Real Estates Disputes: Rights of Light

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The recent High Court decision in CIPT (AIPT) Limited v Transport For London (and others) causes a headache for the BPF in its attempt to establish a Rights of Light Disputes Protocol. In 2011 the British Property Federation began discussions to agree a protocol between their members where disputes as to rights of light arise between developers and owners of adjoining land ("the Protocol")To quote the pre-amble to the current draft of the Protocol:

"The Protocol is intended to improve communication between the Developer and Adjoining Owner by establishing a timescale and framework for the timely exchange of information and negotiations to minimise delays and the scope for prevarication by the parties … to enable a Developer to reach a position within a defined timescale whereby it has a reasonable degree of certainty as to whether an Adjoining Owner will seek an injunction to restrain the development in whole or in part, or is willing in good faith to negotiate a financial settlement."

The Protocol provides for a developer to serve notice on any adjoining owners of his intention to develop "within a reasonable time prior to submitting an application for planning permission". If the adjoining owner wishes to seek an injunctive relief to protect it’s rights of light, it will be required to serve a counter notice within a reasonable period after service of the initial notice. In the absence of a counter notice, the developer will be entitled to assume that the adjoining owner will not be seeking injunctive relief.

Where a counter notice is served, the Protocol provides for the exchange of information, negotiation and the opportunity for the developer to make a formal offer of compensation for any loss of light the adjoining owner may suffer.

The Protocol envisages that these steps will have been undertaken before a planning application is made and that, if an adjoining owner wishes to apply for an injunction, it will do so with 56 days of receiving the offer of compensation.

The timings of this proposed process may have to be reconsidered in the light of the High Court’s recent decision in CIPT (AIPT) Limited v Transport For London and others ("CIPT").

The case concerned a major central London redevelopment. Commencement of the proposed development was contingent upon the developers conditional pre-emption right over the site becoming unconditional and the developer then choosing to exercise that pre-emption right. In reality, several years would need to pass before the pre-emption became unconditional, and development could not begin until at least 2017.

After several years of negotiation, CIPT issued Court proceedings last year seeking a declaration that it enjoyed rights of light over the development site which should not be interfered with by the defendants, and an injunction to stop the proposed development.

The land owners’ and prospective developer’s applied for summary judgment on the basis that the claim was misconceived and premature, and the application was granted, effectively striking out the claim.

In the circumstances where a planning application had only been made in October 2011, and development could not commence until 2017, and then only at the developer’s sole discretion, it could not be said that there was any immediate threat of any damage to CIPT’s rights that required the intervention of the court.

This case highlights the difficulties in seeking to apply a one size fits all approach to this complex area of law. The production of the Protocol demonstrates the clear appetite for both developers and land owners for clarity.

The spectre of Heaney (the 2010 case of HKRUK II (CHC) Ltd v Marcus Alexander Heaney, in which it was ordered that two floors of a redeveloped office block should be pulled down) continues to haunt developers, fearing that an adjoining owner may seek an injunction to stop their development at any time. With less justification, property owners wanting to protect rights of light fear that failing to act early to stop a development that may infringe their rights may prejudice their rights to seek an injunction later on, and leave them with a claim for damages only.

Whilst the decision could be seen as common sense (much can happen in the planning process and over the passage of five years), it does give the BPF cause to revisit the Protocol.

Pegging the timings for the Protocol at the pre-planning application stage may not be ideal. The planning application process may take many months, be instituted well before earth is due to be turned and result in the entire development being revised.

This case demonstrates that early litigation will not be looked upon favourably by the Courts. It may therefore be preferable for the Protocol process to kick in at a pre-construction, rather than a pre-planning stage.

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