Don't Make Promises You Cannot Keep: Developer Behaviour In The Spotlight

In Ottercroft Ltd v. Scandia Care Ltd (1) and Rahimain (2), the court of Appeal has upheld a first instance decision to award an injunction against a developer who infringed an adjoining owner's rights of light.

Following the Supreme Court decision in Coventry v. Lawrence, it had been anticipated that the injunction high watermark of HKRUK v. Heaney had been passed and that a more commercial approach to the award of an injunction would be taken by the court. For this reason, Ottercroft is an important decision and a stark reminder as to the importance of developer behaviour.

Background

On the facts, the developer had started works to construct a storeroom and staircase. It failed to serve party wall notices. The adjoining owner issued proceedings to protect its right of light which was infringed by the proposed development. The developer and one of its directors gave undertakings that the adjoining owner's rights would not be infringed. However, the developer continued with its scheme and erected the staircase in breach of the undertakings and in absence of planning permission.

The infringement to light was, however, minor. Despite this, the first instance court awarded an injunction against the developer. This was a cause of some concern as the key Shelfer tests (useful guidelines in the post-Coventry world) were satisfied. The infringement was minor and no significant damage was suffered by the adjoining owner. The infringement could be measured in monetary terms and could be compensated by way of a small monetary payment.

First instance

However, the court awarded the injunction based on developer behaviour. The breach of undertakings in particular fortified the court in reaching the decision that it did. The court was also critical of the defendant as it had not shared information (despite knowing that its scheme impacted on the adjoining owner's light), and had generally acted in a high-handed and bad manner throughout. The court also queried the veracity of the developer's evidence.

Balancing this against the minor infringement, the court awarded the injunction and ordered the removal or alteration of the staircase such that it no longer interfered with the adjoining owner's right of light.

Court of Appeal

The court of Appeal has now upheld this decision. Whilst damages instead of injunction could have easily compensated for the minor infringement, the developer's conduct was sufficient to merit the injunction. The breach of...