Manolete Partners Plc v Hastings Borough Council
| Jurisdiction | England & Wales |
| Judge | Lord Justice Jackson,Lord Justice Aikens,Lord Justice Patten |
| Judgment Date | 07 May 2014 |
| Neutral Citation | [2014] EWCA Civ 562 |
| Date | 07 May 2014 |
| Docket Number | Case No: A1/2013/1149 |
| Court | Court of Appeal (Civil Division) |
[2014] EWCA Civ 562
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE TECHNOLOGY AND CONSTRUCTION COURT, QUEEN'S BENCH DIVISION
MR JUSTICE RAMSEY
HT-12-123
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Jackson
Lord Justice Aikens
and
Lord Justice Patten
Case No: A1/2013/1149
Mr Steven Gasztowicz QC and Mr Jack Parker (instructed by Hastings Borough Council Legal Services) for the Appellant
Mr Samuel Townend (instructed by Gaby Hardwicke) for the Respondent
Hearing dates: 22 nd November 2013 and 3 rd April 2014
This judgment is in six parts, namely:
| Part 1. Introduction | (paragraphs 2 to 11) |
| Part 2. The facts | (paragraphs 12 to 34) |
| Part 3. The present proceedings | (paragraphs 35 to 41) |
| Part 4. The appeal to the Court of Appeal | (paragraphs 42 to 45) |
| Part 5. The legislative history | (paragraphs 46 to 63) |
| Part 6. Was Stylus in default within the meaning of section 106 of the Building Act 1984? | (paragraphs 64 to 83) |
| Part 7. Absent section 78 of the 1984 Act, did Stylus have a good cause of action against the Council? | (paragraphs 84 to 96) |
| Part 8. Executive summary and conclusion | (paragraphs 97–98) |
This is an appeal by a local authority against a decision that it is liable to pay compensation to the operators of a business on a seaside pier, which the Council had temporarily closed to the public in the exercise of its statutory powers. The principal issue in the appeal is whether the operators of the business on the pier were "in default" within the meaning of section 106 (1) of the Building Act 1984 ("the 1984 Act").
The claimant in the action and respondent in the Court of Appeal is Manolete Partners Plc ("Manolete"). Manolete brings its claim as the assignee of Stylus Sports Ltd ("Stylus"). The defendant in the action and appellant in this court is Hastings Borough Council ("the Council").
Ravenclaw Investments Incorporated ("Ravenclaw") is a company registered in Panama, which will feature in the narrative. Boss Management UK Ltd ("BM") has acted as Ravenclaw's agent in the UK.
As explained later in this judgment, the 1984 Act draws together a number of provisions concerning the construction and maintenance of buildings. Part I provides for the making of building regulations. Part II deals with supervision of construction work. Part III deals with disparate matters concerning buildings. Part IV collects together a number of general provisions.
Within Part III of the 1984 Act, section 76 deals with defective buildings and sections 77–78 deal with dangerous buildings. The focus of section 76 is upon buildings which are injurious to health, rather than liable to cause physical injury: see R v Bristol City Council, ex parte Everett [1999] 1 WLR at 1180H, per Buxton LJ. Sections 77 and 78, on the other hand, are concerned with buildings which have become dangerous because their structure is failing.
Section 77 of the 1984 Act provides:
" Dangerous building
(1) If it appears to a local authority that a building or structure, or part of a building or structure, is in such a condition, or is used to carry such loads, as to be dangerous, the authority may apply to a magistrates' court, and the court may —
(a) where danger arises from the condition of the building or structure, make an order requiring the owner thereof —
(i) to execute such work as may be necessary to obviate the danger or,
(ii) if he so elects, to demolish the building or structure, or any dangerous part of it, and remove any rubbish resulting from the demolition, or
(b) where danger arises from overloading of the building or structure, make an order restricting its use until a magistrates' court, being satisfied that any necessary works have been executed, withdraws or modifies the restriction.
(2) If the person on whom an order is made under subsection (1)(a) above fails to comply with the order within the time specified, the local authority may —
(a) execute the order in such manner as they think fit, and
(b) recover the expenses reasonably incurred by them in doing so from the person in default,
and, without prejudice to the right of the authority to exercise those powers, the person is liable on summary conviction to a fine not exceeding level 1 on the standard scale."
