Beaumont Business Centres V Florala Properties Ltd – Update

10 years on from the notorious Highcross v Heaney injunction, the power and protection of right of light has once again been enforced, and developers are reminded not to ignore the risks.

 

The case of Beaumont v Florala has a long and complex history, which began with Beaumont developing and refurbishing its high-end serviced offices, to which Florala had raised right of light concerns. Rather than seeking compensation or changes to the design, Florala attempted to negotiate reciprocal rights, a ‘build and let build’ arrangement. Whilst Beaumont was willing to negotiate and rectify the light claim, they had concerns over the light impact from Florala’s potential development on its newly refurbished offices.

Beaumont completed its development in 2015 and the new offices were leased, which also included an agreement as to how any compensation resulting from a claim against Florala’s development would be split. Later in 2015, Florala obtained planning permission to build a hotel. The right of light analysis in relation to Beaumont’s property was subsequently agreed between the elected surveyors, and £155,000 was offered to Beaumont in order to settle their claim. This was the equivalent of a five times uplift to the book value. Upon requesting to whom the payment was due, Beaumont disclosed the lease that contained the agreement as to how any compensation would be shared. The matter then went quiet for six months.

Contending that Beaumont was only trying to extract money from the development, Florala contended they had no claim and proceeded with the development.

In 2018 Beaumont issued proceedings for an injunction. Florala applied to the courts for a summary judgement, arguing that the application for the injunction had no real chance at success because of the lease arrangement. The High Court dismissed Florala’s application, and at the end of 2015 the development was completed and let on a 15 year lease.

Judge’s Comments

  • The judge reinforced the use of the 50/50 Waldrum method, but also accepted arguments of radiance. The court rejected the use of reflected light, as Beaumont would have no right to have the reflected light maintained.
  • Despite the losses being small, and the fact that the rooms at Beaumont’s property were already poorly lit, the judge contended that the loss did constitute a nuisance as it was perceptible and did have an impact on the building’s rental value.
  • The fact that Beaumont did not object at planning was not significant, as in order to a avoid an injury occurring, Florala only had to have a relatively small cutback which meant that the planning permission would not be undermined.
  • The suggestion that the claimant could install better windows to allow more light to penetrate through was no defence.
  • Given that the cutback necessary was only small, showed that Florala intended to maximise its profits at the expense of Beaumont’s light, which played a factor in considering the conduct of the parties.

During the course of the case, Florala failed to demonstrate that the granting of an injunction would be oppressive. The injunction was therefore awarded to cutback the development.

However, to obtain the order for an injunction against Florala’s tenant, Beaumont would have to join the tenant in proceedings to enable the court to hear the tenant’s evidence. Beaumont therefore accepted damages in lieu of proceeding, to the value of £350,000. The figure was derived from a combination of considering what would have hypothetically been achieved in out of court negotiations, and a profit analysis pertaining to the part of the development that cased an injury.

Conclusions

 This case has once again highlighted that the court is willing to offer protection to neighbouring properties’ right of light, and that they can and will grant injunctions if necessary. It should be noted that with rights of light, the right is first and foremost to the light, and it should not be expected that neighbouring properties will accept compensation.

Florala is however seeking an appeal, so this case may continue to evolve.

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