LE JONES (INSURANCE BROKERS) LIMITED v PORTSMOUTH CITY COUNCIL [2002] EWCA Civ 1723

IN THE SUPREME COURT OF JUDICATURE

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

(HIS HONOUR JUDGE HAVERY QC)

[2002] EWCA Civ 1723

Case No Case No. A1/2002/0614

Venue Royal Courts of Justice, Strand, London, WC2

Between

LE JONES (INSURANCE BROKERS) LIMITEDClaimant/Respondent

PORTSMOUTH CITY COUNCILDefendant/Appellant

Before

Lord Justice Aldous

Lord Justice Dyson

MR GM BEBB QC (instructed by Legal Department, Hampshire County Council, The Castle, Winchester, Herts SO23 8UJ) appeared on behalf of the Appellant

MR H PALMER QC and MR D CROWLEY (instructed by Plexus Law, London EC4A 1AF) Appeared on behalf of the Respondent

Date 7 November 2002

LORD JUSTICE ALDOUS:

[1]I invite Lord Justice Dyson to give the first judgment.

LORD JUSTICE DYSON:

[2]This is an appeal from the decision of His Honour Judge Havery QC given on 11th March 2002 whereby he decided that Portsmouth City Council ("Portsmouth") was liable to the claimant in negligence and nuisance for damage consequent upon the subsidence of the claimant's property at 208 London Road, Portsmouth ("the property"). He did not determine the issue of damages. The essential facts are these. At all material times, the claimant has occupied and carried on business at the property which was originally built as a terrace house. There is a row of plane trees in London Road. One of these, growing outside number 210, is 0.5 metres north of the boundary with no. 2O8. It is a mature tree that was planted in about 1900. In 2001, it had a height of 14-16 metres. Another tree, growing outside number 206, is 2 metres south of the boundary with no. 2O8. It is a replacement of the tree that was felled in 1994. Both the tree growing outside no. 210, and the predecessor of the tree now growing outside no. 206 played a part in the events which gave rise to this litigation.

[3]Cracks first appeared in the property in about 1990. The claimant instructed the Pearson Ellis Partnership ("PEP") to carry out an inspection. They are a firm of consulting engineers. PEP made a number of reports during the following months. In May 1992, they recommended that the property be underpinned and the cracks repaired. This was done. In a careful judgment, the judge made detailed findings as to the cause of the damage. He found that it was caused by subsidence of the property, and that this was the result of desiccation of the soil caused by the roots of the plane trees, which had encroached on to the property. There is no appeal against these findings.

[4]At all material times, Portsmouth was acting as agent for Hampshire County Council ("HCC") pursuant to an agency agreement. Until April 1997, HCC was the relevant highway authority. The first such agreement was dated 7th March 1975 whereby Portsmouth agreed to carry out inter alia the functions of "planting and maintenance of trees and shrubs and grass verges" (see clause 1 of the first schedule). A subsequent agreement was dated 22nd March 1988, clause 4.1 of which provided:

"The City Council shall act as the agency of the County Council in the management of the highways. ... 'Management' for this purpose shall comprise... (7) The control, ordering and supervision of routine maintenance as defined in the Second Schedule in accordance with such policies and standards as may from time to time be established by the County Council...."

By the Second Schedule, "routine maintenance" included "grass cutting, hedge trimming, maintenance of trees and shrubs".

[5]The judge found (paragraph 11) that no reduction of the crown of the trees took place between 1979/80 and at least 1993. An internal memorandum of Portsmouth dated 15th October 1992 indicated that at that time the two trees in question were 16 metres in height and had a spread of 12 metres. The judge found (paragraph 34) that one of the reasons why Portsmouth included in its tree maintenance programme the reduction of tree crowns was "to reduce the amount of growth the roots put on, and the water uptake by the tree". Portsmouth was aware of the risk of damage to buildings by subsidence. There was a foreseeable risk of subsidence of nearby properties if the trees were allowed to desiccate the underlying soil. The judge specifically held that "there was a foreseeable risk that the trees in question, when allowed, as they were, to grow well over 10 metres in height, would desiccate the soil under the property during hot summers of prolonged dry weather" (paragraph 36). There is no appeal from any of these findings. The issues

[6]The following issues arise on this appeal.(a) Was Portsmouth (rather than HCC) the right defendant?

(b) Did the claimant fail to give Portsmouth the opportunity to "abate" the nuisance?

