(FIRST) ANGELA McMANUS AND (SECOND) ROBERT McMANUS AGAINST (FIRST) CITY LINK DEVELOPMENT COMPANY LIMITED; (SECOND) SCOTT WILSON SCOTLAND LIMITED AND (THIRD) LANARKSHIRE HOUSING ASSOCIATION LIMITED
EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
[2017] CSIH 12
A116/13
Lady Paton
Lord Menzies
Lady Clark of Calton
OPINION OF THE COURT
delivered by LADY CLARK OF CALTON
in the cause
(FIRST) ANGELA McMANUS and (SECOND) ROBERT McMANUS
Pursuers and Reclaimers
against
(FIRST) CITY LINK DEVELOPMENT COMPANY LIMITED, (SECOND) SCOTT WILSON SCOTLAND LIMITED and (THIRD) LANARKSHIRE HOUSING ASSOCIATION LIMITED
Defenders and Respondents
Act: Hajducki QC; R Sutherland; Allan McDougall (for Collins Solicitors, Watford)
Alt: Second Defenders: Duncan QC; P Reid: CMS Cameron McKenna (Scotland) LLP
Alt: Third Defenders: Martin QC, O’Rourke; Brodies LLP
14 February 2017
Summary
[1] The pursuers, who are the reclaimers, raised an action against the first, second and third defenders seeking reparation for loss, injury and damage which they aver was sustained as a result of inhalation of contaminated vapours within two different properties in which they lived in the Watling Street development. The first defenders are a company which undertook development, inter alia of the Watling Street development for the purposes of residential development. The second defenders are averred to be a company and there are averments about what they did in relation to the development project. The third defenders are averred to be a provider of social housing, registered with the Scottish Housing Regulator as a registered social landlord.
[2] The pursuers pled different common law cases of fault against each of the first and second defenders and statutory cases to the effect that the first defenders and, separately, the second defenders breached the provisions of section 33(1)(a) of the Environmental Protection Act 1990 (the 1990 Act). In relation to the third defenders, the pursuers pled a breach of an implied term of their tenancy agreements and a breach of certain provisions of the Housing (Scotland) Act 1987 (the 1987 Act) and the Housing (Scotland) Act 2001 (the 2001 Act). In defending the action, all three defenders pled inter alia that the pursuers’ averments were irrelevant and lacking in specification. The Closed Record extends to 92 pages.
[3] The case came before the Lord Ordinary at Procedure Roll on 24, 25 and 26 March 2015 for discussion of the defenders’ relevancy pleas in law. In a lengthy and detailed opinion, the Lord Ordinary dismissed the action in so far as pled against the first and third defenders. He sustained the second defenders’ plea in law challenging relevancy and specification in relation to the pursuers’ averments founded upon the 1990 Act. The effect of the Lord Ordinary’s interlocutor was to limit the scope of any proof to the averments of the pursuers based on their common law claim against the second defenders. There is an outstanding issue of time bar with which this court is not concerned in this Reclaiming Motion.
[4] The pursuers do not seek to challenge the Lord Ordinary’s decision in relation to the first defenders. The first defenders accordingly played no part in the hearing before this court. The pursuers challenged the decision‑making of the Lord Ordinary in relation to the relevancy and specification of the pursuers’ averments about breach of statutory duty by the second defenders under the 1990 Act and his refusal to admit to probation that part of the pursuers’ case against the second defenders. The pursuers also challenged the decision‑making of the Lord Ordinary in relation to the relevancy and specification of the pursuers’ claim against the third defenders which resulted in the dismissal of the case against the third defenders. The second and third defenders are the respondents.
[5] The pleadings which were considered by the Lord Ordinary were the same pleadings considered by this court with the following changes. This court permitted amendment of the Closed Record by the pursuers, by adding into Article 11, page 53 at the end of line 7:
“Forty cubic metres or thereby of ash and slag removed from around the high voltage power cable was deposited as fill to create a bund at the northwest corner of the site. 12,000 cubic metres or thereby of made ground from within the site was used to extend that bund in order to screen a large electricity substation from the new housing development.”
Averments to that effect originally appeared in Article 8 but were deleted by the amendment. Article 8 focussed on works carried out up to the first quarter of 1994. Article 11 contained averments about three phases of work, the third phase post-dated 1994.
[6] The main issues in the Reclaiming Motion fell into two separate and distinct chapters based on different statutory provisions. We agreed to hear submissions from senior counsel representing the pursuers and the second defenders in relation to the 1990 Act and thereafter to hear submissions by junior counsel for the pursuers and senior counsel for the third defenders.
[7] At the commencement of the hearing, we noted with some concern that in the written Note of Argument for the pursuers, there was no comprehensive attempt to identify those parts of the pleadings which underpinned the different statutory cases on which the pursuers relied. Unfortunately in view of the form and length of the pleadings, the basis of the pursuers’ case was not easily determined. This court therefore asked both counsel for the pursuers to provide, in the course of proceedings, a note to assist the court to identify the pleadings submitted to be relevant to the separate chapters.
[8] We are grateful to counsel for all parties for their detailed written Notes of Argument which were adopted in the course of oral submissions. We consider it unnecessary to set out the submissions in detail. We do consider it necessary to refer in some detail to the pursuers’ pleadings as the alleged inadequacy of the pleadings is at the heart of this Reclaiming Motion.
The statutory case against the second defenders
The Statutory Provisions: The Environmental Protection Act 1990
[9] It was a matter of agreement that the provisions relied on by the pursuers in their statutory case against the second defenders namely section 33(1) and section 76 came into force on 1 May 1994.
[10] Section 33 of the 1990 Act, in the form which applies to Scotland, states:
“Prohibition on unauthorised or harmful deposit, treatment or disposal etc. of waste.
