Wallace & Anor v Crossley & Anor

LORD JUSTICE RICHARDS: I have before me three applications for permission to appeal arising out of proceedings in the Worcester County Court. The applicants, Mr and Mrs Crossley, were defendants in those proceedings. They and the claimants in the proceedings, the Honourable Robert Wallace and Mrs Wallace, were adjoining landowners. The Crossleys lived at Kings End Cottage; the Wallaces at Pond House.

The dispute between them arose out of arrangements for the discharge of sewage. In brief, sewage from the Crossleys' property and two other properties in the vicinity, drained to a septic tank on their land. From there it ran down through two settlement tanks and a reed bed on the Wallace's land before issuing into a seasonal stream which flowed in turn into a series of ponds that were also on the Wallace's land. The settlement tanks and reed bed system were installed in 1997 replacing a previous filter bed system which had become inadequate.

At first, as it would appear, the new system seemed to operate satisfactorily. The environmental team at the local authority, Malvern Hills District Council, was initially satisfied with the improvements and the Environment Agency gave a discharge consent. But by mid 1998 the Wallaces were complaining about the quality of the discharges and about the smell. I think it fair to summarise matters by saying that there was a gradual deterioration of relations between the parties. The Wallaces continued to complain about the discharges and the maintenance work on the system and they imposed restrictions on access onto their land for that maintenance work, putting a padlock on the gate and requiring a week's notice of access to be given. There was also, at some point, a complaint about the alleged extension without their consent of a highways pipe which discharged storm water onto the Wallaces' land.

Eventually they commenced proceedings in the county court alleging nuisance and seeking damages and other relief. The Crossleys put in a defence to the claim, and a counterclaim for various declarations and for orders preventing the restrictions on their access to the Wallaces' land for maintenance work.

The attitude of the council's environmental team also changed. In 2001 the council issued an abatement notice alleging statutory nuisance and requiring the discharges to stop or remedial works to be carried out. The Crossleys appealed against that notice to the magistrates' court and then the crown court and then sought judicial review of the adverse crown court decision. My understanding is that the abatement notice has since been stayed pending the outcome of the county court proceedings.

The hearing of those county court proceedings took place before HHJ Geddes. The Wallaces were represented by counsel, Mr Mason, the Crossleys appeared in person. The judge heard evidence from them all. He also heard evidence from the council's environmental team manager, a Mr Ferguson, and the council's environmental health officer, Mr Robinson, and from a number of experts: Mr Smith, who was described as an expert in drainage, sewage, sewage treatment and environmental engineering; Dr Ashurst, who was described as a consulting chemist; Dr Hudson, who was described as a specialist in the design and installation of reed beds; Mr Peirson, who was described as an expert in odour omission measurements; and Mr Green, who was described as an expert in waste water treatment.

In his judgment, handed down on 4th May 2005, the judge found in favour of the Wallaces. He held that the Crossleys had an easement to discharge effluent onto the Wallaces' land, but it was subject to the qualification that it did not cause a nuisance. He found no evidence of nuisance before 1994. Therefore the Crossleys had not acquired a right to commit a nuisance by proscription. He found that the effluent caused a nuisance on the Wallaces' land both by its appearance and by its smell. He rejected an argument that any such nuisance was the result of interference by the Wallaces with the reed beds, or of the lack of maintenance caused by the locking of the gate. He held that Mrs Crossley had carried out all the maintenance she thought was necessary. He also rejected an argument that the Wallaces were estopped from preventing the Crossleys from maintaining and using the reed bed system. He held that the Wallaces were entitled to relief and that the counterclaim should be dismissed.

Effect was given to that judgment in an order, dated 20th June 2005, after further argument. The order provided in paragraph 1 that the defendants were from 20th December 2005 to cease to cause material to drain from the septic tank so as to cause a nuisance. In paragraph 2, it restrained them from entering on to the Claimants' land save for the purposes of inspecting and maintaining the pipe through which the flow of material from the septic tank was deposited onto the Claimants' land. By paragraph 3 the judge ordered the defendants to pay to the claimants by way of damages the sum of £3,250 in respect of nuisance and trespass, and also a sum to be assessed, if not agreed, to represent the reasonable cost of removing the highways pipe from the claimants' land. Paragraph 4 dismissed the counterclaims. Paragraph 5 ordered the defendants to pay the claimants' costs on the standard basis until 26th October 2000 and thereafter on the indemnity basis. Those costs were to be subject to detailed assessment, unless agreed.

