This is a subject about which a judgment has been expected for some time. The two joined claims referred to below do not involve significant sums of money but for those owning, managing or insuring significant portfolios of industrial, commercial or infrastructure property then the monetary exposure extrapolated over such portfolios could be significant. The full judgment has only very recently become available online. It is useful reading for those exposed to this risk.
In the Cardiff County Court at the end of last year Network Rail Infrastructure Limited (“Network Rail”) was held liable to two Claimants under the civil law of nuisance for damages caused by Japanese Knotweed. The two Claimants are freehold owners of adjoining semi-detached bungalows in Maesteg, South Wales. The rear walls of these bungalows abut a rail embankment of Network Rail on which was located a large stand of Japanese Knotweed. It was accepted that the Japanese Knotweed had been there for 50+ years. The Claimants bought their properties in 2003 and 2012.
Japanese Knotweed
Suffice it to say for the purposes of this article, issues about Japanese Knotweed are reasonably well known in the real estate, industrial, utility and infrastructure sectors. It is a highly invasive, non-native plant the roots of which can cause damage to for instance patios, fences, under-ground conduits, and the like. Indeed in some circumstances it is a criminal offence to allow Japanese Knotweed to grow in the wild.
There has been a lot written about management of Japanese Knotweed, including by the Environment Agency and RICS. In the trial of this case an aspect of central importance was the impact on the residential real estate market of Japanese Knotweed within 7 metres of properties.
Claimants
Both Claimants made their cases under the civil law of nuisance. There were small differences in the two claims but essentially the claims were:
- Japanese Knotweed had encroached onto the Claimants’ properties. The Claimants maintained that they did not have to prove physical damage to their properties caused by the Japanese Knotweed. Encroachment per se was enough.
- Alternatively the encroachment and presence of the Japanese Knotweed was an unreasonable interference with the Claimants' quiet enjoyment and amenity value of their properties.
- Network Rail was aware of the nuisance of the Japanese Knotweed but failed in its duty to take reasonable steps to prevent the nuisance (i.e. to adequately treat or eliminate the Japanese Knotweed).
- The encroachment and presence of Japanese Knotweed resulted in diminution in value of the properties and this was recoverable as damages under the alleged nuisance.
- They incurred various costs in treatment and surveying Japanese Knotweed.
In light of the above the Claimants sought (1) damages and (2) a (mandatory) injunction that Network Rail abate, treat or eliminate the Japanese Knotweed.
Network Rail
In response to the above:
- Network Rail asserted that if Japanese Knotweed had encroached on the Claimants’ properties this per se could not sustain a nuisance claim. Instead it must be proved also that the encroachment caused physical damage to the land.
- Network Rail accepted that the presence of Japanese Knotweed did give rise to diminution in value of the claim properties but liability was not accepted and in any event the quantum of potential diminution was disputed. Network Rail's position was that there was no interference with the Claimants' quiet enjoyment or amenity value of the properties simply because the properties were harder to sell or could only be sold at a lower price.
- Network Rail did not have actual knowledge of the Japanese Knotweed and how it might be impacting the Claimants’ properties until 2013 when the Claimants made complaints. In any event it argued that risk to adjoining landowners was not within its actual or constructive knowledge until issue of RICS guidance on the subject in 2012.
- Very late in the proceedings (indeed this was raised in Defence Counsel’s final submissions at trial) Network Rail asserted a new defence, namely a prescriptive right under the Prescription Act 1832. This was that it had the right to commit the nuisance because the Japanese Knotweed had been present on its land for over 20 years (indeed it was accepted by the parties that it had been present for 50+ years).
Expert evidence
Both parties retained experts in relation to Japanese Knotweed and treatment thereof and in relation to diminution in value.
Judgment
The judgment runs to 59 pages. This in itself is not surprising bearing in mind that this is a novel case. For those with a particular interest in nuisance law this judgment provides a clear and useful journey through prior applicable case law.
There is simply too much in the judgment to cover it all in this article. We restrict ourselves therefore to points of particular interest.
Diminution in value - blight
Evidence was provided that (from at least 2012) buyers and lenders in the residential housing market became wary of properties affected by Japanese Knotweed and that lenders were reluctant to provide mortgages where Japanese Knotweed was present within 7 metres of the subject property’s boundary.
