Stadium Capital Holdings (No.2) Ltd v St Marylebone Property Company Plc
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE VOS,Mr Justice Vos |
| Judgment Date | 08 November 2011 |
| Neutral Citation | [2011] EWHC 2856 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC08C02437 |
| Date | 08 November 2011 |
[2011] EWHC 2856 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Vos
Case No: HC08C02437
Mr John Furber QC (instructed by Thrings LLP) appeared for the Claimant
Ms Janet Bignell (instructed by Mills & Reeve LLP) appeared for the first Defendant
The second Defendant did not appear and was not represented
Hearing dates: 26 th–28 th and 31 st October 2011
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This is the third instalment of a long-running battle concerning an advertising hoarding (the "Hoarding") located on the West side of Finchley Road, London NW3. The Claimant, Stadium Capital (No 2) Holdings Limited ("Stadium" or the "Claimant"), is the owner of a cleared development site known as Midland Crescent, Finchley Road, London NW3 (the "Site"), and the first Defendant is St Marylebone Property Company plc ("Marylebone"), which is the owner of the adjoining 3 storey building at 279A Finchley Road, London NW3. More important to this dispute than the 3 storey building owned by Marylebone is the flank wall (the "Wall") of that property facing due South and clearly visible to the stream of oncoming traffic heading from central London for the M1 and other major trunk roads. The Hoarding over which this dispute has raged was erected at second floor level attached to the Wall and projecting into the airspace of the owners of the Site (now the Claimant).
Stadium's claim for damages for trespass against Marylebone was tried by Sir Donald Rattee, who gave judgment for Stadium on 15 th October 2009, and awarded it damages in the sum of £313,972.70. That sum was the entirety of the licence fee received by Marylebone from the second Defendant, Clear Channel UK Limited ("Clear Channel") for the use of the Hoarding for advertising purposes between 23 rd January 2005 and 2 nd October 2008 (the "Period").
The Court of Appeal allowed Marylebone's appeal against Sir Donald Rattee's assessment of damages, and held that he ought to have acceded to Marylebone's late application for an adjournment of the issue of quantum on 15 July 2010, made shortly before the judgment was delivered. The Court of Appeal held also that the Judge did not have sufficient material before him to reach an appropriate conclusion on quantum, and that he had made an award that was "at the very top end of the basis of awarding damages on a restitutional basis". The Court of Appeal did not, however, think it appropriate to decide on what basis damages payable to Stadium should actually be assessed and that task has been left to me. I have, however, had the benefit of evidence and argument that was not before Sir Donald Rattee or the Court of Appeal, and that was directed specifically at the assessment of damages.
The case raises the question of how damages for trespass should be assessed, where the defendant has made a profit from his trespass and where, in any hypothetical negotiation that might have taken place as to an appropriate payment for such usage, the landowner holds the trump card of being able to refuse permission and thereby prevent any money at all being made from the trespass.
Stadium initially put its claim on two bases. First it claimed what is, in all but name, an account of the profits that Marylebone made in the sum of £313,972.70 less some minor discounts for its expenses. Secondly, Stadium claimed that its damages should be assessed by reference to a hypothetical licence fee which should take into account its ability to use its land in such a way as to make it impossible for Marylebone to use the Wall to display advertisements. At the start of the second day of the trial, Stadium abandoned its claim for an account of profits, and accepted that damages should be assessed on the basis of a hypothetical negotiation of the fee that would have been paid for the grant of a notional licence to use the airspace. The devil, however, is in the detail, since the parties take very different views as to the result of such a hypothetical negotiation.
Before dealing with those differences, I should briefly set out the chronological background to this dispute.
Chronological background
On 7 th September 1956, the then owner of the Site gave the then owners of 279A Finchley Road a licence to erect a hoarding on the Wall, over-sailing the Site.
In 1975, Marylebone became the registered leasehold proprietor of 279A Finchley Road, and of the Wall.
On 27 th November 1975, planning consent was granted for the installation of an advertising hoarding on the Wall at first floor level. That permission was expressed to expire on 31 st November 1980 (sic). It will be observed that the Hoarding was at second floor level.
On 31 st July 2001, the London Borough of Camden ("Camden") refused planning permission for a 96 sheet advertising hoarding at street level on the Site.
