Metropolitan Housing Trust Ltd v RMC FH Co. Ltd

A lease covenant against permitting an encroachment upon or against the demised premises may extend to interference with incorporeal rights included in the demise. A right of light acquired by prescription under section 3 of the Prescription Act 1832 may be appurtenant to the freehold and treated as demised to the lessee. A release of the lessee’s right may therefore amount to permission for an encroachment, if the further contractual condition concerning damage, annoyance or inconvenience to the landlord is satisfied. Whether a landlord may require proceedings to prevent an infringement depends on the reasonableness of that requirement in the circumstances. On incomplete evidence, the court declined to grant the requested declaration.

The claimant was the headlessee of a block of flats. The defendant was the freeholder. The claimant wished to release rights of light benefiting the leasehold interest in return for compensation from the owner of a neighbouring development site.

The freeholder contended that the proposed release would breach clause 3(12) of the headlease, which prohibited permission for an encroachment or easement affecting the demised premises and required reasonable steps to prevent it. The claimant disputed the construction and application of the clause. The central issues concerned the meaning of the demised premises, the scope of encroachment, the requirement of damage, annoyance or inconvenience, and the reasonableness of any requested action.

1. Nature of the right of light. The right of light acquired under section 3 of the Prescription Act 1832 was appurtenant to the freehold and was treated as demised to the headlessee. It therefore formed part of the demised premises for clause 3(12).
2. Meaning of encroachment. The ordinary meaning of encroachment extended to an actionable interference with a right. A building causing actionable interference with the right of light would therefore be an encroachment upon or against the demised premises. A release by the headlessee would amount to permission for that encroachment.
3. That conclusion applied only if the encroachment might be or grow to the damage, annoyance or inconvenience of the freeholder. Such damage or inconvenience could arise because interruption might affect the extent of a prescriptive right or reduce the freeholder’s future ability to obtain an injunction. If the freeholder had already released its own right of light, it could not rely on this part of the covenant.
4. The court could not determine on the evidence whether the proposed development would in fact encroach on the leasehold right of light. If it did, and a release were necessary to avoid infringement, the release would breach clause 3(12), subject to the damage, annoyance or inconvenience requirement.
5. A request that the headlessee bring proceedings under the second part of clause 3(12) had to be reasonable or properly deemed so at the time it was made. Relevant considerations could include the freeholder’s genuine objective, the benefit and detriment to each party, the prospects of the proposed proceedings, the parties’ respective interests, and any collateral purpose. The issue was left open because no such request had yet been made and the evidence was insufficient.
6. A release of the headlessee’s rights of light would not necessarily amount to permission for new windows in the neighbouring development. The documents could be drafted to deal only with the release. Permission for the new windows might itself prevent the acquisition of prescriptive rights, although the court expressed that conclusion with some reservation.
7. The claimant’s requested declaration was refused. The form of any declaration reflecting the matters decided could be considered on hand-down.

First-instance decision. No appellate history is stated in the judgment.