Steenberg & Louden v Enterprise Inns PLC & Other

Transcript date:

Wednesday, March 10, 2010

Matter:

Court:

Court of Appeal

Judgement type:

Substantive Appeal

Judge(s):

Arden LJ, Wilson LJ, Henderson J

Transcript file:

Neutral Citation Number: [2010] EWCA Civ 201

Case No: B2/2008/2763
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM DERBY COUNTY COURT
HHJ MITHANI
LOWER COURT NO: 7MF00451
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 10/03/2010
Before :

LADY JUSTICE ARDEN
LORD JUSTICE WILSON
and
MR JUSTICE HENDERSON
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Between :

(1) HENNING STEENBERG
(2) MARILYN LOUDEN Appellants
- and - 
(1) ENTERPRISE INNS PLC 
Respondents
(2) ANDREW CLIFFORD
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Mr Jeremy Hyam (instructed by Richard Buxton Environmental & Public Law) for the Appellants
Mr Aaron Walder (instructed by Flint Bishop Solicitors) for the Second Respondent

Hearing date : 13 January 2010
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Judgment Approved by the court
for handing down
(subject to editorial corrections)

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Mr Justice Henderson: 
Introduction

1. This is an appeal by the claimants, Mr Henning Steenberg and Ms Marilyn Louden, from the dismissal by His Honour Judge Mithani on 3 November 2008, sitting in the Derby County Court, of their claim in private nuisance against the defendants, Enterprise Inns Plc and Mr Andrew Clifford. The circumstances in which the claim was dismissed were, on any view, unusual.

2. The trial of the action had begun at the Combined Court Centre in Morledge, Derby, on 29 October 2008, when the judge declined an invitation by the defendants (who were separately represented) to rule on a preliminary issue raised in their defences that the claim should be struck out under CPR Rule 3.4(2)(b) as an abuse of process, on the ground (in short) that it sought to re-litigate matters which had been the subject of earlier proceedings between the same parties (or, in the case of Enterprise Inns Plc, its predecessor in title as landlord of the public house which was the alleged source of the nuisance, Whitbread Plc) and which had been compromised by a consent order in Tomlin form dated 16 January 2001 ("the Consent Order") in the Mansfield County Court. The first day of the trial was then occupied by opening submissions, a site visit, the evidence of the claimants' witnesses of fact, and part of the oral evidence of the first claimant, Mr Steenberg.

3. On the second day of the trial there was a good deal of discussion between the judge and counsel (no transcript of which has been provided to us), as a result of which the judge decided, against the opposition of the claimants (voiced by their counsel, Mr Jeremy Hyam, who has also appeared for them on this appeal), that he should rule on the preliminary issue after Mr Steenberg had finished giving his evidence, but before the claimants' expert witness (Mr Mike Stigwood, a highly experienced former Environmental Health Officer with 33 years of relevant experience) had been called, and also before the second claimant, Ms Louden, had given her evidence. There is an unresolved disagreement before us whether Mr Hyam was offered by the judge, and declined, an opportunity to complete the claimants' case before the judge ruled on the preliminary issue. Counsel for the second defendant (Mr Aaron Walder, who also appeared below) said that he was; Mr Hyam, while conceding that he had no clear recollection, thought that he was not. In any event, the judge, who was clearly concerned that the trial was likely to over-run its three-day time estimate, released Mr Stigwood at some point during the second day, and after Mr Steenberg had completed his oral evidence at around 3.30 pm proceeded to hear submissions on the preliminary issue. He then reserved judgment, and on 3 November, sitting in Nottingham, he delivered an oral judgment dismissing the claim. He also refused the claimants permission to appeal.

4. The formal order recording the judge's decision is dated 11 February 2009. After reciting the court's decision to determine the preliminary issue, it continued:

"AND UPON hearing the evidence in connection with the determination of the Preliminary Issue

IT IS ORDERED THAT

1. There be judgment in favour of the Defendants against the Claimants in respect of the Preliminary Issue and the claim ... be dismissed accordingly."

