This paper deals principally with the question when is it correct to grant damages in lieu of an injunction? The question is asked in the context of rights of light matters.
On 26th February 2014 the Supreme Court gave judgment in the case of Coventry v Lawrence  UKSC 13;  2 WLR 433; “Coventry v Lawrence”. The decision is the latest, but for reasons that are explained below, not necessarily the last stage in litigation which goes back to 2006.
The case concerns the tort of private nuisance caused by noise coming from the defendants land at Hayland Drive, West Row, Mildenhall, Suffolk.
This is what the parties properties look like from the air. The Claimants property is to the north in the woods on the road that passes the stadium to its east.
The Claimants, Catherine Lawrence and Raymond Shields, contended that the Defendants’ (David Coventry and others) conduct of the activities carried out on their land (some three miles west of Mildenhall) was a private nuisance and sought an injunction against it, together with damages for past losses. The Defendants activities included motocross racing on the track on their land and speedway, banger and stock car racing took place in front of a stadium on that land. In broad terms these activities (which went back to 1975) had planning consent, or were within a certificate of lawful use granted by the local planning authority. The Claimants house, “Fenland” (which they bought in January 2006), was some 560m from the stadium and 860m from the track. Shortly after they moved in the Claimants complained to both the local authority and the Defendants about the noise coming from the motocross events on the track. By January 2009 some agreed noise attenuation works were completed. Further complaints were made about the other activities on the track and the stadium. In early 2008 the Claimants issued proceedings to restrain the Defendants from carrying on their activities which it was claimed amounted to a private nuisance to the Claimants. Damages for nuisance were claimed but it seems that no damages were claimed in lieu of an injunction. In 2010 the Claimants house suffered a serious fire (in mysterious circumstances dealt with by the trial judge at paras. 261-263 of his judgment) and, since that date, Fenland has remained uninhabitable. For the full factual background and flavour of the relationship between the Claimants and Defendants it is necessary to read the judgment of the trial judge at  EWHC 360 (QB).
The trial of the claim and the order made
The trial of the claim was heard by Judge Richard Seymour QC (sitting as a Judge of the High Court, Queens Bench Division) in January 2011. Final judgment was given on 4th March 2011; see 2011 [EWHC] 360 (QB); sub nom. Lawrence & Anor. v Fen Tigers Ltd. & Ors.
The trial judge held first that it was not possible for the Defendants to claim a prescriptive right to cause a nuisance by virtue of the noise and other activities generated by their own activities at the track. Secondly, he held that a claim in nuisance had been established which was actionable and the proper remedy was an injunction which limited activities on the track by reference to defined decibel limits over certain periods in each year. Note that the parties (principally the Defendants) did not invite the judge to award damages in lieu of an injunction; this point is referred to again further in this paper. Damages for past nuisance were awarded in the total sum of £20,850. The injunction was to take effect when the Claimants property was ready for residential occupation; which has still not happened. Liberty to apply was given to the parties to vary the terms of the injunction.
The appeal to the Court of Appeal
The Defendants appealed that decision and the Court of Appeal allowed the appeal.  1WLR 2127.
It held that the Claimants had failed to establish that the Defendants activities at the stadium and the track constituted a nuisance. The finding of the Court of Appeal was that the judge had gone wrong in holding that the actual use of the stadium and the track over a number of years with planning consent, or other public consent, could not be taken into account when assessing the character of the locality for the purposes of determining whether the activity was a nuisance. Accordingly, that evidence being taken into account meant that an injunction was not the correct remedy. It was not, therefore, necessary for the Court of Appeal to decide in particular whether it was possible to obtain by prescription a right to commit what would otherwise be a nuisance, although Lewison L.J. expressed the provisional view that it would be so possible. The appeal was allowed with costs and the claim was, therefore, dismissed.
The Claimants appealed to the Supreme Court. The hearing took place on 12th –14th November 2013.
The decision of the Supreme Court
The judgments of the Court are complex and some of them are long. Not all of the JSC speak with one voice on some of the issues. What follows is no more than a summary and the Judgment is “required reading” for all property litigators.
This paper does not deal in detail with all of the issues in the appeal. Its main thrust is on that part of the Judgment which deals with the remedy of the injunction and the discretion to award damages in lieu. As the paper relates to rights of light claims in particular (as requested by the representative of the PLA who commissioned this paper), the particular issues raised by claims to enforce restrictive covenants, trespass and private nuisance claims in the context of the judgments are not explored.
