Tinseltime Ltd. v Eryl Roberts

A claimant acquiring another company’s tort claims may enforce them where the assignment, construed objectively in its factual context, covers the whole claim for disruption and damage. A licensee with exclusive possession has sufficient interest to sue in private nuisance. The special-risk exception to liability for independent contractors is narrow and applies in both negligence and nuisance. It is confined to activities exceptionally dangerous whatever precautions are taken. A separate dividing-structures exception applies only where the particular work causing the nuisance concerns the division between properties. Losses arising after the assignor’s voluntary cessation of business, and duplicated or inadequately particularised management-time claims, may be summarily rejected.

Tinseltime claimed under an assignment from Fountain of Youth Ltd (“FOY”), a dissolved company which had occupied premises used for tinsel manufacture. Dust generated during road-building works allegedly damaged FOY’s machinery and caused consequential losses. The preliminary issues concerned FOY’s interest in the premises, ownership and use of the machinery, the scope and validity of the assignment, the possible liability of Denbighshire County Council and the Welsh Assembly Government for an independent contractor, and the arguability of the claimed losses.

The court determined the preliminary issues and considered whether claims for machinery repairs, loss of profits, and wasted management time could proceed.

1. Standing in nuisance and negligence. Applying Hunter v Canary Wharf Ltd [1997] AC 655, FOY’s licence was construed as granting FOY exclusive possession. FOY therefore had sufficient interest to sue in nuisance. The contemporaneous evidence also established that FOY owned the machinery and operated the business when the damage occurred, enabling it to claim in negligence.
2. Assignment. Applying the objective approach to construction summarised in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, the assignment covered the whole claim for disruption and damage to the factory and machinery. The words “currently under negotiation” did not restrict it to the narrower claim then being pursued against the Welsh Assembly Government. The assignment also covered potential claims against Denbighshire, notwithstanding that it was not technically a subcontractor.
3. Champerty. The assignment was valid. The transaction had to be considered as a whole. Following Trendext Trading Corp v Credit Suisse [1982] AC 679, Brownton Ltd v Edward Moore Inbucon Ltd [1985] 3 All ER 499, and Massai Aviation Services v Attorney General [2007] UKPC 12, Tinseltime had a genuine commercial connection with FOY’s business and the arrangement was not wanton or officious litigation.
4. Independent contractors. The narrow special-risk exception stated in Biffa Waste Services Ltd v Outokumpu Wenmac AB [2008] EWCA Civ 1238 applied in nuisance as well as negligence. Cutting concrete blocks in the open was not exceptionally dangerous whatever precautions were taken. The dividing-structures exception identified in Alcock v Wraith (1991) 59 BLR 20 was distinct and did not apply because the particular work causing the dust was cutting blocks some distance from the dividing wall. Denbighshire and the Welsh Assembly Government therefore had an insurmountable independent-contractor defence.
5. Losses. Reasonable repair costs incurred for FOY before the transfer could in principle be recovered. The loss-of-profits claim had no reasonable prospect of success because the alleged losses were not shown to have caused FOY’s later cessation of business, and post-transfer losses belonged to Tinseltime. The wasted management-time claim duplicated the profit claim, lacked evidence of payment to the consultant concerned, and was insufficiently particularised. Claims against Roberts and M & JT Davies could proceed in principle; the claims against Denbighshire and the Welsh Assembly Government, and the profit and management-time claims, were dismissed or excluded as stated.

First-instance preliminary-issue decision. No appellate history is stated in the judgment.