Transco plc v Stockport MBC [2004] 2 AC 1

Key points

  • The rule in Ryland v Fletcher remains standing in English law, this is the leading case on its principles
  • Non-natural use is defined in various forms, with Lord Bingham defining it as use which is “extraordinary and unusual” while Lord Hoffmann thought that the insurability of the risk of relevant
  • Remedial expense to avoid damage from an escape is recoverable under Rylands v Fletcher

Facts

  • Water leaking from a broken pipe installed by D (local council) to serve a block of flats washed away the soil on an embankment below it
  • The collapse of the embankment left C’s gas main (installed upon the embankment) unsupported and exposed to a serious risk of fracture
  • C sought to recover from the defendant the cost of the remedial work under the rule in Rylands v Fletcher
  • D challenged both the entire validity of the rule in Rylands v Fletcher and whether there was a non-natural use of land

Issues

  • Should the rule in Rylands v Fletcher should continue to form part of English law

Held (House of Lords)

  • The rule in Rylands v Fletcher should be retained and kept in strict bounds
  • The piping of water to meet the residents’ needs was a natural use of land and thus D was not liable

Lord Bingham

Validity of the rule in Rylands v Fletcher

  • Although there is a theoretical attraction to abolishing the rule given its complexity and uncertain scope, “there is in my opinion a category of case, however small it may be, in which it seems just to impose liability even in the absence of fault”: [6]
  • Furthermore, in Cambridge Water the House of Lords declined to abolish the rule
  • The rule shall be retained and stated with clarity and certainty: [8]

Limitations on the rule in Rylands v Fletcher

  • The rule in Rylands v Fletcher is a sub-species of nuisance, from this proposition two consequences follow:
    • As stated in Read v Lyons, no claim can arise if the events complained of take place wholly on the land of a single occupier, there must be an escape from one land to another
    • The claim cannot include a claim for death or personal injury, since such a claim does not relate to any right in or enjoyment of land
  • Given that the tort is strict liability, the mischief and danger test should not be easily met: D must have recognised or ought to have recognised according to the standards at the time and place an exceptionally high risk of danger or mischief if there should be an escape

Non-natural use

  • Refers to use which is “extraordinary and unusual”: [11]
  • A use may be extraordinary and unusual at one time or in one place but not so at another time or in another place
  • Whether the use is proper for the general benefit of the community is of little help

Restatement of the rule in Rylands v Fletcher

  • “An occupier of land who can show that another occupier of land has brought or kept on his land an exceptionally dangerous or mischievous thing in extraordinary or unusual circumstances is in my opinion entitled to recover compensation from that occupier for any damage caused to his property interest by the escape of that thing, subject to defences of Act of God or of a stranger, without the need to prove negligence.”: [11]

Current case: neither mischief nor non-natural use

  • The piping of water to meet the residents’ needs was a routine function that could not be considered a special hazard and could not be considered extraordinary or unusual

Lord Hoffmann

Rylands v Fletcher vs Nuisance

  • The novelty of the rule in Rylands v Fletcher is that a single isolated escape is actionable even when the escape itself is not reasonably foreseeable: [27]
  • In nuisance repeated escapes do not raise the issue of whether the escape was reasonably foreseeable, if D does not know C will tell him

Restrictions on Rylands v Fletcher

  • The rule does not apply where works have been authorised by statutory authority: [31]
  • Natural events (“Acts of God”) and acts of third parties excluded strict liability: [32]
  • Although C is liable even if he could not have foreseen there would be an escape, his liability in damages was limited damage that was reasonably foreseeable as a consequence of the escape pursuant to Lord Goff in Cambridge Water: [33]
  • Escape from the defendant’s land or control is an essential element of the tort pursuant to Read v Lyons: [34]
  • The rule has no application to personal injury: [35]
  • Non-natural user: [36]

Validity of the rule in Rylands v Fletcher

  • “I do not think it would be consistent with the judicial function of your Lordships’ House to abolish the rule. It has been part of English law for nearly 150 years and despite a searching examination by Lord Goff of Chieveley in the Cambridge Water case [1994] 2 AC 264, 308, there was no suggestion in his speech that it could or should be abolished. I think that would be too radical a step to take.”

Remedial expense

  • If damage to the pipe would have been actionable, the expense incurred in avoiding that damage would have been recoverable

Non-natural use

  • A useful guide in deciding whether the risk has been created by a “non-natural” user of land is whether the risk is insurable
  • “Property insurance is relatively cheap and accessible; in my opinion people should be encouraged to insure their own property rather than seek to transfer the risk to others by means of litigation, with the heavy transactional costs which that involves”: [46]

Current case

  • Although the pipe was larger than normal, there is no evidence that it created a greater risk than is normally associated with domestic or commercial plumbing
  • Furthermore, the risk of damage to property caused by leaking water is one against which most people can and do commonly insure

Commentary

  • Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520, a majority of the High Court of Australia ruled that the rule had been “absorbed” into the law of negligence on the basis that its attenuated form serves little purpose, its application is unacceptably vague and strict liability on social grounds is better left to statutory intervention
  • Lord Bingham thought that there were positive reasons for keeping the rule whereas Lord Hoffman thought that the rule is unjustified but should be kept as the court is bound by precedent