Summary

The court set out the principles to be applied when assessing damages for the loss of the ability to prevent an infringement of a right to light.

Facts

The court assessed damages in lieu of an injunction. The court had previously found that the defendant company (F) was liable to the claimant company (T) for infringing a right to light to two windows that illuminated some stairs leading to the basement of T's building. The court had, however, declined to grant an injunction and had left over the question of assessment of damages in lieu of an injunction. There was no dispute between the parties that the correct measure of damages was the greater of (i) damages for loss of amenity to the dominant owner; and (ii) damages to compensate for loss of the ability to obtain an injunction. Expert evidence was submitted as to the appropriate measure of damages due to T.

Held

The following principles applied to the assessment of damages for loss of the ability to prevent an infringement of a right to light at the point just before any infringement took place: (i) the court had to attempt to find what would be a "fair" result of a hypothetical negotiation between the parties; (ii) the context, including the nature and seriousness of the breach, had to be kept in mind; (iii) the right to prevent a development (or part) gave the owner of the right a significant bargaining position; (iv) the owner of the right with such a bargaining position would normally be expected to receive some part of the likely profit from the development (or relevant part); (v) if there was no evidence of the likely size of the profit, the court could do its best by awarding a suitable multiple of the damages for loss of amenity; (vi) if there was evidence of the likely size of the profit, the court should normally award a sum that took into account a fair percentage of the profit; (vii) the size of the award should not in any event be so large that the development (or relevant part) would not have taken place had such a sum been payable; and (viii) after arriving at a figure which took into consideration all the above and any other relevant factors, the court needed to consider whether " the deal felt right". In the instant case, the parties as hypothetical reasonable commercial people would take the half-way point between the two figures given by the expert valuer for loss based on the rival right to light experts reports, namely GBP 174,500. They would then agree prima facie at a one-third split of that profit. However, taking into account the context of the relatively modest nature of the infringement of the right in the present case and the need not to have a sum that would put F off the relevant part of a future development in that context, that sum would be reduced to GBP 50,000 as a "fair" result. That sum was very substantially more than any sum available for the loss of amenity, but in terms of the price of avoiding an injunction for infringing F's rights it "felt right", and would accordingly be the sum awarded to T.

Damages assessed