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Injunction?

This page considers four cases where the court considered whether to grant an injunction or instead damages in lieu where there had been a breach of the right to light. The most important case is the CA decision in Regan. The most dramatic is the last, HKRUK II


Midtown


Midtown Ltd v City of London Real Property Company Ltd

[2005] EWHC 33 (Ch)

The defendant wished to carry out a substantial development, which the claimants asserted would interfere with their right to light to a substantial degree and cause a nuisance. The court held that the claimants did have a right to light in respect of certain parts of the property (but not all) but refused to grant an injunction. Damages would be an adequate remedy in the particular circumstances of the case. The infringement suffered by the claimants could be compensated by damages and an injunction would be oppressive to the defendant to prevent it from carrying out the development. One of the arguments raised by the defendant was that only artificial light was being used in any event. This was rejected as an argument on the question of whether or not the right to light was infringed but was relevant to the question of the injuction (Jaggard v Sawyer [1995] 2 All ER 189 applied). The first claimant (Midtown) was the freeholder of the property and the second claimant (Kendall Freeman) was the lessee in actual occupation. Peter Smith J:
    "Looking at it from Midtown's point of view, it seems to me that it is not appropriate for Midtown to obtain an injunction. First, it was only interested in the Property from a money making point of view. If the value of the Property has been diminished, it can be compensated and is capable of calculation. Second, there is probably no present loss, because of the existing lease in its favour, which will be unaffected by the infringement of the easements of light in respect of the windows. Third, it seems to me that it has in mind redevelopment proposals of its own, which would likely make the injunction academic. Fourth, I am quite satisfied on the correspondence that the Defendants behaved reasonably and openly in flagging up the issue and suggested meetings to discuss matters and were rebuffed unreasonably by both Midtown and Kendall Freeman. (Para 76)

    Most of the above arguments are applicable to Kendall Freeman. They too, did not respond to the open approach by the Defendants. Their rights, if infringed, will suffer even less damage than that of Midtown. First, they have no clear capital interest that will be diminished in value. Second, the proposed development does not affect in any way their existing use of the Property, nor on the evidence any use to which they will put it in the light of any refurbishment or redevelopment. Indeed, such refurbishment plans were produced, suggested that there would be even larger open plan areas with less access to natural light.

    I found the evidence of the apparent delight in the unused enjoyment of the natural light somewhat unpersuasive. The reality is that modern offices do use artificial light to maintain a constant light. However, for the reasons I have set out earlier in this judgment that does not mean that that principle can be used to override a right to light in respect of natural light. It plainly does go however, to an injunction and this is an additional factor, which I take into account against Kendall Freeman, when I determine that they are not entitled to injunctive relief (Paras 78 and 79).

    It follows form the above that I will direct an inquiry as to damages. I will hear submissions as to the mode and forum of such an inquiry. One point that must be considered is how the damages (if any) based by reference to a reasonable price for release for the rights is going to be assessed. It seems to me that the Defendants cannot be required to pay the same sum twice over to the Claimants. It seems to me that there will be a one off payment, to be divided between the Claimants as they agree. If they cannot agree, then the court will determine the proportionate share of the Claimants by reference to their interest in the Property. Of course if the Claimants separately can identify separate heads of damages, which are attributable only to their interests, those will be claimable in addition." (Para 81).

Tamares

Tamares (Vincent Square) Ltd v Fairpoint Properties (Vincent Square) Ltd
G Moss QC sitting as a Deputy High Court Judge, Ch D.
4 September 2006

An office building had two windows in the entrance lobby. However, they had been blocked up on the inside throughout the whole of the 20 year prescription period claimed. The court therefore held that no right to light had arisen in respect of those windows (Smith v Baxter [1900] 2 Ch 138 applied.

There were also two basement windows, which did give rise to a right to light and the defendant's development, a three-storey building which had replaced a single-storey building, did interfere with the claimant's right to light. However, the court refused an injunction applying the Shelfar principles as re-stated in Jaggard v Sawyer [1995] 1 WLR 269. To grant a mandatory injunction requiring the new building to be knocked down would be oppressive; the injury was small and could be compensated by a small money payment. The judge:
    "Since the Claimant suffers no harm from the reduction of light to the four windows in respect of which it claims, and since it did not apply for an interlocutory injunction, its demand for a mandatory injunction to demolish a significant part of the Defendant's structure brought to mind the phrase "deliver him to the Plaintiff bound hand and foot to be subjected to any extortionate demands the Plaintiff might make".

