Fawcett & Ors v Phoenix Inns Ltd. & Anor

This is an appeal from two judgments of Her Honour Judge Moir sitting in the Newcastle County Court. The case concerns two adjoining premises in the Market Place, Richmond, North Yorkshire. The Appellants, who I shall call “Phoenix”, own the Talbot Hotel (“the Talbot”). The Respondents are all members of the same family, who I shall call the Fawcetts. At various times one or other of them owned the next door premises, 34 Market Place (“No 34”).

The Fawcetts brought a claim for an injunction and damages against Phoenix. The Fawcetts alleged that for many years, and for at least six years prior to the start of proceedings in October 2000, Phoenix caused or permitted foul and surface water to escape from the rain and foul water drains of the Talbot. The Fawcetts alleged that this liquid penetrated the party wall between the two properties and accumulated in the cellar of No 34. They alleged that this action, or lack of it, constituted a nuisance. They claimed an injunction to restrain Phoenix from continuing the nuisance. The Fawcetts also claimed as damages: (i) the cost of the repairs that they had done in the six years prior to the start of proceedings; (ii) the cost of further repairs that they said were necessary to deal with the problem; and (iii) loss of rent in the past and future loss of rent in relation to the ground floor of No 34, which was used as a shop.

The judge took evidence from witnesses of fact and experts at a hearing held between 13 and 15 August 2001. Counsel then prepared final written submissions which were sent to the judge. These were augmented by oral argument which the judge heard on 5 November 2001. Later that day, after she had retired for a lengthy time to consider the matter, she gave her judgment. She concluded in her judgment that the Fawcetts had established that Phoenix had committed a nuisance. The judge then indicated that she wished to hear further argument on the form of the injunction to be granted and also on the issue of damages.

A Court Order was subsequently drawn up on 30 November 2001. The wording of this order followed further submissions on the form of the Order from Mr Christopher Williams, counsel for the Fawcetts. Mr Nazir told us candidly that he was told by his clients that he had no instructions as to the form of the order and so he took no part in the discussion as to its terms. The Order provided that judgment be given for the claimants and then it set out the form of the injunction, as follows:

The judge heard evidence on the issues of damages on 28 January 2002 and gave judgment the same day. She awarded the following sums as damages: (i) for the repairs already carried out by the Fawcetts: £2953.00; (ii) the estimated cost of future repairs: £7799.00; (iii) the loss of rent from 1 March 1998 to the date of the hearing: £20180.00; (iv) the future loss of rent: £4500.00.

The judge refused Phoenix permission to appeal. But permission to appeal was granted by Kay LJ on 21 May 2002.

At the start of the hearing before us, Mr Brown QC, for Phoenix, recast the grounds on which Phoenix criticised HHJ Moir’s judgments. No objection was taken by Mr Williams to this. In summary Mr Brown’s criticisms were: (i) that the judge failed to make findings of fact as to the precise cause or causes of an ingress of foul or surface water from the Talbot to No 34; (ii) that there was no finding of fact by the judge that the owners of the Talbot either knew or ought to have known about the escape of the foul and surface water from the Talbot, through the party wall and into the cellar of No 34; (iii) that there was no finding by the judge that the owners of the Talbot could reasonably have done something about this escape and ingress of water into No 34 during the six years prior to the start of the proceedings; (iv) the form of the injunction was too vague and wide to be capable of being precisely obeyed by Phoenix; (v) the judge failed to attribute, in any detail at all, how, and when the nuisance caused particular items of damage to No 34 that necessitated the repairs that had already been carried out or would necessitate future repairs; nor had she made any findings to justify a conclusion that the nuisance had been the cause of a loss in rent in the past or that it would do so in the future.

Mr Williams, for the Fawcetts, challenged all these arguments.

