England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE CCRTF 98/0040/2

(MR RECORDER BOYLE )

Royal Courts of Justice

The Strand

London WC2

Wednesday 15th July, 1998

B e f o r e:

LORD JUSTICE MUMMERY

LORD JUSTICE MAY

- - - - - -

IAN C GARDNER

DIANE GARDNER

Respondents

- v -

MARY W DAVIS

N MARSH

JE MARSH

Appellants

- - - - - -

(Computer Aided Transcript of the Palantype Notes of

Smith Bernal Reporting Limited, 180 Fleet Street,

London EC4A 2HD

Tel: 0171 421 4040

Official Shorthand Writers to the Court)

- - - - - -

MR P PUNWAR (Instructed by Messrs Pengilly & Ridge, Weymouth, Dorset) appeared on behalf of the Appellants

MR KF WYLIE (Instructed by Messrs Cousins, Coombe & Mustoe, Weymouth, Dorset DT4 8EN) appeared on behalf of the Respondents

- - - - - -

J U D G M E N T

(As approved by the Court )

- - - - - -

©Crown Copyright

Wednesday 15th July, 1998

JUDGMENT

LORD JUSTICE MUMMERY:

This is a neighbour dispute about the disposal of domestic sewage. Like most neighbour disputes it is regrettable. The parties have to live in acrimonious proximity; the large sums lost in litigation might have been better spent in other ways, such as finding an amicable solution to the cause of the dispute; and in many cases a satisfactory solution can only be achieved by the agreement of the parties. The courts are not omnipotent. They can decide the facts in issue. They can determine the rights in contention. But they only have a limited range of remedies at their disposal for the protection of the parties' legal rights and have no general power to impose a solution which does not accord with the rights of the parties, even though that solution is practicable, accords with the needs of the parties and reflects the common sense of the case.

This is round two in a dispute between three neighbours living in the tranquillity of rural Dorset. The appeal is against an order made by Mr Recorder Boyle on 16th September 1997. This order was made after a four-day hearing in the Weymouth County Court. The appeal is brought by the defendants. The order is in these terms:

"Subject to the Plaintiff [Mr and Mrs Gardner] by not later than noon on the 16th March 1998 stopping off the drainage connection to the joint septic tank system at the point of entry to the property known as No. 2 Butter Street, and thereafter making no use whatsoever of any part of to the combined drainage system

The Court Ordered that

1. The Plaintiff be granted an Injunction against the Defendants and each of them restraining them from causing nuisance to the Plaintiff by overflow or spillage of sewage or effluent on to the Plaintiff's land.

It is further ordered that

1. The injunction hereby granted be suspended until noon on the 16th September 1998.

2. There be Judgment for the Plaintiff against the 1st and 2nd Defendant for damages in the sum of £1,000.00.

3. The 2nd Defendants do pay the Plaintiff's costs on Scale 2. Such costs to include the costs reserved on the 6th August 1997.

4. The 1st Defendant do pay the Plaintiff's costs on Scale 2 such costs to include the costs reserved on the 6th August 1997, the determination of which to be postponed until such time as the court thinks fit.

5. There be Legal Aid taxation of the 1st Defendant's costs.

6. Liberty to both parties to apply.

7. The Defendants' application for leave to appeal be refused."

On 18th December 1997 Peter Gibson LJ, while expressing doubt as to whether leave to appeal was in fact required in this case, granted leave and ordered that the costs of the application for leave be reserved to the court conducting the hearing of the appeal.

Facts

Since the middle of 1979 the plaintiffs, Mr and Mrs Gardner, have been the freehold owners of, and have lived at, no. 3 Butter Street, Fleet in Dorset. Mr Gardner's mother, Mrs Lilly Gardner, who is not a party to these proceedings, lives in a subdivided part called 3A. It is common ground that no. 3 is subject to express easements of drainage for the benefit of the two adjoining properties, nos. 1 and 2. The first defendant, Mrs Mary Davis, lives at no. 1. She has in fact lived there since about 1948. This was a property originally without main water or inside flush toilet. It was conveyed to her on 2nd December 1977. The second defendants are Mr and Mrs Marsh. They live at no. 2 Butter Street. The property was conveyed on 16th June 1972 to their predecessors in title, with the benefit of the easements.

