Beaumont Business Centres Ltd v Florala Properties Ltd [2018] EWHC 2112 (Ch)

If this Transcript is to be reported or published, there is a requirement to ensure that no reporting restriction will be breached. This is particularly important in relation to any case involving a sexual offence, where the victim is guaranteed lifetime anonymity (Sexual Offences (Amendment) Act 1992), or where an order has been made in relation to a young person.[2018] EWHC 2112 (Ch)Case No PT-2018-000116IN THE HIGH COURT OF JUSTICEBUSINESS & PROPERTY COURTS OF ENGLAND & WALESPROPERTY TRUSTS & PROBATE LIST (ChD)Rolls HouseVenue 7 Rolls BuildingsLondon EC4A 1NLDate Wednesday, 11 July 2018
Before
HIS HONOUR JUDGE HODGE QC
B E T W E E N:
Between
BEAUMONT BUSINESS CENTRES LIMITEDClaimantFLORALA PROPERTIES LIMITEDDefendant
MR GUY FEATHERSTONHAUGH QC (instructed by Dewar Hogan) appeared for Claimant.MR MARK WONNACOTT QC (instructed by Clarke Willmott LLP) appeared for Defendant.

JUDGMENT APPROVED

[1]This is my extemporary judgment on the hearing of an application by the defendant, Florala Properties Limited, for summary judgment on certain issues arising in a claim brought against it by Beaumont Business Centres Limited which was issued on 9th February 2018 under claim number PT-2018-000116.[2]The defendant (and applicant) is represented by Mr Mark Wonnacott QC, instructed by Clarke Willmott LLP. The claimant (and respondent to the application) is represented by Mr Guy Featherstonhaugh QC, instructed by Dewar Hogan. Both leading counsel have produced helpful written skeleton arguments, and both addressed me by way of oral submissions yesterday afternoon, Tuesday 10th July 2018.[3]I can take the background facts from the defendant’s skeleton argument. Until 9th April 2015 Beaumont London LLP, the seller, was the freeholder owner in possession of an office building at 80 and 80A Coleman Street, and 63 and 65 Moorgate, London EC2. On that day Beaumont London LLP granted the claimant, a related entity, a 15 years lease of most of that building at an initial yearly rent of £1.42 million with an option in favour of the claimant to renew the lease for a term of either five, ten or fifteen years from the expiry of the lease. Secondly, Beaumont London LLP sold the freehold in the building, subject to that lease, to Dereif London Coleman Street Sarl, a Luxembourg entity, for £27 million.[4]The lease permitted the use of the property as serviced offices. Schedule 1 granted certain rights to the tenant on a no- exhaustive basis. There was no exclusion of s.62 of the Law of Property Act 1925, and it is common ground that the lease implied a grant of rights to light in favour of the tenant. There is no power in the landlord under the lease to deal with third party rights to the prejudice of the tenant.[5]On the same day as the lease was granted and the building was sold, the seller, the buyer and the tenant entered into a rights of light deed dealing with two situations. The first was what would happen if the defendant, as the owner of a neighbouring freehold property at 34 London Wall and 67/69 and 71 Moorgate, brought a right to light claim complaining about works that had been carried out in 2011 and 2012 which had increased the height of 80 and 80a Coleman Street. Secondly, the deed addressed what would happen if the defendant in turn sought to increase the height of its own building so as to reduce the light reaching the windows of 80 and 80a Coleman Street.[6]In the first of those situations, by clause 4 the seller agreed to indemnify the buyer to the extent that the buyer did not recover under a rights to light insurance policy, and the seller agreed to pay any damages awarded to the defendant on a successful claim, as defined in the deed.[7]In the second of the two situations, the rights to light deed provided that for the next 15 years the seller would retain the benefit of any right to light claims for increases in height up to an agreed height of 11.25 metres, the intention being to enable the seller and the tenant to negotiate with the adjoining owner to agree an adjoining property deed with the adjoining property owner permitting the adjoining property owner to develop its site up to the agreed height and for all relevant parties to enter into the same with any settlement sum belonging to the seller, or as the seller might direct: see Recital G(i) to the deed).[8]To achieve that end, clauses 3.1 to 3.5 attempted to assign the benefit of any such claim back to the seller, but by clauses 3.6 to 3.8 the buyer agreed to make the claim on behalf of the seller if the assignment back was legally ineffective. By clause 3.9, the buyer, the seller, and the claimant (as tenant) all covenanted to enter into any adjoining property deed with the defendant; and by clause 3.10 the parties agreed that all compensation agreed to be paid in the adjoining property deed would belong to the seller or be disbursed as the seller might direct.[9]What has led to the instant litigation is that the defendant is now seeking to increase the height of its property by less than 11.25 metres, thereby engaging the provisions of clause 3 of the deed.