UK: Shining A Light On Interpretation

Last Updated: 11 December 2012
Article by Emma Humphreys

Rights of light are often an issue for property owners keen to preserve the value of their assets by protecting the right to develop. In the recent case of CGIS City Plaza Shares 1 Limited & Anr v Britel Fund Trustees Limited [2012] EWHC 1594 (Ch),the court was asked to examine the extent to which successors to the original owner of a property were permitted to interfere with light received by the neighbouring property and the operation of rights to light arising a result of coincidence between old and new apertures.

Background facts

The claimants in this case owned a nine storey property, City Plaza on Cannon Street in Birmingham. The property was built between 1987 and 1988 and the original windows were in place by February 1988. One side of City Plaza – containing 69 apertures - faced the defendant's properties at Temple Row on Cannon Street.

In May 2008, the defendant's predecessors-in-title had registered a temporary light obstruction notice against City Plaza under section 2(3)(b) of the Rights of Light Act 1959. A definitive certificate was registered in September 2008. The claimants sought an order to cancel the certificate and a declaration that City Plaza enjoyed a right to light pursuant to the Prescription Act 1832.

The issues

The key issue in the case centred around the language used in a conveyance dated 6 June 1967 made between the Corporation of Birmingham on the one hand and the Governor and Company of the Bank of England on the other. Put shortly, the question was whether the 1967 conveyance gave the owner of the defendant's property the right to build on its land and interfere with the light or air to City Plaza only whilst City Plaza was owned by the Corporation, or whether this protection continued irrespective of the identity of the owner of City Plaza. In the event that the right only endured whilst City Plaza was owned by the Corporation, the defendant accepted that 62 of the 69 apertures on the relevant façade (plus some other minor apertures) would have acquired rights to light by prescription due to long use.

Another important issue in the case related to the remaining windows within the façade of City Plaza facing the defendant's property. Five of these windows had been altered in around 2006 and the defendant argued that these alterations meant that the windows did not enjoy any right to light. The parties were agreed that a finding on the first issue (i.e. relating to the construction of the 1967 conveyance) in the defendant's favour meant that the second issue would become irrelevant, but the judge was asked by both parties to express a view on the issue in any event.

History of ownership

At the time of the 1967 conveyance, part of the defendant's site was already owned by the Bank. The remainder of the defendant's property affected by this dispute was acquired through a purchase from the Corporation as documented by the 1967 conveyance. At that time, the Corporation retained its freehold interest in the land on which part of City Plaza now stands.

Clause 1 of the 1967 conveyance granted rights to the Bank, including the right for the Bank and its successors in title to build to any height on its land "notwithstanding that any such building may interfere with light or air now or any time hereinafter enjoyed by the buildings for the time being erected on any adjoining adjacent or neighbouring land owned by or vested in the Corporation."

There was then a proviso to clause 1, which reserved certain rights to the Corporation. These included certain rights of support and the right to build without regard to any interference with light or air in respect of the buildings on the land conveyed. The clause added that any light or air enjoyed by buildings on the conveyed land would be "deemed to be enjoyed by the leave or licence of the Corporation or their Successors in Title as the case may be".

In order to assess the buildings potentially affected by the 1967 conveyance, the court heard historical evidence as to the ownership of land by the Corporation as at 6 June 1967. This satisfied the court that the Corporation had owned land at that time – in addition to the City Plaza site – which could properly be described as "adjoining adjacent or neighbouring land" as referred to in the 1967 conveyance. The deputy judge opined that the reference to "neighbouring" was capable of extending to land on the other side of the street. As a whole, he felt that the phrase was intended to mean any other land sufficiently proximate to the defendant's property which was capable of having its enjoyment of light interfered with by a building erected on the defendant's land.

It was noted that the relevant part of the land which now forms part of City Plaza had subsequently been sold by the Corporation, although there was no detailed evidence abut this. However, the freehold interest had been transferred to a predecessor-in-title of the claimant by the time when construction started on City Plaza.

Application of prescription under the 1832 Act

The entitlement to acquire a right to light by prescription is set out in section 3 of the 1832 Act, which provides as follows:

"When the access and use of light to and for any dwelling house, workshop, or other building shall have been actually enjoyed therewith for the full period of twenty years without interruption, the right thereto shall be deemed absolute and indefeasible, any local usage or custom to the contrary notwithstanding, unless it shall appear that the same was enjoyed by some consent or agreement expressly made or given for that purpose by deed of writing."

The effect of section 3 is that a right to light is acquired for the benefit of apertures in a building (in this case, City Plaza) where the light is enjoyed continuously and without interruption for a period of at least 20 years. However, any claim to a right to light acquired in these circumstances will be defeated where it is shown that the light has been enjoyed as a result of an express consent or agreement in writing.

