Network Rail Infrastructure Ltd v Williams & Anor (2018) EWCA Civ 1514

Japanese knotweed nuisance cases – there are already many of these and (given the nature of the pestilential stuff) there will be more. In case you don’t know, Japanese knotweed is an invasive weed that is all but impossible to eradicate (and must be done by licensed organisations). It grows quickly through spreading underground rhizomes and can affect structures if growing within 7 metres of their foundations. It’s presence has to be disclosed on any sale of a property.

This was an appeal of two knotweed nuisance cases, where neighbours had both claimed against Network Rail for the presence of knotweed on their land, arising from knotweed on Network Rail’s land. At first instance, the Judge had found for the claimants, but only on one aspect of the claims.

The claims had been advanced on two basis: the ‘encroachment claim’, that knotweed had encroached on the claimants’  land from the defendant’s land by growth of rhizomes under the surface of the claimants’ land; and the ‘loss of amenity claim’, that the value of the claimants’ land had been affected by the adjacent knotweed growth on Network Rail’s land.

The first instance judge had found against the encroachment claim:

on the balance of probabilities, the Recorder found that the rhizomes had extended below Mr Williams’ property in the same way as on Mr Waistell’s property. He also found that, on those findings, the encroachments were not trivial or de minimis interferences with the claimants’ properties.

The Recorder found, however, (at (96)-(99)) that no actual physical damage had been caused by the encroachment and so the encroachment did not give rise to a claim in private nuisance.

But on the loss of amenity claim, the Judge found:

Ms Creer (counsel for N) submitted that the only reason that there is a diminution in the value of each of the claimants’ properties is because of the position taken by mortgage lenders which, since around 2012, have limited or refused to provide mortgages where (Japanese knotweed) is within seven metres of the property’s boundary. The difficulty with this argument is, as both the claimants’ and defendant’s valuation experts recognise, even when treated there is a diminution in the value of the property. In those circumstances, even though with a treatment-backed guarantee, a loan may be obtained, there remains a residual diminution in value. The only rational explanation of that is that a ‘stigma’ continues to affect the property’s amenity value. The position is no different, in my judgement, from a case where a building has been damaged by a nuisance but, despite its repair, it nevertheless cannot be sold for the same price as would have been obtained if it had never been damaged. There may be many situations in which the amenity value of a property remains affected simply because others do not value the property as highly as might otherwise be anticipated. That, in my judgment, is not a basis for rejecting the claimants’ case under this head of nuisance. In any event, it pays no regard to the more intangible effect on the amenity value due to a landowner’s ‘fix’ of having to live on a property that is blighted by the presence of (Japanese knotweed) on adjoining land”.

Constructive knowledge of the nuisance was found, at least from 2012 when a RICS paper on knotweed was published, and actual knowledge from 2013. Network Rail’s attempts at treatment since 2013 could not amount to an adequate or reasonable attempt to abate the nuisance.

A mandatory injunction for proper treatment was granted and damages were awarded as follows:

damages of £4,320 to each respondent to cover a treatment package for the knotweed together with an insurance backed guarantee; damages of £300 to Mr Waistell for a survey he commissioned of Japanese knotweed; and general damages of £350 per year over a four year period between 2012 and 2016 (totalling £1,400) to Mr Williams for loss of amenity and interference with quiet enjoyment based on the stature of the Japanese knotweed stand behind his property, the fact that the Japanese knotweed stands sometimes knocked against his windows, the blighted nature of his property and the difficulties as to the saleability of the property.

The Recorder then addressed damages for the diminution in value of the claimants’ properties arising from interference with their quiet enjoyment of their land. The Recorder held that, given that the claimants were entitled to recover damages to treat the knotweed in order to remove the nuisance, the appropriate diminution in value was the residual diminution in value once the treatment was completed. The Recorder held that Mr Williams was entitled to £10,500 and Mr Waistell was entitled to £10,000 for that reason.

