Westminster City Council v Ocean Leisure Ltd.

Ocean Leisure Limited (“Ocean”) occupies a shop fronting Northumberland Avenue, where it sells sailing and diving equipment. The shop was formed from four adjacent retail units. It has return frontages to Embankment Place and to Victoria Embankment.

Under the River Thames (Hungerford Footbridge) Order 1999, statutory powers were given for the construction of two footbridges across the river on either side of Hungerford railway bridge. They are now complete, and are known as the Golden Jubilee Bridges. The twin footbridges were a project promoted by the Cross-River Partnership, a body comprising Westminster City Council, the London Borough of Lambeth, Railtrack plc (now Network Rail), London Underground Limited and the Port of London Authority. The Partnership agreed that Westminster City Council should be the undertaker under the 1999 Order.

As part of the authorised works, steps and a lift up to the footbridge on the Westminster side of the railway bridge had to be constructed in Northumberland Avenue outside Ocean’s shop. In connection with these works, two areas of the highway were enclosed by hoardings in the immediate vicinity of the shop. Although there was no specific finding to this effect, we were told without objection that one area formed the work-site for construction of the steps to the footbridge; the other was used for the storage of equipment. These areas were within the limits of deviation established by the 1999 Order. Article 3 of the Order authorise the carrying out of the “scheduled works” as described in a schedule to the order, and also “such other works (of whichever nature)” as were “necessary, convenient or expedient” in connection with the scheduled works.

The Tribunal made the following findings:

“7.

The hoarding along Northumberland Avenue was in position during the period March 2000 to 31 December 2002. It was partly removed on 13 May 2002. The hoarding along Victoria Embankment was in position from August 2001 to 30 September 2002. It was partly removed at the end of December 2001. The southern (upstream) footbridge was opened on 13 May 2002 and the northern (downstream) footbridge was opened on 13 September 2002. The final completion of the works was on 13 December 2002. Signs provided by the claimant indicating that the subject premises remained open for trading were fixed to the hoardings at locations agreed between the contractor and the claimant. Public access was maintained at all material times to the shop entrances in Embankment Place and the Embankment Place end of the Northumberland Avenue frontage. These doors could thus be used at all times for access to the whole of the premises. The Embankment Place door was, however, closed for most of one day during pavement works. ”

The erection of the hoardings resulted in only a narrow passage being left between them and the shop frontages. General access to and from the shop was impeded, and for over a year access could not be obtained from Victoria Embankment. The claimant says that its trade suffered badly as a result, and claims compensation. The President ordered that the question whether Ocean had a valid claim to compensation should be determined as a preliminary issue.

It is common ground that the claim arises, if at all, under section 10 of the Compulsory Purchase Act 1965, which was incorporated by article 16 of the 1999 Order. That section, which reproduces the effect of section 68 of the Lands Clauses Consolidation Act 1845, allows a claim for compensation where land is “injuriously affected by the execution of the works”. It is also common ground that the relevant principles are as stated by the Lord Hoffmann in Wildtree Hotels Ltd v Harrow London Borough Council [2001] 2 AC 1, 7A-8B. The second of those principles, which is directly material to the present controversy, was stated thus:

“… the term ‘injuriously affected’, connotes ‘injuria’ that is to say, damage which would have been wrongful but for the protection afforded by statutory powers … In practice this means that a claimant has to show that but for the statute he would have had an action for damages for public or private nuisance.”

It is accepted (again, following Wildtree) that the claim is based on loss of rental value over the relevant period (rather than loss of profits as such).

Ocean originally relied on four possible heads of claim:

Appeal to this Court lies only on a point of law. Mr Stinchcombe, for Westminster, formulates the question of law for this Court in the following terms:

“…whether a Compensating Authority is liable to pay compensation under section 10 of the Compensation Act 1965 in respect of damage caused to a business through the partial obstruction of a nearby highway by the erection of hoardings around authorised construction works when those hoardings are in situ for no longer than, nor in greater extent than, necessary for those works safely to be undertaken.”