5. In their Appellant's Notice the claimants advanced a number of grounds of appeal which were grouped under four headings, as follows:

(1) apparent bias (based on the conduct of the judge on the second day of the trial, when he allegedly descended into the arena and subjected Mr Steenberg to an unfair cross-examination of his own);
(2) unfairness, breach of Article 6 of the European Convention on Human Rights and/or Article 9(4) of the Aarhus Convention 1998 (the focus here being on the judge's conduct in dismissing the claim half way through the trial, when there was said to be prima facie evidence before him of actionable nuisance);
(3) the construction of the Consent Order; and
(4) the judge's failure to permit the claimants to rely upon one of the exceptions to the Consent Order relating to breach of a planning condition.
6. Permission to appeal was granted in part, on paper, by Lawrence Collins LJ (as he then was) on 17 March 2009. He said that the interventions of the judge were not improper or excessive, and he pointed out that the Aarhus Convention was not part of English law, and in any event members of the public do have remedies, the question in the present case being "whether the acts complained of were within the breach of planning permission exception in the Tomlin order". He considered it to be arguable that the case was not an appropriate one for a preliminary issue (which was in effect treated as a strike out) and that the judge's construction of the Consent Order was wrong. He therefore gave permission to appeal limited to (1) whether the judge should have dealt with the matter as a preliminary issue; (2) whether he was right not to take account of the evidence referred to in the claimants' skeleton argument in support of the appeal; and (3) whether his construction of the Consent Order was correct.

7. The claimants did not renew their application in respect of any of the matters for which Lawrence Collins LJ refused permission to appeal, so the appeal proceeded before us on the three grounds for which he gave permission. In essence, those grounds correspond to headings (2), (3) and (4) in the Appellant's Notice, but excluding any reliance on the Aarhus Convention. I should add, for completeness, that Mr Clifford (the only active respondent to the appeal) put in a Respondent's Notice, but I need say no more about it because Mr Walder wisely decided to abandon it during the course of the hearing.

8. In order to evaluate the surviving grounds of appeal, it is first necessary to give an outline of the uncontroversial background facts; then to describe the nature of the present proceedings in the Derby County Court ("the Second Action"); and then to describe the earlier proceedings in the Mansfield County Court ("the First Action") and the circumstances in which the Consent Order came to be made.

Background Facts

9. The claimants have at all material times been the joint owners and occupiers of their home at 144 Church Lane in the village of Bagthorpe in Nottinghamshire. They bought the property in 1985 from its previous owner, who had built it a few years earlier on the site of a dilapidated cottage.

10. Immediately adjacent to the claimants' property is the village pub, the Red Lion, of which Mr Clifford has been the lessee since 1978. Since it too is at 144 Church Lane, I will refer to the two properties as "the claimants' property" and "the Red Lion" respectively. In November 1992 the then freeholder, Whitbread Plc, granted Mr Clifford a lease of the Red Lion for a term of 20 years commencing on 18 November 1992. The lease included a covenant by the lessee not to do anything offensive, noisy or dangerous on the premises, and not to cause a nuisance. In September 2002 Enterprise Inns Plc acquired the freehold reversion from Whitbread.

11. The west wall of the claimants' property abuts the east wall of the Red Lion, and there is a small window in the kitchen area of the Red Lion which opens directly onto the garden of the claimants' property, close to its front door. There is a second, larger, skylight-type window located in the roof slope of the kitchen directly above the small window. It, too, faces the claimants' garden.

12. Food has always been served at the Red Lion, and according to Mr Clifford's second witness statement the kitchen has been in the same place since 1983. That, I think, is not controversial; but Mr Clifford's assertion in the same statement, that "the kitchen has operated in exactly the same way since approximately 1984", was very much in issue, and was one of the principal matters which the claimants wished to investigate and challenge in the Second Action.

13. In 1991 the local planning authority, Ashfield District Council, refused Whitbread planning permission for an extension to the beer store on the ground floor of the Red Lion, and also refused permission for the construction of an extension to the living accommodation on the first floor. After an appeal, permission was given for the first-floor extension, but the refusal of planning permission for the beer store extension was upheld. In his decision letter, the inspector appointed to determine the appeal described the main issue in the case as being "whether the relocation of the beer cellar and the consequent increase in kitchen and storage space would result in an intensification of the use of the premises affecting the occupants of 144 Church Lane ...". He noted that the effect of the proposal would be to treble the size of the existing kitchen, due to the relocation of the beer cellar. He also noted, on the basis of comments from the environmental health officer and his own observation, that the existing kitchen facilities were "totally inadequate for the existing level of custom". He referred to the smell, noise and disturbance currently experienced by the claimants, and explained his decision to refuse permission for the ground floor extension as follows:

"I appreciate that in view of the proximity of this dwelling the occupants should be expected to put up with a degree of noise and disturbance. However, it appears that the problem has grown significantly over recent years. In the circumstances I consider it right to reject any proposal which could lead to further activity on the site. I am not satisfied the need to improve the kitchen facilities is sufficient to outweigh this harm, since it could be achieved without expanding the overall size of the premises."

