Thornhill & ors v SITA Metal Recycling Ltd & ors

Transcript date:

Thursday, April 23, 2009

Matter:

Court:

High Court

Judgement type:

Substantive

Judge(s):

Seymour J

Transcript file:

TLQ/08/1013
Neutral Citation Number: [2009] EWHC 2037 (QB) 
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

Royal Courts of Justice
Strand
London WC2A 2LL

Thursday, 23rd April, 2009

BEFORE:

HIS HONOUR JUDGE SEYMOUR
(Sitting as a Judge of the High Court)

BETWEEN:

THORNHILL & OTHERS

Claimants
-v-

SITA METAL RECYCLING LIMITED & OTHERS
Defendants

----------

MR HUTCHINGS and MR HYAM (instructed by Richard Buxton) appeared on behalf of the Claimants.

MR PHILLIPS QC and MISS T SCOTT (instructed by Andrew Bryce & Co) appeared on behalf of the Defendants.

----------

A P P R O V E D J U D G M E N T
Crown Copyright ©

----------

Digital Transcript of Wordwave International, a Merrill Communications Company
101 Finsbury Pavement London EC2A 1ER
Tel No: 020 7422 6131 Fax No: 020 7422 6134
Web: www.merrillcorp.com/mls Email: mlstape@merrillcorp.com
(Official Shorthand Writers to the Court)

No of Folios - 74
No of words - 5289

J U D G M E N T

JUDGE SEYMOUR QC:

1. The first claimant, Mrs Pamela Thornhill, is the freehold owner of the premises known as and situate at Station House, Barnwell Junction, Newmarket Road, Cambridge ("Station House"). Mrs Thornhill lives at Station House and has done for many years; in fact it seems since 1959. Station House and other land ("Station Lodge") was conveyed to Mrs Thornhill's deceased husband, Mr Derek Thornhill, by the previous freehold owners of Station House and Station Lodge, the British Railways Board ("BRB") by a conveyance ("the Conveyance") dated 24th January 1969. The land the subject of the Conveyance had previously been used by BRB as part of a railways goods yard and, in particular, as a coal yard.

2. By clause 2(A) of the Conveyance it was provided, so far as is presently material: 
"2. (A) THERE are not included in the Conveyance...
(ii) any easement or right of light air or support or other easement or right which would restrict or interfere with the free use by the Board or any person deriving title under them for building or any other purpose of any adjoining or neighbouring land of the Board (whether intended to be retained or to be sold by them)".

It is convenient to refer to that provision in this judgment as "the Clause".

3. Mr Thornhill died intestate on 2nd July 1975. His widow and Sarah Louise Thornhill (together "the Administrators") were granted letters of administration of Mr Thornhill's estate out of the Ipswich District Probate Registry on 27th April 1976. By an assent dated 1st May 1981 the Administrators assented to the vesting of Station House and Station Lodge in Mrs Thornhill. In about 1990 a house was built on Station Lodge for the occupation of the second and third claimants, Mr and Mrs Trevor Foulkes. Mrs Foulkes is a daughter of Mrs Thornhill. By a deed of gift dated 5th September 1990 Mrs Thornhill gave Station Lodge to Mr and Mrs Foulkes. Their title to Station Lodge seems to have been registered at HM Land Registry under title number CB260857 on 7th June 2002.