All three adjoining properties were jointly served by a shared drainage system for the passage of sewage, water and soil. That system had been installed in about 1950. None of the properties are at present served by main drainage. The septic tank into which the drains pass the sewage and water is situated in the garden of no. 3, the plaintiffs' property. The septic tank accepted solid and fluids discharged by the three properties. The liquid is allowed to run through the tank by a system of pipes to a soakaway by which the liquid is discharged into surrounding land, and from which it should percolate away. The soakaway was replaced in 1979, in circumstances which, we are informed, gave rise to litigation then.

The terms of the grant are crucial to this case. They are most conveniently set out in the copy of the one conveyance which we have been shown. It is a conveyance of 16th August 1971 made by the firm of Nobbs & Co., who are local farmers at East Fleet Farm, trading under the name J Nobbs & Sons. That conveyance was to the plaintiffs' predecessors in title, Mr and Mrs House. The property, no. 3, was conveyed:

"TOGETHER WITH full right and liberty for the Purchasers and their successors in title the owners and occupiers for the time being of the property hereby conveyed and their tenants to use the portion of the drain or sewer and under the Vendors' adjoining land for the passage and conveyance of sewage water and soil from the property hereby conveyed to the septic tank situated on the property hereby conveyed and with a right for the Purchasers and their successors in title and workmen to enter upon the property of the Vendors for the purpose of inspecting, repairing and maintaining said portion of the drain or sewer under the Vendors' adjoining land the person or persons exercising such right making good all damage to the property of the Vendors caused thereby ..."

That is the grant of rights to the owners of no. 3. There is an exception and reservation which will have been reflected in grants in conveyances of nos. 1 and 2. The exception and reservation is in these terms:

"EXCEPT AND RESERVING unto the Vendors and their successors in title owner or owners for the time being of the adjoining properties known as Numbers 1 and 2 Butter Street Fleet aforesaid the right to use the portion of the drain or sewer and the septic tank under the property hereby conveyed for the passage and conveyance of sewage, water and soil from the said premises known as Numbers 1 and 2 Butter Street ..."

There is also excepted and reserved a further right in these terms:

"... the right on giving to the Purchasers reasonable notice to enter upon the property hereby conveyed for the purpose of inspecting and repairing cleansing maintaining and renewing (as the case may be) all cables drains septic tank and pipes which serve not only the property hereby conveyed but adjoining premises the person or persons exercising such right making good all damage occasioned thereby ..."

There is a covenant in this conveyance, which is no doubt also reflected in the other conveyances, concerning contribution to costs. The covenant which is set out in 16th August 1971 conveyance is in these terms:

"... the Purchasers hereby jointly and severally COVENANT with the Vendors each with the other and with their respective successors in title the owners and occupiers for the time being of the property hereby conveyed and the said properties Numbers 1 and 2 Butter Street aforesaid to pay a proper proportion of the cost of repairing and maintaining the services used in connection with the property hereby conveyed, and the adjoining or adjacent properties being Numbers 1 and 2 Butter Street aforesaid such proportion being calculated by dividing the total cost by the number of properties immediately affected by such repair and maintenance at the point where the same shall become necessary such proportion in the case of dispute to be settled by the Surveyor for the time being of the Vendors or other the owner or owners for the time being of East Fleet Farm, save that where such repair or maintenance shall became necessary by reason of any act or default of any one or more person or persons such person or persons shall be liable to pay the whole of such costs of repair and maintenance."

The conveyance does not contain any express obligation on any person to repair the system. It is common ground that the construction of the easements and covenants contained in the conveyance is the critical question on the complaint made by the plaintiffs.

These proceedings were prompted by the fact that, at least since the end of September 1994, it has been asserted by the plaintiffs that effluent in the drainage system has failed to disperse and has instead spilled out into the garden of no. 3. The plaintiffs' case is that the discharge constitutes a nuisance. The case was pleaded in this way: that the cause of the discharge was the disrepair in the system and the failure of the system to work, and the defendants had caused the nuisance by continuing to use the drainage system without it being repaired or being put into working order.