[10]On 9th February 2018 the claimant issued the present proceedings seeking(1) a final prohibitory injunction to prevent the defendant increasing the height of its property,(2) a final mandatory injunction requiring any such structure to be demolished and, further or alternatively,(3) damages for its actual loss caused by any interference with its rights of light.[11]Particulars of claim were served with the claim form. On 3rd April 2018 the defendant served its defence. Having referred to the three transactions entered into on 9th April 2015, para.5 of the defence pleaded that by the rights to light deed the parties had agreed that this right to light claim, being a claim in respect of a development which would add less than 11.25 metres to the height of the defendant’s existing building, would be held for the benefit of and belong to Beaumont London LLP, and that the parties would endeavour to negotiate a settlement with the defendant authorising the development that the claimant now seeks to enjoin on terms that any payment which could be extracted from the defendant for authorising it would belong to Beaumont London LLP.[12]By para.6 it is said that in the premises the claim for the injunction(1) has not been brought to protect the light to windows enjoyed by the claimant, but rather(2) is being brought to extract a ransom payment for the benefit of a third party who no longer has any interest in the property.[13]By para.7 it is pleaded that the result is that the claimant has no arguable case for an injunction, nor damages in lieu of an injunction. The most it could have would be a claim for common law damages for the diminution in the value of its lease, and then not until after the offending extension is actually constructed.[14]The claimant served a reply on the 1st May 2018. It is asserted that para.5 of the defence does not accurately summarise the effect of the rights to light deed. Paragraph 6 pleads the background to the deed and, in para.7, how the deed sought to achieve its objectives.[15]Paragraph 8 pleads that to the extent that clause 3.1 of the deed was intended to operate as an assignment of the rights by the buyer, Dereif, that provision was a nullity and of no legal effect. That is because it is not possible to have an easement in gross. Paragraph 8 goes on to assert that, for the avoidance of doubt, clause 3.1 was not effective to transfer the benefit of the rights to Beaumont London LLP, and did not operate to sever the rights from the property or otherwise dispose of or release the rights. Its purpose was to precisely the opposite effect: to enable the rights to be enforced by Beaumont London LLP insofar as that was lawfully possible.[16]Paragraph 9 pleads that further, and in any event, to the extent that clause 3.1 had any effect, it related only to the rights held by Dereif. The claimant did not purport to assign the benefit of its interest in the rights to Beaumont London LLP.[17]Paragraph 11 pleads that contrary to the assumptions apparently made by the defendant, the effect of clause 3.6.2 was not to limit the remedy which would or could be sought in a future claim to a financial remedy.[18]By para.12 it is accordingly denied that the effect of the deed was to contractually bind the parties to “endeavour to negotiate a settlement with the defendant authorising the development on terms that any payment which could be extracted from the defendant for authorising it would belong to Beaumont London LLP”. It is further pointed out that clauses 3.3 and 3.6 were covenants made between Dereif and Beaumont London LLP.[19]Paragraph 14 admits that the deed would have enabled Beaumont London LLP to negotiate a release of the rights to light over the defendant’s property. It is said that the intention was that this could be done, if necessary, to remove the threat of an order requiring the removal of the additional storey at the claimant’s property. That was said to be the primary concern of Beaumont London LLP at the time of entering into the deed. The deed did not, however, limit the potential remedies which could be brought in a future claim.[20]By para.15 it is pleaded that in the circumstances the contractual agreement entered into between the claimant, Beaumont London LLP, and Dereif is of no relevance to the instant proceedings.[21]Paragraph 16 admits that to the extent that compensation were to be awarded in a future claim, or failed to be paid pursuant to a settlement in a future claim, this would belong absolutely to Beaumont London LLP or, as it directed, to Derief. That, however, is said to be of no consequence to these proceedings. Any contractual arrangement made between the claimant, Dereif, and Beaumont London LLP as to the ultimate recipient of any compensation awarded in relation to a claim is said to be of no concern to the defendant, nor does it indicate that the parties were willing to release the rights of light in return for payment.