Cambridge Water Company v Eastern Counties Leather

JurisdictionUK Non-devolved
JudgeLord Templeman,Lord Goff of Chieveley,Lord Jauncey of Tullichettle,Lord Lowry,Lord Woolf
Judgment Date09 December 1993
Judgment citation (vLex)[1993] UKHL J1209-1
Date09 December 1993
CourtHouse of Lords
Cambridge Water Company
(Respondents)
and
Eastern Counties Leather PLC.
(Appellants)

[1993] UKHL J1209-1

Lord Templeman

Lord Goff of Chieveley

Lord Jauncey of Tullichettle

Lord Lowry

Lord Woolf

House of Lords

Lord Templeman

My Lords,

1

For the reasons given in the speech by my noble and learned friend, Lord Goff of Chieveley I would allow this appeal.

Lord Goff of Chieveley

My Lords,

2

This appeal is concerned with the question whether the appellant company, Eastern Counties Leather Plc (ECL), is liable to the respondent company, Cambridge Water Company (CWC), in damages in respect of damage suffered by reason of the contamination of water available for abstraction at CWC's borehole at Sawston Mill near Cambridge. The contamination was caused by a solvent known as Perchloroethene (PCE), used by ECL in the process of degreasing pelts at its tanning works in Sawston, about 1.3 miles away from CWC's borehole, the PCE having seeped into the ground beneath ECL's works and thence having been conveyed in percolating water in the direction of the borehole. CWC's claim against ECL was based on three alternative grounds, viz. negligence, nuisance and the rule in Rylands v. Fletcher (1868) L.R.3 H.L. 330. The judge, Ian Kennedy J., dismissed CWC's claim on all three grounds — on the first two grounds, because (as I will explain hereafter) he held that ECL could not reasonably have foreseen that such damage would occur, and on the third ground because he held that the use of a solvent such as PCE in ECL's tanning business constituted, in the circumstances, a natural use of ECL's land. The Court of Appeal, however, allowed CWC's appeal from the decision of the judge, on the ground that ECL was strictly liable for the contamination of the water percolating under CWC's land, on the authority of Ballard v. Tomlinson (1885) 29 Ch. D. 115, and awarded damages against ECL in the sum assessed by the judge, viz., £1,064,886 together with interest totalling £642,885, and costs. It is against that decision that ECL now appeals to your Lordships' House, with leave of this House.

3

The factual background to the case has been set out, not only in the judgments in the courts below, but also in lucid detail in the agreed statement of facts and issues helpfully prepared by counsel for the assistance of the Appellate Committee. These reveal the remarkable history of events which led to the contamination of the percolating water available at CWC's borehole, which I think it desirable that I myself should recount in some detail.

4

ECL was incorporated in 1879, and since that date has continued in uninterrupted business as a manufacturer of fine leather at Sawston. ECL employs about 100 people, all or whom live locally. Its present works are, as the judge found, in general modern and spacious, and admit of a good standard of housekeeping.

5

The tanning process requires that pelts shall be degreased; and ECL, in common with all other tanneries, has used solvents in that process since the early 1950s. It has used two types of chlorinated solvents — organochlorines known as TCE (trichloroethene) and PCE. Both solvents are cleaning and degreasing agents; and since 1950 PCE has increasingly been in common, widespread and everyday use in dry-cleaning, in general industrial use (e.g., as a machine cleaner or paint-thinner), domestically (e.g. in "Dab-it-off") and in tanneries. PCE is highly volatile, and so evaporates rapidly in air; but it is not readily soluble in water.

6

ECL began using TCE in the early 1950s and then changed over to PCE, probably sometime in the 1960s, and continued to use PCE until 1991. The amount so used varied between 50,000 and 100,000 litres per year. The solvent was introduced into what were (in effect) dry-cleaning machines. This was done in two different ways. First, from the commencement of use until 1976, the solvent was delivered in 40 gallon drums; as and when the solvent was needed, a drum was taken by forklift truck to the machine and tipped into a tank at the base of the machine. Second, from 1976 to 1991, the solvent was delivered in bulk and kept in a storage tank, from which it was piped directly to the machine.

