Date: Thu, 20 Nov 2003 11:58:40 -0500

From: Jason Neyers

Subject: Interesting cases

Dear Colleagues,

I have read with great interest the new HL cases posted on the list today. For what it is worth, I think that the Transco plc v. Stockport Metropolitan Borough Council case is rather disappointing for a number of reasons:

1) As is to be expected, I find Lord Hoffmann's reliance on insurance in determining "non-natural user" unhelpful and rather silly. Rather than being a tangential flight of fancy, as Harold intimates, it seems to be at the heart of Hoffmann's decision: see para [46] & [49].

"[46] A useful guide in deciding whether the risk has been created by a "non-natural" user of land is therefore to ask whether the damage which eventuated was something against which the occupier could reasonably be expected to have insured himself. Property insurance is relatively cheap and accessible; in my opinion people should be encouraged to insure their own property rather than seek to transfer the risk to others by means of litigation, with the heavy transactional costs which that involves. The present substantial litigation over £100,000 should be a warning to anyone seeking to rely on an esoteric cause of action to shift a commonplace insured risk."

"[49] In my opinion the Court of Appeal was right to say that it was not a "non-natural" user of land. I am influenced by two matters. First, there is no evidence that it created a greater risk than is normally associated with domestic or commercial plumbing ... Secondly, I think that the risk of damage to property caused by leaking water is one against which most people can and do commonly insure. This is, as I have said, particularly true of Transco, which can be expected to have insured against any form of damage to its pipe."

2) Lord Hoffmann's assertion that it is not consistent "with the judicial function of your Lordships' House to abolish the rule ... It has been part of English law for nearly 150 years". How can it be beyond the judicial function to abolish a rule that is in conflict with other more highly developed areas of law, i.e. one that is wrong as a matter of simple justice? That, at least to me, is the heart of the judicial function. Two of their Lordships in Shogun Finance Limited thought it was part of the judicial function to overrule Cundy v Lindsay (1878) 3 App Cas 459 how is it not here?

3) Lord Hobhouse's whole speech, which makes no sense to me whatsoever. He starts out by saying that their is a logical reason for the rule in para. 57: "He who creates the relevant risk and has, to the exclusion of the other, the control of how he uses his land, should bear the risk. It would be unjust to deny the other a risk based remedy and introduce a requirement of proving fault." Yet then goes about showing all the cases which contradict this rationale, or which implicitly support fault reasoning, to be rightly decided. How is that possible?

4) The implicit assertion by a number of their Lordships that nuisance is a strict liability tort on the basis that "it is no defence that the defendant has used all reasonable care to minimise the annoyance" (para 97). This does not make it a strict liability tort, all that it means is that reasonable care may require one from refraining from engaging in an activity in that particular location since it still creates an unreasonable interference with the rights of others. But this is no different than an orthodox, non-policy, understanding of negligence, see Bolton v. Stone "If cricket cannot be played without creating a substantial risk, then it should not be played at all".

5) The implicit assertion by a number of their Lordships that when considering whether or not to overrule a legal rule we should ask yourselves whether it "imposes liability in cases where it would not otherwise exist", i.e. allows for more compensation (para. 98). How is that possibly relevant? If it is relevant, why is it only relevant when jettisoning a rule as opposed to creating new ones? Moreover, if this is the test then every existing rule that limited compensation should be jettisoned, should it not? Bye, Bye negligence : (

One glimmer of hope in an otherwise unrewarding judgment was LORD WALKER OF GESTINGTHORPE's rejection of any role for the general benefit of the community in answering Rylands questions. As he argued in para. 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".

How this squares, however, with his support of Lord Hoffman's speech which espouses utilitarianism is another question altogether.

Sincerely,

--
Jason Neyers
Assistant Professor of Law
Faculty of Law
University of Western Ontario
N6A 3K7
(519) 661-2111 x. 88435

<<<< Previous Message  ~  Index  ~  Next Message >>>>>