| Wrotham Park Estate Co Ltd v Parkside Homes Ltd | |
| Court: | High Court of Justice, Chancery Division |
| Date Decided: | 19 October 1973 |
| Citations: | [1974] 1 WLR 798 |
| Judges: | Brightman J |
| Keywords: | Restitutionary damages |
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 confirmed that a covenant is legally enforceable and refused, as unconscionable, to issue an order for specific performance or an injunction.
Such a remedy, which had precedent before the judgment, has since become firmly known as Wrotham Park damages, which are awarded (in lieu of specific performance or an injunction) under the jurisdiction created (powers vested in the court) by s. 2 of the Chancery Amendment Act 1858 (also known as Lord Cairns' Act). Such damages centre on the hypothetical negotiated value for a release of the covenant, and so in turn may look to a share of the profits from the business venture enabled by the breach; the court decided 5% of profits should be made payable.
Wrotham Park (pronounced) is an estate owned and lived in for generations by gentry and then nobility including the Earl of Strafford. Outlying portions have been sold off for development, subject to some lay-out restrictions. Potters Bar Urban District Council came to own one desolate triangle of land. They offered it for sale by public auction as freehold building land for 14 houses. Parkside bought the land and built the houses, despite warnings from Wrotham Park Estate's owners that Parkside were violating the lay-out restrictions. When the houses were built, the owners of the Estate brought a claim against Parkside for breach of the restrictive covenant.
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:
The jurisdiction for Wrotham Park damages has been expanded and clarified in subsequent cases, and was summarised by the Judicial Committee of the Privy Council in 2009:[1]
While founded in land law, Wrotham Park damages have been found to be available in other contexts, such as employment law in relation to restrictive covenants.[2]
Limitations on applicability exist. Wrotham Park damages will not be available where a plaintiff has originally sought damages for consequential economic damage, which are commonly sought in the law of nuisance for example.[3]
In Singapore, the leading case on Wrotham Park damages is the case of Turf Club Auto Emporium Pte Ltd v Yeo Boong Hua.[4]