The case of Isaaks v Charlton Homes Ltd concerned a lease which incorrectly recorded the demise as a “third floor flat”. In fact, the property was a second floor flat....12 May 2016
Minor loss of light can prove very costly for the less than scrupulous Developer
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 and anr, the Court of Appeal ruled in favour of the claimant whose rights to light were infringed by the defendant developers.
The defendants 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 defendants 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 defendants' unneighbourly actions.
What was the first instance decision?
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 defendants 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:
1. The defendants acted in a high-handed and unneighbourly manner. They deliberately misled the claimant in respect of their plans for development.
2. The defendants gave undertakings not to interfere with the claimant's rights to light, which discouraged the claimant from seeking interim relief from the Court.
3. Despite being fully aware that their actions would affect the claimant's rights, the defendants proceeded to build the staircase in deliberate breach of their undertakings.
What were the defendants' arguments in the appeal?
The defendants argued that the judge failed to carry out a fair and objective balancing exercise in deciding whether to award damages in lieu of an injunction. In particular, he failed to take into account the fact that the minor change to the staircase from that specified in the planning permission did not make the loss of light appreciably worse. They claimed that the judge made a series of unfounded assumptions which were oppressive to the defendants.
The Court of Appeal's decision
The appeal judges dismissed the defendants' appeal. They approved the trial judge's decision on the basis that:
1. 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.
2. 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.
3. An injunction was granted based on the defendants' poor behaviour and breach of undertakings. The judge was entitled to consider the defendants' actions in the round when exercising his discretion and he was not shown to be wrong in his characterisation of the defendants' conduct.
4. The injunction is not oppressive to the defendants. Moving the staircase to avoid the infringement is feasible and the costs are likely to be less than £6,000.
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 defendant has acted in a high-handed manner. His reasoning fits the facts of this case exactly. The defendants had breached their undertakings and the judge had been right to hold them to their 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.