I say at once that I should be surprised and concerned if no compensation were payable in circumstances such as this. There seems little doubt that the trading activities of Ocean’s premises were adversely affected over a significant period by the hoarding; and that the hoarding was erected solely for the purpose of the statutory works authorised by the order. At first blush, I would have thought it obvious that the appropriation, and separation by hoardings, of two areas of the highway, for use as a works site and equipment store, would in the absence of statutory authority amount to a public nuisance, and that Ocean as someone suffering special damage would have had a right of civil action.

Again at first blush, that view seems entirely consistent with the approach of Lord Hoffmann in Wildtree. That case was concerned with preliminary questions directed by the Lands Tribunal, arising from a claim for compensation for the effects of highway works. The first part of Lord Hoffmann’s speech was concerned with the claim for loss caused by noise and dust from the works, where the statutory test had to be reconciled with the principle in Andreae v Selfridge & Co Ltd [1938] Ch 1, 5-6 (that such effects of building works are not actionable if they are carried out reasonably). However, there was also a claim for the effects of obstruction of access due to closing of local roads. Lord Hoffmann (at 5E) summarised the claim as follows:

“The owners of the hotel (‘the claimants’) say that during the period of the works they were subjected to various forms of interference with their use and enjoyment of the hotel. Hoardings were erected which obscured the hotel or prevented or restricted access by themselves and their customers. For long periods the roads and pavements leading to the hotel were totally or partially obstructed or closed. The works caused considerable noise, dust and vibration. All this was very detrimental to business.” (p 5E emphasis added)

The only issue raised by the preliminary questions on that aspect was whether it mattered that the interference was temporary only. Lord Hoffman distinguished such claims for public nuisance by obstruction of the highway, from those depending on the effects of noise and dust on personal comfort:

“This form of damage, which would at common law have been a public nuisance, is not subject to the rule of give and take applicable to nuisances which cause sensible personal discomfort. If the landowner cannot carry on the works without causing an obstruction of the highway which would amount to a public nuisance, he cannot without statutory authority carry them out at all. It is the statute in such a case that legitimates the public nuisance and gives rise to a claim for compensation under section 10.” (p 14B-C)

It was held that the fact that such obstructions were temporary did not itself rule out a claim. Implicit in that decision, although not expressly decided, must have been the assumption that such a claim was in principle allowable under section 10.

Furthermore, in another recent case, Clift v Welsh Office [1999] 1 WLR 796, this Court upheld an award under section 10 for special damage resulting from obstruction to the use of public roads in the vicinity caused by highway works. The Tribunal had held that the claimants had suffered temporary inconvenience, greater than the public in general, due to the need for journey detours caused by obstruction of public roads and footpaths near their property; and that, but for the statutory powers, they would have had a claim for public nuisance causing them special loss ([1999] 1 WLR 796 at 804A-F). That reasoning was upheld in this Court, citing Lord Selborne LC in Caledonian Railway Co v Walker’s Trustees (1882) App Cas 259, 276:

“The obstruction by the execution of the work, of a man’s direct access to his house or land, whether such access be by a public road or by private way, is a proper subject for compensation.”

The Court held that the Tribunal had been -

“… entitled to find that the effect of the works upon its property in terms of interference with the use of the roads and footpaths in its immediate vicinity, amounted to special damage suffered by the claims for the purposes of a claim in public nuisance and (was) sufficient in law to found a valuable claim for compensation under section 10 of the Act of 1965.” (p 807C-E, per Sir Christopher Slade)

It was not submitted before us that Clift was wrongly decided, nor that its reasoning has been undermined by the later decision of the House of Lords in Wildtree. Mr Stinchcombe attempted at one stage to distinguish Clift on the grounds that the works there involved a major reconfiguration of the local highways, rather than the much more limited interference in this case. However, I can see nothing in Clift itself which suggests that the decision depended on that distinction, nor anything in Wildtree which would support it. Accordingly, there is in my view no reason in principle to exclude from the ambit of section 10 a claim for special loss suffered by an owner due to obstruction of the adjoining highways.