(1) Subject to subsection (2) [(2B)] and (3) below and, in relation to Scotland, to section 54 below, a person shall not—
(a) deposit controlled waste, or knowingly cause or knowingly permit controlled waste to be deposited in or on any land
unless a waste management licence authorising the deposit is in force and the deposit is in accordance with the licence;
…
(7) It shall be a defence for a person charged with an offence under this section to prove—
(a) that he took all reasonable precautions and exercised all due diligence to avoid the commission of the offence; or
(b) that he acted under instructions from his employer and neither knew nor had reason to suppose that the acts done by him constituted a contravention of subsection (1) above; or …”
[11] Section 73(6) to (8) states:
“(6) Where any damage is caused by waste which has been deposited in or on land, any person who deposited it, or knowingly caused or knowingly permitted it to be deposited, in either case so as to commit an offence under section 33(1) …, is liable for the damage except where the damage—
(a) was due wholly to the fault of the person who suffered it; or
(b) was suffered by a person who voluntarily accepted the risk of the damage being caused;
but without prejudice to any liability arising otherwise than under this subsection.
(7) The matters which may be proved by way of defence under section 33(7) above may be proved also by way of defence to an action brought under subsection (6) above.
(8) In subsection (6) above—
‘damage’ includes the death of, or injury to, any person (including any disease and any impairment of physical or mental condition); and
‘fault’ has the same meaning as in the Law Reform (Contributory Negligence) Act 1945. …”
Contravention of section 33 is an offence punishable by fine, imprisonment or both.
The Opinion of the Lord Ordinary in relation to the Second Defender
[12] The Lord Ordinary considered the 1990 Act and the challenge to the relevancy of the pursuers’ pleadings in paragraphs 192 to 221 of his Opinion. In doing so he considered both Article 16, which is relevant to the first defenders, together with Article 18, which is relevant to the second defenders. Some issues were raised by the second defenders unsuccessfully before the Lord Ordinary such as the alleged lack of averment that “waste” was “deposited” but the second defenders did not seek to revisit these issues. The issues which are relevant to the present proceedings are focused in paragraphs 213 to 221 of the Opinion of the Lord Ordinary. In paragraph 213, the Lord Ordinary referred to the pursuers’ averments in Article 8 that the remediation works were undertaken in or about 1993 and the first quarter of 1994. He noted that Article 18 begins by referring to those remediation works and that the complaint of “redistribution” of contaminated ground around the site is averred to have occurred during the course of remediation works in 1993 and 1994. He noted that the only other reference to remediation works in the pursuers’ pleadings are to works done in the first quarter of 1995, and work done by CBC after it had commissioned further tests in 2000 albeit no specification is given by the pursuers about what that work involved and in particular whether it involved any movement of contaminated waste from one place to another within the site. He noted that there is no averment by the pursuers in Article 18 that, post April 1994, there was no waste management licence in place and no averment that work done in 1995 or 2000 involved any unlawful deposit of controlled waste.
[13] The Lord Ordinary dealt with submissions on behalf of the pursuers to the effect that section 33(1)(a) of the 1990 Act “applies to a continuing state of affairs” under reference to Thames Waste Management Ltd v Surrey County Council (1997) Env LR 148. In paragraph 216 the Lord Ordinary distinguished that case and concluded that Thames Waste Management Ltd was not authority for the proposition being advanced by the pursuers to the effect that an act of deposit once made should be regarding as continuing indefinitely for the purposes of the legislation.
The Pleadings relied on by the Pursuers in relation to the Second Defenders
[14] In relation to the role of the second defenders in the development of the site prior to 1 May 1994 the pursuers relied on the following averments:
Article 4
Page 30A-B:
“… On or about 21 February 1990 the Second Defender … offered their services to the First Defender to carry out the design of infrastructure works associated with the proposed residential development of the site. On or about 2 March 1990 the Second Defender wrote to the First Defender with fee quotes for design work associated with investigation of the ground at the site for contamination. On about 29 May 1990 the Second Defender wrote to the First Defender with a proposal for procurement of additional geotechnical data. This proposal included carrying out a preliminary contamination survey by digging approximately 100 trial pits in two parts of area A of the site. ... “
Page 30E:
“… Believed to be true that the second defenders were instructed to carry out the design of the infrastructure works associated with the proposed development. Admitted that these works included sites investigations to assess whether the site was contaminated. Admitted that the first defenders asked the second defenders to detail their proposals so that the first defenders could give the second defenders appropriate instructions in relation to those investigations…”
Page 31C‑D:
“… The Second Defender offered their services to the First Defender by providing advice to the First Defender as to what the scope of the infrastructure would involve…”
Article 5 which avers that various tests and examinations were carried out by the second defenders including an averment “that the site investigation study was managed by the Second Defender” and that “the Second Defender issued a final report on the Phase 1 contamination study.”
Article 6
Page 38C-E:
“With reference to the Second Defender’s averments in answer it is admitted that on or around 4 July 1991 the Second Defender sent the First Defender a brief method statement and costs estimates, under explanation that the cost estimates provided were for the movement of surface ash, the construction, extension and completion of roads and sewers and for monitoring decontamination ... Admitted that the Second Defender made recommendations for the next Phase of the contamination study. ... Admitted that on or around 7 February 1992 the Second Defender appointed the regional chemist to conduct the field works. ... Explained and averred that Phase 2 of the contamination study was managed by the Second Defender who also compiled engineering logs during the field work period. … Explained and averred that the method statement sent by the Second Defender to the First Defender on or about 4 July 1991 emphasised that the preliminary study carried out by themselves and the department of the regional chemist was preliminary in nature and was carried out on a very wide grid spacing.”
