The Coal Authority v Davidson and Another
| Jurisdiction | England & Wales |
| Judge | Mr Justice Coulson |
| Judgment Date | 09 September 2008 |
| Neutral Citation | [2008] EWHC 2180 (TCC) |
| Docket Number | Case No: HT-08191 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 09 September 2008 |
[2008] EWHC 2180 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
MR JUSTICE COULSON
Case No: HT-08191
Mr Paul Darling QC (instructed by Messrs DLA Piper UK LLP) for the Applicant
Mr Paul Morris (instructed by Messrs Lawsons) for the Respondents.
Approved Judgment
A. Introduction
The Applicant (“the Authority”) is the body responsible for compensating those who have suffered subsidence damage due to coal mining operations, pursuant to the Coal Mining Subsidence Act 1991 (“the Act”). The Respondents are brothers and respectively the owners of 14 and 16 Rowley Lane, South Elmsall, Pontefract in South Yorkshire (“the properties”).
On 28th November 2007, the Respondents commenced separate arbitration proceedings against the Authority under the Coal Mining Subsidence (Arbitration Schemes) Regulations 1994. The claim centred on the Respondents' claims that, by reason of subsidence damage, the properties were unsaleable. By two awards dated 11th June 2008, the arbitrator, Mr Michael D Joyce, found in favour of each Respondent and ordered the Authority to purchase the properties for sums of £84,500 each. The Authority now seeks permission to appeal against those awards pursuant to section 69 of the Arbitration Act 1996.
Akenhead J set down a timetable relating to the application leading to today's hearing, at which both permission to appeal and, if granted, the substantive appeal were to be heard. Due to their financial situation, the Respondents did not play any part in the run up to the hearing until yesterday, when I received a full skeleton argument from Mr Morris. I should express my particular gratitude to him for his considerable assistance on behalf of the Respondents.
I set out at Section B below a short summary of the principles relevant to applications under section 69 of the Arbitration Act 1996. I then summarise briefly at Section C below the agreed facts and the arbitrator's awards. At Section D, I set out the relevant provisions of the Act and refer to a few of the authorities to which it has given rise. Finally, in Sections E and F below, I set out the Authority's criticisms of the awards and my analysis of their submissions. There is a short summary of my conclusions at Section G below.
B. Application Under Section 69/ Principles
For present purposes, the relevant parts of section 69 of the Arbitration Act 1996 are as follows:
“(1) Unless otherwise agreed by the parties, a party to arbitral proceedings may (upon notice to the other parties and to the tribunal) appeal to the court on a question of law arising out of an award made in the proceedings…
(2) An appeal shall not be brought under this section except—
(a) with the agreement of all the other parties to the proceedings, or
(b) with the leave of the court.
…
(3) Leave to appeal shall be given only if the court is satisfied—
(a) that the determination of the question will substantially affect the rights of one or more of the parties;
(b) that the question is one which the tribunal was asked to determine;
(c) that, on the basis of the findings of fact in the award—
(i) the decision of the tribunal on the question is obviously wrong, or
(ii) the question is one of general public importance and the decision of the tribunal is at least open to serious doubt; and
(d) that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question.”
It is trite law that a court will only rarely grant leave to appeal against an arbitrator's award. I consider that the following statements of principle are directly applicable to the present case:
(a) An error of law is a failure to ascertain the correct legal principle, not the misapplication of the correct principle to the facts: see Northern Elevator Manufacturing Limited v United Engineers (Singapore) Ltd [2004] 2 SLR 494.
(b) There is no error of law if the arbitrator reached a decision within the permissible range of solutions open to him: see The Matthew [1992] Lloyd's Rep 323.
(c) The obvious error must be demonstrable on the face of the award itself: see Benaim UK Limited v Davis Middleton & Davis Limited [2005] EWHC 1370 (TCC); [2005] 102 Con LR.
(d) When considering whether it is just and proper for the court to determine any question of law, the court will have regard to the nature of the point in issue and the qualifications of the arbitrator: see Reliance Industries v Enron Oil & Gas India Ltd [2002] 1 All E R (Comm) 59.
