Factual and Procedural Background
The appeal concerns a damages award of £155,000 for diminution in value of the claimants' property caused by acts of harassment and nuisance by the defendants. The claimants, owners of a property known as the Farm, brought the claim against their neighbours, the defendants, owners of the adjacent Cottage. The properties were originally in common ownership but were separated in 1965, with a reserved right of way benefiting the Cottage. Over nearly 40 years, the defendants engaged in a campaign of harassment and nuisance against the claimants' predecessors and the claimants themselves, including obstruction of rights of way, nuisance caused by animals, vandalism, and intimidation.
The claimants issued proceedings in May 2012 alleging various acts of trespass, nuisance, and harassment. The trial in Carlisle County Court resulted in findings that the defendants had committed these acts and awarded damages for each head of loss, including damages for diminution in value of the Farm. The defendants appealed the award of damages for diminution in value and the costs order.
Legal Issues Presented
- Whether the award of £155,000 for diminution in value of the claimants' property due to the defendants' nuisance and harassment was appropriate given the grant of an injunction preventing future nuisance.
- Whether damages for residual diminution in value can be awarded when an injunction has been granted.
- Whether the claimants had to demonstrate a present or likely future intention to sell the property to recover damages for diminution in value.
- Whether the damages award included impermissible double recovery by awarding both diminution in value and damages for loss of amenity and distress.
- The appropriateness of the costs order awarding indemnity costs and an interim payment by the defendants.
Arguments of the Parties
Appellants' Arguments
- The award of £155,000 for diminution in value was inappropriate because the injunction granted should prevent any future nuisance, eliminating residual loss.
- The court had no evidence that the claimants intended or were likely to sell the property, so no crystallised loss existed to justify damages for diminution in value.
- Damages under the relevant statutory provisions (Senior Courts Act 1981, Lord Cairns' Act) awarded in lieu of injunctions do not apply where an injunction has in fact been granted.
- The award constituted double recovery because damages were also awarded for loss of amenity and distress, which overlap with diminution in value damages.
- The award of indemnity costs was improper as it should reflect conduct in litigation, not the underlying conduct that gave rise to the claim.
Respondents' Arguments
- The diminution in value damages were properly awarded as common law damages for nuisance and harassment, not damages under Lord Cairns' Act.
- The defendants' conduct was longstanding and not transitory; thus, an injunction does not guarantee cessation of nuisance for future purchasers.
- There was evidence of an attempted sale of the property, supporting the assumption of a realistic possibility of sale and crystallised loss.
- The damages for diminution in value included an allowance for the likelihood of nuisance continuing despite the injunction.
- The costs order was justified because the defendants pursued unrealistic defences and made false allegations during litigation.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Strange & Ors v Westbury Homes (Holdings) Ltd [2009] EWCA Civ 1247 |
Damages for residual diminution in value of property can be recovered for breach of contract, reflecting market perception of defects or nuisance. |
Applied analogous principles to nuisance and harassment claims; residual diminution in value damages are recoverable if proved. |
| Bunclark v Hertfordshire CC [1977] 2 EGLR 114 |
Damages can be awarded for residual diminution in value due to nuisance and for general damages for discomfort and distress. |
Supported awarding damages for residual diminution in value and loss of amenity caused by nuisance. |
| Fowler v Jones (unreported, 2002) |
Damages for loss of amenity and injunctions granted for nuisance and harassment; declined damages for residual diminution in value due to likelihood of transitory nuisance. |
Distinguished as a case of transitory nuisance; damages awarded for loss of amenity but not for diminution in value. |
| Dennis v Ministry of Defence [2003] 2 EGLR 121 |
Damages for nuisance including past and future loss of amenity, loss of use, and loss of capital value, with adjustment for likelihood of sale and duration of nuisance. |
Considered relevant but distinguished; no commercial loss claimed in present case; approach to assess diminution in value informed the analysis. |