The defendants accepted that the drainage system was in disrepair, but they denied that they were only entitled to use the system while it was in repair. They said they were not under any obligation to repair it and that the sewage which spilled out into the garden of no. 3 did not emanate from their properties. They alleged that the plaintiffs had caused the very matters of which they were making complaint.

The judgment.

Mr Recorder Boyle gave judgment in the case on 16th September 1997. At the trial he had heard a number of witnesses including, in particular, two experts, a Mr Trump, who gave evidence on behalf of the plaintiffs, and Mr Sands, who gave evidence on behalf of the defendants. I shall refer to the agreement which those experts reached on the first morning of the trial and the evidence which they gave.

The judgment given by the Recorder may be summarised as follows. He held that the defendants had a legal easement of drainage over no. 3 which entitled them to pass sewage and effluent across and into no. 3, and to dispose of it in the septic tank in no. 3. Secondly, he said, acting on the agreement between the experts, that there was no disrepair of the drainage system. There was, however, a lack of porosity in the ground around the soakaway, which prevented the drainage system from functioning to the level needed to serve the three properties. It would not help to dig further soakaways; the system simply could not cope with the current usage. Nothing more could be done to improve the soakaway and the amount of liquid which it could discharge over any given period of time.

Thirdly, he held that the plaintiffs had suffered a nuisance which had been partly caused by the defendants. He found as a fact that raw sewage was, on a fairly regular basis, escaping from the system. The position was so bad that the local authority had threatened the parties with legal proceedings. He held that the problems arose solely as a result of the excessive use by those who were served by the system. He held as a matter of law that the use of an easement of drainage was lawful if it was reasonable, that is if it was not used beyond its capacity. The current use exceeded the capacity of the system.

Finally, he held it would be appropriate to grant relief in the form of an injunction which prevented the use of the drainage system in such a way as to cause the overflow or spillage of sewage and effluent onto no. 3. The form of the injunction is as already stated. As also appears from that order he suspended it for a year in which to give the plaintiffs a reasonable time to rearrange sewage disposal from their premises. He also made the condition of the plaintiffs' disconnection from the system. He awarded £1,000 damages which he calculated by three years' loss of the use of their garden at £500 a year, reducing the sum of £1,500 by one-third to take account of the extent to which, in the Recorder's view, the plaintiffs had been author of their own discomfort.

There are three further matters before considering the submissions on this appeal. The first is to state the events which have occurred since the judgment. Mr and Mrs Gardner have stopped off the drainage connection to the joint septic tank at the point of entry to the property known as no. 2 Butter Street. They have not since made any use of that part of any part of the combined drainage system. Mr Punwar, who appears for the defendants, says that his clients were not informed of this step, which was taken by Mr and Mrs Gardner in about December 1997.

Secondly, Mr Wylie, counsel for the plaintiffs, stated on instructions since the disconnection spillages and overflows of raw sewage into no. 3 have still occurred. Mr Punwar informs us that his clients were not told of this.

Thirdly, we have been shown copies of notices dated 9th June 1998, which have been served by the West Dorset District Council under section 59 of the Building Act 1984, requiring the execution of works of drainage by the defendants as owners of nos. 1 and 2 Butter Street. The notices state that the ground on which the notices are served is that:

"the cesspool provided for the properties is insufficient, is in such a condition as to be prejudicial to health and is in such a condition as to constitute a nuisance."

The notices specify works which are required to be done to remedy this situation within three months of the date of the notice.

I say nothing more about the notices, in view of the fact that an application has been made by the defendants to the Weymouth Magistrates' Court to set aside the notices on the ground that it is not justified under the terms of section 59 of the Building Act, and that the works specified in the notice are unreasonable in character and in extent, and are unnecessary. We have been informed by Mr Punwar that a hearing for directions in relation to that challenge to the notices is in fact taking place today.

