Nuisance

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Travers Smith LLP

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In July, the Supreme Court handed down judgment in the case of Manchester Ship Canal Co v United Utilities Ltd [2024] UKSC 22, a fascinating case about the interaction between common law...
United Kingdom Real Estate and Construction

1. Water pollution

In July, the Supreme Court handed down judgment in the case of Manchester Ship Canal Co v United Utilities Ltd [2024] UKSC 22, a fascinating case about the interaction between common law and regulatory statute, in the context of water pollution by utility companies.

The owners of the canal brought a claim in private nuisance against United Utilities ("UU") seeking an injunction or damages in respect of unauthorised discharges of raw sewerage into the canal. Previous caselaw (Marcic) had decided that a private nuisance claim is not possible where, in practice, the remedy would require the utility company to construct better infrastructure, because that power is reserved for Ofwat under the Water Industry Act 1991.

However, in this case the Supreme Court decided differently, on the basis that the statutory regime would only oust common law rights if that was specifically set out in the legislation. They agreed with the canal owners that the 1991 Act does not authorise UU to cause a nuisance or to trespass by discharging foul water into the canal; and that these contaminated discharges were neither authorised by Parliament nor an inevitable consequence of UU performing its statutory duties. The discharges could be avoided if UU improved its infrastructure and its treatment processes.

In terms of a remedy, the Court accepted that granting an injunction would run the risk of overriding the statutory scheme in the 1991 Act, but that an award of damages would be appropriate.

This judgment has been warmly welcomed by water safety campaigners although the benefits of the case are limited to owners of watercourses or bodies of water not the general public or users of watercourses or bodies of water.

2. Knotweed

In Davies v Bridgend County Borough Council [2024] UKSC 15, Supreme Court clarified the basis on which diminution in value may or may not be awarded in Japanese Knotweed claims. In short, diminution in value which has already occurred prior to the defendant's breach will not form part of any award.

Introduction

In May, the Supreme Court unanimously overturned the Court of Appeal's decision in Davies v Bridgend County Borough Council [2024] UKSC 15. In doing so, it confirmed the basis upon which diminution in value caused by Japanese knotweed can be awarded and provided welcome clarification of the "but for" test for causation when applied to continuing nuisance claims.

Facts

The Respondent, Mr Davies, brought a claim in private nuisance against Bridgend County Borough Council (BCBC) for loss caused by the spread of Japanese knotweed from BCBC's land onto Mr Davies' land in 2021. The timeline of facts was as follows:

2004 Mr Davies purchased a property at 10 Dinam Street, Bridgend (the "Property"), adjoining BCBC's land. Japanese knotweed had been present at the Property for 50 years, having encroached from BCBC's land.

In 2004, the encroachment of Japanese knotweed was not an actionable private nuisance.
2012 A RICS report on knotweed is published, describing the risk of damage and loss of amenity to land caused by Japanese knotweed.
2013-2018 BCBC does not implement a reasonable and effective treatment programme in relation to the Japanese knotweed.
2018 BCBC implements a reasonable a reasonable and effective treatment programme.
2021 Mr Davies brings a claim for damages against the defendant in Swansea County Court. Amongst other heads of loss, Mr Davies argued that the 'blight' caused by the Japanese knotweed had reduced the value of the Property.

Decision

At first instance, the District Judge found that BCBC was in breach of a continuing nuisance between 2013-2018. This was the date at which BCBC knew, or ought to have known, of the risk of damage and loss of amenity to Mr Davies' land due to the publicly available guidance on the risk caused by Japanese knotweed. However, the District Judge did not award Mr Davies damages for the breach, finding that the damage caused amounted to pure economic loss (i.e. loss that is only financial and does not arise out of physical damage to or interference with person or tangible property). This is not recoverable.

The Court of Appeal upheld the District Judge's finding of continuing breach but found that damages for the residual diminution in value of Mr Davies' land were recoverable. The diminution in value is the reduction in value of the land after the Japanese knotweed had been treated. This was valued at £4,900.

The Supreme Court overturned the decision of the lower courts and unanimously allowed BCBC's appeal. The issue turned on causation, principally whether the diminution in value was caused by BCBC's breach in failing to treat the Japanese knotweed from 2013-2018. Giving the leading judgment, Lord Stephens made the following points:

  • In a tort for private nuisance involving the encroachment of Japanese knotweed, a claimant is required to establish that the defendant's breach of duty caused the loss claimed. This required Mr Davies to show that "but for" BCBC's failure to treat the Japanese knotweed from 2013-2018, Mr Davies would not have suffered any loss.
  • There was no dispute that BCBC was responsible for continuing nuisance from 2013 to 2018. However, there was no evidence that BCBC's breach of duty between 2013 and 2018 had increased or materially contributed to the diminution in value of Mr Davies' land. The diminution in value caused by the Japanese knotweed had occurred long before BCBC's tortious conduct.
  • As a result, the application of the "but for" test eliminates BCBC's breach of duty from 2013-2018 as a causative factor in Mr Davies' loss. The diminution in value to the Property would have occurred in any event. There is no causal link between the defendant's breach and the loss claimed.

Agreeing with the lead judgment, Lord Burrows summarised the position as follows:

"the JKW was already present on the claimant's land before 2013 so that the residual diminution in value had already been brought about by the natural, non-actionable, encroachment of the JKW... the claimant has failed to prove that the alleged damage (or, put another way, the alleged undue interference with the claimant's use and enjoyment of land) was factually caused by the breach of duty which was committed from 2013." [85-86].

In reaching its decision, the Supreme Court distinguished this case from the judgment in Delaware Mansions Ltd v Westminster City Council [2001] UKHL 55 ("Delaware"). The Court of Appeal cited this case as the basis for its finding that the residual diminution in value to the Property amounted to harm which arose from BCBC's continuing nuisance from 2013-2018. The Court of Appeal held that the harm (i.e. the diminution in value) to the quiet enjoyment and amenity suffered by Mr Davies persisted in 2018 because the nuisance was a continuing one.

However, the Supreme Court held that the analogy with Delaware was incorrect. Delaware established that where there is a continuing nuisance, a claimant is entitled to abate the nuisance and recover the reasonable costs incurred in doing so. Diminution in value is a different head of loss. The same reasoning cannot be applied. Delaware is not authority for the proposition that diminution in market value is recoverable even if the diminution occurred before the defendant's breach of duty. The standard "but for" test of causation still applies.

Impact

This case is one of several cases which have been heard by the Supreme Court in the past two years which have clarified the basis upon which claimants can seek damages for private nuisance, one of which is summarised at 5.1 of our briefing here. In confirming that any loss claimed as diminution in value to property must flow directly from the defendant's breach of duty (even when caused by a continuing nuisance) this decision will be welcomed by landowners.

Whether this will have any impact on nuisance claims for Japanese knotweed remains to be seen. In 2022, RICS published revised guidance questioning the current approach to the assessment of risk to property caused by Japanese knotweed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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