Development – Property companies – Claimant complaining of interference with right to light – Claimant applying for mandatory injunction – Court ruling damages appropriate remedy in lieu of injunction – Whether deal by hypothetical reasonable commercial parties fair – Ruling made on appropriate award of damages
The claimant and the defendant were property companies. The claimant owned an unoccupied office building (the dominant land) and the defendant owned an adjoining development site (the servient land). As part of the redevelopment of the servient land, the defendant demolished a single-storey flat-roofed building and erected a T-shaped three-storey building with a pitched roof. The claimant complained that the development interfered with the light to certain windows in its building. Four windows faced the development, each at ground-floor level: two served the entrance lobby and two served the basement staircase.
The claimant applied for an injunction requiring the defendant to demolish a considerable part of the new structure.
It was not in issue that the claimant could rely upon the right to receive light through the two basement staircase windows. However, the position of the entrance lobby windows was different because, throughout the relevant 20-year prescription period, they had been blocked by internal panelling that formed part of the design of the entrance lobby. Accordingly, no light had entered through those windows. The question was whether the blockage prevented the acquisition of a right to light through the windows on behalf of the claimant’s building.
The High Court held that there was a small injury to the claimant’s legal right to light, which could be estimated in monetary terms and compensated adequately by a small money payment. It would be oppressive to the defendant to grant a mandatory injunction that would cause loss to the defendant out of all conceivable proportion to any loss that the claimant might suffer: see Tamares (Vincent Square) Ltd v Fairpoint Properties (Vincent Square) Ltd [2006] 41 EG 226.
The matter subsequently came before the court for an assessment of damages.
Held: Damages were assessed in the sum of £50,000.
In assessing damages for loss of the ability to prevent an infringement of a right to light before any infringement took place, the overall principle was that the court should determine what would constitute a fair result of a hypothetical negotiation between the parties. The context, including the nature and seriousness of the breach, had to be borne in mind. The right to prevent a development (or part of it) gave the owner of the right a significant bargaining position and it would normally expect to receive some part of the potential profit from the development. If the amount of the profit was known, the court should award a sum that incorporated a fair percentage of that profit. If the amount was not known, the court should award a suitable multiple of the damages for loss of amenity. In any event, the size of the award should not be so large that the development would not have taken place had such a sum been payable. Finally, the court had to consider whether the “deal feels right”: Carr-Saunders v Dick McNeil Associates Ltd [1986] 2 EGLR 181; (1986) 279 EG 1359, Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798 and Amec Developments Ltd v Jury’s Hotel Management (UK) Ltd [2001] 1 EGLR 81; [2001] 07 EG 163 considered.
In the instant case, the parties, as hypothetical reasonable commercial people, would have to take the halfway point between the two figures provided by the expert valuer for loss based upon the rival right-to-light experts’ reports, namely £174,500. They would then agree a one-third split of that profit at £58,166. However, bearing in mind the relatively modest nature of the infringement and the requirement not to dissuade the defendant from undertaking the relevant part of the development, they would reduce the figure to £50,000 as a fair result.
Furthermore, although the award was substantially more than the sum available for loss of amenity, the deal felt right in terms of the price of avoiding an injunction.
Mark Wonnacott (instructed by Ashfords, of Exeter) appeared for the claimant; Philomena Harrison (instructed by Davenport Lyons) appeared for the defendant.
Eileen O’Grady, barrister