References below are to the paragraph number of the Judgment given on 26th
February 2014. “JSC” means Justices of the Supreme Court.
The issues for the Supreme Court were as follows:
- Whether it is possible to acquire a prescriptive right to do something which would otherwise be a private nuisance.
- Whether it is a defence to a nuisance claim to say that the Claimant has “come to the nuisance”; for example by acquiring, or occupying, property after the nuisance has started.
- How far were the Defendants own activities (alleged to constitute a nuisance) relevant in the assessment of the character of the locality?
- What is the effect on the grant of planning permission for the activity on the allegation that a nuisance has been committed?
- Whether the remedy should be an injunction, or an award of damages in lieu and how far is the existence of planning consent relevant to that issue? (Para. 6).
In respect of those issues, the Supreme Court decided:
- It is possible to establish a right by prescription to commit what would otherwise be a nuisance by noise; i.e. a right to transmit sound waves over neighbouring land; para. 41. On the facts of this case the Defendants failed in that task; para. 145.
- The fact that the Claimants had come to the nuisance was no defence. The house in which they lived had always been used as a private residence before the activities (which were the source of the nuisance) had started; para. 58.
- The planning permissions and other related consents was evidence which the judge should have taken into account. But his failure to do so did not undermine his conclusion that the Defendants activities at the track amounted to a nuisance. The Supreme Court considered the difficult issues which arise where a grant of planning consent effectively leads to a change in the character of the neighbourhood for the purposes of considering whether or not the activity complained of amounts to a nuisance. Planning consent for the activity is normally of no assistance to the defendant in a nuisance claim; paras. 74 and 94.
These parts of the judgment dealt with the first four issues above.
On that footing, the Supreme Court decided that the injunction ordered by the trial judge should be restored, with all other terms including permission to the parties to apply. As the judge had not been asked to award damages in lieu of an injunction, the Supreme Court held that a case for damages in lieu could be raised by the Defendants on an application for permission to apply to discharge the injunction granted by the trial judge; paras. 149-152.
The issue over the proper remedy
The most important part of the decision in Coventry v Lawrence on a more general basis arises from those observations of the JSC on the question of whether damages should be awarded in lieu of an injunction. Whilst these observations were not strictly necessary to deciding the appeal, which was that the order of the trial judge imposing an injunction subject to conditions was restored, those observations are of some considerable importance to those seeing to deal with not just noise nuisance claims but also actionable interference with easements (eg. rights of light) trespass to land and breach of restrictive covenants. But note that (as stated above) whilst the trial judge was not invited to award damages in lieu of an injunction, on the hearing of the appeal in the Supreme Court, the Defendants argued for the first time that, if their activities were a nuisance, the proper remedy was damages in lieu of an injunction; para. 100. The observations of the JSC have to be seen against that contention.
The starting point
As was said by Lord Neuberger at paragraph 101 of the judgement, where a nuisance is being complained of, prima facie the remedy to which the Claimant is entitled, in addition to damages for past nuisance, is an injunction to restrain the Defendant from committing such nuisance in the future. This principle also applies (as is said above) to other breaches of property rights such as rights of light, restrictive covenants and trespass. The Court has since 1858 had the power to award damages in lieu of an injunction, currently s. 50 Senior Courts Act 1981; “s. 50”. But, as appears clearly from the Judgment in Coventry v Lawrence, something has gone wrong in recent years in applying the discretion under s.50.
The leading case and starting point which was examined in some length in Coventry v Lawrence is Shelfer v City of London Electric Lighting Co  1 Ch 287; “Shelfer”. That case was extensively reviewed by the Court of Appeal in the right of light case, Regan v Paul Properties DPF No. 1 Ltd  Ch 135; “Regan”. In Shelfer, A. L. Smith L.J. set out what he described as “a good working rule”. This was that (1) if the injury to the Plaintiffs legal rights is small, (2) and is one which is capable of being estimated in money, (3) and is one which can be adequately compensated by a small money payment, (4) and the case is one in which it would be oppressive to the Defendant to grant an injunction – then damages in substitution for an injunction may be given”.
