Cambridge Water Company v Eastern Counties Leather plc

The House of Lords allowed the appeal by Eastern Counties Leather plc and restored the judgment of Kennedy J. The principal legal holding is that liability under the rule in Rylands v Fletcher (and in private nuisance by analogy) for damages requires that the kind of damage suffered must have been reasonably foreseeable. The court treated Rylands as essentially an extension of private nuisance to cases of isolated escapes and therefore held that foreseeability (remoteness) is a prerequisite to recovery in damages under that rule.

The court also considered the 'natural use' (or 'ordinary use') exception to Rylands and rejected the Court of Appeal's reliance upon Ballard v Tomlinson as supporting strict liability without regard to foreseeability. Although substantial storage and use of chemicals on industrial premises was characterised as a classic example of non-natural use (and therefore normally within Rylands), the absence of reasonable foreseeability of the contamination meant that ECL was not liable on the facts.

Background and facts:

• Cambridge Water Company (CWC) discovered perchloroethene (PCE) contamination in water abstracted from its Sawston Mill borehole in 1983. The contamination was traced to spillage and seepage of PCE from Eastern Counties Leather plc's (ECL) tannery at Sawston, where PCE had been used since the 1950s and spilled repeatedly up to about 1976.
• The PCE had migrated through the drift and chalk aquifer and formed pools of neat solvent at depth, from which dissolved-phase PCE travelled in a narrow plume to the borehole.

Procedural posture: CWC sued ECL in negligence, nuisance and under the rule in Rylands v Fletcher. Kennedy J in the Queen's Bench Division dismissed the claims. The Court of Appeal allowed CWC's appeal on the basis that ECL was strictly liable under Rylands (relying on Ballard v Tomlinson) and awarded damages. ECL appealed to the House of Lords.

Nature of claim/application: Damages for contamination of groundwater by PCE caused (or emanating) from ECL's premises; alternative grounds pleaded were negligence, private nuisance and the rule in Rylands v Fletcher.

Issues framed by the court:

• Whether liability under Rylands v Fletcher (and private nuisance by analogy) for damages requires that the kind of damage was reasonably foreseeable.
• Whether the storage/use of PCE at ECL's premises constituted a 'natural' or 'non-natural' use of land for the purpose of Rylands.
• Whether an ongoing escape, first caused by historic spills before foreseeability, gives rise to liability for later damage once the risk becomes foreseeable.

Court’s reasoning and conclusion:

• The House of Lords analysed the historical relationship between Rylands and private nuisance and concluded it is coherent to require foreseeability of the relevant type of damage for recovery in damages under Rylands, mirroring the rule in private nuisance and the Wagon Mound (No. 2) approach to remoteness.
• Blackburn J's formulation in Fletcher v Rylands supports the view that the thing brought onto land must be "likely to do mischief if it escapes" and that liability is strict in the sense that it can attach despite reasonable care, but the court concluded foreseeability of the relevant type of harm should be a prerequisite to recovery in damages.
• Although the storage and use of substantial quantities of chemicals on industrial premises is properly characterised as non-natural use (and thus would ordinarily fall within Rylands), on the facts ECL could not reasonably have foreseen that the repeated small spillages before 1976 would lead to contamination of CWC's borehole. The claim under Rylands therefore failed. The House of Lords allowed ECL's appeal and restored Kennedy J's order.

Appeal allowed. The House of Lords held that liability in damages under the rule in Rylands v Fletcher (and, by analogy, in private nuisance) requires reasonable foreseeability of the relevant type of damage; since ECL could not reasonably have foreseen that the repeated small spillages up to 1976 would result in contamination at CWC's borehole, CWC's claim under Rylands failed. The Court noted that substantial storage and use of chemicals is ordinarily a non-natural use of land but that the absence of foreseeability was decisive on these facts.

Claim heard in the Queen's Bench Division (Kennedy J: judgment 31 July 1991; claim dismissed). Court of Appeal allowed CWC's appeal (order of 19 November 1992) and awarded damages relying on Ballard v Tomlinson. House of Lords (Appellate Committee) allowed ECL's appeal and restored Kennedy J's order (judgment 9 December 1993) ([1993] UKHL 12; reported [1994] 2 AC 264). The House remitted the cause to the Queen's Bench Division consistent with its judgment.