[2023] UKUT 201 (LC)

The facts set out here are relevant to both claims, and are not in dispute except where the contrary is stated. Findings of fact in this Part are made both by the County Court and by the Tribunal.

While Langley Mill is not specifically named as one of the three mills on the Colne in the Doomsday Book, there is no doubt that a mill has been present on the site for some centuries. It was used for the grinding of grain and the fulling (finishing) of textiles and is one of a series of mills on the Colne. It lies about two miles downstream (east) of the Essex town of Halstead, and three miles west of Earls Colne.

A water mill is a means of harnessing the energy of a river. The amount of energy required from a water mill depends on the use to which it is put – grinding corn using a heavy stone needs more energy than flax and threshing mills – but in any event it is generally necessary to generate a head of water to drive the wheel. (Footnote: ¹) A common way to so do is to divert the natural flow of the river into a mill race at a higher level than the natural river floor. The race has a shallower gradient towards the mill (but still having a fall to ensure the flow of water) than the river, generating a head of water at the wheel before the flow returns to the river at a lower level. The natural river channel remains as a means to prevent flooding and damage to the mill machinery. Simple and effective, but the design means that if the natural energy which would be used to drive the wheel is not so used and is instead released along the channel, an accelerated flow velocity leads to more stream power which can erode and scour the riverbed or banks.

Langley Mill was set up in this way. The river bed is 1 – 3 metres above the valley floor as it approaches the mill to form a mill race upstream, to the west of the building, which is about 10-11 metres wide but owing to vegetation is restricted to around 8-9 metres, and a mill pool to the east. Some 40 metres upstream, on the north side of the mill race is the entrance to what we shall refer to as the channel. The channel flows north then north-east for about 40 metres (which the experts termed “Reach 7a”) before turning through almost 90 degrees to the south-east (“Reach 7b”) to join the natural valley floor and then rejoin the mill pool about 20 metres downstream of the mill. The total length is some 155 metres. The general arrangement is shown on the plan below.

There are two culverts beneath the mill. One is 1.5m wide and has a sluice gate at its inlet which can be raised or lowered using a rack and pinion gear. The sluice is undershot – when raised the water flows underneath, although in flood conditions water can flow over the gate. Operation of the gate affects the levels of water in the mill race, the channel, and the mill pool. The second culvert is about 2.5m wide and is simply an open concrete weir. As we shall explain later, the relative heights of this weir and the point where the channel joins the mill race are important.

On the west and east sides of the mill building there is decking across the river; thus a walk round the house from the drive to the south-east takes one across the river on decking, along the north bank, and back across the river on decking. The sluice gate and weir can only be accessed via the decking. A small area of decking on the west (upstream) side of the building is positioned beneath the building and over the sluice gate culvert. In the 1964 deed referred to below it is pictured in the diagram and labelled “open decking over”. It is possible to stand on the “open decking over” to operate the gate, although (as we saw on our visit) it is equally possible to operate the gate without doing so.

Major George Courtauld was the owner in the mid-1960’s, the mill having been in his family’s ownership for more than a century. On 22 May 1964 the Major entered into a deed (“the Deed”) with the Essex Water Board, under which the Board acquired rights in relation to the control of water around the mill; those rights are now exercised by the Agency as the statutory successor to the Essex Water Board. The Deed is described in more detail later.

Until around 2001, water ran into the channel from the mill race over an earth bank (approximately where the “new side weir” is shown in the plan above). By 2001 the bank was suffering from erosion, such that there was a depression in the middle, causing the bank to fail. The Agency carried out a programme of works to replace the earth bank, comprising a concrete inlet weir and apron, curved brick side walls and below the apron a stone-filled gabion mattress. It is common ground that the mattress has now failed, with the cages deteriorating and stones being carried down into the channel. We saw as much on our view of the site.