The judge dealt with this issue succinctly in the following terms:

"27. In my judgment, the lawful exercise of control over the tree, in the absence of ownership, is sufficient to make the defendant capable of liability in nuisance to the claimant. And the potential liability of the defendant in negligence is not dependent on ownership or occupation of the relevant land. Nor is it excluded by potential liability of the highway authority for the same negligence."

[8]On behalf of Portsmouth, Mr Bebb QC submits that the proper defendant was HCC and not Portsmouth. The duty to maintain the highway was vested by statute in HCC as the highway authority, and, as a matter of law, that duty could not be delegated to Portsmouth, or indeed anyone else. The agency agreement had contractual force as between HCC and Portsmouth, but it did not purport to, nor could it, affect the statutory or common law duties of care owed by HCC and Portsmouth prior to 1st April 1997: (the significance of this date is that, since then, Portsmouth has become the relevant highway authority). The judge was wrong to hold that the lawful exercise of control over the offending trees by Portsmouth pursuant to its contract with HCC was sufficient to make Portsmouth liable in tort to the claimant: Portsmouth did not have a sufficient degree of interest and control to found liability.

[9]On behalf of the claimant, Mr Palmer QC submits that the undisputed fact that Portsmouth exercised control over the trees and exercised the power to maintain them pursuant to its contract with HCC was sufficient to form the basis of liability in nuisance and negligence.

[10]In my view, the judge was right. I shall start with nuisance. It seems to be common ground that the trees were a nuisance: they constituted an unlawful interference with the claimant's use and enjoyment of its property. It was reasonably foreseeable that, unless the crowns of the trees were trimmed regularly, there would be desiccation of the soil beneath the property, and that damage would or might be caused thereby. The question is: who in those circumstances is responsible in law for the nuisance? The editors of Salmond & Heuston on the Law of Torts 21 st edition discuss the question "who is liable" in nuisance at page 64 and following. They start with the liability of occupiers, and say:

"Speaking generally, the occupier of premises is liable for all nuisances which exist upon them during the period of his occupancy. His duty is not merely to refrain from positive acts of misfeasance which cause harm to his neighbours, but also to take care that such harm is not caused by his omission or by third parties or by nature, and to abate it if it does. 'I have the control and management', said Sir Charles Abbott CJ, 'of all that belongs to my land or my house, and it is my fault if I do not so exercise my authority as to prevent injury to another.' Hence an occupier may be responsible for what is done, not only by his servants or (in some cases) independent contractors, but also by his invitees or licensees. The reason is that an owner of private property, if he likes to take the necessary measures, can prevent people coming on his land and causing harm, because he can shut everyone out if he so wishes."

At page 67, the authors discuss the liability of non-occupiers and consider four categories under this heading: the liability of the creator of a nuisance (i.e. by misfeasance); the liability of one who authorises another to create or continue a nuisance; the liability of a lessor or licensor who lets premises with a nuisance on them; and the liability of an owner for breach of covenant to repair. It may be said that Portsmouth does not fit neatly into any of these categories. But as I shall explain, the rationale which underlies making occupiers, and in some instances non-occupying owners, liable in nuisance applies in the present case. As Mr Palmer puts it, the key to responsibility in the law of nuisance is the degree of control, in law and/or in fact, exercised by the putative defendant over the thing or activity which has brought about the nuisance.

[11]In my view, the basis for the liability of an occupier for a nuisance on his land is not his occupation as such. Rather, it is that, by virtue of his occupation, an occupier usually has it in his power to take the measures that are necessary to prevent or eliminate the nuisance. He has sufficient control over the hazard which constitutes the nuisance for it to be reasonable to make him liable for the foreseeable consequences of his failure to exercise that control so as to remove the hazard. Similarly, control lies at the heart of the liability of a non-occupying owner for liability when the nuisance is attributable to a breach by him of the covenants of a lease, or a failure to exercise his right to enter and carry out repairs. An example of this latter category is Mint v Good

[1951] 1 KB 517

. In that case, the plaintiff was injured by the collapse of a wall which separated the highway from the forecourt of a house owned by the defendant. The house was let on a weekly tenancy. No right to enter was expressly reserved to the owner. The judge found that the wall was a nuisance, but dismissed the claim against the owner because he had not specifically reserved the right to enter the premises. The Court of Appeal allowed the plaintiff's appeal, holding that a right to enter was to be implied in the circumstances. The court considered the line of cases, including Wilchik v Marks and Silverstone

