The Manchester Ship Canal Company Ltd v United Utilities Water Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Newey |
| Judgment Date | 15 February 2016 |
| Neutral Citation | [2016] EWHC 259 (Ch) |
| Court | Chancery Division |
| Docket Number | Case Nos: HC10C01046 & HC11C03842 |
| Date | 15 February 2016 |
[2016] EWHC 259 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Rolls Building, Royal Courts of Justice
7 Rolls Buildings, Fetter Lane
London, EC4A 1NL
Mr Justice Newey
Case Nos: HC10C01046 & HC11C03842
Mr Michael Barnes QC, Miss Janet BignellQC andMr Benjamin Faulkner (instructed by Bircham Dyson Bell LLP) for the Claimants
Mr Jonathan Karas QC, Mr Julian GreenhillandMr James McCreath (instructed by Pinsent Masons LLP) for the Defendant
Hearing dates: 21 and 22 January 2016
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
I have before me two sets of proceedings, relating respectively to the Manchester Ship Canal ("the Ship Canal") and the Bridgewater Canal. The claims concern the extent to which the defendant, United Utilities Water Limited ("United Utilities"), which is a sewerage undertaker, is entitled to discharge water into the canals via various outfalls. The claimants are the owner of both canals, the Manchester Ship Canal Company Limited ("MSCC"), and, in the case of the Bridgewater Canal proceedings, a lessee, the Bridgewater Canal Company Limited.
Argument before me was primarily devoted to whether MSCC should be granted permission to re-re-amend its particulars of claim in the Ship Canal proceedings. It was, I think, common ground that what should happen to the Bridgewater Canal case could be conveniently considered after I had given judgment on the application to amend the Ship Canal particulars of claim. This judgment therefore deals principally with the Ship Canal claim.
Context and issues
The Ship Canal claim was issued on 29 March 2010. As re-amended in late 2011, MSCC sought relief in respect of some 113 outfalls, as detailed in four schedules. The prayer asked for, among other things, a declaration that United Utilities "is not entitled to make any of the discharges set out in the Schedules, except (in the case of those marked with an asterisk) in accordance with a specific agreement" and damages "for trespass, and/or for breach of contract, and/or in lieu of an injunction under s.50 of the Senior Courts Act 1981, to be assessed". The essence of MSCC's case was explained as follows:
"8. Since the Canal was constructed and at all material times until 1 September 1991, the Defendant's respective predecessors in title and the Defendant have had statutory authorisation under the Public Health Acts 1875 and 1936 to discharge water into the Canal so long as the water discharged did not prejudicially affect the purity and quality of the water in the Canal.
9. Since 1 September 1991 the statutory scheme governing sewerage undertakers has been contained in the Water Industry Act 1991. In British Waterways Board v Severn Trent Water Ltd [2001] Ch 31, the Court of Appeal held that a sewerage undertaker, such as the Defendant, does not have statutory power to discharge water or other matter from its drainage pipes onto the land or into the waters of others. Accordingly, any discharge now made by a sewerage undertaker without the permission of a relevant land owner constitutes a trespass."
After referring to certain contractual agreements, MSCC said in paragraph 15 of the particulars of claim:
"However, in the case of each of the other discharges listed in the attached Schedules, the Defendant does not have the benefit of any express or implied agreement, or any statutory right, nor any common law right, entitling or authorising it to make such discharge into the Canal or drain into the Canal. Some discharges in particular locations may be the subject of statutory authorisation under sections 63–126 of the [Manchester Ship Canal Act 1885], but the Defendant is put to strict proof that any of its discharges benefit from such authorisation. Each of the individual discharges listed in the attached Schedules is unlawful and constitutes a trespass actionable by the Claimant."
In its amended defence and counterclaim, United Utilities asserted a "General statutory authorisation preserved under the privatisation scheme". It maintained as regards outfalls constructed before 1 September 1991 that it continued to enjoy rights of discharge that it and its predecessors had previously enjoyed by virtue of the Public Health Acts 1875 and 1936. It also alleged that it had relevant rights of discharge under local Acts of Parliament, the Manchester Ship Canal Act 1885 or certain agreements. The counterclaim sought a declaration that United Utilities' continued use of the various outfalls was lawful.
