Transco plc (formerly BG plc and BG Transco plc) (Appellants) v. Stockport Metropolitan Borough Council (Respondents)

HOUSE OF LORDS
OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT
IN THE CAUSE
Transco plc (formerly BG plc and BG Transco plc) (Appellants) v. Stockport Metropolitan Borough Council (Respondents)
[2003] UKHL 61
LORD BINGHAM OF CORNHILL
My Lords,
1. In this appeal the House is called upon to review the scope and application, in modern conditions, of the rule of law laid down by the Court of Exchequer Chamber, affirmed by the House of Lords, in Rylands v Fletcher (1866) LR 1 Exch 265; (1868) LR 3 HL 330.
2. I need not repeat the summary given by my noble and learned friend Lord Hoffmann of the facts giving rise to the dispute between the parties to this appeal. The salient facts appear to me to be these. As a multi-storey block of flats built by a local authority and let to local residents, Hollow End Towers was typical of very many such blocks throughout the country. It had been built by the respondent council. The block was supplied with water for the domestic use of those living there, as statute has long required. Water was carried to the block by the statutory undertaker, from whose main the pipe central to these proceedings led to tanks in the basement of the block for onward distribution of the water to the various flats. The capacity of this pipe was much greater than the capacity of a pipe supplying a single dwelling, being designed to meet the needs of 66 dwellings. But it was a normal pipe in such a situation and the water it carried was at mains pressure. Without negligence on the part of the council or its servants or agents, the pipe failed at a point within the block with the inevitable result that water escaped. Since, again without negligence, the failure of the pipe remained undetected for a prolonged period, the quantity of water which escaped was very considerable. The lie and the nature of the council's land in the area was such that the large quantity of water which had escaped from the pipe flowed some distance from the block and percolated into an embankment which supported the appellant Transco's 16-inch high-pressure gas main, causing the embankment to collapse and leaving this gas main exposed and unsupported. There was an immediate and serious risk that the gas main might crack, with potentially devastating consequences. Transco took prompt and effective remedial measures and now seeks to recover from the council the agreed cost of taking them.
Rylands v Fletcher
3. Few cases in the law of tort or perhaps any other field are more familiar, or have attracted more academic and judicial discussion, than Rylands v Fletcher. This relieves me of the need both to summarise the well-known facts of the case and to
rehearse yet again the passages cited by Lord Hoffmann in which Blackburn J (1868) LR 1 Exch 265, 279 and Lord Cairns LC (1868) LR 3 HL 330, 338-339 expressed the ratio of their decisions. I content myself with three points, none of them controversial:
(1) The plaintiff framed his claim as one of negligence: see (1866) LR 1 Exch 265. It was only when a majority of the Court of Exchequer (Pollock CB and Martin B, Bramwell B dissenting: (1865) 3 H & C 774), held against him, ruling that no claim would lie in the absence of negligence, that the plaintiff changed tack and contended that defendants were liable even if negligence could not be established against them.
(2) Blackburn J did not conceive himself to be laying down any new principle of law. When, in Ross v Fedden (1872) 26 LT 966, 968, it was later suggested to him by counsel that the question in Rylands v Fletcher had never been decided until the adjudication of that case, he rejected the suggestion in robust terms. The Lord Chancellor regarded the principles on which the case was to be determined as "extremely simple": (1868) LR 3 HL 330, 338. Had the House regarded the case as raising issues of great moment, steps might no doubt have been taken to assemble a stronger quorum to hear the appeal: see Heuston, "Who was the Third Lord in Rylands v Fletcher?" (1970) 86 LQR 160-165. It seems likely, as persuasively contended by Professor Newark ("The Boundaries of Nuisance" (1949) 65 LQR 480, 487-488), that those who decided the case regarded it as one of nuisance, novel only to the extent that it sanctioned recovery where the interference by one occupier of land with the right or enjoyment of another was isolated and not persistent.
(3) Those involved in Rylands v Fletcher, as counsel or judges, must have been very much alive to the catastrophic results which may ensue when reservoir dams burst. Professor Brian Simpson has drawn attention ("Legal Liability for Bursting Reservoirs: The Historical Context of Rylands v Fletcher" (1984) 13 Journal of Legal Studies 209) to two such catastrophes, one in 1852, some eight years before the inundation of Mr Fletcher's colliery, the second in 1864, after Fletcher's case had been heard at first instance but before the hearing in the three appellate courts. In the Court of Exchequer Chamber, Blackburn J expressly referred to the case of damage done by the bursting of waterworks companies' reservoirs: (1866) LR 1 Exch 265, 270. Lord Cairns, as Sir Hugh Cairns QC, had advised on the payment of compensation when the second disaster occurred. No matter how broadly the principle was expressed when judgment was given, the risk of escape of water from an artificially constructed reservoir was one which the judges must have had vividly in mind. The damage suffered by Fletcher was not the result of a dam failure, but nor was Rylands' reservoir a mere pond: inspecting it before writing his article, Simpson found it still in use, with a capacity of over 4 million gallons and covering 1½ acres when full.