14. In the summer of 1993 a large extractor fan unit was installed on the roof of the Red Lion, near to the claimants' property. There is no suggestion that planning permission was required for this installation. According to the claimants, it was the cause of excessive noise, vibration and (in conjunction with the two kitchen windows) escape of cooking smells. These were the allegations which formed the subject matter of the First Action, which was eventually begun in January 1999.

15. Meanwhile, in November 1998 Whitbread had submitted an application to the Council for planning permission to construct a full height chimney to house the kitchen extraction system at the Red Lion. They were no doubt encouraged to take this step by the service of six abatement notices dated 1 May 1998 upon themselves and Mr Clifford. On 1 July 1999 the Council granted full planning permission for the development, subject to compliance with nine conditions. The conditions included detailed requirements relating to the installation and maintenance of the "odour filtration assembly" (condition 2), the maximum air stream temperature in the kitchen canopy (condition 5), and the level of noise emitted from the new system when measured at the boundary with the claimants' property up to a height of five metres (condition 7). The stated reason for most of the conditions, including those I have mentioned, was "to protect the amenity of the occupiers of 144 Church Lane".

16. The new chimney was then installed, and the necessary steps to comply with the conditions appear to have been taken to the Council's satisfaction. On 13 July 1999 the Council agreed to withdraw the abatement notices. On 23 September 1999 the Council wrote to Whitbread's town planning and environmental consultants expressing satisfaction with the arrangements made to ensure compliance with conditions 2 and 5. On 7 April 2000 joint monitoring of the noise levels on the site was carried out by the Council and Whitbread's noise and vibration consultant, Hepworth Acoustics, and on 27 June 2000 Hepworth Acoustics wrote to Whitbread, following further on site monitoring carried out on the previous day, confirming that the noise levels were now below the level stated in condition 7. The letter also recorded that Mr Steenberg had informed the writer "that he now considers that the noise level is low enough not to be considered a problem".

17. On 13 January 2001 the solicitors for the claimants and the solicitors for the defendants in the First Action signed a draft consent order to dispose of the First Action. The terms of this signed agreement were then embodied in the Consent Order made by District Judge Lipman in the Mansfield County Court on 16 January 2001. The order provided for all further proceedings in the First Action to be stayed upon the terms set out in the schedule thereto, except for the purpose of carrying the terms into effect, and for the defendants to pay the claimants' costs of the proceedings to be assessed on the standard basis if not agreed. The scheduled terms were as follows:

"1. The Defendants do pay the Claimants without admission as to liability the sum of £10,000.00 on or before 20 January 2001 in full and final settlement of all claims by either party howsoever arising of which either party are aware at the date hereof save as hereinafter described.

2. The following issues are excluded from settlement in this agreement albeit that the Claimants do not anticipate that the said issues are to become the subject of legal proceedings and the Defendants do not admit that such issues have arisen or do arise or admit any liability or responsibility for the same:
2.1 Flooding to the Claimants' basement from the car park of the Red Lion Public House.
2.2 Flooding to the Claimants' rear garden from the playing field of the Red Lion.
2.3 In respect of the Planning Permission granted on 1 July 1999 no. 98/0650 any rights of the Claimants in respect of enforcement of any future breach which may arise from the Planning Conditions.
2.4 As between the Claimants and the Second Defendant only, harassment and/or verbal abuse from the Second Defendant to the Claimants."

The Second Action

18. The Second Action was begun, like its predecessor, in the Mansfield County Court, although it was later transferred to the Derby County Court. The claim form was issued on 2 March 2007. The basic claim, pleaded in paragraph 2 of the particulars of claim, was that:

"Since May 2002, the Claimants have suffered noise, odours, flooding and other nuisances, caused by the operations at the Red Lion by [Mr Clifford] and condoned by [Enterprise Inns]. The nuisances have materially interfered with the use and enjoyment of the Claimants' property."

