Bloor (Measham) Ltd v. Calcott [2001] EWHC Ch 467 (23rd November, 2001)

JUDGMENT I direct pursuant to CPR Part 39 P. D. 6 that no official shorthand note shall be taken of this judgment and that copies of this version as handed down may be treated as authentic. Signed: ..................................................... Mr Justice Hart Date: ..................................................... Mr Justice Hart: This action has an unusual history and raises points of some interest on the law of issue estoppel and on the measure of damages for trespass. The claimant ("Bloor") is a property development company. On 1 July 1997 it completed a contract to purchase for £2.5m some 38 acres of land situate at Brookfield Way, Lutterworth, Leicestershire from Wheatcroft & Sons Limited ("Wheatcroft"), another developer. The land was agricultural land but had the benefit of a planning permission, and Bloor had already entered into agreements with adjoining owners for the comprehensive development of the site as well as a s.106 agreement with, inter alios, Harborough District Council and Leicestershire County Council. Its purchase of the land from Wheatcroft was with vacant possession. Bloor's contractors went onto the site on 28 July 1997. It then emerged that the defendant in these proceedings ("Mr Calcott") was claiming a tenancy of the land. It was implicit in that claim that the tenancy, if there was one, would be protected under the provisions of the Agricultural Holdings Act 1986. Mr Calcott almost immediately (on 7 August 1997) started proceedings in the Burton on Trent County Court to which Bloor was made the defendant claiming damages (including aggravated damages) for trespass and an injunction restraining Bloor from entering on to the land and requiring Bloor to remove its materials and equipment therefrom. On the following day Mr Calcott issued an application, returnable on 21 August 1997, for an interlocutory injunction to restrain Bloor from continuing work on the land pending trial. On 13 August 1997 Mr Calcott applied ex parte to the court and obtained injunctive relief pending the inter partes hearing on 21 August. That hearing duly commenced before His Honour Judge Pugsley who, appreciating that the one hour estimate was inadequate, directed that, instead, the trial of the action should take place before him in the following week after the August bank holiday week-end. The trial of the action thus took place on 26, 27 and 28 August, the closing submissions of Mr Calcott's counsel (Mr West) not then having been completed. Further argument took place on 17 September, when judgment was reserved. Judgment was delivered on 3 October 1997. It was, or became, common ground during the course of the hearing that the effect of an agreement dated 11 June 1993 ("the 1993 Agreement") made between Wheatcroft and Mr Calcott had been to make him an annual tenant of the land. That was a consequence of the application of the provisions of the Agricultural Holdings Act 1986. The 1993 agreement had purported to grant Mr Calcott a tenancy for a 13 month term from 1 November 1992 expiring on 31 November 1993. Had the 1993 Agreement been entered into at or before the commencement of the term it would have fallen outside the provisions of the 1986 Act: see Gladstone v Bower [1960] 2 QB 384. Granted as it was in June 1993, a tenancy for less than a year was created, with the result that it fell within Section 2 (2) (a) of the 1986 Act: see Keen v Holland [1984] 1 WLR 251. In the proceedings Bloor claimed rescission of the agreement on the ground that it had been entered into under a mutual misapprehension as to its effect. By its pleading Bloor claimed that rescission should be on terms providing compensation for Mr Calcott's loss of profit. To Mr Calcott's claim for injunctive relief Bloor pleaded that common law damages for trespass were an adequate remedy and that an injunction should be refused on the ground of Mr Calcott "not coming to equity with clean heads and having delayed in asserting a tenancy as long as possible". The order made by HHJ Pugsley was as follows: "1. The Plaintiff do recover against the Defendant damages for trespass not including aggravated damages to be assessed by the District Judge." It was common ground that this order related to the loss suffered by Mr Calcott from the damage to his crops resulting from Bloor's contractors' entry on the land on 28 July 1997. Although no mention is made of the point in the judgment, it is clear that Bloor's counsel conceded that Mr Calcott was entitled to this relief on the basis that the tenancy was admitted and was not (as a result of the judgment) liable to rescission. These damages were subsequently agreed at £1,200.00. "2. The Plaintiff's claim for an injunction be dismissed". It is clear from the judgment that the judge had acceded to Bloor's case that Mr Calcott had disentitled himself by his conduct from obtaining equitable relief. Given a very important concession made before me on behalf of Mr Calcott it is unnecessary to rehearse in detail the conduct found by the judge. The degree of the unconscionability of that conduct can be gauged, however, from the tone of the judge's final remarks on this issue: "I accept that the plaintiff did not acquire the tenancy through fraud, but he maintained and nurtured it with a web of deceit. At various points if he had signed the leases as promised, the landlord would have had the protection of a Gladstone v Bower lease. Because of that deceit the landlord acted to his detriment in not taking the steps which he would otherwise have taken to bring the tenancy to an end and selling the land with vacant possession to the defendant. The defendant carries the immediate burden of that deceit. In my view, it would be an affront to common sense and an infringement of Lord Diplock's dictum to grant the plaintiff the equitable relief of an injunction when he would thereby be gaining by his own dishonesty. Mr West's argument that his client has an unassailable right to possession and therefore it would be idle to refuse an injunction impresses only by its audacity. There