The future development of Rylands v Fletcher
4. In the course of his excellent argument for the council, Mr Mark Turner QC canvassed various ways in which the rule in Rylands v Fletcher might be applied and developed in future, without however judging it necessary to press the House to accept any one of them. The boldest of these courses was to follow the trail blazed by a majority of the High Court of Australia in Burnie Port Authority v General Jones Property Ltd (1994) 120 ALR 42 by treating the rule in Rylands v Fletcher as absorbed by the principles of ordinary negligence. In reaching this decision the
majority were influenced by the difficulties of interpretation and application to which the rule has undoubtedly given rise (pp 52-55), by the progressive weakening of the rule by judicial decision (pp 54-55), by recognition that the law of negligence has been very greatly developed and expanded since Rylands v Fletcher was decided (pp 55-65) and by a belief that most claimants entitled to succeed under the rule would succeed in a claim for negligence anyway (pp 65-67).
5. Coming from such a quarter these comments of course command respect, and they are matched by expressions of opinion here. Megaw LJ observed in Leakey v National Trust for Places of Historic Interest or Natural Beauty [1980] QB 485 at 519 that application of the decision and of the dicta in Rylands v Fletcher had given rise to continual trouble in the law of England. In its report on Civil Liability for Dangerous Things and Activities (1970) (Law Com No 32), p 12, para 20(a) the Law Commission described the relevant law as "complex, uncertain and inconsistent in principle". There is a theoretical attraction in bringing this somewhat anomalous ground of liability within the broad and familiar rules governing liability in negligence. This would have the incidental advantage of bringing the law of England and Wales more closely into line with what I understand to be the law of Scotland (see RHM Bakeries (Scotland) Ltd v Strathclyde Regional Council 1985 SLT 214, 217, where Lord Fraser of Tullybelton described the suggestion that the decision in Rylands v Fletcher had any place in Scots law as "a heresy which ought to be extirpated"). Consideration of the reported English case law over the past 60 years suggests that few if any claimants have succeeded in reliance on the rule in Rylands v Fletcher alone.
6. I would be willing to suppress an instinctive resistance to treating a nuisance-based tort as if it were governed by the law of negligence if I were persuaded that it would serve the interests of justice to discard the rule in Rylands v Fletcher and treat the cases in which it might have been relied on as governed by the ordinary rules of negligence. But I hesitate to adopt that solution for four main reasons. First, there is in my opinion a category of case, however small it may be, in which it seems just to impose liability even in the absence of fault. In the context of then recent catastrophes Rylands v Fletcher itself was understandably seen as such a case. With memories of the tragedy at Aberfan still green, the same view might now be taken of Attorney General v Cory Brothers and Co Ltd [1921] 1 AC 521 even if the claimants had failed to prove negligence, as on the facts they were able to do. I would regard Rainham Chemical Works Ltd v Belvedere Fish Guano Co Ltd [1921] 2 AC 465, and Cambridge Water Co v Eastern Counties Leather Plc [1994] 2 AC 264 (had there been foreseeability of damage), as similarly falling within that category. Second, it must be remembered that common law rules do not exist in a vacuum, least of all rules which have stood for over a century during which there has been detailed statutory regulation of matters to which they might potentially relate. With reference to water, section 209 of the Water Industry Act 1991 imposes strict liability (subject to certain exemptions) on water undertakers and Schedule 2 to the Reservoirs Act 1975 appears to assume that on facts such as those of Rylands v Fletcher strict liability would attach. If the law were changed so as to require proof of negligence by those previously thought to be entitled to recover under the rule in Rylands v Fletcher without proving negligence, the effect might be (one does not know) to falsify the assumption on which Parliament has legislated, by significantly modifying rights which Parliament may have assumed would continue to exist. Third, although in
Cambridge Water [1994] 2 AC 264, 283-285, the possibility was ventilated that the House might depart from Rylands v Fletcher in its entirety, it is plain that this suggestion was not accepted. Instead, the House looked forward to a more principled and better controlled application of the existing rule: see, for example, p 309. While this is not a conclusive bar to acceptance of the detailed argument presented to the House on this occasion, "stop-go" is in general as bad an approach to legal development as to economic management. Fourth, while replacement of strict Rylands v Fletcher liability by a fault-based rule would tend to assimilate the law of England and Wales with that of Scotland, it would tend to increase the disparity between it and the laws of France and Germany. Having reviewed comparable provisions of French and German law, van Gerven, Lever and Larouche (Cases, Materials and Text on National, Supranational and International Tort Law (2000), p 205) observe:
"Even if the contours of the respective regimes may differ, all systems studied here therefore afford a form of strict liability protection in disputes between neighbouring landowners."
