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MERLIN AND ANOTHER
BRITISH NUCLEAR FUELS PLC
QUEEN’S BENCH DIVISION
2 APRIL 1990
 3 ALL E.R. 711
BEFORE HIS LORDSHIP: GATEHOUSE J
Stephen Sedley QC and Matthias Kelly for the plaintiffs.
Kenneth Rokison QC, Antony Edwards-Stuart and Emma Griffiths for the defendants.
Solicitors: Leigh Day & Co (for the plaintiffs); Freshfields (for the defendants).
K Mydeen Esq Barrister.
ENVIRONMENTAL AND NATURAL RESOURCES LAW:- Pollution from nuclear plants – Proof of radioactive contamination of residential homes due to ionizing radiations emanating from nuclear fuel reprocessing plant – Whether not enough to found liability – Whether proof of actual damage to property or person is required – Art 1(k)(i)c of the Vienna Convention on Civil Liability for Nuclear Damage 1963
CHILDREN AND WOMEN LAW: Women/Children and Environmental Security/Healthcare – Auction of home at a discounted price due to concerns over health risks associated with ionising radiations from a nuclear plant – Whether diminution of value of property without proof of actual damages to property or person is not recoverable against nuclear operators
TORT AND PERSONAL INJURY LAW:- Breach of statutory duty causing diminution of value of property – When deemed to arise – Whether mere presence of ionising radiations within the plaintiffs’ property emitted from waste discharged from the site is sufficient – Whether proof of actual injury to any person or damage to any property is required
TRANSPORT AND INFRASTRUCTURE LAW – NUCLEAR FACILITY:- Diminution of value of properties within its vicinity due to ingress of alleged nuclear pollution to the property thereby threatening the health and safety of occupants – Liability of nuclear plant operators thereof – Whether mere presence of radioactive contamination in the plaintiffs’ house was not enough to constitute damage amounting to a breach of the defendants’ duty
SCIENCE AND TECHNOLGY: Nuclear plant – Externalities associated with its establishment and operation – Nature of legal liabilities associated therewith – Claim for damages due to contamination of homes by ionizing radiations connected with operation of nuclear facility – How treated
SCIENCE AND TECHNOLOGY:- Nuclear plants and operations – Radionuclides – Plutonium isotopes and americium – Whether judicially considered as alpha emitters which cannot do any significant damage to persons or property externally – Whether fact that when inhaled, ingested or otherwise enabled to enter the body they may induce cancers, but, of course, will not necessarily do so does not per se amount to injury
HEALTHCARE AND LAW:- Preventive/Pre-emptive measure – Family who were forced to move from their home so as to safeguard the health of their children and themselves from ingress of ionizing radiation – Whether not ground to recover damages for diminution in value of home
HEALTHCARE AND LAW:- Operations of nuclear plants – Presence of alpha emitting radionuclides in the human airways or digestive tracts or even in the bloodstream which increases the risk of cancer to which everyone is exposed from both natural and artificial radioactive sources – Attitude of court thereto – Judicial view that it is in the nature of nuclear installations that there will be some additional radionuclides present in the houses of the local population, over and above the naturally occurring radionuclides to which every one of us is continually exposed – Implication for justice administration
EDUCATION AND LAW – RESEARCH CENTERS:- Complex/technical environmental matters – Contaminations from nuclear plant – Proof of same and determination of liability – Need for expert testimonies and scientific analysis of samples connected therewith – Implication for the discharge of evidentiary burden of proof
REAL ESTATE AND LAND LAW:- Diminution of price of real estate due to alleged contamination of premises from a nuclear plant – Whether recoverable as damages against plant operators
SUMMARY AND HISTORY
In 1973 the plaintiffs, a married couple, purchased a house overlooking an estuary some six miles south of a nuclear reprocessing plant operated by the defendants. In 1977 a public inquiry was held to examine the defendants’ plans to extend the plant. The inquiry attracted the interest of the media and a number of anti-nuclear pressure groups and, in the wake of that interest, the plaintiffs were alerted to the possibility of radioactive contamination in their home. At the suggestion of a member of one of the pressure groups, the plaintiffs collected a sample of house dust from their vacuum cleaner which was sent to the United States for analysis. In October 1981 the plaintiffs learnt that the tests carried out on their house dust sample indicated high levels of radioactive contamination which gave cause for concern. The plaintiffs decided to move from their home because they were concerned about the health risks to their children which they believed would result from long-term occupation of the house. The plaintiffs purchased a suitable property further away from the nuclear site in May 1982 and put their house on the market for £65,000. They experienced difficulty in selling the property, but it was eventually sold at auction in November 1984 for £35,500. The plaintiffs subsequently issued a writ against the defendants, claiming compensation under s 12(1)a of the Nuclear Installations Act 1965 for financial loss represented by the diminution in value of the house caused by the level of radioactive contamination in the house emanating from the discharge of nuclear waste from the defendants’ site and their perception of the risk to the health of their children. The plaintiffs contended that the defendants were in breach of their duty under s 7(1)(b)(ii)b of the 1965 Act, which imposed a duty on the licensee of a nuclear site to secure that “no ionising radiations emitted … from any waste discharged (in whatever form) on or from the site, cause injury to any person or damage to any property of any person other than the licensee”, and alleged that there was a direct link between exposure to radiation and the risk of injury to health and that the ingress of radiation into their house constituted damage to property within the meaning of s 7. The defendants contended that s 7 of the 1965 Act was to be interpreted according to art 1(k)(i)c of the Vienna Convention on Civil Liability for Nuclear Damage 1963, because the Act was enacted to fulfil the United Kingdom’s obligations under that convention, and, since art 1(k)(i) defined nuclear damage as loss of life, personal injury or loss of or damage to property arising out of or resulting from the radioactive properties of nuclear fuel, radioactive products or waste from nuclear installations, the Act was restricted to providing compensation for actual personal injury and damage to property and did not extend to compensation for increased risk of either or to compensation for economic loss.
