England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		28 February 2003

MR JUSTICE HARRISON:

1. Introduction

This is a claim for judicial review of two decisions of the Environment Agency Wales ("the Agency") both dated 21 August 2000 made pursuant to section 101A of the Water Industry Act 1991 ("the 1991 Act"). The claimant, Welsh Water, is a water and sewerage undertaker within the meaning of the 1991 Act. The Agency is a body corporate established under the Environment Act 1995. It is required to determine disputes arising under section 101A of the 1991 Act. The two decisions made by the Agency in this case relate to different areas – one decision relates to Llantilio Pertholey near Abergavenny and the other decision relates to Rhoseberse Road, Coedpoeth near Wrexham. In both decisions, the Agency determined that Welsh Water were under a duty to provide a public sewer to certain premises in those areas. Whilst it is necessary to deal with each decision separately on its own particular facts, the relevant statutory provisions applicable to each decision are the same. I therefore start by referring to the relevant statutory provisions.

2. Statutory provisions

Under section 94 of the 1991 Act, a sewerage undertaker is under a duty to provide a system of public sewers for the effectual drainage of its area. Under section 98, a sewerage undertaker is under a duty to provide a public sewer for the drainage for domestic purposes of premises in a particular locality in its area when required to do so by a requisition notice, provided certain conditions are satisfied. The requisitioner has to contribute towards the cost of the public sewer provided pursuant to section 98.

3. Section 101A of the 1991 Act, which is the relevant section for the purposes of this case, was inserted by the Environment Act 1995 and came into force on 1 April 1996. It imposes a further duty on a sewerage undertaker to provide a public sewer for the drainage of domestic sewage if the conditions mentioned in that section are satisfied. The cost of a public sewer provided pursuant to section 101A is met, not by the customer who benefits from it, but by means of a charging scheme applicable to the undertaker's customers generally.
4. Section 101A, so far as relevant, provides as follows:-

"101A. – (1) Without prejudice to section 98 above, it shall be the duty of a sewerage undertaker to provide a public sewer to be used for the drainage for domestic sewerage purposes of premises in a particular locality in its area if the conditions specified in subsection (2) below are satisfied.

(2) The conditions mentioned in subsection (1) above are –

(a) that the premises in question, or any of those premises, are premises on which there are buildings each of which, with the exception of any shed, glasshouse or other outbuilding appurtenant to a dwelling and not designed or occupied as living accommodation, is a building erected before, or whose erection was substantially completed by, 20^th June 1995;

(b) that the drains or sewers used for the drainage for domestic sewerage purposes of the premises in question do not either directly, or through an intermediate drain or sewer, connect with a public sewer; and

(c) that the drainage of any of the premises in question in respect of which the conditions specified in paragraph (a) above is satisfied is giving, or is likely to give, rise to such adverse effects to the environment or amenity that it is appropriate, having regard to any guidance issued under this section by the Secretary of State and all other relevant considerations, to provide a public sewer for the drainage for domestic sewerage purposes of the premises in question.

(3) Without prejudice to the generality of subsection (2)(c) above, regard shall be had to the following considerations, so far as relevant, in determining whether it is appropriate for any sewer to be provided by virtue of this section-

(a) the geology of the locality in question or of any other locality;

(b) the number of premises, being premises on which there are buildings, which might reasonably be expected to be drained by means of that sewer;

(c) the costs of providing that sewer;

(d) the nature and extent of any adverse effects to the environment or amenity arising, or likely to arise, as a result of the premises or, as the case may be, the locality in question not being drained by means of a public sewer; and

(e) the extent to which it is practicable for those effects to be overcome otherwise than by the provision (whether by virtue of this section or otherwise) of public sewers, and the costs of so overcoming those effects."

