Supreme Court: ESB found negligent for UCC flood damage



Supreme Court
Supreme Court

The Supreme Court has found that the Electricity Supply Board (ESB) was guilty of negligence in relation to the extensive flood damage to University College Cork (UCC) in 2009.

Three judgments – one main, one concurring, and one dissenting – were delivered.

Background

Cork City suffered severe flooding in November 2009 when the River Lee broke its banks. UCC’s campus was severely damaged. UCC claimed that the ESB was negligent in its handling of its upriver dams at Inniscarra and Carrigadrohid, thus causing or contributing to the flooding.

Cork was built on the Lee’s floodplain, and the river flows through the city, which is “susceptible to both fluvial and tidal flooding”. The Lee Regulations, an ESB document, prescribe how discharges are to be managed during floods by providing that specified amounts should be discharged at specified reservoir levels.

UCC commenced proceedings alleging negligence and nuisance against the ESB. The ESB denied the claims, but pleaded that if it were liable, UCC should be found guilty of contributory negligence, reducing damages.

High Court

Mr Justice Max Barrett distinguished several US authorities on dam flooding and followed People v City of Los Angeles 34 Cal.2d 695; 214 P.2d 1(1950), as judicial recognition of dams and “changed nature”. The court said that a rule, the ‘do not worsen nature rule’, represented a rule that derived from the building and ownership of a dam, and considered that it does not address the additional and distinct responsibility attaching to the harnessing of the river flow for industrial purposes.

The judge found ESB had a “measured duty of care” as an occupier to remove or reduce the hazard which existed to neighbours, as established in Leakey v National Trust for Places of Historic Interest or Natural Beauty [1980] QB 485. The judge followed the Privy Council decision in Goldman v Hargrave [1967] 1 AC 645 holding that the duty’s existence arose from knowledge of the hazard, the ability to foresee the consequences of not removing it and the ability to reduce it.

The court held that the standard required of the occupier ought to be that which is reasonable to expect of him in its individual circumstances. The ESB was held to have failed to do what it reasonably could and should have done to mitigate the nuisance. By deliberately releasing water, it had caused damage which could have been avoided or been significantly reduced by heeding weather reports and spilling earlier.

He dismissed the contention that ESB did not create the flood.

Following Bybrook Barn Garden Centre Ltd v Kent County Council [2001] LGR 329, the court held that, in certain circumstances, a defendant can be liable for a nuisance that he does not directly create.

The court concluded that ESB were liable but also held UCC guilty of contributory negligence, measured at 40 per cent.

Both sides appealed.

Court of Appeal

In a judgment of the Court of Appeal delivered by its President, Mr Justice Sean Ryan, the ESB’s appeal in respect of the finding of liability was allowed, and the court said UCC should not have been found guilty of contributory negligence.

Mr Justice Ryan said that the judgment of the court below, if permitted to stand, would “represent a significant alteration of the existing law of negligence and nuisance, would be contrary to the statutory mandate of ESB in respect of electricity generation and would not be consistent with reason and justice”.

The Court considered persuasive the rule set out in Iodice v State of New York 247 App. Div. 647 (1951), and other subsequent US dam cases, which held that the only duty imposed on a defendant dam-operator in respect of single purpose dams was to avoid making the flooding worse than it would be under natural conditions.

The Court rejected the High Court finding that the ‘do not worsen nature rule’ was not applicable in circumstances of long-standing constructions that had permanently changed nature.

Both sides appealed.

Supreme Court

The court said that the starting point for any consideration of the extent of the duty of care in the law of negligence in this jurisdiction must be the decision of this Court in Glencar Exploration plc v Mayo County Council (No 2) [2002] 1 IR 84. The basis for establishing a duty of care requires that damage be suffered which was both foreseeable and not unduly remote from the acts causing it.

The ESB relied on the UK Supreme Court judgment in Poole Borough Council v GN [2019] UKSC 25, and its distinction between cases where the defendant has caused harm to the plaintiff, and those where the defendant has failed to improve matters for the plaintiff. The ESB submitted that the law of negligence generally imposes a duty not to cause harm rather than a duty to provide other persons with a benefit.

The ESB asserted that there was no established case law which extended a duty of care to the operator of a dam (which did not have as its specific purpose the alleviation of flooding) which required such an operator to take reasonable steps to prevent downstream flooding by adjusting its operations to minimise the risk of such flooding.

UCC submitted that the imposition of a duty of care on a dam operator was established in MJ Cordin v Newport City Council, 23 January 2008, QBD (TCC). UCC submitted that it was just and reasonable to impose liability on the ESB which was an entity engaged in what is said to be a hazardous industrial process so that it must be obliged to take reasonable care in its operations not to cause injury or damage.