On its true construction, s 7 of the 1965 Act did not extend liability for nuclear damage beyond that provided for in art 1(k)(i) of the Vienna Convention and accordingly liability under the Act for nuclear damage did not extend to any loss or damage other than proved physical or mental personal injury and physical damage to property caused by either an occurrence involving nuclear matter or an emission of ionising radiations on or from the nuclear site. It followed that the ingress of radiation into a house, viewed in terms of the risk or increased risk of damage to property, and any consequent increase in the risk of injury to the health of its inhabitants did not amount to `injury to any person or damage to any property’ within s 7 on which a claim for compensation could be founded against the licensee of the nuclear site from which the radioactivity had emanated. Moreover, there was no reason why compensation under the 1965 Act should extend to pure economic loss when such loss would not be recoverable at common law. Since the mere presence of radioactive contamination in the plaintiffs’ house was not enough to constitute damage amounting to a breach of the defendants’ duty under s 7 which would found a right to compensation, the plaintiffs’ action against the defendants would be dismissed (see p 719 a to c, p 720e g to j, p 721 d g to j and p 7221 e g, post).
For duties of nuclear site licensees, see 16 Halsbury’s Laws (4th edn) paras 381-382.
For the Nuclear Installations Act 1965, ss 7, 12, see 47 Halsbury’s Statutes (4th edn) 793, 796.
CASES REFERRED TO IN JUDGMENT
Hedley Byrne & Co Ltd v Heller & Partners Ltd  2 All ER 575, AC 465, 3 WLR 101, HL.
Rylands v Fletcher (1868) LR 3 HL 330,[1861-73] All ER Rep 1.
Simaan General Contracting Co v Pilkington Glass Ltd (No 2)  1 All ER 791, QB 758, 2 WLR 761, CA.
CASES ALSO CITED
Ashby v White (1703) 1 Bro Parl Cas 62, 1 ER 417.
Blyth v Birmingham Waterworks Co (1856) 11 Exch 781,[1843-60] All ER Rep 478, 56 ER 1047.
Bwllfa and Merthyr Dare Steam Collieries (1891) Ltd v Pontypridd Waterworks Co  AC 426,[1900-3] All ER Rep 600, HL.
Crofter Hand Woven Harris Tweed Co Ltd v Veitch  1 All ER 142, AC 435, HL.
Dodd Properties (Kent) Ltd v Canterbury City Council  2 All ER 118; rvsd  1 All ER 928, 1 All ER 433, CA.
Drane v Evangelou  2 All ER 437, 1 WLR 455, CA.
Dreyfus (Louis)& Cie v Parnaso Cia Naviera SA, The Dominator  1 All ER 502, 1 QB 498; rvsd  1 All ER 759, 2 QB 49, CA.
Earnshaw-Wall, Re  3 Ch 156.
Fothergill v Monarch Airlines Ltd  2 All ER 696, AC 251, HL.
Home Office v Dorset Yacht Co  2 All ER 294, AC 1004, HL.
Jones v Skinner (1835) 5 LJ Ch 87.
Junior Books Ltd v Veitchi Co Ltd  3 All ER 201, 1 AC 520, HL.
Lawton v BOC Transhield Ltd  2 All ER 608.
Liesbosch (owners) v Edison (owners)  AC 449, All ER Rep 144, HL.
Metropolitan Asylum District Managers v Hill (1881) 6 App Cas 193,[1881-5] All ER Rep 536, HL.
McGhee v National Coal Board  3 All ER 1008, 1 WLR 1, HL.
Millington v Duffy (1984) 17 HLR 232, CA.
Nokes v Doncaster Amalgamated Collieries Ltd  3 All ER 549, AC 1014, HL.
Rookes v Barnard  1 All ER 367, AC 1129, HL.
Secretary of State for Education and Science v Tameside Metropolitan Borough  3 All ER 665, AC 1014, CA and HL.
Smith v Brown (1871) LR 6 QB 729.
Smith v Eric S Bush (a firm), Harris v Wyre Forest DC  2 All ER 514, 1 AC 831, HL.
Swansea Corp v Harpur  3 KB 483, CA; affd  AC 597, HL.
W (an infant), Re  2 All ER 49, AC 682, HL.
Ward v Cannock Chase DC  3 All ER 537, Ch 546.
Wilsher v Essex Area Health Authority  1 All ER 871, AC 1074, HL.