Absence of "consent or agreement"

In this case, it was clear that the apertures on the relevant façade of City Plaza had enjoyed light for a sufficiently long period prior to the registration of the light obstruction notice so as to give rise to a prescriptive right to light. However, the court needed to examine the terms of clause 1 of the 1967 conveyance in order to establish whether they constituted a "consent or agreement" by which light was enjoyed by City Plaza. Crucially, it also needed to assess whether this consent/agreement still applied once City Plaza was no longer owned by the Corporation.

The court examined how previous cases had approached the construction of the proviso to section 3, with particular reference to the decision of the Court of Appeal in RHJ Ltd v FT Patten (Holdings) Ltd & Anr [2008] EWCA Civ 151. It also noted the following helpful passage from the judgment of Lightman J in Marlborough (West End) Ltd v Wills Head & Eve(Unreported 20 December 1996):

"...provisions designed to authorise the servient owner at a future date to carry out works or build as he pleases unrestricted by any easement of light in favour of the dominant land and notwithstanding any resultant injury to the light enjoyed...may be construed as consents or agreements permitting the enjoyment of light during the interim period and accordingly (as provided in section 3) preclude any easement arising by prescription under the Act."

The examination of case-law confirmed that clause 1 of the 1967 conveyance could be construed as a consent permitting the enjoyment of light so as to preclude any right to light arising by prescription for the benefit of City Plaza – provided that the clause authorised the owner of the defendant's property to build as it pleased at a future date, unrestricted by any easement of light in favour of City Plaza and notwithstanding any resulting injury to the light enjoyed.

The claimants contended that clause 1 should not be construed in this way because the authority to build despite any interference with light was only granted for so long as City Plaza was owned by the Corporation. In short, they considered that the transfer of the City Plaza site away from the ownership of the Corporation meant that any interference with light was no longer permitted by the 1967 conveyance from that point onwards.

Interpretation of the 1967 conveyance

The court agreed with the defendant that clause 1 of the conveyance did not just grant rights to the Bank; it also contained a promise by the Corporation that it would take no steps to assert a prescriptive right to light (in favour of its property including City Plaza) against the land now constituting the defendant's property. The court agreed that the substance of this obligation was essentially a restrictive – rather than a positive – covenant and held that this was a covenant relating to the land of the Corporation within the meaning of section 79(1) of the Law of Property Act 1925. However, whilst the defendant argued that this led to a presumption that the covenant should therefore extend to the Corporation's successors-in-title, the deputy judge highlighted the fact that this operation of section 79(1) only applies "unless a contrary intention is expressed" and that such a contrary intention may be found even without any explicit expression of such. The deputy judge therefore concluded that section 79(1) added little of substance to the main issue of whether clause 1 was intended to be personal to the Corporation.

The claimants argued that any intention for the proviso to section 3 to apply so as to prevent a prescriptive right to light from being acquired would have been expressly stated within the relevant agreement. The deputy judge noted the difference in wording between the different parts of clause 1 of the 1967 conveyance – in particular the reference within the reservation of rights to the Corporation to light being enjoyed by the conveyed land with the "leave or licence of the Corporation". However, he did not consider this to have the significance attributed to it by the claimants and pointed out that the wording within clause 1 which he was examining was also concerned with making provision for at least some application of the proviso to section 3 – even if the consent or agreement was limited to the duration of the Corporation's ownership. It was noted that there was no other obvious explanation as to why an authority to build in the future despite interference with light was introduced into the clause.

It was clear to the court that the authority to build granted to the Bank and its successors in title by clause 1 was intended to relate to the enjoyment of light by the apertures on identified buildings. The options for identifying these buildings could either be based on: (i) whether the building is or is not currently in the Corporation's ownership; or (ii) whether the adjoining, adjacent or neighbouring land on which the relevant building is erected was owned by or vested in the Corporation at the time of the 1967 conveyance. The deputy judge considered it "more probable" that clause 1 of the conveyance intended to identify the buildings concerned by reference to their physical status or location rather than by reference to their ownership from time to time.

The deputy judge also gave some significance to the location of the phrase "for the time being" within clause 1. He felt that it was used to qualify the word "buildings", rather than the ownership of the land. Otherwise, the phrase should have been moved so as to be closer to the reference to the ownership of the Corporation, i.e. "notwithstanding that any such building may interfere with light or air now or at any time hereinafter enjoyed by the buildings for the time being erected on any adjoining adjacent or neighbouring land owned by or vested in the Corporation." The deputy judge believed that this view was supported by the fact that the parties at the time had probably considered it appropriate for a purchaser in the Bank's position to acquire the freedom to build to the maximum extent available, i.e. as against all of the Corporation's property in the vicinity.