is a stream of authority, to which I have not been referred by him, which shows that a party can be denied relief when he has misled a party and lulled them into a false sense of security. If the plaintiff did bring an action for possession, there would no doubt be arguments as to proprietary estoppel and the extent to which the issue of res judicata applies and the extent to which any mandatory injunction could lie in view of the plaintiff's misconduct. This argument was raised very late in the day in Mr West's final speech. To grant this plaintiff the injunction sought would be offensive to common sense, offensive to every moral instinct and offensive to the fundamental principles of equitable jurisdiction." "3. The Defendant's counterclaim for rescission be dismissed". The judge in his judgment had rejected the submission that a mistake as to the legal effect of a document was within the doctrine of Solle v Butcher [1950] 1 KB 671 and Lawrence & Anor v Lexcore Holdings Ltd [1978] 2 AER 810. "4. Declaration on the counter-claim that the anniversary of the Plaintiff's tenancy is on 30 November" The significance of this issue was that Bloor had on 21 August 1997 taken advantage of Mr Calcott's attendance in Court to serve on him what was believed to be an incontestable notice to quit "at the expiration of the year of your tenancy which shall expire next after the end of 12 months from the date of service of this notice". Bloor needed to know whether this would be 30 November 1998 or (as Mr Calcott contended) 10 June 1999. In the event the significance of this issue evaporated. Following arbitration both that notice, and a subsequent one served in July 1998, were held to be invalid. It is however common ground that a further notice dated 7 June 1999 was finally effective to terminate any tenancy Mr Calcott had from 10 June 2000. Mr Calcott applied to the Court of Appeal for permission to appeal, both in relation to the refusal of an injunction and in relation to the anniversary date. Permission was granted in relation to the latter point, and the appeal on that point was subsequently successful. Permission was, however, refused on the former point. The suggested grounds of appeal were that the judge had been wrong to ignore the distinction drawn in Harrow LBC v Donohue [1995] 1 EGLR 257 between acts of mere trespass (where damages might be substituted for an injunction) and dispossession (where a claimant was entitled as a matter of right to the protection of an injunction) and (as Mr Calcott's counsel's skeleton argument put it) "in ignoring the practical consequences involved in refusing the protection of the court to a person admittedly threatened with wrongful dispossession". The Court of Appeal (Staughton and Otton LJJ) was unimpressed. Staughton LJ pointed out that this was a case where Mr Calcott had led Bloor's predecessor into a trap, and where he had in any case an interest which was due to expire in the relatively near future and where there was simply no point in holding up the development. Permission was refused by the Court of Appeal on 28 October 1997. In the meantime these proceedings had, on 21 October 1997, been commenced by Bloor. They sought a declaration that Bloor was entitled to occupy the land and proceed with its development without interference from the defendant, and secondly a declaration that any tenancy of the land which Mr Calcott might have was unenforceable against Bloor. Those claims were made on the basis that Mr Calcott's conduct had, under the doctrine of proprietary estoppel, given rise to an equity in Bloor's favour entitling it to those declarations or alternatively other relief of equivalent effect. These proceedings recognised that HHJ Pugsley's judgment and order had not conclusively settled the question of who was entitled to go onto the land following his order. It was clear that Mr Calcott could not invoke the Court's assistance to protect his rights of exclusive occupation. It was unclear, however, where that left the parties. Although HHJ Pugsley had been invited (by Bloor's counsel Mr de la Piquerie) to make an award of damages in lieu of an injunction he had declined to do so. Such an award would have had the practical consequence of shutting out any claim in the future by Mr Calcott for damages for trespass or breach of the covenant for quiet enjoyment. The judge, however, made it quite clear in post judgment argument that he was not taking that course. The relevant exchanges were as follows: "Mr de la Piquerie: -- and that there be an assessment of the damages suffered by the plaintiff in lieu? If of course that is the position --- Judge Pugsley: Well, gentleman, my judgment is on the narrow basis that I am denying an injunction. Mr de la Piquerie: Yes. That was how I understood it. Judge Pugsley: I am denying an injunction. Mr de la Piquerie: Full stop. Judge Pugsley: Full stop. I have not been asked to assess damages - either damages now or necessarily damages in the future. Mr de la Piquerie: Yes. Judge Pugsley: Mine is on the narrow basis that at this stage as formulated on this pleaded case for the reasons I have given I am not allowing your claim for rescission. I am not allowing the plaintiff's claim for an injunction. Mr de la Piquerie: That is how I read it. Judge Pugsley: Now, what happens in the future is another matter. Mr de la Piquerie: Yes. Judge Pugsley: There is clearly at the moment a claim as to what has happened up to this point." I have already quoted the passage in the judgment where the judge had adverted to the probability that, in a subsequent action by Mr Calcott for possession, "there would no doubt be arguments as to proprietary estoppel and the extent to which the issue of res judicata applies". The lack of clarity as to the parties' strict rights following HHJ Pugsley's judgment proved not to be a matter of mere academic concern. On 21 October 1997 Mr Calcott began a campaign on site seeking physically to obstruct Bloor's contractors with a tractor and plough. This succeeded in holding up works for a week and culminated in his fencing off and putting sheep on the