4. Station House and Station Lodge are on the eastern side of the railway running from Cambridge to Ely. On the western side, as it were opposite Station House and Station Lodge, is land to which it is convenient to refer as "the Scrap Yard". It is common ground that the Scrap Yard was, at the date of the Conveyance, in the freehold ownership of BRB. Following the dissolution of BRB on the privatisation of the railways in the United Kingdom, the freehold ownership of the Scrap Yard became vested in a company called BRB Residuary Limited ("Residuary"). By a lease ("the Lease") dated 2nd December 2002 made between (1) Residuary and (2) Anthony Ernest Edwards and Jeremy Peter Temple Hoggett, Residuary demised the Scrap Yard to Mr Edwards and Mr Hoggett for a term of three years from 16th May 2002. It appears that in about June 2004 the residue of the term created by the Lease was assigned with the consent of Residuary to a company called SB Wheeler & Sons Limited ("Wheeler"). By a transfer dated 24th June 2005, Residuary transferred to Wheeler the freehold title to the Scrap Yard. That transfer was registered at HM Land Registry on 5th August 2005. By a certificate of incorporation on change of name dated 4th August 2006 the name of Wheeler was changed to Easco (Wheelers) Limited. By a certificate of incorporation on change of name dated 5th September 2007 the name of the company was changed again, this time to Sita MR Limited, which is the second defendant in this action. The first defendant in this action is Sita MR Cambridge Limited, a sister company of the second defendant.

5. As I understand it, it is common ground that the first defendant, as agent of the second defendant, operated the Scrap Yard as a scrap metal works between 27th January 2004 and about 14th April 2009. In this action the claimants allege that the operations of the defendants at the Scrap Yard amounted to a nuisance by reason of the noise and vibrations produced, and sought an injunction to restrain the defendants from continuing to cause nuisance, as well as damages. It was accepted on behalf of the defendants that their operations at the Scrap Yard since 27th January 2004 had amounted to a nuisance. However, their case was that the claimants were prevented from complaining about that nuisance by reason of the terms of the Clause. They accepted that, if they were wrong about that, they would not undertake any further works at the Scrap Yard and would pay damages in an agreed sum of £25,000. The sole live issue in this action was, thus, whether by the terms of the Clause it was open to the claimants, or any of them, to complain about the activities of the defendants at the Scrap Yard.

6. While I think it was accepted on both sides that it was not material to the issue which I have to decide, my attention was drawn at the start of the trial to the fact that a new proprietor of the Scrap Yard had been registered at HM Land Registry on 11th March 2009, a company called Roundwood Restorations Limited. It appears that at the time the issued shares in Easco (Wheelers) Limited were acquired by the parent company of the defendants, there was outstanding a contract between Easco (Wheelers) Limited and Roundwood Restorations Limited which provided for the sale of the freehold interest in the Scrap Yard by Easco (Wheelers) Limited to Roundwood Restorations Limited and the grant of a lease of the Scrap Yard by Roundwood Restorations Limited to Easco (Wheelers) Limited. Apparently without the knowledge of the defendants, the sale part of that transaction was completed, as the defendants' employees discovered when they found themselves locked out of the Scrap Yard on attempting to go to work on 14th April 2009.

The defendants' case as to the effect of the Clause.
7. In his written skeleton argument, Mr David Phillips QC, who appears with Miss Tiffany Scott on behalf of the defendants, set out the defendants' case in this way:
13. The Defendants' case is that the effect of the January 1969
conveyance is to deprive the Claimants of the right to bring the
present case in nuisance. That case is based upon the following
analysis -
(1) The conveyance operates to restrict the passing of rights which would otherwise pass to the purchaser, which
would enable him to interfere with the free use of the
adjoining land.
(2) The conveyance does not as such operate to confer any
enforceable benefit or right on the adjoining owner or
occupier (although that may be a necessary incident of
proposition (1)); it operates to provide a defence to any
action brought by the purchaser attempting to enforce
those rights which are excluded from the conveyance.
(3) There is therefore no need for the adjoining occupier, in
order to mount a defence to an action brought by the purchaser based on those excluded rights, to show that it
has the benefit of any right conferred on the British
Railways Board by the conveyance. There is no right or
benefit as such conferred on the British Railways Board,
nor one which must somehow be shown to have attached
to the adjoining land or which "runs with the land".
(4) The conveyance is directed towards allowing the "free
use" of the adjoining land free from interference by the
purchaser. It is not therefore concerned with proof of title
to the adjoining land by the "user".
(5) The words "deriving title under" must take their meaning
from the context and are in this context apt to include not
only successors in title, lessees, mortgagees and assigns
but also licensees and those in lawful occupation of the
adjoining land.
(6) The Second Defendant is not in occupation under any
licence but as the agent or alter ego of SITA MR Ltd; and
the occupation of one is deemed to be the occupation of
the other."

