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In a landmark ruling in 2010 the High Court ordered an injunction requiring the demolition of the top two floors of a recently completed office building in Leeds. The case is known as Heaney and the reason was the floors interfered with a right to light enjoyed by a neighbouring property.
The implications of the decision for the development industry were grave. It effectively enabled the owners of properties near development sites enjoying rights to light to hold the developer to ransom.
The situation was so serious that the Law Commission launched a consultation which included a suggestion that rights to light should be abolished altogether. The Law Commission's recommendations are currently awaited with great interest.
In the meantime, and completely out of the blue, the Supreme Court has recently thrown a lifeline to developers. The case of Coventry v Lawrence related to noise from a motocross track in Suffolk. The issue was whether the noise emitted from the track amounted to a legal nuisance.
If it did, the Court had to decide whether to restrain the activity by an injunction or award damages to compensate the neighbours alleging the nuisance. The Supreme Court decided that a nuisance existed and that it should be restrained by way of an injunction.
So far so good, but what does this have to do with rights to light?
The five Supreme Court Justices then ventured off-piste into a discussion on how this might affect other nuisance cases including rights to light. Their comments don't actually change the law on rights to light but they have taken the industry by surprise.
The written decision records that they all agreed with the leading judgment of Lord Neuberger but a closer analysis throws doubt on that. Their comments provide as many questions as they do answers. Having grappled at length with the five judgments, the following is a summary of how we might expect courts to approach rights to light cases in the future.
Whilst an injunction remains the primary remedy the court should not automatically award one. There should be a more open-minded approach with full consideration of the facts of each case. This involves a classic exercise of the court's discretion and so it is notoriously difficult to predict the outcome. What can be taken from the Judgments is a clear indication that there will be an increase in cases where damages are awarded in lieu of an injunction.
The Court must look at all of the circumstances of each case and conduct a balancing exercise between the respective parties interests. It will look at the extent of the infringement, the conduct of the parties and the effect of an injunction on the developer. Two arguably new factors were raised by the Supreme Court:
The discussion on the approach damages was brief and whilst some interesting comments were made, the position appears to remain unchanged. Damages will be calculated on the negotiating basis principally by reference to a share of the developer's profit.
It has been said that Heaney might be decided differently if it came before the courts today. Whilst there is some considerable support for this view, it will be impossible to tell until the courts have a chance to consider a case with similar facts.
What can be said with some certainty is that change is afoot and we should expect to see a different approach to these cases even before the Law Commission publishes its recommendations.
This article was written by James Souter.
For more information please contact James on +44 (0)20 7427 6716 or email@example.com.