Date decided October 19, 1973 | Citation(s) 1 WLR 798 | |
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Similar Attorney General v Blake, Robinson v Harman, Ruxley Electronics and Cons, Tulk v Moxhay, Farley v Skinner | ||
Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798 is an English land law and English contract law case, concerning the measure and availability of damages for breach of negative covenant in circumstances where the court has refused specific relief. Such remedy is known as Wrotham Park damages, which are awarded (in lieu of specific performance or an injunction) under the jurisdiction created by s. 2 of the Chancery Amendment Act 1858 (also known as Lord Cairns' Act).
Contents
Facts
Wrotham Park was an estate that used to be owned by the Earl of Strafford. Over the years, portions of the land were sold off for development, subject to some lay-out restrictions. The Potters Bar Urban District Council came into the possession of one desolate triangle of land. They offered it for sale by public auction as freehold building land for 13 houses. Parkside bought the land and built the houses, despite warnings from Wrotham Park Estate that they were violating the lay-out restrictions. When the houses were built, Wrotham Park Estate brought a claim against Parkside for breach of the restrictive covenant.
Judgment
Brightman J (as he then was) awarded damages of £2,500 as a substitute for an injunction. The damages were measured as the amount that might reasonably have been demanded by the plaintiff as payment for relaxing the covenant, being 5% of the developer’s anticipated profit. He refused to make an order to demolish the houses built, preferring to award damages under Lord Cairns' Act, saying:
Impact
The jurisdiction for Wrotham Park damages has been expanded and clarified in subsequent cases, and was summarized by the Judicial Committee of the Privy Council in 2009:
- Damages awarded are intended to compensate the claimant for the court's decision not to grant relief in the form of an order for specific performance or an injunction.
- The court will award an amount of damages which represents the sum that the claimant might reasonably have demanded from the defendant as compensation for allowing it to breach the relevant contractual provision. The court assesses this by reference to a "hypothetical negotiation" carried out between the parties at the date of breach.
- At the "hypothetical negotiation" both parties are assumed to act reasonably and the fact that the parties would never have reached a deal in reality is irrelevant.
- Although these damages are awarded in place of relief e.g. an injunction, it is not a prerequisite to their being awarded that either (i) the claimant applied for the injunction in the case or (ii) there was any prospect of such application succeeding.
While founded in land law, Wrotham Park damages have been found to be available in other contexts, such as employment law in the matter of restrictive covenants.
However, there are limitations as to its applicability. It will not be available where a plaintiff has originally sought damages for consequential economic damages.