Mr Stinchcombe’s case in substance depends on the proposition that there is a special rule applicable to hoardings erected in connection with building works. As he puts it:

“…there is a consistent line of case-law dating back 140 years to the effect that the erection of hoardings on a public highway for no longer than, nor in greater extent than, was necessary to protect that highway from contiguous building works does not amount to an unlawful obstruction of the highway…”

The lynchpin of this submission is the decision of the Court of Common Pleas in Herring - v - Metropolitan Board of Works (1865) 19 CBNS 509. The critical task is to decide the effect of that decision in the modern law, having regard in particular to its treatment in two subsequent decisions of this Court: Lingké -v -Christchurch Corporation [1912] 3 KB 595, and Harper - v -Hoden & Sons [1933] Ch 298. The task is not helped by the existence of six separate judgments in those two cases, and the lack of any obvious common theme between them.

Section 135 of the Metropolis Management Act 1855 vested all the main sewers in the metropolis in the Metropolitan Board of Works, and gave it wide powers to maintain and improve them, and for that purpose to carry out works in streets and other land, “making compensation for any damage done thereby…” The Board erected a hoarding in Northumberland Street for the purpose of enabling it to reconstruct a sewer running under the street. The hoarding was very close to the access to the claimant’s premises, where he carried on business as a livery stable keeper, and as a result the access to the premises was rendered less convenient. The decision of a magistrate, holding that the claimant was not entitled to compensation, was upheld by the Court of Common Pleas. Mr Stinchcombe relies particularly on the following statements:

“…I am clearly of opinion that, where the metropolitan board are engaged in the performance of a public work which renders it necessary to erect a hoarding or to deposit materials or rubbish in a public street, the mere fact that thereby the passage along the street becomes more difficult and inconvenient to A than to B and C, gives A no claim to compensation under the act…In other words, it appears to me that, the construction of the hoarding being necessary for the due performance of the works by the board, and the obstruction not having been more than was necessary, or kept for an unreasonable time, would give the appellant no cause of action, and consequently no claim for compensation under the act.” (p 523, per Willes J)

“My judgment rests upon this ground, that the injury here complained of, viz the temporary obstruction of the public way, rendering the access to the appellant’s premises more inconvenient for a short time, gave him no cause of action and no right to compensation. As a general rule, all the Queen’s subjects have a right to the free and uninterrupted use of a public way: but, nevertheless, all persons have an equally undoubted right for a proper purpose to impede and obstruct the convenient access of the public through and along the same. Instances of this interruption arise at every moment of the day. Carts and waggons stop at the doors of shops and warehouses for the purpose of loading and unloading goods. Coal-shoots are opened on the public footways for the purpose of letting in necessary supplies of fuel. So, for the purpose of building, rebuilding, or repairing houses abutting on the public way in populous places, hoardings are frequently erected inclosing a part of the way. Houses must be built and repaired and hoarding is necessary in such cases to shield persons passing from the danger from falling substances. If this be the right of private persons, a fortiori must it be the right of a public body to which extensive power is intrusted for the general good of all. On the ground, therefore, that the obstruction here was of a temporary character, and was done for a proper purpose, and not continued for an unreasonable time, I am of opinion that this is not a case for compensation under the Metropolis Local Management Act.” (p 524-5, per Byles J)

If the emphasised passages are good law, then they appear to provide some support for Mr Stinchcombe’s proposition, there being no contention in this case that the hoardings were unnecessary or kept for an unreasonable time.

In Lingké the claim was for compensation for the effects of the laying of a drain in the highway abutting the claimant’s house and furniture shop. Because of the constraints of the work site, excavated soil had been thrown up against the house and shop, with the result that access to the property (particularly for movement of furniture) was seriously impeded. The claim arose under section 308 of the Public Health Act 1875, which provided for the payment of compensation where any person sustained damage by reason of the exercise of powers under the Act. It was common ground that the claim depended on showing that, but for the statutory powers, there would have been an actionable wrong. The arbitrator had awarded some £23 compensation, and that award was upheld in this Court.

The ultimate decision was unanimous, but the three judgments (unreserved) differed in their reasoning, and in particular in their treatment of Herring:

If matters had stopped there, it would in my view have been impossible for Mr Stinchcombe to rely on Herring to support a special rule for hoardings. None of the judgments saw it as establishing a general rule of that kind, and the majority made clear that they regarded it as wrongly decided on its facts, which they treated as identical in substance to those before them. Vaughan Williams LJ was only able to support the decision by adopting a particular (and to me surprising) interpretation of the facts in Herring, treating the hoarding, not as an integral part of the sewer works, but as a separate item whose sole purpose was the protection of the public using the highway.

