Pavledes & Anor v Hadjisavva & Anor

The only live issues in this action are, first, whether in the circumstances of the case, it is appropriate to make a declaration as to the claimants’ admitted rights and, secondly, costs.

The claim relates to rights of light enjoyed by the building comprised in a property known as 15-21 Arcola Street, London E8 (the claimants’ property), of which the claimants are the freehold proprietors. The defendants are the registered freehold proprietors of an adjoining property known as 27 Arcola Street, London E8 (the defendants’ property).

In January 2005, the defendants obtained planning permission to build a two-storey addition at the rear of their property and a one-storey addition at the front of the property.

By a letter dated 29 April 2009, the claimants’ surveyor, Mr George Palos, informed the defendants that he had undertaken a rights of lights assessment which showed that their proposed development would infringe rights of lights enjoyed by the claimants’ property and invited the defendants to undertake not to carry out the proposed development.

The defendants instructed an architect, Mr Adrian Betham, to deal with this issue on their behalf. Between May 2009 and January 2012, there was extensive correspondence between Mr Betham and the claimants, their surveyor and their solicitors. Mr Betham contended that the claimants’ property did not have the benefit of rights of light over the defendants’ property, any such rights having been abandoned, and that, in any event, any loss of light would be negligible. In a letter dated 21 October 2010, he made clear that the development had started and that the remainder would follow in due course, albeit that 14 days’ notice would be given in respect of works claimed to affect the rights of light alleged by the claimants.

By a letter dated 10 January 2012, Mr Betham gave 14 days’ notice of the defendants’ intention to carry out the proposed works, with a modification which Mr Betham contended would avoid infringement of any rights of light attached to claimants’ property.

The claimants’ solicitors responded with a letter dated 13 January 2012, informing Mr Betham that they were instructed to issue proceedings for an injunction. The defendants instructed solicitors who in a letter dated 20 January 2012 stated that they needed time to take their clients’ full instructions before replying substantively. In the meantime, they confirmed the defendants’ undertaking, given without admission and without prejudice to their clients rights, not to carry out works which could affect “the alleged rights to light claimed by your client” without 14 days’ prior notice. In a further letter dated 30 January 2012, they provided the defendants’ undertaking not to carry out works which would change the top floor and roofline without 14 days’ prior notice. This was stated to be given without prejudice to “our clients’ contention that if the development proceeds in accordance with our clients’ planning permission, it will not affect your clients’ rights to light”.

There is no evidence of further communication until 13 March 2012 when the claimants’ solicitors threatened to issue proceedings unless the defendants acknowledged their rights of light claim, undertook not to proceed with the development and agreed to pay their legal costs amounting to about £6,000 and their surveyors’ costs.

The defendants’ solicitors replied on 14 March 2012 that there was no justification for the issue of proceedings in the light of the undertaking given on 30 January 2012 and continued:

Adopted the correct measurements for, and the correct locations of, the apertures in the eastern elevation of number 15-21; and

Properly given credit for light obtained from other sources.

On 19 March 2012, the claimants’ solicitors stated that they would need to protect their clients’ position by issuing proceedings. The defendants’ solicitors replied on the same day:

The claimants’ solicitors replied, again on the same day:

Our respective clients have been in correspondence for 2 years now as such our client has to date been most patient.

Throughout this time your client chose to be represented by Mr Betham despite our client repeatedly informing him that Mr Betham is not a right of light specialist.

Our client has had to incur substantial legal and professional fees in defending its position.

A claim form was issued on 27 March 2012 and was served with particulars of claim shortly afterwards. At this stage, Andreas Pavledes was the sole claimant and Theodoros HadjiSavva was the sole defendant. Their respective wives, as joint registered proprietors, were later joined as parties. The particulars of claim succinctly asserted the rights of light and identified the respects in which it was alleged that the proposed development would interfere with them. The relief claimed was a declaration as to the existence of the rights of light and an injunction to restrain the defendants from interfering with them.

On 3 May 2012, the defendants served a defence. It annexed a surveyor’s report dated 1 May 2012 and pleaded in paragraph 19:

It was further pleaded in the defence that, having regard to the matters set out in paragraph 19 and the state of the correspondence before the issue of the proceedings, there was no basis on which the court could properly make the declaration or grant the injunction sought. The defendants did not intend or threaten to interfere with the rights of light and no practical purpose would be served by making any declaration about the nature or extent of the rights of light.

