Real Estate Disputes: Heaney case settles


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The news that the developers' appeal in the Heaney case has now been settled (on terms which remain confidential) is unwelcome for developers . The case at first instance had unusually been brought by the developer who had failed to reach a negotiated settlement with Mr Heaney and was trying to bring matters to a head. The developers had proceeded to build out, relying on the fact that the damage to Mr Heaney's light was small and that it was therefore likely that the court would grant damages in lieu of an injunction rather than an injunction.   

Mr Heaney won an injunction requiring HKRUK to remove the upper floors of their new development even though he had had been notified of the proposed works prior to their commencement and had stood by without issuing injunction proceedings. These upper floors were tenanted.

The case gives a boost to neighbouring owners who will now rely on the first instance decision to increase their bargaining position and receive unwarranted compensation payouts even when the damage to their light is objectively small. Although no new law has been made, the case demonstrates the difficulty of predicting the outcome of matters where judicial discretion is to be exercised.

It is to be expected that developers will now ask  local authorities to make more use of their section 237 powers  to prevent desirable developments from being thwarted. Commercially developers will now have to address rights of light at an earlier stage in the life of their development process not only for their own benefit but also to satisfy lending banks or future tenants.  

For further information please contact Wendy Miller or Rashpal Soomal.


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