A.B. v South West Water Services Ltd

JurisdictionEngland & Wales
JudgeLORD JUSTICE STUART-SMITH,LORD JUSTICE SIMON BROWN,THE MASTER OF THE ROLLS
Judgment Date16 November 1992
Judgment citation (vLex)[1992] EWCA Civ J1116-3
Docket Number92/1101
CourtCourt of Appeal (Civil Division)
Date16 November 1992
Gibbons and Others
Respondents
and
South West Water Services Limited
Appellants

[1992] EWCA Civ J1116-3

Before:

The Master of the Rolls

(Sir Thomas Bingham)

Lord Justice Stuart-Smith

Lord Justice Simon Brown

92/1101

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

(MR JUSTICE WRIGHT)

Royal Courts of Justice

MR CHRISTOPHER SYMONS Q.C. and MR JONATHAN NASH (instructed by Messrs Herbert Smith) appeared for the Appellants (Defendants).

MR JOHN MELVILLE WILLIAMS Q.C., MR CHARLES PUGH and MR SIMON FREELAND (instructed by Messrs Pannone Napier, Sheffield, Messrs John Whiting & Co., Camelford, Cornwall and Messrs Sproulls, Bodmin, Cornwall) appeared for the Respondents (Plaintiffs).

LORD JUSTICE STUART-SMITH
1

On 6th July 1988 about 20 tons Of aluminium sulphate was accidentally introduced into the defendant's drinking water system at their treatment works at Lower Moor, Camelford in Cornwall. The plaintiffs, of whom there are some 180, drank the contaminated water and claim to have suffered a variety of ill effects as a result. Individual writs and the master statement of claim in the group action allege a number of different causes of action based on these facts. It is said that the water supplied was a defective product for which the defendants are liable under the Consumer Protection Act 1987 section 2(1); that there was a public nuisance for which the defendants were prosecuted and convicted in the Exeter Crown Court on 8th January 1991 and the plaintiffs have suffered particular damage. It is alleged that the defendants were in breach of their statutory duty to take all reasonable care to provide a supply of wholesome water contrary to section 31 and the Third Schedule of the Water Act 1945; they are also said to be liable in negligence, under the rule in Rylands v. Fletcher, for breach of contract and finally, for good measure for breach of the E.E.C. Water Quality Directive 1980 (80/778) of 15th July 1980.

2

The defendants have admitted that they are liable for breach of statutory duty in failing to supply wholesome water and admit their liability to pay compensatory damages. But the plaintiffs are not content with that. They allege that they are entitled to exemplary and/or aggravated damages in addition. These claims are made in paragraphs 18–27 of the statement of claim and are based on facts alleged to have occurred after the initial contamination on 6th July 1988. The complaints can be summarised as follows: the servants or agents of the defendants as employees of a statutory body acted in an arrogant and high handed manner in ignoring complaints made by their customers; they wilfully and deliberately misled them as to the true state of affairs by sending a circular letter to all customers on 14th July 1988 asserting that the water from Lower Moor treatment works was of the right alkilinity and was safe to use and drink. The plaintiffs assert that that statement was unfounded and known to be so by the persons making it, as no toxicity tests had in fact been carried out. Thereafter it is alleged that the defendants withheld any accurate or consistent information as to what had happened and as to the state of the water; and they failed to give any proper information to the public health authorities, hospitals, doctors, pharmacists and their own customers as to any precautions that should be taken to minimise the ill effects of drinking the water; they failed to close down the plant and supply fresh water by means of bowsers. In the result the plaintiffs continued to consume the water for longer than they would otherwise have done with proportionately greater damage to their health. Finally, it is said that when they found out the truth of the matter in mid-August their feelings of indignation were justifiably aroused by the high-handed manner in which the defendants dealt with the incident.

