Home Information Cases Electricity Supply Nominees Ltd v The National Magazine Company Ltd (1998)

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Electricity Supply Nominees Ltd v The National Magazine Company Ltd (1998)

Summary

Rack rents provided some evidence of the value of fully enjoyed occupation. Expert evidence would be admissible to prove the value of the occupation.

Facts

Trial of a preliminary issue on whether, assuming the truth of the allegations in the defendant's counterclaim, damages were recoverable on that basis. The property concerned was a valuable commercial property in Soho in the West End of London. The defendant was a sub-lessee of the property from the plaintiff. The plaintiff sought payment of sums due under a covenant by the defendant to contribute to the maintenance of the lift and air conditioning systems. The defendant counterclaimed for damages arising as a result of the plaintiff's alleged failure to maintain the lift and air conditioning systems. There were two issues before the judge for determination. (1) The basis upon which the defendant sought to quantify his claim was the diminution in the rental value of a similar property without air conditioning. The plaintiff submitted that there could be no such calculation and that the defendant would be obliged to prove his actual loss occasioned by the alleged breach. (2) The plaintiff and the third parties argued that expert evidence on the subject of rental value was not admissible.

Held

(1) The rule of common law was that where a party sustained a loss by reason of a breach of contract he would, so far as money could, be placed in the same position with respect to damages as if the contract had been performed. See Robinson v Harman (1848) 1 Exch 850 at page 855. Prima facie the measure of damage for breach of an obligation to repair was the difference in the value to the tenant during the relevant period between the property in the condition in which it was and the condition in which it ought to have been had the landlord fulfilled his covenants. See Hewitt v Rowlands (1924) 93 LJKB 1080. On this basis Calabar Properties Ltd v Stitcher (1983) 3 All ER 759 would be distinguished. There was nothing in the authorities to compel the court to make a global award for loss of convenience where the tenant was a trading company. Nor was it expressly stated that in the case of trading company the correct measure of damages would be to take account of the actual loss of profits of the business. (2) There was no general rule that expert evidence as to rental value was inadmissible. All relevant evidence was admissible and expert evidence as to the rental value of the property with and without operating lifts and air conditioning systems was clearly relevant. The admissibility of expert evidence would depend on the facts of the case and there were times when its exclusion would be appropriate. This would be possible when the value of the claim was small and the cost of the evidence would be disproportionately high.
Order accordingly.

Queens Bench Division
Judge John Hicks QC
Judgment date
12 August 1998
References

LTL 13/11/98 : (2000) 2 TCLR 169 : [1999] 1 EGLR 130 : [1998] EG 162 (CS)