5. Subsections (4) and (5) deal with the guidance issued by the Secretary of State referred to in subsection 2(c), and subsection (6) deals with the enforcement of the duty under subsection (1). Subsection (7)(a) provides:

"(7) Any dispute between a sewerage undertaker and an owner or occupier of any premises in its area as to-

(a) whether the undertaker is under a duty by virtue of subsection(1) above to provide a public sewer to be used for any such drainage of those premises as is mentioned in that subsection:

…..

shall be determined by the Environment Agency and may be referred to the Environment Agency for determination by either of the parties to the dispute."

It is by virtue of subsection (7) that the two decisions in this case came to be made by the Agency. Subsection (8) provides that the Agency has to notify the parties of the reasons for its decision and also provides that the Agency can make recommendations or give guidance in relation to the drainage of the premises or locality in question. Subsection (9) provides that the Agency's decision shall be final.

6. Fresh evidence

There is a dispute between the parties as to the admissibility of evidence adduced on behalf of Welsh Water in the witness statements of Mr Roberts, a civil engineer employed by Oscar Faber, the firm of consulting engineers who carried out the technical assessments at Llantilio Pertholey and at Rhoseberse Road on behalf of Welsh Water. Those witness statements contain fresh evidence which Welsh Water say it is necessary to adduce in order to substantiate their grounds of challenge. The Agency object to the admissibility of that evidence, maintaining that the evidence should be limited to that which was before the Agency when it made its decisions. Nevertheless, without prejudice to that contention, evidence in reply to Mr Roberts' witness statements has been adduced by the Agency in the form of witness statements by Mrs Blacklidge, who is a consents scientist employed by the Agency and who drafted the decision letters in this case.

7. By agreement between the parties I took the witness statements of both witnesses into account de bene esse because their admissibility depended to a large extent on the view I took of the merits of the grounds of challenge themselves. I do not, therefore, propose to deal at this stage with the authorities to which I was referred on the admissibility of fresh evidence in judicial review proceedings.
8. I propose to deal with the challenge to each decision separately because the facts in each case are different although the grounds of challenge are similar in character in both cases. I deal first with the decision relating to Llantilio Pertholey.
9. Llantilio Pertholey - facts

The village of Llantilio Pertholey consists of six premises to the east of the Gavenney River – 1 and 2 Mitre Cottages, the Old Mitre Inn (now a private residence), St Teilo's Church, Glebe Cottage and Cherry Tree Cottage. There are three premises to the west of the river – St Teilo's Vicarage, St Teilo's House and Deri Farm Bungalow. All of those premises are served by septic tank systems.

10. Although the Agency's decision letter stated that the duty to provide a public sewer applied to the whole of Llantilio Pertholey village, it is now accepted that that was a mistake and that the decision imposing a duty to provide a public sewer was intended to relate to the locality of 1 and 2 Mitre Cottages, the Old Mitre Inn, St Teilo's Church and Glebe Cottage, all of which are located within a relatively short distance of each other.
11. Mr Haggart lives at 2 Mitre Cottages and it was he who applied to Welsh Water for public sewerage. Oscar Faber carried out a technical assessment on behalf of Welsh Water and prepared reports dated October 1997 and July 1998. The October 1997 report showed that there was pollution from three properties – 1 and 2 Mitre Cottages and the Old Mitre Inn. The effluent from the soakaway from the septic tank for the Old Mitre Inn discharged to a boggy area of ground in the adjacent field which adjoined the church car park, and the soakaway from the septic tank for 1 and 2 Mitre Cottages discharged from a pipe close to the river where it polluted the ground between the pipe and the river. There was a risk to agriculture and a potential health hazard. The October 1997 report stated that the geology was "Loam (reddish) over rock".
12. On 28 May 1998 the Agency wrote a letter to Welsh Water referring to the Ministerial Guidance and pointing out the need to have regard to whether all the properties in Llantilio Pertholey served by septic tank systems were currently, or were likely to be, causing problems. The letter pointed out that Oscar Faber's report only considered 1 and 2 Mitre Cottages and the Old Mitre Inn. Paragraph 2.3 of the letter stated:-

"2.3 In order for all the premises which might reasonably be expected to be drained by means of a public sewer to be considered, please supply us with:

2.3.1…..