Harper was decided some 20 years later. It was not a case about statutory compensation. It was an action for damages by the occupier of a ground floor and basement shop against the tenants of the upper floors. In order to construct an additional storey, they had erected scaffolding and a hoarding which obstructed the highway outside the plaintiff’s premises. Bennett J had found as a fact that the obstructions were not greater than reasonably necessary for the work, but nonetheless held that they were unlawful. This decision was reversed by the Court of Appeal. Although the judgment of Bennett J is not reported, it appears from the judgment of Romer LJ in the Court of Appeal ([1933] Ch at p 316), that his decision was based on the following statement of Fletcher Moulton LJ in Lingké:

“If there is a public right such as the user of a street and it is interfered with by an individual, that interference does constitute an actionable wrong… ”

Again, the ultimate decision of this Court was unanimous; but again there were three judgments (this time, reserved), and the reasoning varied:

I have no difficulty in accepting the conclusion in Harper, nor the view that the particular statement of Fletcher Moulton LJ, relied on by the judge, was too widely stated. However, I find some of the other comments on Lingké hard to follow. On my reading of the case, as I have already indicated, Vaughan Williams LJ was in the minority in his acceptance of the decision in Herring on its facts. Only by discounting the judgment of Buckley LJ was the majority in Harper able to hold otherwise. Furthermore, the judgments in Harper seem to ignore the detailed reasoning of Vaughan Williams LJ, which turned on a particular view of the facts of Herring, not shared by the other members of the Court.

In any event, in view of the marked differences between the statements of principle by the various Lord Justices, I would be cautious in treating any of them as authority for more than was directly necessary for the decisions in the particular cases. The two cases are reconcilable if one treats Harper as deciding no more than the proposition as stated by Romer LJ: that is, in summary, that the reasonable use of the highway by an adjoining owner includes the right, so far as necessary and for a reasonable period, to obstruct it for the purpose of repairing his property. I could not, with respect, endorse the wider statement by Lord Hanworth, if it is taken as implying that any temporary obstruction, regardless of such a purpose, is permissible subject only to being “reasonable in quantum and in duration”.

Read in that way Harper has no direct relevance to a claim for compensation for exercise of statutory powers, which was not in issue. Indeed, Lord Hanworth referred to confusion caused by some of the references to cases under the Land Clauses Act (p 306), and Lawrence LJ specifically distinguished cases such as Lingké relating to works by public utilities under parliamentary powers (p 314).

The controversial aspect of Herring was the extension of that private property right, by analogy, to the exercise of statutory powers. As Byles J explained it:

“If this be the right of private persons, a fortiori must it be the right of a public body to which extensive power is intrusted for the general good of all.”

It is that extension which was not accepted in Lingké, in my view rightly. The fact that a statutory body is exercising powers for the public good tells one nothing about the terms on which those powers are to be exercised. For those one must look to the statute. Compensation is payable for injury caused by the “works”. The fact that one aspect of the works (in this case the hoardings) is similar to one aspect of private building works does not alter the fact that the works as a whole are dependent on the statute.

That conclusion is in line with the judgment of Parker J in Leonidis v Thames Water Authority (1979) 251 EG 669, relating to compensation provisions in the Public Health Act 1936. I find his reasoning wholly persuasive. For completeness, I should also note the comments of Lord Hoffmann on Herring and Lingké in the Wildtree case, in the context of the discussion of compensation for temporary obstructions. He said:

“The question of whether damage was temporary can arise in a number of contexts. In the first place, a temporary obstruction of the highway (such as leaving a skip in the road for a few days) may not be a sufficiently serious interference with the public's right of passage to amount to a public nuisance at all. This was the principle relied upon by the court in Herring v. Metropolitan Board of Works (1865) 19 C.B. (N.S.) 510 to hold that compensation was not payable for obstruction caused by temporary hoardings. In Lingké v. Christchurch Corporation [1912] 3 K.B. 595 the Court of Appeal thought that the court in Herring was probably too generous to the defendants on the facts but the principle is not in doubt. The time for which an obstruction has existed can also be relevant to whether the plaintiff can show that he has suffered special damage. Or it may affect the question of whether the damage is to the plaintiff personally or to his land…. But none of these questions arises in the present case” (p 14D-H))