I should also refer to the expert evidence given at the trial. There was, during the morning of the first day of the trial, an application on behalf of the defendants to exclude certain evidence on the grounds that witness statements had been served late. Those statements included a statement by the plaintiffs' expert, Mr Trump. While counsel were arguing on that application, the experts were outside the court, meeting, at the suggestion of the judge, to see what they could agree. Their discussions bore fruit, because they reached an agreement which they wrote out and which has been transcribed. It is headed "Transcript of joint experts' report". This is the agreement of Mr Trump and Mr Sands:

"We both agree the following:-

1. The tank and associated pre pipework is satisfactory.

2. The ground is not good for a soakaway serving a septic tank. The available surface area is not sufficient for modern day usage.

3. Surface water run off to the edge of the building has greatly increased due to the property No. 3, double garage and concrete driveway.

4. The surface area taken up by the second septic tank restricts available soakaway expansion of original tank.

5. It is an accepted fact that modern day water usage is greater than in the past.

6. The porosity tests clearly show that the available land area i.e. the whole of No. 3 and 3A, will not support a soakaway to BS 6297. The increase in surface water loading makes the situation worse."

They set out a number of suggested solutions with maximum and minimum costs estimated. Those solutions were subject, of course, to necessary consents. It is important to note that both experts in their reports specifically addressed the question of what has been described during the course of argument as "excessive use". Mr Sands' report, after explaining the background to the drainage system for the three properties by the use of the single septic tank in the garden of no. 3, stated on page 3:

"It is well recorded that the average discharge per person for foul water has increased due to the addition of washing machines and the general bathing habits of the population. I believe that the discharge to the original tank from the three cottages will have increased in recent years."

He also stated on page 4, after the sentence "The causes, in my opinion, can be listed under the following headings":

"a) Increase of foul discharge due to modern day use."

Mr Trump dealt with the same point in his report, in which he said on page 3 under the heading "The Likely Causes of Poor Performance":

"a Limited surface area in lower garden to achieve a working soakaway area of 138 M2 as calculated under BS 6297.

b Increase in water usage due to modern day use."

Mr Punwar, for the defendants, made the following submissions: first, he objected that the Recorder had decided the case on a point which had not been pleaded; the point on excessive use of the easement by his clients. This meant that his clients had no proper chance to adduce relevant evidence on that point. He submitted, by reference to the pleadings, that the case had been put against his clients on the basis of disrepair in the system and lack of working order.

Secondly, he contended that on the pleaded case the legal position was that the continued use of the easement of drainage by his clients was incapable in law of amounting to a nuisance, even though the result was damage to the plaintiffs' servient tenement. He submitted, as a general proposition, that where the owner of a dominant tenement cannot exercise his rights over the servient tenement without causing damage to the servient tenement, he is not liable to any damage which is so caused. He argued the wording of the grant was clear. It was really up to the plaintiffs, who were the successors in title of the grantors, to decide what they should do about the problems. The defendants were simply exercising the legal rights which they had been granted. They were entitled to use that system for the disposal of sewage to any extent for the time being required for the enjoyment of their properties. They were entitled to use the system, even in excess of its capacity. What was to happen to their sewage after it had gone down the drain pipes and merged with the plaintiffs' sewage in the septic tank was of no concern to the defendants. It was the plaintiffs' sewage to dispose of. He emphasised that there had been no change in the character of nos. 1 and 2, the dominant tenements. The problems which had been incurred in this case were common problems in this part of the world. He referred to a passage in the evidence saying that the smell of septic drains is common in the countryside.

