Bulletin banner - passion for buildings

"Show me the light"

What are the the implications for local authorities of the recent rights to light case of Highcross v Heaney, asks Nichola Buchanan of Pinsent Masons.

In September 2010, Marcus Heaney was awarded a mandatory injunction after arguing that the right of light to the former Yorkshire Penny Bank building in central Leeds was compromised by the redevelopment of a five-storey building opposite. Highcross, the developer, was subsequently ordered to remove the offending parts of two additional floors at the top of the building. The company appealed but both parties agreed confidential terms of settlement before the appeal was heard.

Developers now have to look at ways around Heaney and local authorities may find themselves being approached increasingly by developers asking them to exercise their powers under section 237 of the Town and Country Planning Act 1990, seeing this as a 'quick fix' to the problem.

Section 237 gives local authorities the ability to extinguish unwanted easements by ‘appropriating’ land that they own, or have an interest in, to make way for developments and has been used recently to extinguish rights to light in schemes at 1 Mitre Square and 20 Fenchurch Street in London.

Using Section 237 to extinguish rights of light removes the risk of an injunction being acquired by adjoining owners for any injury to that right.  Compensation would still need to be paid but this will be calculated by reference to a statutory formula.

Theoretically, the power can be used on any redevelopment as long as the developer and local authority structure the transaction sufficiently carefully. A typical structure would be where the local authority acquires the developer's interest for planning purposes, grants a lease or licence to the developer enabling it to redevelop the site and grants an option under which the developer can recover its original interest on completion of the development. Local authorities will need to ensure that the transaction addresses whether they or the developer pays the statutory compensation that would be payable to the adjoining owners for the loss of light.

While local authorities may wish to assist developers in unlocking stalled developments that have benefits to the economic, social or environmental well being of the surrounding area, they will need to consider carefully whether using their power is appropriate, given the risk of judicial review if it is not used properly. Individual decisions will turn on the facts and circumstances of each particular development but some of the overarching issues that local authorities will need to consider include:

  • Whether the scheme is a proper use of its planning powers;
  • Whether there is a compelling case in the public interest for the use of its powers; and
  • Whether the public interest in the development proceeding outweighs any impact on the human rights of any third party likely to be affected.

Pinsent Masons acted for Heaney in HXRUK (CHC) II Ltd (Highcross) v Marcus Heaney [2010] EWHC 2245 Ch.
Nicola Buchanan is a senior associate with Pinsent Masons’ property litigation team.

For more information, contact Tom Kibblewhite, Associate at Watts Group, on 0161 831 6180.

Watts Pocket Handbook

The Watts Bulletin is the technical companion to the Watts Pocket Handbook, the essential guide to property and construction, as used by professionals since 1983.

Watts Bulletin editor: Trevor Rushton.

To subscribe to Watts Pocket Handbook Online, visit wattshandbook.co.uk.