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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Raymond & Anor v Young & Anor  EWCA Civ 456 (14 May 2015)
Cite as:  HLR 41,  EWCA Civ 456
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ON APPEAL FROM CARLISLE COUNTY COURT
Mr Recorder Duncan Smith
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE BRIGGS
LADY JUSTICE KING
| (1) PETER JAMES RAYMOND
(2) LESLEY RAYMOND
|- and -
|(1) STEVEN FREDERICK YOUNG
(2) FIONA YOUNG
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Mr Edward Bartley Jones QC and Mr Stephen Connolly (instructed by Cartmell Shepherd) for the Respondents
Hearing date : 22 April 2015
Crown Copyright ©
Lord Justice Patten :
"96. Having listened to 12 days' oral evidence and 22 witnesses as to fact, I am satisfied that since the sale of LCF by Frederick Young in 1965, the first defendant has been unable to accept the fact that he has no legal dominion over that property. It is clear from an examination of the historical evidence that it was his intention to make the life of those who occupy LCF a misery; that his campaign of belligerence has continued since the death of his father; that he has a deep-seated aversion to those wealthy enough to afford a second home the size of LCF; and that the notoriety of his conduct in the locality is an open secret. Though nothing turns on it, the allegation that he stated publicly that he had acquired a number of dead rats and it was his intention to strew the corpses over the courtyard at LCF, is one that I am inclined to accept. It is consistent with his conduct that has been demonstrated to my satisfaction and, I would add, his showing his buttocks to the security camera at LCF goes only to show his juvenile and disrespectful attitude.
97. Without causing violence to language I am unable to describe his near 40 year campaign of truculence as transitory."
(i) obstructed the use of the Western Drive;
(ii) interfered or prevented the use of a right of way to a gate into Quarry Field;
(iii) failed to control their dog and to prevent it from defecating at the Farm;
(iv) caused trespass and nuisance with their guinea fowl;
(v) left dustbins and other rubbish near to the back door and kitchen window of the Farm;
(vi) burnt plastic and other noxious materials causing smoke;
(vii) vandalised the two CCTV cameras, a greenhouse and other property; and
(viii) physically intimidated Mrs Raymond.
"36. I conclude that fear of further litigation would drive vendors into sufficient disclosure for the past history of defects and litigation to become known and that that, together with the very small risk of further problems, is just sufficient in the current climate to drive down the price for these properties, but only by a very modest amount. If the years go by and the claimants do not choose to sell and the market picks up and there are no further brickwork defects becoming apparent, this residual diminution in value could prove to be a windfall to the claimants. I do not think the commercial analogy helps here, by that I mean a percentage approach to the diminution in value, in a domestic setting. I am conscious that I am departing from both experts so that it can be said that my conclusion is unsupported by evidence, but this is a difficult area in which no scientific approach is possible. I was careful to ask counsel whether or not a point someway in-between the various extremes that they contended for would be unjustified and they conceded that it would not.
37. I have come to the conclusion that a reasonable figure for residual diminution of loss in all the circumstances of this case would be £5,000 per property. Now, that is two-and-a-half times the general damages per household that would be awarded for discomfort and inconvenience, as I shall shortly indicate. It also, as it happens, represents about two-and-a-half per cent of the market value of the properties, but I emphasise that in arriving at the lump figures I have I have not followed a percentage approach. It represents, on the limited evidence available, a judicial guesstimate of how, in the current climate, negotiations may go, in the hypothetical event of one of these properties coming onto the market, a judicial guesstimate of the discount which it would be reasonable to agree in the light of the past history which we must assume is entirely resolved by satisfactory repair of the agreed rectification works and of a purely cosmetic defect and a further risk which is deemed to be remote and barely significant. If the parties are equally disgruntled by such approach, it may be that I have got it about right."
"15. We have been referred to the decision of HHJ Hicks QC in George Fischer Holding Limited v Multi Design Consultants Limited  ORB 775, and in particular paragraphs 198 and 199 of his judgment. In paragraph 198 the judge said that a residual diminution in value of the property following the completion of remedial works is a recognised head of loss which can be the subject of an award of damages if the facts justify making such an award. At paragraph 199 he referred to the evidential dispute that there was in that case between the two experts. One expert was saying that there would be a residual diminution in value of £200,000, which amounted to nearly 3% of the value free of defects. The other expert said that there would be no residual diminution in value. The judge concluded: "I assess the diminution in value at £100,000".
