Mr and Mrs Chalmers v Diageo Scotland Limited

A recent case in which the enjoyment of property has been allegedly disturbed by actions taking place on a neighbouring property may pique the interest of whisky distillers. It is also a helpful reminder of when the common law of nuisance can be used as a remedy in neighbour disputes. 

1 August 2023

The case of Mr and Mrs Chalmers v Diageo Scotland Limited [2018] CSOH 36; [2019] SLT 1184 concerned the “angel’s share” – the evaporated ethanol vapour from whisky casks – which it was claimed caused a black fungus (baudoinia compniacensis) to grow on Mr and Mrs Chalmers’ house and garden furniture. The couple claimed this constituted a legal nuisance, for which £40,000 was sought from Diageo, the operator of the neighbouring whisky aging facility in Bonnybridge, Stirlingshire. 

Mr and Mrs Chalmers maintained that the value of their property had been reduced by about 5-10% because of the effects of the fungus on their house. They also claimed for particular types of inconvenience and loss of amenity, such as the need to spend time and effort cleaning the external walls of their house, as well as restrictions on the types of materials that they can use in their garden and on the choice of paintwork for external items. 

Nuisance - The Legal Test

The owner or occupier of a property must not use their land in such a way so as to disturb their neighbour’s enjoyment of their property or cause damage to their neighbour’s land. To constitute a legal nuisance, the use must amount to offensive conduct, the effects of which are plus quam tolerabile – meaning the affected person must have suffered more than they could reasonably be expected to tolerate. It is not enough to merely cause discomfort. A legal nuisance includes damage to property in addition to serious disturbance and substantial discomfort.  

Where damages are sought, fault must be established, though in the context of granting interdict (which, notably, Mr and Mrs Chalmers did not seek), liability for nuisance is strict and there is no need to prove fault. 

Facts and Circumstances

A number of facts and circumstances will be taken into account in determining whether conduct amounts to a nuisance and the plus quam tolerabile test is met: the nature of the harm; the impact and extent of the nuisance; the character of the locality of the nuisance; the time the nuisance is said to take place; the frequency and duration of the nuisance; any conventions that may mean the nuisance is tolerable; the importance of the action that is said to amount to a nuisance; whether steps can be taken to prevent the nuisance; and what measures could be taken by the complainer to protect against the nuisance. 

Diageo’s Position 

Diageo claimed that the blackening complained of was indistinguishable from that found in a range of other locations and did not cause serious disturbance, substantial inconvenience or material damage. The company claimed that property values in the area were unaffected and that there could not be a claim for diminution in value as well as a claim for cleaning costs as this essentially amounted to double recovery.  

First Debate - 2017

The case first called for a debate in the Court of Session in 2017, when Diageo sought dismissal of the case due to a lack of specification and sought to argue that the claim had prescribed. Lord Ericht took the opportunity to review the law of nuisance in Scotland and found that:

  • fault must be established for an action of nuisance where damages are being sought, but that culpa of itself is not sufficient to give rise to liability in nuisance – the plus quam tolerabile test must also be satisfied, evidence was needed to establish this and there was sufficient specification of damage pled by Mr and Mrs Chalmers to allow the case to proceed to proof;
  • the nature of the locality is an important feature in determining whether an activity constitutes a nuisance – this goes to the question of whether the use was plus quam tolerabile – and the nature of the locality is one that is best dealt with after proof of facts and circumstances relating to locality has been led; 
  • whether regulatory decisions can, and have, cut down Mr and Mrs Chalmers’ private law right to damages for nuisance was a matter for proof; 
  • there is no defence of “coming to the nuisance” in Scots law – it is still possible to complain of a nuisance even if it existed before you bought your property; and 
  • in relation to the prescription argument (Diageo argued the 20-year prescription test applied and they had exercised the right to emit for a period in excess of 20 years; Mr and Mrs Chalmers said it wasn’t the right to emit but the right to object that was relevant for prescription), that there needed to be an enquiry into the facts before a determination could be made.

Second Debate - 2019

Mr and Mrs Chalmers were subjected to a second debate in 2019, this time on the legal basis for their purported losses, with Diageo arguing that fair notice had not been given in respect of how the quantification of the alleged loss had been reached. The pleadings contained information about the types and amounts of expenses that Mr and Mrs Chalmers claimed to have incurred. Ordinary actions remain governed by established principles of fair notice and it is not (yet) a requirement for a pursuer to produce a precise valuation of its claim. Lord Tyre therefore found that Mr and Mrs Chalmers’ pleadings were sufficiently specific to justify the case proceeding to proof. 

It was accepted that there was an element of double counting between diminution and loss of amenity and that Mr and Mrs Chalmers would not claim both – diminution and loss of amenity are alternative methods of calculating the reduction in the value of the right to occupy property. In relation to the controversy between the parties as to whether Mr and Mrs Chalmers were entitled to claim both (a) diminution in value/loss of amenity and (b) past and future cleaning costs, Lord Tyre opined that there was no double counting between these two heads of claim. 

Whether this matter proceeds to court or is resolved extra-judicially remains to be seen, but it is fair to say that whisky distillers will watch with interest for any reported decision.  

Third Debate - 2023

This latest debate was precipitated by a minute of amendment that Mr and Mrs Chalmers firstly intimated in June 2022. Broadly speaking, the minute sought to amend the description of the alleged damage to their property, and to include averments about the testing of various samples. This was opposed by the Diageo and led ultimately to a third debate.

This third debate was heard in May 2023. Diageo submitted that, as a result of the amendment, Mr and Mrs Chalmers’ case was irrelevant or at least lacking in specification in material respects. Lady Carmichael found that an inquiry into the facts of the matter was necessary and therefore allowed a Proof before Answer.

We will continue to follow this case as it develops and provide further updates in due course.