Hiscox Syndicates Ltd & Anor v Pinnacle Ltd & Ors [2008] EWHC 1386 (QB)

Case No HT/08/113[2008] EWHC 1386 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Venue Royal Courts of JusticeDate Friday, 13 th June 2008
Before
MR. JUSTICE AKENHEAD
B E T W E E N:
Between
HISCOX SYNDICATES LTD. & Anor.ClaimantTHE PINNACLE LTD. & Ors.Defendant
Transcribed by BEVERLEY F. NUNNERY & COOfficial Shorthand Writers and Tape TranscribersQuality House, Quality Court, Chancery Lane, London WC2A 1HPTel: 020 7831 5627 Fax: 020 7831 7737
MR. T. FANCOURT QC and MR. M. SHERIDAN (instructed by Allen & Overy) appeared for Claimants.MR. P. DARLING QC and MR. P. STANSFIELD (instructed by Davies Arnold Cooper) appeared for Defendants.
J U D G M E N T
[1]This case and application relate to a new building proposed to be constructed on Bishopsgate in the City of London, which is to be called The Pinnacle. The Pinnacle, when constructed, is to be one of the tallest buildings in Europe, possibly the tallest building in Europe. By a claim issued in early December of last year, the claimants, Hiscox Syndicates Ltd. and Hiscox plc, sought injunctions on the grounds of nuisance against four defendants: The Pinnacle Ltd., The Pinnacle No.1 Ltd. (both those companies being incorporated in the West Indies), Keltbray Ltd. and Arab Investments Ltd. (the latter two defendants are companies incorporated in England and Wales). Keltbray, the contractor, does not appear before me today and it is not, as such, the subject matter of the injunctions that were granted.[2]Hiscox are lessees and occupiers of office premises at 1 Great St. Helens, London EC3. The defendants are engaged on a substantial redevelopment on adjacent sites which comprise 22 to 24 and 38 Bishopsgate, Crosby Court and 4 Crosby Square. The first defendant is the freeholder owner of the site, and the second defendant is the lessee of the site. The third defendant is the contractor engaged to carry out the demolition works on the site. The fourth defendant is said to be the managing agent for this project.[3]There is a substantial amount of demolition which has already been done, and there remains some demolition to be done.[4]I am not going to define precisely geographically where everything is, but Great St. Helens comprises a small street leading from Bishopsgate to what might be described as a square or a relatively enclosed area behind it. What has been called the entrance tunnel provides highway access at right angles to Bishopsgate, and it has been called here the “entrance tunnel” because the access way through it goes under and through one of the buildings on the defendants' site, which is being demolished, and of course the time has now come when it is thought important that the structure which comprises the tunnel is itself demolished.[5]Once one is in what I might call Great St. Helens "proper" - that is that part of Great St. Helens that does not comprise the entrance tunnel - at right angles to the entrance tunnel there is what has been called the “access tunnel”, which leads to Crosby Court, which is an enclosed square. The access tunnel is also a part of the public highway which is enclosed by a building on the defendants' development site which, so to speak, abuts, at least in part, 1 Great St. Helens, leased and occupied by Hiscox. The time has come in the demolition process when that part of the structure above and to the side of the access tunnel needs to be removed to enable the rest of The Pinnacle development to proceed.[6]Initially and before Christmas of last year, the claimants sought injunctive relief against the first, second and fourth defendants before the Chancellor in the Chancery Division. He granted an injunction relating to access but not in relation, at that stage, to anything else. There followed, in January, 2008, a four day hearing before His Honour Judge Hodge QC, sitting as a judge of the High Court in the Chancery Division, where he heard detailed argument and considered detailed evidence about whether there should be injunctions granted. He decided that injunctions should be granted with regard to vibration, water penetration and access. This current application relates only to access.[7]The defendants now apply to me, the case having been transferred from the Chancery Division to the Technology and Construction Court, to vary that order to enable, in effect, the blocking up of some access and the provision of further access in the meanwhile.[8]The claimants say, and I certainly have no reason to doubt, that they have throughout adopted a relatively pragmatic approach to applications or requests from the defendants to impinge upon what would otherwise be their rights, and that they have been reasonably cooperative on other occasions. However, it is clear that the subject matter of this claim has not been capable of resolution and the claimants are very concerned that insufficient consideration has been given to the protection and assurance of their interests.