Lloyd's Maritime and Commercial Law Quarterly
MESNE PROFITS & RESTITUTIONARY DAMAGES
Inverugie Investments v. Hackett
Inverugie Investments Ltd. v. Hackett
1 will bring no comfort to those fearful of the law’s delays. In June 1970, the respondent Hackett entered a contract with the owners of the Silver Sands Hotel on Grand Bahama to lease 30 apartments in the hotel for a term of 99 years. The hotel owners ran into financial difficulties and in November 1974 the hotel was sold to the appellant, Inverugie. In the same month, Inverugie ejected Hackett from the apartments. In March 1975 he commenced proceedings against them for possession. These ran on for nearly 10 years, until December 1984, when the Privy Council found in his favour. He was awarded a further order by a local court in June 1986, requiring Inverugie to give up possession, but in fact they did not do so until April 1990. He then brought an action against Inverugie for trespass, claiming mesne profits for the 15½-year period he had been out of possession. This action reached the Court of Appeal of the Bahamas, which made an award in Hackett’s favour. Inverugie then appealed to the Privy Council against the size of this award. This appeal was rejected by the Privy Council this February,2 but it appears that Hackett died before their decision was handed down.3
Mesne profits are damages awarded to an owner of land against a trespasser who has occupied the land between two dates (hence, “mesne”.) They are most commonly awarded where a tenant has overstayed his lease, a fact which can obscure the juridical basis of their assessment, as the award usually made in such circumstances is a “reasonable rent” that corresponds both to the landlord’s loss (suggesting the damages to be compensatory) and to the tenant’s gain (suggesting them to be restitutionary). That mesne profits can be awarded on a restitutionary basis in appropriate situations, however, clearly emerges from a line of cases where the trespasser’s gain has not corresponded to the owner’s loss, and the courts have looked to the former rather than the latter when assessing the damages payable.4 The import of these cases was expressly acknowledged by Hoffmann, L.J., quite recently, in Ministry of Defence v. Ashman:5
It is true that in the earlier cases it has not been expressly stated that a claim for mesne profit for trespass can be a claim for restitution. Nowadays I do not see why we should not call a spade a spade. In this case the Ministry of Defence elected for the restitutionary remedy.
In the present case, the Privy Council have also indicated their approval of this line of authority, holding that the approach taken in the Bahamian Court of Appeal by Rowe,
1. [1995] 1 W.L.R. 713.
2. The opinion was delivered by Lord Lloyd of Berwick.
3. At p. 715: “the late Mr. Hackett”.
4. Whitwam v. Westminster Brymbo Coal & Coke Co. [1896] 2 Ch. 358; Penarth Dock Engineering Co. Ltd. v. Pounds [1963] 1 Lloyd’s Rep. 359; Bracewell v. Appleby [1975] Ch. 408; Swordheath Properties Ltd. v. Tabet [1979] 1 W.L.R. 285; Brynowen Estates Ltd. v. Bourne (21 October 1981) Unrep. (C.A.) (per Cumming-Bruce, L.J.: “the measure of damages… is normally to be fixed at the value of the use to the trespasser.”). See, too, D. Friedmann, “Restitution of Benefits Obtained through the Appropriation of Property or the Commission of a Wrong” (1980) 80 Columbia L.R. 504, 507, n. 21; A. Burrows, The Law of Restitution (London, 1993), 386–390; E. Cooke, “Trespass, Mesne Profits and Restitution” (1994) 110 L.Q.R. 420; P. Jaffey, “Restitutionary Damages and Disgorgement” [1995] Restitution Law Review (forthcoming).
5. [1993] 2 E.G.L.R. 102, 105, followed in Ministry of Defence v. Thompson [1993] 2 E.G.L.R. 107.
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