I should record at this stage that the principal issue on this application, namely whether a house owner can claim compensation for blight in circumstances where his property has suffered no physical subsidence damage but the adjoining property has, is agreed by the parties as being a point of general public importance. I respectfully agree with that. Thus, for the purposes of leave, the test is whether the arbitrator's decision is at least open to serious doubt, a broader requirement than that propounded by Lord Diplock in The Nema [1982] AC 724 at 743D.
C. Relevant Facts and Findings
Together with Nos. 18 and 20 Rowley Lane, the properties form part of a terrace. Nos. 18 and 20 have suffered severe subsidence damage and have been purchased by the Authority with a view to demolition. It is proposed that when this happens the gable wall of No. 16 will be underpinned and a new outer skin brick wall will be constructed in order to provide the support which was previously provided by Nos. 18 and 20.
In the past, the properties at 14 and 16 Rowley Lane have themselves suffered damage due to subsidence. This was the subject of an earlier claim by the Respondents in the 1990s. The Authority's predecessor, British Coal, accepted liability and carried out repairs between 1993 and 1995. In addition, agreed payments were made for residual tilt and distortion. Thus the Respondents' earlier claim for subsidence damage was compromised many years ago. In the intervening period, it appears that no mining operations have been carried out in the vicinity of the properties.
In the arbitration, the Respondents claimed that the properties had suffered further subsidence damage. However, a joint inspection by the experts revealed that there had been no subsequent damage to the properties due to subsidence. The arbitrator therefore found, at paragraph 6.5 of each of his awards, that:
“… I do not find there to have been any new physical damage in the last six years.”
Notwithstanding that finding, the arbitrator went on to conclude that the Authority was liable to pay compensation to the Respondents and that indeed the Authority should purchase each of the properties from the Respondents. His reasoning can be found at paragraphs 6.3 to 6.5 inclusive, and I set out those paragraphs in full:
“6.3 The question I have to determine is whether or not mining subsidence has caused damage or loss to the property within the last six years. There is agreement that mining subsidence has affected Nos. 18 and 20, hence the decision for the respondent to purchase them. In my view, this would reduce the value of both Nos. 14 and 16, which would be left as a single pair with an obviously new gable wall and an ongoing suspicion of subsidence.
6.4 One question that I have to consider is whether or not damage equates to loss and vice versa. Certainly in law damages and loss can be synonymous. Although the Subsidence Act is primarily concerned with physical damage due to mining, its main purpose is to compensate house owners for damage caused by mining subsidence. Although the damage or loss in this case occurs indirectly as a result of mining subsidence, I find it to be undoubtedly due in one way or another to past mining.
6.5 The Respondent maintains that it fulfilled its obligation in respect of mining subsidence many years ago, since no new cause of action has accrued in the last six years. Although I do not find there to have been any new physical damage in the last six years, I do find there to have been damage in the form of loss in value within the last six years, which flows directly from the damage to Nos. 18 and 20, which in turn was due to mining subsidence. I do not, therefore, find the claim to be statute barred.”
It is these passages which lie at the heart of the Authority's application for permission to appeal. They submit that, given the finding that there was no actionable physical damage to the properties, the arbitrator had no power in law to make any award to the Respondents under the Act. They dispute that they can be liable to the Respondents for blight that arose as a result of subsidence damage that has occurred, not to the Respondents' properties, but to the adjacent houses.
D. The Act
The relevant part of section 1 of the Act provides as follows:
'1. Subsidence damage to which Act applies
(1) In this Act “subsidence damage” means any damage—
(a) to land; or
(b) to any buildings, structures or works on, in or over land,
caused by the withdrawal of support from land in connection with lawful coal-mining operations.
(2) An alteration of the level or gradient of any land not otherwise damaged which does not affect its fitness for use for the purposes for which, immediately before the alteration occurred, it was used, or might reasonably have been expected to be used, shall not be regarded as damage for the purposes of subsection (1)...
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