Mr Gould thought that the works had been carried out in 2002 but the only witness that could speak with any direct knowledge of the works was Mr Martin Willis, who was part of the team that carried them out, and we are satisfied from his evidence that they were carried out in the summer of 2001. At that time, the owner of Langley Mill was a Mr Eddy Shah. Mr Willis said, and we accept, that Mr Shah welcomed the works. We heard evidence from Ms Natasha Manning from the Agency, who produced an internal Agency memo dated 6 February 2001 which recorded that an inspection of the mill had taken place on that date, that Mr Shah’s concerns had “been resolved” and that “a plan of action decided upon”. Ms Manning had spoken to Mr Barry Scott, another of the 2001 works team, who told her that Mr Shah said that too much water was going into the channel, and not enough into the mill race, causing a smell. While Mr Scott did not give evidence, it seems more likely than not that this was right – it is common ground that the earth bank had failed, with a central dip caused by erosion, which can only mean more and not less water entering the channel. (Footnote: ²)

There is a dispute, which we deal with below, about the height at which the Agency set the level of the new weir, relative to the culverts under the mill, and as to whether it was wider than the old earth weir. Mr Gould believes that the purpose of the works was to divert more water into the channel to alleviate the Agency’s requirement to attend the mill regularly to operate the sluice gate.

Mr Gould made two contentions about the works. First, that they were part of a planned flood relief scheme for Halstead, following the town’s flooding on 21 October 2001. Secondly, that they were designed to make more water flow around the channel so that the Agency would not need to attend to open the sluice gate in times of potential flooding. As for his first contention, we are satisfied that the works had already been completed before the Halstead flooding, based on Mr Willis’s evidence and Ms Manning’s evidence that the initial engineering appraisal for flood alleviation works was not completed until August 2002.

The Agency disclosed a table prepared by Ms Manning contained in an email dated 29 July 2022 in which she listed any Agency employee who might have been involved with Langley Mill. The involvement of Mr Gary Cockett, now retired, is described as “initiated withdrawal of (sic) mills programme in Essex, requested modelling and asset inspection carried out in ~2016. Has met Claimant on site previously, until complaint was filed.” An Agency spreadsheet dated 24 October 2018 had also been disclosed, listing mills on various rivers, and against which there was a forecast date by which the current level of operation and maintenance would cease. Mr Gould contended that the Agency’s intention to withdraw from the mills had started by the early 2000’s. He referred to the example on the spreadsheet of Tinkers Lane on the River Stour against which was noted “adjacent weir constructed in 1990’s to alleviate need to visit and open gates”.

Ms Manning was not employed by the Agency until much later, but we accept her evidence that the programme did not commence until around 2011/12 – at any rate much later than the 2001 works. In the same document the date of cessation of the current level of operation and maintenance was forecast to be 31 December 2019. For these reasons we do not accept Mr Gould’s second contention.

When Mr Gould purchased the mill in 2011, the vendor told him that she had a good relationship with the Agency, which responded promptly when she raised any concerns. Its Field Team would attend the site at least monthly and discuss any issues she had; they would also carry out regular bank maintenance, clearing the river and channel, maintain the sluice gate and operate it when required, and repair the gangway and decking as necessary.

This changed shortly after Mr Gould bought the mill. While the formal withdrawal from mills programme was not enacted until much later, the Agency began to scale back its operations at the mill. Ms Manning explained that the pressure of constrained budgets and limited staff resources meant that the Agency began to prioritise areas where it could prevent flooding or deliver the greatest flood risk management benefit. Langley Mill was a site where the control measures did not provide any wider public benefit, and there was no compelling justification for the use of public money to continue to maintain the banks of the channel or mill pond at the mill. We accept Mr Gould’s evidence that the level of the Agency’s involvement as described to him by the vendor did not continue in his ownership.