| Hunter v Canary Wharf Ltd [1997] AC 655 |
Damages for private nuisance compensate injury to land or its utility, including diminution in amenity value; damages for distress not recoverable separately. |
Confirmed that damages for nuisance reflect diminution in use value of property, not personal distress; damages for distress are subsumed in loss of amenity. |
| Dodson v Thames Water Utilities Limited (No. 1) [2009] EWCA Civ 28 |
Damages in nuisance are for injury to property, not for personal sensibilities; applicable to transitory and permanent nuisances. |
Supported principle that damages for nuisance compensate property loss, not separately for distress. |
| Pell Frischmann Engineering Ltd v Bow Valley Iran Ltd [2011] 1 WLR 2370 |
Damages under Lord Cairns' Act assessed as sum for licence to infringe rights; damages awarded in lieu of injunctions. |
Distinguished; court found damages here were under common law nuisance, not Lord Cairns' Act. |
| Lunn Poly Ltd & Anor v Liverpool & Lancashire Properties Ltd [2006] 2 EGLR 29 |
Damages under Lord Cairns' Act awarded for loss of legal rights in lieu of injunctions. |
Referenced to explain the difference between damages under Lord Cairns' Act and common law nuisance damages. |
| George Fischer Holding Limited v Multi Design Consultants Limited [1994] ORB 775 |
Residual diminution in value of property after remedial works is a recognised head of loss. |
Supported principle that residual diminution in value damages are recoverable if proved. |
| Rust v Victoria Graving Dock Co, 36 Ch.D. 113 |
Damages payable by defendants are not increased by subdivision of interests in land. |
Applied to confirm damages are apportioned according to interests in land, not number of occupants. |
| Bone v Seale [1975] 1 WLR 797 |
Damages for nuisance caused by smells awarded for diminution in property value. |
Referenced in Hunter to illustrate damages for property loss over personal discomfort. |
Court's Reasoning and Analysis
The court analysed the nature of the damages awarded for diminution in value as common law damages for nuisance and harassment, not as damages under Lord Cairns' Act awarded in lieu of an injunction. It emphasised that damages for nuisance compensate injury to the land or its utility, which includes diminution in the value of the right to occupy the property, rather than personal distress alone.
The court found that the defendants' conduct was not transitory but a longstanding campaign of harassment likely to continue if not restrained. Therefore, the injunction granted did not eliminate the risk of future nuisance for prospective purchasers, who would be aware that the injunction was personal to the claimants and not enforceable by successors in title.
The court accepted the expert evidence that the property's value was diminished by 20% due to the nuisance and that this included an allowance for the likelihood of ongoing nuisance despite the injunction. It rejected the argument that damages for diminution in value should be denied because the claimants had no fixed intention to sell, noting that attempts to sell had been made and the issue was one for the trial court to assess based on evidence.
However, the court identified that awarding both damages for diminution in value (£155,000) and a further £20,000 for loss of amenity and distress constituted double recovery, as these are alternative measures of the same loss. The court ruled that damages for distress are subsumed within damages for loss of amenity in nuisance claims and cannot be separately awarded.
Regarding costs, the court upheld the award of indemnity costs and an interim payment, finding that the defendants pursued unrealistic claims and false allegations, justifying the costs order as reflecting conduct during litigation.
Holding and Implications
The court DISMISSED the defendants' appeal against the award of £155,000 for diminution in value, but REDUCED the total damages by £20,000 to eliminate double recovery for loss of amenity and distress. The awards for trespass and aggravated damages remained unaffected.
The appeal against the costs order was also dismissed, affirming the award of indemnity costs and interim payment to the claimants.
The decision confirms that damages for residual diminution in value of property caused by nuisance and harassment are recoverable even where an injunction has been granted, provided the nuisance is not transitory and the risk of recurrence remains. It also clarifies that damages for loss of amenity and distress are alternative to diminution in value damages and cannot be recovered separately to avoid double recovery. The ruling underscores the importance of evidence regarding the likelihood of sale in assessing diminution in value damages but leaves such factual assessments to the trial court.