7

There was no direct evidence of the actual manner in which PCE was spilled at ECL's premises. However, the judge found that the spillage took place during the period up to 1976, principally during the topping up process described above, during which there were regular spillages of relatively small amounts of PCE onto the concrete floor of the tannery. It is known that, over that period, the minimum amount which must have been spilled (or otherwise have entered the chalk aquifer below) was some 3,200 litres (1,000 gallons); it is not possible even to guess at the maximum. However, as the judge found, a reasonable supervisor at ECL would not have foreseen, in or before 1976, that such repeated spillages of small quantities of solvent would lead to any environmental hazard or damage — i.e., that the solvent would enter the aquifer or that, having done so, detectable quantities would be found down-catchment. Even if he had foreseen that solvent might enter the aquifer, he would not have foreseen that such quantities would produce any sensible effect upon water taken down-catchment, or would otherwise be material or deserve the description of pollution. I understand the position to have been that any spillage would have been expected to evaporate rapidly in the air, and would not have been expected to seep through the floor of the building into the soil below. The only harm that could have been foreseen from a spillage was that somebody might have been overcome by fumes from a spillage of a significant quantity.

8

I turn to CWC. CWC was created under its own Act of Parliament in 1853, and is a licensed supplier of water following implementation of the Water Act 1989. Its function is to supply water to some 275,000 people in the Cambridge area. It takes all its water by borehole extraction from underground strata, mainly the middle and lower chalk prevalent in the area. Since 1945, public demand for water has multiplied many times, and new sources of supply have had to be found. In 1975, CWC identified the borehole at Sawston Mill as having the potential to meet a need for supply required to avert a prospective shortfall, and to form part of its long term provision for future demand. It purchased the borehole in September 1976. Before purchase, tests were carried out on the water from the borehole; these tests indicated that, from the aspect of chemical analysis, the water was a wholesome water suitable for public supply purposes. Similar results were obtained from tests carried out during the period 1979–1983. At all events CWC, having obtained the requisite statutory authority to use the borehole for public sector supply, proceeded to build a new pumping station at a cost of £184,000; and Sawston Mill water entered the main supply system in June 1979.

9

Meanwhile, in the later 1970s concern began to be expressed in scientific circles about the presence of organic chemicals in drinking water, and their possible effects. Furthermore, the development of, inter alia, high resolution gas chromatography during the 1970s enabled scientists to detect and measure organochlorine compounds (such as PCE) in water to the value of microgrammes per litre (or parts per billion) expressed as µg/1.

10

In 1984 the World Health Organisation (WHO) published a Report on Guidelines for Drinking Water Quality (Vol. 1: Recommendations). Although not published until 1984, the Report was the product of discussion and consultation during several years previously, and its recommendations appear to have formed the basis of an earlier EEC Directive, as well as of later UK Regulations. Chapter 4 of the Report is concerned with "Chemical and Physical Aspects", and Chapter 4.3 deals with organic contaminants, three of which (including TCE and PCE) were assigned a "Tentative Guideline Value". The value so recommended for TCE was 30 µg/1, and for PCE 10 µg/1.

11

The EEC Directive relating to the Quality of Water intended for Human Consumption (80/778/EEC) was issued on 15 September 1980. Member States were required to bring in laws within two years of notification, and to achieve full compliance within five years. The Directive distinguished between "Maximum Admissible Concentration" (MAC) values and "Guide Level" (GL) values, the former being minimum standards which had to be achieved, and the latter being more stringent standards which it was desirable to achieve. TCE and PCE were assigned a GL value of only 1 µg/1, i.e. 30 times and 10 times respectively lower than the WHO Tentative Guideline Values.

12

The United Kingdom responded to the Directive by DOE Circular 20/82 dated 15 August 1982. The effect was that, as from 18 July 1985, drinking water containing more than 1µg/1 of TCE or PCE would not be regarded as "wholesome" water for the purpose of compliance by water authorities with their statutory obligations under the Water Act 1973. However, following a Regulation made in 1989 (1989 No. 1147), the prescribed maximum concentration values for TCE and PCE have been respectively 30 µg/1 and 10 µg/1, so that since 1 September 1989 the United Kingdom values have been brought back into harmony with the WHO Tentative Guideline Values.

13

CWC employed Huntingdon Research Laboratories (HRL) to test its water for the purpose of compliance with the European Directive. In August 1983 Dr. McDonald, an analytical chemist employed by HRL, decided to test tap water at his home in St. Ives, Cambridge. He discovered PCE in the water. Samples then taken of his own and his neighbours' water disclosed an average PCE concentration of 38.5 µg/1. As a result, CWC caused investigations to be made to discover the source of the contaminant, which was identified as the Sawston...

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