Regan v Paul Properties

Regan v Paul Properties Ltd
[2006] EWCA Civ 1319

Introduction

In an important decision that reviews all the principal authorities from Shelfar onwards the CA has made clear that the principles set out in that case apply to right to light cases. The judge at first instance in this case had stated:
    "My conclusion from a consideration of these authorities is that, whatever may be the position in cases of other wrongful conduct, in the case of an infringement of a right to light it cannot be said that refusing an injunction and leaving the claimant with an award of damages in lieu is an exceptional course. Indeed, it seems to me, having regard in particular to the guidance given in the decisions of the Court of Appeal in the cases of Kine v Jolly and Fishenden, that the onus is plainly on a claimant to persuade the court that he should not be left to a remedy in damages."
That statement is wrong. Right to light cases are like any other. A claimant is prima facie entitled to an injunction and in deciding whether or not to award damages in lieu the principles in Shelfar should be applied (see in particular Mummery LJ at paras 45 and 57 and 59).

The facts

The case concerned the building of a mixed commercial and residential development of two properties across the road from the claimant's maisonette. He complained that the penthouse to the development, if completed as planned, would substantially affect the light to his living room. This case is a warning to developers who proceed with the work in the face of objections from those with rights to light. It is worth noting the dates:
  • Work on the development begun on 19 September 2005.
  • On 12 October 1925 C wrote to D voicing his concerns about the development.
  • D took advice from its own expert and took the view that there was no actionable injury and there was subsequently correspondence between experts for each side.
  • Work on the development continued in the meantime and there was no attempt to redesign the scheme.
  • On 22 March 2006 an application for interim injunction was made which was dealt with be undertakings not to proceed with a certain part of the development.
  • On 27 March 2006 D made an open offer to C of £15,000 in full and final satisfaction of his claims. This was rejected. Throughout C made it clear that he was not interested in money. He wanted his light.
First instance decision

The judge at first instance found that there was an infringement to C's rights that rendered the enjoyment of his living room significantly less comfortable and beneficial than it previously was (see para 21). Prior to the development the room enjoyed adequate light to 65% / 67% of its floor area. After the development in full, as proposed, it would enjoy adequate light to an area of only 42% / 45.2%. However, in purporting to apply the Shelfar principles he refused to grant the injunction sought.

The appeal

As stated above the CA held that the judge had acted on a wrong principle in placing the onus on C to persuade him that he should not be left to his remedy in damages (see para 60).

As the judge had acted on a wrong principle it was open to the CA to reconsider the question of discretion applying the principles in Shelfar. Should an injunction be refused and damages granted in lieu? Having regard to the "good working rule" in Shelfar the injunction would be granted:
  • As the light would be reduced so that the area receiving adequate light would be 42-45% in place of 67% the obstruction was not a "small injury" (para 70).
  • The loss of value to the maisonette if the light was cut back to 53% would be £5,000-£5,500. This was not a small figure. The injury could not therefore be regarded as "a small money payment". The maisonette was valued at £220,000 - so the diminution represented between 2% to 2.5% (para 71). (Compare Tamares immediately above where the judge awarded £50,000 in lieu of an injunction!)
  • It would not be oppressive to grant an injunction. It would seriously affect D's plans and its losses would be substantial (about £200,000 - see paras 65 and 66) but "those things on their own are not determinative of the issue of oppressiveness and of the choice of remedy" (para 73).
In deciding whether or not it was oppressive to grant the injunction it was necessary to look at all the circumstances. The following passage from the judgment refers to those other circumstance and stand as a warning to developer's in a similar position. Mummery LJ at paras 74 and 75:
    "The position is that Mr Regan protested against the infringement of his right to light five months before the development reached the fifth floor level. The defendants had taken a calculated risk in deciding to proceed with the development after the claim had been asserted against them by Mr Regan. They continued with the construction with their eyes open. They relied on advice that there was no infringement of Mr Regan's right to light, but the advice they were given turned out to be wrong. That fact should not prejudice the position of Mr Regan, against whose conduct no criticism can be made and who acted on advice which was correct. The defendants who took and acted on the wrong advice must take the consequences and not throw them on to Mr Regan in order to deny him his prima facie right to protect his property by injunction. In these circumstances I do not regard it as oppressive to the defendants or as unreasonable or inequitable to grant an injunction to protect Mr Regan's right to light in relation to his property. On the contrary the court would not be justified in denying him an injunction and effectively forcing him to accept compensation from the defendants for losing the light in respect of his home."


HKRUK II

Commercial premises

HKRUK II (CHC) Limited v Heaney
High Court Ch D, Leeds District Registry
HH Judge Langan sitting as a High Court Judge
3 September 2010

Summary

The decision in Regan v Paul Properties Limited above demonstrates that a developer who ignores rights to light does so at his peril. The primary remedy for an infringement of a right to light is an injunction. That case concerned a residential property that lost light. This case shows that the court will follow the same principle where commercial property is affected. Here, the developer’s decision to proceed with its building without first resolving its neighbour’s potential rights of light claim will mean estimated costs of £1-2 million for the works required to adjust the redeveloped building, on top of the costs of the case itself.