Since 2001 the Agency has carried out further works in three tranches. In 2006, gabions were installed to the north and south banks of the mill pond, largely to prevent further erosion which was threatening the integrity of the vehicular drive; in 2012 further gabions were installed on the southern bank of the pond; in 2016 willow spilings were installed to the northern bank of the pond and to the eastern end of the channel banks. By 2019 some of these had died, so the Agency installed aqualogs and a geotech membrane. Mr Gould disputed that work was done in 2012, but Mr Simon Hipkin gave evidence for the Agency that he was the site foreman for the works in 2012 and we accept his evidence.

We do accept Mr Gould’s evidence that from Autumn 2011 he was in contact with the Agency endeavouring to persuade it to continue the previous maintenance programme. From 2014 to 2017 this involved informal discussions with local management, escalating to the Eastern Region area management, and then escalated to the highest level. The issues were not resolved, and in due course Mr Gould initiated proceedings in the Court and in the Tribunal.

It is common ground, and was evident during our site view, that the gabion mattress installed in 2001 has failed. The Agency accepts responsibility for repairing it (pursuant to the Deed), and for any consequent erosion caused by its failure. It is also common ground that there has been erosion in the channel. The extent to which the failure of the gabions was the cause of that erosion is, as we shall see, in issue.

The Deed, dated 22 May 1964, recorded that Major Courtauld, as owner of Langley Mill, was entitled to control the flow of water in the River Colne where it passed through the mill subject to the statutory powers of the Essex River Board but agreed to grant to the Board rights in relation to the control of water in the River.

By clause 1, and “in consideration of the covenants by the Board hereinafter contained” the Major granted to the Board:

“(a)

The right to control water in the River Colne at Langley Mill … in order to achieve such level as the Board may from time to time consider to be necessary or desirable.

(b)

The right to carry out such repairs or alterations to or reconstruction of the existing flood gates adjacent walls and inverts grass spillway and millhead bank at Langley Mill… shown on the plan annexed hereto and to construct any new works which the Board may from time to time consider to be necessary to supplement or replace and of the above mentioned works due regard being paid to the interests of the owner.

(c)

The right for the Board its employees agents and contractors with or without plant or vehicles at all times to have full access to the said flood gates grass spillway and millhead bank and other works hereinafter mentioned and to any new works constructed by the Board hereafter for the purposes of operation maintenance repair or reconstruction.”

The Board covenanted at clause 2 that it would:

“(a)

Operate the said flood gates and any control works which it may hereafter construct as it may from time to time consider to be necessary or desirable and maintain the same in good working order

(b)

Carry out at its own expense such works of repair or reconstruction of the said flood gates grass spillway millhead bank the brick walls up to ground level adjacent to the flood gates the inverts of the mill-race and any new works which it may construct as it may from time to time consider to be necessary or desirable.”

The Deed contains a plan showing the layout of the mill, the mill race and the channel, and diagrams showing a cross-section of the sluice gate and the weir beneath the mill, and an aerial view of the mill building, with decking to east and west and the “open decking over” beneath the building and on the downstream side of the sluice gate.

It is agreed between the parties that the fixed crest weir (beneath the mill), the sluice gate and the concrete weir at the entrance to the channel are all “control works”under the 1964 Deed, so subject to the maintenance obligation in clause 2(a). The Agency accepts that the gabion mattress immediately downstream of the side weir is part of that control work, and also accepts that it is responsible for maintaining the “open decking over” as marked on the plan, which is the small section of open decking adjacent to the sluice gate.

In April 2021 Mr Gould brought proceedings in the High Court – which were later transferred to the County Court – seeking a series of declarations. The particulars of claim were amended by agreement in the course of the proceedings, and the issues the court now has to decide are:

Is the decking within paragraph 2b?

The Particulars of Claim state that the Agency is obliged to maintain the “timber decking, over decking and gangway areas” on the plan attached to the Deed. As noted above, the diagram depicts the decking on either side of the building as well as the “open decking over”. The Agency accepts that it is obliged by clause 2b to maintain the “open decking over”; it is worth noting that that small section of decking, while it is not essential as a stance for the person operating the gate, certainly has no other function.

