Cases - Lane v O'Brien Homes Ltd

Record details

Name

Lane v O'Brien Homes Ltd

Date

[2004]

Citation

EWHC 303

Keywords

Rights of light

Summary

The claimant started an action for breach of an oral agreement that only three houses would be constructed on land sold by the claimant to the defendant. On the claimant's application for an interim injunction preventing the defendant from building a fourth house, the defendant undertook not to do so pending the trial. At trial, the judge awarded the claimant £150,000 damages (which was approximately half of his assessment of the defendant's building profit on the fourth house). The defendant appealed against the award, arguing that the damages were too high, that only a small proportion of the profit of the additional house should be ordered and that the judge had failed to take into account the construction cost of the fourth house in assessing the anticipated profit.

The appeal judge rejected the argument that there was a general principle that damages must be limited to a small percentage of the purchaser's potential profit arising from his breach of covenant. He took into account that the potential overall benefit to the defendant was not limited to the builder's profit, although he accepted that the builder's profit was much smaller than the judge had identified. He considered that the assessment should be at a later date than the contract for sale of the land, namely the date of planning permission. The assessment could not be at the time of building, as the fourth house was not built at the time of the trial due to the undertaking. He pointed out that the assessment of this form of damages was not a precise mathematical process, decided that the judge's assessment of the course of hypothetical negotiations was not wholly wrong and therefore dismissed the appeal.