Paragraph 7 and 8 dealt with costs of certain specific issues. Paragraph 9 ordered a set off of costs, the details are unimportant. Paragraph 10 ordered the defendants to pay interest on the sum of £3,250 at the annual rate of 12 per cent from 26th October 2000 to the date of the order, but at half rate, namely the sum of £907.15. Paragraph 11 ordered them to pay interest on the claimants' costs after set off at the annual rate of 12 per cent from 20th June 2005. Paragraph 12 ordered them to pay the sum of £50,000 on account of costs and paragraph 13 made provision for them to pay the costs of the hearing on 20th June 2005 itself.

I have dealt with the detail of the order because various aspects of it are relevant to matters to which I will come in a moment. The first application before me is for permission to appeal against that order of 20th June 2005, but before I consider the grounds of appeal against that order let me continue with the history and outline the other applications.

The Crossleys applied to the court for a reconsideration of paragraph 12 of the order: the paragraph requiring them to pay £50,000 on account of costs. They contended that they did not have the means to pay that figure in a lump sum and that they could only pay in instalments of £800 a month. That application was dismissed on 26th July 2005. A further application, to the same effect, was refused on 15th August 2005, on the basis that no sufficient grounds had been put forward for reviewing the previous order. A yet further application, which repeated the earlier application, was struck out on 1st September 2005. The second application for permission to appeal relates to that strike out order of 1st September.

Complaint is also made of a further order in the county court. On 1st August 2005, the court ordered Mrs Crossley's interest in a property at 36 Whitley Court, Coram Street, London WC1 to be charged with payment of a sum of about £53,000 to secure the amount owing under the order of 20th June. On 21st August, District Judge McKenzie ordered the charge to continue with a small downward modification of the sum charged. The third application for permission to appeal relates to that order of 31st August.

For the record the first application has got case number 2005/1397, the second case number 2005/2023 and the third case number 2005/2035.

Returning to the first and main application there are, in total, some 40 particularised grounds of appeal, if one takes the Notice of Appeal together with the document entitled "Additional Grounds of Appeal" and said to have been prepared with the assistance of counsel. The grounds of appeal were supplemented by a skeleton argument and yesterday I received a further and very late supplementary skeleton argument together with various authorities. There are three main bundles, one for each of the applications, together with nine bundles of transcripts and a further five bundles that were lodged yesterday.

Before me today the Crossleys have appeared in person, as they did before the judge below. Both have addressed me, though the main submissions came from Mrs Crossley. I am grateful to the Crossleys for the clear and courteous way in which they presented their case, a case about which they obviously feel very deeply. I fully understand the constraints affecting oral submissions in an application of this sort and it has only been possible for them to highlight a few of the points that are in their written material. Likewise it is not possible for me, having regard to the nature of the application, to deal fully with all of the grounds that have been advanced, but I will attempt to deal briefly with them.

For that purpose I propose to adopt the groupings in the written Additional Grounds of Appeal, which, to my mind, also embrace the substance of the points in the notice of appeal itself. There are some extra matters of detail, rather than major new matters of substance, that emerge from the skeleton argument and the supplementary skeleton argument, and I recognise that the order in which matters were presented today differs somewhat from the order in which they appear in the written papers. However, in order to impose some discipline on my analysis of the case I think it more convenient to follow the order in the Additional Grounds of Appeal.

That document contains, first, a series of grounds complaining about the judge's assessment of the evidence in finding that there was a nuisance by appearance and smell. The finding is said to be contrary to the preponderance of the evidence. It is also said that the judge was wrong to prefer the evidence of the Wallaces and of their expert, Mr Smith, in preference to the experts who gave evidence on behalf of the Crossleys. One particular point made is that it is said that the judge appeared to disregard the evidence given on behalf of the Crossley's by Mr Pierson and it is said that he failed to apply any objective standard to the issue of nuisance by smell, whereas Mr Peirson provided a detailed quantified case in support of the Crossley's. In the course of submissions before me Mrs Crossley has also emphasised the superior experience and qualifications of Mr Peirson, as compared with Mr Smith.