(Mention should also be made at this stage of the decision of HHJ Langan QC in HXRUK II (CHC) Ltd. v Heaney  EWHC 2245 (Ch) (“Heaney”) which is well known in property litigation circles and was the catalyst that set DCLG to task the Law Commission with reviewing remedies for infringement of rights of light in 2012. It is not clear at this stage whether Heaney was cited in the Supreme Court, but it is an example of a “slavish” adherence to “the good working rule” in Shelfer. Further comment about Heaney appears at the end of this paper.
The proper approach to damages in lieu of an injunction
The Supreme Court considered the subsequent treatment of the “good working rule” in Shelfer in rights of light cases commencing with Colls v Home and Colonial Stores  AC 179 and passing through Kine v Jolly  1 Ch 480 to Fishenden v Higgs and Hill  153 LT 128. It also considered the more recent cases such as Jaggard v Sawyer  1 WLR 269 (trespass) and Watson v Croft Promo-Sport  3 All ER 249 (“Watson”) (noise nuisance) where Shelfer had been applied.
The wrong approach to the proper remedy in recent years
The Supreme Court criticised the recent applications of Shelfer both in Regan (above) and in Watson.
The approach in Regan and Watson was criticised first for being a mechanical application of the good working rule. Secondly, an approach which involves damages being awarded only in very exceptional circumstances was wrong in principle and gave rise to a serious risk of going wrong in practice. (Paras. 101 ff, 161, 171, 239).
The correct approach to the proper remedy
Whilst the prima facie position is that an injunction should be granted and the burden lies on the Defendant (the wrongdoer) to show why is should not, the Supreme Court said that the preferred approach to whether the injunction should actually be granted is that there should be no inclination either way and that the outcome should depend on all the evidence and arguments.
Lord Neuberger suggested that an approach to the good working rule in Shelfer must not be so as to amount to a fetter on the courts discretion under s.50. Secondly, he held that it would, in the absence of additional relevant circumstances pointing the other way, normally be right to refuse an injunction if those four tests in the “good working rule” were satisfied. Thirdly, and most significantly, the fact that all those four tests in Shelfer are not all satisfied does not mean that an injunction should be granted. (Paras. 119 – 123.) This is in contrast to the strict “tick box” approach set out by the Court of Appeal in Jacklin v Chief Constable of West Yorkshire  EWCA Civ 181 (“Jacklin”) for example.
Lord Sumption stated that Shelfer was “out of date and it is unfortunate that it has been followed so recently and so slavishly”; para.161. He also expressed a minority view that, where planning consent has been granted for the activity complained of, there might well be a case that an injunction should not as a matter of principle be granted; para. 161.
Lord Mance and Lord Carnwath were of the view that the grant of a planning consent should not give rise to any presumption that there should not be an injunction; paras.
167 and 246. Lord Mance stressed the need for protection of rights by injunction if necessary in the case of private houses; para. 168. Lord Carnwath indicated that “the opportunity should be taken to signal a move away from the strict criteria derived from Shelfer”; para. 239. He said that this was a particularly relevant point where the effect of an injunction would have serious consequences for third parties, such as employees of the Defendants business, or members of the public enjoying the facilities offered by the Defendant; para. 239.
Two other points emerged from the judgments in Coventry v Lawrence.
First, the comparison between a case where the effect of the injunction was not to bring the Defendants activity to an end, but to set reasonable limits for its continuation, and one where in contrast (eg. rights of light cases) where the Claimant seeks a mandatory injunction to demolish a building built in good faith. In such cases there is a drastic alternative and it may also be that special importance should attach to the rights of light to enjoy ones home without disturbance independently of financial considerations; see Lord Carnwath at para. 247.
Secondly, the JSC referred briefly to the assessment of damages based on a release fee, or Wrotham Park basis, and made some observations about that in the context in particular of a noise nuisance claim where the injury is less specific and the price to be reached at a hypothetical negotiation may be less easy to assess; see Lord Carnwath at para. 248, Lord Clarke at para. 172 and Lord Neuberger at paras. 128 – 132.
Where are we now?
Putting aside the questions raised on the prescriptive right to cause a nuisance and the significance of planning consent on whether a nuisance has been committed, a very significant part of the judgments in Coventry v Lawrence deal with the issue of the remedy.
The decision on this issue signals a radical departure from the strict application of Shelfer in the recent cases such as Regan, Watson and Heaney. In those cases a “tick box” or “computer says no” response to the question of the proper remedy had emerged. Many felt this was wrong as a matter of principle and led to injustice; eg. arguably in Heaney. Coventry v Lawrence sets the balance straight.
