"Sort Rights of Light Sooner Rather Than Later!"

Dec

2010

It is good law when it comes to rights of light that an owner of land is entitled to an injunction against a person committing an act of interference with ones right of light, unless a court exercises its discretion and awards damages instead of an injunction. It is also good law that if one delays in applying for an injunction, one can be defeated by delay and only be entitled to damages.

However, property developers are warned given the recent decision in the High Court in HKRUK II (CHC) Ltd v Heaney (2010) on 7 October 2010, in which the court awarded an injunction against a developer which interfered with a neighbours right of light despite the offending property being completed.

The facts in this case were that, the Defendant (D) purchased a grade II listed building in Leeds in 2003 that used to be a former bank. Adjacent to the former bank was an office building (Block A). In 2007 the owner of Block A obtained planning permission to add two additional floors, floors six and seven. The Claimant (C) acquired Block A in 2007 and notified the D of the proposed works. Matters not in dispute between the parties were that (i) the former bank was the dominant tenement and their existed a right of light in its favour and (ii) the adding of the two additional floors to Block A committed an actionable interference with the rights of light to the former bank. Block A made an offer of settlement to the former bank which was not accepted. The former bank insisted on receiving written confirmation from Block A that (i) the proposed works would cause a substantial interference with the former banks rights of light, that were actionable and injunctionable and (ii) undertake not to carry out any part of the proposed works that would interfere with the former banks right to light enjoyed, failing which, they would issue court proceedings seeking an injunction preventing the continuation of the proposed works. The proposed works were finished in July 2009 and Block A issued court proceedings seeking a declaration that the former bank was not entitled to injunctive relief.

The issue to be determined by the court was: should the former bank be granted an injunction or, paid damages instead, bearing in mind that the proposed works which were the subject matter had already been completed.

The Court considered the Court of Appeal decision and leading case of Shelfer v City of London Electric Lighting Company (1895), in which A L Smith LJ said:-

If the injury to the Claimant’s legal right is small and;
Is one which is capable of being estimated in money and;
Is one which can be adequately compensated by a small money payment and;
The case is one in which it would be oppressive to the Defendant to grant an injunction; then damages may be granted in lieu of an injunction.

The court also considered the case of Jacklin v The Chief Constable of West Yorkshire (2007) in which it emphasised that in order to avoid the grant of an injunction, a Defendant must ensure that all four of A L Smith LJ’s criteria have been satisfied.

Dealing with each of the above heads in turn:-

Small injury:

In applying the Shelfer criteria, the court held that the injury to the D was not small albeit, it was a borderline case. The court was not persuaded by the C contention that this was a commercial property as opposed to a loss of rights affecting a living room, although accepted that good light was relatively more important in a personal home than in a commercial premises. Notwithstanding this, the injury to the D could not be defined as small. The court took into consideration various factors such as the character of the D building, D commitment to restoring the building, the investment which the D had put into the building, the extent to which the C work restricted the flow of light to the building. These all constituted real damage that was not small and the D should not be expected to be content with a financial payment for this. The court also stated that if this conclusion was correct it was not necessary to proceed any further as the C was unable to show that all four of A L Smith LJ’s criteria had been satisfied. The Court however considered the other three criteria in the event that the C decided to appeal.

Injury capable of being estimated in money:

The court was of the view that the D loss was capable of being calculated in monetary terms.

Compensation via small money payment:

The court stated that there were two ways to compensate the D. The first being at common law, which the C asserted the court should follow. The second was to award damages in lieu of an injunction as set out by Brightman J in Wrotham Park Estate Company Limited –v- Parkside Homes Limited (1974). In considering the third of the Shelfer questions the court said it would have assessed Wrotham Park damages in the sum of £225,000 and was not what could be regarded as small.

Oppression:

As to whether it would be oppressive to the D to grant an injunction the court considered the infringement of the D rights by the C. The court concluded that:-

The infringement was not a trivial one.
The infringement was committed in the knowledge that what was being done was actionable.
The infringement was committed with a view to profit, as opposed to a necessity. The court said the C could quite easily have built six and seventh floors of reduced dimensions.
It would be wrong for the court to sanction what had been done by compelling the D to take monetary compensation which he did not want.

Held:

The D was entitled to injunctive relief.

So developers should not assume that:

Just because a property has been built, that a court will order damages in lieu of an injunction; and
The risks associated with rights of light can be bought out after a development has been completed or that delay will defeat an injunction.