[1934] 2 KB 56

and Heap v Ind Coope & Allsopps Ltd

[1940] 2 KB 476

, which support the proposition that a non-occupying owner who has the right to enter premises to carry out repairs may be liable in nuisance to a third party who is injured by reason of the owner's failure to carry out the repairs, even if the owner has not covenanted to carry them out. In the course of his judgment, Denning LJ explained the basis of this line of authority. At page 527, he said:

"I cannot think that the liability of the owner to passers-by depends on the precise terms of the tenancy agreement between the owner and the tenant, that is to say, on whether he has expressly reserved a right to enter or not. It depends on the degree of control exercised by the owner, in law or in fact, for the purposes of the repairs. If a landlord is liable when he reserves an express right to enter, he is also liable when he has an implied right; and even if he has no strict right, but has been given permission to enter whenever he asked, it should make no difference. The landlord has in practice taken the structural repairs on himself and should be responsible for any disrepair."

(emphasis added)

[12]In my judgment, it is not necessary to decide whether Portsmouth was an occupier of the highway in this case. What matters is that it had the right and duty to maintain the trees, and that this included, where necessary, the right and duty to reduce their height so as to prevent damage being caused to nearby properties. The agency agreements gave it sufficient control over the trees, both in fact and in law, to prevent any nuisance from occurring, and to eliminate any nuisance that did occur. Mr Bebb submits that the control exercised by Portsmouth arose from the performance of its contractual obligations to HCC. This is true, but in my view irrelevant. What matters is that it exercised control, not the legal basis on which it came to do so. I am in no doubt that the degree of control exercised by Portsmouth over the trees was sufficient for it to be reasonable to fix it with liability for the nuisance.

[13]The judge was referred to a number of first instance decisions. In Russell v London Borough of Barnet

[1985] 83 LGR 152

, the highway authority was held liable in nuisance and negligence to the owners of a house that was damaged in a manner strikingly similar to that which occurred in the present case. Tudor Evans J decided that, although the plaintiffs were presumed to be the owners of the trees, the highway authority was liable because it had had control over the trees. At page 169, he referred to a passage from the judgment of Stocker J in Solloway v Hampshire County Council (unreported) where that judge had said that, even if the trees in the highway were not owned by the highway authority:

"... where they alone have the power to maintain the trees and if damage or obstruction to the highway is caused, to cut them down, then this is sufficient control over the trees to make them liable for nuisance if such occurs."

I do not accept the submission of Mr Bebb that in Russell the highway authority was liable because it was in occupation of the highway. It is true that, on the facts of that case, the authority was in occupation of the highway, and that its occupation gave it the necessary control. But it is clear that liability was based on the fact that it had sufficient control over the trees to make it liable. In most cases, occupation will give the occupier sufficient control to found liability in nuisance. But Russell is not authority for the proposition that a person cannot be liable in nuisance unless he is in occupation of the land or has some legal interest in it.

[14]It follows that in my view the judge reached the right conclusion on this first issue. As he pointed out, it may be that HCC also had a potential liability. But that is irrelevant to the question of whether Portsmouth was liable.

[15]As for negligence, I do not understand on what basis it can be said that Portsmouth did not owe the claimant a duty to perform its function of tree management with reasonable care. Mr Bebb boldly submits that the only duties owed by Portsmouth were to HCC, and that only HCC owed a duty of care in tort to persons who foreseeably suffered damage as a result of inadequate tree management. I do not agree. The mere fact that Portsmouth owed a contractual duty to HCC does not mean that it owed no duties in tort to anyone else. On the facts of this case, the judge found that the damage suffered by the claimant was reasonably foreseeable. There was sufficient proximity between Portsmouth and the claimant to give rise to a duty of care in tort. In my view, it is also just and reasonable that, as the judge held, Portsmouth should be potentially liable in negligence to the claimant for the damage caused by the trees. Opportunity to abate the nuisance

[16]The facts relevant to this issue are as follows. On 2nd September 1992, the claimant's insurers' loss adjusters wrote to Portsmouth's City Solicitor a letter in these terms:

"We act on behalf of the Building Insurers of [208, London Road, North End, Portsmouth] with regard to a claim which has been submitted following the development of damage which has been demonstrated as arising from subsidence of the site. In the course of the investigation, roots from plane trees growing on the public pavement were found beneath the foundations and it has been demonstrated that these roots have resulted in desiccation of the clay soil. We have pleasure in enclosing a root analysis report and would be pleased if you would immediately advise your public liability insurers of our principals' expressed intention to seek recovery of their outlay from you, in view of the damage caused by the trees. We can advise you that it has been agreed that the front part of the building will require to be underpinned in order to stabilize it and under these circumstances our principals' outlay will be substantial, estimated at at least £40,000. We await hearing from your insurers as soon as practicable."