[9]Some point has been made in the copious witness evidence that has been put before me about the short notice of the defendants' current application. Although I am of the view that more notice of that application should have been given (from a pragmatic standpoint to enable sufficient evidence to be put before the court), it seems to me that I must look at the matter now on the basis of the evidence and argument before me, given, in my view, that the parties' collectively have had sufficient time to marshal their evidence and arguments for this hearing. I adjourned the hearing on Thursday of last week to enable the submission by both sides of further evidence. That has been done. Indeed, the evidence collation process continued until about half past two this morning - extremely industrious solicitors and clients obviously working until late last night finally to respond to further witness statements that had been put in by the defendants yesterday. Of course in some respects, matters are changing on a day-to-day basis. For instance, the City of London is not, I think, changing its mind but more information is coming in day-to-day. But the court has got to review the position, it seems to me, as it stands.[10]I consider that, primarily, in deciding whether or not there should be a variation to an existing injunction, I have to have in mind the Cyanamid principles. Thus, there must be a reasonably arguable case and, if there is a reasonably arguable case and indeed defence, as the case may be, one then moves on to the balance of convenience. If since an interim injunction has been granted the balance of convenience has changed, the Court must have the right to review and vary, if appropriate, the earlier order. I will now turn to what have been called, rightly or wrongly, “threshold” issues which have arisen between the parties.[11]Mr. Fancourt says that, in effect, the defendants' defence in principle is hopeless and unarguable. His clients' rights are bound to be infringed if there is the proposed variation to the injunction, and in those circumstances there is no room to interfere with the injunctions made by His Honour Judge Hodge QC. I have formed the view that all the issues of liability are, and remain, eminently arguable on both sides. It is not for this court to decide now what may be the final outcome to this case.[12]First of all, I deal with the question of public nuisance. It is undoubtedly the case that members of the public and indeed people who live on or near the highway have a right to pass and re-pass and to use the highway for any lawful purpose, and any interference with that right will often give rise to a cause of action. There has been substantial authority on this over many years and I am not going to go into any great detail about this. But there is, it seems to me, an eminently arguable defence, which would obviously depend on the facts, arising out of authorities such as Harper v. Haden [1933] Ch. 298, and in particular the judgments of Lord Hanworth M.R., and Romer L.J., and later cases such as Westminster City Council v. Ocean Leisure [2004] EWCA Civ 970.[13]It seems to me that it is eminently arguable that reasonable, temporary obstruction of the highway is or may be allowable before it becomes a public nuisance. Obviously it is a question of fact and degree and in any case, it may depend on the measures taken by the obstructor to overcome the consequences of his or her obstruction, as the case may be. I do not think it is helpful to have at this stage of the case a final and definitive decision (on witness statement evidence that has not been challenged by cross-examination) as to whether the proposed obstruction of Great St. Helens and the access tunnel will give rise to a cause of action in nuisance. It may do, it may not do, but it is not for me to say so at this stage.[14]The next point relates to whether or not there is, so to speak, an inalienable frontager's right. Mr. Fancourt QC has quite properly referred to me to the general comments made on this in the current edition of Clerk and Lindsell on Torts, para.20-120, which I will not repeat, it will be taken as read. This provides, broadly, that the owner of land (and that would cover, I think, it seems to me, a leaseholder such as Hiscox) adjoining a highway has a right of access to the highway from any part of his premises. But it is clear, on at least what Clerk and Lindsell say, that the private right ceases as soon as the highway is reached, and any subsequent interference is a public nuisance, if it is a nuisance at all. So one, at least arguably, to a large extent comes back to the question of public nuisance and whether or not the temporary obstruction of the public highway is reasonable or unreasonable in all the circumstances.[15]So for those reasons, broadly, I consider that on both sides there is a reasonably arguable claim, but also a reasonably arguable defence, respectively so far as public nuisance and frontager's rights are concerned.[16]So it seems to me that I must then move on to the question of balance of convenience and consider whether or not it is appropriate, weighing one thing up with another, to vary the injunction. Of course one gives weight and attaches great importance to the injunctions that have already been granted, but since His Honour Judge Hodge QC gave judgment, matters have moved forward on this site, and therefore one needs to consider the position as it is now and whether it is appropriate for any part of the access to the public highway to be obstructed for a period.