In October 2011, United Utilities applied for summary judgment in its favour as regards outfalls constructed before 1 September 1989. It sought both declaratory relief and an order dismissing MSCC's claim with respect to 106 of the outfalls. Its argument was to the effect that, whatever the position might be as regards the other outfalls at issue, it was entitled to discharge water through pre-1989 outfalls because it had inherited rights of discharge that its predecessors had enjoyed before the Water Act 1989 came into force.
On 4 November 2011, the proceedings in respect of the Bridgewater Canal were issued. The claim closely corresponds to that made in the Ship Canal case. In their present form, the particulars of claim allege that "any discharge from its sewers now made by a sewerage undertaker without the permission of a relevant land owner constitutes a trespass".
In December 2011, United Utilities issued an application for summary judgment in the Bridgewater Canal proceedings. It asked for declaratory relief as regards pre-1989 outfalls.
United Utilities' applications came before me in January 2012. Mr Jonathan Karas QC, who appeared for United Utilities with Mr Julian Greenhill and Mr James McCreath (as he still does), submitted, and I accepted, that the applications raised a point of law which I should decide. In that regard, I said the following in the judgment I gave on 14 February 2012 ( [2012] EWHC 232 (Ch)):
"6. In the course of submissions, [counsel then appearing for the claimants] accepted that the parties had had an adequate opportunity to address the issue that United Utilities asks me to decide. Further, he did not suggest that I lacked any relevant evidence. The thrust of his submissions was rather to the effect that I should refuse to decide the 'short point of law' for reasons of case management, having regard to the overriding objective. He observed that the losing party would be very likely to challenge any decision I might arrive at. This, he said, could be expected to create practical problems given that the point of law does not affect all the outfalls in dispute and so cannot render a trial unnecessary.
7. Against that, the point that United Utilities wishes to have determined potentially affects some 106 of the 113 outfalls at issue in the Manchester Ship Canal case. A ruling on the point could thus have a substantial bearing on the length of a trial currently listed for 44 days. The point could also, I gather, be relevant to a majority of the outfalls in dispute in the Bridgewater … Canal case. In any event, I have now heard argument, over two days, on the legal question. That hearing would be wasted if I refused to rule on it."
I summarised my conclusions in these terms in my judgment:
"52. In all the circumstances, I have concluded that the 1991 water legislation did not affect United Utilities' entitlement to discharge water via outfalls dating from before 1 September 1989. United Utilities continued to enjoy the rights of discharge which their predecessors had had up to 1989.
53. This result seems to me to make sense. Were the Canal Companies' submissions correct, United Utilities' use of pre-existing outfalls would suddenly have become unlawful. I agree with Mr Karas that Parliament is most unlikely to have intended that. There is, furthermore, no clear indication that it did. On the Canal Companies' case, use of the outfalls became unlawful by virtue of the 1991 legislation, but that legislation was intended to consolidate the law except as to the Law Commission's recommendations [in its 'Report on the Consolidation of the Legislation Relating to Water' (Cmnd. 1483, April 1991)], and no one suggests that the Law Commission recommended the removal of sewerage undertakers' ability to discharge from pre-existing outfalls. Further, there is a sound basis for distinguishing between new and old sewers. The British Waterways Board decision means that sewerage undertakers have no right to discharge from new sewers without the consent of affected landowners. It is quite another matter to say that sewerage undertakers must stop discharging from existing outfalls unless landowners consent. [Counsel for MSCC] suggested that the successors to water authorities had effectively been given a couple of years in which to sort out the position in relation to discharges, but nothing I have been shown demonstrates that that was how matters were seen at the time. On the face of it, there was no indication that the 1991 legislation would deprive sewerage undertakers of the (doubtless very valuable) powers of discharge which they had previously enjoyed, both before and after the Water Act 1989."
In paragraph 56 of my judgment, I said this:
"United Utilities asks me not only to grant declaratory relief reflecting the conclusions I have arrived at, but to dismiss the claim in respect of many of the outfalls into the Manchester Ship Canal. So far...
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