2.3.2 the results of percolation tests carried out for the village as a whole as well as the soakaways considered in the report."

13. On 16 July 1998 Welsh Water replied by reference to the paragraph numbers in the Agency's letter of 28 May 1998. In reply to paragraph 2.3.2, they stated:-

"2.3.2 Geological maps for the area were studied prior to the commencement of the technical assessment and the information obtained indicated that the area was not suited to support soakaways and therefore no percolation tests were undertaken."

14. Subsequently, on 6 December 1999, following the quashing by consent of a decision by the Agency in March 1999, the Agency wrote to Welsh Water asking them if there was any further information they felt the Agency should consider, pointing out that it was important that the information provided to the Agency for a determination of the dispute should be made in the fullest terms possible. On 20 December 1999 Welsh Water replied that they had no further information to provide, whilst stating that they did not think there was likely to be a problem at Glebe Cottage. Finally, on 7 February 2000 the Agency wrote to Welsh Water pointing out that the Old Mitre Inn had become a private property and asking them if there were any further comments they wished to add with regard to the technical assessment carried out at Llantilio Pertholey for the section 101A dispute. On 10 February 2000 Welsh Water simply replied that they were aware that the Old Mitre Inn had become a private residence.
15. A pro-forma completed by the project manager, which was an appendix to the 1997 technical assessment, asked a number of questions including –"Are ground water levels so high as to inhibit effective drainage?" to which the answer was "No".
16. Hyder Consulting prepared an environmental report in July 1998 in which it was stated:-

"The geology of the area is sandstone overlain by glacial till and clay drift deposits of varying depths. These deposits are of very low permeability and are not suitable for the construction of soakaways. It is considered that replacement is not a feasible solution to the problems."