[22]It is pleaded in para.17 of the reply that the claimant does not wish to release or compromise the rights of light on terms permitting the defendant’s development. The amount of light entering into the building is said to be important to the claimant’s business, which consists of the provision of high class flexible and luxurious serviced office accommodation and facilities; and the primary remedy sought by the claimant in these proceedings is an injunction.[23]By the time this reply had been served the defendant had already issued its application (on 16th April 2018) seeking summary judgment under CPR Part 24 against the claimant on paras.1 and 2 of the prayer to the claimant’s particulars of claim on the basis that they disclose no real prospect of success for the reasons set out in a witness statement from Mr Simon Keith Freeman, a solicitor and partner in the defendant’s solicitors, Clarke Willmott, dated 16th April 2018, together with exhibit SKF1.[24]The order sought by the defendant is(1) that the claim by the claimant for an injunction, pleaded at paras.1 and 2 of the prayer to the claimant’s particulars of claim should be dismissed and(2) that the claimant should pay the costs of the application.[25]Evidence in answer to the summary judgment application has been served in the form of a witness statement dated 28th June 2018 from Mr Crispin David Philip Vaughan, one of the two directors of the claimant company, who owns 50% of its issued shares and who is also a member of Beaumont London LLP, together with his exhibit CDPV1.[26]By CPR 24.2, and so far as presently material, the court may give summary judgment against a claimant on the whole of a claim, or on a particular issue, if it considers that the claimant has no real prospect of succeeding on the claim or issue, and there is no other compelling reason why the case or issue should be disposed of at a trial.[27]The principles governing such applications are not in dispute. The most useful of the recent authorities is the guidance given by Lewison J (as he then was) at para.15 of his judgment in the case of Easy Air Limited v Opal Telecom Limited [2009] EWHC 339 (Ch). Omitting citation of authority, this provides:
“The court must be careful before giving summary judgment on a claim. The correct approach on applications by defendants is … as follows: (i) The court must consider whether the claimant has a “realistic” as opposed to a “fanciful” prospect of success. (ii) A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable. (iii) In reaching is conclusion the court must not conduct a “mini-trial”. (iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents. (v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial. (vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case. (vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent’s case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant’s case is bad in law, the sooner that it is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction.”
[28]That paragraph was cited with approval by Lord Justice Floyd at para.26 of his judgment in the case of TFL Management Services Limited v Lloyds TSB Bank PLC [2013] EWCA Civ 1415, reported at [2014] 1 WLR 2006. At para.27 of his judgment Lord Justice Floyd added this:
“I would add that the court should still consider very carefully before accepting an invitation to deal with single issues in cases where there will need to be a full trial on liability involving evidence and cross-examination in any event, or where summary disposal of the single issue may well delay, because of appeals, the ultimate trial of the action… Removing road blocks to compromise is of course one consideration, but no more than that. Moreover, it does not follow from Lewison J’s seventh principle that difficult points of law, particularly those in developing areas, should be grappled with on summary applications. Such questions are better decided against actual rather than assumed facts. On the other hand it may be possible to say that the trajectory of the law will never on any view afford a remedy…”
[29]In the course of his oral submissions, Mr Wonnacott took me to two passages from the judgment of Lord Justice Potter in the case ED & F Man Liquid Products v Patel [2002] EWCA Civ 472. At para.8 Lord Justice Potter said that he regarded the distinction between a realistic and fanciful prospect of success as appropriately reflecting the observation that the defence sought to be argued must carry some degree of conviction. That approach required the defendant to have a case which was better that merely arguable.[30]At para.10

Lord Justice Potter recognised:

“Where there are significant differences between the parties so far as factual issues were concerned, the court is in no position to conduct a mini trial. However, that does not mean that the court had to accept without analysis everything said by a party in his statements before the court. In some cases it may be clear that there was no real substance in factual assertions made, particularly if contradicted by contemporary documents. If so, issues which were dependent upon those factual assertions might be susceptible of disposal at an early stage so as to save the cost and delay of trying an issue the outcome of which was inevitable.”
