The Court of Appeal dismissed an appeal by the defendant, Steven John Hall, from the decision of Mr Recorder Goudie QC, sitting in Edmonton County Court on 15 July 1991, who upheld a claim by the plaintiffs, Adrian James Harris and Laurence James Ehmler, for damages for loss of rent from car showroom premises into which the defendant crashed a van on 6 December 1990. The showroom was being rented under a nine-year lease which provided by clause 6(3) that if the premises were damaged so as to be unfit for use, the rent ceased to be payable until the premises were reinstated. The damage caused by the defendant's vehicle brought clause 6(3) into operation, causing the plaintiff landlords a loss of rent of pounds 4,305.03.
Timothy Briden (B K J Lewis) for the defendant; Nicholas Dean (Kingsford Stacey, for Sharman Trethewy, Bedford) for the plaintiffs.
LORD JUSTICE NOLAN said the defendant's main argument was that, although he would have been liable to reimburse the tenant if the tenant had had to go on paying rent, he was not liable to the plaintiff landlords where the loss fell on them.
The defendant relied on Rust v Victoria Graving Dock Co (1887) 36 Ch D 113. But the circumstances of that case were completely different. The general rule cited in that case, that a reversioner could only sue in respect of damage which would continue to affect the property when the reversion fell in, was applicable to the facts of that case but was not of universal applicability.
Rustcould not be regarded as authority for the proposition that a landlord could never make a claim in tort for loss of rental. The defendant also argued that, because the damage to the premises would have been repaired long before the lease ended, the plaintiffs would suffer no physical loss and were therefore claiming for purely economic loss. But the plaintiffs suffered physical damage to their building, an income-producing asset. Since the loss of rent was consequential upon that damage, it was not pure economic loss.
LORD JUSTICE PARKER and LORD JUSTICE KENNEDY agreed.