The authors indeed suggest (p 205) that the English rule as laid down in Rylands v Fletcher is "the most developed of these regimes".
7. Should, then, the rule be generously applied and the scope of strict liability extended? There are certainly respected commentators who favour such a course and regret judicial restrictions on the operation of the rule: see Fleming, The Law of Torts, 9th ed (1998), p 377; Markesinis and Deakin, Tort Law, 5th ed (2003), p 544. But there is to my mind a compelling objection to such a course, articulated by Lord Goff of Chieveley in Cambridge Water [1994] 2 AC 264, 305:
"Like the judge in the present case, I incline to the opinion that, as a general rule, it is more appropriate for strict liability in respect of operations of high risk to be imposed by Parliament, than by the courts. If such liability is imposed by statute, the relevant activities can be identified, and those concerned can know where they stand. Furthermore, statute can where appropriate lay down precise criteria establishing the incidence and scope of such liability."
It may be added that statutory regulation, particularly when informed by the work of the Law Commission, may take such account as is judged appropriate of the comparative law considerations on which I have briefly touched.
8. There remains a third option, which I would myself favour: to retain the rule, while insisting upon its essential nature and purpose; and to restate it so as to achieve as much certainty and clarity as is attainable, recognising that new factual situations are bound to arise posing difficult questions on the boundary of the rule, wherever that is drawn.
9. The rule in Rylands v Fletcher is a sub-species of nuisance, which is itself a tort based on the interference by one occupier of land with the right in or enjoyment of land by another occupier of land as such. From this simple proposition two consequences at once flow. First, as very clearly decided by the House in Read v J Lyons & Co Ltd [1947] AC 156, no claim in nuisance or under the rule can arise if the
events complained of take place wholly on the land of a single occupier. There must, in other words, be an escape from one tenement to another. Second, the claim cannot include a claim for death or personal injury, since such a claim does not relate to any right in or enjoyment of land. This proposition has not been authoritatively affirmed by any decision at the highest level. It was left open by Parker LJ in Perry v Kendricks Transport Ltd [1956] 1 WLR 85, 92, and is inconsistent with decisions such as Shiffman v Order of St John of Jerusalem [1936] 1 All ER 557 and Miles v Forest Rock Granite Co (Leicestershire) Ltd (1918) 34 TLR 500. It is however clear from Lord Macmillan's opinion in Read at pp 170-171 that he regarded a personal injury claim as outside the scope of the rule, and his approach is in my opinion strongly fortified by the decisions of the House in Cambridge Water [1994] 2 AC 264 and Hunter v Canary Wharf Ltd [1997] AC 655, in each of which nuisance was identified as a tort directed, and directed only, to the protection of interests in land.
10. It has from the beginning been a necessary condition of liability under the rule in Rylands v Fletcher that the thing which the defendant has brought on his land should be "something which . . . will naturally do mischief if it escape out of his land" ((1865) LR 1 Exch 265, 279 per Blackburn J), "something dangerous … " (ibid), "anything likely to do mischief if it escapes … " (ibid), "something … harmless to others so long as it is confined to his own property, but which he knows to be mischievous if it gets on his neighbour's …" (ibid, at p 280), "… anything which, if it should escape, may cause damage to his neighbour . . ." ((1868) LR 3 HL 330, 340 per Lord Cranworth). The practical problem is of course to decide whether in any given case the thing which has escaped satisfies this mischief or danger test, a problem exacerbated by the fact that many things not ordinarily regarded as sources of mischief or danger may nonetheless be capable of proving to be such if they escape. I do not think this condition can be viewed in complete isolation from the non-natural user condition to which I shall shortly turn, but I think the cases decided by the House give a valuable pointer. In Rylands v Fletcher itself the courts were dealing with what Lord Cranworth ((1868) LR 3 HL 330, 342) called "a large accumulated mass of water" stored up in a reservoir, and I have touched on the historical context of the decision in paragraph 3(3) above. Rainham Chemical Works [1921] 2 AC 465, 471, involved the storage of chemicals, for the purpose of making munitions, which "exploded with terrific violence". In Attorney General v Cory Brothers and Co Ltd [1921] 1 AC 521, 525, 530, 534, 536, the landslide in question was of what counsel described as an "enormous mass of rubbish", some 500,000 tons of mineral waste tipped on a steep hillside. In Cambridge Water [1994] 2 AC 264 the industrial solvents being used by the tannery were bound to cause mischief in the event, unforeseen on the facts, that they percolated down to the water table. These cases are in sharp contrast with those arising out of escape from a domestic water supply (such as Carstairs v Taylor (1871) LR 6 Exch 217, Ross v Fedden (1872) 26 LT 966 or Anderson v Oppenheimer (1880) 5 QBD 602) which, although decided on other grounds, would seem to me to fail the mischief or danger test. Bearing in mind the historical origin of the rule, and also that its effect is to impose liability in the absence of negligence for an isolated occurrence, I do not think the mischief or danger test should be at all easily satisfied. It must be shown that the defendant has done something which he recognised, or judged by the standards appropriate at the relevant place and time, he ought reasonably to have recognised, as giving rise to an exceptionally high risk of danger or mischief if there should be an escape, however unlikely an escape may have been thought to be.