[31]Turning to the law governing the substantive claim. Mr. Wonnacott referred to observations of Lord McNaughton in the case Colls v Colonnial Stores [1904] AC 179 at p.193 to the effect that the court ought to be very careful not to allow an action for the protection of ancient lights to be used as a means of extorting money. That passage was recently approved by Lord Neuberger of Abbotsbury PSC in the case Lawrence v Fen Tigers Limited [2014] UKSC 13, reported at [2014] AC 822, at pars.121 to122. Mr Wonnacott observes that the point is that it is risky for a defendant to build whilst an injunction is being threatened, and if an injunction is granted a claimant can name its price for its discharge out of all proportion to his actual loss.[32]Mr Wonnacott referred me to observations of Peter Smith J in the case of Midtown Limited v City of London Real Property [2005] EWHC 33 (Ch), reported at [2005] 1 EGLR 65. At para.70 Mr

Justice Peter Smith referred to the submission of counsel:

“...that where a property right is infringed, the victim is entitled to an injunction virtually as of right. I agree that that is one factor that is to be bone in mind, namely that a person’s rights, if they genuinely need to be protected by way of injunction, ought to be given that protection.”
Bur Peter Smith J said that it was not absolute. He recognised that injunctions had been refused where it was established that the person was plainly only wanting money. Mr Wonnacott submits that this is a case where the claimant is plainly only wanting money. That is what the deed is said to say.[33]In his witness statement opposing the summary judgment application, Mr Vaughan concluded by saying that the claimant had sound commercial reasons for wanting an injunction. The only reason the defendant had put forward to seek to persuade the court why an injunction should not be granted was said to be based on a misunderstanding of the effect and purpose of the rights to light deed. The claimant considers that the terms of the deed are irrelevant to the question of whether or not an injunction should be granted.[34]At para.33 of his witness statement, Mr Vaughan said that the purpose of the deed was twofold. First, to provide an indemnity to Dereif and, secondly, to ensure that Beaumont London LLP had control over any future claim which might arise, whether this be a claim arising as a result of the works to add the new storey to the property or a claim arising by reason of any interference with the rights of light to the property. Mr Wannocott submitted that the final part of that paragraph was not correct because it was only certain interferences with the rights of light to the property that were regulated by the rights to light deed, namely works extending above the agreed height of 11.25 metres referred to at clause 1.5 of the deed.[35]At para.38 of his witness statement Mr Vaughan attempted to summarise the position:
“To put it simply, if absolutely necessary Beaumont London LLP would be in a position to consent to an interference with the rights to light to the property, or a future interference, if this was the price which had to be paid to ensure that the new floor added to the property could be retained, and to avoid having to cut back or alter the property. As will be appreciated, it might have had a catastrophic effect on the claimant’s business if the claimant had to endure the loss of floor space and the disruption which would result from the grant of injunctive relief requiring that the new storey be cut back.”