3

The defendants applied pursuant to R.S.C. Order 18, rule 19 to strike out those allegations contained in paragraphs 18–27 of the statement of claim in which those claims for exemplary and aggravated damages are made. Wright J. refused to strike them out. He did so on the basis that in his opinion it was arguable that the plaintiffs could recover exemplary and/or aggravated damages for the tort of nuisance. He did not accept that any other tort would entitle them to make such a claim. He also gave a very clear warning to the plaintiffs that the mere fact that he did not strike out the claim should not encourage them to think that they were likely to win. He pointed out that they might face very considerable difficulty in establishing the facts said to give rise to such a claim and he drew attention to the fact that the defendants had already been convicted and fined in the lower court, so that on that score the trial court might well think it was not a case for exemplary damages. Mr Symons Q.C. accepted before the judge, as he did before us, that the fact of this conviction and punishment was not of itself an absolute bar to the claim, on the basis that the facts adduced in the Crown Court and upon which sentence was based, bore no relation to the plaintiffs' allegation in paragraphs 18–27 of the statement of claim which of course are strenuously denied by the defendants. I say no more about this concession; without hearing further argument I must not be taken as accepting that it was rightly made. The defendants now appeal that decision.

4

Before considering the grounds of appeal it is necessary to bear in mind the proper approach of a court in an application to strike out. The pleaded facts must be assumed to be true. It is only in a clear and obvious case, or one that is "doomed to failure", to use the words of Lord Bridge of Harwich in Lonrho PLC v. Fayed [1992] 1 A.C. 448 at 470, that the court should take this draconian step. Moreover in a developing field of law the court may be reluctant to determine a difficult point of law on the scanty facts pleaded in the statement of claim. See Lonrho v. Tebbit [1991] Times Law Reports page 421 per Sir Nicolas Browne-Wilkinson V.C. (whose decision was upheld on appeal).

5

But in my judgment this is not a developing field of the law. The law has been authoritatively stated in two decisions of the House of Lords, namely Rookes v. Barnard [1964] A.C. 1129 and Broome v. Cassel & Co. Ltd. [1972] A.C. 1027. Moreover, even if a point of law is difficult, the court should not shrink from deciding it, if it will decide the issues between the parties. I have no doubt that in this case it will be of great benefit to the parties to have the point of law decided one way or the other. If it is decided in favour of the defendants, then the plaintiffs' cases can be settled on ordinary compensatory principles. If it is decided in favour of the appellants, then the parties will have to proceed to what will be extensive discovery and together with the court decide how the factual issues are to be tried, which will be no easy matter with so many plaintiffs, each seeking exemplary damages.

6

In relation to the claim for exemplary damages Mr Symons, on behalf of the appellants, advances three main arguments.

1. That nuisance is not a cause of action that can found a claim for exemplary damages.

2. If that submission is wrong, the allegations in this case do not bring the case into either of the categories laid down by Lord Devlin in Rookes v. Barnard.

3. That in any event this is not an appropriate case for exemplary damages; it is a claim for damages for personal injuries and bears no resemblance to any case in which exemplary damages have been awarded.

7

Can a cause of action in nuisance found a claim for exemplary damages? Although this was the only basis on which Wright J. held the plaintiffs' claim was arguable, by a respondent's notice Mr Melville Williams Q.C. contends that an award can be made on a claim based on negligence or breach of statutory duty. The appellant's submission was based on the proposition that the combined effect of Rookes v. Barnard and Broome v. Cassel1 is that such a claim must pass two tests. First, it must be in respect of a cause of action for which prior to 1964 such an award had been made and secondly, that it must fall within one of the two categories identified by Lord Devlin in Rookes v. Barnard. If that proposition is correct Mr Symons submits that there is no case prior to 1964 where exemplary damages were awarded for nuisance. The contrary argument is that there is no limitation of exemplary damages to specific torts where they had been awarded prior to 1964 and if there is, then nuisance is such a case.

8

It is necessary to start with a consideration of Lord Devlin's speech in Rookes v. Barnard, with which all the other members of the House agreed.

9

At page 1221 he explained the nature of exemplary and aggravated damages; he said:

"Exemplary damages are essentially different from ordinary damages. The object of damages in the usual sense of the term is to compensate. The object of exemplary damages is to punish and deter. It may well be thought that this confuses the civil and criminal functions of the law; and indeed, so far as I know, the idea of exemplary damages is peculiar to English law. There is not any decision of this House approving an award of exemplary damages and your Lordships therefore have to consider whether it is open to the House to remove an anomaly from the law of England.

It must be remembered that in many cases of tort damages are at large, that is to say, the award is not limited to the pecuniary loss that can be specifically proved. In the present case, for example, and leaving aside any question of...

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