[17]Now, there are essentially, as I understand it, three entrances to 1 Great St. Helens. One is, I think, through the front door, which is in Great St. Helens proper; one is through the car park entrance, which is accessed from the access tunnel; and there is also some other access, which is undoubtedly less satisfactory, from a road at the back which I think is called the Undershaft. What is proposed by the defendants is shown at p.26 of exhibit JFB 4 to Mr. Bramhall's fourth witness statement. What is proposed for the access tunnel, in effect, is that for a period there is to be no access along the tunnel as such, and, whilst that is going on, the structure above the tunnel will be removed by way of demolition. However, to continue to provide access to the car park (which, if one looks at p.26 and turns it on one side, is at the bottom right hand corner of 1 Great St. Helens) an alternative car park route (“ACPR”) will be provided from Bishopsgate. That is likely to be in place until the demolition of the structure forming the access tunnel has happened. There will then in time be access provided along the line of the access tunnel, at least approximately, to enable access to the car park entrance and to Crosby Square as necessary, and the ACPR will ultimately be removed, it is proposed, when that is done.[18]It is also proposed that over nine weekends an alternative access route (“AAR”) will be provided to enable there to be vehicular and pedestrian access to the major part of Great St. Helens from Bishopsgate, whilst the structure above the entrance tunnel is removed. This is to be operated, it is proposed on nine weekends.[19]So it is that, to avoid any suggestion that there was a breach of the injunction, the defendants properly come to court to seek a variation to the injunction before they embark down the route of in any way obstructing the current access that is there and protected by the existing injunction.[20]If I can deal briefly with the ACPR first, it is obviously clear, right and proper that access should be provided on a 24hour basis seven days a week to the claimants to enable them to have access, vehicular and pedestrian , to their car park. There has been some discussion and evidence before me as to how much use there is of the car park. It does not seem, in relative terms, as if there is an enormous amount of use of the car park, which is relatively small and so it would not be able to take an enormous amount of use, but there is bicycle traffic, motor cycle traffic and car and van and truck traffic as well. There is some suggestion that there are 20 or 30 of those types of vehicles which may use it in a day. It may well be, one imagines so, that there is less use at the weekends. It is very important that they do have access so that their building and equipment can be serviced. The claimants are an internationally known and renowned insurance business, and it is critical that all the services that need to be supported in that building can continue to be so. As the providers of services generally use the car park to park, it must be kept open.[21]A number of objections have been raised by the claimants and I consider that some of them are good and others less good, but all of them are curable, about appropriate amendments and future proposals. First of all, there is an issue between the parties as to what the width of the ACPR should be. I have formed the view that the width should be a minimum of 4.1 metres, plus a footpath, and the footpath should be at least 4 foot wide or 1.216 metres wide. That will enable two cars to pass and indeed a van or small lorry and a car. A major problem is potentially that, even at 4.1 metres wide, it may not be wide enough to enable two larger vehicles to pass and that would lead to a backing up on to one of the busiest streets in the City of London, Bishopsgate, and that is very unsatisfactory. It seems to me that in the proposals which have been put forward, there is not yet formal or detailed provision for a holding area or an area where vehicles can turn round. Otherwise, if there is no provision for an area where they can turn round, the vehicles will either have to back in or back out, and both would or could be unsatisfactory from a safety, traffic, congestion and obstruction point of view. Therefore, it must be appropriate for there to be a holding area which will be sufficient to enable two larger vehicles to pass with marshals' supervision, as well as being an area where vehicles can turn without the need for having to reverse into or on to Bishopsgate with the result they can go in facing forward and go out facing forward. There are no details yet about this turning or holding area, and when I asked Mr. Darling QC, counsel for the defendants, where it was to go, he quite properly said that he could not tell me and that, I believe, is because no detailed plan has yet been produced showing where it is going to go.