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Sender:
Gordon Goldberg
Date:
Tue, 21 Nov 2000 18:09:55
Re:
Mesne Profits and Restitution

 

With great respect to Eoin O' Dell and Jason Neyers, I claim at the moment to have the advantage. Not only is my solution based firmly in undoubted authority, but it is more straightforward than Eoin's argument and more precise than Jason's abstract "corrective justice", which they respectively outlined and mentioned in their messages of 03 November 2000. Let me rehearse my propositions:

  1. Mesne profits are damages for being deprived of the use of one's land by a trespasser.
  2. Damages are compensatory.
  3. The victim of a trespass to land is to be compensated to the extent either of his proved loss and damage caused by the tort, or of the trespasser's proved benefit derived from the land (whichever be the greater); for, if the trespasser had not taken that benefit, his victim would have had the choice to take it himself or to charge someone else for the right to do so or to leave the land as it was; and it should not lie with the trespasser to say how that choice would have been exercised - cf. The Mediana [1900] A.C. 113 at 117 per the Earl of Halsbury, L.C.
  4. Generally, if the trespasser has occupied the land, his actual benefit will be measured by the market rent of the land or, if his use has been less than occupation, by the market price of the right he has usurped.
  5. When the trespasser is a spoliator, the victim's compensable loss is deemed at least to equal the trespasser's potential, not just his actual, benefit from the land (though, of course, the potential cannot be less than the actual); for in odium spoliatoris omnia praesumuntur - Wardour v. Berisford (1687) 1 Vern. 452.

In my respectful submission, all the cases referred to by Eoin, including those which do not relate to trespass to land, are consistent with these propositions.

A. In Whitwam v. Westminster Brymbo Coal and Coke Coy [1896] 2 Ch. 538, the defendants had trespassed on the plaintiff's land by tipping spoil thereon from their colliery. At 543, Rigby L.J. said: "Independently of the permanent damage done, there has been a user of the plaintiff's land by the defendants. ... [I]t is a matter of indifference whether the defendants made a profit or loss out of the transaction. ... the principle is that a trespasser shall not be allowed to make use of another person's land without in some way compensating [my emphasis] that other person for that user. Where the trespass consists in using a way over the plaintiff's land, a convenient way of assessing damages may be by an inquiry as to way-leave in the locality which, when there is a customary rate of charge for way-leave in the locality, may furnish a convenient measure of damages; but the principle is that in some way or other, if you can do nothing better then by rule of thumb, the trespasser must be charged for the use of the land"; The plaintiffs claimed and recovered "the reasonable value of the land to the defendants for tipping purposes".

B. In Strand Electric & Engineering Co. v. Brisford Entertainments [1952] 2 Q.B. 246 the plaintiffs claimed and recovered in detinue "the market hiring value" of portable switchboards for the whole period of their unlawful detention by the defendants.

C. In Penarth Dock Engineering Coy v. Pounds [1963] 1 Ll.Rep. 359, the plaintiffs had suffered no demonstrable loss from the defendant's keeping his pontoon too long in their dock. The evidence was that to acquire a similar berth for the pontoon would have cost the defendant £37 10s. per week; but the plaintiffs were content with £32 5s. per week. The damages were calculated at this rate as representing the benefit obtained by the defendant.

D. In Wrotham Park Estate v. Parkside Homes [1974] 1 W.L.R. 798, the defendants were respectively the builders and purchasers of houses constructed in breach of a restrictive covenant. In Bracewell v. Appleby [1975] Ch. 408, the defendant claimed the right to use a private road, which provided the only access to a house built by him. In fact, he did not have that right. In neither case was any wrongdoer a spoliator. Each plaintiff was aware of the respective building works and failed, without good cause, to take adequate steps to have the consequent wrongs restrained until the works were well advanced or even complete. A claim to have been despoiled by an infringement of one's rights sounds ill in the mouth of one who has, without resistance, knowingly let the infringement occur. In both cases, because of the delay in seeking it, injunctive relief was refused and damages were awarded in lieu. In both cases, therefore, the works were on completion allowed to stand. Accordingly, in each case the damages were limited to the plaintiff's actual loss arising from the failure to obtain the plaintiff's necessary permission. In Bracewell they amounted to a fair price for the loss of amenity and increased user of the private road resulting from the effective grant of a right of way to the defendant's house, but not so great a sum as would have deterred the defendant from building the house. In Wrotham the damages were such a sum as the plaintiffs might reasonably have demanded as a quid pro quo for relaxing the covenant.

E. In Swordheath Properties v. Tabet [1979] 1 W.L.R. 285 the landlord was awarded damages against defendants, who had remained in occupation of residential premises after the expiration of the lease granted to the person who had let them enter. The damages were determined by reference to the ordinary letting value of the premises, despite the landlord's failure to prove that it could and would have let the premises during the period of the trespass.

