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Transco v Stockport Metropolitan Borough Council, House of Lords, 19 November 2003

1 December 2003
The issues

Water damage – Rylands -v- Fletcher – leaking pipe.

The facts

In 1966 the North Western Gas Board laid a 16-inch high-pressure steel gas main beneath the surface of an old railway, which previously linked Stockport town centre to Denton. The pipe belonged to the North Western Gas Board’s successor, Transco. In 1992, a leak developed in a high-pressure pipe belonging to the Council, which supplied water to a tower block on the Brinnington Estate. It was a large pipe because it had to supply 66 flats in the block. The pipe fractured. The leak was first discovered on the 24th September 1992. The fracture was found and quickly repaired. Water however had been escaping for some time and in considerable quantity because two days later, water was seen bubbling up near the old railway near to the tower. A tower had been built on an old landfill site, which had been soaking up water like a sponge and was now saturated. The water ran along a footpath along the railway bed and then over the side of an embankment. On the 28th September 1992, a section of embankment, which had become sodden with water gave way and spilled over the golf course on the edge of the country pipe. A 27-metre section of Transco’s gas pipeline was left unsupported and exposed. Transco took steps to repair the damage. The costs of the works required to restore support and cover the pipe was £93,681.00. Transco sued the Council. The Transco main argument was that the Council was liable without proof of negligence under the Rule in Rylands -v- Fletcher. The Judge at first instance ordered Stockport to pay Transco damages. Stockport appealed to the Court of Appeal which allowed that Appeal and subsequently appealed to the House of Lords.

The decision

1. The Rule in Rylands -v- Fletcher is to the effect that a person who for his own purposes brings onto his land and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril and if he does not do so is prima facie answerable for all the damage which is the natural consequence of its escape.

2. There had emerged various restrictions on the scope of the Rule, namely:-

(a) A Statute which authorised the construction of works like a reservoir involving risks to others might deal expressly with the liability of the undertakers and might provide that they were to be strictly liable or liable only for negligence or not liable at all. Geddis -v- Proprietors of Bann Reservoir (1878) made it clear that no action could be brought for doing something which statute authorised if it was done without negligence, although it might cause damage. The effect of this principle excludes the application of the Rule in Rylands -v- Fletcher to works constructed or conducted under statutory authority;

(b) Acts of God and third parties. Natural events and acts of third parties were excluded from the application of the Rule;

(c) Remoteness – liability was limited to damage which was the “natural” ie reasonably foreseeable consequence of the escape see Cambridge Water Company -v- Eastern Counties Leather Plc;

(d) Escape – the Rule remained despite attempts to generalise it, to the effect that an escape from the Defendant’s land or control was an essential element of the tort;

(e) Personal injury – Rylands -v- Fletcher is in effect a special form of nuisance. Nuisance is a tort against land. It follows that damages for personal injuries are not recoverable under the Rule. See Cambridge Water Company -v- Eastern Counties Leather Plc and Hunter -v- Canary Wharf Limited;

(f) Non-natural user – it was not every use to which land is put that brought into play the principle in Rylands -v- Fletcher. It had to be some special use, which brought with it increased dangers to others and not merely the ordinary use of the land or such a use as was proper for the general benefit of the community. See Rickards -v- Lothian.

3. The Rule had been subject to significant criticism. The High Court of Australia had decided that it had been “absorbed” into the law of negligence. Scottish Courts had refused to accept that it was part of the law of Scotland. It had been argued that instances of strict liability should be imposed by parliament, rather than by the Courts. Notwithstanding the strengths of these arguments, it was not consistent with the judicial function of the House of Lords to abolish the Rule. That would be too radical a step to take. However, there was need to introduce greater certainty into the concept of natural use. It was relevant to bear in mind the extension of statutory regulation to a number of activities, such as discharge of water, pollution by the escape of waste and radioactive matter. It might have to be considered whether these and similar provisions created an exhaustive code of liability for a particular form of escape which excluded the Rule in Rylands -v- Fletcher. Secondly, it had to be borne in mind that insurance in respect of damage to property was extremely common and a useful guide in deciding whether the risk had been created by not a natural user of land, would be to ask whether the damage which occurred was something against which an occupier would reasonably be expected to have insured himself. (Lord Hoffman)

4. In this case, the damage which occurred was subsidence beneath a gas main. This was the sort of risk, which any rational owner of a gas main would insure. It was caused by the escape of water. The source was a perfectly normal item of plumbing. It was larger than a domestic pipe but smaller than a water main. The Court of Appeal were correct to say that it was not a non-natural user of land. There was no evidence that it created a greater risk than there was normally associated with domestic or commercial plumbing. The criteria of exceptional risk had to be taken seriously to create a high threshold for a Claimant to surmount. Secondly, the risk was one against which most people would ensure. (Lord Hoffman)

5. The Rule should be retained because it continued to have valuable application. It however needed to be re-stated so as to achieve as much certainty and clarity as was possible. Bearing in mind the effect of the Rule being to impose liability in the absence of negligence for an isolated occurrence, the mischief or danger test should not be at all easily satisfied. It had to be shown that the Defendant had done something, which he recognised or judged, by standards appropriate at the relevant place and time as giving rise to an exceptionally high risk of danger or mischief if there should be an escape. (Lord Bingham)

6. With regard to the test of natural user, it was preferable to use the test of ordinary user, making it clear that the rule applies only where the Defendant’s use is shown to be extraordinary and unusual. There was flexibility in this test. A use might be extraordinary and usual at one time or in one place but not so at another time or in another place. (Lord Bingham)

Appeal dismissed.

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