On the legal point, he referred to, and relied heavily on, two cases. The case of Jones v Pritchard , a decision of Parker J in [1908] 1 Ch 630 and Wood v Saunders , a decision of Sir Charles Hall V-C, (1875) 10 Ch App 582. The argument on these authorities is that in the case of an express easement the person who was entitled to the easement was entitled to have the water or sewage, as the case may be, drained away on to the servient tenement and was not liable for any trespass or nuisance that might be caused. He placed particular emphasis on the case of Wood v Saunders . That was a case where an easement had been expressly granted, originally in a lease. An option to acquire the freehold was then exercised. The easement granted was to drain sewage through a drain into an existing open cesspool in the form of a ditch on the servient property. The dominant tenement had then been enlarged from a property that had 25 residents into an asylum that had 150 residents. That change in the character of the dominant tenement had brought about a large increase in the volume of sewage that went into the open cesspool. The reasoning in the judgment of the Vice-Chancellor, on which Mr Punwar relied, is set out on page 584. The Vice-Chancellor said:

"The right to the passage of soil was not an unrestricted right, but was at that time to some extent limited, as the mansion-house could not be enlarged without the consent of the lessor, and it must be held that the grant was on the same terms as the lease. The words as to the passage of soil could not be held to apply to any additions to the buildings. The Plaintiff, therefore, had not made out a right to the passage of soil and water from the building in its enlarged state. It had been said that the right must be construed with regard to the size of the pipe or ditch, but there was no authority for that proposition."

He referred to the analogy of the extent of the user of a road having regard to the condition of the road, and went on cite Willes J in Williams v James as saying:

"´The right must be measured according to the principle laid down by Willes J in Williams v James ... as a reasonable use for the purpose of the land in the condition in which it was when the user took place, that is, in the case of this mansion, in the state in which it was when the grant was made. The matter must however be looked at reasonably, and no small addition to the house would be improper. Here there had been a very large increase.

It had also been argued that the easement must be measured by the quantity which the ditch would contain, but there was no authority for such a doctrine, which would give rise to very difficult questions. Some similar questions might no doubt arise in this case, as the owner of the easement might send down so large a quantity as not to leave room for the quantity sent by the owner of the land, but this would probably be of much less importance.'"

That construction of the easement in that case was concurred in by the Court of Appeal in Chancery which heard the appeal from the Vice-Chancellor.

Building on that line of reasoning, Mr Punwar submitted that, if there was excessive use (which he disputed) and that was an issue properly before the Recorder (which he said it was not, because it had not been pleaded), the Recorder had failed to address the contemplated use at the time of the grant. He simply assumed an increased use from the time since the installation of the system about 20 years before the easement was granted. On the evidence it had not been established what was the current level of use by the defendants. He submitted that the Recorder should have found, on the available evidence and on the balance of probabilities, that the matters complained of were in fact caused by the plaintiffs' use of the drainage system and not by the defendants' use.

Finally, he submitted that the form of injunction granted was objectionable. It was uncertain, as it failed to identify the lawful qualitative or quantitative extent of the defendants' easement. He submitted that no injunction should have been granted even if there was a nuisance. The appropriate relief would be by way of a declaration of the parties' rights and the order should then incorporate notice provisions which had to be invoked before the plaintiffs could apply to the court for an injunction. He said that the plaintiffs had disentitled themselves to an injunction by the delays which had occurred on their part. They had not disconnected themselves from the system at an earlier date than they had been required to do so by the terms of the order. There had been a preceding period of 10 years in which they could have disconnected themselves. When they did disconnect themselves they did not even inform the defendants. He said that there was a maxim of equity, that they should be vigilant. No injunction should be granted.

Mr Wylie's response to these submissions was that the case had been properly pleaded. The pleading had made it clear what the plaintiffs were complaining about, namely, a nuisance caused by the overflow of raw sewage into their garden from the drainage system which the defendants were using. It was made clear in the pleadings that their complaint was that, for some reason or other, disrepair or soakaway problems, the system was not working. The level of use was a matter which was explored in the evidence, in particular in those passages of the experts' evidence which I have quoted from and in their agreement about the situation. He referred to further passages in the reports of Mr Trump and Mr Sands. He said, in response to the legal argument, that the position was that this was a claim for nuisance and an easement of drainage was not a defence to a claim in nuisance, if the volume of effluent exceeded the current maximum capacity of the system based on the servient site. The right under the easement was restricted to the volume of effluent which it was possible to process through the drainage system consisting of the drains, septic tank and the soakaway. The position on the evidence was, as the judge found, that the current volume of effluent exceeded what the system was able to take. An injunction was a proper remedy to protect his clients' rights not to have a nuisance on their property. The period of suspension for one year was an adequate time for the defendants to try and make other arrangements about the disposal of their sewage or to do things which would prevent the nuisance from occurring. He was opposed to any suggestion on the part of Mr Punwar that, if an injunction were granted, it should be suspended for as long as a further year.