17. Oscar Faber concluded that the provision of new soakaways for the three polluting properties was not feasible because of the waterlogged nature of the ground and that the only alternative to public sewerage would be replacement by cesspools. They carried out a cost evaluation of replacement by cesspools compared to the provision of a public sewer to the three properties. The NPV cost of the cesspools was £109,600 and that of a public sewer was £164,900.
18. Hyder's environmental report of July 1998 compared the environmental effects of the cesspool and public sewer options both during construction and afterwards, including the effects of emptying the cesspools once a month. The public sewerage option was found to have a minor negative impact overall due to disruption from the construction period. In their July 1998 report Oscar Faber reported that there were no environmental problems with the sewage from Glebe Cottage, which had a septic tank and a soakaway, and no environmental problems with the sewage from St Teilo's Church which had a toilet which discharged to a septic tank located in the graveyard.
19. Based on those reports Welsh Water concluded, after weighing up the environmental, social and economic factors, that the septic tanks of 1 and 2 Mitre Cottages and the Old Mitre Inn should be replaced with cesspools, instead of those premises being connected to the public sewer.
20. Mr Haggart referred the dispute to the Agency who, on 1 March 1999, determined the dispute in favour of Mr Haggart, holding that Welsh Water was required to provide a public sewer. Following an application for judicial review, that decision was quashed by consent on the basis that the Agency had interpreted the Ministerial Guidance as meaning that it was not open to Welsh Water to recommend another private sewerage option (cesspools) once it was established that the existing private sewerage (septic tanks) was unsuitable.
21. The Agency then re-considered its decision and made a fresh decision on 21 August 2000, holding that Welsh Water was under a duty to provide a public sewer to 1 and 2 Mitre Cottages, the Old Mitre Inn, St Teilo's Church and Glebe Cottage. That is the decision which Welsh Water seek to impugn in these proceedings. The decision letter runs to nine pages. It summarises the various reports to which I have already referred. Having concluded that the requirements of section 101A(2)(a) and (b) were satisfied, the Agency considered the requirements of section 101A(2)(c) and concluded, after consideration of each of the premises in Llantilio Pertholey, that the adverse environmental and amenity effects associated with their drainage were, or were likely to be, serious and substantial.
22. In paragraph 14 of the decision letter, the Agency dealt with each of the premises. They concluded there existed adverse environmental and amenity impacts associated with the drainage from l and 2 Mitre Cottages. When dealing with the Old Mitre Inn, the decision letter expressly referred to the conclusion of both Oscar Faber and Hyder Consulting that the area was of low permeability and not suitable for soakaways. It stated that any premises in the area drained by septic tank and soakaways were likely to give rise to adverse effects to the environment or amenity. The Agency concluded in relation to the Old Mitre Inn that it was likely to give rise to adverse effects to the environment or amenity.
23. When dealing with St Teilo's Church and Glebe Cottage, the Agency referred to the fact that Welsh Water had found no evidence of environmental or amenity problems as a result of the discharge from those premises but they concluded that, as the area had been assessed as not suited to support soakaways, the drainage from those premises was likely to give rise to adverse effects to the environment or amenity. A conclusion in similar terms was also expressed in relation to Deri Farm Bungalow, St Teilo's House and St Teilo's Vicarage, although those premises had not been assessed by Welsh Water. Cherry Tree Cottage, 100 metres south of Glebe Cottage, was mentioned as being served by a public sewer.
24. In paragraph 15 of the decision letter, the Agency concluded that the "particular locality", using the terminology of section 101A(1), was formed by 1 and 2 Mitre Cottages, the Old Mitre Inn, St Teilo's Church and Glebe Cottage. They were described as forming a group with a distance of 100 metres between the two furthest premises.
25. In paragraph 19 of the decision letter, the Agency referred to Welsh Water's costing of the cheapest public sewerage option compared to the cost of the option of cesspools for 1 and 2 Mitre Cottages and the Old Mitre Inn. They concluded in paragraph 20 of the decision letter:-

"The Agency has found that more than three premises in the locality of Llantilio Pertholey give rise to adverse effects to the environment amenity, including St Teilo's Church and Glebe Cottage. Therefore the cost of the cesspool option would rise proportionately."

26. In paragraph 21 of the decision letter, the Agency stated that they had reservations about widespread installation and maintenance of cesspools in Llantilio Pertholey and that they were concerned as to the sustainability of the proposed cesspool option and whether cesspools contribute a sound, long term solution to the environment and amenity problems of Llantilio Pertholey. Reference was made to a number of documents giving guidance relating to cesspools.
27. Paragraphs 22 to 24 of the decision letter stated as follows:-

"Having considered the particular circumstances the Agency does not accept the Company's conclusion that cesspool installations are the appropriate response to the adverse effects caused by the pollution…..The Agency does not consider that cesspools can practicably overcome the adverse effects on the environment and amenity so as to provide a long term sustainable solution. Experience with cesspools is reflected in CIRIA technical note 146 and the recent DETR circular. Individual circumstances of a case may indicate that cesspools are the proper or perhaps the only practicable solution but in this case the Agency is of the view that a public sewerage provision is the appropriate method of dealing with the pollution problem identified in the evidence. Cesspools, compared with public sewer provision, provide only a relatively shorter term solution. In addition the need to empty cesspools on a regular basis is a considerable environment disbenefit. The frequency of the tanker visits has been underestimated as the Company's assessment relied on out of date information. The number of visits is dependent upon the amount of sewage produced by the household. BS 6297: 1983 as relied on by the Company estimates that an average household of 3 persons will produce 7m³ of sewage every 3 weeks. PPG4 (1997) reduces the period to 2 weeks.

Tanker movements to, within and from this locality are undesirable and detrimental having regard to the rural nature of the area and the roads themselves. The use of cesspools will result in a significant number of new tanker visits.