11. No ingredient of Rylands v Fletcher liability has provoked more discussion than the requirement of Blackburn J ((1866) LR 1 Exch 265, 280) that the thing brought on to the defendant's land should be something "not naturally there", an expression elaborated by Lord Cairns ((1868) LR 3 HL 330, 339) when he referred to the putting of land to a "non-natural use": see Stallybrass, "Dangerous Things and the Non-Natural User of Land" (1929) 3 CLJ 376-397; Goodhart, "Liability for Things Naturally on the Land" (1932) 4 CLJ 13-33; Newark, "Non-Natural User and Rylands v Fletcher" (1961) 24 MLR 557-571; Williams, "Non-Natural Use of Land" [1973] CLJ 310-322; Weir, "Rylands v Fletcher Reconsidered" [1994] CLJ 216. Read literally, the expressions used by Blackburn J and Lord Cairns might be thought to exclude nothing which has reached the land otherwise than through operation of the laws of nature. But such an interpretation has been fairly described as "redolent of a different age" (Cambridge Water [1994] 2 AC 264, 308), and in Read v J Lyons & Co Ltd [1947] AC 156, 169, 176, 187 and Cambridge Water at p 308 the House gave its imprimatur to Lord Moulton's statement, giving the advice of the Privy Council in Rickards v Lothian [1913] AC 263, 280:
"It is not every use to which land is put that brings into play that principle. It must be some special use bringing with it increased danger to others, and must not merely be the ordinary use of the land or such a use as is proper for the general benefit of the community."
I think it clear that ordinary user is a preferable test to natural user, making it clear that the rule in Rylands v Fletcher is engaged only where the defendant's use is shown to be extraordinary and unusual. This is not a test to be inflexibly applied: a use may be extraordinary and unusual at one time or in one place but not so at another time or in another place (although I would question whether, even in wartime, the manufacture of explosives could ever be regarded as an ordinary user of land, as contemplated by Viscount Simon, Lord Macmillan, Lord Porter and Lord Uthwatt in Read v J Lyons & Co Ltd [1947] AC 156, 169-170, 174, 176-177, 186-187). I also doubt whether a test of reasonable user is helpful, since a user may well be quite out of the ordinary but not unreasonable, as was that of Rylands, Rainham Chemical Works or the tannery in Cambridge Water. Again, as it seems to me, the question is whether the defendant has done something which he recognises, or ought to recognise, as being quite out of the ordinary in the place and at the time when he does it. In answering that question, I respectfully think that little help is gained (and unnecessary confusion perhaps caused) by considering whether the use is proper for the general benefit of the community. In Rickards v Lothian itself, the claim arose because the outflow from a wash-basin on the top floor of premises was maliciously blocked and the tap left running, with the result that damage was caused to stock on a floor below: not surprisingly, the provision of a domestic water supply to the premises was held to be a wholly ordinary use of the land. An occupier of land who can show that another occupier of land has brought or kept on his land an exceptionally dangerous or mischievous thing in extraordinary or unusual circumstances is in my opinion entitled to recover compensation from that occupier for any damage caused to his property interest by the escape of that thing, subject to defences of Act of God or of a stranger, without the need to prove negligence.
The present appeal
12. By the end of the hearing before the House, the dispute between the parties had narrowed down to two questions: had the council brought on to its land at Hollow End Towers something likely to cause danger or mischief if it escaped? and was that an ordinary user of its land? Applying the principles I have tried to outline, I think it quite clear that the first question must be answered negatively and the second affirmatively, as the Court of Appeal did: [2001] EWCA Civ 212.
13. It is of course true that water in quantity is almost always capable of causing damage if it escapes. But the piping of a water supply from the mains to the storage tanks in the block was a routine function which would not have struck anyone as raising any special hazard. In truth, the council did not accumulate any water, it merely arranged a supply adequate to meet the residents' needs. The situation cannot stand comparison with the making by Mr Rylands of a substantial reservoir. Nor can the use by the council of its land be seen as in any way extraordinary or unusual. It was entirely normal and routine. Despite the attractive argument of Mr Ian Leeming QC for Transco, I am satisfied that the conditions to be met before strict liability could be imposed on the council were far from being met on the facts here.
14. I would accordingly dismiss the appeal with costs.