Conversion of warehouse buildings into flats — Appellant replacing existing pipes but not connecting individual flats — Whether flats “premises” for purposes of section 146(2)(a) of Water Industry Act 1991 — Appeal allowed
The respondent builder owned two buildings that were used as offices and warehouses and were connected to mains water and sewage facilities. It converted the buildings into 109 flats. The appellant water authority constructed new pipes to run from the buildings to the water supply and main drains but, inside the buildings, connections to each individual flat were carried out by the respondent.
The respondent subsequently refused to pay the appellant’s infrastructure charges. It claimed that since the appellant had not carried out the connections to the new flats, but had replaced only the existing pipes to the already connected buildings, it could not levy a charge under section 146(2) of the Water Industry Act 1991, since that Act only gave authority to levy such charges on “premises never previously connected”.
At first instance, the judge found for the respondent, holding that the buildings as a whole were premises that had been previously connected, and distinguishing Thames Water Utilities Ltd v The Burser of Magdalen College Oxford District Registry unreported 30 June 1999. The appellant appealed.
Held: The appeal was allowed.
No definition of “premises” or “buildings” was found in the Water Industry Act 1991, and it did not specifically mention infrastructure charges. However, in conferring upon the water authority a discretion to levy a service charge, parliament must have intended that it could recover its infrastructure costs: Thames Water approved. In general terms, the building industry understood infrastructure charges to be for the purpose of obtaining a contribution from builders and developers towards the cost of the increased demand placed upon utilities by new developments.
Premises usually included, but were not limited to, buildings, yet a garden centre devoid of buildings was still termed as “premises”, and a small firm’s premises might consist of one room situated in a much larger office building. Clearly the use of the word “premises” was to be contextualised, and, in the instant case, it was to be considered in the light of the word “connection”.
Who made the physical connection was irrelevant; the issue to be considered was whether the new premises placed an increased demand upon the water supply.
James Watson QC and Gerard Boyle (instructed by Thames Water Utilities Ltd) appeared for the appellant; the respondent did not appear and was not represented.
Vivienne Lane, barrister