The Agency considers that the information used by the Company underestimates the number of tanker visits required. This will increase the maintenance cost of the cesspools. Also the use of tankers has an environmental impact which is absent in a public sewer provision.

23. Accordingly, the Agency having regard to the Ministerial guidance and all relevant considerations in this particular, case including, in particular, technical factors, finds that the provision of cesspools in Option 3 is not considered to be an appropriate solution.

DECISION

24. The Agency has considered the submissions of the parties and in particular the options considered by the Company. The Agency finds that, in this case, the adverse environmental effects caused by the existing sewerage provision are such that the provision of a public sewer is the appropriate remedy. The costs of the provision of a public sewer have been considered as well as the costs of the Company's alternative solutions together with the environmental effects likely to arise if a public sewer is not provided. The appropriate solution is the provision of a public sewer to the village of Llantilio Pertholey."

28. The last paragraph of the decision letter concluded by saying that there was a duty to provide a public sewer to the whole village of Llantilio Pertholey. However, as I mentioned previously, it is accepted by the Agency that that was a mistake and that the duty was only intended to apply to the locality of 1 and 2 Mitre Cottages, the Old Mitre Inn, St Teilo's Church and Glebe Cottage.
29. Submissions - general

I turn now to deal with the generality of the submissions that were made in this case before turning to the submissions that were made specifically in relation to Llantilio Pertholey.

30. The submissions made by Miss Lang QC on behalf of Welsh Water were wide ranging and sometimes very detailed. The main grounds of challenge are the same for both Llantilio Pertholey and Rhoseberse Road although they differ in application to the facts of the two different locations.
31. The first ground of challenge relates to the Agency's findings that there were likely to be adverse environmental effects in relation to properties other than those which Welsh Water had accepted caused adverse environmental effects – that is to say, St Teilo's Church and Glebe Cottage in the case of Llantilio Pertholey, and 8, 9, 11, 12, 16 and 17 Rhoseberse Road in the case of Rhoseberse Road, Coedpoeth. The general thrust of the submission was that the Agency failed to carry out adequate inquiries and wrongly assumed that they did not need to carry out the necessary balancing exercise under section 101A(2) and (3) in respect of those properties because they were under the impression that a duty to sewer all the premises in the locality arose if it were found that any of them were causing adverse environmental effects. Such an approach had been held to be unlawful in the case of R v The Environment Agency, ex parte Anglian Water Services Limited, both at first instance by Tomlinson J. (transcript, 27 October 2000) and on appeal by the Court of Appeal [2002] EWCA Civ 05 31 January 2002. The Agency's decision in this case preceded both of the decisions in that case. This ground of challenge was one of those which gave rise to fresh evidence being adduced to show what would have been revealed if adequate inquiries had been made by the Agency. It will be necessary to refer to some of that evidence when dealing with the individual cases.
32. It was accepted on behalf of Welsh Water that the Agency could impose the public sewerage duty in respect of premises other than those found by Welsh Water to be causing adverse environmental effects, but it was submitted that, if they did so, they should either commission consulting engineers or ask Welsh Water to carry out a further assessment in respect of those premises. Reference was also made to the Agency's guidance notes mentioning the possibility of site visits and even an informal hearing in certain circumstances.
33. The second ground of challenge was that in both cases the Agency failed to weigh in the balance the considerations in section 101A (3). That is partly tied up with the first ground of challenge but it also relates to other factual matters as well.
34. The third ground of challenge was that in both cases the Agency applied its policy against cesspools inflexibly and failed to consider that option with an open mind. I will deal with the Agency's policy on cesspools when I come to the decisions themselves.
35. The fourth ground of challenge in respect of both decisions was that the Agency failed to take into account the costs of providing a public sewer as against the costs of the private sewerage alternative as required by section 101 (A)(3)(c) and (e). It will be necessary to consider that ground of challenge in relation to the facts of each of the two cases. It was the subject matter of further evidence by both sides.
36. The fifth, sixth and seventh grounds of challenge in both cases was, respectively, that the decision was irrational, that it failed to take into account relevant considerations and that it was based on material mistakes of fact. Those grounds necessitate consideration of the facts of each case and they have also given rise to fresh evidence, the admissibility of which is challenged on behalf of the Agency.
37. Submissions – Llantilio Pertholey

(i) St Teilo's Church and Glebe Cottage.

