(delivering the Judgment of the Court): On November 19, 1976, there was a heavy rainfall. It was in the afternoon of that day, still raining, that the respondents' factory was flooded. Dulip Kumar Bardhan (PW1) Manager of the Dunlopilo factory succinctly described that eventful day as follows: —

"On November 19, 1976 in the afternoon I was in my office at the factory. It was raining. I heard a commotion and I saw water running under the door of my office. I went out to the corridor and I saw water rushing in like mad as if a bund had broken. The water was rushing from the back of the factory towards the front. The water was muddy with silt and rubbish. The water also carried timber pieces and debris — and drums and crates. I then went to the back of the factory from where the water was rushing. The water was about 12–14 inches deep. I waded through and went to the back of the factory to the outlet. This time I saw that the fence had completely collapsed to our land. The outlet was all blocked with sawn timber, debris and wood. Our drain was running full at that time. Along our drain we had built a bank about 2 feet high. At that time the drain water had risen about one foot up the bank."

As a result of the flood damage was caused to the factory and goods. There was also a loss of a few days' work. By reason of the damage suffered the respondents sued the appellants Seong Fatt Sawmills Sdn. Bhd. They claim that the appellants carried out substantial earthworks in or about early 1974 on their land adjacent to the respondents' land creating thereby a dangerous situation. And the negligent acts of the appellants had caused rain water to overflow into the respondents' land causing extensive damage to the respondents' land, roads, buildings and goods stored therein. The claim is based on negligence and nuisance.

The appellants deny that their water flowed over to the respondents' land by their negligence. They also deny that they owe any duty to the respondents in respect of the matter complained of by the respondents.

The facts have been summarised by the learned Judge in his judgment and suffice if we reproduce that part of the judgment which reads —

"the plaintiffs' and the defendants' land have a common boundary. The plaintiffs' case is that the defendants altered the natural structure of their land which resulted in overflowing of water from their land on to the plaintiffs' land. Before the alterations were carried out there was a natural stream running through the centre of the defendants' land. This stream joined the plaintiffs' land along the boundary on to a monsoon drain which also ran along the boundary but inside the plaintiffs' land and on to another monsoon drain at the junction of Loop Road and Rasa Road in front of the plaintiffs' factory. The stream which ran through the defendants' land widened at two places at depressions forming two pools on the defendants' land. This had the effect of slowing down the rain water and thus avert flooding during the rainy season.

In April — May 1973 the defendants cut the side of the hill on their land and filled their land. They filled up the ponds and raised the level of their land by almost four feet above the level of the plaintiffs' land. The natural stream which was previously running through the middle of the defendants' land and then joining the plaintiffs' monsoon drain along the common boundary was diverted by the defendants. This they did by building an earth drain along the border and this drain entered the plaintiffs' land into the plaintiffs' earth drain. The plaintiffs' earth drain was meant to take water from the rear of the plaintiffs' land but now they had to take water also from the defendants' drain which the defendants had now constructed and which ran along the plaintiffs' boundary along a cliff. The defendants had built the drain right at the cliff, one bank of the drain being the cliff itself. It was a plain earth drain and had four right angl