The Supreme Court has handed down its highly anticipated judgment in Davies v Bridgend County Borough Council, deciding that the defendant should not be ordered to compensate the claimant for the residual diminution in value of his property. The key factor in the decision is that the encroachment of Japanese knotweed (JKW) from the defendant’s land occurred before the defendant’s breach of duty.
This appeal raised an important question regarding breach of duty and causation in private nuisance. The Supreme Court specifically considered the application of the “but for” test and made a finding that where the loss suffered by the claimant pre-dated the defendant’s breach of a duty of care, the losses would not be recoverable.
Keoghs has previously provided commentary on this case, following the Court of Appeal decision querying this specific point on the timing of the breach.
Japanese knotweed had been growing for around 50 years on the embankment of a cycle path (an old railway line) owned by the defendant. The JKW spread to an adjacent residential property before 2004 when the property was purchased by the claimant.
The District Judge at first instance found that the defendant had constructive knowledge of the JKW from 2013 following the authority Network Rail Infrastructure v Williams & Waistell [2018] EWCA Civ 1514, given in the publication of the 2012 RICS information paper. Treatment of the JKW did not actually commence until 2018, so it was found that the defendant had been in breach of duty from 2013 to 2018, a period of five years. There was no appeal on this point.
The appeal concerned only the award of damages by the Court of Appeal of £4,900 for the residual diminution in the value of the claimant’s property after the JKW had been treated. Claims for other heads of loss had been withdrawn or failed and were not appealed.
The Court of Appeal in this case had examined the judgment in Williams & Waistell in detail and affirmed that there could be no claim for diminution in value where the JKW was only present on the defendant’s land and had not spread to the claimant’s. Loss of market value of the property in this case would be a pure economic loss, not recoverable in the tort of nuisance. However, where JKW had encroached on the claimant’s land, it constituted a physical interference for which damages for diminution in value may be awarded. This point was not appealed at the Supreme Court.
The arguments at the Supreme Court were based on breach of duty and causation. The defendant argued that as the JKW had encroached before the defendant was in breach of duty, the breach cannot have been the “but for” cause of the diminution in value and so the claim should be dismissed.
The Court of Appeal found that, although the encroachment was historic, there was a continuing nuisance during the period of breach between 2013 to 2018, when the defendant failed to treat the JKW. During this period, the claimant continued to suffer interference with the quiet enjoyment of his land because of the defendant’s ongoing breach of duty and so the breach did cause the loss.
The Court of Appeal drew parallels with Delaware Mansions [2002] 1 AC 321, in which the landowner was awarded the costs to underpinning the property because a tree root was causing an ongoing nuisance.
The “But For” Test
The Supreme Court held that in 2004 when the JKW first encroached onto the claimant’s land, there was no actionable nuisance by the defendant. An actionable nuisance first arose in 2013 when the defendant was, or ought to have been, aware of the risk of damage and loss of amenity to the claimant’s land as a result of publicly available information about JKW at the time and after the defendant had failed to implement a reasonable or effective treatment plan (which was not put in place until 2018).
The Supreme Court allowed the defendant’s appeal on the basis that the diminution in value occurred prior to the defendant’s breach between 2013 and 2018 before any actionable private nuisance arose. The diminution in value would have occurred anyway, regardless of the defendant’s breach. Applying the “but for” test, the breach could not have caused the loss on this basis.
The Court of Appeal’s Analysis of Delaware
The Supreme Court did not agree that Delaware was authority in relation to diminution in value (aligning with Keoghs analysis in the previous article Davies v Bridgend County Borough Council | Keoghs). Rather, Delaware Mansions was the authority for the recovery of the costs of abatement to end or lessen the effects of an ongoing nuisance. A diminution in value claim could not properly be characterised as the costs of abatement and so the Supreme Court stated that the Court of Appeal had been wrong to make an award relying on Delaware in this way.
During submissions, counsel for the defendant cautioned the Supreme Court against giving sweeping or definitive guidance on JKW cases generally in this case, which addressed only a very specific point. The Supreme Court appears to have taken this on board and various points raised in arguments will have to be decided in future cases.
Continuing Nuisance?
National Rail, as intervener, argued that JKW was not an ongoing nuisance because once JKW is present, it has a life of its own on the claimants’ land and is not dependent on the original stand for survival, in the same way that a tree root continues to emanate from the tree itself. The Supreme Court stated that this issue did not fall to be determined in its judgment in this case because the defendant had conceded there was a continuing nuisance during the period of breach between 2013 to 2018.
Diminution in value over time
The claimant presented no evidence that the diminution in value had materially increased while the defendant was in breach.
At trial, the claimant had attempted to argue that as a matter of logic, buyers would be less concerned about JKW which has grown on a property for two hundred years, than two years. As such, the diminution in value would taper off over time. Delay in treating the JKW meant that this tapering off could not commence and so he was in a worse position than he would have been in but for the council’s breach.
The Supreme Court dismissed this argument on the basis that it had not been pleaded and the claimant’s evidence did not support this view – indeed, the claimant’s expert had said that diminution in value might be “infinite” in time. The claimant had not discharged his burden of proof in relation to this argument and on that basis, the Supreme Court dismissed it.
Residual Diminution in Value
During submissions at the Supreme Court, the nature of residual diminution in value was discussed. Counsel for the claimant characterised this loss as a discount that the property owner would need to give to a future buyer upon disclosing that JKW was once present on the land, even after the JKW had been fully and successfully treated, due to the enduring stigma or “blight” in the mind of a buyer.
This loss arises not because JKW is still actively growing on the land, or because of the risk that it could return, but on the stigma of the previous encroachment onto the land. It is worth noting that a programme of appropriate treatment renders the underground rhizomes dormant and an insurance-backed guarantee protects a claimant against recurring treatment costs.
It was acknowledged that there had been something of a “market overreaction” following the 2012 RICS information paper on JKW, which set out a framework for the assessment of the risk posed by JKW to residential properties and the impact upon market value. Mortgage lenders and the general public had formed the view that JKW was something of a “bogey plant” which could cause serious damage to buildings if left unchecked.
The 2012 RICS paper was withdrawn and replaced with fresh guidance in 2022, following research which established that JKW was not as destructive as it was thought to be previously. However, while it was acknowledged at the Supreme Court that attitudes might change if mortgage providers and the public become unconcerned about JKW, this has not happened yet and in the meantime, JKW can still give rise to a claim in nuisance.
For more information, please contact:
Matthew Kirk - Associate & Vegetation SIG Member
Jessica Taylor - Assistant Solicitor & Vegetation SIG Member
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