LEGAL PRINCIPLE: TENANCY – Mesne Profit – How Calculated – Whether Liquidated or Unliquidated – Whether Landlord Not Entitled to Amount in Excess of Amount Payable During Subsisting Tenancy
PRINCIPLE STATEMENT
A plaintiff in an action for loss of use and occupation of premises is not bound to use rent payable during the tenancy as the measure for mesne profits; while rent is liquidated and operative during tenancy subsistence, mesne profits are unliquidated and only start to run when tenancy expires and the tenant holds over; mesne profits are generally calculated on the yearly value of the premises.
RATIO DECIDENDI (SOURCE)
"The point must be stressed that the plaintiff in an action for loss of use and occupation of a premise is not bound to use the rent payable during the tenancy as a measure for the rate of mesne profits. The law as I have observed, is that while rent is liquidated and operative during the subsistence of a tenancy, mesne profits are unliquidated and only start to run when the tenancy expires and the tenant holds over. Mesne profits are generally calculated on the yearly value of the premises and a landlord is certainly not bound to use the rent payable during the tenancy as a yardstick in his determination of mesne profits."
EXPLANATION / SCOPE
Mesne profits differ fundamentally from rent. Rent is: (1) liquidated (fixed amount agreed by parties); (2) contractual (based on lease terms); (3) payable during lawful tenancy. Mesne profits are: (1) unliquidated (determined by court based on property’s value); (2) quasi-tortious (compensation for wrongful holding over); (3) payable only after tenancy ends when tenant wrongfully remains. Landlords aren’t restricted to the former rent rate when claiming mesne profits—they can claim based on current yearly value, which may exceed the rent (especially if rent was below market or property values increased). This recognizes that tenants holding over wrongfully shouldn’t benefit from favorable rent terms negotiated when tenancy was lawful. Courts assess property’s current rental value independently