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
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 08/11/2010.