By writ issued on 14 August 1985 as reissued on 6 September 1988 as amended pursuant to the order of Master Creightmore, and by reamended particulars of special damage served by leave of the trial judge, the plaintiffs, Christopher Peter Merlin and his wife Christine Ann Merlin, brought an action against the defendants, British Nuclear Fuels plc, claiming compensation under s 12(1) of the Nuclear Installations Act 1965 for diminution in the value of their home, Mountain Ash, Ravenglass, Cumbria, allegedly caused by radioactive contamination from the defendants’ nuclear installation at Sellafield. The facts are set out in the judgment.
Cur adv vult
2 April 1990. The following judgment was delivered.
In this action the plaintiffs, Mr and Mrs Merlin, claim statutory compensation from the defendants as owners and occupiers of the nuclear fuel reprocessing plant at Sellafield in respect of damage to their property alleged to have been caused by radioactive contamination emanating from the plant. The claim is brought under s 12 of the Nuclear Installations Act 1965, which gives a right to compensation where any injury or damage has been caused in breach of a duty imposed by, inter alia, s. 7 of the Act. It will in due course be necessary to look more closely at the provisions of the Act but in brief s 7 imposes on the licensee of a nuclear site, in this case the defendants, a duty to secure that no ionising radiations emitted from any waste discharged from the site cause damage to any property of any person other than the licensee. Of course, the Act also provides for the payment of compensation where the licensee’s activities, in breach of its duties under s 7 cause death or personal injury, but no such claim arises in the present case.
The plaintiffs claim that damage has been caused to their property, namely their former home, a house called Mountain Ash in the village of Ravenglass some six miles south of Sellafield. They say that as a result of the discharge of waste material from the defendants’ operations into the Irish Sea via a pipeline radioactive matter has, by the turbulence of the sea, found its way back to the coastline and become deposited in the mud of the Ravenglass estuary and thence, by the action of the wind and the carriage of the sediment on the feet of the plaintiffs, their family and their dogs, into their house.
By paragraph 6(i) of the reamended statement of claim the plaintiffs allege that owing to the contamination of their premises by artificial radionuclides the premises ceased to be of any use or value to the first and second plaintiffs as a home and/or the first and second plaintiffs were obliged and/or reasonably decided to sell the same on 14 December 1984 at an undervalue. They claim as special damage the loss in value of the house and various other matters said to be consequential on the sale and they also claim general damages in respect of annoyance and inconvenience.
The prayer of the statement of claim includes a claim for aggravated damages but counsel for the plaintiffs abandoned this at an early stage. The above resume sets out the basis of the claim. I add these further points. From the outset, counsel based his case exclusively on the statute and emphasised this is not a claim founded in negligence. The 1965 Act, he argued, imposed an absolute liability on the defendants to pay statutory compensation for any damage to property proved to have been caused in breach of the duties imposed by s 7. There is, he argued, no other cause of action (see the wording of s 12(1)) and, therefore, the claim in para 5 in the statement of claim, based on strict liability at common law under the principle in Rylands v Fletcher (1868) LR 3 HL 330,[1861-73] All ER Rep 1 does not arise.
I set out, as briefly as I can but necessarily at some length, the facts of the case as admitted or established by the evidence. The first plaintiff, Mr Merlin, was at the date of the hearing aged 48. After leaving school he obtained a diploma in automobile engineering and worked for a company which made go-karts. Go-karting was his hobby. He became the British champion and he established an international reputation both as driver and as engine builder.
In 1968 he started his own business at Isleworth, which prospered well and quickly and he and his wife were able to move to the Surrey countryside. But Mr Merlin’s great love was the sea. During his early childhood while his father, a naval surgeon, was away on war service he lived on Saltcoats on the Ravenglass estuary and came to know and love the area. After the war his family returned to Ravenglass on regular holidays. Mr Merlin and his wife married in 1963 and they spent their honeymoon there and thereafter spent a number of long weekends and longer breaks at Christmas in each year staying in the local hotel. In 1972 the plaintiffs heard that the post office and general store in the main street at Ravenglass was for sale.
By this time Mr Merlin, having worked very hard in his business, had, as he put it, burnt himself out and he and his wife were attracted by the idea of getting out of the rat race and moving to the wilds and a quieter life. They also wanted to start a family. The post office had enough living space above and behind it to accommodate the two of them until they could find something larger and they, therefore, sold their Surrey house and bought the post office. In fact, they never did live on the premises because within a short time they learnt that Mountain Ash was to be put on the market in the spring of 1973.
Mr Merlin knew the house well and had been a regular visitor since early childhood. It had an incomparable position overlooking the estuary and he was determined to buy it if he possibly could. As appears from the photographs and plans, Mountain Ash is indeed a singular property. It is a substantial house built about 1910 situated at the very end of the village and with views over the estuary and on the other side to Scafell and the mountains. It has direct access from its garden to the beach. Mr Merlin was an enthusiastic observer of the birdlife on the estuary and he and his family enjoyed walking both on the estuary and in the mountains behind.
It was in every way a very desirable property for Mr Merlin and in the spring of 1973 he purchased it at auction, together with a small adjoining house called Rose Cottage and a certain amount of garden and land, against a number of competitive bidders. Thereafter the position was this: Mr Merlin had sold his Surrey home and a half interest in his business. With the proceeds he bought the post office and general store and, with a mortgage, Mountain Ash and Rose Cottage, which was then occupied by protected tenants. Mrs Merlin ran the store and became the postmistress. Mr Merlin made exhaust systems in the garage at Mountain Ash. The post office accommodation was let.
In 1974 the Merlins were offered a small property adjacent to the post office called Ashley Cottage. This they purchased, Mr Merlin using the proceeds from the sale of the remaining half interest in the business. The Merlins’ first surviving son was born on 29 December 1976 and their second on 23 March 1978.
In 1977 the public inquiry into the defendants’ plans to extend the Sellafield plant was held. The inspector was Parker J. The proceedings were widely reported, particularly in the local press, but the general issues raised caused no great concern to the plaintiffs.
The planning inquiry, however, gave rise to three incidents that did affect them. One of the possible pathways by which radioactive material can find its way into humans was by the consumption of locally caught fish and the Merlins were among a number of volunteers who were tested for this with some positive but in no way startling results.
More significant, one of the groups at the inquiry opposed to the extension, Network for Nuclear Concern (NNC), suggested that an analysis of radioactivity in house dust should be carried out. An air monitoring device was placed in the Merlins’ garden for 30 days by the National Radiological Protection Board (NRPB) and attracted a certain amount of media interest in the house and its occupants. As it was being removed at the end of the test period, the Merlins were told they had nothing to worry about, a remark which Mr Merlin said struck him as being too glib to be convincing but clearly it caused little concern at the time.
The third incident arose out of the second and was to have much more far-reaching consequences. As a result of the temporary installation of the outdoor monitoring device, a Mr Thompson called on the Merlins. He was a local biology teacher and a member of NNC. He was concerned that only the outdoor air was being monitored and, as a result of discussions with Professor Radford (of whom much more later), suggested that a Hoover bag of house dust should be analysed for radioactive material.
A bagful was in due course collected by Mrs Merlin and handed over to Mr Thompson. This was in the latter months of 1977. That was, so far as Mr Merlin was concerned, the last he heard of the matter until 1981. Meanwhile the next significant event was the appearance in 1979 of a German scientist, Dr Sonhoff, at the Merlins’ house with a small camera team. He was apparently making a TV film on the environmental impact of the Sellafield plant on the surrounding area.
There had, since the Parker inquiry, been regular monitoring of the air, local seafood and the sediments in the estuary and the Merlins were becoming uneasy, so Mr Merlin put it, as they began to realise that `to some extent we were living in the outskirts of a sort of open laboratory’. The unease was considerably more on the part of Mrs Merlin than her husband. Dr Sonhoff’s visit caused her positive alarm, particularly when he advised her against hoovering her house and expressed surprise that the Ravenglass area had not been evacuated. The advice about hoovering was because dust on the floor which may contain adherent radionuclides can become resuspended in the cleaning operation and thus capable of being inhaled by humans.
Dr Sonhoff tested their cat, a heavy consumer of local fish, with a Geiger counter, producing positive results and amusement to the owners at the time, but some concern when they thought about it afterwards.
Mrs Merlin was seriously upset by Dr Sonhoff’s visit, but her husband regarded him as alarmist. He had no intention of moving at that time, and told his wife so. What changed Mr Merlin’s mind, he said, was a telephone call from Mr Thompson in 1981, following his visit in late 1977, an incident which by the time of the telephone call Mr Merlin had almost entirely forgotten.
The Hoover bag of dust had been sent by Mr Thompson to a distinguished epidemiologist in the United States, Professor Radford, for analysis. Mr Thompson knew Professor Radford, who had given expert evidence on behalf of NNC at the Parker inquiry. The professor encountered considerable difficulties in having the contents of the bag analysed, and it took a very long time to obtain the results, but eventually, on 27 February 1981, he wrote to Mr Thompson enclosing a summary of the analyses. This confirmed the latter’s expectations. The material part of the letter read:
`It was good to talk to you, and I am enclosing a summary of the analyses as I have them at present. As you can see, the alpha activity totals about 11 pCu/gm, as I said, with substantially more gamma activity. The alpha activity is of primary concern in terms of biological effects, but these effects cannot be accurately assessed unless we have a further evaluation of the size, distribution and chemical form of the activity … It is evident that much additional work is needed before the hazard can be adequately defined, although I think we can say that there is sufficient reason to be concerned. This additional work would be virtually impossible for me to get done here. Too many questions would be asked and there would probably be considerable expense. We have to find some way to get the matter looked into in Britain.’
He then discussed various ways in which this might be done and continued:
`In any case, I think you should discuss the problem with your friend. Talk over these possibilities. I await further word from you.’
Unfortunately, Mr Thompson has since died, but it was his account to Mr Merlin of Professor Radford’s letter which was the turning point in the plaintiffs’ lives. The only evidence of this is that of Mr Merlin, who said this:
`But in October 1981 dear Joe Thompson, who I had totally forgotten about, and when he mentioned his name I could only just kind of place him, rang up. I was in my workshop, and I think he rang up about 7 o’clock one evening. He said,”I have heard back from my colleague in America”, who at that time he had put a name to as Professor Radford. He said, “I am afraid the news isn’t very good, Chris. You are not going to like this, but there are levels of radioactivity which give cause for concern, particularly as I understand you now have two boys and your family is growing up. Mr Radford does express grave concern. I can’t tell you more than that. What you do is up to you”.’
Mr Merlin’s evidence continued:
`We actually had something which I had heard about at the time of the inquiry, and that was plutonium, in the house. I could not really hold this from my wife, but I did for two or three days, because I knew that now I had run out of reasons to stay in the village. I was absolutely heart broken, but I knew that there was absolutely no excuse for staying any longer, no reason for staying any longer.’
There was a dispute whether this telephone call was in October 1981, as Mr Merlin said, or March. That was the date given in Mrs Merlin’s affirmation made at the RSC Ord 14 stage in these proceedings. She changed this to October in her evidence before me, one of the unsatisfactory parts of her evidence. Further urgent efforts were then made to support the October date. Mr Cattley, the plaintiffs’ accountant, said that he had not been aware of the discovery of contamination at the time of the sale of Rose Cottage, which was in July 1981, but that does not assist. There was no particular reason why he should have been told.
The late Mr Thompson’s widow said he was in a dilemma whether to pass on the news to the Merlins and she said he waited for some months before doing so, putting it off, although she apparently kept trying to persuade him to do so. I cannot place much reliance on Mrs Thompson’s memory for detail, stirred for the first time some eight years after the event, and I do not accept that her husband waited for what must have amounted to a further eight months before relaying Professor Radford’s views. On balance of probability, although Mr Thompson may have wavered for while before bringing himself to pass on the bad news, I find that he did so in about March rather than in October. Probably it does not matter very much.
Having brooded alone for a few days on Mr Thompson’s message, Mr Merlin decided that he no longer had any good reason for opposing his wife’s desire to move. He therefore told her the unwelcome news and they jointly decided to move from Mountain Ash because, according to them, they were not prepared to expose their children to the health risk which they believed would result from long-term occupation of the house.
They did not take any urgent steps to this end. They did not visit any estate agents but they regularly scanned the local paper’s property columns, and similar sources. They visited one house in Kirkudbrightshire in late 1981 and another house near Hexham in early 1982 but otherwise took no active steps to find an alternative home. On this subject, again, I find Mrs Merlin’s evidence to the contrary unsatisfactory.
Eventually they heard from the postman that a farm in the Duddon Valley, some 15 miles inland, was coming on the market. This was Grass Gars Farm, their present address. It was remote, in attractive countryside, it was a working farm and it had a large detached barn which Mr Merlin could convert to a workshop.
With their accountant they attended the auction in May 1982 and with little competitive bidding they purchased it for £43,000 plus £2,000 for some 35 acres of grazing land for the 20 breeding ewes which they also bought. The price of the farm was substantially less than they feared they might have to pay.
Thereafter, in the same month, the plaintiffs put Mountain Ash into the hands of at first two, then three and finally four estate agents. The original asking price was £65,000. In July this was reduced to £62,000. In December it was again reduced to `offers over £59,950′ and in March 1983 to £55,000. Quite a number of people came to look at the house, some more than once, but no offers were made until October 1983.
In September 1982 completion on Grass Gars Farm took place and this was financed by means of a bridging loan from the plaintiffs’ bank.
In about April 1983 a team from Yorkshire Television embarked on the making of a documentary to be entitled,`Sellafield-the Nuclear Dustbin’ and they persuaded the Merlins to take part. The Merlins and their children, and Mountain Ash, featured quite prominently in the film, which was broadcast on 1 November 1983. It must have been obvious to the plaintiffs that once broadcast the documentary would be unhelpful in their efforts to sell the house, and so it proved.
I should mention here as an important part of the chronology that Dr Philip Day, senior lecturer in chemistry at Manchester University and an expert witness on behalf of the plaintiffs, also played a part in the documentary. He was shown accepting for analysis another Hoover bag of house dust from Mrs Merlin. That was shot in April and about a month later, in May 1983, Mrs Merlin sent Dr Day a third bag. The results were analysed for radioactivity and the average figures derived from both bags are those pleaded in para 4(b) of the statement of claim.
In June or July 1983 the plaintiffs consulted Messrs Cameron Markby on their legal position vis-à-vis the defendants and they were advised, inter alia, that they were under a legal obligation to disclose to prospective purchasers the facts so far as then known relating to contamination of the house. They said that this reinforced the moral obligation which they felt to make such disclosure. I think it is understandable that they did not, in fact, make such disclosure to any of the potential buyers who merely looked at the house between May 1982 and September 1983 but in late September or early October 1983, a Mr Hayward, a local solicitor, and his fiancée became seriously interested and offered £53,100 for the property, including carpets and curtains, and together with the adjacent building plot.
The Yorkshire Television documentary was to be shown on the `First Tuesday’ slot on 1 November and so the Mountain Ash contamination would then become public knowledge. There is some doubt as to the exact moment when Mr Hayward and his fiancée learnt of it, whether disclosed by the plaintiffs before the broadcast or whether only as a result of the broadcast, but on balance I accept the plaintiffs’ account of this, namely that as Mr Hayward was almost at the point of agreeing unconditionally to purchase they did disclose the facts to him prior to the broadcast. I do not think it is of much importance because, accepting the plaintiffs’ account, the discharge of their obligation of disclosure was, in any case, also recognising the inevitable that in a matter of two or three weeks Mr Hayward and his fiancée were almost certain to learn the true facts.
To begin with, they were apparently unconcerned but after the broadcast they withdrew from the negotiations, not specifically because of the contamination, but because Mr Hayward was concerned at his ability to resell the house at a future date. Another potential purchaser, a Mr Nuttall, was also apparently prepared to buy at around £53,000 but he too withdrew after the broadcast.
By this time, if not before, the plaintiffs’ bank was becoming restive. The bridging loan for the purchase of Grass Gars Farm remained outstanding. The expected repayment from the sale of Mountain Ash had not materialised, and the plaintiffs had to realise their other Ravenglass asset, the post office and general store, in order to discharge or reduce the loan. The agreement for sale was concluded in November 1983, although completion was delayed until May 1984 for reasons which are not relevant.
Mr Merlin transferred his workshop to one of the barns at Grass Gars Farm and, as I understand the position, he lived there and continued to attend to his increasingly successful operation of building exhaust systems. The children were now at day school at Gosforth and they and their mother continued to live at Mountain Ash, joining Mr Merlin at weekends. After completion of the sale of the post office the whole family went to live at Grass Gars Farm in May 1984 and Mountain Ash was shut up.
By now the plaintiffs were falling further behind in their interest payments to the bank and the bank were putting increasing pressure on them to sell Mountain Ash. It was accordingly put up for auction in November 1984. The auction was poorly attended (apparently television cameramen and the press outnumbered the public) and Mountain Ash (but without the building plot which the plaintiffs retained) was sold for £35,500 to a Sellafield employee who was unconcerned at the now much publicised contamination of the house and expressed the view that he had got a bargain.
That is a summary of the main facts and I now turn to consider the issues, but adding two factual concessions made by the defendants for the purposes of this action.
The defendants accept, first, that the levels of activity in Mountain Ash were as pleaded in para 4 of the statement of the claim, and that those levels can be assumed to have been present at all times during the plaintiffs’ occupancy. Second, the defendants accept that the radionuclides so found in Mountain Ash originated in waste emitted from the Sellafield pipeline.
So the essential nature of the plaintiffs’ claim is this: it is for the financial loss resulting from their decision to sell Mountain Ash. That decision was based on the advice given to them by the late Mr Thompson as to the level of contamination in the house emanating from the defendants’ site and their perception of the consequent increased risk to health, particularly the health of their children were they to remain in Mountain Ash for any substantial period of time.
The plaintiffs’ primary argument is that, as there is a linear relationship between exposure to radionuclides and risk to health, the ingress into the plaintiffs’ house of radionuclulides from the defendants’ plant ipso facto constitutes damage to property within the meaning of the 1965 Act and entitles the plaintiffs to compensation. Although he seemed reluctant to qualify this by the de minimis principle, counsel for the plaintiffs accepted that there must be a limit below which the damage was so trivial as to attract no compensation. But, subject only to this, his primary case is the simple one set out above.
The defendants’ primary case is that as there is no question of personal injury or physical damage to the fabric of the plaintiffs’ property, there is no breach of statutory duty and the plaintiffs have no claim to compensation under the 1965 Act. They say that apart from a minor claim for general damages for annoyance and inconvenience the plaintiffs’ claim is in respect of economic loss consequent on their decision to leave Mountain Ash, that on the plaintiffs’ own case that decision was taken because of the plaintiffs’ perception that to remain in the house would be to expose themselves, but more particularly their young children, to an additional risk of future physical injury. The defendants say that the 1965 Act provides for compensation in respect of proved personal injury or damage to property: it does not provide compensation in respect of the risk, or increased risk, of either; it does not compensate for mere economic loss, which is the essence of the plaintiffs’ claim and the presence of radionuclides in Mountain Ash does not of itself constitute damage.
My initial reaction to the defendants’ primary case was unfavourable: it appeared to limit drastically the ambit of the compensation provisions of the 1965 Act, and to give no remedy for a case such as the present which might be the typical result of an accidental emission of radioactive material from a nuclear site. Furthermore, although this is by no means clear and the point was not argued, it may be that a plaintiff’s only remedy is confined to a claim for statutory compensation under s 12 of the Act. But I am convinced by counsel’s arguments that the defendants’ approach is right. There are several reasons.
First, I refer to the terms of the Vienna Convention on Civil Liability for Nuclear Damage (Vienna, 21 May 1963; Misc 9 (1964); Cmnd 2333). It is not in dispute that the 1965 Act was passed in order to fulfil the United Kingdom’s obligations under the Vienna Convention.
I was referred in some detail to the Vienna Convention on which reliance was placed by both parties. The preamble recites that:
`THE CONTRACTING PARTIES HAVING RECOGNISED the desirability of establishing some minimum standards to provide financial protection against damage resulting from certain peaceful uses of nuclear energy,… have agreed as follows …’
Article II (and I will return to art I in a moment) provides:
“1. The operator of a nuclear installation shall be liable for nuclear damage upon proof that such damage has been caused by a nuclear incident … (b) involving nuclear material coming from or originating in his nuclear installation, and occurring …’
and then four qualifying matters are set out which I need not read. Article IV (1) provides:
`The liability of the operator for nuclear damage under this Convention shall be absolute.’
Article IV (3)(b) provides:
`Except in so far as the law of the Installation State may provide to the contrary, the operator shall not be liable for nuclear damage caused by a nuclear incident directly due to a grave natural disaster of an exceptional character.’
Article V entitles the contracting parties to limit the operator’s financial liability in respect of any one nuclear incident subject to a minimum figure. Article VI provides for limitation periods for the bringing of claims but provides that the contracting parties may extend these periods in certain defined circumstances. Article VIII provides:
`Subject to the provisions of this Convention, the nature, form and extent of the compensation, as well as the equitable distribution thereof, shall be governed by the law of the competent Court.’
Article I contains definitions. I need only refer to the following:
`(g) “Radioactive products or waste” means any radioactive material produced in, or any material made radioactive by exposure to the radiation incidental to, the production or utilisation of nuclear fuel, but does not include radioisotopes which have reached the final stage of fabrication so as to be usable for any scientific, medical, agricultural, commercial or industrial purposes.
`(h) “Nuclear material” means-(i) nuclear fuel, other than natural uranium and depleted uranium, capable of producing energy by a self-sustaining chain process of nuclear fission outside a nuclear reactor, either alone or in combination with some other material; and (ii) radioactive products or waste …
`(k) “Nuclear damage” means-(i) loss of life, any personal injury or any loss of, or damage to, property which arises out of or results from the radioactive properties or a combination of radioactive properties with toxic, explosive or other hazardous properties of nuclear fuel or radioactive products or waste in, or of nuclear material coming from, originating in, or sent to, a nuclear installation … (ii) any other loss or damage so arising or resulting if and to the extent that the law of the competent court so provides …
`(l) “Nuclear incident” means any occurrence or series of occurrences having the same origin which causes nuclear damage.’
The pattern of the Vienna Convention is clear. In accordance with the preamble referring to the establishment of minimum standards, the Vienna Convention imposed obligations on the contracting parties in respect of certain matters, but left it to the parties to take their individual decisions in respect of others. Accordingly, and as an example, the 1965 Act has extended the minimum limitation period required by the Vienna Convention, and has imposed liability in respect of unforeseeable natural disasters, as permitted by art IV, para 3(b).
But most significant for present purposes the 1965 Act has not extended liability for nuclear damage beyond the requirements of para (k)(i) of art I.
Section 7(1) of the Act imposes a duty on the licensee to secure that-
`(a) no such occurrence involving nuclear matter as mentioned in subsection (2) of this section causes injury to any person or damage to any property of any person other than the licensee … (b) no ionising radiations emitted … (ii) from any waste discharged (in whatever form) on or from the site, cause injury to any person or damage to any property of any person other than the licensee.’
Section 26 of the Act provides that `injury’ means personal injury and includes loss of life. `Damage’, more particularly `damage to … property’, is not defined.
Thus, read with the qualifications set out in sub-s (2), sub-s (1) of s 7 of the 1965 Act covers the various alternatives which are contained in para (k) (i) of art I of the Vienna Convention.
The Act therefore provides as required by the Vienna Convention for compensation for loss of life, personal injury or damage to any property of any person other than the licensee, caused by breach of statutory duty. It does not provide for compensation for `any other loss or damage’ as it could have done in accordance with art 1(k) (ii).
`Personal injury or damage to property’ is a familiar enough phrase and in my judgment it means, as it does in other contexts, physical (or mental) injury or physical damage to tangible property. The word `property’ alone may well have a wider meaning in some contexts (eg in testamentary dispositions, or in the field of company law, where the expression `all the company’s property’, and so on, will extend to incorporeal property) but where it is used in the Vienna Convention and the 1965 Act it does not in my judgment extend to incorporeal property or property rights. The plaintiffs’ argument that `property’ included the air space within the walls, ceilings and floors of Mountain Ash, that this has been damaged by the presence of radionuclides and the house rendered less valuable as the family’s home, seems to me to be too far-fetched.
The 1965 Act contains compromises. The principal compromises are these. It imposes absolute liability on the licensee irrespective of negligence, and a greatly extended period for the bringing of claims; no doubt because, typically, the various types of cancer that can arise may take many years to manifest themselves. To balance this extended exposure of the licensee and his strict liability, there is introduced a maximum money liability in respect of any one occurrence (s 16) and, in my judgment, a restriction on the nature of the harm which qualifies for compensation, namely injury, including fatal injury, to the person or physical damage to tangible property.