On 18 May 2012, the claimants’ solicitors informed the defendants’ solicitors that having regard to the admission made in the defence, there was no longer any need to seek a declaration or injunction, but they were entitled to costs. They wrote to Master Marsh in similar terms. However, at a CMC on 13 June 2012, the claimants made clear that while they did not pursue the claim for an injunction, they were still seeking a declaration. The Master gave directions for trial, limited to remedy and costs.

In accordance with the Master’s directions, the defendants served a witness statement of Mr HadjiSavva, in which he stated:

It was submitted by Mr Johns for the claimants that the circumstances of this case were such as to make it appropriate to make a declaration as to the rights of light. There had been a long-running dispute conducted in correspondence over a period of three years in which the defendants had denied the rights of light and denied that their proposed development would interfere with any rights of light that might exist. In January 2012, they had given 14 days’ notice of their intention to proceed with the development. Although when faced with the strong stance taken by the claimants, the defendants had said that they would take further advice and would not proceed without giving a further 14 days’ notice, this was expressly without prejudice to their rights.

The position remained the same more than two months later when the proceedings were issued. Although the defendants had by their defence admitted that the claimants’ property enjoyed rights of light over the defendants’ property and that their proposed development would unlawfully interfere with those rights of light, the latter concession was expressly on the basis that the technical analysis carried out by the claimants’ surveyor was accurate. The defendants’ stated in their defence that they intended “at least for the foreseeable future” to proceed on that assumption. The defendants did not therefore unequivocally admit the claimants’ case. In any event, the dispute had reached the point where the claimants were entitled to greater protection than would be given by admissions in the defence. Those admissions would not prevent the defendants from subsequently raising a contrary case. In the absence of a confirmatory deed executed by the defendants, a declaration was appropriate. It would be unjust to the claimants not to resolve the dispute conclusively with a declaration as to their rights.

For the defendants, Mr Weekes based his argument in opposition to the grant of a declaration on a principle which he formulated as follows:

Mr Weekes submitted that the claimants did not plead and, in any event, could not establish that there was any imminent threat to their rights of light. Whatever the position had earlier been, the defendants had retreated before the issue of the claim form. They had undertaken not to carry out any further work on their proposed development save on 14 days’ notice and were taking expert legal and other advice on their position. He submitted also that the declaration sought was too vague, to serve any practical purpose or to enable the affected property owners to understand their rights. The real purpose of the action was, he submitted, to recover the claimants’ pre-action costs.

Mr Weekes submitted that there were good reasons for the principle he propounded. It ensured that there was a substantial basis for quia timet proceedings. Legal proceedings were an anxious, expensive and time-consuming matter for the parties and absorbed the scarce resources of the court. This principle avoided unnecessary litigation.

I will first make some general points about the remedy of a declaration. The present jurisdiction is statutory. The power conferred by statute on the Court of Chancery in the mid-nineteenth century was subsequently applied to the High Court, by the Judicature Acts and now by section 19 of the Senior Courts Act 1981. The court may make a binding declaration whether or not any other remedy is claimed: CPR 40.20. It is a matter for the court’s discretion whether to grant a declaration in the circumstances of any particular case, although it is of course a judicial discretion to be exercised in accordance with general principles.

It is widely acknowledged that the circumstances in which the court will be prepared to make a declaration have broadened since the decision of the House of Lords in Gouriet v Union of Post Office Workers [1978] AC 501, where Lord Diplock stated at p.501:

The principal developments since Gouriet have concerned questions which are not directly relevant to the circumstances of this case, such as whether the court will determine issues which have become “academic” as between the parties or whether all persons which will be affected by the declaration need to be parties, including whether the court will make a declaration as to the meaning of the contract when all the contracting parties are not also parties to the litigation. In Rolls-Royce PLC v Unite the Union [2009] EWCA Civ 387; [2010] 1 WLR 318, Aikens LJ at [120] summarised the applicable principles, of which the first three are relevant to the circumstances of this case:

It will be noted that there is nothing in these general statements requiring an actual or an imminent infringement of a legal right before a declaration will be made. The willingness of the courts in appropriate cases to make declarations as regards rights which may arise in the future or which are academic as between the parties suggests that the court’s jurisdiction is not so tightly constrained.