On 9 th November 2001, the Planning Inspector allowed an appeal against Camden's refusal to grant planning permission for a 96 sheet advertising hoarding at street level on the Site, allowing consent for a temporary 2 year period.
On 25 th March 2003, Marylebone entered into a licence agreement with Clear Channel in respect of the Hoarding for a period of 5 years from 29 th September 2003 (the "CC Licence"). The licence fee payable by Clear Channel to Marylebone was £80,000 per annum for the period to 28 th September 2006, and £90,000 per annum for the period from 29 th September 2006 to 28 th September 2008.
On 5 th January 2004, Camden renewed the planning permission for the 96 sheet advertising hoarding on the Site for a further 2 years from that date.
On 15 th March 2004, BRB (Residuary) Limited, the then owners of the Site ("BRB") entered into an agreement with Maiden Outdoor Advertising Limited ("Maiden") for a 96 sheet hoarding on the Site for 5 years at £40,000 per annum from 1st October 2003 to 30 th September 2008. There was a redevelopment break clause in the agreement.
On 23 rd December 2004, BRB's solicitors gave one month's notice to Marylebone requiring the removal of "both [the Hoarding] and [the associated] bill posting platform". The notice is marked with a stamp suggesting it was received on 4 th January 2005.
On 23 rd January 2005, when the notice expired, the presence of the Hoarding and platform constituted a trespass on the airspace of the Site, according to the findings of Sir Donald Rattee.
On 1 st February 2005, Marylebone responded to BRB's solicitors by claiming that it had acquired the airspace by adverse possession.
On 17 th October 2005, BRB's solicitors wrote to Marylebone drawing its attention to the 1956 licence granted by BRB to Marylebone and, for the avoidance of doubt, withdrawing the permission granted and requiring the removal of the advertising hoarding within 28 days of the date of the letter.
On 1 st November 2005, Marylebone's solicitor wrote to BRB saying that "any license [sic] (which is not admitted) that may have been granted in 1956 terminated at the latest on the date when my client company acquired the leasehold interest. My client company has been in possession of the air space occupied by the advertising hoarding ever since, as of right, and has exercised rights of access thereto".
On 8 th February 2008, Stadium was incorporated.
On 28 th March 2008, BRB transferred the freehold of the Site to Stadium.
On 8 th May 2008, Marylebone entered into a further licence agreement with Clear Channel in respect of the Hoarding. The licence fee payable by Clear Channel to Marylebone was £55,000 per annum for the period to 28 th September 2011.
On 30 th May 2008, Stadium's solicitors wrote to Marylebone giving 14 days notice to remove the Hoarding. Also on 30 th May 2008, Stadium offered without prejudice to allow Clear Channel to lease the 96 sheet hoarding site, and to erect and lease a new free-standing 48 sheet hoarding at the same height as the Hoarding.
On 4 th June 2008, Stadium wrote to Titan Outdoor Advertising Limited ("Titan", which had by then taken over Maiden) saying that Stadium was not bound by BRB's licence in respect of the 96 sheet hoarding on the Site, and demanding that it remove the 96 sheet hoarding within one month. At the same time, Stadium proposed without prejudice terms for the 96 sheet hoarding to remain in place as long as vacant possession was obtained by 30 th September 2008, on the basis that Stadium could buy the steel frame for the 96 sheet hoarding from Titan. Mr Antony Spencer, managing director of Stadium ("Mr Spencer"), told me in evidence that Titan accepted these terms.
On 7 th July 2008, Stadium and Clear Channel entered a 2 year agreement with Clear Channel in respect of the 96 sheet hoarding for a rent of £100,000 per annum. In addition, Stadium and Clear Channel agreed by a side letter from Clear Channel headed "subject to contract and without prejudice" but countersigned by Mr Spencer on behalf of Stadium, as follows:—
i) Clear Channel would use reasonable endeavours to obtain Marylebone's agreement to a tripartite agreement for a 2 year term for Clear Channel to use the Hoarding for a rent of £50,000 per annum less any rent payable by Stadium to Marylebone for the use of its Wall, with Clear Channel having a tenancy of Stadium's airspace. Mr Spencer told me that he would have been prepared to pay Marylebone the whole of the £50,000 rent if it had been prepared to settle its claims on the title to the Site that was...
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