I am grateful to counsel for their arguments. In my judgment, the conclusion on this appeal is clear. The judge was right to grant the relief in his order of 16th September. I would dismiss this appeal. The legal position, in my judgment, is as follows.

1. An easement, whether it be a right of way or a right of drainage, consists of a right over the property of another. It can provide to the owner of the dominant tenement a defence to what might otherwise be a trespass or other tort actionable by the owner of the servient tenement. In this case the easement of drainage has been pleaded by the defendants as a defence to the action of nuisance brought against them.

2. Whether that easement is or is not a defence depends upon the facts which give rise to the wrong complained of, and on the nature and extent of the easement which is relied upon. Where, as here, there is an express easement by way of reservation and grant, it is necessary to construe the language of the reservation or grant in conjunction with the circumstances surrounding its creation. It is true, as pointed out by Mr Punwar, that there is no general rule that an easement is confined to the purpose for which the dominant tenement was used at the date of the creation of the easement, or that the quantum of use is limited to that which existed at the date of creation.

3. There is, however, a general principle applied to the construction of documents that their meaning and effect is to be determined by reference to the circumstances in which and the purpose for which the documents came into existence. The surrounding circumstances, or factual matrix, as it is sometimes called, is crucial in determining the scope of what might otherwise seem to be unlimited width of language. Thus, considerations which apply to a right of way do not necessarily apply to a right to discharge sewage. It is relevant to look at situation of the parties and the properties, the dominant and the servient tenement, and also at the nature and purpose of the easement. The relevant circumstances are not always easy to identify, as the grant may have occurred many years ago.

What is known of the relevant surrounding circumstances in this case?

(1) There were three adjoining residential properties.

(2) There was a jointly used drainage system. This system was not exclusively for the use of the owners of nos. 1 and 2. It was used by all three.

(3) The drainage system consisted not only of pipes going from the properties. It consisted at the relevant time of a single septic tank under no. 3, referred to in the conveyance as "the septic tank". It also consisted of a soakaway.

(4) The disposal of domestic water and sewage must have been intended by the parties to be dealt with in such a way as not to constitute a nuisance to any of them.

In my judgment, the passage in Jones v Pritchard (supra) at page 638, cited by Mr Punwar, assists in this case. When Parker J referred to the easement being "fairly or properly exercised", he was recognising the need for a court to construe an easement and determine its scope by a process of construction that takes into account not only the words of grant but also the surrounding circumstances in which the easement was created. The question is whether, on the correct construction of the easement, the use complained of in this case is outside the scope of the easement or, as it is sometimes put, outside the reasonable contemplation of the parties at the time when the easement was created.

In my judgment, it cannot possibly have been within the reasonable contemplation of the parties to the creation of this easement that it would be permissible to discharge sewage on to one of the properties in circumstances that would lead to raw sewage escaping on a regular basis so as to constitute a nuisance and to such an extent, as has happened in this case, that the local authority has considered it appropriate to invoke statutory powers to abate that nuisance. The logic of Mr Punwar's submission is that the easement enjoyed by nos. 1 and 2 over no. 3 entitles them, without incurring any liability at all, to discharge sewage through the pipe into the septic tank, even if the consequence is that the garden of no. 3 is transformed into a stinking cesspit. That is very different from a right to discharge sewage into a septic tank in which it is treated before it soaks away in a treated state.

Mr Punwar attempted to justify this consequence of his submission by the citation from Ingram v Morecroft , the judgment of Sir John Romilly MR (1863) 33 Beav 49, page 51 where the Master of the Rolls said:

"... if a man enter into a covenant to do a particular thing, however absurd, the covenantee is entitled to have the covenant performed; ..."