19. Brief details were then given in paragraphs 3 to 5, under the headings of "Kitchen noise", "Compressor noise" and "Odours":

"Kitchen noise

3. The Defendants have wrongfully caused or permitted excessive noise arising from the kitchen of the Red Lion and, in particular, through the open windows of the kitchen, which are situated close to the Claimants' front door. This includes loud verbal commands and communications between staff, singing and shouting, general conversation and banter, the expressions are often offensive. There is also the noise of kitchen tools, utensils, pots, pans and crockery constantly in use. This particular noise frequently exceeds recommended noise levels.

Compressor noise

4. The Defendants have wrongfully caused or permitted excessive low and mid frequency noise arising from the use of compressors situated outside the main kitchen building. This is at times a constant noise and at other times intermittent. It results in a significant increase in ambient noise levels. This noise is at a level leading to the prediction of complaints when assessed in accordance with BS 4142.

Odours

5. The Defendants have wrongfully caused or permitted excessive and offensive cooking odours from the kitchen of the Red Lion, which smell like burnt/rancid fat, fish and chip frying, frying of steak and garlic mushrooms. Such odours being offensive and intolerable."

20. Paragraphs 6 and 7 contained further allegations relating to flooding and use of the pub garden, but they were not pursued at trial and can be ignored. The relief sought by the claimants was an injunction against both defendants and damages, including damages for the diminution in value of their property which was said to have been "blighted".

21. The defence of the first defendant, Enterprise Inns, sought to answer the claim on its merits, essentially on the basis that the noise and smells experienced by the claimants were consistent with the normal operation of a public house, were not unreasonable in all the circumstances, and already existed when the claimants chose to come and live next door to the Red Lion. However, the first defendant also advanced two contentions of law. The first was that, if any allegation of nuisance were found to be established, it had not been authorised by Enterprise Inns which accordingly could not be held liable for it. The second, pleaded under the heading "Abuse of process", was that the claim should be struck out pursuant to CPR rule 3.4(2)(b) because it re-litigated matters settled by the Consent Order, or alternatively raised matters which could and should have been raised by the claimants in the First Action.

22. Mr Clifford served a short defence which simply adopted the whole of the first defendant's defence, with the exception of the first of the two contentions of law which I have mentioned.

23. Most unfortunately, no reply was ever served by the claimants, with the predictable consequence that their case on the two contentions of law remained unarticulated until the start of the trial. This omission, for which both sides must in my view share responsibility, contributed significantly to the procedural confusion on the first and second days of the trial, and may also help to explain why attention was not focused more sharply on what appears to me to be the critical issue, namely the true meaning and scope of the Consent Order construed (as it must be) in the light of the surrounding circumstances, or (to use Lord Wilberforce's famous phrase) the matrix of fact in which it was made.

24. Directions for trial were given by a district judge on 13 July 2007. They included directions for standard disclosure, for the simultaneous exchange of witness statements, and for each side to be permitted to rely on the evidence of two experts, one on noise and one on valuation. Rather oddly, the order did not expressly authorise the expert on noise to deal also with smells, but I think this must have been tacitly understood. At all events, Mr Stigwood in his detailed report for the claimants dated 16 September 2008 dealt at length with both "odour impact" and "noise impact", and so far as I am aware no objection was taken to his doing so. The defendants, for their part, elected not to rely on any expert evidence, but they did serve witness statements: the two statements of Mr Clifford, which I have already mentioned, and (on behalf of Enterprise Inns) a statement by Mr Christopher Jones, its divisional director with responsibility for the Red Lion.