Mr Brown accepted that the law to be applied in this case was not in dispute and had been accurately summarised by the judge in paragraph 32 of her judgment on liability. He accepted that liability in nuisance would be established if the Fawcetts proved and the judge found (on a balance of probabilities): (i) that surface and/or foul water that was found in the cellar of No 34 had originated from the Talbot; (ii) that Phoenix knew or ought to have known that this water had originated from the Talbot; (iii) that with the knowledge that Phoenix had - or ought to have had, it failed to take such action as a reasonable person in the circumstances of Phoenix would consider reasonably necessary to eliminate the nuisance; (iv) that any loss or damage complained of by the Fawcetts was caused by the ingress of water and Phoenix’s failure to take appropriate action.

Mr Brown’s arguments focused on what he submitted were failures by the judge to make specific findings or give reasons which could justify the overall conclusion that Phoenix was liable to the Fawcetts in nuisance. He submitted that, accordingly, the judge had no basis on which to make an order for any injunction against Phoenix, let alone the order that was in fact made. Further, there were no findings on which the judge could properly base her conclusions that Phoenix must compensate the Fawcetts in damages as ordered. Mr Brown also applied to adduce further evidence in support of the appeal, and in particular in relation to the injunction. We examined the new material in order to be better informed during the course of the hearing, but indicated we would rule on its admissibility in the course of our judgments.

CPR Part 52.11(1) states that appeals to the Court of Appeal will be limited to a review of the decision of the lower court unless the Court of Appeal considers that it would be in the interests of justice to hold a rehearing. We were not invited to hold a rehearing. Therefore this appeal can only review the judge’s decision. CPR Part 52.11(3) states that the Court of Appeal will only allow an appeal if the judgment below was wrong, or it was unjust because of some serious procedural or other irregularity in the proceedings of the lower court. The latter basis for setting aside HHJ Moir’s judgments was not urged on us. So the only basis on which this appeal could succeed is if the judge’s judgments were wrong.

As I have said, Mr Brown submits that the judgments were wrong because the judge did not make the requisite findings or give sufficient reasons in order to come to the conclusions on liability and damages that she did. In English v Emery Reimbold & strick Ltd [2002] 1 WLR 2309 [2002] ECWA Civ 605, Lord Phillips of Worth Matravers MR set out the approach that an appellate court must take when lack of findings or lack of reasons is the principal basis of appeal. He stated (at para 26 of the judgment of the Court):

First the judge recited the early history of dampness and water in the cellar of No 34. Complaints were first made in about 1965. Even at that time, it was suspected that the problem originated in the Talbot. The judge recorded that one of the claimants, Mr Robert King, gave evidence that around 1975 the dampness started to increase and effectively had continued to the present day: para 14. As I read her judgment, the judge accepted that evidence.

Next the judge dealt with various complaints and attempts at investigation and repairs that took place between 1975 and 1992. In April 1992 dye – tests were carried out at the Talbot and dyed water appeared in the basement of No 34. The problem was identified as being a manhole and a collapsed pipe from a gully in the courtyard of the Talbot. the problem was rectified and there was then no further discernible or documented problem until 1995; that is until within the six year period before the start of the proceedings: (para 22).

In paragraphs 23 and 24 the judge made an important finding of fact. She held that events after 1995 showed that:

These paragraphs are important because, in my view, they constitute findings of fact to the effect that (a) water could run between the Talbot and the cellar of No 34; (b) it did in fact do so; and (c) the reason that it did so was because there were defects in the Talbot drainage. It is also implicit in these findings that at that time the owners of the Talbot must have known about the defects in the drainage and that the consequences of those defects were that foul and surface water were escaping into No 34.

In paragraph 31 the judge makes another finding of fact that:

Having made some comments on the law (on which no issue arises on this appeal), the judge then went into an elaborate consideration of the evidence on the source of the ingress of water into the cellar of No 34. She noted (at paragraph 37) that the expert for the Fawcetts, Mr Billinghurst, had concluded that the source of the ingress of foul water was the Talbot’s drains. The expert for Phoenix, Mr Taylor, had concluded that the Talbot was only one possible source and there could have been others.