He submitted that the same principle applies to an easement. That submission does not meet the point that the covenant or grant, construed reasonably in its factual setting, may not be as absurd as a literal construction would produce. It also does not take into account the fact that any court is slow to impute to parties an intention to produce an absurd situation.

This reasoning leads to the conclusion that the judge was right in this case to find that there was a nuisance and that it was no defence to the nuisance that an easement of drainage was enjoyed by nos. 1 and 2. He was entitled to find that the defendants partly caused that nuisance; they were using the drainage system from which the raw sewage was escaping. The defendants have done nothing, either before the injunction was granted or after it was granted, to solve the problems and prevent the nuisance. They have simply regarded it as not their problem, as solely a problem of the plaintiffs. They submit, through Mr Punwar, that it is for the plaintiffs to obtain a release from easement, which I take to mean paying the owners of no. 1 and 2 a sufficient sum to cover any costs that they may incur installing another system serving their own properties. This is not a correct approach. The position is that these defendants have caused a nuisance. They are continuing a nuisance. The plaintiffs are entitled to have that restrained by injunction.

In conclusion, I recognise that, as stated at the outset of this judgment, this injunction can only serve to protect the legal right of the plaintiffs not to suffer a nuisance on their property. It does not solve the problem facing the parties to this litigation. That problem is now to provide a satisfactory means for disposing of the sewage of nos. 1 and 2. It can only be solved in one of two ways, neither of which are open to this court. The first way is by the exercise of goodwill and reason, by co-operation between the parties to produce a practical solution. Failing that, the second way as an imposed solution, such as may be available to a public authority in the exercise of its statutory powers. For reasons already mentioned, I say nothing more about whether those powers are available or appropriate for exercise in this case.

For all those reasons I would dismiss the appeal on the main issue. That leaves the question of costs. It is submitted by Mr Punwar that the Recorder did not exercise his discretion correctly in relation to either the reserved costs of 6th August 1997 or the costs of the action. The Recorder made an order that the defendants pay the costs of the action on scale 2, such costs to include the costs reserved on 6th August 1997.

The reserved costs were incurred on an application made by the defendants ex parte on 4th August 1997. They applied to the Circuit Judge on 5th August for orders debarring the plaintiffs from relying on an undated report of Mr Trump, served on the solicitors on 30th July 1997, to be evidence at the trial to start on 6th August. They also asked that the plaintiffs be debarred from relying at the trial on a supplementary statement of Mr Ian Gardner of 31st July, which had only been served on the defendants' solicitors on 1st August, and a supplemental statement of Mr William Gill dated the 24th April, which had been served on the defendants' solicitors on 29th April 1997. When that matter came before the Circuit Judge, His Honour Judge Chalkly, on 5th August he adjourned it to the trial judge. The first morning of the trial was spent dealing with that application. The application was unsuccessful. The judge allowed the evidence to be admitted. The hearing of the trial proceeded. While these arguments were taking place in court the two experts, at the instigation of the Recorder, were discussing their reports and reaching an agreement out of court. Their agreement must have saved considerable costs at the trial in limiting the areas of dispute between them.

When the costs came to be dealt with at the end of the trial, the Recorder ordered the reserved costs to be paid by the defendants. Mr Punwar submitted that this was wrong. Although his application had been unsuccessful, it had been occasioned by the plaintiffs' advisors failing to comply with the rules relating to the service of expert evidence and witness statements. If the defendants had not made this application, the plaintiffs would have had to make an application. If they had made an application, they would have had to pay the costs, even if they were successful in that application.

Mr Punwar then made an attack on the general order for costs which had been made against his clients, in addition to the reserved costs. He submitted that, on a proper exercise of the discretion, the plaintiffs should have been ordered to pay one-third of the costs of the action, to take account of the contributory negligence which he said they had been guilty of, and to take account of the fact that they had only taken themselves off of the joint drainage system as a result of the order. He submitted that, following the agreement between the experts, a large part of the plaintiffs' case relating to the disrepair of the drainage system and alleged breach of the duty to repair had been abandoned.