25. Although the claimants failed to serve a reply, their case on the merits was considerably fleshed out in replies to two requests for further information served in January and April 2008, and in a voluntary "note on further information" dated 13 February 2008. This detailed material, together with Mr Stigwood's report, can have left the defendants in no doubt about the nature of the case they had to meet. In broad terms, that case was that noise and offensive smells had begun to intensify in 2002 and had continued thereafter at an unreasonable and unacceptable level. The Council had been asked to take action, but had declined to do so. However, there was at least one occasion, in June 2004, when an unannounced visit was made to the premises by a Council officer who found that the air filtration system was not being properly maintained, and that the carbon filter had apparently not been changed "for some considerable time". On another occasion, in March 2006, a report to the Council's planning committee said that the log which Mr Clifford was obliged to maintain, pursuant to condition 2 in the 1999 planning permission, had been found to contain "inconsistent and confusing entries such that the implementation of a satisfactory maintenance regime cannot be verified in total".

26. In his report, Mr Stigwood attached particular significance to a chargrill which, according to his understanding, had been introduced into the kitchen after the installation of the new ventilation system in 1999/2000. Mr Stigwood had not been able to inspect the premises, because Mr Clifford had refused to allow him access and no court order for access had been obtained by the claimants. However, Mr Stigwood was able to explain that even small chargrills make disproportionate demands on ventilation and odour extraction systems, and in his experience they "cause more problems than any other appliance in terms of ventilation demand, failure of the canopy to capture emissions and odour production". One of the reasons for this is that chargrills "rapidly shorten" the life of carbon filters used to absorb odour molecules. They also emit a lot of convected and radiant heat, and thus increase the risk of excessive temperature of the gas stream entering the extractor canopy. Once such temperatures rise above 40ºC, the heat energy starts to release the odour molecules bonded to the carbon filter, and it begins to work in reverse, releasing smells which are often stale and pungent.

27. Mr Stigwood also gave evidence in his report of the levels of noise and smells which he had experienced on nine separate visits to the claimants' property (four in 2003, three in 2004, and one each in 2006 and 2008).

The First Action

28. There is little more that needs to be said about the First Action. I have already explained that it was started in January 1999, and the allegations of nuisance in the particulars of claim all related to the extractor fan which had been installed at the Red Lion in the summer of 1993 (although it was also alleged that smells emanated from the two kitchen windows, the larger of which was described as "an opening vent in the roof"). All of the pleaded allegations of nuisance were said to have arisen since the installation of the extractor fan. The relief claimed, as in the Second Action, was an injunction and damages, including damages of £40,000 for alleged diminution in value of the claimants' property. The solicitors acting for the claimants were the same as in the Second Action, Richard Buxton of Cambridge.

29. On 5 March 1999 the defendants to the First Action, Whitbread and Mr Clifford, served a common defence. The installation of the extractor fan in the summer of 1993 was admitted, although it was not admitted that the fan vented over the claimants' house and garden. The allegations of nuisance were denied. Without prejudice to that denial, it was then averred that the defendants had made a number of proposals (including further applications for planning consent) "with a view to using the best practicable means to meet the [claimants'] concerns". Express reference was made to the most recent application, made on 17 November 1998, after detailed consultation with the Council's planning officer and environmental health officer, for "the construction of a full height chimney adjacent to the gable end of the public house and discharging above eaves level". This was, of course, the application for which the Council in due course granted full planning permission on 1 July 1999, subject to the conditions I have mentioned.

30. I have already summarised the history of the installation of the chimney, and how matters were apparently then resolved to the satisfaction of all concerned (the claimants, Mr Clifford, Whitbread and the Council) by mid-2000. There is no need to trace the history in any greater detail. It is enough to say that the allegedly offending extractor fan had been removed and replaced, and that noise and smells had been reduced to acceptable levels. In those circumstances there could have been no reason to expect a recurrence of the pleaded acts of nuisance (since the primary source of the problem had gone), and the only obvious risk, looking ahead, was that noise and/or smells might again reach unacceptable levels if the maintenance regime in condition 2 was not adhered to.

31. Against that background, the claimants must have realised (or, if they did not realise, they must have been advised) that their prospects of obtaining an injunction at trial were, at best, slim. Their damages claim for loss of value of their property was likewise doomed to failure. Accordingly, the First Action had for all practical purposes become a claim for damages for any past acts of nuisance that could be established, and for costs. This is the context in which the First Action was settled and the Consent Order made.

