Wednesday, 4 July 2018

Network Rail Loses Japanese Knotweed Appeal

Network Rail has lost its appeal in NetworkRail Infrastructure Limited v Stephen William and Robin Waistell [2018] EWCA in a judgment handed down by the Court of Appeal on 3 July 2018.

Neighbours Stephen Williams and Robin Waistell, who own adjoining semi-detached bungalows in South Wales, issued private nuisance claims in 2015 against Network Rail (NR), arguing that the Japanese knotweed on its land encroached on their properties and, by being within 7 metres of them, interfered with their quiet enjoyment of, and caused a loss of amenity in respect of, their properties by reducing their market value.

Japanese knotweed is designated as ‘controlled waste’ by the Environmental Protection Act 1990 with the consequence that if you want to move it off site, only licensed organisations can remove and dispose of it. This makes treatment expensive.

According to the Council of Mortgage Lenders’ policy, where Japanese knotweed is within seven metres of a habitable space, the valuation of a property can be affected and some lending institutions make special provision in their lending policies for this.

The County Court at first instance found that the claimants were entitled to succeed in a claim for private nuisance because of the reduced market value of their respective properties caused by the close proximity of Japanese knotweed. NR had knowledge of the presence of Japanese Knotweed and their treatment was found to be inadequate and unreasonable and in breach of their duty as landowner, causing a continuing nuisance and diminution in the value of the properties.

The Court of Appeal has unanimously upheld that decision, but for different reasons.

The Court of Appeal has ruled that the claimants cannot claim in private nuisance merely because of the diminution in the properties’ market value.

They can claim however in respect of the encroachment of Japanese Knotweed rhizomes because they have diminished the claimants’ ability to enjoy the amenity and utility of their properties.

Success for the claimants then, but what about the wider implications for the law of private nuisance?

Sir Terrence Etherton, Master of the Rolls, said It was wrong in principle for the Recorder to hold that the presence of knotweed on NR’s land within seven metres of the claimants’ properties was an actionable nuisance simply because it diminished the market value of the claimants’ respective properties because of lender caution in such situations. He went on to say:

“This is because the purpose of the tort of nuisance is not to protect the value of
property as an investment or a financial asset. Its purpose is to protect the land’s intangible amenity value which concerns landowners’ use and enjoyment of the land. The
amenity value of a property, for the purposes of actionable private nuisance, does not include the right to realise or otherwise deploy the value of the property in the owner’s financial interests. To extend the tort of nuisance to include such a claim for pure economic loss would be a radical and unprincipled reformulation of the purpose and scope of the tort.”

Critical in this case was the encroachment of Japanese knotweed on to the neighbouring properties.

“Japanese knotweed, and its roots and rhizomes, does not merely carry the risk of future physical damage to buildings, structures and installations on the land; its presence imposes an immediate burden on landowners who face an increased difficulty in their ability to develop, and in the cost of developing, their land, should they wish to do so, because of the difficulties and expense of eradicating Japanese knotweed from affected land. In this way, Japanese knotweed can fairly be described as a natural hazard which affects landowners’ ability fully to use and enjoy their property and, in doing so, interferes with the land’s amenity value.”

Following the ruling, a Network Rail spokesperson said:

'As many gardeners know, Japanese knotweed is invasive and requires several years of treatment to remove. Once identified, Japanese knotweed growing on our land is entered into a treatment programme. We will continue with this established regime, which complies with legislation and helps us run a safe, reliable railway. Network Rail is aware of today’s ruling by the Court of Appeal and is considering its implications.'

The Law Society Gazette quotes Lincolnshire firm JMP Solicitors, which represented Williams, as saying it has hundreds of cases against public bodies and new home builders who have not addressed the knotweed problem.

The Court of Appeal refused to give NR permission to challenge the ruling in the Supreme Court.

Property lawyers must ensure they carry out adequate due diligence on Japanese knotweed.

Sellers of residential property must confirm (on the standard property information form TA6) whether the land is affected by Japanese knotweed and, if it is, whether there is a management plan in place to control it. The replies given to such enquiries must be considered very carefully.

There’s a greater risk for buyers of new build homes however, as builders and developers are not obliged to complete Form TA6. A specific enquiry should therefore be made.

For commercial property, standard property enquiries CPSE 1 were updated on 13 March 2018 to Version 3.7, which adds to enquiry 8.1 a specific enquiry asking for details if the property has been affected by Japanese knotweed (enquiry 8.1 (e)).

When buying any property, as well as making sure the relevant enquiries are raised, you should also make your own site investigations to satisfy yourself whether there is any Japanese knotweed present. If it is, a proper management plan backed by a transferable guarantee or warranty ought to satisfy most lenders and should be obtained before completion.

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