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

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    103.  There is obvious force in this criticism. A proliferation of adjectival paraphrase may not succeed in giving a full explanation of the twin requirements, but some explanation is called for, since "non-natural use" (the expression used by Lord Cairns LC in Rylands v Fletcher itself) is, as Lord Goff said in Cambridge Water (at p 308) "redolent of a different age". In my opinion the twin requirements are best understood if they are taken together, as is implicit in Lord Moulton's reference to danger:

    "… some special use bringing with it increased danger to others".

    It is the extraordinary risk to neighbouring property, if an escape occurs, which makes the land use "special" for the purposes of the principle in Rylands v Fletcher.

    104.  This point is brought out vividly in an interesting and scholarly article by Professor A W B Simpson, "Legal Liability for Bursting Reservoirs: The Historical Context of Rylands v Fletcher" (1984) 13 J Leg Stud 209, 219:

    "… In 19th century Britain there occurred two sensational reservoir disasters, and to appreciate the significance of these incidents it is important to appreciate the menacing character of a large dam once anxiety as to its security becomes current. Those who live or work in the area thought to be endangered by failure can conceive of themselves as permanently and continuously threatened; and depending on the state of the law, they may be, or at least think themselves to be, impotent in the face of the ever present threat. Nuclear power stations possess this menacing character for many people today, and it is not a product of the frequency of accidents at all".

    The same may be said of industrial complexes producing or processing explosive or volatile substances. During the first half of the 20th- century the terrible explosion at Rainham in Essex found its way into the law reports (Rainham Chemical Works Ltd v Belvedere Fish Guano Co Ltd [1921] 2 AC 465). During the second half of the 20th-century, the explosion at Flixborough in Humberside did not end in contested litigation. But no one who owned a house in the close vicinity of those disasters would readily have accepted that Lord Moulton's proposition was devoid of objective content.

    105.  Where Lord Moulton's formulation becomes questionable is, as Lord Goff pointed out in Cambridge Water (at p 308) his reference to land use "for the general benefit of the community". It is understandable that any court might be inclined to deal more strictly with a defendant who has profited from a dangerous activity conducted on his own land, and less strictly with persons conducting similar activities for the general public good. But in this area (which is some way removed from the "give and take" of minor nuisances) the court cannot sensibly determine what is an ordinary or special (that is, specially dangerous) use of land by undertaking some utilitarian balancing of general good against individual risk. The court must beware of what David Campbell has called "unsustainably ambitious claims to be able to identify the social welfare function" (see Of Coase & Corn: A (Sort of) Defence of Private Nuisance (2000) 63 MLR 197, 204). That inclination is apparent in the judgment of the Court of Appeal in Dunne v North Western Gas Board [1964] 2 QB 806. The temptation to make a utilitarian judgment even led Viscount Simon and Lord Macmillan in Read v J Lyons & Co Ltd (at pp 169-70 and p 174) to contemplate that in wartime the manufacture of explosive munitions might be regarded as an ordinary use of land. Regardless of any national emergency that sort of activity is (in Lord Goff's words in Cambridge Water at p 309) "an almost classic case of non-natural use".

    106.  My Lords, it is most desirable, after Burnie, that this House should state, with as much precision as the subject-matter allows, the way in which Lord Moulton's test, now 90 years old, should be understood and applied in the 21st century. I have had the great advantage of reading in draft the speeches of my noble and learned friends Lord Bingham of Cornhill and Lord Hoffmann. I respectfully agree with their observations on this topic, and in particular on what should now be understood by the "non-natural" or "special" use of land. I refrain from saying any more on the topic for fear of obscuring or qualifying in any way the clarity of my Lords' exposition.

    107.  The majority in Burnie commented that the scope of the Rylands v Fletcher principle has been progressively restricted from within and without. Both those observations are correct up to a point, but the process has not been entirely one-way traffic. Since the middle of the 19th century many activities which were once regarded as unusually dangerous (such as running railways, which no longer use steam locomotives fuelled by coal manually shovelled into the firebox) have become commonplace. Other activities unknown in the 19th century (including all those connected with the internal combustion engine) have come on the scene, being regarded first as dangerous innovations (see Musgrove v Pandelis [1919 ] 2 KB 43) but now as basic necessities. More recent developments (especially those concerned with nuclear energy) are largely untouched by common law authority (see as to liability under sections 7 to 12 of the Nuclear Installations Act 1965 Merlin v British Nuclear Fuels plc [1990] 2 QB 557 and Blue Circle Industries plc v Ministry of Defence [1999] Ch 289).

    108.  The extent of land use to be regarded as "special" has therefore certainly changed, and may on balance have diminished. The impact of statutory regulation has certainly increased. Mr Turner referred us not only to section 209 of the Water Industry Act 1991 (which imposes a strict, though qualified, liability in respect of any escape of water from a pipe vested in a water undertaker) but also to other statutory provisions affecting gas undertakers and persons responsible for damage caused by waste or aircraft. Another statutory provision of potentially far-reaching impact is to be found in the Health and Safety at Work etc Act 1974, which empowers the Secretary of State to make regulations, enforceable by action, for purposes which include:

    "(b)  protecting persons other than persons at work against risks to health or safety arising out of or in connection with the activities of persons at work;

    (c)  controlling the keeping and use of explosive or highly flammable or otherwise dangerous substances, and generally preventing the unlawful acquisition, possession and use of such substances".