land. Bloor applied for, and obtained, in these proceedings an interim injunction the terms of which enabled Bloor's development thereafter to proceed (Order of Jacob J, 6 November 1997). Mr Calcott has counter-claimed in these proceedings for damages for breach of the covenant for quiet enjoyment and for trespass, arising out of Bloor's incursions on the land from 14 October 1997 onwards. By an order dated 9 October 2000 Master Bowman directed that there should be tried before me: "all issues arising in [these proceedings] including the proper basis for assessing any damages payable by Bloor to Mr Calcott in the event that Mr Calcott succeeds on his counterclaim save that the assessment of such damages (if any) shall be held over to an inquiry." The Issues The issues raise by the pleadings are: Is any claim by Bloor to an equity by way of proprietary estoppel barred by the judgment in the county court action ("the res judicata point"); If not, is such an equity incompatible with the provisions of the Agricultural Holdings Act 1986 ("the AHA 1986 point"); If the answer to (2) is negative, is Bloor entitled to the equity claimed; Alternatively, did Judge Pugsley's judgment itself extinguish Mr Calcott's right to possession? If Bloor is not entitled to the equity claimed, to what measure of damage is Mr Calcott entitled? The third issue has, happily if belatedly, disappeared as a result of a concession made by Mr Aaron, counsel now appearing for Mr Calcott. He accepts that Mr Calcott's "deceitful and exploitative" conduct would, but for the effect of the judgment below and/or the provisions of the 1986 Act, entitle Bloor to the relief claimed. It is unnecessary for me, therefore, to rehearse the details of that conduct save to emphasise that its hallmark was the concealment of his claim to a tenancy until the moment at which its assertion could be calculated to extract the maximum ransom for his surrender of those rights. The Res Judicata Point The principle that no-one should be vexed by the same suit twice has generated what, in the modern law, can be seen as three distinct rules. They have recently been summarised by May LJ in Specialist Group International Ltd v Deakin & Anr [2000] EWCA CIV 777 in the following terms: "23. If a claim has been explicitly determined in previous concluded proceedings between the same parties, that claim cannot be raised again, other than on an appeal, unless there is fraud or collusion. If a necessary element of a claim has been explicitly determined in previous concluded proceedings between the same parties, that issue cannot be raised again, if, as is likely but not inevitable, it would be an abuse to raise that issue again. This may also extend to an implicitly necessary element of the previous determination. The previous determination may include a settlement. If a claim or issue has not been determined in previous concluded proceedings between the same parties, there may nevertheless be circumstances in which, as a matter of public and private interest on a broad merits-based procedural judgment, it would be an abuse for a party to raise that claim or issue. Such circumstances may, depending on the facts, exist where the litigant could and should have raised the matter in question in earlier concluded proceedings. There may in particular cases be other elements of abuse, including oppression of another party; but abuse of process is a concept which defies precise definition in the abstract. The court will only stop a claim as an abuse after most careful consideration. 24. The main sources of this summary are Arnold v NatWest Bank plc [1991] 2 AC 93 at 104-107 and Johnson v Gore Wood & Co [2001] 2 WLR 72 at 90 and 118." The first of those rules is often referred to as cause of action estoppel, the second as issue estoppel, and the third as Henderson v Henderson estoppel. The decision in Arnold v Nat West Bank plc referred to by May LJ exploded the view that issue estoppel stood on the same ground as cause of action estoppel in causing an absolute bar to relitigation in the absence of fraud or collusion. That case held that "special circumstances" might exist which would prevent issue estoppel from operating as a bar, the special circumstances there in point being "that there has become available to a party further material relevant to the correct determination of a point involved in the earlier proceedings, whether or not that point was specifically raised and decided, being material which could not by reasonable diligence have been adduced in those proceedings" (see per Lord Keith at [1991] 2 AC 93 at 109). The decision in Johnson v Gore-Wood [2001] 2 WLR 72 dealt with the ambit of Henderson v Henderson estoppel. I draw attention in particular to the passage in Lord Millett's speech at page 118 where he said: "It is one thing to refuse to allow a party to relitigate a question which has already been decided; it is quite another to deny him the opportunity of litigating for the first time a question which has not previously been adjudicated upon. This latter (though not the former) is prima facie a denial of the citizen's right of access to the court conferred by the common law and guaranteed by article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms (1953). While, therefore, the doctrine of res judicata in all its branches may properly be regarded as a rule of substantive law, applicable in all save exceptional circumstances, the doctrine now under consideration can be no more than a procedural rule based on the need to protect the process of the court from abuse and the defendant from oppression. In Brisbane City Council v Attorney General for Queensland [1979] AC 411 , 425 Lord Wilberforce, giving the advice of the Judicial Committee of the Privy Council, explained that the true basis of the rule in Henderson v Henderson 3 Hare 100 is abuse of process and observed that it "ought only to be applied when the facts are such as to amount to an abuse: otherwise there is a danger of a party being shut out from bringing forward a genuine subject of litigation". There is, therefore, only one question to be considered