[36]Mr Wonnacott submitted that that was not consistent with the terms of the deed, which was said to deal entirely separately with claims by the claimant and claims by the defendant. Mr Wonnacott emphasised that the true intention of the deed was to be found in the recitals at paras.G(i) and (ii). Mr Wonnacott points out that Mr Vaughan has not said, and Mr Wonnacott adds he has been very careful to ensure that he does not say, that the claimant is not now, and never will be, willing to negotiate to allow the defendant to build up to the agreed height. Mr Wonnacott submits, for the reasons set out at para.21 of his written skeleton, that what Mr Vaughan does say about the purpose of the deed is plainly contradicted by the terms of the deed itself.[37]Mr Wonnacott points out that it is easy for someone who wants to extract the maximum financial value out of a right to light to bring proceedings seeking a final injunction whilst not putting themselves at any risk for the disruption the claim causes to the development pending trial by the simple expedient of not seeking an interim injunction, which would oblige them to give a cross-undertaking as to damages, and maintaining a position that it is all about the rights and not about money.[38]This is said to be an unusual case because notwithstanding what Mr Vaughan might say in his witness statement, the incautious registration of the deed as a restriction against the title to the property has provided the court with evidence about the claimant’s real intentions, which is said to make it absolutely clear that this case is about money and not about rights.[39]In those circumstances, Mr Wonnacott submits that there is no reason why the claim for the injunction should be allowed to go to trial. There is no reasonable prospect that the judge will grant an injunction at trial. The claim should be confined to one for damages for the claimant’s actual loss, if any, and negotiations can then proceed on that basis.[40]In his oral submissions, Mr Wonnacott argued that the court does not grant an injunction in claims which are really about money. Injunctions are for cases where money is not adequate compensation for the alleged wrong. If the court is not going to grant an injunction at trial, then that aspect of the claim should be disposed of now. Mr Wonnacott referred me to CPR 1.4 (2) (c), which is said to encourage the court to dispose of issues summarily. Alternatively, if the court is not willing to grant summary judgment outright, Mr Wonnacott submits that the court should at least make a conditional order requiring the claimant to give a cross-undertaking in damages if it wishes to continue to prosecute its claim for a final injunction. Any negotiations can then take place on an equal footing between the parties.[41]Mr Wonnacott referred me to Practice Direction 24 governing the summary disposal of claims. Paragraph 4, setting out the court’s approach, states that where it appears to the court possible that a claim or defence may succeed, but improbable that it will do so, the court may make a conditional order. By para.5.2 of the Practice Direction a conditional order is one which requires a party either to pay a sum of money into court or, more pertinently to the present case, to take a specified step in relation to his claim, and provides that that party’s claim will be dismissed, or his statement of case will be struck out, if he does not comply.[42]Mr Wonnacott took me to the final paragraph of the commentary at para.24.6.6 of the current (2018) edition of Volume 1 of Civil Procedure. That emphasises that the court’s power to make a conditional order on a summary judgment application is not limited to cases in which the respondent raises a case as to which success, although possible, is improbable. The Court of Appeal has held that paras.4 and 5 of Practice Direction 24 are not exhaustive of the court’s options as to the orders it may make on an application for summary judgment. The relevant power to impose conditions is not to be found in Part 24 but is contained in CPR 3.1(3). Mr Wonnacott took me to that provision. It provides:
“Where the court makes an order it may: (a) make it subject to conditions, including a condition to pay a sum of money into court; and (b) specify the consequence of failure to comply with the order or a condition.” (a) make it subject to conditions, including a condition to pay a sum of money into court; and (b) specify the consequence of failure to comply with the order or a condition.”
[43]Paragraph 3.1.14 of the commentary to the current edition of Civil Procedure makes it clear that any conditions imposed should be expressed clearly and precisely, and it should be capable of being complied with. Mr Wonnacott submits that none of the principles set out in that paragraph is relevant to the condition which he suggests the court should impose. Mr Wonnacott submits that an undertaking in damages should be required as the price for continuing what he describes as this improbable claim to an injunction. If the court were going to allow the claimant to pursue its claim, then the court should impose the obvious condition of a cross-undertaking in damages. If at trial the court concluded that this was a blackmailing claim, which had been pursued unreasonably in order to exact a ransom from the defendant, then it would require the claimant to pay under its undertaking in damages, otherwise it would not do so. Where, Mr Wonnacott asks rhetorically, could be the injustice in such a course?[44]Mr Wonnacott pointed out that inter-solicitor correspondence at the time the deed was entered into would show the true motivation for the present claim. Such correspondence would be admissible because it would not merely be evidence of intention on the part of the negotiating parties, but of the true motivation for the instant claim.