Mining subsidence affecting houses built for sale – Builder unable to sell houses – Builder claiming for loss – Whether houses constituting property used for purposes of company – Coal Mining Subsidence Act 1991 section 30 – Lands Tribunal rejecting claim – Court of Appeal dismissing appeal
The claimant, C Ltd, built 16 houses at Greenroyd Court, Darrington, Pontefract, between 1989 and 1990. 14 of the houses were sold and two were retained, remaining in the ownership of C Ltd pending sale. In 1990 British Coal gave notice of an intention to mine in the immediate vicinity. The two houses suffered subsequent mining subsidence damage and agreed sales fell through. In October 1992 subsidence damage notices were served on British Coal Corporation, predecessor of British Coal Authority. C Ltd claimed in respect of interest upon a loan taken out in order to undertake the development. The claim was made under section 30 of the Coal Mining Subsidence Act 1991, which concerned loss consequential upon damage to land or any buildings on the land.
Hearing a preliminary issue of law as to the construction of section 30, the Lands Tribunal ordered that a building company which built domestic dwelling-houses for the purposes of sale did not “use” those houses, pending sale, wholly or partially for the purpose of the company within the meaning of section 30(1)(a) of the 1991 Act. C Ltd appealed contending, inter alia, that the words “property used wholly or partly for the purposes of the firm”, (the crucial words), which appeared in both section 30(1)(a) and section 31(2)(a), showed that the two sections were intended to be co-extensive. In the latter, in the case of movable property under section 31, there was no material distinction between the stock in trade of a business and the implements of the trade, both of which fell within the scope of the crucial words, and that consequently the houses awaiting sale also fell within their scope under section 30. The respondent argued that the claim was essentially a claim for blight, a matter governed by section 29 and regulations made under that section, and that the Lands Tribunal had not erred in giving the crucial words their natural meaning.
Held The appeal was dismissed.
1. In the statutory context of the 1991 Act, the holding of unsold houses with a view to sale was not the “use” of those houses as such for the purposes of the business of a small company: cf Brake v Inland Revenue Commissioners [1915] 1 KB 731 per Rowlatt J, at p733.
2. In the case of both sections 30 and 31 the natural and ordinary meaning of the crucial words, properly construed, meant that property held for sale (section 30) and stock in trade (section 31) fell outside the scope of both sections respectively.
3. Ownership was not the same as use and had parliament intended a wider interpretation, it would have said so in plain words. Nor had parliament intended there to be a separate claim for blight under section 30 as well as under section 29.
4. The respondent was therefore not liable to make good C Ltd’s financial losses represented by the interest cost exigible out of the loan, which C Ltd obtained in order to construct the two houses.
Phillip Engelman (instructed by Ford & Warren, of Leeds ) appeared for the appellant; David Lloyd Jones (instructed by Nabarro Nathanson,of Sheffield) appeared for the respondent.