in the present case: whether it was oppressive or otherwise an abuse of the process of the court for Mr Johnson to bring his own proceedings against the firm when he could have brought them as part of or at the same time as the company's action. This question must be determined as at the time when Mr Johnson brought the present proceedings and in the light of everything that had then happened. There is, of course, no doubt that Mr Johnson could have brought his action as part of or at the same time as the company's action. But it does not at all follow that he should have done so or that his failure to do renders the present action oppressive to the firm or an abuse of the process of the court." Mr Aaron's primary submission was that this was a case of issue estoppel rather than Henderson v Henderson estoppel, and that there were no special circumstances to prevent it operating. He relied on the order in Mr Calcott's favour for damages for trespass. Relying on Diplock LJ's definition of an "issue" for this purpose as being a decision "as to the legal consequences of particular facts, constituting a necessary step in determining what are the legal rights and duties of the parties resulting from the totality of facts "(see Fidelitas Shipping Co Ltd v VO Exportchleb [1966] 1 QB 630 at 641), he submitted that in this case it had been a necessary condition of that award of damages that the court should find (or that it should be conceded) that there was a valid tenancy, and that as a legal consequence Mr Calcott was entitled to damages if there was an act of trespass. Since the parties in the previous action were the same as in this one, the same issue arose, the court was one of competent jurisdiction, and the judgment in the case was a final one, he submitted that all the requirements of the doctrine were fulfilled. It followed, he submitted, that the question of Mr Calcott's entitlement to damages in this action was the subject of an issue estoppel, and that no special circumstance of the kind illustrated by Arnold v NatWest Bank existed to prevent it operating. It was only not a cause of action estoppel because Mr Calcott's present claim was in relation to a separate later acts of trespass. Mr Rowley's principal riposte to this line of argument was that it made little difference to the result at which should I arrive whether I regarded the question as being an issue estoppel or Henderson v Henderson estoppel. In submitting that it should be viewed as the latter, he relied on the decision of the Court of Appeal in SCF v Masri [1987] 1 QB 1028 as showing that, where the judicial disposal of a matter had been by consent, the question of whether re-litigation should be permitted depended on the application of the test in Johnson v Gore-Wood rather than (if different) the search for a special circumstance in the Arnold sense. While the language of the Court of Appeal in that case is consistent with the former test having been applied, the point relied on by Mr Rowley did not there arise for direct decision. For myself I see no reason why a judgment based on admissions made in relation to particular issues should have more limited consequences than a judgment made after a trial of those issues. Nor is there any basis in the authorities which have been cited to me for such a distinction. Mr Rowley also submitted that the conditions for an issue estoppel were not fulfilled since the existence or otherwise of a proprietary estoppel was not a necessary step in determining Mr Calcott's trespass claim before HHJ Pugsley. As to this, I accept that it was not for Mr Calcott to disprove the existence of any estoppel interest in order to make good his claim to damages for trespass. To found a claim for trespass all that Mr Calcott had to show was that he was in possession of the land. In fact he pleaded that possession by reference to a tenancy, which tenancy was admitted by Bloor. It seems to me that it was necessarily implicit in Mr Calcott's successful claim for damages to his growing crop that he had possession by virtue of a tenancy and that, in relation to the damages alleged, Bloor could not assert a better title. There was, therefore, in my judgment an issue estoppel arising as a result of the award of damages in Mr Calcott's favour. It was, however, of a much narrower nature than that now asserted on his behalf. It goes only to the question whether Mr Calcott's possession quoad Bloor had the quality to enable him to claim damages against Bloor in respect of the crop damage caused by Bloor's contractors in July 1997. It does not, in my judgment, go to the question of whether his possession or (having been dispossessed) his right to possession after that date had that quality. To put the point in another way, had the issue of the proprietary estoppel been raised in the County Court proceedings, it would have been logically possible for the judge to have held that Mr Calcott was entitled to damages in respect of damage to the crop but was not entitled to assert his tenancy so as to claim either possession or damages in respect of any period after the crop had in fact been harvested (which appears in fact to have taken place before the trial of the action). As a matter of logic, that would have been a possible disposition of the case. Where the elements of a proprietary estoppel are present, the court has a wide discretion as to the nature of the remedy to be granted in order to satisfy the resulting equity. The court could therefore have held that the equity raised was sufficient to estop Mr Calcott from asserting his tenancy (or possession) for any purpose other than the immediate damage to the crops which, as a result of his own efforts (in this case honest efforts) were growing on the land. Accordingly, in my judgment the estoppel here to be considered is Henderson v Henderson estoppel. As such it calls for the application of what Lord Bingham of Cornhill in Johnson v Gore-Wood & Co [2001] 2 WLR 72 at 90 described as: "a broad merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing, or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not." In the present