A tenant who installed air-con units on the landlord's roof without consent was trespassing. But the court decided against awarding damages. Hayley Harris explains why.
30 January 2014
Using an empty storeroom, basement or roof space in your landlord's building may seem harmless.
After all, no one else is using it, and you can always move your kit out if asked. But straying outside of your demised area is a trespass and would entitle a landlord to damages, even where it has suffered little or no loss as a result.
In a recent case, the court confirmed that the amount of damages a tenant should pay in this situation is the same amount that the tenant would have hypothetically paid the landlord for permission to use the additional space.
However, turning the tables back slightly in the tenant's favour, the court also confirmed that, where the trespass turns out to be short-lived, the amount of damages should only equal the sum the tenant would have paid for a temporary licence to use the space for the period of the actual trespass, not the amount if would have paid for a permanent permission (which will often cost much more).
The court also held that, while "aggravated" damages may be awarded in cases of trespass where the defendant's conduct warrants it, they cannot be awarded in favour of a company - only an individual.
In 2007 the tenant company (Stinger) installed air-conditioning units on the roof of the mansion block in which it rented two flats. Then in 2008, Stinger replaced these units with new ones.
Both the 2007 and 2008 installations were undertaken without proper permission and constituted a trespass to the landlord's land, which lasted until Stinger assigned its leases in 2010 and the new tenant obtained consent to install air-con equipment.
The landlord only suffered £1,716 of actual loss from the trespass (the cost of removing the offending kit), but it sought to recover from Stinger a far greater sum by way of compensation based on what Stinger would have hypothetically paid the landlord at the outset for permission to place the air-con apparatus on the roof.
The court's approach
Although the trespass only lasted until 2010 when the leases were assigned, the landlord argued that neither it nor Stinger would have known that at the time the hypothetical licence would have been granted in 2007. The landlord argued that Stinger would have sought a permanent permission (capable of benefiting a purchaser of the flats), and would have paid a six-figure sum for the privilege.
While this may have been true, the court held this was not the correct basis of assessment. The amount of damages had to equate to the sum Stinger would have hypothetically paid for a licence covering the actual period and extent of trespass that occurred, regardless of whether the parties would have known the duration at the outset or not. It was held that Stinger would have only paid £6,000 for a temporary licence until 2010, so that was all the landlord was entitled to.
The landlord sought to increase its compensation by seeking aggravated damages. These can be awarded where the defendant's conduct has been high-handed or oppressive and caused injury to the claimant's feelings. Here, Stinger had been found to have behaved unreasonably, specifically when installing the 2008 air-con units.
Despite this, the court refused to award aggravated damages on the basis that the landlord was a company, and so had no feelings to injure. The court confirmed aggravated damages are only available for individuals.
On the one hand, this case is bad news for tenants, as it confirms they are still liable for damages in circumstances where their trespass has caused the landlord minimal loss or inconvenience.
On the other hand, using the "hypothetical negotiation" as a measure of damages will only get landlords so far. There is still an overriding requirement for damages to compensate a landowner for the loss suffered in the sense of what the trespasser has, in reality, gained from its trespass. It is for this reason that the actual duration and extent of the trespass must form the basis for any measure of compensation.
Of course, it is far better to seek permission from a landlord before you use additional space in its building, not only to avoid a costly damages claim, but also to avoid forfeiture proceedings in circumstances where the trespass constitutes a breach of lease.
Hayley Harris is an associate in Berwin Leighton Paisner's real estate disputes team