Business common sense?

Whilst the deputy judge accepted the claimant's submission that commercial construction should not override the clear language of a document, he noted that – where words used are capable of having more than one meaning – the court should follow the guidance given in Rainy Sky SA v Kookmin Bank [2011] UKSC 50. This involves consideration of all of the relevant background circumstances in order to ascertain the parties' meaning, but permits the court to "prefer the construction which is consistent with business common sense" where there is more than one option for interpretation.

In considering whether his findings met the test of business common sense, the deputy judge considered the effects of the claimants' proposed interpretation of clause 1. He noted that the claimants' construction offered the attraction of certainty, i.e. by raising only the need to check the current ownership of City Plaza rather than the need to undertake a historic investigation of title. However, the court was not persuaded by this as it would mean that land subsequently coming into the Corporation's ownership would be caught by clause 1. The deputy judge felt that any such interpretation would be "surprising" and would therefore require a clearly expressed intention.

It was also noted that the claimants' interpretation meant that the prescription period would start to run from an uncertain point in the future when the ownership of City Plaza was transferred away from the Corporation. The deputy judge could see no reason for the original parties to contract for such uncertainty here and said that he would have expected clearer language to have been used to convey any such intention.

In conclusion, the judge felt that the claimants' approach relied too much on comparing wording within the 1967 conveyance and gave insufficient regard to the context in which the wording was used. He therefore held that the right to build on the defendant's property despite any interference with light was not limited to a right against the Corporation alone. This meant that City Plaza's enjoyment of light over the defendant's property continued as a result of the "consent or agreement" granted by the 1967 conveyance, even though City Plaza was no longer owned by the Corporation. Accordingly, the proviso to section 3 was engaged so as to defeat the claimants' claim to a right of light acquired by prescription.

Coincidence of the altered windows

In case his findings regarding the interpretation of the 1967 conveyance were incorrect, the deputy judge also delivered his views regarding the five windows within the façade of City Plaza facing the defendant's property which had been altered in around 2006 (before the original windows in their position could have acquired any right to light by prescription).

The parties' experts appeared to agree that the light received and enjoyed through each of the new windows included some of the same light which was received and enjoyed through the old windows. However, the defendant submitted that the windows could not have acquired rights to light on the basis that the circumstances surrounding the alterations indicated an intention to abandon the ancient light. The claimants argued that no question of abandonment should arise if they were able to satisfy section 3 by proving the use of the light for the duration of the prescription period.

On reviewing the case law, the deputy judge noted that the test was "identity of light, and not identity of aperture". He therefore rejected the defendant's suggestion that the 20 year prescription period should have started again when the new windows were installed. He also disagreed that there should be any distinction between alterations made before the expiry of the 20 year period and alterations made after that time. Accordingly, he confirmed that a right to light would have been acquired by prescription where there is coincidence between the light enjoyed through the old and the new windows. Although the deputy judge noted that the extent of this right was subject to the extent of the coincidence within a particular new aperture, he considered that the claimants had proved sufficient coincidence here between the old and new windows.

Lessons for the future?

It is tempting to regard this case as one which deals with the arcane law of light only. But there are lessons to be drawn from it which are highly relevant to all developers and property owners, as well their advisers. Key lessons include:

  • Always consider title entries and the documents behind them with great care.
  • In rights of light matters, technical and complex law may be crucial to the right to develop, or to stop it. So take specialist advice at the first stage of any consideration of the rights and obligations between neighbouring property owners.
  • Recent cases such as Rainy Sky SA v Kookmin Bank [2011] 1 WLR 2900show the importance of the application of a commonsense and business-orientated approach when construing documents. But never ignore the words and their context in the search of what the reasonable person with all the relevant background knowledge would have understood the language used to mean.
  • When looking at "standard" or "commonplace" terms in documents, bear in mind what was said by Sir Stephen Sedley in Rees v Peters [2011] 2 P&CR 18:-

    "The present case offers a good illustration of why, despite the usefulness of standard phraseology in conveyancing, the instrument which contains it must still be read and understood as a unique text directed to a specific transaction with its own parties and purposes."
  • Finally, as to the coincidence issue, always ensure that records of buildings are kept by management surveyors or agents, especially prior to the alteration or demolition of such buildings. This case is believed to be the first reported one on coincidence for over 80 years since News of the World Ltd v Allen Fairhead & Sons Ltd. [1931] 2 Ch 402.What both cases show is the need for detailed evidence when coincidence is being asserted by the dominant owner.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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