Bad form by developer that isn’t let off the hook by Court of Appeal
Developers that act in a high-handed manner, with little regard to another party’s rights, were sent a sharp reminder (in Ottercroft Ltd v Scandia Care Ltd) of the court’s discretion to award damages in the post Coventry v Lawrence world (the first rights to light case to reach the Court of Appeal since that case in 2014).
In 2014 the Supreme Court criticised the courts following the four-stage test, set out in Shelfer v City of London Electric Lighting co, to decide whether to grant damages. Shelfer wasn’t put on a shelf to collect dust in legal archives (metaphorically speaking), but a more flexible approach was advocated.
Developers welcomed the decision. It was thought the court would be more likely to grant damages and consequently this would prevent developers being held to ransom over rights to light issues.
In Ottercroft a developer built a fire escape which infringed a neighbour’s rights to light. The infringement was valued at less than 20% of the cost of moving the staircase. In years gone by this would seem a clear case for damages. The infringement of the right appeared small, could be compensated with a payment of money and an injunction would seem oppressive.
The developer, however, acted in a high-handed manner by building in the knowledge rights to light would be infringed and by building in breach of an undertaking.
The County Court granted an injunction which was upheld by the Court of Appeal.
The key point about this decision is that the Court of Appeal accepted that the County Court had a wide discretion as to whether to grant an injunction and could place a great deal of emphasis on a party’s conduct.
This doesn’t herald a swing towards injunctions being granted over damages but is a reminder to developers that their conduct will be scrutinised in court. The more flexible approach, advocated by the Supreme Court, can still assist developers but only if serious thought is given as to how to deal with possible infringements of a party’s rights at an early stage and throughout a development.