No entitlement to interim injunction when claiming a Right to Light

In recent times the issue of claims for a "right to light" (that gives a landowner the right to receive light through defined apertures in buildings) has impacted cityscape development, with insurers less likely to indemnify, build costs increasing as developers factor-in the liabilities and investors re-assessing their appetite for risk – because a court may order a scheme to be cut back or even for an offending building to be demolished.

Parties involved in development in England & Wales should take note of a recent decision, Handstone Investments Limited -v- Abri Group Limited, where the High Court refused an interim injunction to halt development, despite there being acceptance of a right to light and that the build would interfere with the right.

Background

The claimant owned a commercial office block. On adjoining land, the defendant intended to build a 4-storey building containing 33 affordable housing flats. It was agreed that the offices in fact enjoyed a right of light over adjoining land and the build would negatively affect the passage of light to the offices. Compensation was offered by the defendant, however the claimant wanted the build to be cutback to restrict the loss of light.

Eight months into the build, the claimant sought an interim injunction to halt the works, pending determination of its entitlement to a final injunction to cutback the development, instead of an award in damages.

Interim Injunctions

An interim injunction can be granted by a court where it appears "just and convenient" to do so. The test for the court is: Whether there is a serious issue be tried; and, if so, where the balance of convenience lies in granting an interim injunction pending determination of the substantive claim. An applicant is also required to give a cross-undertaking to the defendant demonstrating an ability to pay all liabilities in the event the injunction is held to have been incorrectly granted. In this particular case, the parties agreed that there was a serious issue to be tried and the cross-undertaking in damages was sufficient – meaning the court had to consider the various submissions on the balance of convenience test.

Decision

In refusing an interim injunction to restrain the development, the court said 1) The claimant was not in occupation itself - its interest in the office block was for investment purposes only 2) The claimant had failed to act promptly in bringing the application, only pursuing it at a relatively late stage after works had commenced 3) The development was in the public interest, providing housing to those in need, and 4) There had been no material complaint from the office block tenants except for an objection during planning.

Conclusion

The decision is a reminder to be proactive and take action at an early stage when seeking urgent remedies, because a failure to do so could defeat your entitlement to the remedy. For developers, especially those with projects in the public interest, the decision offers a ray of hope that a court will apply the legal tests rigorously. We will update this blog further following the outcome of the substantive trial.

If you are a developer, investor or commercial landlord dealing with claims for a right to light, or you have any questions about how these issues may impact you or your business, please do not hesitate to get in touch with our Real Estate Disputes team or your usual Brodies contact.