The judgment contained the following passages which are central to the decision:
“It is difficult if not impossible, to state the numerous circumstances that the tort of private nuisance may reach in particular under the head of interference with a landowner’s “quiet enjoyment”. The usual case will arise where there is an immediate impact upon the enjoyment of the property, for example where a smell is noxious or noise is intolerable. The tort is however a tort against land and the gist of the action is damage which is the objective loss of amenity in the property....In my judgment the amenity value of a property can include the ability to dispose of it at a proper value where the claimed nuisance (which must of course be established) produces a blight upon the property that leaves a property owner in the unenviable position of the uncertainty that his property may, no longer, be the valuable asset and home that it was bought to be. To borrow and transpose the words of Buckley J in Bridlington Relay Ltd v Yorkshire Electricity Board [1965] the right to use and dispose of a residential property at a market value is in my judgment “so important a part of an ordinary householder’s enjoyment of his property that such an interference should be regarded as a legal nuisance”.
The evidence, which is accepted in these cases, is that the claimants' properties are devalued by the presence of the [Japanese Knotweed] and, even if treated, their saleable values are below the otherwise market value of their properties. It is proper in my judgment, to characterise the properties as blighted by the presence of [Japanese Knotweed]...Adding together the diminution in value with what I conclude is the likely position of any owner, namely that they live with the concerns and adverse consequences of a devalued property, in my judgment, that is properly characterised as an aspect of the “amenity” of the land protected by the tort of private nuisance”.
Encroachment
In terms of encroachment (accepted as fact) the Court rejected the Claimants’ position that encroachment per se could amount to a nuisance. It held that there also had to be physical damage to the property. As the Claimants could not prove such physical damage, this aspect of their claims in nuisance failed.
Quiet enjoyment, amenity and duty to take reasonable steps
These environment nuisances involving natural occurrences require proof that the defendant (Network Rail) knew or ought reasonably to have known of the state of affairs giving rise to the nuisance. On close examination of the evidence the Court held that Network Rail did so know from at least 2012. Also following examination of the evidence the Court held that Network Rail failed in its duty to take reasonable steps to prevent the nuisance. The Court held that Network Rail had constructive knowledge of the risk and spread and consequential damage to the Claimants’ property from around 2012/3 (and before the Claimants made complaints) and that from 2012 did not take the steps reasonably required to deal with the nuisance. Consequently the Claimants succeeded in their nuisance case based on unreasonable interference with their quiet enjoyment, and loss of amenity of their properties as a result of the presence of Japanese Knotweed.
Right of prescription
This was introduced very late in the proceedings by Network Rail and without particularisation. It was also not expressly dealt with in the evidence. The Court accepted that in principle a right of prescription may be applicable but on the facts of this case (and indeed we would suggest inconsistent otherwise with Network Rail’s defence) prescription would inevitably fail because Network Rail would need to prove 20 years of knowledge and acceptance by the Claimants (or their predecessors) that the nuisance (and not the mere presence of Japanese Knotweed) had continued for 20 years.
Remedies
Injunction
In their final submissions it was clear to the Court that the Claimants’ applications for an injunction were not pursued with any particular vigour. Also the Claimants did not particularise with sufficient detail what they sought from an injunction. Instead they used phrases such as “abate the nuisance and adequately treat the knotweed” or "effectively treat the [Japanese Knotweed] on the defendant and claimants’ land”. The Court was concerned by the vagueness of this and taking into account the circumstances generally the Court held that it was not appropriate to grant a mandatory injunction.
Diminution in value
Taking into account the evidence, including expert evidence, the Court awarded one of the Claimants £10,000 and the other £10,500.
General Damages
The Court awarded the Claimants general damages in respect of the costs the Claimants incurred in undertaking Japanese Knotweed treatment with insurance backed guarantees (£4,320 for each Claimant). One of the Claimants was also awarded £300 for a Japanese Knotweed survey that he had procured.
In terms of general damage to the utility or amenity of the land one of the Claimants was awarded £350 per annum for 4 years (2012 – 2016).
Comment
The importance of this case is the confirmation of potential liability for diminution in value of neighbouring properties affected by Japanese Knotweed. The individual monetary amounts in these two cases are not significant. However many industrial, utility, infrastructure and other commercial organisations have portfolios of sites amongst which several sites may have Japanese Knotweed. Depending on the circumstances of such Japanese Knotweed and in particular the proximity to third party properties, and extrapolating this across the portfolios the liability exposure may be significant. In essence the risk is foreseeable but at the same time manageable if appropriate risk assessment and management processes are put into effect. This case is likely to be of interest to commercial real estate managers, asset managers, managing agents, facilities managers, insurers and the like.
