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Royal court decision empowers the court to order damages for a neighbours’ encroachment

A simple boundary dispute

A dispute between neighbours can be the most stressful and upsetting experience a person encounters in his or her lifetime. Home owners expect stability and security; they expect their home to be their castle.

However, a simple boundary dispute, if not settled amicably between neighbours can seriously threaten that security and, if the dispute proceeds to court, it will inevitably have serious financial implications to at least one of the parties concerned.

In the 1979 case of Felard Investments Limited v Trustees of the Church of Our lady, Queen of the Universe the Royal Court considered the general proposition put forward by Felard that the Court had power to remedy an encroachment by awarding damages as compensation instead of ordering the removal of the encroachment. In this case, Felard had built on a piece of land which was subject to a building restriction in favour of the Trustees. Felard argued the building should remain and the remedy be one of damages paid to the Trustees, however, although the Court appeared to recognise that in some circumstances an order to remove the structure would be disproportionate and in some cases, inequitable, it decided the Court’s powers were limited to ordering the removal of any encroaching structure and had no power to award damages as an alternative. The Court stated:

“The argument that the Court has the power, in an appropriate case, to legalise a breach of proprietary rights by ordering the payment of damages instead of requiring the breach to be remedied is attractive. It is easy to envisage a case where a property owner by mistake builds a house which very slightly extends beyond his boundary. The prejudice to his neighbour may be minimal, but the cost of rectifying the breach may be high.”

However, the Court then referred itself to earlier cases which had already considered this point. Felard had produced only one Judgment which recorded damages being awarded instead of demolition, whereas the Trustees were able to point to many cases where the breach was rectified. The Court went on to say:

“Counsel entirely accepted those precedents, for he agreed that the normal remedy where something had been done in breach of a restriction was the removal of the offending building or obstruction. He argued, however, that, as in England so in Jersey, the Court had a power to apply the equitable remedy of damages instead of the strict legal remedy, where there were exceptional circumstances, that is to say, where it would be inequitable to apply the strict law, as for example where the plaintiff had by his own conduct contributed to the breach, as was claimed had occurred in the present case.

As we have said, apart from the case of Corbin v. Lee, where no reasons were given for the decision, we have not been able to discover any case where the Court awarded damages instead of the strict remedy, nor indeed any case where it appears from the record that the present argument of counsel has even been raised as a defence. We can only assume, therefore, that Corbin v. Lee is an isolated case, and in our view the decision there runs counter to the fundamental principles of Jersey law to which we have already referred as to the manner in which a servitude can be created, varied or extinguished, and there is no power in the Court to create, vary or extinguish a servitude against the wishes of the owner of the land thus affected. It follows that whatever may have been the reasons for the decision of the Court in Corbin v. Lee, we consider that we have no power to adopt a similar course in this case.

Our view is entirely consistent with the finding in our previous judgment that the doctrine of proprietary estoppel is not part of the law of Jersey, but nevertheless we have come to our view with some regret, because, as we have said, it is possible to visualise exceptional circumstances where a strict legal enforcement of the law would create injustice. However that may be, the law of Jersey relating to interests in land has developed as it has for valid historical reasons, and is now so well entrenched that it is not open to the Courts to change the fundamental principles.

We therefore find, on full consideration and for the reasons we have given, that we have no power to award damages in substitution for ordering the removal of that part of the building which is in breach of the covenant.”

The significance of the Felard Judgment cannot be underestimated as it framed the legal advice given by property lawyers over the last 14 years. Clients were told that if their neighbour could prove you had built on land belonging to them (or on land subject to a restrictive covenant in favour of them), the Law required you to remove the structure unless they entered into a contract (passed before Court) agreeing otherwise. Importantly however, this advice was caveated to the extent that because Felard was never appealed, the decision remained open to challenge by a differently constituted court that could choose to disagree with the decision of Felard.

It was commonly felt by practitioners that the Felard decision would lead to inequitable results, with parties who have innocently built on another’s land having to knock down buildings on land which was worth very little to the other party. This was never more evident than in the case ofFogarty v St Martin’s Cottage Limited [2015], which came before the Royal Court last November.

In this landmark property case, Viberts were instructed to act on behalf of the defendant after the plaintiff had issued proceedings seeking both the removal of the defendant’s supporting wall and the replacement of all the downstairs windows on the west side of the property from clear opening windows to opaque non-opening windows.

The defendant argued that the cost to remove the wall had been quoted by professionals to be in the hundreds of thousands and changing the windows on the ground floor was likely to have required the complete reconfiguration of the layout of the property and a substantial decrease in its value. On the flip side of the coin, the defendant stated the land upon which the encroachment lay had no value to the plaintiff as it was a steep bank upon which the plaintiff had planted high Leylandii trees to guard her privacy and the bank could not be used for any other purpose.