[17]On 3rd November, the loss adjusters wrote again:

"We refer to our recent letter and your subsequent telephone call and confirm as advised that we are quite happy to meet with you at the risk address to consider the matter but consider that an appropriate stage would be when tenders are available for remedial works which will be in the middle of November and we shall contact you further nearer the time so that appropriate appointments can be made."

[18]By this time, the loss adjusters had already put in train the tendering process for the underpinning works. Quotations had been received by 11th November from four contractors. The contract for the underpinning works was made on 21st December 1992.

[19]At paragraph 42 of his judgment,

the judge said:

"... the fact is that the defendant was notified of the claim before the claimant was committed by contract to the underpinning. There is no evidence that the defendant suggested that an alternative remedy should be considered or even asked the claimant for time to consider the matter. In my judgment, the defendant did have an opportunity at least to ask for an opportunity to abate the nuisance."

[20]Mr Bebb submits that the judge was wrong. He relies on a passage in the speech of Lord Cooke in Delaware Mansions Ltd v Westminster City Council

[2001] 1 WLR 1007

, at 1019:

"It is at this point that I see Solloway v Hampshire County Council 79 LGR 449 as important as a salutary warning against imposing unreasonable and unacceptable burdens on local authorities or other tree owners. If reasonableness between neighbours is the key to the solution of problems in this field, it cannot be right to visit the authority or owner responsible for a tree with a large bill for underpinning without giving them notice of the damage and the opportunity of avoiding further damage by removal of the tree. Should they elect to preserve the tree for environmental reasons, they may fairly be expected to bear the cost of underpinning or other reasonably necessary remedial works; and the party on whom the cost has fallen may recover it, even though there may be elements of hitherto unsatisfied pre-proprietorship damage or protection for the future. But, as a general proposition, I think that the defendant is entitled to notice and a reasonable opportunity of abatement before liability for remedial expenditure can arise."

[21]Mr Bebb says that Portsmouth was not in reality given any opportunity to abate the nuisance. It was, in effect, presented with a fait accompli . It was not given a copy of the engineers' report or asked to remove the trees or reduce their height: it was simply told that the insurers intended to underpin the building. In so far as Portsmouth was given any opportunity, it was not a reasonable opportunity. It was not given the evidence on which the decision to underpin was based, nor told what evidence there was which would or might have persuaded it that the trees were responsible for the damage. Portsmouth was not given a reasonable time to make its own inquiries and carry out its own tests and then make a decision as to what remedial work was required. It had taken the claimant's insurers from October 1990 until September 1992 to investigate and notify Portsmouth of the claim. In the circumstances, it was not surprising that, in the light of the letter of 2nd September, Portsmouth had directed its inquiries to the issue of causation and not the abatement question. The judge himself made the point (at paragraph 42) that his impression was that, if Portsmouth had been given more time, it "might have come round to questioning the suitability of the remedy".

[22]I would reject this criticism of the judgment for the reasons advanced by Mr Palmer. What is a reasonable opportunity to abate the nuisance is a question of fact. The judge made a clear finding on this issue. This court should be very slow to interfere with such a finding. Portsmouth did not respond to the letter of 2nd September. It did not ask the insurers for time to investigate the cause of the damage, or to explore other measures than underpinning. In particular, it did not ask for time to consider whether the problem could or should be solved by removal or severe reduction in the height of the offending trees. In any event, Portsmouth did not satisfy the judge that, if it had been given more time, it would have abated the nuisance by tree management. In this respect, it is significant that Portsmouth contested the issue of causation right up to the trial, and at no time following receipt of the letter of 2nd September, did it say that it would resolve the problem by removing or reducing the height of the trees.