Article 7
Page 42C-43A:
“… In or about August 1992 the First Defender and the Second Defender agreed that the only solution which permitted the whole of the 27 acre site to be developed for residential housing was Option 1, namely the excavation of all made ground, its removal off-site, and its replacement by clean fill material. In a letter to the LDA dated 15 October 1992 the First Defender stated that LDA ‘should now undertake decontamination of this site in accordance with Option 1’ of the May 1992 Report. By or about mid November 1992 the Second Defender had prepared tender documentation for the LDA which did not involve the removal and replacement of all made ground in accordance with Option 1. The reason for adopting a more limited scheme of remediation of the site was due to the expense of Option 1. … The tender documentation was issued in November 1992 and the actual scheme of remediation works which were carried out were not Option 1. The Pursuers reasonably believe in these circumstances that the First Defender agreed in November 1992 to the Second Defender’s proposal to a more limited scheme of remediation work over the whole of the site. By January 1993 the Second Defender had been commissioned to administer and supervise the remediation works. The scheme of remediation which was undertaken was not Option 1. At or around the same time the First Defender entered into an agreement with Scottish Enterprise whereby the First Defender would develop the whole of the site for residential development. By or about June 1993 remediation work had been carried out on only 18 acres of the site and the First Defenders and the LDA entered discussions about the remaining 9 acres. In or about October 1993 the Second Defender submitted an application ... for the removal of contaminated material from the site and for this to be deposited on six acres of adjacent land to the north west of the site. This application was granted in or about late 1993 or early 1994. ...”
Article 8 which deals with the extent of the work at 50B‑D and further:
Page 51B-C:
“... It was recommended by the Second Defender that a ‘suitable thickness’ of subsoil and topsoil was provided in garden areas. Following the remediation works that were carried out as hereinbefore condescended upon, the Second Defenders issued a Certificate of Substantial Completion on 28 April 1994. In or about July 1994 the Second Defender prepared a report in respect of the remediation works undertaken in 1993 in the first quarter of 1994. It was patent from the terms of that report that not all the known contaminated Made Ground had been removed from the site. It was also patent from the terms of that report that no testing had been done for solvents, notwithstanding the known prior uses of the site and the foreseeable likelihood that solvents would have contaminated the ground and the foreseeable likelihood that these could be present within the made ground at any part of the site and at any depth within the Made Ground. ...”
[15] On the basis of these averments, counsel for the pursuers submitted that they found a case to the effect that the site was historically contaminated with waste, that the second defenders were actively involved in designing proposals for remediation of the site and that it was known to the second defenders that the remediation measures implemented resulted in waste material remaining which was distributed throughout the site.
[16] Counsel also relied on factual averments in Articles 8, 9, 10 and 11 which he submitted indicated that the second defenders, post 1 May 1994, had a continuing advisory role in relation to development of the site as demonstrated by averments that the second defenders continued to make recommendations about what should be done, or reported back on the appropriateness of what had been done.
Article 9
Page 54C:
“In or about the first quarter of 1995 the Second Defender undertook further investigatory work on part of the site, ...”
Averments are made about what was discovered. It is then averred:
Page 54E‑55A:
“In or about April 1995 the Second Defender prepared a report on behalf of the First Defender on the remediation work undertaken in the first quarter of that year. The said report did not contain any reference to trial pit V 7. The said report did make recommendations in respect of ash and slag remaining within the site. These recommendations noted that the layout of the proposed development had not been finalised, that there were areas in Area A2/2 and A2/3 where there were concentrations of cadmium which exceeded the threshold for domestic gardens and allotments but which did not exceed the threshold value for playing fields and open space, that if final development proposals for the site required the area formerly occupied by buried structures to be used for housing then either the contaminated soil would have to be excavated and removed or a specially designed cover layer must be provided to isolate the contaminated soil from the proposed development. An alternative was to structure the development layout to avoid locating houses and gardens in the area of buried structures. ...”
Article 10
Page 57D:
“In or about October 1997 and in or about November 1997 the Second Defender had prepared Site Condition Reports for Scottish Homes in respect of Plots B1 and B2.”
Counsel submitted that this averment refers to other locations within the site where the second defenders were aware that housing development was due to take place and that waste present would not be cleared prior to the housing development. He submitted that it is a necessary inference that such development of each section of the site for housing would patently result in further movement of waste, as individual house plots were prepared, foundations were dug, and roads were constructed for each phase of development. Plainly he submitted the second defenders had knowledge of all this.
Article 11 sets out averments about the building of the housing in three phases at different parts of the site and problems in phase 3.
Page 60C-E:
“… After the testing and remediation works were done the First Defender instructed the Second Defender to prepare a supplementary report on post remediation conditions. Those instructions were given by the First Defender to the Second Defender in a letter dated 7 June 2001 ... The Second Defender prepared a draft report for the First Defender in or about July 2001. ...”
Counsel again emphasised the knowledge of the second defenders particularly under reference to the averments about the report of July 2001 and their active involvement and continuing role in investigating and providing advice as to what steps were required to be taken in relation to the ongoing development of the site.
[17] In summarising the pursuers’ position in relation to these foundation averments, counsel submitted that the breach of section 33(1)(a) of the 1990 Act is based on the second defenders’ awareness of construction works due to take place at the site in areas where waste was present and where the construction works would necessarily involve further movement of waste. The second defenders’ role in advising what should be done was carried out by them in the knowledge that areas of contaminated ground would be in situ, would be moved within the site, and would not be removed from the site.
