Waste-water disposal — Statutory undertaker Water Industry Act 1991 — Charging scheme — Whether scheme falling within powers of Act — Whether common law remedy available
The defendant provided water and sewerage services to the claimant in its role as statutory undertaker under the Water Industry Act 1991. It operated a charging scheme under which sewerage charges for sites with a metered water supply were calculated on the assumption that the volume of potable water being discharged into the sewer was the same as that recorded by the meter at the point of entry. The defendant’s charging scheme provided for discretionary allowances in respect of leaks and for abatements of sewerage charges in certain other circumstances.
The claimant investigated the into water and waste-water use at various army barracks and concluded that because of pipe leakage, a significant amount of the water that entered the sites was not returning as waste water to the sewers. It sought a repayment of sewerage charges, but the defendant maintained that the claim did not fall within its rebate policy.
The claimant brought a claim in restitution to recover the alleged overpayment. The defendant argued that its charges accorded with a charging scheme that it had the power to impose under sections 142 and 143 of the Act. It further argued that, in such circumstances, the court had no jurisdiction to hear the claim, since the claimant’s sole remedy would be an enforcement order from the director general of water services in his supervisory role. The claimant contended that the statute did not permit the defendant to charge for a service that it did not in fact provide, so that charges had to be calculated by reference to the volume of waste water services actually provided. Preliminary issues were tried as to the court’s jurisdiction to hear the case, the compliance of the charges with the Act, and the legal basis for any entitlement of the claimant’s repayment.
Held: The claimant was entitled to pursue its claim.
(1) The court had jurisdiction to determine the claim. The claimant was seeking relief pursuant to a common law claim in mistake for restitution. It was not seeking to sidestep the provisions of the Act by pursuing a claim that could instead be brought under it; it was questionable whether the director general, even if he could take enforcement action in relation to the charging scheme, would have the power to award a restitutionary remedy to a customer: Marcic v Thames Water Utilities Ltd [2003] UKHL 66; [2004] 2 AC 42; [2003] PLSCS 268 distinguished.
(2) The defendant’s power to charge for waste water services under sections 142 and 143 was confined to charging for services actually provided. A charging scheme that permitted the defendant to charge for services that it had demonstrably not provided did not conform with the Act. The defendant defined the nature of the service for which it charged by reference to the volume of waste water disposed of, as could be seen from its charging formula; its charges were not merely for making the facility of water disposal available. It was not entitled to charge a customer to whom it provided no service, or a lesser service from that for which it charged, and any such charges would fall outside the powers of the Act. The defendant’s leak allowance policy did not have the force of law. Neither this nor the rebate policy precluded the claimant from pursuing its common law claim for reimbursement of moneys that had been paid by mistake to the unjust enrichment of the defendant.
Jeffery Onions QC (instructed by Wragge & Co LLP, of Birmingham) appeared for the claimant; Vincent Nelson QC (instructed by the legal department of Thames Water Utilities Ltd) appeared for the defendant.
Sally Dobson, barrister
