This week matters came to a head as the London Borough of Hammersmith and Fulham (“LBHF”) resolved (subject to terms) to use their powers under s.203 of the Housing and Planning Act 2016 (the successor to the old s.237) to override neighbours’ rights to light so that the development can proceed.
The issues go back for some time as in the usual way Chelsea has sought to settle its neighbours’ rights of light claims by doing deals for financial compensation.
One very near neighbour- the Crosthwaites family- issued proceedings for injunctive relief in May 2017, claiming that the ambitious 60,000 capacity stadium will block the light enjoyed by their West London cottage.
The Report to LBHF’s cabinet meeting held on 15 January sets out in some detail the history of the dealings between Chelsea and its neighbours although some material has been redacted.
Why does this matter?
- If LBHF had not intervened, the injunction proceedings would have probably proceeded to a trial. In previous cases the courts have made it clear that they are generally sympathetic to the rights of private residential owners if they can demonstrate that the infringement of those rights affects the amenity of their property.
- This approach has contrasted starkly with the public law approach where in matters such as CPO or section 203 the public interest overrides private rights.
- The Crosthwaites’ lawyers have stated that they may well seek a judicial review of LBHF’s decision so the issue may rumble on for some time.
- For a developer there are of course many arguments that can be developed to assert that any loss of light is not actionable. One might argue that locality is relevant and that the level of light to be reasonably expected within a built up urban environment is different to that which might be reasonably expected in the countryside. Further arguments might focus on whether the loss is in fact noticeable (this might well be different to the classic Waldram analysis) or whether the loss interferes with beneficial use and enjoyment. Still further arguments might focus on the Waldram test itself and whether alternative forms of modelling loss of light might helpfully inform the analysis, for example Radiance software which takes into account internal reflectance or yet more nuanced climate based daylight modelling.
When is an injunction appropriate?
The previous rather strict presumption in favour of the grant of an injunction to protect any interference with property rights has now been eroded by the 2014 decision of the Supreme Court in Coventry v Lawrence (Lawrence v Fen Tigers). The court emphasised that there, whilst prima facie the remedy for a nuisance is an injunction, the court has a very broad discretion to grant damages in lieu, with such discretion to be exercised on a case by case basis after a consideration of all the issues, including the public interest. This much more flexible approach will assist a developer.
It should be noted that the Supreme Court had a range of views on this issue which are yet to be fully worked out. For example, Lord Mance expressed concerns about the right to enjoy one’s home without disturbance for reasons independent of money.
What will a court consider relevant? Some of the factors considered by Lord Neuberger are:
- The fact that a defendant’s business may have to shut down.
- That employees would lose their livelihood.
- That there would be a loss to the public of facilities or services.
- That there would be a waste of resources “on account of what may be a single claimant”. This factor seems particularly relevant in the rights of light context where there may be one last intransigent neighbour and would seem to be relevant to the Crosthwaites’ position.
- The financial implications of an injunction.
- Whether the loss to the defendant would be disproportionate to the damage done to a claimant.
Some other factors that might be relevant in an appropriate case might include the following:
- The availability of artificial light. The court in Midtown Ltd v City Of London Real Property Co Ltd (2005) specifically held that this would go to remedy and whether an injunction would be granted.
- That the scheme will be beneficial to the wider community and that it has the support of the locals and of the local planning authority. Will the scheme deliver employment, regenerate the local area, or deliver socially desirable affordable housing and public realm?
- Whether the developer has acted fairly, openly and reasonably.
- Does the owner really care about light as much as he now asserts? Has he released rights in the past? Is he a new purchaser who purchased with full knowledge of the pending development? Is there any open correspondence talking about settling the claim for cash?
Given the new injunction landscape, neighbours might feel less comfortable about securing an injunction than they might have done previously, and there is much more room for debate.
Measure of damages
Even if an injunction is avoided, the court must determine the correct measure of damages; with profit share or release fee damages being the likely focus, and this is again an area that carries a great deal of uncertainty. Dicta from the courts that the judges need to consider whether the “deal feels right” add little clarity. Clearly what feels right to a developer will not feel right to the neighbour.
If the decision to use LBHF’s statutory powers stands this will be a stark reminder of the difference between private law and public law remedies. A claim for injunction or damages in lieu will instead have been replaced by a claim for statutory compensation for injurious affection and the development will proceed.
However there will be many developments where the assistance of the local authority under s.203 will not be forthcoming and, in those, careful risk appraisal must be undertaken at an early stage to reduce the number of potential litigation claims. Matters such as potential use of s.203, insurance, or the early service of light obstruction notices in an appropriate case should be considered early on in the process. If a neighbour makes a claim for an injunction, the focus will shift to questions of actionable loss (to consider different types of modelling and software) and then to the appropriateness of an injunction as the ultimate remedy. Strategic use of Part 36 offers may help shift the risk of uncertainty back to the neighbour but ultimately neither party can be entirely confident of the outcome when engaged in the litigation lottery.