[18] Counsel submitted that the basis of the legal claim is set out in Article 18 pages 82-83 which states:
“The remediation works that were undertaken in 1993 and 1994 were intended to remove contamination by metals near the surface of the ground. The remediation works proposed then and subsequently did not consider or address the contamination of the ground by VOCS or SVOCs. The verification work that was undertaken in 1995 did not test for VOCs and SVOCs. VOCs and SVOCs remained in the ground following the remediation works carried out in 1993 and 1994. The ash, slag, VOCs and SVOCs, and the ground contaminated by those VOCs and SVOC’s, in that part of the site where the Pursuers homes were built were controlled waste for the purposes of Part II of the Environmental Protection Act 1990 (‘the 1990 Act’). Said waste had been deposited on the site during the course of its former industrial use prior to 1984 or thereby. During the course of remediation works in 1993 and 1994 the ash, slag, VOCs, SVOCs and contaminated ground were further redistributed around the site, including that part of the site on which the Pursuers homes were constructed, as a consequence of the levelling of the Made Ground in 1994, the creation of the bund at the north western corner of the site, the backfilling works and the open drainage at site. The area of open space at the end of what was to become Forum Place was known to contain contaminated ground. The levelling of Made Ground and its redistribution throughout the site caused the movement and depositing of ash, slag, VOC’s and SVOCs, and ground contaminated by VOCs and SVOCs throughout the site. The controlled waste which was moved continued to remain on the site. That depositing of controlled waste was not authorised by a waste management licence, contrary to Section 33(1)(a) of the 1990 Act. The proposed layout of housing around the site, including that part of the site on which the Pursuers homes were built, was designed and altered to take account of remaining areas of contamination known to be unsuitable for housing construction. By or about April 1995 it was known that there were areas of slag and ash known to contain contaminants remaining in parts of the site. The Second Defender were responsible for the decision to level the site by the aforesaid movement of this material within the site and they knowingly caused or knowingly permitted the deposit of controlled waste that resulted, contrary to Section 33(1)(a) of the 1990 Act. By or about July 2001 it was known to the Second Defender that there was contamination in the ground of properties being constructed at Forum Place. It was also known to them that construction of that housing was completed before the results of testing of ground samples was known. It was also known to them that the results of that testing showed that notwithstanding previous remediation works there was contamination of garden ground where houses were to be built, and that further investigation of that part of the site ought to be undertaken. That investigation was not undertaken. The consequences of the investigations undertaken in 2000 were not further considered. The Second Defender knew that contaminated waste was present in various locations within the site, and in particular within that part of the site upon which the pursuers’ homes were built. The Second Defender knowingly caused or knowingly permitted the deposit of controlled waste at the site through their knowledge that the site had not been cleared of all Made Ground, that the Made Ground had been levelled as an alternative to clearing the site of Made Ground and the importation of clean fill, the creation of the bund from contaminated ground, the use of ash and slag as backfill, the proposed layout of the proposed housing development being designed and altered to take account of contaminated parts of the site. The Second Defender knowingly permitted the deposit of controlled waste at the site by the construction of houses at Forum Place without the extent of contamination in Forum Place being properly investigated, and without the extent of contamination of other parts of the site where housing construction had already taken place being further investigated.”
In his submission counsel made it plain that the pursuers were not attempting to aver and prove a case that the second defenders themselves at any stage “deposited” “waste” by any of the activities they did.
[19] Counsel submitted that the purpose of Part 2 of the 1990 Act is to provide a strong system of control over the production, movement, keeping and disposal of waste for the protection of the environment and human health. He analysed section 33(1) of the 1990 Act and submitted that it would be anomalous if it was possible for a person who was aware of the existence of controlled waste and who was in a position to allow that controlled waste to remain in place to be exempt from the system just because they had not initially been the person responsible for carrying out or permitting the initial physical act of placing controlled waste in or on land. Such an anomaly would give rise to a lacuna in the Act which should be avoided. Section 33 imposed strict liability. Mens rea was not required (R (Thames Water Utilities Ltd) v Bromley Magistrates Court (No 2) (DC) [2013] 1 WLR 3641). He submitted that a broad interpretation should be given to the meaning of “deposit”; that movement of waste by only a few yards as part of the construction process falls within the definition of “deposit” (R v Frampton (Peter James) 2013 Env LR 18). To prove an offence it was necessary only to show that the accused had knowledge of waste operations taking place, that he had allowed (or failed to prevent), the waste operations and that in fact the operations had not been performed in accordance with a statutory licence. Under reference to a series of cases culminating in R v Walker & Son (Hauliers) Ltd [2014] 4 All ER 825 and under reference to the pursuers’ averments, he submitted that controlled waste was present throughout the site both before and after 1 May 1994. He criticised the averments by the second defenders and noted that the second defenders made no averment that there was in fact a waste management licence in place in respect of any of the operations on the site after 1 May 1994.
[20] Counsel submitted that the Lord Ordinary erred in his approach to the averments. The averments made by the pursuers show that there were acts carried out by “others”
which must necessarily have involved the movement of controlled waste on the site through excavation of the Made Ground for certain works such as the uncovering and demolition in situ of underground brick structures in 1995, the excavation of ground for the removal of the high voltage power cable in 1999, and the construction of new streets of residential housing. Counsel submitted that it is also averred that actual construction of housing was stopped and further investigation was undertaken at Forum Place; (Article 11) that disturbance (and therefore movement) of contaminated Made Ground must have taken place. Reference was also made to the second defenders’ draft supplementary post remediation report dated July 2001 which referred to earth moving and building works carried out after earlier testing in 1994 and 1995. The same draft report confirmed that excavated Made Ground was not removed from the site but was used to extend the bund created in 1993/1994.
[21] In summary, counsel submitted that the Lord Ordinary erred in his analysis of the pursuers’ averments which were relevant and specific to found the pursuers’ case. The Lord Ordinary further erred in his approach to Thames Waste Management Ltd because of his wrong interpretation of section 33(1)(b) of the 1990 Act which was concerned with a different aspect of the control activities involving controlled waste.