The construction of the Consent Order

32. Once the Consent Order has been placed in its factual and chronological context, its interpretation in my view gives rise to no real difficulty. Under paragraph 1 of the scheduled terms, the defendants agreed, without admitting liability, to pay a lump sum of £10,000 "in full and final settlement of all claims by either party howsoever arising of which either party are aware at the date hereof save as hereinafter described". Of the savings which follow, the only one which is relevant is the saving in paragraph 2.3 for enforcement of "any future breach" which may arise from the conditions attached to the July 1999 planning permission.

33. I begin with the critical words in paragraph 1(quoted above). The clear purpose of the payment of the £10,000 was to settle all claims, of whatever nature, of which either the claimants or the defendants were aware on 16 January 2001, subject only to the specified exceptions. Plainly, the claims which were settled were not confined to the nuisance claims in the First Action. The words "all claims ... howsoever arising" could hardly be more general or emphatic. But they are subject to a crucial limitation. No party was to be precluded from bringing a future claim of which he was unaware on 16 January 2001.

34. Without attempting an exhaustive definition, it seems to me that a party can only be "aware" of a claim if, as a minimum, he has knowledge, on the material date, of the essential ingredients of a cause of action which (if established) would prima facie entitle him to judgment against the other party. Thus, in the context of a private nuisance claim, the first party must at least have knowledge of acts or omissions by the other party which, if established, would amount to an actionable interference with the first party's ordinary use and enjoyment of his property. Applying that test, can it be said that on 16 January 2001 the claimants were aware of the claims which they subsequently made in the Second Action? In my judgment, clearly not. The claims in the Second Action all arise from the use of the kitchen at the Red Lion from 2002 onwards. They entirely post-date the Consent Order, and the facts relied upon bear no relation to the claims which were settled by the First Action apart from the fact that they involve the same parties (other than Whitbread) and the same premises. A claim in nuisance is inevitably highly fact-specific, and it is only if and when a particular factual situation crosses the threshold of actionable interference that a claim can arise.

35. If my analysis is correct, it follows that the claimants would not be precluded by the Consent Order from pursuing their claims in the Second Action even if those claims were for levels of noise and smells no worse than those which obtained at any time before the Consent Order was made. In my view this is not a relevant enquiry, because in the Second Action everything depends on the levels of noise and smells at a future date or dates of which the parties obviously could not have been aware at the date of the Consent Order. If a construction which led to this result was clearly unreasonable or uncommercial, the court would naturally strive to find a more sensible alternative construction if it could. In my judgment, however, there is nothing unreasonable in imputing a common intention of this nature to the parties. The whole point of the remedial work carried out by Whitbread was to solve the problem for the future, and in January 2001 it appeared that this objective had been achieved to the satisfaction of all concerned. It was thus entirely natural for the parties to wish to wipe the slate clean for the past, subject to the specified exceptions, but to leave it open to the claimants to bring fresh nuisance proceedings if noise or smells reached actionable levels in the future.

36. The judge reached a different conclusion. Having correctly reminded himself (paragraph 25 of the transcript of his judgment) that the terms of the schedule to the Consent Order "need to be construed in the same way as the terms of any other contract", he held (paragraph 29) that:

"in reality, the nature and circumstances of this claim are in substance identical to the circumstances that obtained in January 2001 when the first claim was compromised."

The judge returned to this theme several times. Thus, for example, he said in paragraph 33 (after referring to some of Mr Steenberg's evidence and an extract from Mr Stigwood's report):

"All of the sources of the nuisance about which the claimants claim in the present action were in existence at the time the consent order was concluded. They and their potential to cause the odours in respect of which complaint is now made by the claimants were within the claimants' actual knowledge ... The matters that Mr Stigwood identifies as the causes for the odours were in existence in January 2001. Indeed, [Mr Steenberg's] complaint about the odours is difficult to understand given what he says in his letter dated 21 June 2002 to the Laurel Pub Company that the cooking smells to which he and the second claimant were being subjected were "almost as bad as those that existed before the installation of the new extraction system"."

37. In my respectful opinion, this reasoning is erroneous in several ways. It rests upon an implicit construction of the Consent Order which would prevent the claimants from bringing any future claims after 2001 if the nuisance complained of came from sources which were in existence before that date. It assumes, less than half way through the trial and before the defendants had given evidence, that the matters identified by Mr Stigwood as the probable causes of the smells, including in particular the chargrill, were all in existence and known to the claimants in January 2001. It appears to say that any later claim is precluded merely because the cooking smells were not quite as bad as those which existed before the installation of the new extraction system in 1999, that is to say before the carrying out of the works that had appeared to remedy the situation.

