Heaney settled - developers in a dark place

The news that the Heaney rights of light appeal has been settled has "left developers in a dark place" Bryan Johnston of Clifford Chance has warned.

The rumours have been circulating for the past week but it appears now that developer Highcross has abandoned its appeal against an order requiring it to demolish part of central Leeds office block Toronto Square after it was found to have infringed the rights of light of a neighbouring property owner.

Last September, HH Judge Langan QC, sitting at the Leeds District Registry, awarded Marcus Heaney a mandatory injunction, rather than damages, for the "actionable interference" with rights of light to the former Yorkshire Penny Bank building in Infirmary Street.

On hearing the most recent rumours Johnston said "News of a settlement of the Heaney case will not be welcomed by developers and will only serve to increase uncertainty and cost.

"Whether the Court of Appeal would have overturned the first instance decision is a moot point. The view of the Court of Appeal however would have at least provided greater judicial clarity. In view of the current uncertainty, more disputes will arise and I therefore think that it is likely that the Court of Appeal will have the opportunity to consider rights of light in the not too distant future.

"Adjoining owners will continue to be emboldened by Heaney, using it to support a claim for ransom-based damages that may be disproportionate to their actual loss of light.

"Developers can expect to have to negotiate earlier and pay more in order to secure releases to permit their developments. Lenders and JV partners may also be more cautious and require greater due diligence and certainty in view of the increased risk of injunction.

"Developers can attempt to insure against the risk, though the perception of risk has increased since the first instance decision in Heaney and this has a knock-on effect on premiums and actual insurability of any scheme.

"Finally, local authorities are increasingly likely to be called upon to exercise, or at least threaten to exercise their powers under section 237 of the Town and Country Planning Act 1990 in order to facilitate development and limit compensation.

"The Heaney decision and subsequent settlement has left developers in a dark place. It may well be time to consider reform of the prescriptive rights of light regime," he said.

Photo by Dave Wild via flickr.