Submissions by Counsel for the Second Defenders
[22] Counsel for the second defenders criticised the pursuers’ averments as diffuse and prolix. Despite their length, they did not reveal a relevant case which gives fair notice of the statutory case pled against the second defenders. The Lord Ordinary was correct to identify in Article 18 that the focus is on remediation works undertaken in 1993 and 1994. The factual averments about said remediation work are to be found in Article 8. Even if it were possible to read the averments in Article 18 as referring to a date after the 1990 Act had come into force, (that is 1 April 1994) there are no averments of deposit and/or redistribution past that period. There are no clear averments by the pursuers that the bund was created after the end of April 1994. It is not sufficient for relevancy in a case such as this merely to make general averments about construction work taking place on the site from 1998 to 2001 as if that somehow provides a relevant case about the deposit of waste for which the second defenders are in some unspecified way responsible.
[23] Counsel for the second defenders submitted that the Lord Ordinary’s analysis of section 33(1)(b) was correct. But even if the legal analysis was wrong, the pursuers have no relevant case. There is no averment by the pursuers that there was no waste management licence for the later work and no proper foundation in the averments to link the knowledge of the defenders post April 1994 with illegal deposits.
Decision and Reasons in relation to the Second Defenders
[24] In Article 2 averments are made by the pursuers about the complicated history of the site and its contamination under reference to the historical ownership of the site and the sale of the site sub-divided into four land parcels. There are averments that all the land parcels were developed by the first defenders. The properties in which the pursuers resided were within Plot A. There are averments scattered in the pleadings of works to this site being carried out by I & H Brown Limited and that construction of the houses was undertaken by CBC. There are references to other professionals involved such as the regional chemist and architects. The waste originally deposited was by a number of different companies. There are no clear averments to explain which company “deposited” “waste” by movement, disturbance etc after the date section 33 of the 1990 Act came into force.
[25] We note that the statutory case under the 1990 Act developed in relation to the first defenders is based on averments in Article 16 that the first defenders knowingly permitted the deposit of controlled waste.
“… through their control of the development of the site, the failure to clear the site of all made ground, their knowledge of the ground levelling operations at the site as an alternative to clearing the site of made ground and the importation of clean fill, the creation of the bund from contaminated ground, the use of ash and slag as backfill and the creation of the bund. The first defender knowingly permitted the deposit of controlled waste in allowing the proposed layout of the proposed housing development to be designed and altered to take account of contaminated parts of the site. The first defender knowingly permitted the deposit of controlled waste at the site by the construction of houses at Forum Place without properly investigating the extent of contamination in Forum Place, and without further investigating the extent of cf contamination of other parts of the site where housing construction had already taken place.”
We express no views about these averments except to say that where there are averments that a person controls a site, it is possible to understand how one might start to develop a case of knowingly causing or knowingly permitting controlled waste to be deposited by someone else. These averments in relation to the first defenders are in contrast to the averments relating to the second defenders. We are unable to identify any relevant factual averments which might potentially provide a foundation to bring the second defenders within section 33(1)(a). What is clear from the submissions of counsel for the pursuers is that there is no attempt to found a case that the second defenders themselves had breached section 33 of the 1990 Act by themselves depositing controlled waste. In so far as we can understand the pleadings, the deposit of waste complained about appears to be the result of remediation and building works carried out both pre 1 May 1994 and post 1 May 1994 by I & H Brown Ltd and CBC builders. That is not entirely clear from the pleadings but that merely emphasises the lack of clarity in these pleadings particularly about who did what and when post 1 May 1994.
[26] The averments about the powers of the second defenders in relation to the first defenders are entirely vague and unclear. It is impossible to determine from these pleadings what the relationship between the first defenders and the second defenders is alleged to be apart from some general averments such as reports were provided and advice given by the second defenders to the first defenders. In response to detailed averments made by the second defenders in answer 2 about the nature of their contractual relationships and the dates thereof, there is a general denial by the pursuers. There is no attempt by the pursuers to set out and aver facts and circumstances relating to the contractual relationship between the first and second defenders which would explain and provide a foundation for inferring that the second defenders knowingly caused or knowing permitted a third party that is I & H Brown and/or CBC or some other third party to deposit controlled waste. It may be that in some contracts, provision might be made that a consultant/expert has the right to direct the works regardless of the clients’ views and instruct works from third parties without the agreement of the client. The liability of such an expert consultant in relation to section 33 would require to be considered in the light of the averred contractual provisions and averred facts. Counsel appeared to regard the contractual provisions and the legal relationship of the second defenders and other defenders and third parties as not within his knowledge and therefore not really a problem for him. Such an attitude appears to ignore the discovery processes which are available to a party to enable a party to discover relevant facts to plead a case. It is not averred in this case that the second defenders had any control over the land or any power to control the person depositing. Whatever may be the delictual or contractual duties of the second defenders, we can identify no relevant factual averments capable of bringing the second defenders within section 33(1)(a). In any event there is no averment that there was no waste management licence in place authorising the deposits.
[27] The height of the pursuers’ case appears to be an offer to prove that the second defenders had knowledge of the site conditions, gave certain advice about problems to the first defenders and knew that contamination still existed. In our opinion, such averments are insufficient as a foundation for this statutory case.
[28] If we focus on Article 18 and the pleadings prior to amendment, as the Lord Ordinary did, we consider that the Lord Ordinary was well entitled to come to the decision which he did for the reasons he gave. In any event, we do not consider that Thames Waste Management Ltd assists the pursuers in relation to what we have identified as the major problem in the pleadings.
[29] For these reasons therefore the pursuers’ appeal in relation to the statutory case against the second defenders is unsuccessful.