[22]I now come to the question of traffic marshals for the ACPR, and it seems to me, so far as they are concerned, how many are required remains the issue. The claimants say four would be required and the defendants say two. I have formed the view, not I think peculiarly by reference to King Solomon, that three marshals should be allowed, because that gives some flexibility at both ends of the ACPR to permit and to control the flow of traffic. They should be there 24 hours a day, seven days a week.[23]Next a point is made about access for EDF, who are the suppliers and/or distributors of electricity to the claimants' building. EDF have, and maintain, a substation for the building which is in the basement or in the lower floor, and it is accessed by, I am told, some stairs from the outside. It could be, although it has not been made clear yet, that that stairway down to the EDF substation is not in the access tunnel area but it may be, so to speak, round the corner with access from Crosby Square. I am told also, and I accept, that in the substation area the claimants also need to have access also for servicing, I believe, of air conditioning or plant of that sort. So this access, the ACPR access, should make adequate provision in terms of doorways through the side of the ACPR for the passage of men and women and the requisite equipment for EDF and any people who need to check up on the claimants' air conditioning installation or whatever else is, so to speak, down in that area.[24]There was a question raised about the piling. The new piling work is going to be done on the defendants' site in the near future, and it appears likely that the nearest pile, which is likely to be a substantial one, will be some six metres from the line of the ACPR. However, it is not necessary for me to make any order about that because one thing must be made clear in any order that is granted, that this access through the ACPR is to be provided and maintained by the defendants and therefore it will be in their interests to secure that the piling does not in any way interfere with the access. The access route along the ACPR must be of sufficient strength and durability to take up to 32 tonne vehicles, which I am told is the maximum loaded tonnage of vehicle used, although it does appear that the majority of vehicles are very substantially less than that.[25]Another important point which is raised by Mr. Fancourt QC relates to the City of London, what they have done in the past and what they are saying about whether or not Great St. Helens and Crosby Square can be, in effect, blocked up. On 3rd March 2008 the City of London imposed a temporary prohibition of vehicular traffic in respect of Great St. Helens. The document by which this was done makes it clear that it relates to Great St. Helens. The period is identified and it goes from 29th March 2008 up to 31st July 2008. The prohibition applies to vehicles. The reason for the temporary prohibition is to allow demolition and site works. It seems to be common ground that the reason given here relates to the demolition and site works to be carried out on the defendants' site, or at least primarily on the defendants' site. No alternative route is shown on this temporary prohibition, but the exceptions are said to be:
"The prohibition will not apply (1) so as to prevent access to premises on or adjacent to the length of highway insofar as such access is reasonably practicable"
. Now, it appears at least a possibility that the requisite notices were not given before this temporary prohibition was granted. I make no finding about that; I do not know enough about it.[26]So it is that the City of London has indicated that it may well issue new orders both on an emergency road closure basis and a prohibition basis. I was given a document which is headed "Note to legal representatives for Hiscox and Pinnacle regarding road closure issues". This is a document that emerged fairly recently from the City of London and it perhaps has been produced in the light of the fact that the claimants, or at least one of the claimants, has commenced judicial review proceedings against the City of London about road closures. I have not been told how far those judicial review proceedings have progressed.[27]Be that as it may, it seems to me that although this order relates only to Great St. Helens and not to Crosby Square, as the City of London say in this document:
"It is not considered that as a matter of pragmatic reality an order is required for the period 11th June to 22nd July, because the effect of the existing road closure in respect of Great St. Helens is that vehicles are lawfully prevented from gaining access to Crosby Square, in the event the City is satisfied that for public safety reasons Crosby Square should be closed. For the time being the City is confident that the effect of the road closure order is that vehicles cannot gain access to Crosby Square. In the circumstances, the City is not currently satisfied that it is necessary or expedient that such an order is required today."
