Senior Pensions Consultant
Out-Law Guide | 25 Oct 2010 | 1:38 pm | 3 min. read
Universities must consider any potential rights of light before carrying out alterations or constructing new buildings on their estates. A recent case serves as a warning that complaints from owners of other buildings are not always easily resolved.
In July 2010, the High Court granted a mandatory injunction requiring a developer to remove about 30% of the top two floors of a newly-developed building, the top floor of which had already been let to a firm of accountants. The case was Hkruk II (CHC) Ltd v Heaney.
The developer, Highcross, took a risk in its proposed development of a five-storey building in central Leeds. Its intention was to redevelop the existing building and increase its height by refurbishing the first to fourth floors, reconstructing and extending the fifth floor and building a new sixth and seventh floor to increase the office accommodation.
This building work commenced in early 2008 and was substantially completed by the end of the year. The seventh floor was occupied by a firm of accountants by the time the legal proceedings took effect.
The development is opposite the former Yorkshire Penny Bank building, belonging to a Marcus Heaney. Constructed in 1894, it was described as an "impressive building" of unique architectural significance.
Mr Heaney protested against the development from the outset. He sought to engage the developer in negotiations to reduce the scheme and so reduce the impact on the light to his building which the development would cause. Negotiations took place over many months but without resolution.
Fearing that Mr Heaney might seek an injunction to stop the development, Highcross issued pre-emptive proceedings in summer 2007. It asked the court to declare that Mr Heaney had, by acquiescence, lost his rights to any remedy, basically by failing to seek an injunction to prevent the works going ahead. Alternatively, it said, the court should rule that the injury was so small that the court should not in any event grant a mandatory injunction.
His Honour Judge Langan QC indicated during the hearing that he was unlikely to accept the argument based on acquiescence. Highcross abandoned that element of its case. The remaining issues were whether a mandatory injunction should be ordered, in effect requiring one third of the upper two floors of the development to be removed; or whether an award of damages would be more appropriate.
Earlier cases had established that damages may be awarded as a substitute for an injunction in limited circumstances. The injury must be small and it must be one that can adequately be compensated by a small payment, according to the case law.
Judge Langan considered that the injury was significant and thus not capable of being compensated for by a small payment. Further, given that the developer had proceeded in full knowledge of Mr Heaney's complaints, the grant of a mandatory injunction would not be oppressive. Indeed, the infringement was committed with a view to profit and the developer was not driven by necessity. Highcross "could have very easily, if somewhat less profitably, built sixth and seventh floors of reduced dimensions," said the judgment.
Judge Langan did not therefore consider that Mr Heaney had to accept damages, saying "it would be wholly wrong for the court effectively to sanction what has been done by compelling the defendant to take monetary compensation which he does not want."
A mandatory injunction requiring removal of the offending part of the development was thus awarded, notwithstanding that the seventh floor of the development had already become tenanted.
The judgment shows that courts may well grant a mandatory injunction provided an injured party has made his protests clear (even if he has not actually issued proceedings), and the developer has chosen to ignore such protests and carry on regardless.
Universities and their development partners should keep in mind that they cannot 'assume' that rights of lights claims can be paid off prior to, or in the course of, a trial. Instead, all potential claims need to be resolved before actually starting work. Otherwise there is a risk that they may be required to alter or even demolish buildings that have just been constructed. Further, when contemplating purchasing new buildings, providing finance for development, or taking leases of new buildings, universities need to ensure that there are no ongoing rights of light disputes which might lead to such a situation.
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Senior Pensions Consultant