London Borough of Enfield v Outdoor Plus Ltd & Anor

Damages for trespass may be assessed by a hypothetical negotiation where they compensate the claimant for the value to the trespasser of the use actually made of the land. The negotiation assumes both that the admitted trespass will occur and that an agreement will be reached.

Alternative means available to the trespasser may affect the price only where they are compatible with, and can coexist with, the trespass. An alternative which would eliminate the trespass cannot reduce the fee, because it undermines the basis upon which compensation is assessed.

Outdoor Plus erected and operated advertising hoardings beside the North Circular Road. Their supports and foundations encroached by up to 600 millimetres onto land owned by the London Borough of Enfield, although the panels oversailed neighbouring land. J C Decaux later obtained rights to use the site.

The respondents admitted continuing trespass. His Honour Judge Seymour QC awarded only nominal damages, holding that the hoardings could have been placed wholly on the neighbouring land and that the respondents therefore derived no benefit from the encroachment.

The Council appealed on quantum. The central issue was whether the hypothetical-negotiation assessment could be reduced to nominal damages by treating relocation so as to avoid the admitted trespass as an available alternative.

1. Appeal allowed unanimously. The judge had addressed the wrong question. The assessment had to compensate the Council for the trespass which actually occurred, not determine what the parties would have done had they identified the boundary before the hoardings were erected.

2. The appropriate measure was a hypothetical negotiation. It seeks the value of the trespass to a reasonable person in the trespasser’s position: the reasonable price for the right of user. The assumed negotiation must result in an agreement, even if the parties might actually have been unwilling to agree. This followed the approach in Stadium Capital Holdings Ltd v St Marylebone Property Co Plc [2011] EWHC 2856 (Ch) and was consistent with Attorney General v Blake [2001] 1 AC 268.

3. An alternative course may affect the negotiation only if it is a genuine alternative that can coexist with the trespass. The ability to erect the whole hoarding on neighbouring land would eliminate, rather than provide an alternative to, the encroachment. It could not therefore be used to reduce the compensation to nominal damages. Sinclair v Gavaghan [2007] EWHC 2256 (Ch) was consistent with that conclusion because the alternative routes there could coexist with the unauthorised route whose use was being valued.

4. The unchallenged expert evidence established the notional annual fees for a site in single ownership. Since the panel and its foundations had to exist together, the proper outcome of the negotiation was an equal division between the two landowners. Damages were therefore assessed at £4,625 per annum for the first hoarding and £11,500 per annum for the later hoarding, payable quarterly in advance with interest at 1% above base rate. The Council’s contention for the full later rate after notice of trespass was rejected, because the nature of the trespass had not changed.

• Court of Appeal (Civil Division): Allowed the Council’s appeal in [2012] EWCA Civ 608 and substituted substantial damages for nominal damages.
• High Court, Queen’s Bench Division: His Honour Judge Seymour QC awarded nominal damages of £2 against each respondent for admitted trespass and made consequential costs orders.