The Pursuers’ Statutory Cases against the Third Defenders
Introduction
[30] The first and second pursuers respectively aver that they suffered loss, injury and damage through the breach of contract, et separatim breach of statutory duty of the third defenders. The common law case of breach of contract was based on an implied contractual term that the third defenders, as landlord, provided a house that was un‑tenantable and not in habitable condition at the beginning of the tenancy. The case under the Housing (Scotland) Acts 1987 and 2001 was complicated mainly because of changes in statutory provisions regulating statutory tenancies. The Lord Ordinary concluded in paragraph 190 that the averments both at common law and founded upon the statutory provisions were irrelevant and dismissed the case against the third defenders.
[31] The pursuers do not challenge the decision‑making of the Lord Ordinary in relation to the common law case. In their ground of appeal 6, the challenge is to the decision‑making of the Lord Ordinary in relation to the pursuers’ case founded upon the statutory provisions. In summary the pursuers’ contention is that the Lord Ordinary erred at paragraphs 183, 184 and 190 in concluding that the statutory provisions are restricted to the repair of the fabric of the building. His approach to the statutory provisions was too restrictive because the statutory provisions were not restricted to the implied contractual position at common law. Criticism was also made that the Lord Ordinary had failed to deal with English authorities Bole v Huntsbuild and another [2009] 124 Con LR 1 and Harrison v Shepherd Homes Ltd (2011) 27 Const LJ 709.
The Statutory Provisions: The Housing (Scotland) Acts 1987 and 2001
[32] There was some complexity in the statutory provisions. In the period narrated in the pleadings from 13 November 2000 when the first pursuer became the tenant of the first property, he held an assured tenancy under the Housing (Scotland) Act 1988 until 29 September 2002 when it became a Scottish secure tenancy under the Housing (Scotland) Act 2001. From the pleadings it is not clear if the second pursuer had a tenancy of the first property or if so, the date of commencement, Both the first and second pursuers are averred to have had a joint tenancy of the second property in the form of a Scottish secure tenancy from 23 March 2009. There was no dispute that the relevant provisions which applied in relation to the tenancy up to 29 September 2002 are to be found in Schedule 10 of the Housing (Scotland) Act 1987. From 30 September 2002 the relevant provisions are to be found in section 27 and Schedule 4 of the Housing (Scotland) Act 2001.
[33] The Housing (Scotland) Act 1987 Schedule 10 states:
“…
(2) In any contract to which this paragraph applies there shall, notwithstanding any stipulation to the contrary, be implied a condition that the house is at the commencement of the tenancy, and an undertaking that the house will be kept by the landlord during the tenancy, in all respects reasonably fit for human habitation:
…”
[34] The Housing (Scotland) Act 2001 Schedule 4 states:
“(1) The landlord in a Scottish secure tenancy must—
(a) ensure that the house is, at the commencement of the tenancy, wind and watertight and in all other respects reasonably fit for human habitation, and
(b) keep the house in such condition throughout the tenancy.
(2) The landlord must, before the commencement of the tenancy—
(a) inspect the house and identify any work necessary to comply with the duty in paragraph 1(a), and
(b) notify the tenant of any such work…”
The Opinion of the Lord Ordinary in relation to the Third Defenders
[35] The Lord Ordinary considered the pursuers’ case against the third defenders in paragraphs 145 to 191 of his opinion. In paragraphs 145 to 147 the Lord Ordinary identified the pleadings on which the pursuers rely namely Articles 2 and 19 of Condescendence. He considered the authorities at common law in some detail as a prelude to the submissions about the statutory provisions founded upon. He set out in some detail, in paragraph 187, the provisions in Schedule 4 of the 2001 Act. He recognised in paragraph 188 that, unlike the predecessor provisions “Schedule 4 does not have effect by implying conditions into the contract of tenancy. It imposes on the landlord statutory duties to do certain things”. In paragraph 190 the Lord Ordinary stated:
“There is no averment that, before either of these dates (30 September 2002 and 23 March 2009) the third defenders failed to ensure that the house was reasonably fit for human habitation. There is no averment that they failed to inspect the properties before either of these dates or that they failed to identify any work necessary to comply with the duty to ensure fitness for habitation … the pursuers aver only that the house at Empire Way was not fit for human habitation ‘as a result of being built on contaminated land and the construction of the house permitted contaminated vapours to permeate the said house’.”
Submissions by Counsel for the Pursuers in relation to the Third Defenders
[36] In his opening submissions, junior counsel advised the court that he had not accepted the invitation by the court to set out in writing reference to the averments concerning the third defenders on which he relied. He adopted his written submission. The court insisted that, in the course of oral submissions, he clearly identified the foundation in the pursuers’ pleadings on which he relied to set out a relevant case. Thereafter he identified Articles 2 and 18 and, later in his submission, relied also on part of Article 13.
[37] We summarise the pleadings which were submitted to be the basis of the pursuers’ case against the third defenders.
