HKRUK II (CHC) Ltd v Heaney
| Jurisdiction | England & Wales |
| Judgment Date | 03 September 2010 |
| Neutral Citation | [2010] EWHC 2245 (Ch) |
| Docket Number | Claim No 9LS70819 |
| Court | Chancery Division |
| Date | 03 September 2010 |
[2010] EWHC 2245 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
LEEDS DISTRICT REGISTRY
Claim No 9LS70819
His Honour Judge Langan QC.
Introduction
This action is concerned with rights of light. Unusually, the claimant is the servient, not the dominant, owner. The claimant brought the proceedings with a view to obtaining declarations as to its freedom from liability to the defendant, while the substantive relief in the form of an injunction or damages is asked for in the counterclaim.
The following matters are not in dispute. (1) An easement of light exists in favour of windows in the defendant's building, the former head office of the Yorkshire Penny Bank. (2) The claimant, by the addition of two floors to its nearby building, formerly called Block A Cloth Hall Court and now called Toronto Square, has committed an actionable interference with the access of light to the defendant's building. (3) The defendant is entitled to a remedy in respect of that interference. As to (3), until a late stage in the proceedings the claimant maintained that the defendant's conduct had been such as to debar him from obtaining any relief from the court, but that contention was not pursued in closing submissions.
The litigation has thus become focused on the question of remedy. There are two areas in which the court has to come to a decision. (1) The defendant seeks a mandatory injunction requiring the claimant to cut back the offending works. The claimant says that the appropriate remedy is an award of damages, and the matters which would have been raised in support of the 'no remedy' case remain pertinent to this question of injunction or damages. (2) If there is to be an award of damages, there is a dispute as to how the damages are to be quantified. These two issues are inter-related, because the amount of any damages which might be awarded is one of the considerations which will be relevant to the question whether an injunction should be granted.
The leading text book on the subject is Bickford Smith and Francis, Rights of Light The Modern Law (2 nd ed., 2007). I have been fortunate to have had the assistance of the co-authors as counsel in this case, Mr Francis for the claimant and Mr Bickford Smith for the defendant. I am grateful to them both for their exceptionally helpful written and oral submissions.
Narrative
The buildings with which I am concerned are situated in Infirmary Street, which is in the centre of Leeds. They are familiar to many people, myself included, who commute to work by bus. As one stands at the bus stops on the north side of Infirmary Street, one can see on the other side of the street (1) to one's right, with a frontage to Infirmary Street, the old bank building; (2) to one's left, the claimant's building; and (3) between the two properties, Toronto Street, a private road and pavement with (outside the claimant's building) four mature trees. The light which this case is concerned comes into windows on the left hand elevation of the bank building which faces the claimant's building across Toronto Street.
The defendant purchased the bank building, the address of which is 2 Infirmary Street, in November 2003. In his witness statement, the defendant described his property as "a striking Victorian building… grade II listed… featuring impressive stone carvings and window apertures along with a very striking turret." The defendant went on to say:
When I purchased the building it was part let as offices with a vacant banking hall and [was] in need of restoration. Over the years I have spent approximately 3 million pounds restoring the building to its former glory, re-instating the original detail, re-letting the impressive revamped offices, and created a conference and banqueting venue, with what will be residential accommodation on the top floor.
2 Infirmary Street contains five floors of mixed use accommodation. The total net internal areas of the building are approximately 32,000 square feet. There are various office tenants with a range of lease terms, with the predominant occupier being Aspire, which is my conference and banqueting company.
Cloth Hall Court was constructed as a complex of four office buildings
in or about the year 1980. The building with which I am concerned was known as Block A. It was constructed in an L-shape, with the long arm of the L facing on to Infirmary Street and the short arm facing on to Toronto Street, opposite the side elevation of the defendant's building. As it faced the defendant's building, Block A comprised a ground floor and five upper floors, with the fifth and top floor having a mansard roof.