It was said that the Agency were too ready to extend the public sewerage duty to St Teilo's Church and Glebe Cottage in circumstances where there was no evidence of any adverse environmental effects caused by those properties, and that the Agency failed rigorously to carry out the section 101A(3) balancing exercise.

38. It was submitted that the Agency made a material error of fact and/or failed to take into account relevant considerations in relation to the sewerage discharge from 1 and 2 Mitre Cottages and the Old Mitre Inn in that the reason for Welsh Water not recommending soakaways was because of the level of the water table, not because of the impermeability of the ground. There was fresh evidence to that effect by Mr Roberts who maintained that the soil was permeable and drains well but that the discharge from those premises was likely to be at or below the water table so that a soakaway would be unlikely to operate correctly in that location. Mr Roberts produced some photographs and also a section which purported to show the levels of the river, the water table and the soakaways of St Teilo's Church and Glebe Cottage, showing that the discharge from those two premises was likely to be above the level of the water table into permeable soil which, he said, would account for there being no adverse environmental effects from those premises.
39. Mrs Blacklidge stated that the Agency relied on the information relating to the geology of the area supplied by Welsh Water in the reports of Oscar Faber and Hyder Consulting, together with the answers in the pro-forma completed by the project manager to which I have previously referred. She also stated, by reference to the ground levels shown on one of Mr Roberts' plans, that the soakaways for St Teilo's Church and Glebe Cottage were at a lower level than the soakaway for the Old Mitre Inn, to which Mr Roberts replied that the river was at a lower level at St Teilo's Church and Glebe Cottage. He thought that the project manager had completed the pro-forma incorrectly when answering the question about the ground water levels.
40. Percolation tests were carried out on behalf of Welsh Water in January 2001, well after the decision in this case. Those tests showed poor percolation at a test hole in the vicinity of St Teilo's Church and Glebe Cottage, but the tests were said to be unreliable because they were made after heavy rainfall.
41. Miss Lang submitted that the Agency had made material errors of fact and/or failed to take into account relevant considerations and/or reached a perverse conclusion because they had wrongly assumed that St Teilo's Church and Glebe Cottage could not support a soakaway because they were in the vicinity of 1 and 2 Mitre Cottages and the Old Mitre Inn, whereas the reason for those latter premises not being able to support soakaways was due to the level of the water table, not the impermeability of the ground.

(ii) cost

42. Cost was another aspect on which there was fresh evidence. I have already referred to the comparative cost figures given by Welsh Water for the private and public sewerage options and I have referred to paragraph 19 of the decision letter which stated that the cost of the cesspool option would rise proportionately to include St Teilo's Church and Glebe Cottage.
43. Welsh Water contended that the Agency made material errors and/or failed to take into account material considerations and/or reached a perverse conclusion for three reasons which are based on Mr Roberts' evidence. Firstly, that no reference was made to the increased cost of providing public sewerage for St Teilo's Church and Glebe Cottage; secondly, that the Agency failed to take into account the engineering difficulties due to topography in constructing a public sewer for Mitre Cottages and the Old Mitre Inn and also the need for a pumping station and, thirdly, the Agency failed to take into account the need for pumping stations for St Teilo's Church and Glebe Cottage.
44. Mrs Blacklidge, in reply, stated that the Agency accepted all Welsh Water's costings, which would have allowed for the points made by Mr Roberts in connection with providing public sewerage for Mitre Cottages and the Old Mitre Inn. The unit cost for a cesspool, derived from Welsh Water's figures, was £36,500 so that the total cost for the cesspool option including St Teilo's Church and Glebe Cottage would be £182,000. The cost of the public sewerage option including Glebe Cottage had previously been given by Welsh Water as £183,200. The cost of linking St Teilo's Church to the sewer would be modest as it would have to pass the Church, and, on Welsh Water's own evidence, a pumping station would cost about £4,000, making a total of £187,200 for the public sewerage option.
45. Mr Roberts, in reply, asserted that a further £1520 should be added to the public sewerage option to allow for the cost of the pumping main to the public sewer. Allowing for NPV calculations, he gave figures of £183,300 for the cesspool option and £203,200 for the public sewerage option. Mrs Blacklidge does not accept the extra cost figure for the pipework because it would be the responsibility of the owner of the premises.