The first authority on which Mr Weekes relied for the existence of the principle which he put forward was Cowley v Byas (1877) 5 Ch D 944. This was not a claim for a declaration but for an injunction. The defendant successfully appealed against the grant of an interlocutory injunction. The judgment of Jessel MR is concerned with the circumstances in which the court will grant an interlocutory injunction. In that case not only was there no immediate threat on the defendant’s part to do any acts alleged to interfere with the claimant’s rights but there was not the remotest possibility of the defendant doing so nor the remotest intention on his part of doing so. It provides no support for Mr Weekes’ proposition so far as it relates to the grant of a declaration.

In the second authority, Draper v British Optical Association [1938] 1 All ER 115 the defendant association had adopted a code of ethics which restricted advertising by its members. The association alleged that the plaintiff was in breach of the code and convened a meeting to consider whether he should be expelled from the association. Before the meeting, the plaintiff issued his writ, claiming a declaration that it would be ultra vires the defendant association to attempt to enforce the code of ethics against the plaintiff and for a declaration that the defendant was not entitled to expel the plaintiff. At the trial of the action, Farwell J refused to make the declaration sought, for reasons which he explained at pp 118-119 and 120. In the latter passage, Farwell J said:

This is consistent with the practice of the court, to which Farwell J referred at p.116, of not granting relief in respect of meetings duly convened but awaiting the outcome of the meeting and, only if the challenged resolution is passed and proper grounds exist, granting declaratory and/or injunctive relief in respect of the resolution. It is not, in my view, authority for the proposition that a declaration will only be granted if a threatened wrong is imminent.

The final authority was the decision of Sir Andrew Morritt C in CIP Property (AIPT) Ltd v Transport for London [2012] EWHC 259 (Ch). This was the main basis for Mr Weekes’ submission and it is necessary to look at it in a little detail.

The claimant (Aviva) was the freehold proprietor of properties close to the underground station at Tottenham Court Road. It contended that a proposed development above the station, forming part of the Crossrail project, would infringe the rights of light enjoyed by those properties. Aviva brought proceedings against Transport for London, London Underground Limited and the third defendant, which was proposing the development. The third defendant did not own the site but it had a right of pre-emption over the station and an entitlement, upon exercising that right, to build above it. The third defendant had worked up plans for the proposed development. Aviva issued proceedings seeking a declaration that the defendants were not entitled to obstruct the rights of light enjoyed by its properties and an injunction to restrain them from doing so. Some months after the issue of the proceedings, the third defendant applied for planning consent for its proposed development, which had not been determined by the time of the hearing before the Chancellor. Assuming planning consent were given, the exercise of the third defendant’s option and the proposed development would not take place for at least five years.

The defendants applied for the summary dismissal of the claim.

The arguments of the defendants were summarised by the Chancellor at [20]:

The Chancellor reviewed the authorities relied on at [24]-[29], stating at [23]:

At [27] he turned to the authorities on quia timet injunctions. At [28], having referred to Cowley v Byas, he said:

In considering the facts the Chancellor found at [32]-[38] that there was no immediate threat to infringe Aviva’s rights.

The Chancellor concluded as regards the claim for a declaration at [40]:

At [41] the Chancellor said as regards the claim for an injunction:

There is in my judgment no oversight on the Chancellor’s part in applying the test of imminent threat to the claim for an injunction but not to the claim for a declaration. The cases to which he referred established the requirement of an imminent threat as a ground for the grant of a quia timet injunction. He applied to the claim for a declaration the test of prematurity and utility. While the Chancellor considered in his judgment that the principles as regards both remedies are broadly similar and, as regards prematurity, “much the same”, he clearly did not apply the test of imminent or immediate threat to the claim for a declaration, and the authorities would not have justified him in doing so.

In my judgment, Mr Weekes cannot make out a principle that before the court will grant a declaration as to the claimant’s rights, there must be shown to be either an actual infringement or the threat of an imminent infringement. It is entirely understandable that there should be this requirement for the very different remedy of an injunction. The Chancellor’s decision in CIP Property does however clearly illustrate that the court may refuse a declaration on grounds of prematurity or because it would not serve a useful purpose.

