Ottercroft Ltd v Scandia Care Ltd and another

  Party walls – Right to light – Joint tortfeasors – Parties owning adjoining properties – Dispute arising out of appellants’ proposed redevelopment of property by constructing store room and erecting external metal staircase – Judge granting mandatory injunction, holding second appellant personally liable and ordering payment of respondent’s pre and post action costs – Whether judge erring in law – Appeal dismissed The respondent and the appellants owned adjoining properties in St Paul’s Row, High Wycombe. The first appellant company was controlled by the second appellant. A dispute arose out of the appellants’ proposed redevelopment of their property by the construction of a store room in the yard behind the property and the erection of an external metal staircase in place of an existing wooden one. The appellants had commenced work without serving notice on the claimants under the Party Wall etc. Act 1996. The respondent began proceedings to restrain works which, it said, interfered with its right to light. The second appellant gave a personal undertaking which was later followed by an undertaking from the first defendant. However, the appellants went ahead and erected a metal fire-escape staircase which obstructed the respondent’s window. The court held that the staircase infringed the respondent’s right to light and that the appellants had acted in breach of undertakings without notice or planning permission, although the infringement was minor and no significant damage had occurred. The judge decided that the damage could be measured in money but that the breach of binding undertakings was an overwhelming reason to grant an injunction. He also held that the second appellant had acted in a high-handed manner throughout, keeping his neighbours in ignorance of his plans and with the knowledge that his plans might infringe a right to light. Further, the judge found the second appellant was not a truthful witness. He ordered the removal or alteration of the staircase and made a costs order in favour of the respondent. The appellants appealed arguing that the judge had been wrong to: (i) grant a mandatory injunction rather than award damages; (ii) hold the second appellant personally liable; (iii) order payment of the claimant’s pre and post action party wall legal and surveyor’s costs. Held: The appeal was dismissed. (1) The judge had conducted a balancing exercise in order to determine whether to grant an injunction. He had expressly directed himself that he should not grant an injunction if damages would be an adequate remedy. He then went on to consider the factors that weighed for and against the grant of an injunction. The judge had been entitled to consider the appellants’ conduct in the round, including everything that had preceded the commencement of the action as well as the breach of the undertakings. Although the infringement was minor, the undertakings had been as binding as an interim order. He had not been wrong in his characterisation of the defendants’ conduct. An expert report indicated that it was feasible to alter the staircase to overcome the light issue at a cost of around £6,000. Therefore, the injunction was not oppressive to the appellants. Injunctions were necessary where a defendant had acted in a high-handed manner, attempting to evade the court’s jurisdiction, in order to do justice to the claimant and to serve as a warning to others: Coventry (t/a RDC Promotions) v Lawrence [2014] UKSC 13; [2014] 1 EGLR 147; [2014] EGILR 57 followed. (2) Whether a director should be treated as liable with the company as a joint tortfeasor depended on whether the putative tortfeasor was exercising control through the constitutional organs of the company. If he did no more than vote at board meetings, then he would be exercising control through the constitutional organs of the company. The constitution of the company might have delegated authority to officers of the company without the need for formal board meetings; and in that event the court would not rule out the possibility that an individual doing no more than exercising that properly granted authority would escape personal liability. The second appellant was the director and company secretary and his wife was the only other director. There was no evidence in respect of the first appellant’s constitution or decision-making processes and no evidence that it did anything other than what the second appellant wanted it to do. The judge had been entitled to find that he had been personally instrumental in pushing plans through and was a tortfeasor: MCA Records Inc v Charly Records Ltd [2001] EWCA Civ 1441; [2002], FSR 26 applied. (3) The judge’s jurisdiction to make an order for costs derived from section 51 of the Senior Courts Act 1981, which provided that subject to the rules of court, the costs of “and incidental to” all proceedings in the county court were in the discretion of the court. That was explicitly confirmed by CPR Part 42.2(6)(d), which empowered a court to make an order that a party had to pay “costs incurred before proceedings are begun”.  In addition, one of the factors that the judge was required to take into account was the conduct of the parties, which included conduct before as well as during the proceedings: see CPR Part 44.2(4)(a) and (5)(a). The order that the judge made was therefore well within his jurisdiction. There was no separate attack on the judge’s exercise of discretion. The judge had deliberately not exercised his power to order costs under the Party Walls Act 1996. However, irrespective of the rights and wrongs under the 1996 Act, the judge had jurisdiction to make the costs order that he did. Stephen Hockman QC (instructed by Direct Public Access) appeared for the appellants; Nicholas Lavender QC and Greville Healey (instructed by Guy Clapham & Co) appeared for the respondent. Eileen O’Grady, barrister Click here to read a transcript of Ottercroft Ltd v Scandia Care Ltd and another.