Staffordshire Area Health Authority v South Staffordshire Waterworks Company

Four simple words "At all times hereafter" have given rise to this important case. These are the facts: There is a hospital for mental patients in Staffordshire. It is at Burntwood about four miles to the west of the City of Lichfield. It used to be run by the Staffordshire County Council but it has now been taken over by the Area Health Authority. It needs a large supply of pure clean water.

At the turn of the century the hospital got its supply from a deep well in the grounds. It had a pumping engine which pumped up the water from below to tanks in a water tower: and then it ran down through pipes by the force of gravity into the kitchens and wash-houses of the hospital. The pumping engine drew between 20 and 30 million gallons a year from the well for the use of the hospital.

There was, however, a rival drawer of water in the shape of the South Staffordshire Water Company. In 1908 they had already several pumping stations in the neighbourhood. The nearest of them at that time was at Pipe Hill about two miles from the hospital. The water company had constructed it without statutory authority. That pump had not, at that time, drawn off enough water to affect the hospital's supply but there were fears that it might in the future. More important, however, there was a proposal by the water company to make a new pumping station at Maple Brook only one mile from the hospital. This might draw off large quantities of water. Especially as the water company were extending their services to a large and increasing population. The hospital authorities feared that in time the water company would draw off enormous quantities from the underground supplies. So much so that thehospital well would itself be affected. It might even dry up.

THE 1909 ACT

In 1908 the water company promoted a private Bill in Parliament. Its object was to sanction and confirm the existing pumping stations. That included the one at Pipe Hill - two miles from the hospital. Also to authorise the construction of a new pumping station at Maple Brooke, one mile from the hospital. Also to authorise the water company to take and appropriate all the underground streams, springs and waters that they desired for the purposes of their undertakings.

Naturally enough many of the householders and authorities in the neighbourhood became anxious about their own wells. They lodged petitions in Parliament so as to secure protection in case their existing supplies were diminished or affected by the works of the water company. One of them was the Staffordshire County Council. They sought protection in case the well at the Burntwood Hospital was diminished or affected. As a result Parliament did confer protection upon them and other owners. The protective clauses are contained in sections 16 and 23 of the South Staffordshire Waterworks Act 1909. They are too long for me to recite now but I will state the effect:

(i) If it appeared at any time that the supply of water from the well was in any way diminished or affected - so that the hospital authorities could not get all the water they needed from their own well - then the water company were forthwith to give the hospital an equivalent supply from the mains.

(ii) It was realised that there might he a dispute about the cause of the diminution of affection. Any such dispute was to go to arbitration. If the water company proved to the satisfaction of the arbitrator that the diminution or affection was not due to the water company's works, then the hospital would have to pay the ordinary water rates for the district.

(iii) But if the arbitrator found that the diminution was due to the water company's works, then section 23 required the water company to make good the supply in one or other of two ways:-

Either (A) the water company were to deepen the existing well at the hospital and do whatever was necessary to make good the supply without putting the hospital authorities to any expense whatever over their previous expenditure.

Or (B) the water company were to make good the supply by providing all the water necessary from their own mains. If they did this, the water company were not to put the hospital authorities to any more expense than they would have had if their own well had continued undiminished. For instance, if the cost to the hospital in getting water from their own well was only three pence for 1,000 gallons, the water company were only to charge the hospital three pence per 1,000 gallons from the mains.

If there was any difference about those provisions in the Acts, it was to be settled by arbitration.

1919 AGREEMENT

The water company did not make the new pumping station at Maple Brook for some years. It was not completed until 1915. Before that time the hospital did not notice any diminution in the supply. They had got all they needed from their own well. The average consumption was 50,000 gallons a day with a goodreserve in the tanks at all times. But, after the new pumping station was completed, the effect began to be felt. Three years later in November 1918 a serious shortage occurred in the water supply at the hospital. It was attributed by all concerned to the new pumping station at Maple Brook. The hospital authorities took the matter up with the water company. Negotiations took place from November 1918 to March 1919. It was suggested at first that the well at the hospital should be deepened to make up the difference. But eventually it was agreed that that should not be done. Instead the water company agreed to "top up" the tanks in the water tower whenever needed to keep them full. The hospital authorities would still use the well so as to supply the tanks as much as they could, but the water company would "top them up" from their own mains. It is to be noted that they did not need any new system of pipes for the purpose - because as long ago as 1904 there had been installed a line of pipes as a stand-by with high pressure in case of fire at the hospital. On this "topping up" water being supplied from the mains, the water company were to supply 5,000 gallons a day free of charge: and for any quantity in excess of 5,000 gallons a day, the hospital were to pay at a special rate of four old pence per 1,000 gallons (that was the average cost to which the hospital had been put in getting water from the well). If less than 5,000 gallons a day was needed to "top up", the hospital authorities were to be credited with the amount unused to go against any times when more than 5,000 gallons a day was needed.

THE SUPPLY FROM 1919 TO 1928

From March 1919 to September 1928 the authorities kept records of the amount of water taken from the water company'smains to "top up" the hospital well. In the early years there was little or none taken: but it gradually increased until from 1924 to 1927 these were the average figures:- The total consumption of water at the hospital for those three years was 58,414 gallons per day of which 44,757 were supplied from the well and 13,657 from the water company's mains. That is, about 21,000,000 gallons a year from the well and 5,000,000 a year from the water company's mains. It looks as if the hospital authorities did not pay for the excess over 5,000 gallons at the rate of four old pence per thousand gallons. That would come to about £13 a quarter. The hospital in fact only paid a standing charge of £2 9s. 6d. a quarter.

THE ABANDONMENT OF THE WELL

About 1927 there was a serious outbreak of typhoid at the hospital. Some patients died in the hospital 28 in the locality. The source of infection was traced to the hospital well which was close to the boiler house. As a result the hospital well was promptly abandoned. The hospital then went over to the mains and took all their supplies from the water company. This meant a big jump in the quantity taken. The figure shows a great increase in the last quarter of 1928.

THE 1929 AGREEMENT

As a result there were negotiations between the hospital authorities and the water company. It resulted in an agreement dated the 30th July, 1929 but it operated from the 25th September, 1928. The water company still allowed the hospital authorities to take 5,000 gallons a day free of charge: but for additional water the charge was to be seven old pence per thousand gallons. This rate was 70 per cent of the current water rate. It was a compromise between ten old pence whichwas the rate being charged at the time by the water company to ordinary consumers and five or six old pence which would have been the cost to the hospital of getting water from the well. I will return to this agreement later. But the important thing to notice is that it contained clauses which looked as if it was to continue forever. The key words were "at all times hereafter", The hospital authorities rely on those words to say that they are entitled to receive water from the mains at seven old pence...