Panesh Chimanlal Mistry v Thakor & Ors

J U D G M E N T

1. LORD JUSTICE PILL: This is an appeal against a judgment of His Honour Judge Inglis sitting as a deputy judge of the High Court in Nottingham on 21st October 2004. On 30th July 2000 the claimant, Mr Panesh Mistry, was walking along Belgrave Gate, a public highway in Leicester. As he passed in front of number 36/38 two pieces of concrete cladding fell from the building, struck him and caused him serious injury. A claim was brought on his behalf in nuisance. The trial before the judge was on the issue of liability only.

2. The judge gave judgment for the claimant on the issue of liability in the action against the first and second defendants, Mr and Mrs Thakor, who were the owners of the property. He dismissed a claim against Carphone Warehouse UK Ltd, who were previous tenants of Mr and Mrs Thakor of the building.

3. There were Part 20 proceedings. The judge gave judgment for Mr and Mrs Thakor on those proceedings against Mr Michael Roberts, a chartered surveyor, to the extent of 80%. They were claiming an indemnity or contribution from him.

4. The party who were tenants of the building when the injury occurred were not defendants. They were without assets. They had become tenants in May 2000, the tenancy of Carphone having ended in March 2000.

5. In this appeal Mr and Mrs Thakor seek to reverse the finding of liability against them and Mr Roberts, in the event of the claimant's judgment against Mr and Mrs Thakor standing, seeks to increase the share which they should bear of the damages.

6. In the appeal against the claimant it is Mr Roberts who has made the running. Mr and Mrs Thakor have associated themselves with the appeal only because it is necessary to do so because Mr Roberts was merely a Part 20 defendant. Counsel has not addressed us on that issue on behalf of Mr and Mrs Thakor.

7. The building was built probably in the 1960s. On the face of it, as it overlooked the highway, both at first-floor and second-floor level, there were courses of concrete facing panels, roughly 40 inches by 20 inches and weighing about 50 kilograms. They were vertical to the wall. The horizontal face provided support for them. In effect a shelf was formed on which the panels stood. The panels fell (it was common ground on the expert evidence available) due to the corrosion of fixings and the steel angle below the panel. The effect of the corrosion had pushed the bottom edges of the cladding panels away from the building. As Mr Patrick Flint, a chartered building surveyor, put it:

"The movement would obviously sever any bond with the original cement mortar bedding and the slabs that fell must have just slipped off the corroded edge of the base angle."

8. It was not in dispute but that the frontage of the building giving on to the public highway was in a dangerous condition. The concrete panels had become unstable and liable to fall. This was not a freak or unlikely occurrence, the judge found, it was the natural consequence of a process of deterioration. The condition of the panels at the time the accident happened would not have been materially different from their condition in the previous year. The building was unsafe and a public nuisance while Carphone were tenants, and during the subsequent period up to the accident.

9. Mr and Mrs Thakor owned a number of properties and employed Mr Michael Roberts as their property manager. He is an experienced property manager and chartered surveyor, his firm practising under the title "Estate agents Surveyors Property Advisors Property Management". The terms of engagement included a document headed "Outline Duties of Managing Agent". They included a duty to inspect. It is necessary only to refer to two paragraphs:

"6. Making visits to the property as necessary to deal with all management matters and to the provision of at least 2 inspections a year.

...

14. Generally to act in all respects and do all such things as could reasonably be expected of a professional manager of property of this type."

10. The state of the premises when the Carphone tenancy ended and that of the new tenants began was considered in detail by the expert witnesses. One of the issues in the case was whether Carphone had discharged their responsibilities as tenants. That issue was the subject of detailed discussion between Mr Michael Roberts, acting for Mr and Mrs Thakor, and Mr Nicholas, who was acting for Carphone. An issue arose in the trial as to what Mr Roberts should have observed, and what advice he should have given to Mr and Mrs Thakor. The judge accepted the evidence of Mr Clarke, who said (paragraph 31 of the judgment):

"... the defect in the cladding apparent (the bowing and also being out of vertical) coupled with observation that the joints were not all sound so that water may have got in, ought to have led to an enquiry that would have determined the state of the panels and led to the danger being uncovered. The movement observable was enough for a person in Mr Roberts' position managing the property to be concerned about the integrity of the panels. The panels had apparently moved and further investigation was warranted. The state observed should have rung alarm bells. The investigation should have been immediate."

