Damages for trespass: Bypassing Swordheath and Dunlop

A landowner who sues a trespasser for damages is normally entitled to recover a sum equivalent to the value of its use to the trespassers, sometimes described as a restitutionary claim. Thus, in Swordheath Properties Ltd v Tabet [1979] 1 WLR 285 CA, the landlord recovered damages calculated by reference to the ordinary letting value of the premises, although he could not prove that the premises would have been let to someone else.

Difficulties in assessing damages can be overcome by assuming a hypothetical negotiation between a ‘willing and reasonable’ people. This was the approach taken by Justice Vos in Stadium Capital Holdings v S Marylebone Property Co [2012] 1 P & CR 7, which concerned advertising hoarding, which projected into airspace owned by the claimant.

These principles appear to have been bypassed by the recent decision of the Court of Appeal (CoA) in ParkingEye Ltd v Beavis [2015] EWCA Civ 402, where the operator of a car park, in which motorist, Barry Beavis, had overstayed by an hour, was found to be entitled to recover a parking charge of £85. This is much more, on any basis, than the value of the benefit he received, or any sum that would have been negotiated for the right to park for that period.

Penalty or pre-estimate of loss?

ParkingEye obtained judgment against Beavis in Chelmsford County Court. His defence was that the charge of £85 was a penalty, as opposed to a genuine pre-estimate of loss, and thus unenforceable. He also argued that it was an unfair term for the purposes of the Unfair Terms in Consumer Contracts Regulations. Both defences failed. The judge held that a motorist who parks his car in the car park does so on the terms displayed in the notice and as a result enters into a contract with ParkingEye, which includes an obligation to leave within
two hours. The judge held that although the charge had the characteristics of a penalty, it was commercially justifiable because it was neither improper in its purpose nor manifestly excessive.

Permission to appeal to the CoA was granted but the appeal was dismissed. The CoA held that the simple dichotomy between liquidated damages and penalty is inadequate because it fails to take into account the fact that some clauses that require payment on breach of a sum, which cannot be justified as liquidated damages in accordance with established principles, should nonetheless be enforceable because they
are not extravagant and unconscionable, and are justifiable in other terms.

In this case, the justification was that because the operator of the car park affords the driver a free facility of two hours’ parking, the terms of use of the car park need to provide a disincentive to drivers, which will make them comply with this limit. Unusually, permission to appeal to the Supreme Court was given.
That appeal will be heard on
21 to 24 July 2015.

Departure from principles

The CoA’s decision – i.e. that a sum payable on breach, which is clearly a deterrent,is nevertheless enforceable – appears to be a departure from the principles explained by the House of Lords in Dunlop v New Garage and Motor Co Ltd [1915] AC 79.

In order to reach this conclusion, they had to sidestep the law on damages for trespass. Sir Timothy Lloyd did this by simply saying, with reference
to Swordheath Properties, that, as the approach taken in these cases was followed, there would not be a disincentive against overstaying.

In the Supreme Court Beavis will argue that a motorist who leaves his car in a car park longer than he is permitted to should be in no better or worse position than a tenant who refuses to leave premises at the end of
his lease, or anybody who obtains some kind of benefit by trespassing onto another’s land without authorisation and, thus, that the approach taken by the CoA was wrong. The answer, whatever it is, and the way it is reached, will have enormous implications for landowners, parking operators and of course, motorists. SJ

John de Waal QC and David Lewis of Hardwicke were instructed by Harcus Sinclair for Mr Beavis on his appeal to the Supreme Court