case there is no doubt that the issue of whether Mr Calcott's rights under the tenancy were such as to entitle him in the future to possession of the land or damages for dispossession, or whether his conduct disentitled him from obtaining either remedy, could have been raised in the County Court proceedings. With the benefit of hindsight, it is difficult to see why it was not raised. Before me Mr Aaron speculated that it was because Bloor's then counsel had assumed that a proprietary estoppel argument would be bound to fail in the light of the provisions of the Agricultural Holdings Act 1986. Mr Rowley, on behalf of Bloor, submitted that it was no abuse of process for this claim now to be litigated. He relied on the following matters as explaining why the point had not been ventilated in the county court proceedings and justifying its now being raised. First, those proceedings had been commenced and tried at quite unusual speed, reducing Bloor's opportunity fully or properly to prepare for them. Secondly, the full extent of Mr Calcott's deceit only emerged in the course of the hearing. Thirdly, the assertion on Mr Calcott's behalf that, even if the judge refused an injunction, Mr Calcott would still have an indefeasible right to possession was only made at a late stage in the trial. In this connection the judge himself appears to have taken an extremely adverse view of the way in which Mr West on behalf of Mr Calcott had conducted the argument, describing his conduct in raising the point as "quite incredible", as being "not consistent with the traditions of trust between Bench and Bar and between members of the same profession", and as "argument by ambush". It was submitted before me that, until this argument was raised in Mr West's closing submissions, the whole case had been conducted on the footing that the judge's determination of the question whether or not to grant an injunction would be determinative of the question who thereafter would be entitled to occupy the land. Fourthly, further proceedings were necessitated by the fact (as demonstrated by Mr Calcott's subsequent actions) that Mr Calcott refused to accept the effect of the judgment. Finally, it was submitted that weight should be given to the fact that the judge himself had recognised that there were questions (including that of proprietary estoppel) which would have to be left over to future proceedings as a result of the limited order he was prepared to make. With hindsight, it is possible to take the view that the judge was over-critical of the tactics employed (with how much deliberation it is hard to say) by Mr West. His client had a simple claim, and it was up to Bloor to find an answer to it. However, the judge had the benefit of watching the arguments as they developed, and I hesitate to describe his criticisms as unfair. The point can also be made that in his final submissions, Bloor's counsel Mr de la Piquerie positively invited the judge to consider an award of damages in lieu of an injunction. No doubt that was on the basis (consistently with Mr Calcott's pleading and consistently with the terms offered by Bloor for rescission) that such damages would be assessed on the basis of losses suffered by Mr Calcott from being deprived of his tenancy. However that may be, it is clear that the judge refused the invitation (and was not pressed by Mr West to accept it), and refused it on the basis that there was an outstanding issue between the parties that could only be resolved in future proceedings. That was undoubtedly the case. The judgment produced a situation in which Mr Calcott could not restrain Bloor from entering the land, and doubts existed as to whether Mr Calcott was himself entitled to use the land. As Jacob J put it in his interlocutory judgment: "It can hardly be right that we have here a lawless position in which the farmer may not get the land owner off the land by injunction and the land owner cannot get the farmer off by injunction. If that were the position it would invite trouble and indeed I am told there has been some already. Would it be right, for example, if the developers here were to decide to send their diggers through the electric fence and drive the sheep off the land that the farmer would be entitled to try to stop them by using his tractors? If each is entitled to possession of the land, because neither can get an injunction against the other, the law would have come to a pretty strange pass. I do not think it has." In my judgment, so far from being an abuse of process now to raise the issue, the need for that issue now to be resolved has been dictated by the decision of the judge in the earlier proceedings deliberately to exclude it from the scope of the order made by him. Accordingly I reject the submission that the effect of those proceedings, and the order made thereon, has been to debar Bloor from seeking the relief which it now seeks. The AHA Point It was submitted on behalf of Mr Calcott that the statutory protection afforded by ss 2 and 25 of the 1986 Act cannot be defeated by an alleged estoppel. The submission was that the yearly tenancy enjoyed by Mr Calcott could only be determined by a notice to quit given in terms of Section 25, and that the tenant could not give up his rights under such a notice in advance of such a notice being served. Reliance for these propositions was placed on Johnson v Moreton [1980] AC 37 (HL) at 50/51. 