The Manchester Ship Canal Company Ltd v United Utilities Water Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Nugee,Lord Justice Arnold,Lady Justice Asplin |
| Judgment Date | 27 June 2022 |
| Neutral Citation | [2022] EWCA Civ 852 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case Nos: CA-2021-000674 |
and
[2022] EWCA Civ 852
Lady Justice Asplin
Lord Justice Arnold
and
Lord Justice Nugee
Case Nos: CA-2021-000674
CA-2021-000675
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
Mr Justice Fancourt
Royal Courts of Justice
Strand, London, WC2A 2LL
David Hart QC, Charles Morgan and Nicholas Ostrowski (instructed by BDB Pitmans LLP) for the Appellant
Jonathan Karas QC, Richard Moules and James McCreath (instructed by Pinsent Masons LLP) for the Respondent
Tom de la Mare QC and George Molyneaux (instructed by Hausfeld & Co LLP) for the Interveners (by written submissions only)
Hearing dates: 29, 30 and 31 March 2022
Approved Judgment
Remote hand-down: This judgment was handed down remotely at 10.30am on 27 June 2022 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Introduction
There are two appeals before the Court brought by The Manchester Ship Canal Company Ltd ( “MSCC”) against decisions of Fancourt J on issues arising in a long-running dispute between MSCC and United Utilities Water Ltd ( “UU”) concerning discharges by UU into the Manchester Ship Canal ( “the canal”). Fancourt J decided both issues in favour of UU for the reasons contained in a single judgment handed down by him on 15 June 2021 at [2021] EWHC 1571 (Ch) ( “the Judgment” or “Jmt”).
MSCC, originally incorporated pursuant to the Manchester Ship Canal Act 1885 as the Manchester Ship Canal Company, is the owner of the canal. It is admitted on the pleadings that it is the freehold owner of, and entitled to possession of, the beds and banks of the canal; there is a dispute whether it has any proprietary right in the waters of the canal, but we have heard no argument on the point and nothing turns on it for present purposes. The canal, constructed pursuant to the 1885 Act, is over 35 miles long and runs from east of Salford Quays in Greater Manchester to Eastham. In its upper reaches the canal is a canalisation of the Rivers Irwell and Mersey, and it drains into the Mersey estuary and hence the sea.
UU is the sewerage undertaker for the North West of England, having been appointed as such in 1989 under the provisions of the Water Act 1989. It owns an extensive network of sewers and drains, much of it inherited from its predecessors (local authorities and, under the Water Act 1973, the regional water authority). This includes in the region of 100 outfalls of various types which discharge directly or indirectly into the canal.
In 2010 MSCC brought a claim against UU which in summary alleged that all discharges from UU's outfalls constituted a trespass ( “the 2010 proceedings”). Most of this claim had already been determined in UU's favour, or discontinued, by the time of the hearing before Fancourt J, but there remained a small number of outfalls in issue where the outfall had originally been permitted by MSCC by way of an agreement that on its face was terminable by MSCC. A preliminary issue was ordered as to whether UU would have any continued statutory right to drain through the outfalls if MSCC terminated (or purported to terminate) the agreements. Fancourt J decided this issue in favour of UU. In appeal CA-2021-000674 MSCC appeals this decision with permission of Arnold LJ granted on 6 September 2021. I will refer to this appeal as “the 2010 appeal”. Before us the parties treated the 2010 appeal as very much the subsidiary of the two questions, arguing it after the other appeal and more briefly, and I also propose to consider it after the other appeal.
This arises in a second set of proceedings, this time brought in 2018 by UU by way of Part 8 claim ( “the 2018 proceedings”). The issue raised by this claim was whether MSCC has any private law claim in trespass or nuisance against UU in respect of discharges from outfalls that are not authorised by statute (in effect untreated foul water discharges that prejudicially affect the quality of the water in the canal). UU accepted that if there had been any such discharges it would have acted in breach of its statutory duty, but said that the only remedy available was regulatory enforcement under the relevant statutory provisions, not a private law action by the landowner affected. Again Fancourt J decided this issue in favour of UU and MSCC appeals, in this case with permission granted by Fancourt J himself. This is appeal CA-2021-000675 and I will refer to it as “the 2018 appeal”.