Facts

The claim was, rather unusually, issued against rather than by the party with the benefit of a right to light; i.e. the claimant developer sought declarations that it was free from any liability to the defendant neighbouring owner. The parties were agreed that the claimant’s redevelopment of its building had interfered with the rights of light enjoyed by the defendant’s building. However, they disagreed as to the appropriate relief for the defendant. The defendant requested an injunction to require the claimant to remove the relevant parts of its redeveloped building that were infringing the light to the defendant’s building. The claimant submitted that damages (at most) were an appropriate substitute. The parties also disagreed as to how any damages should be calculated.

Decision

The court confirmed the defendant’s primary entitlement to an injunction in accordance with Regan, despite the fact that the property affected by the development in this case was used for commercial, rather than residential, purposes.

However, the judge acknowledged that damages may be substituted for an injunction where all four of the following criteria as set out in Shelfer v City of London Electric Lighting Company [1895] 1 Ch 287, are satisfied, i.e.
  • If the injury to the complainant’s legal rights is small;

  • If the injury is capable of being estimated in money;

  • If the injury can be adequately compensated by a small money payment; and

  • If it would be oppressive to the infringing party to grant an injunction.
In assessing the level of injury to the defendant’s legal rights, the judge noted that this was a borderline case. However, he felt that the level of injury could not properly be regarded as “small”. The judge was particularly persuaded by the character of the defendant’s building and his commitment to investing in the restoration of the property, together with the extent to which the claimant’s redevelopment had reduced the light to the defendant’s building. Taking these factors together, the judge considered that they constituted “real damage of a kind for which the defendant should not be expected to content himself with a money payment. In other words, the injury is not small.”

The judge noted that his decision on this issue should determine the case, since it meant that the claimant had failed one of the hurdles set out in Shelfer. However, to assist any review by an appeal court, he also gave his views on the other Shelfer hurdles and on the question of the appropriate level of damages in this case.

On damages, the judge felt that the claimant developer would have had in mind the following figures during any hypothetical negotiations:
  • The anticipated profit from the overall development was just under £7 million;

  • The difference in value between the development with and without the “problem area” was around £1.4 million;

  • The claimant had reduced the price paid for the building by £350,000 in order to take account of the potential light issues; and

  • The claimant had budgeted £200,000 for settling all light issues.
In view of the reduction in the purchase price, the judge felt that the claimant could be expected to go beyond the budgeted figure for settlement in order to obtain certainty before starting work, commenting that:
    “Reasonable people want to know at an early date where they stand, and a reasonable developer does not risk his money on works which he may be ordered to pull down.”
Having considered the claimant’s likely approach to negotiations, the judge then considered the fact that the defendant had been reluctant to issue court proceedings, indicating a lack of any serious intention to push hard in the negotiations. Accordingly, he felt that any uplift on the figure of £200,000 would be modest. Following this analysis, the judge arrived at a likely settlement figure of £225,000.

Although this meant that the injury to the defendant was capable of being estimated in money (as required by the Shelfer hurdles), the judge found that the level of damages would not be regarded as “small”, even bearing in mind the likely costs of around £1-2 million required to cut back the relevant floors of the development and/or the significant value of the properties involved.

As to the possibility that it would be oppressive to the claimant if an injunction were granted, the judge did not level any particular criticism at the defendant’s delay in dealing with correspondence concerning this matter and/or in bringing any claim to protect his rights. Moreover, he was not persuaded by the claimant’s concerns about the significant costs of carrying out the work to remove the infringing parts of the building, given that the total cost of the redevelopment exceeded £35 million. The judge therefore concluded that there would be no real oppression caused to the claimant by granting an injunction to require it to adjust the redeveloped building. In his view, this conclusion was supported by the fact that the infringement of light by the claimant was not trivial or inadvertent and was committed with a view to profit.

Comment

This case is a severe blow for developers, as it emphasises that any party that proceeds with a redevelopment without first securing appropriate agreements with neighbours concerning rights of light does so at its peril. It is certainly no longer sensible to assume that a developer will be able to sort out damages "after the event" and/or that any neighbour who fails to take action quickly will have lost its ability to obtain an injunction.

The decision also has implications for those seeking to invest in buildings, the banks funding such investments and the potential tenants who look to take space there. Here, one of the floors to be adjusted as a result of the court order had already been let and the owner of the building will now have to make arrangements to relocate its tenant whilst the remedial works are carried out.

The case is currently being appealled.


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