52G-53A, and 58H-60A. Since, so the argument ran, the protection of the Act could not be given up by express agreement, the right to statutory protection could not be lost because of an estoppel. That was said to be demonstrated by the decision of the Court of Appeal in Keen v Holland [1984] 1 WLR 261. Johnson v Moreton was a case in which the tenant had, in the tenancy agreement itself, purported to contract "not in any event to serve a counter-notice under Section 24(1)" of the 1948 Act. There are passages in the speech of Lord Salmon, especially at p. 51, which suggest that the only time at which a tenant by his own act can destroy the protection given him by the Act is when he himself has first received a notice to quit from the landlord. It is clear, however, that the subject matter before the House was a case in which the relevant agreement had been made at the time of the tenancy. If effective according to its terms, its effect would be to allow the parties to such a tenancy to contract out of the Act. The principle of public policy which strikes down such an agreement does not in my judgment necessarily apply with the same force to the voluntary acts of a tenant who is already in possession with the full protection of the Act. It has never, for example, been doubted that such a tenant may effectively surrender his tenancy, either by instrument or by operation of law. I interpose that the question whether such an existing tenant may agree to surrender his tenancy at a future date has never been expressly decided and is the subject of conflicting indications in the Court of Appeal: cf Elsden v Pick [1980] 3 AER 235 and Short Bros (Plant) Ltd v Edwards (1978) 249 Estates Gazette 539. If an existing tenant of a agricultural tenancy may surrender his tenancy with immediate effect by conduct inconsistent with the continued subsistence of the tenancy, it is difficult in principle to see why his landlord should not be able in appropriate circumstances to invoke the doctrine of proprietary estoppel against him so as to prevent him from being able thereafter to assert his tenancy, or some incident of it. The tenant's ability to determine the tenancy by consensual surrender must include the ability, by acts falling short of a surrender, to create an equity in favour of the landlord. Mr Aaron conceded that, if his submission were correct, the consequence would be that a third party could never acquire any interest in the land by proprietary estoppel effective against the tenant as a result of acts by the tenant. It is impossible to see the basis in principle for such a rule. As already noted, Mr Aaron relied on Keen v Holland as authority for the proposition that the tenant cannot be estopped from relying on the Act. In that case (as in the present) the parties had deliberately entered into agreements believed by them both to be outside the protection of the Act. In fact the agreements were within the Act. The landlords argued that the common intention of the parties that the agreements should have effect as agreements which fell outside the Act (which, had the agreements been for different terms, would have been lawful) gave rise to an estoppel by convention of the type applied in Amalgamated Investment & Property Company Ltd v Texas Commerce International Bank Ltd [1982] GB 84. The Court of Appeal rejected that argument on the basis that the parties could not do by means of an estoppel that which Johnson v Moreton showed that they could not do by contract. The estoppel relied on in that case was an estoppel by convention alleged to arise as a result of the common intention of the parties as at the date of each agreement. It is readily intelligible why the Court of Appeal should have regarded such a creature as indistinguishable, from the point of view of policy, from an express agreement entered into at the commencement of the tenancy that the Act should not apply. In my judgment the case decided nothing about the possible application of the doctrine of proprietary estoppel as a result of conduct by an existing tenant of an agricultural holding. I conclude that nothing in the Agricultural Holdings Act 1986 prevents Bloor from asserting its present claims, either positively by claiming the right to use the land during what would otherwise have been the subsistence of the tenancy, or negatively in denying Mr Calcott damages in respect of such user. Bloor's alternative claim Bloor's alternative claim was that the effect of HHJ Pugsley's refusal to grant an injunction was itself to extinguish Mr Calcott's rights of exclusive occupation under the tenancy and thus to preclude his claim to damages for interference with those rights. Given the conclusions at which I have arrived on the earlier issues this claim does not require my decision. If, however, Mr Calcott is entitled to rely on the order as conclusively determining both the points actually decided and all those which might have been raised, it would be necessary to interpret the order in order to discover its meaning in relation to the latter. There are only two possible interpretations. One is that the judge was saying: I am refusing you an injunction and it follows that, if you are dispossessed by Bloor, you will of course be entitled to an order for possession and damages for trespass. The other is that he was saying: I am refusing you an injunction and it follows that, if you are dispossessed by Bloor, you will not be entitled to an order for possession or damages. A third interpretation, under which the judge was shutting the door on a future action by Mr Calcott for possession but leaving open the possibility of his claiming damages for future trespass is not logically available: the right to claim damages for trespass is dependant on the right to possession. The first of the two possible interpretations involves a practical absurdity. The second would only be a possible result if the judge had decided that the tenancy had somehow been extinguished; and the only route to that result would have been by an application of the doctrine of proprietary estoppel. Had it been necessary to decide the point I should have inclined to the view that the judge had, by implication, decided the issue of proprietary estoppel in Bloor's favour. As it is, consideration of the dilemma produced if the issue is regarded as res judicata simply reinforces my view that it should not be. Mr Calcott's measure of damages This question only arises if I am wrong in the conclusions reached so far. Mr Calcott's claim was pleaded as follows: "28. By way of damages the Defendant is entitled to receive the value of the benefit which the Plaintiff will obtain from having evicted him, or alternatively such as a lessor in the position of the Plaintiff might reasonably have been expected to pay him to secure a surrender of his tenancy. The Defendant is not presently in a position to quantify the said damages. 