Diminution in Value of Property Caused by Encroachment of Japanese Knotweed is a Recoverable Loss, Court of Appeal Rules

The Royal Institution of Chartered Surveyors’ report on Japanese knotweed and Residential Property (2022) discusses how the stigma surrounding Japanese knotweed is disproportionate to the challenges it presents in reality. However, it is undeniable that the notorious weed can cause physical damage to land and buildings which, in turn, affects the value of property.

The Court of Appeal has recently ruled in the case of Davies V Bridgend County Borough Council that diminution in the value of property, caused by the encroachment of Japanese knotweed from neighbouring land is a recoverable loss. This is likely to be a welcome decision by many property owners who each year look to seek damages in connection with their property falling victim to Japanese knotweed.

Facts of the case

The appellant, Mr. Davies, owns a property in South Wales, which adjoins land owned by the respondent, Bridgend County Borough Council. Mr. Davies purchased the property in 2004 as an investment property but discovered some years later that the knotweed had encroached onto his land, likely prior to Mr. Davies purchasing it. Mr. Davies subsequently brought a claim in nuisance.

The Judge found that the council was in breach of the relevant duty in nuisance owed to Mr. Davies as a neighbour starting from 2013 when the council became aware of the encroachment of knotweed until 2018 when the treatment programme started and therefore there was an actionable nuisance from 2013 to 2018.

However, the Judge dismissed the claim for residual diminution in the value of Mr. Davies’ property and this decision was upheld on first appeal. The Judge referred to the case of Network Rail Infrastructure Ltd V Williams & Others. In Williams, the Judge found that damages for diminution in value of the property was pure economic loss, and not loss resulting from physical damage or interference with the property, which was irrecoverable in the tort of nuisance, stating that “the purpose of the tort of nuisance is not to protect the value of property as an investment or financial asset.”

Second Appeal

1. Diminution

The Court of Appeal held that the case of Williams had been misinterpreted and overturned the decision on residual diminution. The District Judge in Williams held that there had been no actionable nuisance based on the facts “simply” because the value of the property had been diminished.

However, the Court of Appeal found that if there has been encroachment then there has been physical interreference with the claimant’s property and the claimant’s quiet enjoyment of the property. Therefore, consequential losses, including diminution in value, are recoverable.

2. Causation

The Court of Appeal found that the harm to Mr. Davies’ quiet enjoyment of the property persisted because the nuisance was continuing and the breach of duty was a result of the persisting encroachment.

Damages were consequently awarded for diminution in value of the property in the sum of £4,900.

Only time will tell whether the Court of Appeal’s decision will open the flood gates to claims for diminution in value caused by encroaching Japanese knotweed. If you would like to discuss a potential claim with our expert litigation team, then please contact us on 0845 287 0939, complete our online contact form, or talk to us on the online chat below.