[28]There seems to be something to be said so far as this pragmatic approach is concerned. It may be the case, and I am certainly not going to make any finding about it today, that the access tunnel is part of Crosby Square. It may or may not be, but it seems to me that the City of London is giving active consideration to whether or not the existing order should be revoked and be replaced by an emergency road closure order or orders, and further prohibitions. But it seems clear that there has been some reasonably close liaison between the City of London and the defendants with regard to this development as such.[29]So it seems to me that in broad terms and subject to the variants that I have put on it, the order as sought in relation to the ACPR can be granted, but what I would like to ask the parties to do, in the light of the decision I have reached, subject to any reservation of rights, is to draw up the requisite order and come back before me later today and I will deal with any other consequential matters.[30]So far as the AAR is concerned, this involves a much more limited obstruction. It will only apply at weekends. There is little evidence before me that there is anything approaching the use of the claimants' building over the weekend than applies during the week, though I accept of course that it is always open to them as leaseholders to use it as much as and whenever they wish. But the AAR, I am satisfied, at least at this stage, should provide sufficient access, both vehicular and pedestrian. It is going to be marshalled by four permanent marshals throughout the weekends in question, and I do not see that the objections made to this are valid.[31]There had been some suggestions in respect of both the sets of demolition work to the tunnels that this could be done in a way which would not involve the closure or obstruction of the tunnels. I have to say, from the experience that this court has had over many years, that whilst all things are possible, it is much more practicable to demolish tunnels of this sort with the area of tunnel to be demolished cleared of people and vehicles. It is much safer to do so, and on the current evidence before the Court I consider that what is proposed by the defendants is not unreasonable, although I make no ultimate finding for the purposes of the final trial.[32]The question of business interruption insurance relates to both the AAR and the ACPR. There is a legitimate concern by the claimants that two of the defendants are registered in a tax haven country in the West Indies, and the other defendant against whom injunctions have been made has assets insufficient to satisfy any significant business interruption claim by Hiscox. There seem to be one or more insurance policies in place. The first version of an insurance policy that was provided by the defendants is exhibited to the third witness statement of Viscount Dupplin at p.11. It certainly caused me some concern because it indicated that there was a construction all-risks policy covering loss of or damage to any permanent and/or temporary works including materials from incorporation, but, so far as third party liability was concerned, the interest was to indemnify the insured in respect of legal liability to pay damages to others for the death or personal injury to any person, or for "loss of or damage to material property of others and including consequential losses which result occurring during the period of insurance in connection with the project". The indemnity limit was £20 million and the period of insurance was 14th April to 31st May 2008. Now, that is clearly not adequate because, on its face, it only goes up to 31st May and we are beyond that now. There is a real risk that that cover in respect of third party liability would only cover the consequential losses of a third party such as the claimants for losses which were consequential upon the physical damage. There would not have to be physical damage necessarily. There could be other forms of nuisance and obstruction which would not lead to physical damage which could result in significant business interruption to the claimants.[33]But since then I have been pointed to further insurance procured by the defendants, details of which have been provided, which relates to insurance, amongst other things:
"... to indemnify the insured against their legal liability, contractual or otherwise, arising from loss of or damage to any property, obstruction, interference, loss of amenities, nuisance, trespass, stoppage of traffic, infringement of light, easement or quasi-easement and denial of access or any like cause."
[34]There are effectively three policies which cover different levels of insurance. The first one relates to £1 million, the second one to the next £49 million, and the third to the final £50 million. So there appears to be cover for £100 million. The version of the cover that has been provided for the £1 million however - and this may be a mistake - relates to the period of insurance from 14th April 2008 to 31st May 2008, whilst the higher excess levels relate to a period from 14th April 2008 to 23 July 2012. Of course, this covers a liability which the insured, the defendants, or at least some of them, would have for any actionable wrong by Hiscox. It is apparently, subject to the first £1 million not being in place at the moment, in force for the next four years. But Mr. Darling QC has indicated in argument that his clients are willing to secure business interruption insurance or to provide business interruption security to the extent that business interruption is caused by a breakdown in access to Great St. Helens, as a result of what the defendants are doing or proposing to do, irrespective of liability.[35]In my view, first of all, before any works start and before this variation of the injunction comes into place, there must be confirmation that the first £1 million cover is in place now and for the foreseeable future. Secondly, that adequate security must be provided to cover business interruption caused by any breakdown in access over the ACPR or the AAR. This means that work cannot necessarily start this weekend, because these matters will have to be sorted out, but it should be capable of being started fairly soon thereafter. What I would like the parties to do, and come back later with an order that is at least agreed on its terms. If they cannot agree, I will resolve it, and deal with any consequential matters. But the orders must reflect the things which I have indicated.[36]Whilst I am not deciding that the City of London’s current prohibition order of 3 March 2008 is valid, as a matter of pragmatic reality the City of London seems committed to closing Great St Helens at least in part. Although I was at one stage of the argument attracted by a suggestion that any injunction should be subject to the securing of effective orders from the City of London, I consider on balance that this leaves matters too much in the air. There is currently an order in place although it may be one that could be set aside. But if it is set aside and then replaced by something else, it may not matter given the pragmatic approach of the City of London to this issue.[37]In any order access was to be provided and maintained by the defendants. That is to be by a mechanism of transferring the injunction so that it applies to the ACPR and AAR. This can be by way of injunction or undertaking to the Court.[38]It must be understood that this judgment and the Order made pursuant to it do not render lawful what the Defendants have done or will do pursuant to it. I have had regard to Cyanamid principles and what I hope is a pragmatic application of the balance of convenience. I am not however endorsing as lawful or unlawful the activities of the defendants.