11. The judge pointed out that the essence of the case against Mr Roberts was that he had failed to identify the dangerous state of the panels, failed to have the dangerous state rectified, and did not inform the Thakors of the dangerous state or the steps that needed to be taken.

12. The first issue to be determined is of course whether Mr and Mrs Thakor as owners and landlords are liable to the claimant, and that must be resolved before any question of contribution as between them and Mr Roberts can arise. The two issues are quite distinct, but some of the evidence bears upon both of them and I have that in mind in summarising the evidence as I do.

13. At paragraph 33 the judge again stated that he preferred the evidence of Mr Clarke and of Mr Smith to that of Mr Mason, an expert witness who gave evidence for Mr Roberts:

"If there was movement, then finding the cause of it was urgent, given the safety issue immediately apparent. That required appropriately expert investigation."

14. The judge concluded at paragraph 34:

"... I am satisfied that Mr Roberts' failure to identify possible danger from what he saw, and failure to address it, from his position as a professional property manager who was being relied upon as he was, amount to negligent breaches by him of his duty to manage the property in accordance with the obligations of his agreement. I am satisfied also that had he taken the steps he should have taken then on the balance of probabilities the problem would have been identified and dealt with so as to avoid the accident. ... In any event discharging his contractual duty to the Thakors would have involved Mr Roberts in taking effective steps, or absolving himself by a clear and full explanation including a warning of risk to Mr Thakor. He did neither of those things and his breach in my view was causative of the Claimant's injuries."

15. The judge stated that the primary case against Mr and Mrs Thakor can best be expressed in nuisance. He referred to ways in which building owners can become liable for private damage caused by public nuisance, as occurred in this case. The judge referred to the case of Brew Brothers Ltd v Snax (Ross) Ltd [1970] 1 QB 612 as stating the principle upon which the claimant relies. That was a case where the owners must have been presumed to have known that the state of the premises at the date of the lease which they had granted was such as to constitute a nuisance. There is an issue in this case as to what the owners knew at the material time.

16. The main point at issue in Brew Brothers was whether the obtaining from the new tenant of a full repairing covenant discharged the owner's duty to members of the public. The principle was stated by Sachs LJ at page 636:

"On that footing, then, are the owners liable in nuisance? The tenants contend that they are liable to the plaintiffs because at the time that the owners let No. 396 to the tenants the flank wall was unstable and they ought to have known that fact. It is, of course, well-settled law that where a liability for nuisance attaches to an owner of property on account of facts within his knowledge it attaches equally if his reason for not having that knowledge was failure to use reasonable care to ascertain them (see Scrutton LJ's judgment in St Anne's Well Brewery Co v Roberts (1928) 140 LT 1, 8 and the speeches in Sedleigh-Denfield v O'Callaghan [1940] AC 880). It will thus be convenient if in the rest of this judgment I use the word 'knowledge' to include presumed knowledge."

17. Sachs LJ repeated that there was an actual or at least a potential danger when the lease was granted. He added (page 636G):

"This state of affairs constituted a nuisance. Moreover, on the further specific findings of the judge it was a nuisance of which the owners ought to have known when granting the lease. It was thus a nuisance which was within the knowledge of the owners at the material times."

18. Further, at page 639C:

"The owner of property in my view remains liable to third parties for the effects of a nuisance of which he has knowledge at the date of granting a lease unless excused by some further fact over and above taking a covenant to repair ..."

The reasoning of Phillimore LJ, agreeing with Sachs LJ, was to a similar effect.

19. We have been referred to the St Anne's Well Brewery case. It is not necessary to deal with it in detail. Scrutton LJ stated at page 8, left-hand column:

"Under those circumstances it appears to me that the cardinal thing which would have to be proved to establish any liability against anybody would be, namely, knowledge of the defect which ultimately resulted in the fall of the wall and (or) failure to acquire that knowledge because you had failed to use reasonable care to ascertain what you should have ascertained."

20. The claimant's case was and is that the principle in Brew Brothers Ltd applies. On their behalf Mr Tonna submits that on the judge's findings Mr and Mrs Thackor knew of a potential danger when the lease commenced, having regard to the knowledge imputed to them. Moreover, they were in breach of duty themselves in failing to take action upon advice they received, to which I will refer.

