The case of HKRUK II (CHC) Limited v- Heaney [2010] PLS CS 238 demonstrates that developers should take care to resolve rights of light issues at the outset of a development or risk paying the ultimate price.
HKRUK II (CHC) Limited (the "Developer") purchased a commercial building with planning for two extra floors. Adjacent to the site was a listed building, owned by Heaney, whose rights of light were likely to be interfered with by the development. The Developer knew this and had negotiated a reduction in the purchase price to cover any such claims. The parties entered negotiations on the issue but reached no settlement. The Developer commenced works in June 2008 and finished in July 2009. In August 2009 the Developer sought a ruling that Heaney's loss could be compensated by a small award of damages. Heaney counter-claimed for an injunction requiring demolition, which the Developer argued was oppressive.
Taking into consideration the character of Heaney's building, his investment in its upkeep and his commercial usage of it, the Court found that Heaney's rights were not small and he could not be adequately compensated in money.
Further, the Developer's conduct was found to be lacking. It had been aware of Heaney's rights but had gone ahead with the works assuming that damages would be adequate compensation. The Court identified that the Developer had not acted inadvertently but with a view to profit and stated that it did not wish to sanction the Developer's action by awarding damages. An injunction requiring demolition was granted in spite of the £2.5million cost to the Developer and the fact that the building was let. The decision is being appealed.
The case should serve as a reminder that rights of light issues should be dealt with effectively prior to the commencement of a development, that it should not be assumed that damages will be adequate compensation and that the parties' conduct will be scrutinised by the Court.
Further reading:
Shelfer -v- City of London Electric Lighting Company (No 1) [1895] 1 Ch 284
Regan -v- Paul Properties DPF No 1 Limited [2006] EWCA Civ 1319