[45]For the claimant, Mr. Featherstonhaugh points out that it is common ground(1) that the claimant occupies the property for the purposes of its business, providing high class serviced office accommodation, and similar business services;(2) that the claimant has the necessary standing to bring a claim in respect of the rights to which it is entitled under the lease since it has an interest in the dominant land; and(3) that if at the date of the grant of the lease the claimant succeeds in establishing that the property then enjoyed rights of light, a leasehold interest in those rights would have passed to the claimant by virtue of s.62 of the Law of Property Act 1925. Mr Featherstonhaugh submits that the lease itself is predicated upon such rights being enjoyed, instancing clause 4.29.2 of the lease.[46]Mr Featherstonhaugh points out that the defendant’s reasons supporting its application for summary judgment are said to be set out in the witness statement of Mr Freeman. That reasoning is said to be put in various ways, but, according to Mr Featherstonhaugh, it is probably best encapsulated in para.25, which asserts that the claim for the injunction is not being brought to protect the light to windows enjoyed by the claimant, but rather is being brought to extract a ransom payment for the benefit of a third party (the original seller) who no longer has any interest in the property. That assertion is, Mr Featherstonhaugh submits, based, and only based, upon the terms of the deed, which the defendant construes in such a way as to lend support for the proposition it advances.[47]The parties’ statements of case set out their contentions regarding the proper interpretation of the deed at some length. In essence, the claimant contends that the defendant has adopted a mistaken interpretation of the deed which has led to what is said to be this flawed application, which should be dismissed. The test to be applied to this summary judgment application is said to be rigorous, and the claimant submits that the defendant has not come close to satisfying the requisite ingredients.[48]The defendant’s application is, according to Mr Featherstonhaugh, seeking to shortcut the court’s opportunity to have interrogated before it the evidence to be given by each party. For the time being, the defendant must accept, since there is nothing obviously incredible about it, the evidence upon which the claimant proposes to rely, as found in the witness statement of Mr Vaughan, as well as its statements of case, supported by statements of truth.[49]Mr Featherstonhaugh invites the court to note that Mr Vaughan states that(1) the claimant seeks an injunction because it wants to prevent an interference with its rights to light,(2) the claimant wants an injunction to protect its rights, and its reasons for wanting an injunction are obvious given the nature of its business,(3) the claimant’s business involves the provision of high class serviced offices and other business services, to which the nature of its accommodation is highly important and depends upon the size of the windows in its buildings and the amount of natural light which passes through them,(4) the amount of natural light available in the accommodation is an important element in the overall ambience the claimant seeks to provide in its buildings, and,(5) the defendant’s works will have a substantial effect on the quantity of light which the property receives.[50]It is said that the defendant is in no position, on the present application, to controvert those statements by Mr Vaughan. Further, it is in no position to assert that the interference with the claimant’s rights will be so minimal that an injunction should be refused on that ground.[51]In those circumstances, the claimant invites the judge to accept, for the purposes of this application, that it has a real and credible need to protect its rights, and that damages instead of an injunction, or at common law, would be wholly inadequate. The claimant’s director’s assertions as to the importance of preserving its rights cannot be gainsaid or doubted by the defendant at this preliminary stage.[52]Mr Featherstonhaugh refers to the authoritative restatement of the law by the Supreme Court in Lawrence v Fen Tigers Limited as to the circumstances in which injunctive relief should be granted:(1) The starting point in the case of an infringement of property rights is that an injunction is the prima facie remedy.(2) The legal burden is on the defendant to show why an injunction should not be awarded.(3) In the absence of additional relevant circumstances pointing the other way, it will normally be right to refuse an injunction if the four Shelfer tests are satisfied; but the fact that those tests are not all satisfied does not mean that an injunction should be granted.[53]Mr Featherstonhaugh points out that the defendant does not at this stage seek to assert that it would be inappropriate to grant the claimant an injunction by virtue of anything set out in Lawrence v Fen Tigers Limited; rather the defendant basis his application instead upon the terms of the deed. Mr Featherstonhaugh submits that the deed was a protective document designed to accommodate a possible claim by the defendant rather than to trade its own rights of light. If the claimant was seriously challenged about any infringement caused by the works it had carried out to the property in 2011 and 2012, then the operative provisions of the deed would have come to its assistance.[54]The claimant was never challenged in that way and, as a result, it is said that the deed is now irrelevant. But even if the claimant had been so challenged, and had sought to raise its own infringed rights in turn, the deed does not settle the question whether the primary remedy for the claimant should be an injunction or damages. Accordingly, it is said that the defendant’s repeated assertions that the reason the claimant is seeking an injunction is to extract a ransom payment, and that the injunction is not being brought to protect the rights but rather is being brought to extract a ransom payment, are not founded upon anything set out in the deed.