Environment – Trade effluent – Sewerage undertaker – Drainage charges – Respondent water company obtaining summary judgment in dispute with appellant manufacturer concerning right to charge for trade effluent discharge – Appellant appealing – Whether mixed liquid constituting “trade effluent” within section 141(1) of Water Industry Act 1991 – Appeal dismissed
The appellant manufactured medical, cosmetic and toiletry products at its premises in Beeston, Nottingham. The manufacturing processes gave rise to trade effluent which was discharged into a private sewer. Before the effluent was discharged into that private sewer it was metered. The respondent supplied water and sewerage services to the appellant, which included the drainage of surface water and the discharge of trade effluent. It charged the claimant for surface-water drainage according to the rateable value or the area of the property. The discharge of trade effluent was charged according to the volume recorded by the meter. The appellant alleged that varying quantities of surface water, including rainwater, had been draining through the meter that measured trade effluent, and that the respondent had included those quantities of surface water in the volumetric charge for trade effluent discharge while, at the same time, charging the appellant for the drainage of surface water by rateable value or area. The appellant alleged that it was not entitled to levy metered charges on the whole of the mixed liquid, but only on that part which was trade effluent; and claimed reimbursement of alleged substantial overpayments over many years. The High Court gave summary judgment in respondent’s favour but gave the appellant permission to appeal: [2018] EWHC 53 (Comm); [2018] PTSR 1245.
An issue arose whether the mixed liquid was “trade effluent” as defined in section 141(1) of the Water Industry Act 1991.
Held: The appeal was dismissed.
(1) Since the 1930s the statutory scheme for regulating sewerage and drainage had maintained a clear distinction between three distinct and mutually exclusive types of effluent: domestic sewage, surface water and trade effluent. Until 1937 a person had a right to discharge foul water and surface water into public sewers; but had no right to discharge trade effluent. The Public Health (Drainage of Trade Premises) Act 1937 conferred a right to discharge trade effluent which had not existed before. It was not designed to alter the law as regards foul water or surface water. Since then trade effluent had been treated as a separate category of effluent. Each of those mutually exclusive categories gave rise to separate rights of discharge. The threefold classification was not reproduced in the definition of trade effluent in section 141 of the 1991 Act. The definition did not expressly exclude surface or storm water, whereas it did expressly exclude domestic sewage. Further, section 106 referred to at least three, possibly four, different types of sewer. Three were expressly mentioned: a foul water sewer, a surface water sewer and a storm-water overflow sewer. The fourth was a combined sewer which was implicit in section 106(2)(b) which applied “where separate public sewers are provided for foul water and surface water”. If there were no separate sewers, necessarily there had to be a combined sewer. So that classification did not replicate the threefold division. The definition expressly included liquid partly produced in the course of trade. The part of the definition which contemplated a liquid partly produced in the course of trade thus contemplated a mixture. Moreover, the definition also contemplated a mixture of liquid and suspended particles of matter. Section 141 made a distinction between the composition of the liquid and the place where it was produced. Limb (a) of the definition dealt with the composition of the liquid (“partly produced in the course of any trade or industry”); whereas limb (b) dealt with the question whether that liquid was produced at particular trade premises or elsewhere. In the present case, all the mixed liquid was produced at the appellant’s factory. A mixed liquid was to be treated as a single mixture, and not separated into what had been its former parts: Barras v Aberdeen Steam Trawling and Fishing Co Ltd [1933] AC 402, Yorkshire Dyeing and Proofing Co Ltd v Middleton Borough Council [1953] 1 WLR 393 and Thames Water Authority v Blue and White Launderettes Ltd [1980] 1 WLR 700 considered.
(2) The appellant’s interpretation did not fit comfortably into the scheme of the 1991 Act. Absent both a consent to discharge trade effluent and also an approval by the undertaker under section 106(2)(b)(ii) to discharge surface water into a foul sewer, a mixed liquid could not be discharged into the public sewers at all. Chapter III filled that gap. It made little sense to have two separate but concurrent approval regimes for a single body of mixed liquid. At least in principle the remedy for any perceived injustice lay in the hands of the discharger. It was in control of the arrangement of its own internal infrastructure. The appellant had chosen to construct its factory so that effluent produced by its manufacturing activities was mixed with rainwater before the mixed liquid entered the drain. There was no reason in principle why the appellant should not have arranged matters originally so that rainwater was separately discharged. The facts of the present case could not affect the correct interpretation of section 141. There was an entirely rational purpose for treating a mixed liquid as trade effluent. The essential point was that a mixture of trade effluent and surface water was still contaminated water; and would need to be treated in a different way from surface water. It might also be necessary to arrange for its eventual discharge in a different way. Whereas pure surface water could be discharged into a canal or a river, contaminated water could not. The difference in treatment between surface water and foul water was also the reason why approval was needed under section 106(2) to discharge pure surface water into a foul sewer. If the conditions imposed by a consent to discharge trade effluent were unfair, the occupier might appeal and OFWAT might intervene. Since the right of appeal to OFWAT was an integral part of the statutory scheme, it was legitimate to take it into account when interpreting the statutory scheme as a whole.
Jonathan Davies-Jones QC and Christopher Bond (instructed by DLA Piper UK LLP) appeared for the appellant; Simon Colton QC (instructed by Eversheds Sutherland (International)) appeared for the respondent.
Eileen O’Grady, barrister
Click here to read a transcript of Boots UK Ltd v Severn Trent Water Ltd