The judge accepted the evidence of a number of witnesses, including independent witnesses, that there was a smell in the cellars of No 34, which they confidently identified as emanating from sewage: see paragraphs 46 – 49. She stated, at paragraph 50: “I accept that at times the water within the cellar smelt of beer, of urine, and on one occasion that Mr Schollick recalled a smell like hairdresser waste, which of course contains ammonia”.

The judge then considered the evidence about scientific analyses of the water in No 34 that were conducted on a number of occasions from August 1991. The judge concluded, at paragraph 74:

The judge recognised that this conclusion did not, by itself, pinpoint the source of the this water: paragraph 90. It was the defendants’ case at trial that the sole or principal source was ground – water. The judge considered the evidence of the two experts, Mr Billinghurst (for the Fawcetts) and Mr Taylor (for Phoenix), on the various possible sources of the foul water. She dealt with and discounted various suggestions put up by the defendants: (a) the Victorian culverts or road drainage; (b) the toilets at No 34 and No 35; and (c) periods of heavy rainfall as indicated in graphs that had been prepared. That left the opinion put forward in the report prepared by Mr Billinghurst on behalf of the Fawcetts, (which was at E/83 para. 2 of the trial bundle, set out at paragraph 97 of the judgment) that:

The judge was alert to the fact that it was for the claimants to prove the source of the ingress of water, not for the defendants to disprove it: paragraph 99. The judge made her conclusions in paragraphs 122 to 124 of her judgment. I think it is necessary to set out those paragraphs in full:

The judge then went on to find, in paragraph 125, that the presence of ground water was also in part a cause of the ingress of water into the cellar of No 34. In paragraph 126 the judge held that the Fawcetts were entitled to an injunction. But she recognised that it needed to be carefully framed and she said that she would hear argument on its form if necessary. Then, as had been requested by counsel, she gave some preliminary indications on damages, whilst emphasising that if necessary she would hear further evidence and submissions.

I have summarised at paragraph 7 above the criticisms that Mr Brown made of the judgment of HHJ Moir. In my view, looking at the judgment overall and, if necessary, the material evidence, none of them are justified.

Alleged failure to make findings of fact as to the precise cause(s) of the ingress of foul or surface water from the Talbot to No 34.

The draft joint statement was drafted in the form of questions and answers. Paragraph 1 posed the question: “Over the period to date has water escaped from the Talbot Hotel into the basement of 34 Market Place?”. Effectively Mr Billinghurst answered that question: “yes”. Paragraph 2 posed the question: “If yes, what is the nature and origin of the excaping water?”. This is at E/83 of the Trial Bundle, which is referred to by the judge at paragraph 97 of her judgment. I have already set out that paragraph which quotes from Mr Billinghurst’s report.

In my view that finding of the sources is more than adequate.

Alleged failure to make a finding of fact that Phoenix knew or ought to have known about the escape of the foul and/or surface water from the Talbot through the party wall and into the cellar of No 34.

In this case Phoenix must have known of the facts at all times. The judge recorded that dye – tests had been done to water “on the Talbot side” from at least 1989. Those tests must have been done with the knowledge and consent of Phoenix. They must also have known the purpose of the tests was to see if water from the Talbot was finding its way into the cellar of No 34. Remedial work was done to a manhole at the Talbot as a result of dye – tests in 1991. The dye – tests established that there was a path for water to get from the Talbot to No 34. The judge went on to record her finding (at para 31) that Phoenix knew of the problem in the cellar of No 34 and that “upon occasions when they have been responsible for escape of water into the basement, they have, without delay, remedied the problem when they have been made aware of it”.