I need not read paragraph 14 and move to paragraph 15:
"15. The conveyance must be construed in accordance with the conventional principles governing the interpretation of written contracts. Those principles were summarised by Mr Edward Bartley Jones QC in Margerison v Bates [2008] EWHC 1211 (Ch) in the following terms..."

I do not think I need set those out.
"16. We make two simple points. First, the natural and ordinary
meaning of the words "There is not included in the
Conveyance...any... right which would restrict or interfere with
the free use by the Board...for any...purpose of any adjoining or
neighbouring land of the Board" is self-evident. When he
purchased the land Mr Thornhill acquired no right to restrict the
British Railways Board's activities on any of its adjoining or
neighbouring land. The sale was on the express basis that such
right was excluded.

17. Second, that natural and ordinary construction is supported and confirmed by the relevant facts surrounding the transaction so far as known to the parties. Station House and its grounds had
been a tied house standing in the middle of industrial and
railway premises. During the period that he was a tenant Mr
Thornhill could not have objected to any of the activities being
carried on by the British Railways Board. At the time of the sale
in January 1969 the British Railways Board continued to own the
railway line and the surrounding premises, including the former
goods yard. The purpose of the exclusion was to permit it to
carry on and, if so advised, to develop its commercial activities
on those premises without restriction. It would not have sold
Station House and its grounds in a way that might have
jeopardised such activity. The purpose of the exclusion was to
ensure that such activity could be carried on without challenge
or objection. Although not a requirement for our construction, it
seems likely that the fact of the exclusion would have been
reflected in the price paid by Mr Thornhill for the property.

18. The conveyancing defence does not involve the retention of any right by the British Railways Board or the acquisition of that
right by a subsequent occupier. It is based on the fact that the
Claimants' land was acquired without the benefit of a right. The
Claimants have no right to complain about the activities of "the
Board or any person deriving title under them".

19. The conveyancing defence therefore requires the Defendants to show no more than that they derive title from the British
Railways Board. To do that they need be no more than lawful
occupiers. So long as they are not in occupation as trespassers
but occupy either as freeholders or with the consent of the
freeholders their occupation is lawful and derives from the
British Railways Board's title. That is clearly the case here."

8. With great respect to Mr Bartley-Jones QC, I think that it is sufficient for the purposes of this judgment to remind myself simply of the well-known statement of Lord Hoffman in Investors Compensation Scheme Limited v West Bromwich Building Society [1988] 1 WLR 896 at pages 912H to 913E as to the principles to be applied in construing a written document:
"The principles may be summarised as follows:

(1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.

(2) The background was famously referred to by Lord Wilberforce as the "matrix of fact," but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.

(3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them.

(4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax. (see Mannai Investments Co. Ltd. v. Eagle Star Life Assurance Co. Ltd. [1997] AC 749.

(5) The "rule" that words should be given their "natural and ordinary meaning" reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in The Antaios Compania Neviera S.A. v. Salen Rederierna A.B. 19851 A.C. 191, 201:

‘...if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must be made to yield to business commonsense.'"

9. In his oral submissions Mr Phillips identified two aspects to the issue before me. The first was whether it was possible, as a matter of law, for a freehold owner of land to limit the package of rights relating to that land which he sold to a purchaser by excluding therefrom a right to complain of nuisance. The second was whether, if that was possible, on proper construction of the Clause that had been achieved in the present case in relation to the right which would otherwise have passed to Mr Thornhill under the Conveyance to complain of nuisance committed on land of BRB adjoining or neighbouring Station House and Station Lodge, specifically nuisance committed on the Scrap Yard.

