HT-2022-000311 & HT-2022-000254 - [2024] EWHC 3179 (TCC)

As I have already indicated, a further all encompassing defence raised by the defendants is that, even if the defendants are in breach of the FPA, RTM has suffered no loss in respect of the damage to or defects in the fabric of the building as RTM has no proprietary interest in the Property. At the time of trial, the factual position was that RTM was still seeking to acquire the freehold and, therefore, anticipated that it would suffer loss and incur the costs of carrying out remedial works.

RTM would always have been entitled to nominal damages for breach of the FPA and the Click Group Holdings’ guarantee would have extended to these damages even though nominal. It was submitted on behalf of RTM that the purpose of the RTM (to acquire the freehold), and the contemplation that it would do so, was sufficient to give raise to an entitlement to substantial damages. There is an obvious attraction in that submission which reflected the intentions of RTM and the leaseholders but it failed to grapple with the potential issues in awarding a substantial sum in damages to a party that was not obliged to acquire the freehold or carry out remedial works.

In the event, the difficulty does not arise as RTM acquired the freehold on 8 May 2024. Accordingly, there can now be no issue in awarding substantial damages to RTM as freehold owner. It is not material that RTM did not own the freehold at the time the proceedings were commenced or at trial – as I have said the company could always have recovered nominal damages and those damages can now be substantial.