Allen v Gulf Oil [1981] A.C. 1001

The Gulf Oil Refining Act 1965 preamble stated that in order to meet the increasing public demand for the D’s oil, it was essential that more facilities for importation and refinement of crude oil needed to be made. The 1965 Act stated that D intended to establish a refinery in C’s parish, and empowered D to acquire lands and construct authorised works necessary for the facilities, including jetties for tankers. The 1965 Act s5(1) stated D ‘may enter upon, take and use such of the lands delineated on the deposited plans…’ While the 1965 Act s15(1) authorised the construction of certain works, it contained no provision for compensation for any damage caused. The 1965 Act s16 authorised the construction and use of subsidiary works (railways) and required D to make reasonable compensation for damages caused by exercise of D’s powers under that section.

Could Gulf Oil rely on statutory authority as a defence to nuisance arising from the refinery’s authorised operation, despite the absence of an express nuisance exemption?

Finding for D, that the Gulf Oil Refining Act 1965 s5 expressly/impliedly conferred statutory immunity from proceedings for any nuisance which was the inevitable result of constructing and operating an oil refinery. As such, D could rely on the 1965 Act as a defence of statutory authority. C alleged that D has ‘carte blanche’ to construct the refinery itself, and therefore the intention must be that they must construct it with regard to private rights. It follows that if C or anyone else can establish nuisance, they are entitled to an injunction. This may make it impossible for the refinery to be operated, leaving D occupying land that cannot be used for other purposes. This is clearly an artificial reading of the text. Manchester Corporation v Farnworth [1930] A.C. 171. held that in absence of specification (and subject to the ‘negligence’ exception) the usual rule applied. There could be ‘no action for nuisance caused by the making or doing of the thing authorised, if the nuisance is the inevitable result of the making or doing so authorised.’ This is parallel to the present case.

Statutory authority can defeat nuisance liability where Parliament expressly or necessarily impliedly authorised an undertaking and the nuisance is an inevitable consequence of its authorised operation. The defence does not protect avoidable nuisance resulting from a failure to exercise appropriate care.

Allen concerns the effect of a specific Act authorising a refinery, rather than ordinary planning permission. It demonstrates why statutory interpretation comes before applying a broad nuisance defence: Parliament may authorise consequences which private rights would otherwise prevent. The protection remains limited to inevitable consequences of what was authorised. A defendant cannot turn permission to conduct a business into unrestricted immunity for the way that business is operated.