The light stuff

A recent rights to light case demonstrated how property rights are treated differently than contractual rights. John McGhee QC reports

The law concerning easements of light is a particularly arcane subject. It is still shaped by 19th century cases, by the ancient doctrine of lost modern grant, and by the Prescription Act 1832.

Whether a reduction in light amounts to an actionable interference is still determined by a method proposed by Percy Waldram in the 1920s, which is increasingly the subject of debate. A law that was designed to give the owner of a house the right to object when his neighbour built so that he could no longer read comfortably in his front room has more recently been adopted by owners of commercial buildings looking to obtain six-figure sums from a developer that wants to build a skyscraper.

For the most part the developer and the adjoining owner agree terms for compensation advised by the small specialist band of rights of light surveyors. The adjoining owner will usually claim, at least in open ­correspondence, that it is entitled to ­injunctive relief, that it is not interested in money at all, and that it just wants to retain a well-lit building.
The without-prejudice correspondence between the parties usually betrays a ­completely different position: the adjoining owner is only too willing to accept compensation but is holding out for a large sum and dangling the threat of injunctive relief in order to improve its negotiating position.

Just occasionally the negotiations fail and the adjoining owner seeks an injunction to prevent the offending building from being erected or to require it to be pulled down.
The recent decision of Judge Langan QC in HKRUK II (CHC) Ltd v Heaney (2010) was such a case. For those involved in rights to light law the case caused much ­excitement.

ut from a legal point of view the decision was unexceptional. The ­developer conceded that the development had caused a substantial interference with the adjoining owner’s light and the court found that it was done deliberately knowing of the infringement and with a view to ­profit. It thus should have caused little surprise when an injunction was duly awarded.

Heaney is, however, a useful reminder of the differing attitude of the courts to ­awarding injunctive relief depending on the nature of the right that has been infringed. The adjoining owner’s cause of action in Heaney was for the common law tort of ­nuisance, but the right infringed was a right in respect of real property.

Real property includes not only land and buildings on land, but also rights by way of easements and restrictive covenants that attach to that land. If any of those rights are interfered with, the court treats the matter in precisely the same way as if the defendant had trespassed onto his neighbour’s land. For interference with property rights an injunction is the primary remedy. The courts do sometimes refuse injunctive relief and award damages instead but only if special circumstances are made out.

All this is in marked contrast to the approach of the courts where, for example, a commercial contract is breached. There, as is well known, the courts will confine the claimant to its remedy in damages unless there are special reasons why injunctive relief should be granted. The position is thus precisely the reverse of the position where property rights are interfered with. This makes eminent sense where an owner occupier of residential property seeks relief.

But what about the position where ­property is held as an investment for its capital appreciation or income return? Why are damages not an adequate remedy for an insurance company that holds an interest in a remote reversion to commercial property as part of an investment portfolio?

One argument often advanced is that property rights are different. By their very nature they are protected against the whole world primarily by way of injunction. If the courts did not protect them in this way it would in effect be sanctioning the ­compulsory acquisition of property by one private individual from another.

This argument, although it has a ­uperficial appeal, does not explain why the court does sometimes confine a claimant to damages where its property rights are intervened. Nor does it really explain why property rights are more deserving of ­protection than contractual rights.

A more sophisticated analysis would look beyond the forms of action and the rights that they protect to the interests of those affected by the conduct in question. Whether the courts will be willing and able to chart a principled way through so as to distinguish the position of the insurance company and the householder without ­hiding behind the smokescreen of equitable discretion remains to be seen.

John McGhee QC is a barrister at ­Maitland Chambers