Section 78 of the 1984 Act provides:
" Dangerous building – emergency measures
(1) If it appears to a local authority that—
(a) a building or structure, or part of a building or structure, is in such a state, or is used to carry such loads, as to be dangerous, and
(b) immediate action should be taken to remove the danger, they may take such steps as may be necessary for that purpose.
(2) Before exercising their powers under this section, the local authority shall, if it is reasonably practicable to do so, give notice of their intention to the owner and occupier of the building, or of the premises on which the structure is situated.
(3) Subject to this section, the local authority may recover from the owner the expenses reasonably incurred by them under this section.
(4) So far as expenses incurred by the local authority under this section consist of expenses of fencing off the building or structure, or arranging for it to be watched, the expenses shall not be recoverable in respect of any period—
(a) after the danger has been removed by other steps under this section, or
(b) after an order made under section 77(1) above for the purpose of its removal has been complied with or has been executed as mentioned in subsection (2) of that section.
(5) In proceedings to recover expenses under this section, the court shall inquire whether the local authority might reasonably have proceeded instead under section 77(1) above, and, if the court determines that the local authority might reasonably have proceeded instead under that subsection, the local authority shall not recover the expenses or any part of them.
(6) Subject to subsection (5) above, in proceedings to recover expenses under this section, the court may –
(a) inquire whether the expenses ought to be borne wholly or in part by some person other than the defendant in the proceedings, and
(b) make such order concerning the expenses or their apportionment as appears to the court to be just,
but the court shall not order the expenses or any part of them to be borne by any person other than the defendant in the proceedings unless it is satisfied that that other person has had due notice of the proceedings and an opportunity of being heard.
(7) Where in consequence of the exercise of the powers conferred by this section the owner or occupier of any premises sustains damage, but section 106 (1) below does not apply because the owner or occupier has been in default –
(a) the owner or occupier may apply to a magistrates' court to determine whether the local authority were justified in exercising their powers under this section so as to occasion the damage sustained, and
(b) if the court determines that the local authority were not so justified, the owner or occupier is entitled to compensation, and section 106 (2) and (3) below applies in relation to any dispute as regards compensation arising under this subsection."
Section 106 of the 1984 Act is within Part IV of the Act. It provides:
" Compensation for damage
(1) A local authority shall make full compensation to a person who has sustained damage by reason of the exercise by the authority, in relation to a matter as to which he has not himself been in default, of any of their powers under this Act.
(2) Subject to subsection (3) below, any dispute arising under this section as to the fact of damage, or as to the amount of compensation, shall be determined by arbitration."
In this judgment I shall refer to the Occupiers Liability Act 1957 as "the 1957 Act". I shall refer to the Health and Safety at Work Act 1974 as "the 1974 Act". The Council relies upon alleged breaches of those two Acts as constituting "default" within section 106 (1) of the 1984 Act.
After these introductory remarks, I must now turn to the facts.
Hastings is a town in East Sussex with a long and distinguished history. In the Victorian era, following the construction of the railways, Hastings became a popular seaside resort. In 1872 a pier was constructed to improve the leisure amenities available to residents and visitors. That pier is the subject of the present litigation.
In the late twentieth century Hastings Pier Company Ltd was the owner of the pier. In 1999 that company went into creditors' voluntary liquidation. Ravenclaw then became the freehold owner of the pier. Ravenclaw let out various units on the pier to companies carrying on business in the leisure sector.
By leases dated 14 th August and 10 th October 2001 Ravenclaw let units C2 and C15 on the pier to Stylus. Stylus operated a bingo hall in unit C2 and an amusement arcade in unit C15. These two units stood at the near end of the pier, which was closest to the town.
Clause 5.3 of the lease dated 14 th August 2001 imposed repairing obligations on Ravenclaw as landlord. These included "repairing, maintaining and when requisite modifying or renewing and rebuilding the structure (including the support structure roof structural and load bearing walls structural columns beams slabs and floors and the exterior of the building…".
In about 2004 Stylus became concerned about the structural integrity of the pier and commissioned a full structural engineering survey of the pier by Hamill Davies...
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