38. The judge went on to quote further extracts from Mr Stigwood's report, which suggested that increased noise levels had been caused by intensification in use of the kitchen, and substantial extracts from Mr Clifford's second witness statement (which was not yet in evidence, and upon which he had not been cross-examined), including his assertion that the kitchen had operated in exactly the same way since 1984. The judge noted that Mr Steenberg challenged much of Mr Clifford's evidence, and maintained that use of the kitchen had intensified, partly because of the increase in noise levels and partly because he had seen more customers going to the pub. In paragraph 41 the judge dismissed Mr Steenberg's views as "pure speculation", and rejected a submission by Mr Hyam that the true position could not be ascertained properly or with any certainty until Mr Clifford had been cross-examined. He said "I am not sure how that proposition can be correct", and observed that the defendants did not have to give evidence if they did not wish to do so. He then continued:

"42. I agree with the defendants that the substance of the operations at the kitchen have remained the same over the relevant period. In any event, there is no basis for a claim merely because the activities in the kitchen have intensified or because there has apparently been a change in the menu or cooking methods over that period of time. There is no provision in paragraph 1 of the schedule to [the Consent Order] that states that the claimants are entitled to maintain a claim in such circumstances."

39. Here too, it seems to me, the judge clearly fell into error. Not only did he misconstrue the Consent Order, but he purported to make a finding of fact on a hotly contested question half way through the claimants' case, and without the defendants having been put to an election whether they wished to call any evidence. In my view Mr Hyam's objection was in substance correct, and the judge was quite wrong to dismiss it.

40. If the other members of the court agree with my conclusion on the construction of paragraph 1 of the schedule to the Consent Order, it is unnecessary to decide whether any of the claims in the Second Action might also fall within the exception in paragraph 2.3. I will therefore deal with the point briefly. The judge held that the claimants could not rely on paragraph 2.3, because it was no part of their pleaded case that the defendants were in breach of the 1999 planning permission (paragraph 13 of the judgment). He acknowledged that some of the documents in the bundle referred to possible breaches of the planning permission by Mr Clifford, but said that this merely provided support for the claimants' claim in nuisance. He concluded that there was "no substance in the assertion that the present claim survives as a result of the operation of paragraph 2.3".

41. It is true that there is no allegation of breach of the planning permission in the particulars of claim, but that is not surprising. The proper place for such an allegation would have been in a reply, as an answer to the defendants' plea of abuse of process. However, no reply was served, an omission for which (as I have observed) both sides must share responsibility. Furthermore, the documents relating to the Council's investigations of the claimants' complaints, together with Mr Steenberg's evidence and Mr Stigwood's report, provided at least some prima facie evidence of failures by Mr Clifford to comply with condition 2. In those circumstances, the judge was in my view over-hasty in ruling that the claimants could not rely on the paragraph 2.3 exception. If he considered that such reliance had to be pleaded, he should have given the claimants an opportunity to apply for permission to do so, whether by the belated service of a reply or by amending the particulars of claim. If he considered that there was insufficient evidence to justify any such reliance, it was too soon for him to form a concluded view on the point and he should have waited at least until the conclusion of the evidence on both sides (or the conclusion of the claimants' evidence if the defendants elected to call no evidence) before ruling on the point.

The procedure followed by the judge

42. The procedure which the judge followed was in my view seriously flawed, and should not be repeated. I have no doubt that he adopted it with the best of intentions, with a view to saving time and costs in a case which was over-running its time estimate and would have to be adjourned if it could not be completed within three days. However, what he ended up doing, in substance, was striking out the claimants' case on the footing that it was bound to fail. This conclusion rested partly on his erroneous construction of the Consent Order, but also on his findings of fact that the operations in the kitchen of the Red Lion had not intensified since the date of the Consent Order, that the matters identified by Mr Stigwood as the causes of the smells were all in existence at that date, that the same was true of the alleged sources of noise, and that the claimants were fully aware at that date of all the matters relied upon in the Second Action (see in particular paragraphs 33, 34, 42 and 44 of the judgment). It was only on the basis of these findings that the judge could conclude, as he did in paragraph 49, that the claimants were "attempting to recover twice over for the same claim".