[23]Mr Bebb accepts, rightly in my view, that the burden of showing that the claimant failed to give Portsmouth a reasonable opportunity to abate the nuisance rests on Portsmouth. This involves showing that(a) it did not have sufficient time to abate the nuisance, and

(b) if sufficient time had been allowed, it would have ensured that the nuisance was abated. In my view, the judge was entitled to reach the conclusion that the burden of proof was not discharged in either respect. At the very least, Mr Bebb has not persuaded me that the judge was wrong so to conclude. Was the underpinning necessary ?

[24]At paragraph 7 of the amended defence, Portsmouth pleaded:

"in so far as the plaintiff claims damages for the costs of underpinning, it is averred that such underpinning was unnecessary and unreasonable and, in incurring any such cost, the plaintiff failed to mitigate his loss."

Portsmouth's case, supported by its expert Mr Freeman, was that the damage caused by the subsidence was not sufficiently significant in structural terms to justify underpinning. The judge rejected this case. At paragraph 47 of his judgment, he accepted the evidence of Mr Kelsey that the remedies available to prevent further damage to the property were "to remove or severely reduce the trees or to increase the depth of the foundations". This last solution involved underpinning the foundations of the building. At paragraph 48, he said:

"I conclude that it was not necessary to underpin the property provided, but only provided, that sufficiently effective management of the trees could be assured. No attempt was made on behalf of the claimant to obtain such assurance."

He then referred to the passage in the speech of Lord Cooke in Delaware from which I have already quoted, and continued:

"Both parties failed to raise the question of management of the trees. The claimants may have so failed because of the advice received from their engineers. The defendant may have so failed because they were concentrating on questions of causation. However that may be, given that there was no assurance of management of the trees, underpinning was necessary. The only way in which I think it could be said that the costs of underpinning are not recoverable by the claimant would be on the basis that the claimant had unreasonably failed to mitigate its loss by failing to ask the defendant to manage the trees. No such argument was put before me; nor do I think that the point is a good one."

[25]Mr Bebb criticises this passage. He relies on the following points:(a) it was common ground that tree management would have been an effective remedy;

(b) it was also common ground (as recorded at paragraph 12 of the judgment) that the investigations carried out by PEP "had some deficiencies"; and

(c) Mr Kelsey (the claimant's expert) gave evidence that he would not have recommended underpinning in 1992 on the evidence then available. In these circumstances, the judge should have concluded that the view taken by PEP (viz that tree management would have been ineffective) was an unreasonable view, but he failed to make any finding on the point.

[26]In response, Mr Palmer submits that the judge should not be criticised for making no finding as to whether it was reasonable of PEP to take the view that tree management would be ineffective, since no such argument was advanced to the judge. I agree that, for the reasons given by Mr Palmer, the criticisms of the way in which the judge dealt with the underpinning issue are not well-founded. PEP recommended underpinning. As the judge found, since there was no assurance from Portsmouth that the trees would be managed, underpinning was necessary. It is true that the claimant did not ask Portsmouth in terms whether it would remove or severely reduce the height of the two trees. But, as the judge pointed out, the mitigation argument was not put that way. The judge was entitled to say that, even if such an argument had been put, he would have rejected it. It is not surprising that he did not give reasons for this hypothetical answer. But there was ample material on which it could be based. As Mr Palmer points out, even when given the opportunity to abate the nuisance, Portsmouth concentrated on the issue of causation, and not abatement. It continued to dispute that the trees had caused the subsidence and damage up to and including the trial. I would, therefore, reject the challenge to the judge's conclusion on the underpinning issue. The judge was entitled to conclude that the claimant acted reasonably in taking the course that it did. It is trite law that the onus is on a defendant to show that a claimant has failed to take reasonable steps to mitigate his loss: see Clerk & Lindsell on Torts 18 th edition at paragraph 29-02. Moreover, the measures taken by the innocent party to extricate himself from the difficulty in which he has been placed by the wrongdoer "ought not to be weighed in nice scales at the instance of the party whose [breach of contract] has occasioned the difficulty": per Lord Macmillan in Banco de Portugal v Waterlow & Sons

[1932] AC 452

, 506. The question of mitigation is one of fact. I see no reason for disturbing the judge's finding. Conclusion

[27]I would, therefore, dismiss this appeal on all three issues.

LORD JUSTICE ALDOUS: I agree.

ORDER

Appeal dismissed with costs, assessed in the sum of £18,000 plus VAT. (Order not part of approved judgment)