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

On Friday 11 May 2007 following the handing down of my judgment in this action I heard among other submissions, submissions on behalf of the claimants and on behalf of Strutt & Parker as to an issue concerning the assessment of damages. I reserved my decision. In the judgment I had had to decide whether damages were to be assessed on the basis of a value difference at transaction date or on the basis of the likely lost income. I decided that in accordance with Court of Appeal authority the former was correct. It is not a straightforward question, and it plainly merits permission to appeal. The House of Lords was recently divided on a similar issue in Golden Strait Corporation v Nippon Yusen Kubishka Kaisha [2007] UKHL 12, [2007] 2 WLR 691.Mr Anthony Speaight Q.C. submitted on behalf of the claimants that on the assessment of damages I should hear evidence and reach a conclusion on each basis. Mr Timothy Lamb Q.C. submitted on behalf of Strutt & Parker that I should not.

The arguments in favour of deciding the appropriate damages on both bases are as follows. It will enable the claimants to see whether there is a substantial difference between the figures meriting an appeal. If there is an appeal, it will enable the Court of Appeal to see what the difference is and how its arises. That is something which could be relevant to which measure of damage better satisfies the overriding principle as to damages stated by Lord Blackburn in Livingstone v Rawyards Coal Co. (1880) 5 App. Cas. 25 at 39. It would avoid the need for a second assessment following a successful appeal. Such a second assessment would be a cause of delay. The additional costs of a second assessment would be substantially greater than those which would be incurred if the both measures were covered at a single hearing this year.

The disadvantage of deciding the damages on both bases would that the hearing would take longer and cost more. It would not take twice as long nor would it cost twice as much. For both exercises would in part be essentially the same but would use different data to reflect the different dates. The first exercise would involve both an assessment of the likely income streams over the period of the leases using a turnover rent and the likely actual rent, and then a valuation of them. The second exercise would not involve valuations but would involve assessment of the likely income streams. I think it likely that the difference in outcome between the two will be substantial, but I do not know and I have heard no evidence or submissions about it.

Balancing these factors I have concluded that it will be the better use of costs and court time, and is likely better to further the interests of justice if the assessment is carried out on both bases. I appreciate that this will involve the court making an alternative finding on a basis that the court has held to be wrong. On the other hand, if all the evidence had been available, and I had dealt with damages at the trial as was originally intended, I would certainly have made alternative findings in case the Court of Appeal held that the measure I had chosen was wrong. As I have indicated, that is a very real possibility. In the circumstances I consider that the sensible and practical course in the circumstances is to make assessments on both bases at the one hearing.

This ruling gives me the opportunity to mention a further matter which arose in the course of submissions, namely the question of an interim payment by Strutt & Parker to the claimants on account of costs. This was stood over to be heard at the conclusion of the application for interim payment on account of damages. I have not been asked to make any other order as to costs between those parties at this point. I refer the parties to CPR 44.3(8).