[38] Article 2 page 14E‑15A states:
“The Third Defender has been operating since in or about 1978 and is registered with the Scottish Housing Regulator as a registered social landlord. The Third Defender is a provider of social housing in the form of properties to rent and shared ownership schemes. The Third Defender provides social housing through the rehabilitation of existing tenement buildings, regeneration schemes in existing housing estates and new build housing developments. One of the new build housing developments provided by the Third Defender is known as the Watling Street Development. The pursuers were formerly tenants of the third defender at two different properties in the Third Defender’s Watling Street Development. The First Pursuer became a tenant at 13 Tiber Avenue, Motherwell on or about 13 November 2000. The second pursuer started living at 13 Tiber Avenue in or about June 2004. On or about 23 March 2009 the first pursuer and the second pursuer became joint tenants of 31 Empire Way, Motherwell. …”
Article 13 page 65E‑66C states:
“The results of site investigations referred to in Condescendence 12 show the presence of contaminants in the ground in the form of VOCs, SVOCs, PCB’s, heavy metals and chlorinated solvents. They also show that fumes from VOC’s and SVOC’s are entering into properties on the site at concentrations above USEPA Regional Screening Level. The Pursuers former tenancy subjects at 13 Tiber Avenue and 31 Empire Way are built on ground containing a variety of contaminants, including VOCs and SVOCs. VOCs and SVOCs in the ground will pool around structures on and in the ground, including the Pursuers former tenancy subjects, such as the foundations of buildings and utility pipes and cables. VOCs and SVOCs under the ground are not stable and will release vapour. The extent to which they do so will depend on temperature and the level of the water table. The level of the water table on the site will vary according to the amount of rainfall there has been. The vapours given off by VOCs and SVOCs in the ground around and under the properties built on the site will migrate through the ground. These vapours will permeate the houses built on the site, including the Pursuers former tenancy subjects, through openings in the structure for pipes and services, airbricks in the walls, gaps between the flooring and pipes, cables and ducts, and the doors and windows of the houses. The extent to which vapours will permeate the house, and the concentration of these vapours at any particular point in time will vary, according to the extent which the VOC’s and SVOC’s are present in the ground under and around the buildings, pipes and cables. The extent to which said vapours were and are present within said houses and the concentration of said vapours at any particular point in time will also be influenced by environmental factors such as the extent of water saturation of the ground and ambient air temperature. The particular vapours given off by the VOC’s and SVOC’s over a period of time will not remain constant due to the fact that the compounds will behave differently from each other, and that the compounds will, over time, break down into different parts, and when they do so they will release different vapours than when in an earlier phase. …”
Article 19 page 84C-85A states:
“The tenancy of 13 Tiber Avenue, Motherwell was an assured tenancy under the Housing (Scotland) Act 1988 until 29 September 2002. From 30 September 2002, the tenancy of 13 Tiber Avenue was a Scottish Secure Tenancy under the Housing (Scotland) Act 2001. The tenancy of 31 Empire Way, Motherwell was a Scottish Secure Tenancy under the Housing (Scotland) Act 2001. It was an implied contractual term at common law of an assured tenancy that the landlord provided a house that was in a tenantable and habitable condition at the beginning of the tenancy. It was an implied contractual term under Section 113 and Schedule 10 of the Housing (Scotland) Act 1987 that the house was, at the commencement of the tenancy, in all respects reasonably fit for human habitation. In terms of Section 27 and Schedule 4 of the Housing (Scotland) Act 2001 it is a statutory condition of a Scottish Secure Tenancy that the landlord must ensure that the house is, at the commencement of the tenancy, wind and watertight and in all other respects reasonably fit for human habitation. The house at 13 Tiber Avenue, Motherwell was not tenantable and habitable, nor was it in all respects reasonably fit for human habitation, as a result of being built on contaminated land and the construction of the house permitted contaminated vapours to permeate the said house. The house at 31 Empire Way, Motherwell was not in all respects reasonably fit for human habitation as a result of being built on contaminated land and the construction of the house permitted contaminated vapours to permeate the said house. The Fourth Defenders were in breach of their said implied contractual duties as landlords of 13 Tiber Avenue, Motherwell. The Fourth Defenders were in breach of the said statutory duty as landlords of 31 Empire Way, Motherwell. As a consequence of the exposure to, and inhalation of, the VOCs and SVOCs in the air within said properties the pursuers suffered the loss, injury and damage hereinafter condescended upon. With reference to the Fourth Defender’s averments in answer, it is admitted that the Second Pursuer’s tenancy of 31 Empire Way ended on 27 April 2012.”
Counsel explained that the reference in Article 19 to the fourth defenders should be read as third defenders.
[39] Counsel in oral submissions emphasised the wide ambit of the expressions used in the statutory provisions and submitted that “in all respects” in the 1987 Act and “in all other respects” in the 2001 Act should be interpreted as in all respects material to the enjoyment of the property. He referred to the example of an infestation of rats from a broken outside sewer pipe discussed in Summers v Salford Corporation [1943] AC 283. He criticised the approach of the Lord Ordinary when he concluded in paragraph 183:
“… Whether it is that subjects let must be wind and watertight, tenantable and habitable, or fit for human habitation, the various authorities, statutory and common law, when properly understood, make it clear that the landlord’s obligation relate to the repair of the fabric of the let property itself …”
He submitted that this error in interpretation by the Lord Ordinary led to the wrong conclusion about the issue in the present case. The absence of averments by the pursuers of defects in the fabric of the subjects let, at the date of commencement of the lease, did not mean that the pursuers’ averments were irrelevant. Counsel cited various cases including Kippen v Oppenheim (1847) 10D 242; Smith v Marrable, Knt (1843) 11 Meeson and Welsby 5, 152 ER 693; Bole v Huntsbuild Ltd [2009] 124 Con LR 1; Harrison v Shepherd Homes Ltd, (2011) 27 Const LJ 709 as examples of ways in which a house may be unfit for human habitation in the absence of a problem in the fabric of the house. It was submitted that the Lord Ordinary had not given sufficient consideration to cases such as Bole and Harrison and that he failed to address them, as he had stated he would do, in his opinion at paragraph 163.
Submissions by Counsel for the Third Defenders
[40] In opening the submissions on behalf of the third defenders, counsel stated that the pursuers had failed to engage with the problems about their pleadings. The pursuers had failed to plead their way into a case by averring facts to found a case that at the commencement of the tenancy of the subjects of let on 30 September 2002 and 23 March 2009 to which the 1987 and 2001 Acts respectively related were met. The weakness at the heart of the pursuers’ case was the absence of relevant averments. In considering the statutory provisions, counsel emphasised that the pursuers’ case was founded exclusively on the state of the subjects of let at the commencement of the tenancy dates. That did not mean that persons, such as the pursuers, who allegedly suffered harm at a date after the commencement date as a result of the condition of the house becoming not reasonably fit for human habitation, had no remedy. In such a situation there was a potential statutory remedy based on the landlord’s obligation to keep the house in a state reasonably fit for human habitation as defined in the 1987 and 2001 Acts, but the pursuers’ case was not pled on that basis.
