Have Rights to Light Moved on?20 Mar 2019 // Insights
Head of Commercial Real Estate Tessa Naylor discusses rights to light.
Five years ago, one of the more unpredictable challenges of property development was due for consolidation and modernisation, but what has happened? Expectations were raised back in 2014, when the Law Commission published its final report on rights to light, setting out its recommendations to reform this area of law. Unfortunately, a legislative timeframe does not appear to have been allocated, and in the years since, Parliamentary priorities have given no indication of accommodating it. Politically, it could be seen as unattractive to voters to assist developments at the expense of individual property rights. On the other hand, there have been rallying cries from all quarters urging the Government to challenge home owners who block local development. This could be by asserting rights to light as a way to oppose planning.
What were the Law Commission’s original recommendations? In the absence of any progress towards implementing them, what are the principles and case decisions guiding us? The key recommendations were to make the law more transparent. In particular:
- There would be a statutory notice procedure that would allow 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;
- A statutory test to clarify when courts may order damages to be paid, rather than halting development or ordering demolition;
- An updated version of the procedure that allows landowners to prevent their neighbours from acquiring rights to light by prescription;
- Amendment of the law governing where an unused right to light is treated as abandoned; and
- A power for the Lands Chamber of the Upper Tribunal to discharge or modify obsolete or unused rights to light.
This article is not seeking to summarise the pre-existing law on private property rights protecting natural light. However, it is fair to say that the law is, in many respects, unclear and has developed in a haphazard way. This is evident from the recommendations above. Developers have to focus on addressing the risk of claims where light obstruction is unavoidable. Negotiating deeds of release and incepting insurance are possible solutions, but the main risk is assessing whether a Court would grant an injunction or award damages in lieu. With this key point, it is helpful to consider recent cases. However, it is useful to go back to the benchmark 2010 High Court case that first set the cat amongst the pigeons for developers, known as the Heaney case.
In HKRUKII (CHC) Ltd v. Heaney (2010), the High Court awarded an injunction against a developer who infringed the rights to light to a neighbouring commercial property, requiring the partial demolition of a building. This was despite early negotiations, and a failure on the part of the infringed property owner to follow through on threats to apply for an injunction, in addition to extra floors having been completed. The Court considered the principles laid down in the leading case of Shelfer v. City of London Electric Lighting Company (1895), which set out the relevant criteria as to whether an injunction or damages are appropriate. These principles hold that damages are a suitable substitute if:
- The injury to the Plaintiff’s legal rights is small;
- The injury is capable of being estimated in money;
- The injury can be adequately compensated by a small money payment;
- The case would be oppressive to the Defendant to grant an injunction.
The Court in Heaney held that, despite the Claimant’s conduct, it would not be oppressive to grant an injunction for the following reasons:
- The infringement was not trivial;
- The infringement was carried out in the knowledge that it was actionable;
- The infringement was carried out with a view to profit, not out of necessity;
- It would have been wrong for the Court to sanction what had been done, by compelling the Claimant to take monetary compensation, which it did not want.
An appeal to the Court of Appeal was considered, but regretfully for practitioners, advisers, and developers, the parties settled out of Court. This set the scene for uncertainty for developers. As it was, the case served as a warning to developers not to assume that infringed rights to light can be bought out for commercial buildings, especially if the works had been completed.
Then came a Supreme Court decision in the case of Coventry v. Lawrence in 2014, which actually reviewed the law of nuisance, but is of relevance to the injunction or damages in question. Here, the Shelfer principles were considered again, but the Court was reluctant to surrender discretion by automatically refusing an injunction if the tests were satisfied. Other relevant facts were brought into play, and a more flexible approach prevailed. The Claimant’s Appeal was allowed with an injunction granted, but the ruling made it clear that, even if a prima facie case is made that a defendant’s activities constitute a nuisance, it is for the defendant to show that an injunction should not be granted. Nevertheless, Courts have been too quick to grant injunctions, and the merit of awarding damages must be considered.
Since then, we have three unreported cases as follows:
- Scott v. Aimiuwu (2015) in the County Court;
- Ottercroft Limited v. Scandia Care (2016) in the Court of Appeal; and
- Pauline Forster v. SSCLG Tower Hamlets (2016) in the Court of Appeal.
These cases appear to be ushering in a more comfortable position for developers who act reasonably, where the extent of the light infringement nuisance is small and does not affect primary living accommodation. The conduct of the party alleging the light encroachment is also relevant. In addition, the Shelfer and Coventry v Lawrence principles were considered by the Judge in Scott, as well as the Law Commission findings with the effect that damages were considered more appropriate. Indeed, the calculation of the uplifted value of the property was proposed as a basis for negotiation for the appropriate level of damages.
Interestingly, Pauline Forster v Tower Hamlets resulted in the quashing of a planning permission. This was due to the Planning Inspector failing to consider that its impact would mean significant deprivation of daylight and sunlight to an adjoining property, which should have been a material consideration.
All in all, the guidance from the Courts suggests that a balance is being struck between the developer and the property owner with rights to light. Developers can reduce the risks of rights to light claims having serious consequences by identifying early on the potentially actionable rights to light in the vicinity, thoroughly assessing solutions, and adopting a measured and cautious approach before works begin.
Whether we see a rights to light Bill enacted remains to be seen, but guidance and rulings from case decisions have long shaped the legal framework in the UK and, in short, that hasn’t changed.