F. In Stoke-on-Trent Council v. W. & J. Waas [1988] 1 W.L.R. 1406 the holding of a market within 62/3 miles of the plaintiff's statutory market, though an infringement of the plaintiff's monopoly, was held not to be the equivalent of usurping the plaintiff's property. Hence the plaintiff could recover only its actual loss. Since none could be proved, the recovery was restricted to nominal damages.

G. Ministry of Defence v. Ashman [1993] 2 E.G.L.R. 102 and Idem v. Thompson ibid. 107 are cases of occupiers of houses, owned by the Ministry, remaining in possession after the Ministry had validly terminated their right to do so. In neither case did the Ministry prove any loss or damage; and in each, though it had charged less than the market rent for the respective use and occupation, it claimed that rent as mesne profits. In both cases it failed. The benefits derived by the defendant occupants were less than the market rent; for the occupants were entitled to be rehoused by the local authorities. Because this entitlement and the evidence, that the Ministry would not have let the houses on the open market, were the only reasons given for disregarding the market rent, it is not at first clear that these are not hard cases tending to make bad law. The market rent represented the benefit potentially available from the land. As Wardour v. Berisford led one to expect, this potential benefit was the measure adopted for calculating the mesne profits in Inverugie Investments v. Hackett [1995] 1 W.L.R. 713, regardless of whether or not the trespasser derived any actual benefit, or the Plaintiff sustained any actual loss, from the wrong. On the other hand, in neither of the Ministry's suits was any defendant a spoliator. The occupants were overtaken by events. Marital breakdown led to their husbands (both servicemen) leaving the houses; the occupants consequently lost their entitlement to remain in possession; and neither could obtain immediate local government (or afford other adequate) accommodation. In Ashman, at 104L, Kennedy, L.J., drew a parallel with "an elderly widow living alone [who] were to hold over possession of a mansion while attempting to arrange accommodation more suited to her needs". Furthermore, both suits were instituted seven months after the husbands' respective departures. To avoid having these delays mistaken for the Ministry's generosity, on which at least one of the occupants was induced to rely (q.v. at 106K), the Ministry could at once have taken proceedings for possession and compromised them on the defendants' undertaking to pay a market rent. Hence, on the facts, the decisions were right.

H. In Inverugie Investments v. Hackett the defendant trespasser, being a landlord who had ejected the plaintiff tenant, was a spoliator. Hence the plaintiff's loss, which the trespasser had to compensate was deemed to be the full potential income from the use being made of the land even though, because the hotel on the land was running at a loss, the realization of that potential was not a practical possibility. Therefore "disgorgement" is not an apt term in this field; for, as in Inverugie, the trespasser may have received no ill-gotten gains to give up.

A supplementary point should be made. In my own message of 03 November 2000 I treated The Mediana as an example of spoliation and of the application of the relevant maxim. It was not a case of trespass, but of negligence. Generally, in negligence, the victim can recover compensation only for the loss and damage he can prove. In The Valeria [1922] A.C. 242 the House of Lords applied this general rule to a collision at sea. The Mediana was distinguished on the ground that there the damaged vessel was one which, "in the ordinary course, would have earned nothing at all". In The Valeria damages were claimed for injury to a ship engaged in earning freight. That by itself, with respect, does not seem to me sufficient. If, purely for one's own pleasure, one owns a craft, which sustains damage caused by the negligent navigation of another, the duty to mitigate one's losses would bar the hiring of a replacement, while one's own is being repaired. One would have to be content with damages for inconvenience. Mutatis mutandis, the same would be true of a collision on land. However, in The Mediana, the damaged light ship was being employed not only without prospect of gain, but in the public interest. So was the dredge in The Greta Holme [1897] A.C. 596. There, at 604, Lord Watson seems to have considered both matters significant. Indeed, in The Valeria, at 244, the appellants' counsel arguendo raised the public interest alone. On the facts he could do no more. Clearly, albeit tacitly, the House regarded it as not enough. I think nothing in this paragraph conflicts with 12(1) Halsbury's Laws (4th edn reissue) 865. I have laboured the point because, as regards "non profit-earning" chattels, n.6 distinguishes between "the shipping and omnibus cases" and "private cars", rather than between chattels used in the public interest and those devoted to private use. I submit that the latter distinction is warranted. If, without prospect of gain to oneself, one has devoted one's chattel to the service of the public and it is harmed in the course of that service by another's fault, is not one's sense of injury properly greater than if the harm had occurred in seeking one's own remuneration or pleasure?


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" These messages are all © their authors. Nothing in them constitutes legal advice, to anyone, on any topic, least of all Restitution. Be warned that very few propositions in Restitution command universal agreement, and certainly not this one. Have a nice day! "


     
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