Crazy Bear Group Ltd v Patel & Anor

Consequential loss cannot be recovered where the claimant’s own failure to satisfy planning conditions and statutory party-wall requirements meant that the relevant works should not have started. A claimant seeking damages for trespass must prove causation. For events that did not occur, this requires proof on the balance of probabilities or, where future conduct is involved, a real or substantial chance rather than speculation. Loss-of-profit claims require sufficient evidence for a fair assessment, although the court may adopt a liberal and broad-brush approach. The claimant must also mitigate loss, and damages must not place it in a better position than if the trespass had not occurred.

The claimant operated a hotel adjoining the defendants’ newsagent and convenience store. The defendants planned a two-phase development involving a rear extension, shop alterations, a sub-post office and conversion of a flat. The claimant obtained interim relief after works began, and the defendants gave an undertaking concerning excavation and demolition within the relevant area.

The claimant later conceded an underground basement trespass beneath the defendants’ land. The defendants claimed consequential loss, including lost trading and rental profits, alleging that the trespass and the undertaking prevented the development. The central issues were whether the undertaking or trespass caused the claimed losses, given the unfulfilled planning conditions and absence of notice under section 6 of the Party Wall etc. Act 1996, and whether the evidence permitted a fair assessment.

1. Cross-undertaking. The claim to enforce the cross-undertaking failed. Phase 1 could not lawfully begin because the Phase 1 Planning Conditions had not been fulfilled and no notice under section 6 of the Party Wall etc. Act 1996 had been served. The claimant was therefore entitled to final injunctive relief. The undertaking did not cause the defendants’ loss because it permitted work with consent, compliance with section 6 and its statutory procedures, or further order. Phase 2 was not prohibited.
2. Trespass and causation. The basement trespass could not have caused loss arising from the stoppage of work on 8 October 2018. The defendants were not entitled to start Phase 1 then, and their preparatory steps had already been taken independently of the trespass. Discovery of the trespass was capable in principle of breaking the causal chain after that date, but the defendants did not prove when Phase 1 would have started after satisfying the planning conditions and section 6.
3. Phase 2. Phase 2 was essential to the proposed new business. It was capable of proceeding under the undertaking, but the defendants stopped it in late November 2018. The late explanation that litigation costs caused the stoppage was rejected as unreliable and unsupported. Even if accepted, the defendants failed to establish a real or substantial chance that Phase 2 would have continued without the basement trespass, because other litigation would have remained.
4. Quantum and mitigation. The projected profits were inadequately supported. The evidence did not explain the proposed additional sales, sub-post-office income, expenses, rental for the permitted one-bedroom flat, or tax. The court could in principle make a conservative broad-brush assessment, but a fair assessment was impossible on the evidence. The defendants were not required to redesign Phase 1 around the basement because infilling from the claimant’s land would have imposed disproportionate additional cost. The consequential-loss claim was dismissed.

Order accordingly.