Although Harper was not apparently cited, I agree with the Tribunal’s comment:

“… it seems to me improbable that if [Lord Hoffmann] had thought that Herring and the other hoardings cases might enable part of the claim relating to obstruction of the highway to be excluded on the same basis as the part relating to noise, dust and vibration he would not have said so.” (para 32)

I would add that, even if there were a special rule for hoardings surrounding a building site, justified by the need to provide protection for the public as Vaughan Williams LJ suggested, I would not accept that it would cover the present case. The scale and purpose of what was done in this case were quite different. It involved the appropriation of two areas of the highway, one for a work site and the other for equipment storage. Some form of separation was obviously required, and the hoardings no doubt performed that purpose, and may also have provided protection for passers-by (although there is no finding to that effect). But, as a matter of common sense, I would assume that their primary purpose was to provide, in one case an unencumbered working area, and in the other security for the equipment. Whatever the precise limits of the common law principle recognised in Harper, we were not referred to any authority which would support its extension to such a case.

The Tribunal concluded that Mr Stinchcombe’s analogy with the rights of private owners was fallacious:

“… The right of an occupier of premises adjoining a highway to obstruct the highway by erecting hoardings to a reasonable extent and for a reasonable time in connection with building works on his premises is simply an aspect of his right to gain access to his premises from the highway… By contrast construction works in a highway can only be carried out under statutory authority. Authority for any obstruction of the highway, whether caused by the permanent works or arising otherwise in connection with such works, must be derived from statute. It can have no other source.” (para 44)

I agree

Mr Stinchcombe challenged this separation between private and statutory rights. He noted, correctly, that, whatever the position at common law, the erection of hoardings is subject to a measure of statutory control (see Highway Act s 172). Conversely, he submitted, it was wrong to assume that the bridge project could not have been carried out by a private owner without specific statutory authority. The premise was the proposition that, at least in theory, all the various elements of the project (construction works, diversion of footpaths, interference with navigation etc) could have been carried out, with the benefit of planning permission and other appropriate consents from the relevant authorities. Indeed, he suggested that the only reason why an order under the Transport and Works Act was necessary was in order to repeal certain private Acts, listed in Schedule 14.

This submission did not appear to me to advance his case. The premise of the submission is far from self-evident, and there appears to have been no discussion of this aspect before the Tribunal. In any event, I do not see how it assists. The fact is that the partners in the project sought and obtained an order under the 1992 Act, and must bear the consequences in terms of compensation. It is not for us to speculate why they needed to do so. Secondly, the submission does nothing to advance the case that there was a common law right to interfere with the highway in the way which was done in this case, such as to defeat a potential claim for public nuisance.

Having disposed of the contention that there is some special rule applying to hoardings, I see no reason to depart from the view stated in my preliminary observations. In substance I agree with the President’s reasons for allowing this head of claim, and I would dismiss the appeal.

Although there was no dispute as to the application of section 10 of the 1965 Act, the statutory route to that conclusion is obscure. I hope I may be forgiven for spending a moment to explain what is yet another example of the deplorable state of the statutory law of compensation in this country.

It was common ground that the relevant provision of the 1999 Order was article 16 (not article 6, mentioned by the Tribunal). That article provided for the application of Part I of the 1965 Act to “the acquisition of land under this order”. The relevance of that provision is not obvious, since no land in the vicinity appears to have been “acquired” as part of this Order. However, Mr Denyer-Green helpfully pointed out that section 1 of the 1965 Act, which introduces Part I, is also apparently limited to acquisition of land, but that has never been held to limit the application of section 10. This no doubt has to be accepted as part of the inscrutable legacy of section 68 of the 1845 Act, as described by Lord Wilberforce:

“The relevant section of the Act of 1845 (section 68) has, over 100 years, received through a number of decisions, some in this House, and by no means easy to reconcile, an interpretation which fixes upon it a meaning having little perceptible relation to the words used. This represents a century of judicial effort to keep the primitive wording - which itself has an earlier history - in some sort of accord with the realities of the industrial age.” (Argyle Motors Ltd v Birkenhead Corp. [1975] AC 99,129)

The section has been discussed in detail by the Law Commission in its recent report on Compensation Law (LC 286), where it was suggested that it should not be treated as part of the law of compulsory purchase at all. The Commission recommended that it should be re-enacted as part of a separate statutory code governing the right to compensation for depreciation caused by the construction or use of public works (para 11.2, 11.23).

