Developers should beware of costly penalties for less than scrupulous behaviour when it comes to infringing their neighbours' rights to light.
In the appeal of Ottercroft Ltd -v- Scandia Care Ltd [2016] EWA Civ 867, the Court of Appeal ruled in favour of the claimant whose rights to light were infringed by the defendant developers.
The developer had given undertakings not to develop their property so as to cause interference with the neighbouring claimant's rights to light. In breach of these undertakings, the developer built a metal staircase which caused a relatively minor loss of light (valued at less than £1,000) to the claimant's restaurant. Notwithstanding the fact that the infringement was minor, the appeal judges concluded that the trial judge was correct to grant an injunction rather than damages in light of the developer's actions.
Back in January 2015, the Court held that the staircase interfered with the claimant's rights to light. He ordered a mandatory injunction for the developer to alter, remove or replace the staircase so that it no longer infringed the claimant's rights. Although the infringement was relatively minor, his reasons for awarding an injunction rather than damages included:
- The developer acted in a high-handed and unneighbourly manner. They deliberately misled the claimant in respect of their plans for development.
- The developer gave undertakings not to interfere with the claimant's rights to light, which discouraged the claimant from seeking interim relief from the Court.
- Despite being fully aware that their actions would affect the claimant's rights, the developer proceeded to build the staircase in deliberate breach of their undertakings.
The developer argued on appeal that the judge failed to carry out a fair and objective balancing exercise in deciding whether to award damages in lieu of an injunction.
The appeal judges dismissed the developer's' appeal. They approved the trial judge's decision on the basis that:
- The trial judge is entitled to exercise his discretion and it should not be overturned by an appellate court unless he has made the wrong decision on the principles.
- The four criteria in Shelfer -v- City of London "open the door" for the judge to exercise his discretion to award damages in lieu of an injunction. They do not, however, compel him to do so.
- An injunction was granted based on the developer's poor behaviour and breach of undertakings. The judge was entitled to consider the developer's actions in the round when exercising his discretion and he was not shown to be wrong in his characterisation of the developer conduct.
- The injunction is not oppressive to the developer. Moving the staircase to avoid the infringement was feasible and the costs were likely to be less than £6,000.
This decision appears to go against the more flexible approach to awarding damages in lieu of an injunction advocated by the Supreme Court in the earlier decision of Coventry -v- Lawrence. However the Court made clear that there had been no error in the judge's exercise of discretion in this case. Lord Neuberger stated in the Supreme Court case of Coventry v Lawrence that an injunction may be necessary to do justice and warn others, especially if the developer has acted in a high-handed manner. His reasoning fits the facts of this case exactly. The developer had breached its undertakings and the judge had been right to hold the developer to its contractual obligations.
It is clear that the courts will not look kindly upon any potentially misleading actions by developers. When it comes to rights to light, developers should ensure that their conduct is demonstrably scrupulous in their dealings with neighbours.
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