Developers take care before turning off the lights

As buildings go up, adjoining landowners sometimes feel that they should share a slice of the profit pie, whether they are entitled to it or not. Those adjoining a development know that a right to light claim can be a developer's nightmare, as claims for rights to light can be expensive and protracted.

Well-advised developers on 'at risk' developments will therefore calculate build costs to include compensation to pay off potential right to light claims. Until now, this has been a reasonably safe course of action. Then came the Court of Appeal judgment in Regan -v- Paul Properties Limited published last week.

Summary of the facts

Regan owned a property in Brighton. Paul Properties were constructing a development across the road, which involved extending a two/three storey building to five storeys. Having obtained advice as to the infringement of his right to light, Regan objected to the development proceeding. Notwithstanding this, Paul Properties carried on with the works. Regan responded by seeking injunctive relief to prevent the development. The High Court agreed that the development would infringe Regan's rights, but refused an injunction and awarded damages. Regan appealed and sought an injunction to stop the five-storey development going ahead and requiring some of the works already carried out to be demolished.

Court of Appeal judgment

The Court of Appeal summarised the issues a court should look at when considering whether to award damages or an injunction:

		The level of light left after the infringement is relevant, not how much light is taken;
		Whether the infringement could be compensated by a "small money payment" - the Court of Appeal did not consider £5,000 to be "small", particularly in light of the developer's projected profit;
		The potential loss of developer profit if an injunction is awarded is relevant but should not dictate the remedy;
		The conduct of the parties is relevant - in this case, Regan had always sought to defend his legal rights, not seek recompense for giving them up. Conversely, the developer took a calculated risk in proceeding with development in light of a potential claim.

The Court awarded Regan an injunction.

Light at the end of the tunnel?

This judgment is important for developers and those who advise them. An assumption can no longer be made that a "small" level of loss will rule out the risk of injunctive relief.

However, all is not lost. The circumstances of the case did involve a development that would have a significant impact on Regan's enjoyment of his property (albeit a small impact in financial terms). The Court of Appeal is unlikely to extend principles to allow injunctive relief for spurious claims intended to extort money from developers, rather than those claims that genuinely seek to protect property interests.

What you should do:

		Always take rights to light complaints from adjoining owners seriously.
		Obtain professional expert advice on the likelihood of a complainant's success, and what their potential remedy will be - injunction or damages.
		Ensure that your lawyers and surveyors are fully briefed of all facts - lawyers should know about all complaints, and surveyors should be up to date with this recent judgment.
		Take legal advice. Preserving your legal position from the outset will ensure that you are well placed for negotiating - we will provide tactical and legal advice.

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