THE HOUSE MAKER (PADGATE) LIMITED v NETWORK RAIL INFRASTRUCTURE

A landowner may owe a measured duty of care in nuisance and negligence to take reasonable steps to prevent drainage defects causing damage to neighbouring land. The assessment is fact-sensitive and requires consideration of fairness, justice and reasonableness, including the foreseeable risk, available preventive measures, their cost, and the parties’ resources. A public authority’s competing budgetary priorities do not automatically justify prolonged inaction where actual flooding prevents a neighbouring development. A statutory defence requiring reasonable diligence is not less stringent than the measured duty. Damages may reflect the lost development profit at the relevant time, less the present value of the affected land and appropriate credits.

The claimant, a residential property developer, owned land adjoining the defendant’s railway land. A collapsed drainage system beneath the railway land caused flooding, preventing the claimant from satisfying a planning condition and commencing its proposed development. The defendant had known of drainage problems since 2015, was notified of the flooding in March 2017, and completed remedial works in April 2020.

The claimant initially sought injunctive relief but proceeded for damages after the works were completed. The issues were whether the defendant had breached its duty in nuisance and negligence, whether section 122 of the Railways Act 1993 provided a defence, and whether the claimant’s claimed development losses were recoverable and properly quantified.

1. Liability. The claimant established nuisance and breach of the measured duty of care. Although the judge had reservations about applying the natural-nuisance authorities to an artificial drain, the measured duty was adopted because it made no practical difference to the outcome.
2. The duty required consideration of what was fair, just and reasonable between neighbouring landowners. Relevant matters included the foreseeable risk, available preventive measures, their cost, and the parties’ resources, including the defendant’s competing public obligations. The defendant’s internal budgeting cycle and the fact that railway safety was not compromised did not justify leaving actual flooding unresolved for some three years. Once notified of the flooding and its effect on the proposed development, the defendant should have reprioritised the remedial works.
3. Statutory defence. Section 122 of the Railways Act 1993 did not assist the defendant. The requirement of reasonable diligence was not less stringent than the measured duty of care. In any event, the defendant had failed to exercise due diligence by not addressing the flooding before January 2018.
4. Loss. The claimant was entitled in principle to recover the difference between the profit it would have made from completing the development by March 2020 and the profit represented by selling the land with planning permission. The possibility of developing the land in the future did not defeat that claim. The present value of the land was assessed at £978,000. Credit was required for £17,200 paid for use of the land, but not for saved wages. Precise construction, finance, planning-fee and survey-cost issues were left for further submissions.