Hastings Borough Council should have compensated a seaside bingo hall when it closed Hastings Pier without notice in 2006, the Supreme Court has unanimously held.
The council closed the pier for safety reasons in 2006 after it fell into disrepair.
Manolete Partners v Hastings Borough Council [2016] UKSC 50 concerned whether the council was liable to compensate Stylus Sports, the owners of the bingo hall and amusement arcade for loss of profits in 2006. Manolete, which acquires and funds insolvency litigation, bought the case in 2012 from Stylus Sports. The case turned on the issue of whether Stylus was “in default” within the meaning of the Building Act 1984, s 106(1).
Section 106(1) provides that a local authority should compensate a person who has sustained damage due to the exercise of the local authority’s powers under the 1984 Act in relation to “a matter as to which he has not himself been in default”.
Two years before the pier’s closure, Stylus had commissioned a structural engineering survey which advised urgent work to prevent an unacceptable risk to the public. However, the landlord did not take action.
Delivering the lead judgment, Lord Carnwath said the “matter” which led the council to exercise its powers was the state of the pier combined with the crowds expected for events planned that month. The trigger was not the general state of the pier or the report commissioned by Stylus. Therefore, Stylus was not “in default” as to the matter which led the council to exercise its powers to close the pier.