21. On behalf of them and Mr Roberts, Mr Piper accepts that the knowledge of Mr Roberts with respect to the premises must be imputed to the defendants. He submits that Mr Roberts did not know of the relevant defect, so that no knowledge of it could be imputed to Mr and Mrs Thakor. He also submits that their duty (to which reference is made in the cases) was discharged by instructing a reputable chartered surveyor to manage the property for them. It is not enough, he submits, to establish what Mr Roberts ought to have known, and the finding of negligence against Mr Roberts is not to the point. All that can be imputed to Mr and Mrs Thakor is what Mr Roberts in fact knew.

22. I turn to the findings of fact on the question of knowledge. Having referred to evidence and photographs, the judge found at paragraph 12:

"It is agreed that the cause of failure and the likelihood of failure could not be assessed from ground level, but I accept and find that the following features could be:

(i) The lower panels of each area of paneling were significantly out of vertical when viewed against the vertical brick columns which are a feature of the frontage. They are leaning out at the bottom from the vertical face of the building.

(ii) Seen from below the bottom of each of the panels on the lower course of panels on both floors bowed out to a variable extent from the face of the building."

The reference to ground level, to which I will need to refer in more detail, arises because Mr Roberts was unwilling to climb scaffolding. To climb would have enabled him to take a closer look at the danger which led to the injury.

23. In his report, Mr Roberts had referred to cracks. The judge was not satisfied that were any cracked panels. The judge stated (paragraph 16):

"I am satisfied that Mr Roberts could and did see all the features of the front elevation except for the degree of deterioration of the steel supporting angle brackets, but that, as the schedule shows, he did not attach importance to the features referred to in paragraph 12 and so did not mention them in the schedule."

That was the schedule of dilapidations prepared at the end of the Carphone lease.

24. There was an issue of fact as to whether Mr Roberts had in fact climbed the scaffolding to inspect the relevant area. On behalf of Carphone it was alleged that he had. The judge made a finding of fact in Mr Roberts' favour that he had not:

"27. On balance I find that Mr Roberts did not ever go up the scaffolding or inspect the front of the building from above street level. Not using the scaffolding was described by one of the experts as bizarre. However, there is no direct evidence of his going up; he never refers to doing so or to the results of what he has seen; the evidence of Mr Nicholas and Mr Emberton turns out, contrary to the effect of their statements, to be unspecific hearsay; the letter of 4th March 2004 to Mr Thakor makes it plain that he is not going to inspect at heights, just before the time that the scaffolding was to be put up again at his request; if he gone up he would clearly have seen the seriously corroded angle brackets. I do not think it conceivable that having seen those the corrosion clearly visible would not have been brought into discussions with Mr Nicholas, and it was not. The extent of corrosion is something that plainly amounted to disrepair, and I do not think he would have let it go. A surveyor refusing to go up scaffolding does sound on the face of it unlikely, but his direct evidence coupled with the considerations above lead me to decide on the balance of probabilities as I have said above."

25. The judge stated his conclusions at paragraph 48. (I will refer again to the letter of 4th March already mentioned):

"On the basis of the Thakors' actual and imputed knowledge alone, however, I have nonetheless come to the conclusion that they should have known by the time they let the property in May 2000 at the latest what the condition of the building was. They are taken to have known what Mr Roberts knew but attached no importance to in December: that joints between the panels were defective; that the bottom courses were out of vertical; and that the bottom edges of them bowed out from the building to varying degrees."

26. Later in the paragraph reference is made to the effect of the 4th March letter:

"... the Thakors ought to have known of the state of the panels. That is sufficient for them to remain liable after the new tenant came into possession so as to be liable to the Claimant for the injuries he suffered in July 2000."

27. The letter of 4th March was one written by Mr Roberts to Mr Thakor, in the course of his investigations at the conclusion of the Carphone lease. I will not read all of it:

"As I explained, I cannot inspect the upper roofs and it is my professional advice that you instruct a roofing contractor to examine and to carry out a full report."

Reference is then made to the possibility of problems with the electrics:

"It is also my advice that a building contractor examines the front concrete panels as again I have no access to examine what works have been carried out, and although Mr Nicholas confirms that the panelling has been renewed to the joints and sealed, I am unable to confirm this. I would strongly advise that a building contractor examines as I am unable to carry out any inspection which will have to comply with Health & Safety with this being at upper level. Could you please ring me to discuss, and if you confirm I will obtain quotations for the costs incurred for inspection to ensure that works comply."

It was clarified in evidence that when Mr Roberts used the expression "Health & Safety" he was concerned not with the health and safety to the public and the possible risks to those using the highway, but to his own health and safety.

