Rights of light: injunction refused

Background

This was a claim by two long leaseholders of flats in a building known as Bankside Lofts in London. They were seeking an injunction, requiring the demolition of substantial parts of a recently constructed 19 storey office block known as 'Arbor'. The injunction was sought on the basis that Arbor interfered with the rights of light to which the leaseholders' properties benefitted. If an injunction was not available the claimants sought damages on a negotiating basis, or alternatively based on the diminution in value of their flats caused by the nuisance.

Arbor was the first in a series of eight buildings which the defendant plans to construct on a large development site which is near the Tate Modern and which surrounds Bankside Lofts. A second 48 storey tower is close to completion and further buildings are expected to follow.  

All of the buildings, apart from Arbor, are or will be constructed on land which was the subject of a transfer in 2022, pursuant to section 203 of the Housing and Planning Act 2016.  In short, as it relates to this case, the effect of this 2022 transfer was to limit the claimants (and any other affected owners) claim in relation to any actionable loss of light caused to their property by the development to a monetary claim, based on the diminution in value of their property. The claimants could therefore only bring a claim for an injunction in relation to the Arbor building, which was not covered by the 2022 transfer. 

Some points of note from the judgment:

Refusal to grant an injunction: Multiple reasons were set out in relation to the refusal to grant an injunction, with proportionality, public benefit and the availability of damages as an adequate remedy being key themes. The judgment noted: 

• If an injunction was granted there was a strong likelihood that the defendant would obtain planning permission to rebuild Arbor or construct an equally large building, which would also infringe the Claimants' rights of light but be protected by a s.203 resolution - rendering an injunction futile.

• As none of Arbor's tenants, who were in occupation, had been joined to the proceedings, there was the potential for substantial delays in enforcing any injunction. It was also noted an injunction against the Arbor tenants' might be refused regardless.

• The harm caused to the defendant's legitimate interests, the Arbor tenant occupiers, and the public by granting the injunction would be disproportionate to the harm to the claimants from the interference with their light. Separately, it was noted there was a strong public benefit in retaining Arbor.

• The defendant, by its conduct, was not prevented from arguing an injunction would be oppressive.

• Damages would be adequate compensation. This was supported by the fact all other persons in the position of the claimants have settled with the developer.  The  claimants had also acknowledged they did not want to see Arbor demolished.

Negotiating damages awarded: The judge awarded damages on a 'negotiating basis', which were significantly higher than the damages which would have been awarded based on the diminution in value of the property. Following recent case law the defendant argued it did not automatically follow damages would be awarded on a negotiating basis.  However, in this case they were judged to be the appropriate remedy - reflecting a way to assess the loss of 'a valuable right that the owner wanted to use and enjoy with their property, in perpetuity'. It was noted negotiating damages 'asks for what sum' the claimants would reasonably be willing to give up enjoyment of their right, reflecting a way to measure the loss of use of the right. The judge noted that if damages, based on the diminution in value of the property, were judged to be the correct remedy this would have been a strong argument in favour of granting injunctive relief, on the basis damages would not be an adequate remedy.

However, when it came to assessing the amount of negotiated damages, the claimants were awarded significantly less than the amount claimed. The claimants each claimed in excess of £3million (significantly more than the value of their properties). However, they were awarded £500,000 in one case and £350,000 in the other.  The Court considered the position 'in the round' as to the kinds of sums that could reasonably have expected to be negotiated.

Waldram method endorsed: The judge acknowledged the criticisms of the Waldram method but ultimately concluded that it remained the industry standard, had stood the test of time, and is broadly respected by the light surveying industry.

Determining whether there had been an actionable interference:  In determining whether there had been an actionable interference with the claimants' rights of light, as a result of the construction of Arbor, the judge had to consider the interplay between the law in relation to rights of light and planning legislation. This is a complex area and three different options for the calculation were put forward. The judge agreed with the claimants' first option and held that the correct approach to calculating whether there had been an actionable interference by Arbor was to exclude from that calculation the light that will be lost when the rest of the development is built. This is because as a result of the 2022 transfer the claimants lost their right to protect their light from the remainder of the development site.  The judgment noted:

'When determining whether a right to light has been actionably infringed, it is right to take into account other light that the dominant owner enjoys (light "from other quarters"), not just the remaining light from a defendant's land. There is no infringement if, in fact, the dominant owner will continue to be able to enjoy light from other quarters, in perpetuity, and the light is sufficient - even if the owner has no right to it. But other light that the dominant land actually enjoys will not be taken into account if the owner has no effective means of protecting it, regardless of when the light may be obstructed.'

As further summarised in the judgment '[f]or  the  purposes  of  calculation,  it assumes that the other towers on the 203 development site have been built, but only as a means of eliminating from the assessment the light that they will block. It was noted that this is new law and may be the subject of an appeal.