It is ironic that the Law Commission is currently considering the reform of remedies for breach of rights of light after the consultation closed in the summer of last year. No doubt the effect of Coventry v Lawrence is going to represent a vital part of the Commissions deliberations when determining the recommendations to make in the
Report, anticipated to be published by the end of this year, if not sooner.
From the point of view of those involved in claims involving breaches of rights of light, the landscape has now changed in that the Supreme Court has emphasised the importance of the discretion in deciding whether or not to grant damages in lieu of an injunction. The decision reflects the true nature of the discretion under s. 50 which in recent cases had been overlooked. This is an important readjustment and represents a change in the law. It is suggested that this change is important where factors such as delay are present (see Heaney) or where the use of the Claimants property is important, such as for private residential purposes; see Lord Sumption at para. 161 and Lord Mance at para. 168 where the enjoyment of residential property is referred to. All these factors enter into the exercise of how the discretion under s. 50 should be exercised, one way or the other.
Following this decision there will have to be a radical reassessment of the prospect of obtaining an injunction from the point of view of those having the benefit of property rights such as rights of light. Consideration will also have to be given to the effect of the decision on the quantum of release fee damages. (Such damages are mentioned briefly by the JSC.) This is because it is likely to be the case that, if the risk of the injunction is less, than the release fee should be reduced. What remains uncertain is how far the amount of release fee damages should dictate the application of Shelfer where they are not usually “small”. But given the emphasis on the discretion, it is hoped that this will not be a barrier as it was in Heaney for example.
Much will depend on the facts and all the circumstances, but what is clear is that the decision requires a reappraisal of on-going rights of light matters where obtaining, or resisting, an injunction or damages in lieu is in issue.
Specific points for those advising in rights of light matters
Finally, what can we learn from Coventry v Lawrence in rights of light matters?
All the analysis above clearly applies to rights of light cases, with the following qualifications and caveats. In summary:
- Rights of light are not always going to raise the same issues as in noise nuisance cases; para. 122. For example, a right of light case may not be capable of being dealt with in as flexible a way as a noise nuisance case; eg. as to conditions under which certain activities may be carried out. Noise nuisance may be discontinuous, whereas interference with light is invariably continuous. The nature and quality of the neighbourhood may be more important in noise nuisance cases than in rights of light cases. Noise may be more acceptable in city centres as opposed to rural areas, whereas right of light may be more precious in the former than in the latter. Of course it is impossible to generalise but the point being made here is that Coventry v Lawrence needs to be treated with care because of its facts. Rights of light cases will often present the stark choice between a building being allowed to go up (or be removed) or being allowed to be built, or to stay; para. 247 per Lord Carnwath. Coventry v Lawrence does not affects this choice.
- The prima facie remedy for breach of rights of light (i.e. an actionable interference) is the injunction and the burden lies on the Defendant to prove that the proper remedy (if any) should be damages; para. 101. This is an important starting point which developers must bear in mind. Hence the use of the words “amber light” in the title to this paper; not “green light”. So proceed with caution (if at all). Coventry v Lawrence does NOT mean that the developer has a “get out of jail” card if he breaches rights of light actionably.
- Rights of light for the benefit of residential properties will be given “special” consideration; paras. 168 (Lord Mance) and para. 247 per Lord Carnwath. This reflect the older cases such as Fishenden as well as Regan.
- Consideration of all the facts and circumstances should lead to the proper outcome. There should be no inclination either way as to the proper remedy, subject to the legal points made at (ii) above. Conduct will often be important, such a whether there has been a delay in asserting rights, as in Heaney; para. 117.
- The fact that the development in breach has planning consent is a “neutral” factor given the lack of unanimity of the JSC on the point. Developers must always be warned that the fact that a project has planning consent and satisfies BRE daylight and sunlight standards does NOT mean that it is safe from challenge by Court claim and a possible injunction if an actionable loss of light to the dominant buildings can be shown.
