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Articles | Tue 9th Feb, 2021
Last week’s case of Gosden v. Halliwell Landau  EWHC 159 (Comm) is a useful reminder that there is no universal rule for ascertaining the date for assessment of damage in negligence cases.
The defendant solicitors were instructed to implement a scheme, known as an Estate Protection Scheme (EPS), which was intended to reduce liability to inheritance tax. The first claimant’s mother (W) owned a property in Kennington, London. Under an EPS created in April 2003 the property, of which she was to remain the registered owner, was placed in trust, she and the two claimants being the trustees. Under the terms of the scheme she was to enjoy the property during her life and it was to pass to the first claimant on her death. Until then she could not in law dispose of it without the consent of her fellow trustees. In order to prevent such a disposition the defendants should have entered a restriction against her registered title but failed to do so.
In October 2010 in breach of trust and without the consent or even knowledge of the claimants W sold the property. She died in March 2013 and it was not until 2015 that the claimants discovered the sale.
The defendants having been found guilty of negligence, the parties agreed that the first claimant’s loss was the value of the property. The issue Judge Pelling Q.C. had to decide was the date at which that value should be assessed.
The default position was not in dispute. Damages should be assessed at the date the wrong occurs. In relation to the tort of negligence, where damage is of the essence of the tort, that is when the loss caused by the breach of duty occurs. The parties agreed that was when the property was sold in 2010. At that time on the evidence it was worth at most £785,000.
It was also not disputed that a court can and should depart from that rule where it is necessary in order adequately to compensate the claimant for the damage suffered by reason of the defendant’s wrong: see Dodd Properties Ltd v. Canterbury City Council  1 W.L.R. 433, County Personnel (Employment Agency) Limited v. Alan R Pulver & Co.  1 WLR 916 and Smith New Court Securities Ltd v Scrimgeour Vickers  AC 254. That involves a fact-sensitive analysis.
The defendants appear to have argued for the default position but, if there was to be a departure from that, they submitted that the date of assessment should be the date of the death of W and no later. For that was when, but for the defendants’ negligence, the claimant would have been entitled to inherit the property. At that time (March 2013) it was worth £875,000.
The claimants’ primary submission was that damages should be assessed at the date of trial.
The judge decided that he should depart from the usual rule and adopt the date of W’s death as the appropriate date for assessment. His reasons were these.
The decision is clearly right but it is interesting to note that the case had been remitted to the judge by the Court of Appeal  EWCA Civ 42, which had allowed the claimants’ appeal against his earlier dismissal of their claim for lack of causation. In doing so the Court of Appeal had also dealt with a limitation point and had decided (as had the judge) that the loss had been suffered at the point in time when the defendants should have registered a restriction, namely, in April 2003: see Bell v. Peter Browne & Co.  2 QB 495. Their failure to do so had exposed the claimants and their interests under the EPS “to an immediate risk which would have cost money to rectify and arguably reduced the value of those interests.” That was not merely a contingent liability resulting in damage only when W sold the property in 2010 but a real loss: see para.64. Yet at the later assessment hearing the parties agreed (a) that the loss was the value of the property and (b) that it occurred in 2010. No doubt even if the loss was taken to have been incurred in 2003 the result would have been the same but it shows that there can be one view as to date of loss for the purposes of limitation and another for the purposes of assessment.