29. Alternatively the Defendant is entitled to recover as damages a sum equivalent to the profits he could reasonably have expected to make from farming the land for the proper duration of his tenancy if he had not been evicted." This was understandably interpreted by Bloor as a claim on three different possible bases, namely (1) the benefit obtained by Bloor from the eviction; (2) the sum which Bloor might have been expected to pay for a surrender; and (3) the loss of profit. However, Mr Aaron made it clear in the course of argument that he meant the same thing by measures (1) and (2) and that the measure which he sought was in fact (2). I interpose that, as a matter of theoretical analysis, measure (1) is plainly framed in restitutionary terms, whereas measure (3) is plainly framed in terms of compensation for loss. Measure (2) can, however, be viewed either on a restitutionary basis or on a compensatory basis. It has the former flavour if it is seen as simply a proxy for measure (1), i.e. simply as a convenient method of valuing the benefit in measure (1). This is, in effect, how Mr Aaron invited me to view it. The distinction is, however, an important one with a number of practical implications. The price which Bloor might have been expected to pay to secure a surrender of the tenancy is not necessarily the same as the benefit enjoyed by Bloor as a result of the unlawful eviction. In order to ascertain the former, one has to hypothesise a particular negotiation taking place at a particular time between parties having limited information available to them. In order to ascertain the latter, a wide-ranging inquiry might need to be made into the actual profitability of the development. I mention these points because of the procedural tactics which appear to be being employed on Mr Calcott's behalf in relation to the inquiry as to damages, in particular his application for wide-ranging disclosure in relation to Bloor's development (an application forestalled by the Master's direction that I should first rule on the question of the proper measure of damages). It was submitted on Mr Calcott's behalf that a claimant in a trespass case is entitled at common law to damages based either on the loss he has suffered or (at his election) by reference to "the price a reasonable person would pay for the right of user". He relied on Whitwham v Westminster Brymbo Coal & Coke Co [1896] 2 Ch 538 , Penarth Dock Engineering Co v Pounds [1963] 1 LL L Rep 359, Ministry of Defence v Ashman [1993] 25 HLR 513 and Ministry of Defence v Thompson [1993] 25 HLR 552 for this proposition. Ashman and Thompson were both cases in which the wife of a licensee of residential premises remained in occupation following termination of the licence. In each case the owner (the Ministry of Defence) sought mesne profits on the basis of the open market rental value of the premises. In each case the judge at first instance had awarded a different, lesser, measure based on the lower concessionary rental which had been enjoyed under the licence. In each case the Court of Appeal rejected the claim of the Ministry of Defence. It did so, however, on the basis that, on the facts, the open market rental value of the premises was not the correct measure of the value of the benefit received by the particular trespasser. In Thompson , Hoffmann LJ summarised the position (so far as relevant to this case) as follows:- "The principles in Ashman may, in my judgment, be summarised as follows: first an owner of land which is occupied without his consent may elect whether to claim damages for the loss which he has been caused or restitution of the value of the benefit which the defendant has received. Secondly, the fact that the owner if he had obtained possession would have let the premises at a concessionary rent, or even would not have let them at all, is irrelevant to the calculation of the benefit for the purposes of a restitutionary claim. What matters is the benefit the defendant has received." Hoffmann LJ's identification of the principle at work as "restitutionary" was not uncontroversial. In Ashman , Lloyd LJ had dissented from the view that a claim for mesne profits was restitutionary in nature, although in a later case he opined that it contained some elements of a restitutionary claim (see Inverugie Investments Ltd v Hackett [1995] 1 WLR 713 at 718). However that may be, the principle stated by Hoffmann LJ was in no sense a revolutionary one. It did no more than reflect the approach of the Court of Appeal in the earlier cases cited by Mr Aaron, and conveniently encapsulated in the judgment of Megaw LJ in Swordheath Properties v Tabet [1979] 1 WLR 285 at 288, when he said: "It appears to me to be clear, both as a matter of principle and of authority, that in a case of this sort the plaintiff, when he has established that the defendant has remained on as a trespasser in residential property, is entitled, without bringing evidence that he could or would have let the property to someone else in the absence of the trespassing defendant, to have as damages for the trespass the value of the property as it would fairly be calculated; and, in the absence of anything special in the particular case it would be the ordinary letting value of the property that would determine the amount of damages." For convenience I will label the two alternative measures contended for as "the benefit" and "the loss" measures. Mr Aaron further submitted that in the present case I should therefore simply declare that Mr Calcott was entitled to elect either to have damages assessed on the basis of the benefit of Bloor (scilicit the price which Bloor would have had to pay for a surrender) or on the basis of Mr Calcott's loss of profit during the period up to 9 June 2000 (which the parties had agreed was £19,635). This appears to have been an attempt to have a second possible bite at the disclosure application which the Master's order had been designed to obviate. In the circumstances in which the Master had directed that I should try the issue of "the proper