In March 2007 the then owners of Block A, Cloth Hall Realty Limited ('CHRL'), obtained planning permission from Leeds City Council for the redevelopment of Block A. The main elements of the redevelopment were to be: (1) the refurbishment of the accommodation up to fourth floor level; (2) the demolition and reconstruction of the fifth floor; (3) the construction of sixth and seventh floors; (4) the addition of an extension, to be integrated with the remainder of the building, within the elbow of the L, and running from ground to seventh floor levels.
Highcross Strategic Advisers Limited ('HSAL') is a company which, on behalf of a fund known as Highcross Fund 2, concentrates its interest on the industrial and office sectors of the property market throughout the United Kingdom. HSAL, according to the evidence of Mr Christopher Mills, the development director, seeks "to purchase commercial properties that have the potential to offer significant added value through active management or development." The claimant is a Jersey-registered company, which is part of Highcross Fund 2, and was the vehicle used for the purchase of Block A. That property is the claimant's only asset.
In May 2007, CBRE, a firm of commercial property agents based in Leeds, drew Cloth Hall Court to the attention of HSAL as a potential investment. It seems that the idea must have been immediately attractive to HSAL, because due diligence got under way quickly, and solicitors were instructed as early as 7 June 2007. At first, the proposal was that both Block A and Block C should be acquired, but at some stage during the second part of 2007 Block C dropped out of the picture and HSAL's interest was thereafter limited to Block A.
Mr David Parratt is a well-known surveyor who specialises in light cases. On 28 September 2007 he wrote a report on "Right of Light Problems relating to Building A." The report was written on the instructions of GSD Limited, who were acting as agents for CHRL but I think that it must have come fairly quickly to the attention of HSAL. Mr Parratt has, in fact, acted as an expert witness for the claimant in this action. His conclusions in his report of 28 September 2007 were:
(1) the redevelopment of Block A would not cause any actionable interference with the access of light to the Old Post Office, a side elevation of which is on Infirmary Street, but the owners of the building should be formally notified of the proposals so that, if they had a different view, they could put it forward; (2) he gave the same advice in regard to Block B, Cloth Hall Court; (3) the Yorkshire Penny Bank building would suffer an actionable loss of light, and the owner should be approached with a view to agreeing either that there would be no claim or to a calculation of the losses.
On 1 October 2007 Mr Martin Dalley of GSD Limited wrote to the defendant.
Block A Cloth Hall Court, Infirmary Street, Leeds
Additional two Storeys and Refurbishment Work
I act on behalf of Cloth Hall Realty, the owners of the above building and I understand you own the Yorkshire Bank Chambers opposite. Having received planning permission for the extension and refurbishment of the building, my clients are currently finalising tender costs and are hoping to start work in the near future. In preparation for start of the re-development, my clients have asked that I write to you to consult over any potential rights of light issues.
I enclose a copy of the planning documentation for which we have received planning permission, which shows you artistic images of the re-development together with floor plans, sections and elevations. I believe this should give you an understanding of what is proposed by Cloth Hall Realty Limited.
There may not necessarily be any effect on light levels, but my clients are keen to raise this matter at an early stage and wish to deal with any claim in a reasonable manner.
If you feel that the proposed alterations may cause a significant loss of daylight, please could you let us have drawings which show floor plans and (if you have them) sections and the elevation which faces Cloth Hall Court. In due course it may also be necessary for my client's right to light surveyor to enter the premises to take some measurements and I would be grateful if you could confirm whether this would be possible.
If there are any matters you wish to discuss please contact me.
The defendant passed this letter to Mr Raymond Rowan, a commercial property consultant who had acted for the defendant for some years.
On 10 December 2007 the Board of the claimant approved a proposal to purchase Block A from CHRL for £18,750,000. The price originally agreed on a subject to contract basis had been £350,000 more than this sum, but had been negotiated downwards in order to allow for rights of light claims.
Contracts were exchanged between CHRL and the claimant on 11 December 2007. The purchase was completed on 20 December 2007.
Between exchange of contracts and completion, on 13 December 2007, Mr Rowan replied to Mr Dalley's letter of 1 October 2007. I should say that there had been some informal contact between...
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