It is true that the judgment is economical in its analysis of the factual and expert evidence, but, to my mind, there is enough in it to show that the judge below had in mind, and took properly into account, all the evidence that he had heard. He picked out, as he was entitled to do, what he considered to be the most important points. There was, in my judgment, ample evidence from the Wallaces and their witnesses, including, I should stress, the council's to Mr Ferguson as well as the expert witness, Mr Smith, to sustain the judge's conclusion. I would note that the applicants are wrong in the written material to describe the judge as having exercised a "discretion" in making findings of fact. The exercise of judgment in the assessment of the evidence is a different process from the exercise of discretion. But the point of substance is that the findings of fact were properly open to the judge on the evidence he heard and, in my view, there is no prospect of establishing the contrary on an appeal.

I turn next to a series of procedural points. One I can deal with quickly. It is a complaint that the judge did not have a site view and this resulted in a feeling of unfairness on the part of the Crossleys. It should not have done. It was for the judge to decide whether he needed a site view. As it was, he had detailed descriptions in the witness evidence and he also had photographs. I see nothing arguably unfair about his decision to proceed without a site view.

More importantly, various allegations have been made of unfairness in the conduct of the trial. Complaint is made about certain of the judge's comments. It is said that he unfairly restricted examination-in-chief of one of the Crossleys' expert witnesses, that he did not make appropriate allowance for the Crossleys themselves as litigants in person, and that he allowed counsel for the claimants to intimidate them in the presentation of their case. A further allegation is that he did not allow them a proper opportunity to raise legal argument and, in particular, required written closing submissions rather than allowing oral legal argument. Other points are made about the judge's control over the order of witnesses and the extent to which examination and cross-examination was permitted. It is said that the Crossleys were rushed in comparison with the latitude allowed to the claimants and their counsel.

All of this is said to amount to, or evidence, actual bias and the Crossleys do not shrink from an allegation of actual bias. Alternatively, is said to have given rise to an appearance of bias. In her oral submissions Mrs Crossley illustrated the concerns that they have by reference to a number of passages in the transcript. I am aware that they are only a few of the totality of passages relied on. I have looked at all of the passages of the transcript on which reliance is placed in the written material.

The conclusion that I have reached is that there was nothing in the judge's language that could possibly be said to evidence actual bias, or to have given rise to an appearance of bias from the point of view of a fair minded and informed observer, which is the relevant legal test. Interruptions in the course of evidence did not go beyond permissible limits and did not amount to displaying what might be called "animus" against the Crossleys. The various decisions that were made about the order in which evidence should be given, and the extent to which evidence-in-chief and cross-examination would be allowed, were, in my judgment, within the judge's reasonable discretion (and this time discretion is the right word, in relation to the conduct of the trial). There was a lengthy opening discussion, but it was more in the way of a discussion of the issues than an opening speech by counsel for the claimants. In any event, the judge had an opening skeleton argument from each side. It was properly open to him to require closing submissions with all relevant legal arguments to be made in writing by both sides.

In all of this I see no lack of even-handedness. It is true that decisions were changed as the trial went on, particularly as regards whether Mrs Crossley's own evidence should precede that of the defence experts. But that was because the judge accepted counsel's submission, as he was entitled to do, that because of the way the previous evidence had developed it was important that Mrs Crossley's factual evidence should be heard before the opinion evidence of the experts. Again I see no lack of even-handedness here.

It is also true that timing got tight towards the end of the trial. The Crossleys decided to drop one of the witnesses they had proposed to call. I have been shown a chart showing the way in which their evidence was relatively compressed in the latter part of the trial, but again I am wholly unpersuaded that there is any sustainable argument that the judge's conduct of the trial evidenced bias or gave rise to an appearance of bias on the application of the proper legal test. It is plain that the Crossleys feel that they were prejudiced, but I do not consider that there was any unfairness that would vitiate the judge's conclusions.

