Helen Wheddon, Partner discusses the recent outcome of a high profile right to light case appeal and what it means for developers.
The development industry has been waiting for guidance following the 2014 Supreme Court case of Coventry v Lawrence which indicated that courts might be more likely in future to award damages instead of injunctions in rights to light cases. The hope had been that the Court of Appeal might shed some light on this area which has been of particular concern to developers, given the potential delays to delivering a scheme with potential rights to light claims. This can include the possibility of injunctions being awarded to prevent development or high payouts being made to neighbours to stop them applying for one.
Right to light allows owners of buildings who have received natural daylight for more than 20 years to prevent any construction that would deprive them of that light. Many sites that are ripe for redevelopment are nonetheless blighted by potential right to light claims, due to the uncertainty around whether an injunction will be ordered by the court, restricting the development potential of the site.
Hopes for clarity
The long awaited appeal in the right to light case of Ottercroft v Scandia & Anor was finally dealt with recently, potentially signalling an end to the confusion. A decision from the court endorsing the indication given by the Supreme Court in Coventry v Lawrence would have given much needed clarity in this area.
However, the lower court’s decision was instead upheld. The developer’s appeal against the judge’s decision to grant an injunction in place of damages was refused, despite this being a relatively minor right to light infringement. This could have been adequately compensated in damages, provisionally assessed at less than £1,000. It should be noted that the decision was very much linked to the unusual facts of the case, with the court taking a dim view of the defendants’ conduct and exercising its discretion to order an injunction for the removal of the offending works.
Despite the Court of Appeal upholding the injunction, this may still be seen as an encouraging decision for developers. The judge had accepted the principle that, following Coventry v Lawrence, an injunction should not be awarded if damages are an adequate remedy. However the court always retains a wide discretion to penalise poor conduct, as in this case. There is a clear public policy element to this decision, where the defendants had breached undertakings given and the second defendant was found to be an untruthful witness.
Developers and housebuilders should take from the case a clear warning that their conduct and dealings with parties whose rights to light are affected by their scheme must be beyond reproach, particularly if a dispute over rights to light ends up in court. Developers should engage at an early stage with their neighbours and do everything they can to show in any later litigation that they have acted reasonably, to persuade the court to make an order for damages if terms cannot be agreed with those affected. Developers should not expect to always be able to argue for damages in place of an injunction though, especially if damages will not be adequate and certainly if their own conduct is open to criticism.
Further help to developers may come from the announcement in the Queen’s Speech that proposals to respond to the 2011 Law Commission report on easements are being considered, with a view to introducing a Law of Property Bill. It will not be clear until the Bill is published whether any right to light measures will be mentioned, or specifically whether any of the recommendations in the Law Commission’s 2014 rights to light report are likely to be included. These proposals included a notice procedure whereby landowners could require neighbours to notify within a specified time their intentions to seek an injunction to protect their right to light. Failing to do so could lose the potential for that remedy to be granted. This process could bring some much needed certainty for developers, particularly in the challenging times that may well lie ahead for the development industry as a whole. In view of the wide ranging implications of the Brexit vote, it remains to be seen whether there will be any parliamentary time to deal with this.
Certain schemes where there is an arguable public benefit may also be able to enlist the support of the relevant local authority. In some situations, statutory provisions allow interference with an easement such as a right to light, so that no private nuisance claim can be brought. Recently enacted Section 203 of the Housing and Planning Act 2016 gives a local authority power to override rights restricting the execution of works on land, where that land has been vested in or acquired by a public body or appropriated by a local authority. The power applies to works carried out by the local authority or by a person deriving title under it, which includes any successor in title.
The effect of this in certain circumstances is to override private rights to light, which still need to be compensated but at a level likely to be below a commercially negotiated release. Nevertheless, developers still need to show that they have properly engaged with adjoining owners. These powers will, however, only be exercised in limited circumstances so most developers are still in the position of waiting for further guidance from the court or newlegislation for further clarity in this area. In the meantime, they will need to ensure their own houses are in order in terms of conduct generally when wanting to progress new schemes and dealing with affected neighbours.
First published in Housebuilder & Developer, August 2016