16. Mr Singer accepts that in principle it is possible for a court to award damages for a residual diminution in value of property following the satisfactory completion of remedial works if it is satisfied that such a residual diminution in value has been proved on the evidence. In my judgment he is right to make that concession. I find it difficult to see on what basis it can properly be said as a matter of principle that such an award of damages cannot be made. It must always depend on the facts of the case. Mr Singer appeared to submit that this principle had little or no application in the case of residential property. He seeks to distinguish the Fischer case from the present case on the grounds that the Fischer case concerned a very substantial commercial property. I cannot accept that this is a proper or principled basis for distinguishing the two cases. If the evidence supports the conclusion that the proper carrying out of remedial works to a residential property will nevertheless result in there being a residual diminution in the value of the property, then I cannot see in principle why the claimant should not be awarded damages to reflect that diminution in value. Nor can I accept Mr Singer's submission that it was not open to the judge to award damages under that head because the claimants apparently had no present or fixed future intention to sell their properties. The fact that the claimants did not intend immediately to sell their properties did not mean that the assessment of the diminution in value involved a hypothetical exercise and guesswork as to what the market conditions would be at the time when, if that time did occur, the claimants came to sell their properties.
17. The time for carrying out the assessment was either the date of trial or the date when the remedial works were completed. For practical purposes, there is no difference between these two dates in the present case. It seems to me that the judge was entitled to award the damages that he did under this head, especially in the light of the concession made by counsel. I wish to emphasise that is only right to award damages under that head if there is cogent evidence of a residual diminution in value. In cases where what is being contended for is some modest residual diminution in value, a court may well conclude that it is not satisfied that it is appropriate to award damages under this head. As I have said, each case turns on its own facts."
"The claimants argue that they have suffered a diminution in the market value of their property because of the prolonged nuisance and the obligation that they have to disclose this to a prospective purchaser in response to normal pre-contract enquiries. They also say that this dispute is notorious and this will depress the market value of the Farmhouse, and deter would-be purchasers. A joint expert valuers' report dated September 2001 derived from individual reports indicates that if all the Fowlers' allegations against Miss Jones are made out the market value of the Farmhouse of £375,000 would be reduced by 20 per cent (£75,000). On the other hand, if all the allegations fail, there will be no effect on the market value. This is not a case where reinstatement will rectify the damage so that the diminution in value can be quantified accordingly. It follows that this argument has to be approached in the context of the actual nuisance and not simply confined to a given point in time. This nuisance is capable of being abated, and so the diminution in value may not exist in the future, or it may be reduced substantially. Also, for example, if Miss Jones were to move away, or if the prohibition against her having control of animals were to be upheld and enforced, the nuisance may cease. The acrimony between these neighbours would become history, and there is no reason why that should adversely affect the value of the Farmhouse.
The situation in this case is similar to the situation foreseen by Lord Hoffmann in Hunter v Canary Wharf Ltd  2 All ER 426 HL at 451h:
"But diminution in capital value is not the only measure of loss. … In the case of a transitory nuisance, the capital value of the property will seldom be reduced. But the owner or occupier is entitled to compensation for the diminution in the amenity value of the property during the period for which the nuisance persisted. To some extent this involves placing a value upon intangibles. But estates agents do this all the time."
With respect, I consider this to be the appropriate approach in this case, and not to attempt to evaluate a percentage of proved "nuisance level" and apply it to the experts' scale of diminution of value."
"As to loss of capital value, Mr Dennis is not forced to sell the estate and thus suffer the present drop in market value. He has stated that he does not wish to sell and has no present intention of doing so. In 2012, the value will be restored or Mr Dennis will have a new cause of action. However, I consider it fair to recognise that circumstances might arise in which Mr Dennis would either be forced to sell or reasonably decide to do so. In other words, for the next nine years or so he carries the risk of having to sustain the capital loss. The family's determination to retain the estate is evidenced by the fact that Mr Dennis has owned it since 1984. I cannot therefore assess the risk of his being forced to sell as high but it is there. No particular risk was drawn to my attention but the ordinary vicissitudes of life suggest to me that it should be assessed as somewhere between 5% and 10%."
"88. I think it appropriate, in the particular circumstances of this case, to consider the three heads of damage I have mentioned, but to take an overview. In Hunter v. Canary Wharf Ltd. http://www.bailii.org/cgi-bin/redirect.cgi?path=/uk/cases/UKHL/1997/14.html AC 655, their lordships considered loss of amenity as an appropriate measure where no capital loss was established and loss of use as an additional head. See in particular Lord Hoffman at page 707. In this case I am not awarding the full present capital loss and I consider a significant loss of amenity should be allowed, albeit not to the extent I would have awarded if that were the only head. I also think there is some interplay here between capital value and loss of opportunity to exploit the property commercially. Thus I take into account the three identified heads in arriving at an overall figure, but do not simply add them together. They are a guide.