[41] Although in his written submissions, counsel supported the reasoning of the Lord Ordinary in paragraph 183 which led the Lord Ordinary to conclude that the landlord’s obligations are restricted to repair of the fabric of the let property itself, in his oral submissions he accepted that the reference to “fabric” of the let property was too narrow in scope. Counsel did not depart from his submission that the landlord, under the statutory provisions, had no obligation to deal with or repair problems located outwith the confines of the let property. He accepted however that a problem which perhaps arose initially from outwith the property but manifested itself within the property, such as rodent or bug infestation, was capable of being included within the statutory provisions. He conceded that the use of the word “fabric” by the Lord Ordinary was too restrictive. He accepted that, with the concession made, there was little relevant dispute between the parties about the case law and the interpretation to be given to the statutory provisions, but that did not assist the pursuers.
[42] Counsel submitted that it is plain from the statutory provisions that the pursuers must aver and offer to prove that at the commencement of a particular tenancy (ie on one specific date) the house let is not in all respects reasonably fit for human habitation (the 1987 Act Schedule 10) or that the house is at the commencement of the tenancy, not wind and watertight and in all other respects reasonably fit for human habitation (2001 Act Schedule 4). Although there are averments about the condition of the site and problems from time to time, including the averments in Article 13, these averments are insufficient to found a case under the statutory provisions relied on by the pursuers against the third defenders.
[43] In relation to that part of the appeal in which it was stated that the Lord Ordinary had failed to give proper consideration to the cases of Bole and Harrison, counsel did not accept that contention by the pursuers. In any event, said cases were not binding on the Lord Ordinary and any failure to give more detailed consideration to the cases had no material bearing on the outcome.
[44] Counsel submitted that the Lord Ordinary was correct to identify the need for relevant averments to found a case based on the statutory provisions against the third defenders and to highlight that absence. In addition, the Lord Ordinary was also correct to recognise that the 2001 Act introduced different legal provisions which were not based on an implied breach of contract. Counsel reserved his position about the enforceability of the provisions relied on by the pursuers in the 2001 Act by way of ordinary action. He also reserved his position in relation to the second pursuer about the status of the occupation of the first property in the absence of specific averment that the second pursuer was a tenant thereof.
[45] In the absence of sufficient relevant averments to found the case, counsel submitted that the Lord Ordinary was correct to dismiss the action insofar as directed against the third defenders and therefore invited the court to refuse the appeal in so far as directed against the third defenders.
Decision and Reasons in relation to the Third Defenders
[46] In Article 2 of Condescendence it is averred that the first pursuer became a tenant of the first property on or about 13 November 2000 and the second pursuer “started living” at said property in or about June 2004. Article 19 avers that the tenancy of said property was an assured tenancy until 29 September 2002 under the 1988 Act and a Scottish secure tenancy under the 2001 Act from 30 September 2002. On or about 23 March 2009 the first pursuer and second pursuer became joint tenants of the second property. It is averred that the said properties were not “reasonably fit for human habitation” as a result of being built on contaminated land and the construction of the houses “permitted contaminated vapours to permeate the said house” (Article 19). There are no averments that contaminated vapours permeated either the first or second property at the commencement of the tenancy. In Article 20 there are averments that during the course of 2003 the first pursuer experienced symptoms contributed to by inhalation of contaminated vapours within the first property at an unspecified date and that she also experienced symptoms caused by inhalation of contaminated vapours when she moved to the second property. In relation to the second pursuer, the symptoms are not averred until a date in 2008, and again at an unspecified date on moving to the second property (Article 21).
[47] In Article 13, the pleadings relied on by the pursuer are based on vapours entering into said properties at concentrations above USEPA regional screening level. It is averred that this is variable depending on temperature and the level of water tables and various other factors. It is specifically averred that the extent to which vapour will permeate and the concentration of these vapours at any particular point in time will vary and will not remain constant. The case pled is not a case to the effect that on a specified date of commencement of the tenancy, vapours harmful to health permeated the house to the extent that the house was not reasonably fit for human habitation on that date (1987 Act) or at the commencement of the tenancy, wind and watertight and in all other respects reasonably fit for human habitation (the 2001 Act). In our opinion that is the minimum requirement of relevant pleadings in this case and we do not consider that the pleadings meet that minimum requirement. Indeed, in his oral submissions we understood counsel to explain that there was nothing wrong with the properties but the problem was that as a result of the contaminated land, as averred in Article 18, vapours at some point were likely to occur in the properties and did so in this case causing injury to health.
[48] We do not consider the Lord Ordinary’s decision is in error because of any misapplication of the case law. We accept that the use of the word “fabric” by the Lord Ordinary may suggest too narrow a focus and we consider that the concession by counsel for the third defenders recorded in paragraph [41] is appropriate. Fumes or vapours permeating a house causing ill health may, depending on the facts averred, be capable of amounting to a breach of the statutory provision. We have set out what the minimum requirement for relevant pleading is in relation to this aspect of the case. We consider that the Lord Ordinary was correct to focus on the averments the pursuers offered to prove in relation to the date of commencement. It is not enough, in our opinion, to aver that problems might arise in the future during the tenancy or that problems did arise, for example, some fumes or vapours penetrated the house. It is essential to offer to prove that at the date of the commencement of the particular tenancy, the condition of the house was such (and we accept that might be because of the penetration of vapours or fumes) that it was uninhabitable by reference to the relevant statutory test which applied.
[49] In the absence of averments which we consider to be essential, the appeal by the pursuers in relation to the statutory case against the third defenders is unsuccessful and accordingly the Reclaiming Motion is refused. All questions about expenses are reserved.