UCC relied on Embrey v Owen [1851] 6 Exch 353, in which it was observed that “the owner of the upper stream must not raise the water by dams, so as to make it fall with more abundance and rapidity than it would naturally do, and injure the proprietor below.”

The court said that the case law could be generically described as “do no harm” jurisprudence, and that the “do not worsen nature” approach taken in some of the dam cases represents a particular application of the “do no harm” approach to cases such as this. The Court considered a number of American authorities, including the judgment of the New York Supreme Court in Iodice, affirmed without opinion by the New York Court of Appeals (Iodice v New York 303 NY 740 (1951))

Iodice was followed in Elliott v City of New York (06 C.V. 296, 2010 US Dist LEXIS 121344, 15 November 2010) where Justice Robert P Patterson in the Federal District Court for the Southern District of New York stated that there was no “responsibility by or duty on a dam owner ‘to make flood conditions better for lower property owners than they would be if the river flowed naturally’.” This approved by the US Court of Appeals for the Second Circuit (Elliott v New York 497 Fed Appx 108, 2012 US App LEXIS 19735).

The Supreme Court said that another “clear statement” can be found in the judgment of the US District Court in Key Sales Company v South Carolina Electric and Gas Company 290 F Supp 8 (DSC 1968) where the court concluded that the “only obligation imposed upon a dam operator in the operation of his dam is not to worsen conditions downstream beyond what would have occurred in the absence of the dam.”

The Supreme Court also considered the judgments of the Arkansas Supreme Court in Power and Light Company v Lewis Cash, 245 Ark 459, 432 SW2d 853 (1968), the Court of Appeals of Georgia in Baldwin Processing Company v Georgia Power Company 122 Ga App 92, 143 SE2d 761 (1965), the Alabama Supreme Court in Bryan v Alabama Power Co (20 So 3d 108 (Ala 2009)), and the Supreme Court of Pennsylvania in Shamnoski v PG Energy (579 Pa 652; 858 A 2d 589 (Pa 2004)).

The court further cited Canadian (Smith v Ontario and Minnesota Power Co Ltd [1918] 45 DLR 266, and Australian (Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority [2014] NS2WSC 1565) jurisprudence.

Conclusion

The Supreme Court found the ESB liable.

Chief Justice Frank Clarke and Mr Justice John MacMenamin, in the court’s main judgment, with whom Ms Justice Elizabeth Dunne agreed, noted the finding by Mr Justice Barrett that another management system would have reduced flooding downstream, and found that the ESB was negligent in not managing the Lee dams in line with that system.

Commenting on the Glencar test, the judges said that “We are not sure… that the use of that part of the test … to the effect that a court must determine whether it is “just and equitable” in all the circumstances to impose a duty of care, is really of any great assistance. It begs the question of how a court is to decide what is just and equitable. By reference to what criteria or considerations is the justice or equity of the case to be analysed?”

The court said that the ESB had a “special level of control over a danger”, (from Robinson v Chief Constable of West Yorkshire Police [2018] AC 736), and found that the case was one of the limited situations where the law imposes a duty to confer a benefit. This duty of care arises on the basis that the ESB had a “special and substantial level of control which would enable it to prevent or reduce harm arising from a flood danger”, and that the duty concerned could be specified with reasonable clarity so as not to impose an impermissibly vague obligation on the ESB.

In a concurring judgment, Mr Justice Peter Charleton noted the High Court’s findings of fact that the ESB had storm warnings and knew about the condition of the ground. It could have provided anti-flooding space in the reservoirs by earlier releases of water. The judge said that if the ESB had released waters earlier, UCC and Cork may have still been flooded to some degree, and that any assessment of damages would be assessed on the difference in the damage of the two floods.

Mr Justice Donal O’Donnell, dissenting, said that the Lee is known to be prone to rapid “flashy” floods, and that the flooding was not caused by ESB. He said that ESB customer will “not only bear the cost of the very substantial damages in increased electricity charges, but also the increased cost caused by the reduction in generation efficiency that would be a consequence of the measures necessary to be taken to avoid any risk of flooding, steps which would have to be taken in all hydroelectric dams in the jurisdiction”. This would, at the same time, release “insurers from the obligation that they unambiguously undertook”. The judge said it was difficult to “explain why the insurer should be relieved of that part of the cost of flooding claims by being able to make a claim against ESB, especially since this cannot have an impact on the calculation of the premium to their client, but would, however, require ESB either to absorb those claims, or to insure against such an extensive liability”.

© Irish Legal News Ltd 2020



Other judgments by Mr Justice Frank Clarke