How valuable is a right of light? In the first right of light case to come before the Court of Appeal in more than 20 years, it was decided that interference with a right to light could not be compensated by a monetary payment. Instead, an injunction was the appropriate remedy.
The recent decision of Regan v Paul Properties Ltd involved the development of a new five-storey building in Brighton, the construction of which would block the light to the living room of a first and second floor maisonette owned by Mr Regan. The maisonette enjoyed an easement granting a right to light. The top floor of the development was to be a penthouse flat which, when fully constructed, would reduce Mr Regan’s adequate light to his living room to well below the conventional minimum and significantly less than the light he had previously enjoyed.
Mr Regan sought an injunction requiring the developer, Paul Properties Ltd, to take back the skyline of the topstorey penthouse flat so as to restore an adequate amount of light. The effect of the injunction would be to reduce marketability of the penthouse from £470,000 to nearer £300,000.
In the first instance the High Court judge agreed that the construction of the new building amounted to an unreasonable interference with the right to light, but refused Mr Regan an injunction. Instead the remedy was to compensate Mr Regan with a monetary payment. Mr Regan appealed the decision to the Court of Appeal.
In September 2006, the Court of Appeal overturned the High Court decision and granted a mandatory injunction preventing the developer from completing construction of the building. In reaching its decision, the Court of Appeal was unconvinced by the approach of the High Court. It found that the burden of proof had been placed on Mr Regan to show why he should be awarded an injunction and not damages; in doing so the High Court trial judge had erred in law. The proper remedy was to grant an injunction, which was not considered to be oppressive or inequitable to the developer. Even though Paul Properties would suffer a far greater loss than Mr Regan, it had continued to build despite his protests, which had started five months earlier, even before the building had reached the 5th floor. The developer, it seemed, had taken a “calculated risk”.
Mr Regan’s property was a residential dwelling, which was a key consideration for the Court of Appeal in reaching its decision. One of the factors discussed in the judgment was the apparent lack of privacy Mr Regan would be subject to if the light available into the room was reduced. The case raises the question as to whether or not the outcome would have been different had the property involved been a commercial rather than a residential premises. This is a question which remains to be answered although it is worth noting the recent decision of Tamares (Vincent Square) Ltd v Fairpoint Properties (Vincent Square) Ltd. In that case, the defendant’s redevelopment of an adjoining building infringed the claimant’s right to light and damages of £50,000 were awarded. The building was an office and the area affected was an unoccupied stairwell. It is also worth noting that the Vincent Square case moves away from the traditional route of assessing damages. Given that the owner of a right to light would normally be expected to receive some part of the likely profit from the development in question, it was said that the court should award a sum that took into account a fair percentage of that profit. On that basis the court awarded a larger percentage of profit than has been usual in such cases, so even if an injunction is not granted, damages are likely to be considerably more.
The Regan case is a landmark decision with far-reaching consequences. It will be greeted with dismay by developers and with delight by adjoining landowners. The Court of Appeal has overturned the perceived wisdom that injunctions are rarely, if ever, granted in rights of light cases. Whether or not the law relating to rights of light is ripe for reform has yet to be seen. Until then, however, and in light of this decision, developers would be advised to proceed with caution if their proposed developments might interfere with a neighbouring landowner’s right of light. It is no longer safe to assume that a person with the benefit of a right to light can always be adequately compensated with a financial settlement. An injunction, if granted, will in many cases be disastrous for the developer. It is dangerous to assume that the existence of easements can be bought off by negotiation. It is equally unwise to assume that the courts will invariably look sympathetically at a developer who wishes to proceed with a development despite an interference with easements, just because the developer has committed a substantial amount of money to a development.
It remains the case that if you are an owner or occupier of land, you must act promptly as soon as you become aware that there may be an interference with your right to light. Any delay will reduce your chances of obtaining an injunction and increase the chance that you will only be entitled to monetary compensation.