10. That formulation of the aspects of the matter for my decision involved, implicitly, the contention that the foundation in law of a right to complain of nuisance was as part of a package of rights ordinarily transferred by a conveyance or transfer of land. Mr Phillips reminded me of the decision of the House of Lords in Hunter v Canary Wharf Limited [1997] AC 655 in which the House reaffirmed the existing law of nuisance, summarised by Lord Goff of Chieveley at page 692B to D thus:
"It follows that, on the authorities as they stand, an action in private nuisance will only lie at the suit of a person who has a right to the land affected. Ordinarily, such a person can only sue if he has the right to exclusive possession of the land, such as a freeholder or tenant in possession, or even a licensee with exclusive possession. Exceptionally, however, as Foster v. Warblington Urban District Council shows, this category may include a person in actual possession who has no right to be there; and in any event a reversioner can sue in so far his reversionary interest is affected. But a mere licensee on the land has no right to sue."

11. Earlier in his speech Lord Goff, at pages 687G to 688A, had approved the observations of Professor Newark in his article "The Boundaries of Nuisance" (1949) 65 LQR 480 at 482
"that the essence of nuisance was that ‘it was a tort to land. Or to be more accurate it was a tort directed against the plaintiff's enjoyment of rights over land...'"

Mr Phillips submitted that that approval demonstrated that what a freehold owner of land had was a package of rights and, as a matter of logic and common sense, it was possible for that owner, if minded to dispose of only some of his rights, to limit the precise rights of which he relieved himself.

12. In support of that submission Mr Phillips also relied on the decision of the Court of Appeal in Squarey v Harris-Smith [1981] 42 P & CR 116. So far as is material to the present case, the issue in that case was the effect upon a contention that the plaintiff was entitled to a right of way over certain land by virtue of implied grant under section 62 of the Law of Property Act 1925, under loss of modern grant, or under section 2 of the Prescription Act 1832, of Condition 26 of the 1934 Edition of the Law Society's Conditions of Sale. That condition was in these terms:
"Where the property or any part thereof adjoins or faces or is neighbouring to any other land of the vendor (whether intended to be retained or to be sold by him), a purchaser of the property shall not become entitled to any easement or right of light or air or other easement or right which would restrict or interfere with the free use of other land by the vendor or any person deriving title under him for building or any other purposes. The conveyance shall contain a reservation or provision for giving effect to this condition and in the case of registered land an application shall, at the cost of the person requiring the entry, be made to the Registrar to enter a notice of the reservation in the register."

The Court of Appeal held that that provision prevented the operation of the rule in Wheeldon v Burrows, which would otherwise, on the facts of that case, have led to the conclusion that the right of way contended for was established. In the course of his judgment, at page 128, Oliver LJ, who gave the only substantive judgment, said:
"It [condition 26] has, as it seems to me, a dual effect. First, it ousts from the contract any implication of any right under the Wheeldon v Burrows doctrine which might interfere with the vendor's free use of his own land and the range of possible rights that do not have that effect must be a very limited one. Secondly, it enables the vendor to insist, if he wishes to do so, upon the exclusion from the conveyance of the general words which are implied under section 62."

Mr Phillips contended that in that passage Oliver LJ was recognising that what a freehold owner of land had was a package of rights.

13. At the core of his submissions was the contention that there was an important distinction between an exclusion, on a sale of a package of rights, from the package of one of the rights which would otherwise have been included (which is what he said was the present case) and a reservation by a vendor of a right to do something which, but for a reservation on the sale, he would not have been entitled to do.

14. Mr Phillips accepted that in the present case no relevant reservation had been made in the Conveyance. He submitted that the right to complain of nuisance was part of the package of rights which a freehold owner of land ordinarily acquired by his purchase, and thus that such a right could be excluded from the package on a particular purchase. In the circumstances of the present case, Mr Phillips did not contend that no right at all to complain of nuisance had been transferred to Mr Thornhill by the Conveyance. If and insofar as adjacent owners other than BRB and those claiming through it might commit a nuisance, Mr Phillips accepted that he, and those claiming through him, was entitled to complain. It was only a right to complaint of nuisance committed by BRB or those claiming through it which Mr Phillips contended did not pass to Mr Thornhill by the Conveyance.