The judge then refers (at paragraph 34) to a detailed agreed record of when water had escaped from the Talbot Hotel to No 34, between January 1997 to July 2001. (The judge said that was set out in the Taylor version of the joint statement at E/93 of the Trial Bundle). These were all events of which Phoenix must have been aware, because they involved either tests or events at the Talbot, such as when a sump pump broke in May 1998.

Mr Williams also drew our attention to passages in his cross – examination of Mr Ian Vart, who was a building surveyor working for the defendant owners of the Talbot. It is clear from the answers that Mr Vart gave that he knew that the Fawcetts were saying that there was a problem with foul water coming from the Talbot; that tests were being done and that repairs were carried out from time to time at the Talbot. But his attitude was that not all the water problems at No 34 were caused by the Talbot.

In my view, this evidence, taken with the other evidence to which the judge referred concerning escapes of water from the Talbot to No 34, tests that were done, repairs that were done at the Talbot and the information passed from the Fawcetts to Phoenix all show that Phoenix were aware of the facts that, in law, constitute a nuisance. I suspect that this was so obvious that the judge did not even think that it was necessary to underline the point. Hence the absence of a specific reference of the nature I have suggested at the start of this section.

Allegation that there was no finding by the judge that the owners of the Talbot could reasonably have done something about this escape and ingress of water into No 34 during the six years prior to the start of the proceedings.

Application to adduce further evidence

Mr Brown submitted that this was important evidence on the issue of whether Phoenix should reasonably have done anything to deal with the nuisance. He recognised that the Court of Appeal would only accept new evidence in rare circumstances, but he submitted that it would be just to do so in this case.

I do not agree. A dye – test such as this could have been done very easily before the trial in August 2001. It appears that the defendants chose not to have one done immediately before the trial. In the statement of Mr Paul Goel, solicitor for the defendants, which was filed in support of the application, there is nothing to explain why this dye – testing was not done before the trial. Nor is there any suggestion that it could not have been done earlier. If this evidence were to be admitted it would be necessary, in fairness to the claimants, to allow them to conduct another dye – test as well. That would take time and money. Therefore, overall, it would not be fair and just to permit this evidence to be adduced.

Criticism of the form of the injunction

These criticisms of the form of the injunction are unfair, particularly given the fact that Mr Nazir (as he candidly admitted) took no part in the discussion with the judge on the form of the injunction before the Court Order dated 5 November 2001 was drawn up, because he had no instructions on that matter. His clients (the appellants) were adamant that there were no defects in the Talbot’s drains; therefore they decided that it was inappropriate for them to be involved in submissions on the form of the order. I do not criticise Mr Nazir, who was put in a very difficult situation. But in my view if that type of situation arises and it appears to counsel that there are or might be problems with the wording of the order, then it must be the duty of counsel for a defendant to assist the judge, even if his client has stated that it has no specific instructions for him. If a party is represented when the form of the order is being discussed in court and no complaints are made at the time (and no good reason is given for failing to speak up), then it is hardly apt to complain on appeal that the form of the order is too vague. The same point applies when a judgment is delivered or handed down and it appears to counsel that the judge has failed to make a finding on a material point; has failed to do so unambiguously or has failed to give any or any adequate reason for a finding or conclusion. The point should be drawn to the judge’s attention there and then. The judge can then consider whether further facts need to be found or further reasons given. He can adjourn the matter if necessary. (See: English v Emery, Reimbold & Strick Ltd [2002] EWCA Civ 605 para 47; Re T(a child) [2002] EWCA 1736). If counsel does not adopt this course then he may have to explain to the appellate court why he did not do so, if his client appeals and one of the grounds of appeal is that the judge failed to make a particular finding or failed to give any or sufficient reasons.

But I think that the criticism on the form of the injunction is unfounded in any event. Paragraph 9 of Mr Billinghurst’s version of the joint statement identifies precisely the particular parts in the Talbot that he says were sources of foul or rain water getting into the cellar of No 34. It is those areas that have to be investigated. It seems to me that Phoenix has to carry out investigations to those areas to see if there are leaks; if there are, then they must be repaired. If the investigations reveal that there are no leaks in a particular area then Phoenix should apply to the court for an order that it has done all that can be required of it in relation to that particular area. If the investigations show that there are no leaks at all then Phoenix will have to apply to the court for an order that it has discharged all its obligations in relation to the injunction.