Finally, he criticised the judge for ordering the costs on scale 2. He said scale 1 was the appropriate scale as only £1,000 damages has been recovered.

I have considered these criticisms of the judge's exercise of his discretion. In the exercise of his discretion the Recorder was entitled to have regard to all the relevant circumstances. I am unable to say, in the absence of any reasoning given by the Recorder for his decision, that he had taken matters into account which he should not have done, or that he had left out of account matters which he should have taken into account. What I am able to say about the decision which he arrived at both on the reserved costs, the costs of the action and on scale 2 is this: that there is nothing plainly wrong or plainly aberrant in principle in the orders which the judge made as to the payment of the reserved costs, the costs of the action and the costs to be taxed on scale 2.

I would dismiss the appeal on costs. The result is that the appeal is dismissed on the questions relating to the construction of the easement, the appropriate relief and the orders for costs.

LORD JUSTICE MAY: This appeal and the litigation out of which it arises in my view cause concern. In saying this, I am aware that there may be aspects of the historic relationships between the parties and their lawyers which are unknown to the court and which could well affect the detail of what has occurred and any commentary on it. But it is now well-known that there is acute public concern about the costs of civil litigation and the way in which it is sometimes conducted. The Master of Rolls, Lord Woolf's proposals in his report "Access to Justice", which are being taken forward in the new Rules of the Court currently being prepared, are aimed at making a radical improvement by a variety of means. One such aim is to bring about a change of culture, and one element of that change is to promote a climate in which litigation is conducted co-operatively, economically and with a view to sensible compromise.

In this case there was no meeting of experts before the first morning of the hearing, which was itself on an adjourned date. There was plenty of time for such a meeting to take place and in my view such a meeting should have been arranged by co-operation between the parties' lawyers well before the hearing, quite irrespective of whether such a meeting had been required by the court. The main object of the meeting should have been to see whether a practical compromise could not be achieved before the main costs of the litigation had been incurred. When the experts did eventually meet at the instigation of the Recorder, they speedily agreed what was and was not wrong with this drainage system, and further gave an agreed outline of the practical solution to the problem and its approximate costs. Despite this obviously sensible approach by the experts and despite a commendable general attempt by the Recorder to direct the litigation on sensible lines, the litigation continued without any apparent sign of co-operation or compromise for an extended hearing before the Recorder. That has extended to this appeal, during which it has become apparent that the drainage system either is or is not now adequate to accommodate nos. 1 and 2 Butter Street, but that in either event the underlying point of continuing the litigation into this court appeared to be mainly to argue about the costs of the litigation itself.

If the drainage system is inadequate, then money has to be spent to improve it. This has yet to take place. I hope that it may even now, if it is necessary, take place without compulsion by one means or another through the legal system. What stands out as, if not certain, at least highly likely, is that the combined costs of the litigation are likely to have exceeded the experts' estimated costs of improving the drainage system. If that is correct, it is highly regrettable.

Without in any way seeking to suggest that any one or more individual or organisations might be more responsible for this than anyone else, I think it important to say that in my view this litigation does not appear to be an example of the co-operative culture which the court now seeks to encourage. The court cannot compel co-operation, least of all by personal litigants between whom relations may be strained or broken down. But the court can, and in my view should, encourage lawyers who conduct litigation to do their utmost to enable their clients to avoid what appears to have happened in this case. I say "appears" because I acknowledge the possibility that behind the scenes and unknown to the court the lawyers in this case may have indeed done their utmost but without success. The encouragement which I am attempting to express is not intended to generate a backward looking examination of the conduct of this case, but to encourage the continuation of a much needed change of culture for the future.

On the substance of appeal I agree with the judgment which my Lord, Lord Justice Mummery, has given and I would dismiss this appeal for the reasons he has given.

LORD JUSTICE MUMMERY: I wish to add that I agree with the comments by Lord Justice May about the conduct of this case.

ORDER: Appeal dismissed with costs. Legal aid taxation of the First Defendant's costs.

(Order not part of approved judgment)

____________________