DAMAGES FOR RELEASE FROM CONTRACTUAL PROHIBITION

Lane v O’Brien Homes [2004] EWHC 303 (QB), 5 February 2004

In Lane v O’Brien Homes [2004] EWHC 303 (QB), 5 February 2004, Mr Justice David Clarke held that a vendor of land was entitled to recover a share of the potential profits made by the buyer of the land as a result of a breach by the buyer of a collateral contract not to build more than three new houses on the land acquired. It was held that the proper approach to apply was to consider the price which would have been offered by the buyer and accepted by the seller at the time when the release from the contractual prohibition was being sought. On the facts, Mr Justice David Clarke, after stating that ‘the assessment of this form of damages is not a precise mathematical process’ upheld the award of damages of £150,000 to the vendor on the ground that the buyer could not show that the judge below had made a ‘wholly erroneous assessment of the course of the hypothetical negotiations which must be taken to have occurred’.