The background to that report was a “Fundamental review” of the law of compulsory purchase and compensation, initiated by the present Government in 2000. This led in due course to the report of an expert advisory group set up by the Government (CPPRAG), which concluded that the law had become “an unwieldy and lumbering creature” and that there was a pressing need for simplification and codification. That recommendation was accepted by Government, and led in 2001 to a reference to the Law Commission to make proposals “for simplifying, consolidating and codifying” the law. The Commission reported in December 2003.

More recently, in Waters v Welsh Development Agency [2004] UKHL 19 para 1-4 (concerned with the notorious Pointe Gourde rule, another minefield of compensation law), Lord Nicholls having referred to the importance of compulsory purchase law “ as an essential tool in a modern democratic society”, commented that “unhappily the law in this country… is fraught with complexity and obscurity”. He quoted with approval my own comment (in the Court of Appeal in the same case):

“The right to compensation for compulsory purchase is a basic property right. It is unfortunate that ascertaining the rules upon which compensation is to be assessed can involve such a tortuous journey, through obscure statutes and apparently conflicting case-law, as has been necessary in this case….”

Lord Brown also acknowledged “the present highly unsatisfactory state of the law”, echoed my plea in the court below for “fresh parliamentary consideration of this important area of the law”, and expressed the hope that the opinions in Waters coupled with the Law Commission’s report would pave the way for further legislation (para 164).

The present case gives me the opportunity to repeat those statements with renewed emphasis.

I agree with the judgments of Carnwath and Potter LJJ.

I agree with the judgment of Carnwath LJ and his analysis of the relevant authorities in the Court of Appeal upon the point argued. I, too, consider that the appropriate way to read and treat those authorities is that set out in paragraphs 24 – 26 of his judgment. I have no hesitation in rejecting the argument that the obstruction caused by the hoardings in this case would not give rise to a cause of action in public nuisance if erected and maintained other than under statutory powers.

It is a public nuisance to obstruct or hinder the free passage of the public along the highway, save to the extent that the parking of vehicles or the creation of other obstructions which do not cause danger to other users of the highway may properly be regarded as reasonable incidents of such passage. Similarly, the owner of premises contiguous to the highway is entitled to make reasonable use of that highway for the purpose of obtaining access to and of loading and unloading goods at his premises, notwithstanding that some inconvenience may be caused to the public and provided that serious obstruction is not caused. Associated with such right of access and reasonable user, in the cases to which Carnwath LJ has referred, the courts have recognised the right of an occupier of premises adjoining the highway to erect hoardings to a reasonable extent and for a reasonable time in connection with building works being carried out lawfully on those premises. Recognition of such a right may sensibly be rationalised as an appropriate measure to protect the public from harm in the exercise of that right. However, as made clear by Lord Hoffmann in Wildtree, it does not displace the general rule that interference in substantial measure and over a substantial period of time with the right of the public to make use of the highway, constitutes a public nuisance which is not subject to any rule of ‘give and take’. A member of the public, including an adjoining owner, who thereby suffers special damage is entitled to sue the creator of the public nuisance.

In reality, of course, major works of construction or repair which obstruct the highway over a substantial period will be undertaken by a local or highway authority or other undertaker under appropriate statutory powers. The owner of premises contiguous to the highway, or at any rate sufficiently proximate to be adversely affected by the works, is then entitled to take advantage of such right to compensation as is provided for by the statutory provisions pursuant to which the works are carried out. If, as is frequently the case, there is a right in the party affected to claim compensation for injurious affection to land under s.10 of the Compulsory Purchase Act 1965, the principles will be those set out by Lord Hoffmann in the Wildtree case, without any special exemption in respect of hoardings erected in connection with such works.