Easement of light – Remedy for interference – Mandatory injunction or damages – Claimant’s extension to commercial building interfering with easement of light enjoyed by defendant’s building – Claimant seeking declaration that small award of damages sufficient to compensate defendant – Claimant arguing that mandatory injunction requiring removal of offending parts of extension oppressive – Whether interference with right sufficiently small as to justify damages award – Claim dismissed – Counterclaim for injunction allowed
In 2007, the claimant purchased, for £18.75m, a commercial property in the centre of Leeds with the benefit of a planning permission obtained by the vendor for redevelopment and extension, including the building of two additional floors at sixth- and seventh-floor level. The property was subject to an easement of light in favour of the defendant’s nearby office building, a Grade II listed Victorian property on which the defendant had spent considerable to restore. The price paid by the claimant included a negotiated reduction of £350,000 to allow for claims by the defendant in respect of interference with the right to light.
Despite early negotiations, no solution was reached between the claimant and defendant regarding the right-to-light issue. Works on the extension commenced in June 2008. Meanwhile, further correspondence ensued between the parties, in the course of which the defendant threatened to bring legal proceedings for an injunction. That threat was not carried out and the building works were completed by July 2009.
In August 2009, the claimant brought proceedings for declaratory relief, seeking a ruling that a small award of damages was an appropriate remedy for the admitted actionable interference with the defendant’s right to light. The defendant counterclaimed for a mandatory injunction requiring the claimant to demolish the offending parts of the development. The claimant contended that the injury to the defendant’s rights was capable of being compensated by a money award and that a mandatory injunction would be oppressive both by reason of the injurious effect it would have on the claimant and by reason of the defendant’s conduct, including his failure to issue a claim form, such that the claimant had been obliged to do so itself in order to inject some certainty into the situation.
Held: The claim was dismissed; the counterclaim was allowed.
Whether an actionable interference with an easement should be compensated by a mandatory injunction or an award of damages depended on whether: (i) the injury to the dominant owner’s rights was small; (ii) it was capable of being estimated in money; (iii) it could be adequately compensated by a small money payment; and (iv) it would be oppressive to the servient owner to grant an injunction: Shelfer v City of London Electric Lighting Co (No 1) [1895] 1 Ch 287 and Jacklin v Chief Constable of West Yorkshire [2007] EWCA Civ 181 applied. In order to avoid an injunction, the servient owner had to show that all four criteria were satisfied.
Although the injury to the defendant’s rights lay close to the margin, it could not be characterised as small for the purpose of the first criterion. This was so even though the loss of adequately lit space in the defendant’s building had been calculated at less than 1% of the net lettable area of the building and the conventional “book value” damages for the loss of light would be £80,000, only 2% of the £4m value of the building. While such comparisons had to be taken into account, as did the fact that good light was relatively more important in a person’s home than in industrial or commercial premises, those matters did not deflect from a finding that the injury to the defendant’s rights was more than small. The decision on that matter carried a subjective element that was dependent as much on impression as analysis. Given the character of the defendant’s building, the commitment and investment that he had put into its restoration, and the fact that he operated several businesses there, the reduced flow of light constituted damage of a kind for which the defendant should not be expected to be content with a money payment. The claimant’s infringement was not inadvertent but had been committed with a view to profit. The claimant had not been driven by necessity and could easily, although less profitably, have built the sixth and seventh floors at reduced dimensions. It would be wrong for the court effectively to sanction what had been done by compelling the defendant to take monetary compensation that he did not want. Accordingly, the claimant had not satisfied the first criterion and a mandatory injunction should be granted.
Per curiam: Had an award of damages been appropriate, this could have taken the form of either “book value” damages for nuisance at common law or an award of damages in lieu of an injunction under section 50 of the Senior Courts Act 1981, based on the figure that the party with the right could fairly have demanded, in a hypothetical negotiation between the parties, for relaxing that right: see Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798. The latter measure would have been appropriate in the instant case. The matters relevant to the hypothetical negotiation would have included the £350,000 reduction that the claimant had obtained on the purchase price and also the fact that it had budgeted £200,000 for that purpose. In view of the price reduction, the claimant could have been expected to go above the £200,000 figure, but only by a modest uplift, since the defendant’s seeming reluctance to commence proceedings would have made it unlikely for him to push unduly hard in negotiations. Accordingly, the appropriate figure would have been £225,000.
Andrew Francis (instructed by Shoosmiths) appeared for the claimant; Stephen Bickford-Smith (instructed by Pinsent Masons LLP, of Leeds) appeared for the defendant.
Sally Dobson, barrister