A further batch of issues is advanced under the heading of "points of law". Some of those points in fact come back to the judge's assessment of the evidence. It is said that he was wrong to reject the Crossleys' case as to a prescriptive right to commit nuisance, in that if there was a nuisance now there must have been one previously, and there was evidence that the state of the effluent had been worse previously. Again I have been shown some of the evidence in question and some photographs, although the photographs do not date back to 1994 or before. It seems to me, however, that the judge was entitled to reach the conclusion that he did, that the evidence did not support a finding of a right to cause a nuisance before 1994. The matters that are relied on in the appeal documents, and to which my attention has been drawn, in my judgment do not begin to show that such a conclusion was not reasonably open to him.

A further point made is that the judge applied an inappropriate standard when considering the question of nuisance. I can see no such error. There is a complaint that he did not address adequately defence arguments on estoppel and the effect of a written agreement in April 1998 concerning the discharge of effluent and access to the land. However, in my view the judge gave a properly reasoned rejection of the estoppel argument grounded in his finding that any consent given by the Wallaces was on the basis, express or implied, that the system did not cause a nuisance on his land. In my view, too, the agreement added nothing material to the estoppel argument and did not need to be separately addressed by the judge in his reasons and, in any event, in the light of his findings I do not see how it could provide a successful basis of appeal.

There is a challenge to the award of damages but it is sufficient to say that in my judgment there is nothing in the point. There is also a challenge to the award of costs on an indemnity basis from 26th October 2000, more than two years before the proceedings were commenced. I have seen the relevant correspondence, which included letters of 26th October 2000 and 31st October 2002 from the Wallaces' solicitors making offers to settle, as well as a letter from the Crossleys' solicitors dated 19th December 2002 requiring a very large payment from the Wallaces as one of the terms of a proposed settlement.

It is right that the October 2000 letter was not strictly a Part 36 offer, Part 36 applying only once proceedings are commenced, but it was held in Huck v Robson [2002] 3 All ER 263 that such an offer can be taken into account in the same way as a Part 36 offer. I am satisfied that the judge was entitled to take the correspondence into account, that there was nothing wrong with his legal approach and that it was within his reasonable discretion to make the costs order he did.

The same basic reasoning applies to the judge's decision to award interest at 12 per cent on the judgment sum of £3,250. On none of these financial points, any more than on any of the other matters I have covered, is there a real prospect of success on appeal.

To the extent I have not covered specific matters, I make clear that I consider the rest of the argument to be equally unsustainable on appeal. That disposes of the main application for permission to appeal against the order of 20th June 2005. The remaining applications can be dealt with more quickly. The judge was plainly right to strike out the repeat application to pay by instalments the sum of £50,000 ordered to be paid on account of costs. There was no change in circumstances to warrant the repeated applications. The initial refusal to order payment by instalments is not technically the subject of an application to appeal, but it does not matter because that refusal was also plainly right. There was evidence before the judge that Mrs Crossley owned a large number of properties which she had previously said were worth some £4 million and that she derived an income of approximately £118,000 per annum in rents. The couple also had other sources of income. It was clearly open to the judge to find that they could raise a loan to pay the £50,000, and that it was not necessary, or appropriate, to order a payment to be made by instalments. There is no merit to any of the matters raised in the Grounds of Appeal whether in relation to the substance of the decision, or the conduct of the hearing, or the refusal to transfer the case to a court in London.

In the light of the existence of a valid order as to payment of the £50,000 and the failure to pay it, I can see no possible basis for objection to the charging order made by the district judge: an order made in respect of a precise ascertained sum due under the judgment. None of the matters raised by the applicants has any merit.

For those reasons I refuse permission to appeal in respect of all three applications. I should mention that at the outset of the hearing there was put before me an application in relation to proceedings for contempt of court by the Crossleys against the Wallaces. That is an entirely separate matter which it is not for me to deal with on the applications that are before me. It is very sad that so much money has been spent by the parties on what was, at bottom, a relatively small issue. I think it right to express my concern as to whether the Crossleys have a truly balanced sense of perspective in relation to the case, but that is a matter for them.

For the reasons I have given, I must refuse the applications.

THE APPLICANT: My Lord, might I have your permission to appeal to the House of Lords?

LORD JUSTICE RICHARDS: I do not think that where I have refused permission to appeal to this court the matter can possibly arise. If it were to arise permission is refused.