43. The potential unfairness of making findings of this nature, at such an early stage of the trial, is in my judgment manifest. Although a judge may well form a preliminary view on disputed issues of fact as a trial progresses, he cannot properly form or express a concluded view until he has heard all the relevant evidence and considered the parties' submissions. That stage had obviously not been reached, and it is no mitigation of the potential unfairness to the claimants to say (as the judge did at the end of his judgment, in paragraph 52) that the views which he had expressed about the evidence he had read or heard had no application beyond the sole issue that he determined. Since the direct result of the views which he had expressed was the striking out of the claim in its entirety, this saving was, with respect, meaningless.

44. The unsatisfactory nature of the procedure followed by the judge is brought into sharper focus if one contrasts it with two alternatives, either of which would have been perfectly acceptable. One alternative would have been to rule on the abuse of process plea as a true preliminary issue, at or before the start of the hearing. At that stage no evidence would have been adduced on either side, and in order to test the position, having once construed the Consent Order as he did, it would have been necessary for the judge to assume the truth of all the evidence relied upon by the claimants, unless it was inherently or demonstrably incredible. On that basis, he could not possibly have made the findings of fact which he purported to make in the judgment. Another possibility, if the defendants had chosen to go down this route, would have been to rule on a submission of no case to answer at the conclusion of the claimants' case. But in that event the judge would have heard all of the claimants' evidence (including the potentially crucial evidence of Mr Stigwood), and in accordance with the normal practice the defendants would have been put to their election and would have decided to call no evidence: see the discussion of the relevant principles in the White Book, 2009, volume 1, at paragraph 32.1.6.

45. As it is, however, the judge adopted a hybrid procedure of his own devising, and did so in the teeth of the claimants' justified opposition. He then compounded the problem by apparently accepting at face value the content of Mr Clifford's witness statements, although they were not (and might never be) in evidence, while placing reliance on the unfavourable view which he had evidently formed of Mr Steenberg's evidence while he was in the witness box. As I have already explained, it was premature for the judge to express any concluded views about Mr Steenberg's evidence at this stage of the trial. It was also palpably unfair to the claimants to use the unadduced and untested evidence of Mr Clifford as a yardstick for assessing the reliability of Mr Steenberg's evidence.

Conclusion

46. For the reasons which I have given this appeal must be allowed. Not only did the judge err in his construction of the Consent Order, but he followed a procedure which was flawed and productive of unfairness to the claimants. In the circumstances, I regret that I can see no alternative to directing a retrial of the Second Action before a different judge. I would invite the parties to agree the wording of a suitable declaration for this purpose, and also to consider whether any further directions for the conduct of the retrial should be given at this stage.
47. I also agree with the judgment of Arden LJ, which I have had the advantage of reading in draft.

Lord Justice Wilson:

48. I agree.

Lady Justice Arden:

49. I also agree. In my judgment, on its true interpretation, the Consent Order only excluded the claimants from bringing further litigation in respect of causes of action which were then known to them.

50. There is a further reason that I would add. A fresh cause of action for nuisance arises whenever further actionable damage occurs (Darley Main Colliery v Mitchell (1886) 11 App Cas 127). Lord Halsbury gave the following example:

"A man stores water artificially, as in Fletcher v. Rylands; the water escapes and sweeps away the plaintiff's house; he rebuilds it, and the artificial reservoir continues to leak and sweeps it away again. Cannot the plaintiff recover for the second house, or must he have assessed in his first damages the possibility of any future invasion of water flowing from the same reservoir?.. .

The wrong consists, and, as it appears to me, wholly consists, in causing another man damage, and I think he may recover for that damage as and when it occurs."

51. Accordingly I do not consider that the claimants could be said to be "aware" of a "claim", howsoever arising, which had not then accrued. On the contrary, the limitation of claims in the Consent Order to claims of which the claimants are aware is inconsistent with an intention to cover future claims.

52. Accordingly the claimants are entitled to raise in the Second Action any new cause of action in nuisance and any claim in nuisance existing at the date of the Consent Order of which they were not then "aware".

53. We are of course considering the meaning of the terms used in the Consent Order for the purposes only of that Order, and not in the context of any statutory or other provision in which these terms might appear.