28. There was an issue of fact as to the action taken by Mr Thakor upon receipt of that letter. That also was resolved in favour of Mr Roberts. Mr Roberts had made a note in relation to employing a building contractor:

"Mr Thakor not interested, does not want to spend money on reports. He has tenants waiting to take premises on full repairing lease."

29. The judge accepted that Mr Thakor took no action upon the advice he received. No doubt, he had in mind the fact that tenants who would take on a full repairing covenant were, by then, in prospect.

30. On the basis of that evidence and those findings, Mr Piper submits that Mr Roberts had no knowledge of the relevant defects which could be imputed to Mr and Mrs Thakor. The judge made a contrary finding to which I have referred, at least to the extent of finding that Mr Roberts "could and did see all the features of the front elevation", including those referred to at paragraph 12 which I have set out.

31. Mr Piper has referred us to the transcript. He submitted that the finding of fact is not justified and, while the defects may have been there to see, the judge was not entitled to find that Mr Roberts had seen them.

32. The judge's finding cannot, in my judgment, be challenged successfully. We have been referred to the transcript of Mr Roberts' evidence. When points were put to him as to what he had seen, he was at best equivocal. In my judgment, the finding that the witness had seen what the judge described at paragraph 12 is not assailable.

33. On that basis, in my judgment there must be imputed to Mr and Mrs Thakor, not merely that knowledge, but knowledge as to what should have flowed from that. On the evidence and the judge's findings it is a necessary conclusion that, had it been appreciated what dangers arose from the observed defects, action should and would have been taken. Not only should Mr Roberts have taken the action which the judge found he should have taken, but it must be imputed to Mr and Mrs Thakor that the action was to be taken. For the principle in Brew Brothers to apply, it is not necessary for the owner of the building to have knowledge of the entire consequences of the defect and the action that should be taken. It is sufficient if he knows, or is imputed to know, the basic evidence which will inevitably lead in the present case to a failure such as that which occurred.

34. Moreover, in my judgment there is a separate basis upon which Mr and Mrs Thakor were in breach of duty. They were given advice in the letter of 4th March. They did not take that advice. The consequences of that will need to be considered in more detail on the question of apportionment. But even if -- and I make no finding as to this -- it is a sufficient discharge of the owner's duty to instruct a reputable chartered surveyor, if that chartered surveyor gives advice which ought reasonably to be followed and which the owner does not follow, an independent breach of duty arises. This does not depend on any imputed knowledge. It depends on the basic duty of the owner.

35. When considering apportionment, the judge found that Mr and Mrs Thakor had been negligent in failing to take the advice which had been given to them. Mr Roberts' success in achieving that finding inevitably works against him when the question of the liability of Mr and Mrs Thakor is considered. They ought to have taken action upon receipt of the letter of 4th March. They were given sufficient notice of possible dangers, and their failure to do so, as owners, involved a causative breach of duty by them.

36. That being so, it is not necessary to go on to decide the more difficult point as to whether an owner is to be imputed to have knowledge which his professional agent ought to have. If the situation had been that Mr Roberts was not aware of the defects, or at any rate the raw material which led to the disaster, but he ought to have known of them, it is arguable that that should not be imputed to Mr and Mrs Thakor. While it is right to impute to them what knowledge their instructed surveyor actually has, the issue whether they should be imputed with knowledge he does not but ought to have is to take matters a step further. Mr Piper has warned of the dangers of taking constructive knowledge too far, especially where several independent contractors or successive independent contractors may be involved. I do not find it necessary to express a view on that issue. On the two grounds already considered, the claimant has a sound case against Mr and Mrs Thakor.

37. On the question of apportionment, Mr Piper submits that, having regard to blameworthiness and causation, a finding of 80% against him ought to be altered in this court. It is common ground that the principles in the 1945 Act apply. He submits that the letter of 4th March involved the plainest advice to Mr and Mrs Thakor and if they failed to take that advice, a substantial proportion of the contribution should be attributed to them.

38. For Mr and Mrs Thakor, Miss Adams submits, first, that this court should be reluctant to change any apportionment and, secondly, that, on the merits, the finding against the chartered surveyor instructed was a reasonable one in the circumstances.

39. Mr Piper has referred to the decision of this court in Exel Logistics Ltd v Curran [2004] EWCA Civ 1249, where the court was prepared to make a comparatively modest change as to apportionment in a running down action, having found that the judge's apportionment was incorrect.

