Scott v Aimiuwu (unreported) is the first Court decision since the Supreme Court's judgment in Coventry v Lawrence (see our Real Estate Bulletin, April 2014) examining whether the Court should grant an injunction preventing development or order damages in lieu of injunction in relation to a rights to light claim.
The grant of an injunction is a discretionary remedy and until the relatively recent Supreme Court's decision in Coventry v Lawrence the position on whether damages should be awarded instead of an injunction was uncertain but had moved somewhat against developers. The test was based on a 19th Century decision (Shelfer test) which established that damages rather than an injunction should only be granted in exceptional circumstances where:
- The injury to the claimant's right is small
- The injury is capable of being estimated in money
- The injury can be adequately compensated for by a small payment
- It would be oppressive to the defendant to grant an injunction
At the end of last year, the Supreme Court held in Coventry v Lawrence that the above test should no longer apply. Instead the Court should consider the facts of each case, apply judicial discretion and not award an injunction as of right. It should look to whether the public interests outweigh the breach of the landowner's right and whether the grant of an injunction would be more prejudicial to the developer or others including members of the public who might benefit from the development. The Supreme Court's decision has been regarded as good news for developers. Importantly, the Judge's application of these principles in Scott v Aimiuwu will provide developers with further comfort.
This was a private residential claim. The Aimiuwus had obtained planning permission to extend their home. Although there were discussions between them and their neighbours, the Scotts, about the interference with rights to light to the Scotts' house, they proceeded with the construction without resolving matters. It was not until the works were almost complete that the Scotts applied for an injunction seeking a cut back of the extension. Experts agreed that the interference was actionable, however, it only affected secondary accommodation (a garage, utility room and bathroom). In turn the Aimiuwus argued that the Scotts were barred from taking action on the ground that the discussions between the parties had created an estoppel.
The Judge rejected the estoppel argument, but refused to grant an injunction and awarded damages to the Claimants instead. The Judge accepted that the infringement was actionable but noted that it only affected secondary accommodation. Having applied the Shelfer test in the context of Coventry v Lawrence, the Judge considered that in the circumstances it would be oppressive to grant an injunction.
The decision is also interesting as far as the calculation of damages is concerned. The Judge considered the diminution in value caused by the extension and found that this figure (GBP 11,500) was too low. On the other hand, he found that damages based on a share (in this case a third) of the Aimiuwus' profits (GBP 65,000) would be too high. Instead, the Judge awarded damages based on what he considered would be a reasonable settlement (or release fee) figure if the parties had negotiated a settlement at an early stage.
This pragmatic approach will be welcomed by developers who will be pleased to see that the Courts will look at all the circumstances of the claim and are now prepared to depart from a stricter approach when considering whether to grant an injunction. This approach is in line with the Law Commission's proposed changes to rights to light law, which would prevent neighbours from seeking an injunction if they have not served a statutory notice of their intention to do so at an early stage (see our Real Estate Bulletins, June 2013 and Spring 2015). Each case will be different depending on the circumstances but large commercial developers will also be very pleased that they will not necessarily have to share a large part of their profits.
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