basis for assessing any damages payable by Bloor to Mr Calcott in the event that Mr Calcott succeeds on his counterclaim" it seems to me obvious that whether or not it is open to Mr Calcott to preserve his right of election, I should go further into the question than thus invited. Mr Rowley submitted that there was no general principle that, in a trespass case, a claimant was entitled to make an election between the benefit and the loss measures. Reminding me of Lord Nicholls' comprehensive review of the authorities on damages in A-G v Blake [2001] 1 AC 268 he urged that the question of the proper measure of damages in a trespass case could not be arrived at by the application of mechanical formulae, and that the cases where damages had been awarded on the "benefit" principle were exceptions to the general rule that loss was the correct measure, each of which could be explained by its own special circumstances. He suggested that the principal criterion for classifying the cases where recovery on the "benefit" basis had been allowed was that these were all cases where no loss had been shown. He pointed out that Lord Nicholls himself had described Whitwham and Penarth as "no loss" cases, and submitted that Lawson v Hartley-Brown (1995) 71 P & CR 242 could be similarly analysed. Cases where a claimant had recovered on a "benefit" basis despite having suffered quantifiable loss were, he submitted, confined to cases where damages had been awarded in lieu of an injunction as opposed to at common law. He gave Carr-Saunders v Dick McNeil Associates [1986] 1 WLR 922 as an example of this kind of case. He further submitted that, insofar as Ashman and Thompson established some new or different principle, the principle was that of unjust enrichment and did not apply in circumstances where a claimant was only in a position to assert his claim to damages by reason of his own deceitful and unconscionable behaviour. In my judgment I am bound by Ashman and Thompson to hold that a claimant in a trespass action is able to elect to claim damages either on the basis of the loss suffered by him or on the basis of the value to the defendant of his wrong. So far as this court is concerned, that seems to me to be a brightline rule, which I cannot refuse to follow simply because one or other measure seems inappropriate to me by the light of nature. That conclusion does not, however, dispose of this aspect of the case in Mr Calcott's favour. One has to go on to consider what value has been derived by the particular defendant from its wrong. One way of characterising this question is as one of causation. Once the benefit derived by Bloor has been identified as its ability to develop the land without having to pay a consideration for the surrender of the tenancy, the question becomes: did Bloor obtain that benefit by reason of its trespass? The answer is plainly not. The reason why Bloor enjoyed that benefit was not because of its wrongful entry on the land but because Mr Calcott's behaviour had been such that he was held not to be entitled to restrain Bloor's presence. The position appears to me analogous to that in relation to damages in lieu of an injunction adverted to by Millett LJ in his judgment in Jaggard v Sawyer [1998] 1 WLR 269 where, in the course of commenting on the approach of Steyn LJ in Surrey County Council v Bredero Homes Ltd [1993] 1 WLR 1361 at 1369 to the decision in Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798, he said "One element in the value of the plaintiff's land immediately before the breach is attributable to his ability to obtain an injunction to prevent the building. Clearly a defendant who wished to build would pay for the release of the covenant, but only so long as the court could still protect it by the grant of an injunction. The proviso is important. It is the ability to claim an injunction which gives the benefit of the covenant much of its value. If the plaintiff delays proceedings until it is no longer possible for him to obtain an injunction, he destroys his own bargaining position and devalues his right. The unavailability of the remedy of injunction at one and the same time deprives the court of jurisdiction to award damages under the Act and removes the basis for awarding substantial damages at common law. For this reason, I take the view that damages can be awarded at common law in accordance with the approach adopted in the Wrotham Park case, but in practice only in the circumstances in which they could also be awarded under the Act." It is true that in that passage Millett LJ was deliberately focusing on cases where damages were being awarded on a compensatory rather than a restitutionary basis. However, the principle of causation seems to me to be the same whether one is looking at the loss suffered by the claimant or the benefit obtained by the defendant. The point can, alternatively, be seen as one going to the valuation of the benefit in fact obtained by Bloor. Because the court would not, as a result of Mr Calcott's unconscionable conduct, restrain Bloor from proceeding with the development, the value to Bloor of not having to negotiate a voluntary surrender of the tenancy was reduced to nil. Mr Calcott had, by his own acts, destroyed whatever bargaining position he might otherwise have had. The result is that there is nothing, in my judgment to take the case out of the normal rule applicable where the claimant elects to claim damages on the "benefit" principle. That is "the value of the property as it would fairly be calculated" (see per Megaw LJ in Swordheath Properties (supra)). The property in question here is Mr Calcott's agricultural tenancy in the period from October 1997 until its expiry on 9 June 2000. The rental value of that has presumably already been agreed between the parties in their calculation of Mr Calcott's loss of profits and will, necessarily, be a lower figure. If (contrary to my findings) Mr Calcott is entitled to any damages at all that is the figure which he is in my judgment entitled to claim on the "benefit" basis. © 2001 Crown Copyright BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII