#19876 - Harm To Property - Tort Law

Harm to property (note: part of negligence)

This is where D performs an act which results in C’s property being damaged. C has to show two main things, then the courts will normally find a duty of care was owed

1. C had sufficient interest in the property (P) at the time C caused harm to it

2. It was reasonably foreseeable D’s conduct would result in property like P being harmed.

What’s property?

Tangible things. The law doesn’t protect damage to intangible property here – mere foreseeability that D acting a certain way will damage C’s intangible property isn’t enough for a duty (Esser v Brown).

What’s ‘sufficient interest’?

Straightforwardly, it means C has to have a legal interest in P or be in possession of P – Leigh & Sillavan v Aliakmon Shipping. The CA’s ruling in Shell UK v Total UK has added another category:

• D’s duty will also have been owed to anyone for whom P was held on trust at the time of the harm

• But anyone for whom P was held on trust at the time of the harm will not be able to sue in their own right for losses unless they make the legal owner of P at the time of the harm a party to their claim against D.

This has come under heavy academic fire:

1 - Who asked for this?

Should the common law get involved with protecting a trust beneficiary? It’s not clear the common law can, either, without unacceptably disrupting and confusing existing rules on the matter. That last reason is one which lead the CA in MCC Proceeds v Lehman Bros to deny a claim in this sort of scenario.

2 – Is the beneficiary the ‘real’ owner at the time of the harm?

If A holds property for B on trust, B doesn’t really have an interest in the trust property. B only has rights in or against the rights A holds over the property. If this is right, Shell’s claim should not have been allowed because they didn’t have enough interest in the property. All they would have suffered was pure economic loss, which would not have been recoverable without overturning the current rules.

3 – Why make them a party?

It’s not clear why, if Total had owed Shell a duty of care, Shell had to bring their company holding the property on trust for them into the proceedings. This was to get round the Aliakmon Shipping case, but it would have been better for CA to comply with the rules of precedent and dismiss Shell’s claim.

What counts as ‘harm’?

Clearly destroying or damaging counts. The definition in Hunter v Canary Wharf was when a property undergoes a physical change making it less useful or valuable. So, in that case, excessive dust on a carpet counted. In Blue Circle Industries v MoD, the CA was willing to hold mixing plutonium with soil so it couldn’t be removed counted. In Pride & Partners v Institute of Animal Health, Tugendhat J held farmers who’s pigs became overweight less valuable had a good chance of succeeding with a property damage claim.

It seems that irretrievably losing someone’s property also counts. In The Nicholas H, cargo lost at sea counted.

But, say someone manufactures shirts to sell at a concert. It says ‘I was here – 12^th April’. Because of Driver’s carelessness, the shirts don’t arrive at the concert venue to be sold. The person tries to later sell them over the internet, but no one’s interested. They probably don’t have a claim for property damage because...