smith J as extremely weak.

1. Court of Appeal (Civil Division) — allowed the appeal on damages, leaving the appropriate basis and amount open: [2010] EWCA Civ 952.
2. Chancery Division — Sir Donald Rattee ordered the first defendant to pay £313,972.70 in damages for trespass and costs. The award was based on the entire fee income obtained from the hoarding.