Most developers will be eager to hear (probably more than the election results!) that the first Court Case on Rights of Light has determined following both Coventry v Lawrence and the Law Commission which presented themselves last year. However, it is unfortunately not too significant.
This is a first instance County Court Judgement and therefore an unreported case. However, whilst it does not offer precedent it does indicate the direction in which Judges are oriented following Coventry v Lawrence. The Recorder in this case was Edward Cole, a QC from Falcon Chambers.
This is clearly a domestic dispute between two neighbours living in Potters Bar, Hertfordshire, where there was obviously some cordial relationship before this dispute went into Court. In essence there had been discussions between the two owners about their own separate building plans to their own homes, but the clarity and nature of those conversations appear nebulous.
The Defendants suggested that the nature of those discussions created an estoppel and thus where the light injury was being claimed as actionable, this would mean that there would be no remedy for either Injunction or Damages. The Defendants had obtained two planning permissions and built out their latest consent in May 2013 and by the time the Claimants issued Court proceedings for an Injunction, it was virtually complete.
Thus the Judge had to determine if there was no estoppel whether a mandatory Injunction (i.e. one that part of a building that has caused an actionable infringement to be removed) should be granted or whether Damages would suffice. The first question of course is whether an actionable injury had actually occurred to the affected areas of the neighbouring property which constituted a garage at ground floor level, which was also used for some administrative and DIY purposes, as well as a bathroom at 1st floor level.
The Judge considered that there had been no estoppel in this case. There was not sufficient evidence to suggest that the Claimants had ever agreed or supported the proposed extension. The fact that when they had written to the Local Authority and not formally objected to the proposals, particularly in relation to loss of light, was not seen as a significant point. The Judge considered that it was likely that the Claimants were seeking to maintain (at that time!) a reasonable relationship with their neighbour. They were simply highlighting that they did have windows on their boundary as an invitation for the Local Authority to consider whether permission should be granted on these grounds.
The two rights of light experts effectively agreed the overall injury to the ground floor garage and bathroom and concluded, particularly at ground floor, that there would be an actionable injury in that location.
The Judge considered the basis on how that advice was reached i.e. through the 50/50 rule on the Waldram diagram method and whilst no other form of analysis was considered, he was clear that it was simply a useful rule of thumb which in some circumstances could be deemed mean and in others generous. He did confirm that in his view an actionable infringement had occurred in this situation and therefore was left to consider whether injunction or damages were the appropriate remedy.
In relation to consideration of injunction, the Judge clearly referred to Coventry v Lawrence but also the four Shelfer tests as well. He considered that in reviewing the Shelfer tests within the context of Coventry v Lawrence that each of the four questions could be responded to positively and therefore Damages were the appropriate remedy. He particularly saw this as oppressive to ask for an extension to be taken down in terms of the fact that the impact to the Defendants would outweigh the benefit to the Claimants.
In terms of Damages, he referred to traditional Damages by reference to diminution in value, the Wrotham Park “negotiated damages” position but isolated the profit related damages aspect. He found that the simple book-value approach and thus looking at true diminution in value would produce too low a figure. Equally, on the other hand, that the profit related element would not be appropriate in this case, probably because he was considering the extension to a family home. In his view the hypothetical negotiation between parties as was established within the Wrotham Park case was the way forward.
As a result, the book-value figure of £11,569 was seen as too low, equally at one third of the profit, £65,000 was considered excessive. In terms of the rights of light loss the Judge considered a figure of £30,000 was appropriate.
Some consideration was also given to the fact that whilst the impacted area formed secondary accommodation, (it was considered unlikely) that it could be altered to habitable space.
The Judgement did not go onto address the question of costs which could help one understand where his sympathy’s lay.
As an unreported first instance County Court Judgement, this case offers no significant weight on the future of rights of light. To do that, it would need to be in the High Court or Court of Appeal. However, there are some points which might suggest a judicial direction:
- The potential lack of seeking injunctive proceedings before a development is implemented may mean that the opportunity to receive an injunction afterwards is more limited.
- The Judge clearly took reference to Coventry v Lawrence and the Law Commission report within the Judgement. Both of these documents therefore have provided clear context in going forward with rights of light litigation, even at County Court level.
- In relation to profit related damages, this was seen as not relevant in this case but the negotiated settlement approach, based upon an uplift to the book-value, was deemed more appropriate.
- The future use of the space is still a material consideration.
- The 50/50 rule remains a simple rule of thumb which may be interpreted flexibly.
The “What if’s”
There are a few questions which are raised on this judgement, particularly if some of the circumstances were different. For example:
What if this has been a development (for profit) scheme as against a family home? Would the Judge have potentially granted an injunction more readily or adopted profit related damages as the scheme would have been more focused on the return to a developer?
What if the impact was not to secondary accommodation but to primary habitable rooms? Would the Judge have readily given an injunction after the building had been built or was it the fact that whilst there was an actionable injury it was only to less important accommodation.
What if it was possible and potentially likely that a future use in the garage could have become a principle habitable room? Would this have altered the implications to the overall Judgement?
Even as an unreported first instance case, we now see the judiciary take account of both Coventry v Lawrence and the Law Commission report. Whilst the Law Commission report is in no way binding, it is obvious that its review and recommendations do and will continue to influence the judiciary. The case does provide some potential hope in connection with the basis for damages, but it does not limit the ability to take account of the profits in other circumstances.
There is a question now of whether the Judgement suggests that the adjoining owner would need to issue proceedings ahead of a development being implemented to be more certain of obtaining a mandatory injunction. However, this is equally not clear as we are dealing with a domestic dispute where impacts occurred to secondary accommodation.
The overall message is that it is still possible to create actionable injuries to secondary space and see a fairly large sum of money (against the overall gain to the defendant) be awarded to the Claimant, even in these circumstances. So, in reality, nothing has really changed.
GIA, Chartered Surveyors