Network Rail appealed on two grounds:

The first ground of appeal (“Appeal Ground (1)”) challenges the Recorder’s conclusion that, where a residential homeowner suffers a diminution in the value of their property by virtue of the presence of Japanese knotweed, the pure economic loss which is suffered constitutes an actionable private nuisance on the basis that it interferes with the quiet enjoyment of their property. If NR is unsuccessful in relation to that ground of appeal, NR contends (“Appeal Ground (2)”) that the Recorder was in any case wrong to find that there was a causal link between NR’s breach of duty and the residual diminution in value of the claimants’ properties.

The respondents argued:

1) encroachment without physical damage can give rise to an actionable claim in private nuisance; and (2) the presence of Japanese knotweed roots and rhizomes on the claimants’ properties constituted damage in any event.

The Court of Appeal found

i) The Recorder was wrong to reject a claim in nuisance based on the spread of knotweed to the claimants’ land

It does not only carry the risk of future physical damage to buildings, structures and installations on the land. Its presence, and indeed the mere presence of its rhizomes, imposes an immediate burden on the owner of the land in terms of an increased difficulty in the ability to develop, and in the cost of developing, the land, should the owner wish to do so. As the RICS paper observed, any improvement or alteration of the property requiring the removal of contaminated soil would require disposal of the soil either on site or, more likely, off site by special, and probably expensive, procedures. For all those reasons, Japanese knotweed and its rhizomes can fairly be described, in the sense of the decided cases, as a “natural hazard”. They affect the owner’s ability fully to use and enjoy the land. They are a classic example of an interference with the amenity value of the land.

Given NR’s constructive and actual knowledge and failure to prevent the interference, a classic case in nuisance was made out.

The concept of damage was elastic, potentially encompassing both a loss of utility and loss of amenity to the land.

For a quia timet (preventative) injunction to prevent damage (or further damage)

It is usually said that there must be proof of imminent physical injury or harm for a quia timet injunction to be granted: Fletcher v Bealey (1885) 28 Ch D 688, 698; Birmingham Development Company Ltd v Tyler (2008) EWCA Civ 859, (2008) BLR 445 at (45); Islington London Borough Council v Elliott (2012) EWCA Civ 57, (2012) 1 WLR 2375 at (29). It is possible, however, that that is too prescriptive and that what matters is the probability and likely gravity of damage rather than simply its imminence: Hooper v Rogers (1973) 1 Ch 43 at 30; Islington LBC v Elliott at (31), quoting Chadwick LJ in Lloyd v Symonds (1998) EWCA Civ 511, and at (33)-(34), (36); D. Nolan, ‘Preventive Damages’ (2016) 132 LQR 68-95.

Although the point has not been considered before in the cases I see no reason why, in appropriate circumstances, as in the present case, a claimant should not be able to obtain a final mandatory injunction where the amenity value of the land is diminished by the presence of roots even though there has not yet been any physical damage.

So, a claim based on loss of amenity was a valid claim in nuisance and a qui timet (preventative) injunction could be granted.

ii) The second ground of appeal apparently relied upon Network Rail’s own expert having failed to properly address the assessment of residual diminution of market value

As I understand NR’s point, that statement of the Recorder failed to take into account that there had been Japanese knotweed in the general area for many years. On the issue of the market valuation of the claimants’ properties, the Recorder had preferred the evidence of Mr Neil Inman, NR’s expert, but, according to Mr Hart, the problem was that Mr Inman’s valuation does not appear to have taken into account the fact that Japanese knotweed existed for many years not only within the immediate vicinity of the claimants’ properties but also within a much more extensive area in the locality.

As one might expect, this did not go down well. Appealing on the basis that your own expert had failed to take things into account, despite them supposedly being instructed on it, was never going to. NR were not going to get ‘a second opportunity’ on the basis of their own failings.

Appeal dismissed, and the first instance decision upheld but for different reasons.