The judgment on damages

The judge had a very difficult task to perform. She had concluded that the ingress of water from the Talbot to the cellar of No 34 did constitute a nuisance. She was then faced with two particular problems. The first was that this had been going on since the 1960s, whereas damages could only be claimed for loss and damage caused by the nuisance for a period from six years prior to the start of the proceedings. The second was that there was another cause of water getting into the cellar of No 34: groundwater. The judge therefore had to award damages for only that part of any loss or damage that had been caused by the nuisance, but not that caused by groundwater.

The judge had before her an estimate of £4,360 for repairs that had already been carried out. She concluded that this figure should be reduced by 30% to take account of the cost of repairs necessitated by damage that was caused by the nuisance prior to 1994: see paragraph 26 of damages judgment. (References below are to the damages judgment). The judge also concluded that this deduction included an element for “betterment”. No criticism is made of that. The judge also concluded that the existing repair costs figure should be reduced by 10% to take account of the fact that the other source of damage was groundwater: see paragraph 31.

The judge did the same kind of exercise for future repairs, thus holding that the figure should be reduced by 10% to take account of groundwater and making a 5% reduction for “betterment”.

Mr Brown submitted that the judge should have made express findings on: (i) the state of the cellar at No 34 in 1994; (ii) the repairs that were needed then; (iii) what had happened to the cellar since then and how much of any damage since then was attributable to the nuisance; (iv) what of the repairs that had been done already were attributable to the nuisance, as opposed to groundwater; (v) what proportion of future repairs would be attributable to the nuisance.

The judge found that the evidence was limited; paragraph 21 and 25. The judge also appreciated that it was for the claimants to prove their loss and that they must satisfy the court that it was the defendants’ behaviour that caused the loss and damage alleged: paragraph 14.

The judge concluded that the damage was caused by the nuisance and was continuing “each and every day from October 1994”: paragraph 22. The judge had figures for the cost of the existing repairs and for future repairs. The judge heard evidence from Mr Billinghurst that the estimates were reasonable and she accepted that evidence: paragraph 9. The judge accepted the evidence of Mr Clarke that damage had continued to be done to the cellar from 1991 onwards: paragraph 12.

I think that the proper inference to be drawn from the judge’s conclusion that the claimants should recover 70% of the cost of existing repairs (subject to a deduction for “groundwater damage”, see below), is that she was satisfied that 70% of the damage that had been made good by the repairs that had already been done was the result of the nuisance caused by the defendants. The judge set out the evidence on which she relied. I am satisfied that the judge had well in mind the need for causation between the nuisance and the damage done and so the damages awarded. I think that link was maintained.

The judge held specifically that, so far as future repairs were concerned, they were necessary because of the continuing nature of the nuisance: see paragraph 27. I cannot see any ground for criticism of that finding.

The proper inference to be drawn from the judge’s conclusion that the claimants’ damages for past and future repairs should be reduced by 10% is that she had concluded that the nuisance was the cause of 90% of the damage. I think that is reasonably clear from the way that the judge appreciated the need to show causation and her realisation that groundwater was a source of water in the cellar to No 34 and therefore one cause of damage there.

Mr Brown also made some muted criticisms of the judge’s conclusions in relation to the loss of rent claims. The judge made detailed findings on the position on the letting of No 34 as a shop during the relevant period. I can find nothing wrong with those reasons.

I have concluded that the appellants have not made out a case that the judge was wrong on any aspect of either liability or damages. Nor, in my view, is there anything wrong with the form or content of the injunction. Accordingly, I would dismiss this appeal.

I agree.