Pollution of land from escape of radioactive substances — Polluted and about to be sold — Prospective purchaser withdrawing — Liability under Nuclear Installation Act 1965 — Amount of compensation to be paid under Act
The plaintiffs owned an estate of 137 acres including a listed Victorian Manor House, used as an hotel, and a modern office building set in attractive grounds adjoining the Aldermaston Atomic Weapons Establishment (AWE), owned by the defendant. After heavy rainfall on July 6 1989 water from ponds on the AWE site overflowed on to the plaintiffs’ land. AWE personnel carried out a survey shortly afterwards which revealed a small area of radioactive contamination, which, though not posing any threat to health, was above regulatory levels. The plaintiffs were not informed at the time, but the information came to the attention of their senior management at a meeting in 1993 arranged in connection with negotiations for the sale of the estate at a price of around £10m. Following the disclosure the prospective purchaser withdrew and the estate remained unsold.
By the end of 1994 AWE had removed the contaminated material in accordance with agreed criteria and accepted responsibility for the removal of the material at a cost of nearly £350,000, but denied liability for any further costs, or for the effect of the incident on the saleability or value of the property. The plaintiffs’ claim against the defendant was founded upon the statutory cause of action under section 12 of the Nuclear Installations Act 1965, or alternatively on nuisance or the rule in Rylands v Fletcher. Two questions were ordered to be tried: (a) whether the defendant was liable to pay compensation under the Act; and (b) if not, whether the plaintiffs had suffered loss and damage actionable at common law in nuisance and under the rule in Rylands v Fletcher and whether the effect of the Act was to preclude common law claims.
Held Judgment was given for the plaintiffs.
1. The plaintiffs had a cause of action under the 1965 Act and were entitled to damages for the loss of the sale to the proposed purchaser and to the clean-up costs. Damage to property in section 7(1), the cause of which was the radioactive properties of the materials, meant physical damage to tangible property. The contamination caused a physical change to the area affected which rendered it less valuable. The physical change was evident from the fact that decontamination required a major engineering operation involving the removal of large quantities of earth from the site. It was self-evident that the contamination rendered the property less useful or less valuable and it was quite clear that once it was know that the contamination exceeded the regulatory levels, it could not be left in situ.
2. The amount of compensation to be paid in respect of the damage under section 12 of the Act was governed by ordinary common law principles. Where there was damage under the Act, section 12(1) required the claim to be made under that section and excluded any common law claim. The approach to assessing the measure of damage was no different to that applying to damages for injury to the person. It was clearly forseeable that radioactive contamination would have an adverse effect on the marketing of the estate, of which AWE was aware, and would diminish its market value.
3. The plaintiffs were entitled to damages for the loss of the sale in the sum of 75% of the assumed receipts plus running costs from April 1993 to July 1996 less the value at July 1996, and for 100% of the clean-up costs and interest to be determined.
Antony Edwards-Stuart QC and Stephen Worthington (instructed by Reynolds Porter Chamberlain) appeared for the plaintiffs; Charles Flint QC and Thomas Croxford (instructed by the Treasury Solicitor) appeared for the defendants.
