In the recent case of Scott -v- Aimiuwu the question whether to award damages rather than an injunction for breach of a right to light was aired in court for the first time since the Supreme Court decision in Coventry v Lawrence and has received much comment suggesting that the rules may be applied in a manner more favourable to developers in future.
The background to the interest is the consternation generated in the developer community when the court in HKRUK II (CHC) Ltd v Heaney [2010] EWHC 2245 (Ch) granted an injunction requiring a development to be cut back, even though it was already completed and:
• The floors that would have to be cut back had already been let.
• The owner of the right of light had failed to take steps to prevent the development during its construction, despite attempts to negotiate made by the developer.
The court applied established case law that the primary remedy for interference with legal rights is an injunction to prevent the interference, that damages in substitution for an injunction may be given only if all the criteria set down in Shelfer v City of London Electric Lighting Co – a decision from 1895 – were satisfied:
1. The injury to the plaintiff’s legal rights is small
2. The injury is capable of being estimated in money
3. The injury can be adequately compensated by a small money payment
4. The case is one in which it would be oppressive to the defendant to grant an injunction
The Court of Appeal was due to hear the developer's appeal but it appears that the parties settled the case out of court so this unsatisfactory High Court decision stands. But last year the Supreme Court in Coventry v Lawrence [2014] UKSC 46 (No.1) revisited the question of whether to grant injunctions or damages in the context of a nuisance claim. That decision suggests a more flexible approach to when damages may be awarded rather than the test adopted by the Shelfer case which it found had been applied in a way that is too restrictive. This encouraged commentators to think that the Heaney case might be decided differently if it came before the court today.
The Supreme Court thought the four tests must not be “a fetter on the exercise of the court's discretion' and whilst it would normally be right to refuse an injunction if those four tests were satisfied, the fact that all four tests are not satisfied does not mean that an injunction should inevitably be granted. If the injury cannot fairly be compensated by money, the developer had acted in a high-handed manner or tried to steal a march upon the plaintiff or to evade the jurisdiction of the Court then an injunction is necessary in order to do justice to the plaintiff and as a warning to others. The starting position is that an injunction should be granted, so the legal burden is on the defendant to show why it should not, but the outcome should depend on all the evidence rather than a rigid application of the Shelfer tests.
Scott -v- Aimiuwu does give an indication that a more pragmatic judicial attitude may benefit developers in similar circumstances. The decision is only from the County Court and so has no formal precedent value but the Judge rejected the claim for an injunction as the complainant failed to take proceedings before construction commenced and the defendant had behaved reasonably throughout. He assessed damages based neither wholly on share of development profit (ie one third, which would have been c. £65,000) nor on diminution in value of the property whose light was reduced (c.£12,000) but took both into account along with other factors including loss of amenity and the behaviour of the parties and awarded £31,000. Points to bear in mind are that the development was not directly for profit but was an extension to a family home and the impact was on secondary accommodation (garage/workshop, utility room and bathroom) in the complainants home. So it is possible that in a commercial development for profit the Judge may have been more inclined to grant an injunction or to adopt profit related damages, particularly if the injury was to primary habitable rooms in a dwelling.
So perhaps in future developers are less likely to be held to ransom for technical infringements of rights to light, or where complainants have been dilatory about taking injunction proceedings, but it is of paramount importance to be seen to have acted reasonably and if there is significant interference to primary residential accommodation an injunction is still quite likely if a negotiated settlement cannot be achieved. Developers can by no means assume they will face only a damages award rather than an injunction if they interfere with established rights to light. The Law Commission in December 2014 recommended changes to the law to provide a statutory notice procedure for landowners to require their neighbours to tell them within a specified time if they intend to seek an injunction to protect their right to light, or to lose the potential for that remedy to be granted and a statutory test to clarify when courts may order damages rather than halting development or ordering demolition. The Government response to this suggestion is still awaited.
For more information please contact Ross Polkinghorne.