[55]The defendant has founded this application upon what is said to be a misapprehension as to the nature and effect of the deed. That is said to appear clearly from para.12.4 of the defence, where it is said that “the claimant would not have contractually committed itself to enter into a negotiated settlement authorising the reduction [in its light]”. This drafting is based upon the premise that that is the effect of the deed, but it is not. The deed specifically preserves the remedies available to the claimant (see the definition of ‘Future Claim’, which expressly includes an injunction as well as damages). Mr Featherstonhaugh submits that the claimant wishes to make good its opportunity to show at trial that it wishes to have an injunction rather than damages; that far from preventing that remedy, the deed contemplates it; and that it should have such an injunction. In those circumstances, the claimant asks the court to dismiss the application with costs.[56]In his oral submissions, Mr Featherstonhaugh emphasised that the deed is all about claims by and against the seller, with the claimant having only a peripheral involvement to the extent indicated by clause 3.9. In relation to this present claim by the claimant, as the tenant under the lease, the deed is said to be entirely irrelevant. As to Mr Wonnacott’s suggested conditional order, Mr Featherstonhaugh submitted that the condition was not only unconventional but was also illogical. The claimant was not seeking any interim injunction. The defendant has not sought to say that the claimant will stop the work if a condition is imposed, so what does the claimant obtain if an undertaking in damages is ordered? What does the claimant get in return?[57]Earlier in his submissions, Mr Featherstonhaugh had taken me to observations of Peter Gibson LJ in the case of Mortimer v Bailey [2004] EWCA Civ 1514, reported at [2005] 1 EGLR 75. At para.30 Peter Gibson LJ said this:
“For my part, I own to some doubt as to whether it is appropriate to say that a person who does not proceed for an interlocutory injunction when he knows that a building is being erected in breach of covenant, but who has made clear his intention to object to the breach and to bring proceedings for that breach, should generally be debarred from obtaining a final injunction to pull down the building. There may be many circumstances in which a claimant would not be able to take the risk of seeking an interim injunction. He would need to satisfy the American Cyanamid test, and would have to provide an undertaking in damages. It may be entirely reasonable for the claimant, having put the defendant on notice, to proceed to trial, rather than take the risk of expending money wastefully by seeking interim relief. However, I accept that not to seek an interim injunction is a factor which can be taken into account in weighing in the balance whether a final injunction should be granted.”
[58]Mr Featherstonhaugh submitted that the claimant’s decision not to seek an interim injunction should not be held against it, either on the hearing of this summary judgment application or at trial.[59]In his reply, Mr Wonnacott submitted that the issue here is whether the deed shows that the claimant really wants a cheque and is exploiting its claim to an interim injunction. Mr Wonnacott pointed out that the intention recorded in Recital D to the deed is that of the parties, including the tenant, who joined in the deed and agreed to enter into an adjoining property deed if so required by the landlord: see clause 3.9. Mr. Wonnacott pointed out that the seller has no claim to any injunctive relief because it no longer has any interest in the property. As for the suggested condition, Mr Wonnacott pointed out that in return for an undertaking in damages, or a condition to similar effect, the claimant would receive in return the opportunity to prosecute its claim to a final injunction up to trial.[60]Those were the submissions. I remind myself that this is an application for summary judgment and of the principles which govern such applications.[61]On the present state of the evidence, the court is in no position the gauge whether the threatened interference with the claimant’s rights of light is so trivial as to warrant the refusal of a final injunction. The defendant’s application was not founded upon the extent of the threatened interference with the claimant’s rights of light. In my judgment, Mr Featherstonhaugh was right to criticise Mr Wonnocott’s attempt, in oral submissions, to trivialise the claimant’s right to light claim. In my judgment, this application stands or falls on the effect of the rights to light deed. In my judgment, that deed does not have the effect for which Mr Wonnacott contends, of disentitling the claimant to pursue a claim for final injunctive relief. I prefer the competing submissions of Mr Featherstonhaugh.[62]Apart from the tenant’s guarantee and indemnity in respect of the seller’s obligations contained in clause 9 of the deed, the claimant’s only obligation under the rights of light deed is that contained in clause 3.9. Clause 3.9 provides:
“Subject to the provisions of clause 3.11 the buyer, the seller, and, if appropriate, the tenant, all covenant with each other to enter into any adjoining property deed with the adjoining property owner, together with any other party who has covenanted to comply with the terms of this deed, and any other party with an interest in the property who is willing to be a party to the adjoining property deed, and the buyer is to use its reasonable endeavours to procure that any mortgagee of the buyer’s interest in the property shall either (a) enter into any such adjoining property deed, or (b) provide a letter of consent enabling such deed to be registered at the Land Registry against the relevant title numbers.”