The fact that the claimants need not show an imminent threat of the infringement of the rights of light enjoyed by their property does not mean that a declaration should be made. The issue is whether the circumstances of the case are such as to make it appropriate for the court, in exercise of its discretion, to grant a declaration. Is there a real dispute between the parties such as to make it appropriate to grant a declaration, taking account, as stated by Neuberger J in Financial Services Authority v Rourke [2002] CP Rep 14, of:

As to the existence of a dispute regarding the claimant’s rights to light and the effect of the defendants’ proposed development, there was clearly a very real dispute in January 2012 and in the period leading up to it. The defendants, through their surveyor, had for some considerable time vigorously asserted that the claimants’ property enjoyed no relevant rights of light and that the proposed development would not in any event interfere with them.

The defendants’ position changed in January 2012, but only to the extent of informing the claimants that they were seeking new advice and that they would not proceed with that part of the proposed development which might interfere with the claimants’ alleged rights of light save on 14 days’ notice.

In March 2012, faced with the renewed threat of legal proceedings, the defendants extended their undertaking by agreeing not to commence any development work save on 14 days’ prior notice.

There was not however an acknowledgement by the defendants of the claimants’ rights or an acknowledgement that their proposed development would interfere with those rights. In January 2012 the Defendants’ solicitors reiterated the defendants’ intention that the “alleged” right to light would not be affected by the development. The undertaking was given without any admission and without prejudice to the defendants’ rights. In March 2012, the defendants’ solicitors again made clear that no admission was being made as to the claimants’ position.

Mr Weekes relies heavily on paragraph 19 of the defence which I have earlier quoted, but it is not an unconditional acceptance of the claimants’ position. It proceeds expressly “on the assumption that the technical analysis carried out Mr Palos is accurate” and states that the defendants then proceed on that assumption “at least for the foreseeable future”.

In my judgment, the terms of the defence and the undertakings given before the issue of proceedings cannot be said to have laid to rest the very sharp dispute which had previously existed. At best, the defendants put the dispute into abeyance, but reserved the right to revive it at their discretion.

The declaration sought by the claimants is directed to an issue which has been a very live issue between the parties and which has not been resolved.

In these circumstances, would it be just and would it serve a useful purpose to grant declaratory relief? In my judgment, it would, precisely because it would bring resolution and finality to this issue. In view of the previous history, I do not consider it would be just to deny that resolution and finality to the claimant. Mr Weekes submitted that the defendants would not be bound by paragraph 19 of the defence, so as to prevent them from re-asserting their prior position. Without a declaration, the claimants will be left in a position of uncertainty, with the defendants reserving the right to re-assert their prior position on 14 days’ notice given at a time of their choosing.

It does not meet the point to say, as Mr Weekes did on behalf of the defendants, that for the foreseeable future there is no likelihood of infringement. The defendants have recently let their property on a lease expiring in 2017. But it would be open to the defendants to agree an early surrender. In any event, given the background to this case, which is very different to that which existed in CIP Property, I see no very good reason why resolution of the issue should await the end of the lease.

Equally, for much the same reasons that the grant of a declaration would be just, it would serve a useful purpose. It would bring finality to the dispute, enabling all parties to know where they stood. Mr Weekes submitted that if the claimants had plans to sell their property, there would be a justification for the grant of a declaration at that stage, but not in circumstances where a sale was no more than a possibility in the future. I do not accept that the claimants are obliged to wait until then before seeking a declaration of their rights. I see every reason for dealing with it now, rather than waiting until either the claimants wish to sell or the defendants re-assert their position, and then having to deal with it, perhaps at very short notice.

If, in their defence, the defendants had unconditionally acknowledged the claimants’ rights and the effect of their proposed development on those rights, they might well have been in a position to argue that the claimants should have waited a little longer before they issued proceedings and should not therefore have their costs. But the defendants did not adopt that position.

I therefore conclude that a declaration should be granted as to the claimants’ rights. The defendants took issue with the terms of the declaration proposed but I did not hear full argument on that. I will invite counsel to seek to agree the terms of a declaration, failing which there will have to be further submissions on it.