89. My approach to the risk of capital loss would lead to a figure in the region of £300,000. In respect of loss of use, it is unrealistic to expect the net profit after tax to remain constant, but the findings I have made give a guide to the amount I would allow for this aspect of the claim. I have included 6 years for past loss. I have had in mind that the figures are gross of tax and I have accepted that by 1997 the business would have been fully established. I also allow for immediate payment of the future loss. I have indicated that I consider the particular circumstances of this case would merit a significant award for loss of amenity. This, of necessity, is an imprecise calculation. It is one that should reflect the size and nature of the Estate and its general location. I do not believe an award of less than £50,000 would do justice to the serious loss of amenity over a considerable number of years if this aspect stood alone. That figure would scarcely cover the cost of a decent holiday each year, which it might be thought is the least compensation that should be awarded for such a disturbance. I believe my findings give a sufficient indication of the approach I have adopted and how I arrive at my final figure.
90. The overall figure for damages I regard as appropriate in this exceptional case is £950,000."
"In the case of nuisances "productive of sensible personal discomfort," the action is not for causing discomfort to the person but, as in the case of the first category, for causing injury to the land. True it is that the land has not suffered "sensible" injury, but its utility has been diminished by the existence of the nuisance. It is for an unlawful threat to the utility of his land that the possessor or occupier is entitled to an injunction and it is for the diminution in such utility that he is entitled to compensation.
I cannot therefore agree with Stephenson L.J. in Bone v. Seale  1 W.L.R. 797, 803-804 when he said that damages in an action for nuisance caused by smells from a pig farm should be fixed by analogy with damages for loss of amenity in an action for personal injury. In that case it was said that "efforts to prove diminution in the value of the property as a result of this persistent smell over the years failed." I take this to mean that it had not been shown that the property would sell for less. But diminution in capital value is not the only measure of loss. It seems to me that the value of the right to occupy a house which smells of pigs must be less than the value of the occupation of an equivalent house which does not. In the case of a transitory nuisance, the capital value of the property will seldom be reduced. But the owner or occupier is entitled to compensation for the diminution in the amenity value of the property during the period for which the nuisance persisted. To some extent this involves placing a value upon intangibles. But estates agents do this all the time. The law of damages is sufficiently flexible to be able to do justice in such a case: compare Ruxley Electronics and Construction Ltd. v. Forsyth  AC 344.
There may of course be cases in which, in addition to damages for injury to his land, the owner or occupier is able to recover damages for consequential loss. He will, for example, be entitled to loss of profits which are the result of inability to use the land for the purposes of his business. Or if the land is flooded, he may also be able to recover damages for chattels or livestock lost as a result. But inconvenience, annoyance or even illness suffered by persons on land as a result of smells or dust are not damage consequential upon the injury to the land. It is rather the other way about: the injury to the amenity of the land consists in the fact that the persons upon it are liable to suffer inconvenience, annoyance or illness.
It follows that damages for nuisance recoverable by the possessor or occupier may be affected by the size, commodiousness and value of his property but cannot be increased merely because more people are in occupation and therefore suffer greater collective discomfort. If more than one person has an interest in the property, the damages will have to be divided among them. If there are joint owners, they will be jointly entitled to the damages. If there is a reversioner and the nuisance has caused damage of a permanent character which affects the reversion, he will be entitled to damages according to his interest. But the damages cannot be increased by the fact that the interests in the land are divided; still less according to the number of persons residing on the premises. As Cotton L.J. said in Rust v. Victoria Graving Dock Co., 36 Ch.D. 113, 130:
"where there are divided interests in land the amount of damages to be paid by the defendants must not be increased in consequence of that subdivision of interests."
Once it is understood that nuisances "productive of sensible personal discomfort" (St. Helen's Smelting Co. v. Tipping, 11 HLCas 642, 650) do not constitute a separate tort of causing discomfort to people but are merely part of a single tort of causing injury to land, the rule that the plaintiff must have an interest in the land falls into place as logical and, indeed, inevitable."
"The speeches of the majority thus clearly establish that damages in nuisance are for injury to the property and not to the sensibilities of the occupier(s). That is so as much for the case of the transitory nuisance interfering with comfort and enjoyment of the land as it is for the case of the nuisance which occasions permanent injury to the land and to its capital value, or other pecuniary loss."
"93. From a review of these authorities I derive the following principles of law:
- A court can award damages for residual diminution in value of property;
- residual damage must be proved on the evidence;
- in the case of a transitory nuisance, the capital value will seldom be reduced.
94. I do not derive from those authorities the principle for which Mr Elleray QC contends, that the effects of a belligerent neighbour cannot in law lead to residual damage to property.
95. I have to decide whether the nuisances and the harassment that I have found proved can properly be described as transitory such that the injunctive relief sought would provide adequate satisfaction to the claimants. Save to say the authorities suggest the distinction between a transitory nuisance and residual damage, I am conscious that a finding of belligerent neighbour activity establishing residual damage may be breaking new ground."
Lord Justice Briggs :
Lady Justice King :