UKSC 40
On appeal from:  EWCA Civ 40
The Manchester Ship Canal Company Ltd and another (Respondents) v United Utilities Water Plc (Appellant)
The Manchester Ship Canal Company Ltd (Respondent) v United Utilities Water Plc (Appellant)
Lord Neuberger, President
JUDGMENT GIVEN ON
2 July 2014
Heard on 6-7 May 2014
Jonathan Karas QC
(Instructed by Pinsent Masons LLP)
Robert McCracken QC
(Instructed by Bircham Dyson Bell LLP)
Stephen Tromans QC
(Instructed by Canal and River Trust)
|Intervener (The Middle Level Commissioners)
Laura Elizabeth John
(Instructed by Taylor Vinters)
Douglas Edwards QC
(Instructed by Anglian Water Services Limited)
LORD SUMPTION (with whom Lord Clarke and Lord Hughes agree)
The law before 1991
"Nothing in this Act shall authorise any local authority to make or use any sewer, drain or outfall for the purpose of conveying sewage or filthy water into any natural stream or watercourse, or into any canal pond or lake until such sewage or filthy water is freed from all excrementitious or other foul or noxious matter such as would affect or deteriorate the purity and quality of the water in such stream or watercourse or in such canal pond or lake."
The Court of Appeal did not say that an implied right of discharge into private watercourses was necessary to the efficacy of a local authority's statutory powers and duties. Nor did they derive it from the mere existence of a power under section 16 to lay sewage pipes through streets, roads or private land. Since the Public Health Act 1875 conferred extensive powers of compulsory purchase on local authorities for the purpose of enabling them to perform their sewerage functions, neither point would have been sound. What they said, adopting the reasoning of North J, the trial judge, was that the right of discharge was implicit in the express terms of section 17, which by restricting the right to discharge foul water into any watercourse impliedly recognised the existence of a right to discharge treated effluent and surface water: see pp 295 (North J), 302 (Lindley LJ), 303 (Lopes LJ), 304-305 (Chitty LJ). There was no provision requiring local authorities to pay for mere exercise of their rights under sections 16 and 17, but they were required by section 308 to pay "full compensation" for any "damage" caused by the exercise of any of their powers. This was held to be a sufficient answer to any objection based on the adverse effect on property owners.
The legislation of 1991
"(1) It shall be the duty of every sewerage undertaker
(a) to provide, improve and extend such a system of public sewers (whether inside its area or elsewhere) and so to cleanse and maintain those sewers as to ensure that that area is and continues to be effectually drained; and
(b) to make provision for the emptying of those sewers and such further provision (whether inside its area or elsewhere) as is necessary from time to time for effectually dealing, by means of sewage disposal works or otherwise, with the contents of those sewers."
Sections 106 and 116 re-enact the provisions originally found in sections 21 and 18 respectively of the Act of 1875 conferring a right on owners and occupiers of premises to connect to a public sewer and forbidding local authorities to discontinue the use of a sewer without providing another equally effective sewer for the use of those served by it. Sections 158 and 159 substantially re-enact the power to lay pipes across streets, roads and other land which dated back to section 16 of the Act of 1875.
"(5) Nothing in sections 102 to 109 above or in sections 111 to 116 above shall be construed as authorising a sewerage undertaker to construct or use any public or other sewer, or any drain or outfall-
(a) in contravention of any applicable provision of the Water Resources Act 1991; or
(b) for the purpose of conveying foul water into any natural or artificial stream, watercourse, canal, pond or lake, without the water having been so treated as not to affect prejudicially the purity and quality of the water in the stream, watercourse, canal, pond or lake.
(6) A sewerage undertaker shall so carry out its functions under sections 102 to 105, 112, 115 and 116 above as not to create a nuisance."
The alleged general right of discharge: section 159 of the Water Industry Act 1991
"The fallacy, as it seems to me, lies in the underlying (but unspoken) premise that Parliament must have intended that sewerage undertakers should have facilities to discharge (which, plainly, they do require in order to carry out their functions) without paying for those facilities. Whether or not that premise could have been supported in the context of a public authority charged with functions imposed in the interests of public health, it cannot be supported, as it seems to me, in the context of legislation enacted following a decision to privatise the water industry."
Survival of pre-existing rights of discharge
"'public sewer' means . . . a sewer for the time being vested in a sewerage undertaker in its capacity as such, whether vested in that undertaker by virtue of a scheme under Schedule 2 to the Water Act 1989 or Schedule 2 to this Act or under section 179 above or otherwise . . ."
LORD NEUBERGER (with whom Lord Clarke and Lord Hughes agree)
The relevant statutory provisions
The statutory provisions relating to sewerage before 1989
The Water Act 1989
"The property, rights and liabilities of a water authority that shall be capable of being transferred shall include
(a) property, rights and liabilities that would not otherwise be capable of being transferred or assigned by the water authority;
(b) property situated anywhere ;
(c) rights and liabilities under enactments, including
(i) such rights and liabilities as may arise after the transfer date by virtue of enactments amended or repealed by this Act and, in pursuance of provision contained in Schedule 26 to this Act, may be the subject of an allocation made by a scheme under this Schedule; and
(ii) other rights and liabilities under enactments which are amended or repealed by this Act subject to a saving;
The 1991 legislation
The Interpretation Act 1978
"It is not easy to reconcile all the decisions. This lends weight to the criticism that the reasoning in them is essentially circular: the courts have tended to attach the somewhat woolly label 'vested' to those rights which they conclude should be protected from the effect of the new legislation. If that is indeed so, then it is perhaps only to be expected since, as Lord Mustill observed in L'Office Cherifien des Phosphates v Yamashita-Shinnihon Steamship Co Ltd  1 AC 486, 525A, the basis of any presumption in this area of the law 'is no more than simple fairness, which ought to be the basis of every general rule.'"
At para 201, Lord Rodger suggested that the test could well be expressed thus:
"would the consequences of applying the statutory provision retroactively, or so as to affect vested rights or pending proceedings, be 'so unfair' that Parliament could not have intended it to be applied in these ways? In answering that question, a court would rightly have regard to the way the courts have applied the criterion of fairness when embodied in the various presumptions."
The first question
The second question
The position prior to the 1989 Act
The first argument in relation to the 1989 Act
The alternative argument under the 1989 Act
The 1989 Act: conclusion
The position under the 1991 legislation