[63]Recital G(i) to the deed, upon which considerable reliance is placed by Mr Wonnacott, is, in my judgment, merely permissive and facilitative. The claimant can be required by the former owner, the seller, its related entity, to enter into a financial settlement of any claim arising out of any actual or threatened infringement of the claimant’s right to light. But the defendant is not a party to the rights of light deed and, in my judgment, the deed does not take away any right of the claimant to pursue a claim to an injunction to restrain any actual or threatened infringement of its rights to light unless and until the seller requires it to enter into a financial settlement within an adjoining property deed with the defendant.[64]There is no evidence before the court that the seller is contemplating entering into any such deed. Since the defendant would need to be a party to such a deed, if one were in contemplation the defendant would have been able to bring such evidence before this court in support of its present application.[65]In my judgment, the mere existence of the rights to light deed does not mean that there is no realistic prospect of an injunction being granted at trial. I do not accept Mr Wonnacott’s submission that the deed makes it absolutely clear that this case is about money and not about the enforcement of rights to light.[66]In the introduction to his skeleton argument, at paras.1 to 6, Mr Wonnacott characterised the present claim in the following six propositions:(1) A limited partnership grants a 15 year lease of an office block to a related company and then sells the fee simple reversion to an unconnected third party.(2) All three parties agree that if a neighbouring owner increases the height of his building by up to 11.25 metres within the next 15 years, then a right to light claim will be made in order to extract a settlement sum for the seller, i.e. the former owner.(3) The neighbour begins work and the related company brings the right to light claim as tenant seeking a final injunction.(4) Is there any realistic prospect that the tenant will obtain a final injunction at trial so that it can use the threat of enforcement to negotiate a settlement sum for the benefit of the seller, which no longer has any interest in the property?(5) That is the issue on this application.(6) The defendant says that there is not, and that it should be granted summary judgment on that part of the claim now.[67]I do not accept that characterisation of the instant case. In my judgment, where it falls down is at the second stage of the argument. I do not accept that the deed amounts to an agreement that a right to light claim would be made in order to extract a settlement sum for the benefit of the former owner. The former owner can compel the present owner, and the claimant as the tenant of the property, to enter into an agreement compromising any right to light claim for a sum of money to be paid to the seller. But the seller is not obliged to take that course; and, unless and until it does so, the claimant, as tenant, seems to me to be entitled to pursue a claim for an injunction to restrain any actual or threatened infringement of its rights to light. If it obtains a final injunction at trial, then any final injunction can be crafted in such a way that it is subject to any further order of the court, which might be capable of being made if at some future date the seller were to require the claimant, as tenant, to enter into an adjoining property deed pursuant to the provisions of clause 3.9 of the rights to light deed.[68]For the same reasons, whilst I have some sympathy with Mr Wonnacott’s point that it is risky for the defendant to build whilst an injunction is being threatened against it, the imposition of any condition must be justified. Since, in my judgment, the existence and terms of the rights to light deed do not mean that there is no realistic prospect of a final injunction being granted at trial, it seems to me that there is no principled reason for imposing any conditions on the claimant’s ability to pursue its injunction claim to trial.[69]For those reasons, therefore, I would dismiss the summary judgment application. 70. _____________________ Transcribed by Opus 2 International Ltd. (Incorporating Beverley F. Nunnery & Co.) Official Court Reporters and Audio Transcribers 5 New Street Square, London EC4A 3BFTel: 020 7831 5627 Fax: 020 7831 7737 civil@opus2.digital __________ **This transcript is subject to the Judges approval**