- The “ghost at the banquet” since Regan and Heaney when advising on injunction risks in rights of light cases has been Peter Smith J.s decision in Midtown v CLRP Co  EWHC 33 (Ch). It had been thought (post Regan) that this decision was no longer of any relevance on the issue as to the remedy. It may now be appropriate to give it an exhumation. The balanced consideration of the factors which led to the refusal of an injunction in that case may be a fair reflection of the proper approach to the exercise of the discretion under s. 50 now stated in Coventry v Lawrence by the JSC. What Peter Smith J. said on the issue of the remedy may be worth reading:
“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. That appears clearly from the correspondence repeatedly addressed to both of them and unanswered. I say nothing about negotiations, because of course, I have no evidence before me of any such negotiations having taken place. In addition, it would be oppressive to the Defendants to be prevented from pursuing a worthwhile and beneficial development for that area (which might actually benefit Midtown). Mr Morgan QC accepts that if the remedy is damages only, part of those damages can possibly include a compensatory payment by reference to a reasonable price or possibly (and I say nothing about this for obvious reasons) based on a sharing in the Defendant’s profits in accordance with the above cases and AG -v- Blake  1 AC 268.”
- The question remains in some minds. Would Regan or Heaney have been decided differently post Coventry v Lawrence? As Counsel for the developers in both cases, I have to be careful to avoid any comment on cases in which I have appeared which might appear “partisan”. But I think I am allowed to say that, as Regan involved a private residential maisonette, it is more likely than not that the sensitive approach to injunctions in such cases reflected in some of the judgments of the JSC (see above) would lead one to conclude that the decision (if it had to be reached after 26th February 2014) would be the same. The outcome in Heaney (if decided after 26th February 2014) might, however, be different. The user of the dominant building was commercial and non-residential. The dilatory conduct of Mr Heaney was a strong factor against the injunction being granted. The judge was inhibited by the Court of Appeals decisions in Regan and Jacklin and had to perform the “tick box” exercise as to “the good working rule” in Shelfer. So it could be well argued that the decision in Heaney would not be reached now. Who knows what the Court of Appeal would have made of it had the claim not been compromised at the 11th hour before the hearing of that appeal, for which permission had been given ironically, by Neuberger LJ (as he then was). That is probably enough speculation.
- The amount of release fee damages may well be affected by the strength of the injunction case; see Amec v Jurys Hotel (2001) 82 P&CR 286 at para. 35 per Anthony Mann QC. Coventry v Lawrence would seem to reduce the “ransom” element in many cases where the interference is small and where a proper assessment of all the relevant facts and circumstances in the exercise of the discretion under s. 50 calls for a damages award.
- In many current rights of light matters (whether or not at the claim stage) it is suggested that there should be a review of the arguments for and against the remedy sought, from both sides. Thus, in a case where the loss of light is small in a non-residential context, the injunction risk (in terms of a final order) should be reassessed. It may not be lower given the protection due to such enjoyment, as the JSC recognise. In a case of major losses in a residential context the injunction risk (in terms of a final order) may remain high. The same task should be applied to the amount release fee damages which are being sought, or disputed. The proverbial slide rule should be applied across the range of amounts and “fair” percentages. In a case, for example, where the loss of light is small (in a non-residential context) ask whether the effect of the new approach to Shelfer justifies the “ransom” amount being sought.
- It may be tempting to latch on to Coventry v Lawrence and think there is now an open gate for developers or others whose activities will infringe property rights such as rights of light. The decision has no such effect as I have sought to make plain above. The injunction remains the prima facie remedy and starting point. In addition any adviser must make it clear that there are no guarantees in litigation and that any advice where a discretion has to be exercised must be expressed in cautious terms; hence the amber light used in the heading.
- Do not forget the possible use of s. 237 Town & Country Planning Act 1990 being brought in to influence the damages being sought in the hypothetical negotiation. In cases where the effective use of s. 237 is a realistic possibility (rare in practice) as compensation of the interest being overridden will be awarded only on an injurious affection basis; i.e. for the loss in value (if any) of the dominant property. (See Chapter 12 of my book on restrictive covenants referred to above for a full analysis of s. 237). That analysis is just as applicable to cases where rights of light are to be overridden. On a general point, albeit outside the topic covered by this paper, s. 237 is difficult to engage properly, has special risks and is not the “universal panacea” as claimed by some commentators post Heaney. It is suggested that since Coventry v Lawrence, the “necessity” test required for the effective use of s. 237 may be harder to satisfy, if the injunction risk is lower.
No property adviser or litigator can afford to ignore this decision when advising in rights of light cases where an injunction, or damages in lieu are under consideration. But tread carefully!
Please note: No duty of care is owed by the author to any person who may read this paper and it is not intended to be used when giving specific advice.