By Order dated 19 January 2022, Arnold LJ gave permission to a number of bodies with an interest in the environmental health of waterbodies to intervene in the 2018 appeal, by way of written submissions only.
Brief history of the statutory regulation of sewerage
It is helpful to start with a brief overview of the history of the statutory provisions regulating sewerage. I do not set out the text of the relevant provisions here, but simply identify the succession of principal statutes and some of their features.
Although provision was made by the Public Health Act 1848 for Local Boards of Health to be established with various powers in relation to drainage and sewers, we were not referred to its provisions and the first Act of Parliament to which we were referred was the Public Health Act 1875 ( “PHA 1875”). This divided England (other than the metropolis) into districts (either urban sanitary districts or rural sanitary districts), each being subject to the jurisdiction of a “local authority” (either an urban sanitary authority or a rural sanitary authority) (s. 5). It vested all existing and future sewers within a district in the relevant local authority, subject to some limited exceptions (s. 13), “sewer” being given a wide definition which included almost all sewers and drains other than drains for draining one building only (s. 4). Various powers in connection with sewers were conferred on the local authorities, some of which I will have to look at in due course.
The PHA 1875 also contained a number of provisions which, in various forms, have been reiterated in later legislation. These included a statutory obligation on a local authority to cause to be made such sewers as might be necessary for effectually draining their district (s. 13); a right on owners and occupiers of premises within the district to connect to and use the local authority's sewers (s. 21); a power for a local authority to discontinue a sewer, but only on condition of providing a substitute for anyone lawfully using the sewer (s. 18); and a declaration that nothing in the Act should authorise a local authority to discharge sewage or filthy water into a watercourse (including a canal) without it first being treated to free it from foul matter (s. 17). The Act also contained, in s. 299, a particular statutory procedure for enforcing a local authority's obligations which was by way of complaint to the Local Government Board, which could make an order requiring compliance. Again I will have to come back to the detail of some of these provisions in due course.
On 1 October 1937 the Public Health Act 1936 ( “PHA 1936”) was brought into force. This was a consolidating Act and superseded the PHA 1875 as the principal statute governing sewerage. By that stage there had been some change in the identity of the relevant local authorities, but it remained the case that it was the duty of a local authority to provide such public sewers as might be necessary for effectually draining their district (and in addition a local authority was by then also under a duty to make such provision, by means of sewage disposal works or otherwise, as might be necessary for effectually dealing with the contents of their sewers) (s. 14); that owners and occupiers had a right to connect to and use such public sewers (s. 34); that a local authority had power to discontinue a sewer but before depriving any person of the use of a sewer had to provide a sewer that was equally effective (s. 22); and that nothing in the Act authorised a local authority to use a sewer for the purpose of conveying foul water into a watercourse (or canal) until it had been treated (s. 30). And the Act again contained a particular statutory procedure for enforcing a local authority's obligations, in this case by complaint to the Minister who might (if satisfied, after holding a local inquiry, that there had been a default) make an order directing them to remedy it (s. 322).
On 1 April 1974 the principal provisions of the Water Act 1973 came into force. This established 10 regional water authorities in England and Wales (one of which was the North West Water Authority) with responsibility both for water supply and for sewerage. So far as sewerage is concerned, it imposed on them the duty to provide such public sewers as might be necessary for effectually draining their area and to make provision for effectually dealing with the contents of their sewers (s. 14(1)), and provided that they should exercise the functions conferred on local authorities by the relevant sections of the Public Health Act 1936 (s. 14(2)).
In 1986 the Government decided to privatise the water industry. It set out its reasons for the decision in a White Paper published in February 1986: Privatisation of the Water Authorities in England and Wales (Cmnd. 9734). In July 1987 the Government supplemented this proposal...
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