Tenant denied costs after ignoring an invitation to mediate. PGF was OMFS’s landlord of three floors of a mixed commercial and office building in Lombard Street, London. At the expiry of OMFS’s leases, PGF served schedules of dilapidations alleging breaches of OMFS’s repairing covenants and seeking damages of around
12 Real Estate Quarterly Winter 2013 bound to contribute proportionately to its maintenance under the principle of benefit and burden. Eaton Mansions (Westminster) Ltd v Stinger Compania de Inversion SA  EWCA Civ 1308 Damages for trespass only payable for period of trespass Eaton Mansions was the head lessee of a block of mansion flats just off Sloane Square, and Stinger was the tenant of two flats. Under the headlease, Eaton covenanted with the superior landlord not to make any external alterations without consent. For a number of years, air conditioning equipment had been in situ on the roof of the mansion block placed there with the superior landlord’s consent. In 1980, Stinger placed three air conditioning units on the roof with consent. By 1998, this had been increased to six units without consent. In 2006, due to repair works to the roof, Eaton removed all the units. In breach of planning control and without consent, Stinger then proceeded to place two extremely large units on the roof. Eaton brought a claim for trespass seeking £400,000 in damages from Stinger. Whilst Eaton accepted that it had suffered no direct loss from the trespass (except the cost of removing the air conditioning units) it sought damages calculated by reference to the fee payable under a hypothetical temporary licence for a period from installation of the units until the expiry of Stinger’s leases (which expired in 2053). Eaton sought to claim damages relating to this period on the basis that the air conditioning equipment was intended to remain on the roof until the leases expired. However, Stinger sold its leases in 2010. The judge at first instance awarded Eaton £6,000 as compensatory damages, representing the fee payable under the hypothetical licence for a period equivalent to the duration of the trespass only, ending when Stinger sold its leases. Eaton appealed. The appeal was dismissed. The Court of Appeal held that Eaton was limited to recovering what Stinger would have paid for the rights it illegally obtained. There was no loss of opportunity for Eaton to make a greater profit as, at the date of trespass, it was not willing to grant a permanent licence and neither, in reality, had Stinger obtained such a right. Eaton could not be compensated for damages greater than the gain Stinger had actually obtained. Blackpool Borough Council and another v Cargill  UKUT 377 (LC) Apportionment of residential management charge reasonable where each tenant charged the same Mr Cargill was the lessee of a residential flat on a long lease from the Council at a low rent, acquired under the right to buy scheme. The Council delegated the management of its housing stock to an arms-length management organisation (“ALMO”), a non-profit organisation wholly owned by the Council. Mr Cargill’s lease required him to pay a “proportionate amount” of specified reasonable expenses and outgoings incurred by the landlord. The Council paid only a fixed fee to the ALMO. Instead of attempting to apportion the fee amongst tenants by any complex mechanism, it decided to split the cost equally; each tenant was charged the same. Mr Cargill applied to the Leasehold Valuation Tribunal (“LVT”) alleging that the management charge was excessive and therefore unreasonable for the purposes of section 19 of the Landlord and Tenant Act 1985. The LVT, at first instance, decided in favour of Mr Cargill finding that, as a consequence of the above apportionment, the management charge sought to include costs which were not recoverable under the terms of the lease. The charge was therefore unreasonable. The Council’s appeal to the Upper Tribunal was successful. The apportionment was reasonable and ALMO had acted reasonably. Complete precision would have been unobtainable in estimating costs apportionable to the tenants.