    (See sections 1(1), 15 and 47(2) of that Act).

    109.  There has, as already noted, been some assimilation of the principles of nuisance and negligence in the limited area where the law imposes, in respect of an adventitious hazard, a measured duty of care (the phrase first used in England, I think, by Lord Wilberforce in Goldman v Hargrave [1967] 1 AC 645, 662). Your Lordships' House has in Delaware Mansions shown some readiness to extend the process of assimilation. But the principle in Rylands v Fletcher is the area of nuisance least open to that sort of assimilation. I am not persuaded that it would assist the development of the law to recast the Rylands v Fletcher principle as a 'non-delegable duty of care' (see Burnie at pp 61-5) especially if the end result were to stretch the principles of negligence so far that (in the words of Lord Macmillan in Donoghue v Stevenson [1932] AC 562, 612, cited in Burnie at p 65):

    "the law exacts a degree of diligence so stringent as to amount practically to a guarantee of safety".

    110.  The last observation that I wish to make about Burnie is on its implicit assumption that the imposition of strict liability is unnecessary and undesirable if a claim based solely in negligence would lead to the same outcome. That assumption seems to me, with respect, to overlook the practical implications, in a case of this sort, of bringing a claim in negligence, perhaps against a powerful corporate opponent. In such circumstances fairness may require that, instead of the claimant having to prove his case, the law casts on the defendant the burden of proving act of God, or some other defence to strict liability. That is illustrated by the New Zealand case of Autex Industries Ltd v Auckland City Council [2000] NZAR 324, in which the plaintiff would have succeeded (but for the court's residual discretion) in obtaining summary judgment under the principle in Rylands v Fletcher.

    111.  In my opinion the Court of Appeal was right in concluding that Transco's case, as pleaded and proved at trial, did not come within the principle in Rylands v Fletcher, nor did it establish liability under any other head of nuisance. The 11-storey tower built in the 1950's by Stockport MBC's predecessor was not in itself an unusual use of land. Nor was it an unusual use of land to provide a three inch asbestos cement pipe carrying water, under normal mains pressure, into the water tank room in the basement of the flats. There water was stored in two 1,000-gallon tanks, before being pumped up to tanks in the roof of the block of flats. No escape occurred from any of these tanks.

    112.  The only relevant accumulation of water within (or in the vicinity of) the flats of which the local authority was aware was the amount of water in the three inch pipe between the water authority's main and the point of discharge in the water tank room. The volume of that water is unknown, but it cannot have been significant or such as could, by itself, have been regarded as dangerous. The judge's suggestion that it would have been different if there had been 66 separate small pipes coming from the water authority's main is not a realistic approach.

    113.  It is true that a very large quantity of water must have escaped from the three inch pipe before the fracture was discovered, since the adjacent ground had become saturated, and produced a new "spring", by the time that the matter was investigated and the fracture found. The judge found that "vast quantities of water must have escaped". But that gradual and invisible saturation of the adjacent ground cannot be described as an accumulation made by deliberate human design, in the way that Mr Rylands planned, constructed and started to fill his reservoir at Ainsworth. The conditions for strict liability were simply not fulfilled. The Court of Appeal came to the right conclusion as regards both Rylands v Fletcher and nuisance. There was no proper basis in the pleadings or the evidence for reliance on a measured duty of care based on the adventitious accumulation of water after its escape.

    114.  The case was in fact originally pleaded on a quite different basis from that on which it was argued at first instance and on appeal. Initially attention was focused on the drainage of the disused embankment, and that is what the experts' reports addressed. Transco pleaded that it was the owner of the gas pipeline, without initially referring to any easement, but did in its reply plead that it had a proprietary interest in the land "the subject of the easements or rights enjoyed by [its] pipeline". Whether the easement was only an equitable easement, though granted by deed, was a point raised by the judge during closing submissions and it need not be addressed further.

    115.  On this part of the case the judge concluded that Transco could have a cause of action in nuisance in respect of its easement (which he regarded as a prescriptive easement) otherwise than by positive acts of withdrawal of support. He distinguished the well-known decision in Bond v Nottingham Corporation [1940] Ch 429, 438-439 by referring to the decision of Judge Blackett-Ord in Bradburn v Lindsay [1983] 2 All ER 408. That was a case where the defendant knew of the perilous state of her property (a semi-detached dwelling) and the judge applied the measured duty of care principle. But as the Court of Appeal observed, Transco's case:

    "was not pleaded or argued on the basis that the events of the weekend preceding the collapse should have caused Stockport to provide the replacement support before [Transco] did".

    For that reason your Lordships' House declined to permit Mr Leeming QC (for Transco) to advance this point, and it is not necessary to go further into what difference (if any) it made that Transco was not the owner of the embankment but merely had an easement running through its length.

    116.  For these reasons, and for the further reasons given by my noble and learned friends, Lord Bingham of Cornhill and Lord Hoffmann, I would dismiss this appeal.

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