40. This court is reluctant to make any such alteration. The appellate court, having accepted the lower court's findings of fact, as we have done in this case, will be very reluctant to interfere with the court's apportionment under the 1945 Act ( National Coal Board v England [1954] AC 403, at 420 per Lord Porter). As a rule, an appellate body does not interfere with the discretion exercised by the judge who tried the case. The judge has had the opportunity to see the witnesses, to assess their evidence and their conduct, and to make an apportionment accordingly.

41. This is not a typical situation in an accident arising out of a building dispute. A major factor in considering apportionment, in my judgment, is the unwillingness (described by one of his colleagues as "bizarre") of Mr Roberts to go up the scaffolding. He made it very plain in the course of his evidence that he was not prepared to do that, and in the letter to which I have referred he gave a health and safety reason for doing so. This is, as Mr Piper has inevitably to accept, extremely unusual conduct on the part of a chartered surveyor. If one instructs a chartered surveyor, one normally expects him or his representative to do comparatively routine exercises as climbing scaffolding when conducting inspections. It is right to say That Mr Roberts was entirely frank about his unwillingness to go up scaffolding. But in my judgment if a chartered surveyor who takes that attitude does not perform the tasks normally to be expected of a chartered surveyor, it comes ill from him if a defect is not appreciated and he simply advises the client to take other advice, that that client, who does not go to someone else, should bear a substantial share of the blame. Professional men are employed to do the things normally expected of them in their profession. Mr and Mrs Thakor did not expect that they would have to go to someone else to do this comparatively elementary task, with respect, of climbing scaffolding to inspect a building.

42. In my judgment, not only is this an apportionment which should not be interfered with; it was one which was appropriate in the circumstances. The point was fairly put to Mr Roberts in the course of his evidence, when he referred to the inaction by Mr and Mrs Thakor:

"Q. ... The obvious thing to do was to go up the scaffolding with Mr Nicholas and have a look.

A. I disagree because Mr Thakor had given me clear instructions. If I disobeyed that instruction, that would be debasing the instruction that he had given me ..."

With respect, that is not an answer to the comment which was made to him by counsel about the obvious thing to do.

43. Accordingly, the result of this appeal is that the appeal of Mr and Mrs Thakor against the judgment in favour of the claimant is dismissed, and the appeal of Mr Roberts against the apportionment finding of the judge is also dismissed, if my Lords agree with my conclusions.

44. LORD JUSTICE LLOYD: I agree. As this appeal appeared on paper, it seemed that we might have to grapple with a question as to the extent, in the context of this particular tortious liability, of imputed knowledge where an owner, who is responsible for property which is in a dangerous condition, has in effect delegated his management of the property to an apparently competent surveyor as an independent contractor, but who in the particular case discharges his duty incompetently and in breach of his duty to his client. That is a point on which there appears to be no authority, so far as the researches of counsel and the Bench demonstrate. But I agree with my Lord that it is unnecessary to consider that point, which can await a later case (if it arises) where the facts do require that the court should decide it.

45. On the present facts, I agree that the matter can be dealt with on the basis of the judge's findings of fact -- as to which, it seems to me, there is no justification for disturbing them -- and on the further point taken by Mr Tonna that the very finding that Mr and Mrs Thakor contributed by their own fault to their loss, so as to be subject to a 20% discount, so to speak, on the indemnity that they are entitled to from Mr Roberts, demonstrates that they have failed to take reasonable care in respect of the condition of the property; and, if they had taken the reasonable care in question by instructing Mr Roberts to commission Mr Taylor to get up on the scaffolding and inspect the panels, the true position would have become apparent. In those circumstances, it seems to me that this case, on the facts found by the judge, falls fair and square within the principles expounded in Brew Brothers Ltd v Snax (Ross) Ltd . For those reasons, it seems to me that the judge's conclusion was right.

46. With my Lord, I would also not disturb the judge's apportionment under the 1945 Act. It seems to me that it was fair to hold that Mr and Mrs Thakor did contribute to their own loss by their failure to act on Mr Roberts' advice in his 4th March letter, but that the primary liability was that of Mr Roberts, who did not in that letter suggest that the need for the report was anything to do with the safety of the building.

47. For those reasons, I agree that both appeals should be dismissed.

48. MR JUSTICE RIMER: I agree with both judgments. I too would dismiss both appeals.

ORDER: Appeals dismissed with costs, to be the subject of detailed assessment if not agreed; counsel to lodge a draft final order.

(Order not part of approved judgment)