The Plaintiff relied upon the Felard Judgement, arguing the Court had no power to allow the encroachment to remain on her land and thus could not order damages as an alternative remedy.

The Court disagreed with the plaintiff, stating the facts of the case warranted an order of damages. In order to understand why the Royal Court decided damages was the fair order to make, it is therefore necessary to briefly summarise the facts.

Not long after the defendant purchased the property, the plaintiff made the defendant aware of a boundary contract which had been passed by the person who had sold the defendant the property. This was the first time the defendant became aware of any problem with its boundary. After taking legal advice, the defendant was told the boundary contract had established a straight boundary line by reference to two fixed points, whereas previously the exact boundary between the defendant’s property and the plaintiff’s property had been unclear. The creation of the straight boundary line (in a position which the Royal Court found the parties to the boundary contract had agreed), meant the defendant’s supporting wall, which had been built over 35 years before the boundary contract had been passed, was on the land owned by the plaintiff. It also meant that the downstairs windows on the west side of their house, which has also been in existence since the 70s were too close to the boundary.

At the final hearing, the defendant produced evidence to show the boundary line created by the boundary contract was an artificial boundary and that the true boundary, although unclear, was further away from the defendant’s property and as such the wall was never previously an encroachment. It was highlighted to the Court that the purpose of the boundary contract was to determine the ownership of the trees and the intention was not to create a boundary which in turn created encroachments of existing structures. The Court agreed that it was unlikely that the wall was an encroachment before the boundary contract was passed and remarked that the true reason for passing the boundary contract was to establish the ownership of the trees which the creation of the boundary contract had established firmly in the ownership of the plaintiff.

Whilst the Court declined to interfere in any way with the boundary contract, it did agree with the defendant that the boundary contract should not give an additional benefit to the plaintiff by allowing her to remove a wall and change windows which had been in existence for many years and the removal or change of which would have devastating effects to the defendants with little benefit for the plaintiff. The court therefore disagreed with Felard and ordered the windows and wall to remain as they are, in return for which the defendant should pay damages to the plaintiff.

The Royal Court stated:

“…..we think that the encroachments which now exist were probably created by the boundary contract and probably did not exist before.  …, there seems little equity in an order now that the advantage which the plaintiff secured by the boundary contract – which does after all protect her trees – should be enhanced by subjecting the owner of Treetops to a significant financial penalty.

Balancing the factors, we do not think this is an appropriate case in which to order a demolition of the dividing wall where it encroaches on the property of Clairmont.  In our view it would be neither fair nor proportionate to do so.”

In relation to the windows the Royal Court stated:

“In so far as the windows are concerned, to the extent that these are within 2 foot 9 inches of the line established by the boundary contract, we also take the view that it would be inappropriate to order that they be blocked up.  There are numbers of cases in the past where this Court, faced with windows too close to the boundary line in this way, has ordered that frosted glass be introduced.  Of itself, this shows that there is a remedy other than the blocking in of the windows and the removal of the encroachment in that respect.  In our judgment, having regard to all the factors that we have described in relation to the boundary wall, and adding the additional consideration that the presence of the trees and the configuration of the properties is such that there is no serious overlooking of the plaintiff’s property through these windows, we think that an award of damages to reflect the encroachment would be appropriate.  We take into account on the other side that an order that frosted glass be substituted and that the windows be fixed so as to be incapable of opening would seriously damage the defendant’s property.”

The legal position post Fogarty v St Martins Cottage Limited

The Fogarty decision is a welcomed development in Jersey property law and gives the Court a much needed alternative to ordering the removal of an encroaching structure.

The decision means property owners embroiled in a dispute involving an encroachment, will have to consider the extent and nature of the encroachment in order to determine which remedy is the most appropriate. The particular facts of the case, including how the encroachment arose, will also be a key factor in any dispute.  Importantly, the decision should not be taken to mean that damages will be the most likely remedy to be ordered by the Court. The Royal Court’s decision makes it clear that removal of a structure can still be the most appropriate way to compensate a landowner for an encroachment on his land, however, it also recognises that in some circumstances, justice is best served by awarding damages rather than ordering removal.

Unfortunately for the parties in Fogarty, the Judgment does not currently solve all the issues between them and it is clear from the Judgement that the Court hopes the parties will settle the remaining issues without the court’s assistance.

At the date of writing this article, it is also unclear whether either party will appeal the Royal Court’s decision. If the decision is appealed, it would be open to the Court of Appeal to either disagree or confirm with Fogarty or Felard.

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