It is true, and the evidence of Dr Phillips made this plain, that the dose required to produce any detectable damage to the molecular structure of inanimate objects such as building materials, furniture etc is enormous, infinitely greater than the level of radionuclides present in the plaintiffs’ house. If `damage to property’ is restricted to physical damage to tangible property, it might be argued that in reality this is so unlikely to occur that there is really nothing to which the phrase would apply. But one obvious answer given by counsel for the defendants is that it would cover injury to livestock, which is probably just as likely to occur in the vicinity of a nuclear installation as injury to humans, and would clearly be an important head of compensation to local farmers.
I reject the argument that contamination of the plaintiffs’ house per se amounts to damage to their property. All that such contamination as was admitted in this case amounts to is some increased risk to the health of its occupants. The 1965 Act compensates for proved personal injury, not the risk of future personal injury. If the Act were concerned with risk, a number of very difficult questions would arise. For instance, risk to whom? Is it the plaintiffs’ health risk that has to be evaluated, or,(and this was their concern) that of their children? Or is it that of potential purchasers of the house? The degree of risk depends, among other factors, on the length of time over which the individual is exposed to radioactivity. Is the court to attempt to forecast how many years each individual concerned is likely to live in the house?
Again, counsel for the plaintiffs conceded that there must be a cut-off line of contamination below which no compensation would be payable. How is the court to judge where this should be drawn? The Act provides no guidance. Is compensation to depend on whether plaintiffs’ reaction to the advice they happened to receive was at least a reasonable response? Or is the test the reaction of a reasonable person in their position, which is not necessarily the same thing? Or is it a wholly objective test, based not on the particular advice given to the particular plaintiffs, but on the actual level of risk as assessed by the court as a result of expert evidence? In the present case, and because my construction of the statute may be wrong, I read the reports of twelve experts, supplemented by a vast mass of supporting documentation, and I heard oral evidence from nine of them, extending over many days, in order to attempt to evaluate the actual increased level of risk in the plaintiffs’ house.
Other questions would arise. The selection above is far from exhaustive. I therefore conclude on the wording of the 1965 Act, and in the context of the Vienna Convention, that damage to property has the limited meaning contended for by the defendants and that the facts of this case do not entitle the plaintiffs to statutory compensation.
I have noted above what seems to me the deliberate choice of Parliament not to extend the liability of the operator beyond the obligatory requirements of art 1(k) (i) of the Vienna Convention. Counsel for the plaintiffs argued that this was unnecessary because the jurisprudence of the English court would fill the gap and extend to the facts of this case. I do not agree. Although this is not a case founded on negligence, I can see no reason why compensation under the 1965 Act should extend to pure economic loss when such loss would not be recoverable at common law.
No special relationship existed between the defendants and the plaintiffs, who were merely part of the general public living in the Sellafield area, such as would give rise to a duty of the Hedley Byrne type, so it seems to me that any such claim at common law must have failed (see Hedley Byrne & Co v Heller & Partners  2 All ER 575, AC 465). See, for example, the judgments of the Court of Appeal and particularly Bingham LJ in Simaan General Contracting Co v Pilkington Glass Ltd (No 2)  1 All ER 791, QB 758.
A further argument in favour of the defendants’ construction is this: I bear in mind the dangers of acceding to a `floodgates’ argument, nevertheless I incline away from a construction of the Act which would result in the operator being in continual breach of the statutory duty to a possibly very large number of people. It is in the nature of nuclear installations that there will be some additional radionuclides present in the houses of the local population, over and above the naturally occurring radionuclides to which every one of us is continually exposed. If the mere presence of this additional source is enough to constitute damage under s 7, the result would inevitably be that the defendants were indeed in breach of their statutory duty every day to possibly thousands of citizens, each of whom would have a claim for compensation.
Whether there would in fact be an award in every case would then involve a long and complex inquiry into the particular facts, such as has been carried out in this case, to ascertain objectively whether the resulting additional risk did or did not reach a level justifying a monetary award, and with no guidance as to what that level should be.
Another reason why in my view the Act has no application here is the wording of s 7, which imports the element of causation. For there to be a breach of statutory duty, carrying with it a right to compensation, the plaintiff must establish that he has suffered injury or damage to his property caused, and I emphasise the word `caused’, by either an occurrence involving nuclear matter (s 7(1)(a)) or an emission of ionising radiations on or from the site (s 7(1)(b)).
Although there was some dispute whether the present facts fell within para (a) as well as para (b), I am satisfied that this is a para (b) (ii) case, but it does not appear to matter: in either case there must be cause and effect. The mere presence of ionising radiations within the plaintiffs’ property emitted from waste discharged from the site is not enough to constitute a breach of statutory duty. There must be consequential damage. The radionuclides with which this case is concerned, plutonium isotopes and americium, are alpha emitters. These cannot do any significant damage to persons or property externally, but when inhaled, ingested or otherwise enabled to enter the body they may induce cancers, but, of course, will not necessarily do so. The presence of alpha emitting radionuclides in the human airways or digestive tracts or even in the bloodstream merely increases the risk of cancer to which everyone is exposed from both natural and artificial radioactive sources. They do not per se amount to injury.
I therefore conclude that the facts of this case do not disclose any breach of duty by the defendants and the action must fail on that ground.
[His Lordship then made various findings of fact which do not call for report.]