Environment – Sewerage – Discharge – Appellant canal owner threatening to bring claim in trespass against respondent sewerage undertaker concerning unauthorised discharges into canal – High Court holding that complaint premised only on alleged fact of discharge not actionable as private law claim – Appellant appealing – Whether common law remedies surviving where statute providing remedial and enforcement schemes – Whether appellant limited to statutory remedy – Appeal allowed in part
The appellant owned the Manchester Ship Canal. The respondent was the water and sewerage undertaker for the North West region, appointed under the Water Industry Act 1991. It owned an extensive network of sewers and drains, much of it inherited from its predecessors (including local authorities). Pursuant to section 116 of the 1991 Act, the respondent had an implied right to discharge effluent into the canal.
Following heavy rainfall, the capacity of the sewerage system was temporarily exceeded and inadequately treated effluent was discharged from some of the respondent’s outfalls into the canal. Such discharge was unlawful since, under sections 117(5) and 186(3) of the 1991 Act, the respondent was not authorised to discharge foul water into or cause injurious affection to any canal.
The appellant threatened to issue proceedings in trespass, claiming damages for the unlawful discharge of inadequately treated sewage effluent. The respondent sought a declaration that the statutory scheme of powers and duties, regulation, enforcement and remedies in the 1991 Act was intended by parliament to exclude common law remedies for what would otherwise be tortious conduct of a sewerage company.
The High Court granted the declaration. It held that by discharging inadequately treated effluent into a canal in breach of sections 117(5) or 186(3), a sewerage undertaker was not acting in breach of section 116 since the discharge of inadequately treated effluent had occurred without the respondent doing anything to cause it or being able to do anything lawfully to stop it, except by spending money on large-scale improvements to the sewerage system.
Any breach of duty by the sewerage undertaker was a breach of its duty under section 94 of the 1991 Act to make provision for effectually dealing with the contents of sewers in its area, which could not be enforced by private action: [2021] EWHC 1571 (Ch); [2021] PLSCS 109. The appellant appealed.
Held: The appeal was allowed in part.
(1) The decision in Marcic v Thames Water Utilities Ltd [2003] UKHL 66; [2003] PLSCS 268; [2004] 2 AC 42, showed that, in certain cases, the existence of a private law right to sue a sewerage undertaker in tort was inconsistent with the statutory scheme and such a right had to be regarded as impliedly ousted.
The question was whether this was one of those cases. That question was not answered by the fact that the present case concerned a breach of the foul water provisos which were not in issue in Marcic. That breach established that the discharges were not authorised by statute, thereby negating any suggestion that the 1991 Act conferred statutory authority on respondent to discharge foul water into the canal.
The defence in Marcic was that any claim in tort was ousted by the statute as being inconsistent with the statutory scheme. There was no fundamental difference between a case where an undertaker was acting outside the powers set out in the statute and a case where an undertaker was simply in breach of section 94. In each case the undertaker was doing something in breach of its obligations under the 1991 Act. Whether there were any relevant differences turned on the breadth of the Marcic principle.
The question was whether it was consistent with the statute for the tortious remedy to be available. Unless this case could be sufficiently distinguished from Marcic, the answer had to be that it was not.
The appellant’s complaint was that the discharges into its canal were either a trespass or a nuisance. But in practical terms the only way to prevent that was for the respondent to build more infrastructure. The appellant’s expressed aim was to be able to charge the respondent a rent or fee for the right to discharge into the canal. But that did not affect the fact that what the appellant’s complaint was that the respondent’s existing sewerage system was inadequate. It was in that sense that in effect what the appellant was saying was that the respondent should have built a larger or better system. That was not materially different from Marcic. And the fact that all the appellant actually wanted was money, and the claim in trespass was a means of putting itself in a commercial position to negotiate a fee, did not change the position.
Accordingly, the judge was right to find that the private law claim was inconsistent with the statutory scheme and fell to be treated as impliedly ousted.
(2) The appellant had argued that five of the respondent’s outfalls were the subject of contractual agreements with predecessor local authorities which had been terminated so that the continued use of each outfall after termination of the relevant licence was a trespass.
Once it was accepted that local authorities had the power to acquire rights to construct sewers by agreement, there was no reason why they could not agree to acquire limited and determinable rights if that was what they were offered. They did not need to contract on those terms and could have relied on their statutory powers instead; but having chosen to contract on terms that they acquired a determinable, not a permanent, right, that was all they acquired. If such a right was then determined in accordance with its terms, that was not a case of the local authority choosing to exercise a discretionary power in section 18 of the Public Health Act 1875 (or its successors) to discontinue the sewer; it was simply the consequence of only having acquired a limited right in the first place. In each of the licences the appellant had reserved the right, if the local authority did not do so, to remove the sewer itself at the authority’s expense. On its face, section 18 merely imposed restrictions on the exercise of powers on local authorities, not on anybody else.
Accordingly, the judge had erred in holding that the effect of the licences to terminate was an unlawful fetter on the exercise of relevant powers and duties by the respective local authority parties.
David Hart QC, Charles Morgan and Nicholas Ostrowski (instructed by BDB Pitmans LLP) appeared for the appellant; Jonathan Karas QC, Richard Moules and James McCreath (instructed by Pinsent Masons LLP) appeared for the respondent; Tom de la Mare QC and George Molyneaux (instructed by Hausfeld & Co LLP) made written submissions for the interveners.
Eileen O’Grady, barrister
Click here to read a transcript of Manchester Ship Canal Co Ltd v United Utilities Water Ltd