15. When I suggested to Mr Phillips that what he was contending for was rather like a reservation on the part of BRB and those claiming through it of a right to commit nuisance, he denied that that was what he was contending for. He submitted that the critical distinction between Mr Thornhill's right to complain of nuisance against anyone other than BRB and those claiming through it, and his lack, and that of those claiming through him, of such a right against BRB and those claiming through it, was that Mr Thornhill was only in privity of contract with BRB.

16. I confess that I did not understand that point. If, as Mr Phillips contended, a right to complain of nuisance was part of a package of rights acquired by a conveyance or transfer of real property, and that package could be split up so as to omit from it some one or more of the rights ordinarily included, then it would seem that a right to complaint of nuisance could simply not be included in the package and Mr Thornhill would then not have had a right to complain of nuisance against anyone. If, on the other hand, it was important, as Mr Phillips seemed to suggest, that BRB retained other land in the area of Station House and Station Lodge, in order to be able to withhold in its own case and the cases of successors in title, a right to complain of nuisance, then, as I have already remarked, that inhibition looked remarkably like a reservation of some kind. If one does not have a right of a particular kind, then one does not have it. It does not seem to be relevant one's ability to exercise a right one does not have that only a particular person or group of persons can easily demonstrate that the right one does not have was expressly not included in some contract or conveyance by which other rights were transferred.

17. On the question of construction of the Clause, Mr Phillips emphasised the disjunctive list of what appeared in the Clause. He also emphasised the desirability, from a commercial point of view, of BRB not being inhibited by reason of the Conveyance from turning to account in the most profitable fashion the Scrap Yard and other land of BRB in the vicinity of Station House and Station Lodge. Thus, he submitted, an objective observer informed of the circumstances in which the Conveyance was executed would have recognised that the parties intended by the language which they had used that the ability of BRB to develop its retained land should not be adversely affected by the execution of the Conveyance.

Submissions on behalf of the claimants in answer to the defendants' case.
18. In their written skeleton argument in response to the skeleton argument of Mr Phillips and Miss Scott, Mr Mathew Hutchings and Mr Jeremy Hyam addressed the argument of Mr Phillips and Miss Scott head-on: 
"4. It is submitted that there is a simple flaw in this argument. The clear purpose of clause 2(A)(ii) was to prevent the implied grant of easements appurtenant to the Station House land, which might interfere with the free use of the Site: see Squarey v Harris-Smith (1981) 42 P&CR 118, 128, CA.

5. In contrast to those excluded rights, the right to sue in nuisance is a right conferred by the general law. Such right is enjoyed by property owners and occupiers, but is derived from the law of tort: see Hunter v Canary Wharf Ltd [1997] AC 655, 688E-F, HL. It is not a real property right which passes under a conveyance. Thus, there was no need for the Conveyance to include a transfer of the right to sue in nuisance, which Mr Thornhill acquired under the general law, simply by virtue of his ownership and/or occupation of the Station House land.

6. The Defendants' argument (skeleton, para.16) conflates the obvious purpose of clause 2(A)(ii) of restricting the property rights transferred under the Conveyance with a wide-ranging exclusion of Mr Thornhill's rights under the general law.

7. It would be astonishing if purchasers of land were to be deprived of their ordinary rights in respect of any use of neighbouring land, however noxious or noisome, whether by suing in tort, bringing a complaint under Part III of the Environmental Protection Act 1990 or objecting to a planning application, by virtue of a common type of clause designed to prevent the implied grant of easements.