But the Agency denies any responsibility to maintain the rest of the decking. It is not referred to anywhere in the wording of the Deed. Clause 2b refers specifically to the existing features in 1964 for which the Agency took on responsibility (albeit only insofar as it considered it necessary or desirable to repair or maintain them). And the rest of the decking is not within “any new works which [the Agency] may construct”.

Mr Bates argued that there is an implied term that the Agency will repair the decking.

The principles on which terms may be implied into a contract are well-known and are not in dispute. The authority is Marks & Spencer plc v BNP Paribas Securities Trust Co (Jersey) Ltd [2015] UKSC 72, where the Supreme Court re-stated the principle that the question is not whether it would be reasonable to imply a term, nor whether it would be fair, but whether it is necessary to do so “in order to make the contact work” (paragraph 77) – or, in the older phrasing, in order to give business efficacy to the contract.

There is no basis for the implication of a term that the Agency will maintain the decking, aside from the “open decking over”. Major Courtauld granted to the Agency’s predecessor in clause 1(c) “full access” to the works mentioned in the Deed. On the assumption (of which more will be said later) that Mr Gould is bound by that grant, he has to maintain the decking insofar as that is necessary to give the Agency the access to which it is entitled. All the Agency needed was a grant of access; if the decking falls into disrepair and Mr Gould does not maintain it the Agency can enforce its right and thereby require him to repair it or to provide some other means of access. Mr Bates’ argument that there is a “plain and obvious gap” in the Deed, such as that identified in JN Hipwell v Szurek [2018] EWCA Civ 674 is unsustainable.

It is argued that the fact that the Agency has repaired the decking in the past indicates the intentions of the parties to the Deed. Whilst the conduct of the parties may be an aid to construction where a document is ambiguous, there is no ambiguity here; in any event it seems that the Agency before 2011 or so went beyond its obligations in dealing with Mr Gould’s predecessor in title in a number of respects, and there is nothing to indicate that anything it may have done to the decking in the past was anything other than voluntary.

It is also suggested that the obligation to maintain the decking is required as consideration for the grant of access. That is without foundation. This is a deed, so no consideration is required in any event; insofar as the deed does expressly contain consideration then there is no need, in this or any contract, for a specific item of consideration to match a specific grant such as the access in clause 1(c).

The decking, other than the “open decking over”, is not within the Agency’s obligations in clause 2(b) and no term can be implied in the Deed that the Agency will repair it.

Is the channel a “control work” within clause 2(a)?

The second practical point that Mr Gould asks the court to determine is that the channel is among the “control works” that the Agency is obliged to maintain under clause 2(a).

The channel was not made by the Agency and it is difficult to see how it can fall within “any control works which it may hereafter construct”. The term “control works” is not defined in the Deed; as Ms Daly (who presented the argument for the Agency in the County Court claim) points out, clause 1(a) is helpful here in that it grants the right to control the water in the River Colne, and control works may be supposed to be structures designed to help with that. The Agency accepts that the side weir and the gabion mattress are control works; the construction work done in 2001 was done in accordance with the Deed.

Mr Bates’ argument is that the side channel has “become an integral part of the system”, and he relies upon the expert evidence of Dr Brookes to the effect that the side weir, the gabion mattress and the channel “are all integral parts of the same water control measure”.

Dr Brookes is not a witness in the county court action and there is no permission to adduce expert evidence here. Nor should there be; the action is about the construction of the Deed. Clause 2(a) is very specific; it refers to the flood gates and to later works; there is no basis on which natural or other physical features can be included within the clause because of their connection to such works. In any event the channel itself does not control water levels; levels are controlled by the side weir, the mill weir and the sluice gate, and the side channel simply receives water.

The Agency is not obliged by the Deed to maintain the side channel.

Does the Deed have perpetual effect?

The third declaration sought by Mr Gould is that the Deed cannot be brought to an end.

