Top 3 Cases - February 2023 09 March 2023
In this series of articles, we aim to highlight 3 of the most interesting cases in our field decided in the past month. This month: knotweed and nuisance, freehold valuation, and an injunction against urban explorers.
1) Davies v Bridgend County Borough Council [2023] EWCA Civ 80
Summary
The Court of Appeal held that damages for diminution in the value of land can be awarded in cases of nuisance caused by Japanese knotweed, where there has been an encroachment of the knotweed onto the claimant’s land from the defendant’s land.
At first instance, the judge found that the defendant had been in breach of duty, but dismissed the claim on the basis that all the damages claimed were for diminution in value, and Williams v National Rail [2018] EWCA Civ 1514 was authority that such damages were irrecoverable in law in this type of case.
On first appeal, the judge’s conclusion was upheld. Permission for a second appeal was granted in view of the issue of principle of recoverability and the number of other knotweed claims that could be affected.
The Court of Appeal held that:
- Williams is not authority for the proposition that damages for diminution in value as a result of Japanese knotweed are irrecoverable. Once the elements of the tort of nuisance are complete, damages, including for diminution in value, may be available, even if there is no other damage to the claimant’s land.
- There was no issue with causation. The fact that there was historic damage was not a causation issue where the breach had been ongoing into the claimant’s ownership; any treatment of the claimant’s land would have been ineffective while the defendant remained in breach.
Why it’s important
This case clarifies important issues of principle and will be required reading for any practitioners advising on issues arising out of the presence of Japanese knotweed.
Birss LJ’s careful judgment, with which Baker and Snowden LJJ agreed, considers the reasoning in Williams in some depth and concludes that the ratio of Williams is that the nearby presence of knotweed does not create liability merely by diminishing the value of the claimant’s land: such loss is pure economic loss and irrecoverable for policy reasons. However, where there has been non-trivial physical encroachment of the knotweed or its rhizomes, then the tort of nuisance may be established. If that damage has resulted in diminution in value, then those damages may be recoverable.
The case also contains useful practical comment on the evidence which may be adduced at first instance to support the quantum of a claim for diminution in value.
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2) Charles Hunt (Holdings) Limited v 77-82 Bridle Close Freehold Limited [2023] UKUT 32 (LC)
Summary
The Upper Tribunal determined, by way of a re-hearing, the appropriate premium payable for the freehold of a block of flats to be acquired by leaseholders exercising their right of collective enfranchisement under s.1 Leasehold Reform and Urban Development Act 1993.
A number of issues were disputed in the valuation, in particular the development value of the roof space and whether the premium should include a sum to reflect the value of releasing subletting restrictions. A key reason why permission to appeal was given, however, was that the First-tier Tribunal’s rejection of development value had been on the basis that the freeholder’s expert had made a mistake in his calculations; the parties agreed there was no such mistake, and the FTT had not given them an opportunity to comment on its conclusion.
Having considered the evidence before it, the Upper Tribunal concluded that:
- While the leases did prohibit subletting, there was likely no money to be made from selling deeds of variation to release them, and therefore no allowance should be made in the premium.
- The hypothetical purchaser would see the potential for modest profit in development, subject to risks such as planning. The round figure of £10k should be included in the premium.
Why it’s important
While the decision in this case turned on the evidence available to the Tribunal in respect of this particular building, the Tribunal’s judgment is nevertheless of interest to practitioners as a detailed example of the approach the Tribunal takes to valuation evidence presented to it. For example, the Tribunal was unimpressed with an attempt to calculate gross development value by reference to the vacant possession value of the freehold flats, and preferred calculations on the basis of the current value of the flats, even though that required an adjustment to reflect that the leases of any new flats likely would not contain restrictions on subletting.
The decision is also a salutary reminder of the importance of parties being invited to comment on matters of significance which may come to light between a hearing and judgment: the rehearing may have been avoided had the FTT been aware that there was no mistake in the expert’s calculations.
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3) Quintain (Wembley Retail Park) Limited v Persons Unknown
Summary
The High Court continued an injunction designed to prevent trespass by urban explorers on a development site near Wembley Stadium.
This was the return date for an interim injunction granted in December 2022 against persons unknown, preventing entry on the parts of the construction site as enclosed from time to time in hoardings. The court did so having considered evidence of the potential attraction of the site to urban explorers, due to the presence of cranes, good transport links and views of the iconic Wembley Stadium, and the real dangers of urban exploring.
The injunction will be reviewed in 2025, by which time much of the construction of the development is anticipated to be complete.
Why it’s important
Injunctions against persons unknown has been an area of law of much recent development and, as perusing the papers in this case illustrates, many such cases have involved urban exploring. In this case, although there was no specific individual who could be identified as potentially intending to trespass on the site, the court found there was a real and imminent risk of trespass given the characteristics of the site and its similarity to others, including another overlooking the stadium, where urban exploring had occurred.
As is not uncommon in such cases, the court provided for one method of service of the injunction to be by publication of relevant documents on a dedicated web page. The injunction and supporting evidence, which provide a useful example of what may be expected to be adduced in similar cases, can be viewed here: https://www.quintain.co.uk/site-services/injunction
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