Cases - Shelfer v City of London Electric Lighting Co

Record details

Name
Shelfer v City of London Electric Lighting Co
Date
[1895]
Citation
1 Ch 287, CA
Legislation

Chancery Amendment Act 1858

Keywords
Easements - nuisance - remedy - award of injunction - damages in substitution for an injunction - award of damages in substitution an exceptional remedy - whether damages should be granted instead of an injunction - rights of light.
Summary

This late-19th century case established the rules (commonly referred to as the Shelfer working rule) by which the court would determine whether damages are an equitable remedy in lieu of granting an injunction.

Although it did not consider it appropriate to do so on the facts of this case, the Court of Appeal set out guidance as to the circumstances in which it would be appropriate for the Court to award damages:

'(1) If the injury to the plaintiff's legal rights is small,

(2) And is one which is capable of being estimated in money,

(3) And is one which can be adequately compensated by a small money payment,

(4) And the case is one in which it would be oppressive to the defendant to grant an injunction: — then damages in substitution for an injunction may be given.'

The result of these guidelines was that for a full century it became the exception rather than the rule to award damages in place of an injunction.

However, in the late 20th and early 21st centuries a series of rulings were handed down in which damages were awarded in place of injunctions in situations in which, previously, one would have expected an injunction to have been granted. The most influential of these cases include Jaggard v Sawyer [1995] 2 All ER 189,  Midtown Ltd v City of London Real Property Co. Limited [2005] EWHC 33 and  Tamares (Vincent Square) Ltd v Fairpoint Properties (Vincent Square) Ltd. [2006] 41 EG 226. One important factor in accounting for these rulings appears to have been the delay (or otherwise) of the innocent party in seeking relief, a point that figured directly into whether or not the grant of an injunction would be judged oppressive for the claimant. From these rulings, an impression developed among lawyers that developers need not worry unduly about the risk of an injunction unless a building owner sought an interim injunction at an early stage in the development.

Since then, a number of cases have reaffirmed the essential principle of Shelfer v City of London Electric Lighting Co that the legal burden rests on the plaintiff to demonstrate that an award of damages would be more appropriate than the granting of an injunction. These cases include Dennis Regan v Paul Properties Ltd [2006] EWCA Civ 1319, HXRUK II (CHC) Ltd v Heaney [2010] EWHC 2245 (Ch)Coventry v Lawrence [2014] UKSC 13 and Beaumont Business Centres Ltd v Florala Properties Ltd [2020] EWHC 550 (Ch).

The current general understand seems to be that, on the one hand, the Shelfer guidelines need not be interpreted in a rigid manner (i.e. other factors may be taken into consideration as well, and the failure of just one of the Shelfer criteria to obtain does not in itself necessitate the granting of an injunction) but that, on the other hand, injunction represents the ‘default setting’ when property rights are infringed, and in some cases (e.g. when the defendant has acted in a ‘high handed manner’) the granting of an injunction is essential both to ensure justice and to serve as a warning to others.