No-one is seeking to do so. The request to the court for a declaration that the Deed continues in perpetuity arises from an anxiety that the Agency may seek to give notice to terminate the Deed – an anxiety brought on by a remark by one of the Agency’s staff in correspondence.

Mr Bates in his skeleton argument addresses this issue by arguing that clause 2(b) remains part of the Deed. The Agency has not argued that it does not and it is difficult to see why Mr Bates puts his argument this way. The Agency in its pleaded response observed that the obligation to carry out maintenance in clause 2(b) is only to do so as the Agency may from time to time consider it necessary or desirable. It filed a witness statement by Mr Aaron Scott, its Operations Team Leader in the Essex Flood and Coastal Risk Management Department; he said that the Agency does not consider it necessary or desirable to maintain the structures listed in clause 2(b), because it takes the view that the arrangements at Langley Mill make little contribution to protecting downstream and upstream communities from flooding.

Subject to the contractual requirement to act rationally (see Braganza v BP Shipping Limited [2015] UKSC 17) the Agency is entitled to take that view, and that has no bearing on the construction of the Deed; this is not an action for breach of contract. In argument at the hearing the point in issue was clearly not what the Agency is choosing to do in pursuance of its obligations under the Deed but whether or not the Deed could be terminated by either party giving reasonable notice to the other.

Mr Bates says that the Deed was clearly intended to be perpetual; certainly its wording gives no indication of any limitation in time. He argues that the Deed has not been frustrated; but no-one is suggesting that it has. He argues that the Agency is wrong to put upon Mr Gould the responsibility for maintaining and operating the flood gates for the amenity of others and to prevent flooding, and that it is failing to act in accordance with the common purpose of the parties to the Deed which was for the Board (and now the Agency) to use the control works to fulfil its responsibility; but this is akin to an argument about breach of contract or perhaps about public law, and either way is not relevant to the construction of the Deed.

Essentially the application for a declaration that the Deed cannot be brought to an end is a pre-emptive move; Mr Bates urges the court to make a declaration, rather than leaving the parties to litigate afresh if and when the Agency decides to try to bring the Deed to an end.

The Agency argues that there is simply no need for a declaration; Ms Daly points out that the Agency has not sought to bring the Deed to an end and is observing its obligations (hence the promised repair of the gabion mattress). But if the court is minded to make a declaration she argues that this is the sort of arrangement in which the court will readily imply a term that the contract can be brought to an end on reasonable notice.

The court declines to make a declaration for two reasons.

First, there has been little or no analysis by the parties of what the Deed is. Ms Daly thought it was a contractual licence, but that is hard to accept. It is a Deed; it expressly “grants” certain rights. Mr Bates said it is a statutory easement. Neither party had really delved into full argument about what the Deed is and whether the obligations within it do bind the successors in title to the original parties, and without that it would be premature to make a decision about whether it can be brought to an end.

Second, the only way to terminate the Deed – absent a frustrating event – would be by implying a term, and at present there does not seem to be any particular reason to do so. The Agency does not point to something in the present circumstances and argue that because of it there is a need to imply a term about termination by notice in order to give business efficacy to the contact. But the court is not prepared to say that that would not be possible in the future.

It is not appropriate for the court to make a declaration now that no term could be implied that would enable either party to terminate, when that would bind the parties for ever, regardless of what might happen in the future. Either party might come to regret it.

Accordingly the court declines to make a declaration as to whether there is an implied term in the Deed that it can be terminated on reasonable notice.

We now turn to Mr Gould’s claim for compensation under paragraph 5 of Schedule 12 to the Water Resources Act 1991, both for costs he has already incurred in repairing the bed and banks of the overflow channel and for costs to be incurred in the future. Costs already incurred are said to amount to £1,775; costs to be incurred are estimated at £12,230 for urgent work and further work estimated to cost £34,000. The Tribunal was not told how much of what is claimed will be rendered unnecessary by the Agency’s commitment to repair the gabion mattress and the erosion its failure has caused.