Claims for diminution in value to a dwelling in neighbour disputes – not something to be pleaded lightly

January 06 2025

Sam was recently instructed by Emma-Jayne Scullion of Berry Smith Lawyers in a trial where it was common ground that the Defendant (Sam’s client) had trespassed upon the Claimant’s demise.

In short, the Claimant and Defendant each occupied a flat in a four-apartment complex. The complex had a courtyard. Historically, each lessee had treated the courtyard as a common area for their/their visitors’ cars, but the terms of the lease in fact partitioned the courtyard between four lessees in demised areas of about equal size (none of which were physically delineated on the brick courtyard).

The Defendant had admitted trespassing by driving through a “gap” between the apartment building and a garage, so as to enjoy access to a safer exit (the other exit being something of a “blind bend” onto the road). In doing so, he was driving over the Defendant’s demised portion of the courtyard, and he admitted to repeatedly moving plant pots she had placed on her demised area of the courtyard to do so. Default judgment was entered, and the Defendant subsequently offered perpetual prohibitory undertakings not to drive through the gap again, and further offered to construct a bollard adjacent to the gap to prevent any future reoccurrence. It had transpired during trial that other residents and even paid carers for another elderly resident had moved the Claimant’s plant pots to use the other exit.
 

The claim for damages in diminution and the expert evidence

The Claimant, rather than pursuing a claim for nominal damages, or alternatively damages for loss of amenity (which would have been little more than nominal in the circumstances), as would ordinarily be the case in a dispute of this type, instead contended for an award of diminution in value of her property of some £23,500. She relied on an expert report of a chartered surveyor, which was initially premised upon the reasoning that mortgage lenders would refuse to lend on a property subject to such a dispute, so that the buying market would be limited to cash purchasers, concluding with a bare assertion that cash purchasers typically pay 10% less than mortgagors.

Perhaps the report’s most significant flaw was its failure to expressly opine upon RICS approved rubric of ‘Market Value’, where it is vital the intentions of both the “willing buyer” and the “willing seller” are evaluated. The Claimant’s expert was only instructed to consider the former, but nonetheless his failure to address the latter was a considerable flaw in his reasoning.

The Defendant instructed Mr Paul Raine, a leading expert in diminution, who had given oral evidence in an authority included within the trial authorities bundle. His evidence was robust and addressed the correct RICS Professional Standards (Red Book) test, being:

“The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion”. [emphasis added].

Mr Raine’s opinion was that whilst the historic dispute was mandated to be included in the TA6 conveyancing form, it was “transitory” in nature and would not influence the “willing seller”.
 

The legal framework

The core of a claim in diminution in value is the existence of a dispute that is “more than transitory” i.e. that a willing buyer will likely not treat the historic grant of an injunction as a guarantee that the dispute will not reoccur. The two oft cited higher court authorities are Raymond v Young [2015] EWCA Civ 456 and Manson-Smith v Arthurworrey [2021] EWHC 2137 (QB). These cases involved extreme behaviour from the respective tortfeasors, being years-long cases of harassment, in Arthurworrey the defendant, despite a criminal conviction for harassment, a period of imprisonment and the imposition of a restraining order, remaining unwilling to recognise the rights granted under the claimants' lease.

The author is also aware of unreported/compromised matters where diminution has been a matter in issue where one neighbour has shot another’s dog, or placed corrosive and injurious substances on a neighbour’s doorhandle, etc, but these cases tend to be the exception rather than the rule. In the author’s experience, the vast majority of neighbour disputes re boundaries and easements, even where accompanying allegations of unneighbourly conduct associated with the primary dispute are raised, will not meet the “more than transitory” threshold.

In the joint-statement the Claimant’s expert performed an about-turn in his reasoning, abandoning his previous opinion re cash purchasers, and re-opining that a reasonable conveyancing solicitor would advise the buyer to make a reduced offer. Whilst a prudent conveyancing solicitor might advise a client to consult their appointed surveyor re a dispute disclosed on a TA6 form, advising on property value is outwith the professional competence of any conveyancing solicitor, so that the expert’s reasoning remained flawed.
 

The Claimant’s future intentions and conduct

Furthermore, the Claimant had not led with evidence of her intention to sell the property in the future (and in fact her oral evidence and the surrounding evidence suggested she wished to remain in the property for the foreseeable future), with her being aged about a decade junior to the Defendant, who was in his early 80s so likely to decamp the property before her. The Claimant had also not taken up the Defendant’s offer to erect the bollard, a point highlighted by the Judge in his judgment.
 

Conclusion

In conclusion, diminution in value claims in neighbour disputes are rarely encountered. This is because the threshold for meeting such a claim is high. Care should be taken before embarking upon the complex exercise of raising such a claim, which will require costly expertise and forensic analysis if it is to be pursued up to trial/robustly defended, as in the instant matter. The Judge granted a split costs order on liability and quantum, with the Claimant being ordered to pay the Defendant’s costs in respect of that issue.