8. The factual background that in 1969 the Board was using part of the Site as a coal yard provides no basis for implying a right for the Board and its successors in title to cause a nuisance, nor (what is in substance the same thing) an exclusion of liability in nuisance. In order for such a right to be implied, it would be necessary for the Defendants to show that the parties to the Conveyance had a common intention for the Board to carry on a definite and particular activity, which inevitably caused a nuisance: Pwllbach Colliery Co. Ltd v Woodman [1915] AC 634, 646-647, HL. Since the Board was the grantor under the Conveyance, the Defendants would also have to justify a departure from the normal rule that no rights will be implied in favour of a grantor: Adealon International Corpn Pty Ltd v Merton LBC [2007] 1 WLR 1898, [14], CA."

19. In his oral submissions Mr Hutchings emphasised the points which I have quoted; in particular, his contention that the origin of a right to complain of nuisance is not the conveyance or transfer by which an owner of real property acquires his title, but the law of tort. He also raised the rhetorical questions: if a right to complain of nuisance committed by BRB or someone claiming through BRB was not transferred to Mr Thornhill, where did it go? Did it remain with BRB or simply cease to exist?

Conclusions.
20. In my judgment, the submission of Mr Hutchings that the origin of a right to complain of nuisance is not a package of rights acquired by an owner of real property by virtue of the conveyance or transfer to him but the general law is sound and I accept it. The law of contract is concerned with voluntary relationships, at least in the ordinary case. One chooses with whom to enter into a contract, in relation to what subject matter, and on what terms. The role of the court is essentially to enforce a relationship into which parties have elected to enter on the terms they themselves have decided, or to order payment of compensation, or other remedy, if one of the parties breaches what has been agreed. The law of tort is not in any meaningful sense concerned with voluntary relationships. Even in the area of negligence, in which there is often consideration of what is called "voluntary assumption of responsibility", the focus is not so much what has actually been done voluntarily as whether, in the eye of the law, circumstances are such that a party should have liability thrust upon him. Thus, the law of tort is concerned with providing remedies for what the law, reflecting perhaps in some degree the view of society at large, perceives to be a wrong. A nuisance is a wrong to the enjoyment, by a person in exclusive possession of the land affected, of that land. The right to complain of a nuisance is not a commodity to be bought or sold at whim. It is, in law, an incident of exclusive possession of land, as explained in the passage which I have quoted from the speech of Lord Goff in Hunter v Canary Wharf Limited. The right does not actually depend upon ownership of any particular interest in the land of which there is exclusive possession. Consequently, it cannot possibly be the case that the right only arises by virtue of the acquisition of some particular interest, such as a freehold. It is true that in most circumstances, without a freehold or leasehold interest in the land affected, the person wishing to complain of interference with his occupation of the land will not be in exclusive possession. But the decision in Foster v Warblington Urban District Council demonstrates that the foundation for the right is the exclusive possession, not any interest in the land itself.

21. It follows that, in my judgment, it is not possible in law to prevent a freehold owner of land having a right to complain of nuisance by the simple expedient of not transferring such a right to him as a matter of contract. The defence of the defendants fails for that reason.

22. The defence also fails, as it seems to me, in any event as a matter of construction of the Clause. As a matter of construction, it is plain, in my view, that the purpose of the Clause was to prevent Mr Thornhill obtaining, by virtue of the Conveyance, and as a matter of contract, taking into account, so far as might be necessary the rule in Wheeldon v Burrows and the provisions of section 62 of the Law of Property Act 1925, rights which otherwise would not exist. It was not concerned with limiting rights which Mr Thornhill, and those claiming under him, would have under the general common law or by statute. That is clear, as it seems to me, from the introductory words of the Clause: "There are not included in the Conveyance." That form of words demonstrates, in my view, that the easements or rights which are not included are only those which might have been created by the Conveyance and had no existence if not so created. So even if, theoretically, it were possible to traffic in the right to complain of nuisance, as it had an existence outside creation by the Conveyance, it was not, in my judgment, intended to be encompassed by the Clause.

23. Bearing in mind the parties' agreement, perhaps counsel would like to address me as what form of order ought to follow from my conclusion.