(iii) St Teilo's House, St Teilo's Vicarage and Deri Farm Bungalow

46. It will be remembered that these premises lie to the west of the river. They had not been assessed by Welsh Water. The decision letter stated that, as the area had been assessed as not suited to support soakaways, the Agency concluded that those premises were likely to give rise to adverse effects to the environment or amenity. Although it is now accepted on behalf of Welsh Water that the public sewerage duty was not intended to include those premises, it is submitted that the Agency's statement relating to them illustrates both the failure of the Agency to investigate the true need for a public sewer and the tendency of the Agency to assume that there was a duty to provide a public sewer to the whole village if some of the premises in the village had been shown to be causing adverse environmental effects.
47. The evidence of Mr Roberts was that St Teilo's House and St Teilo's Vicarage were at the top of a hill on permeable ground suitable for soakaways in a different catchment area separated by a river and a main road from Mitre Cottages, the Old Mitre Inn, St Teilo's Church and Glebe Cottage. Welsh Water had discovered in January 2001 that the owner of Deri Farm Bungalow had unilaterally connected his premises to the main sewer without notifying them.
48. In relation to the alleged failure to carry out proper investigations, Miss Lang submitted that the Agency was under a duty to satisfy itself that it has the information required to discharge its statutory duty to make a proper determination of the disputed issue, particularly where, as here, it imposed a duty to sewer premises which had not been the subject of the application. It was suggested that the Agency has an inquisitorial role as well as a quasi-judicial role.
49. Mrs Blacklidge described in her first witness statement how the Agency performs its statutory duty under section 101A. It often seeks clarification or further information, although it has no power to compel its provision. It does not carry out or commission any independent investigation itself. Although it can draw on some in-house expertise, it is primarily related to environmental matters. It does not have access to civil engineers or geologists. It therefore generally accepts the professional technical reports of consulting engineers engaged by the sewerage undertaker. The Agency therefore makes its determination on the evidence placed before it.

(iv) The Agency's cesspool policy

50. In its policy on cesspools, the Agency stated that it does not accept the promotion or proliferation of cesspools as a long term sewerage option in view of potential environmental, amenity or public health problems arising from inadequate operation and maintenance. Reference was made in the policy to DETR Circular 3/99 which was said to discourage the use of cesspools. The policy stated that in certain circumstances, such as dwellings where there is no suitable or viable alternative option, the use of cesspools may be acceptable.
51. Miss Lang submitted that the terms of the decision letter showed that the policy had been applied inflexibly, rejecting cesspools out of hand without considering the circumstances of the individual case, including the small number of properties affected, the limited environmental disadvantages in the area and the disproportionate cost of installing public sewerage. The Agency had disregarded the fact that cesspools were a lawful and acceptable means of drainage and it failed to have regard to the enforcement powers available to it in relation to the maintenance and proper operation of cesspools. It was submitted that the Agency's strong preference for public sewerage had resulted in its failure to carry out a proper balancing exercise under section 101A. Reference was made to the identical text relating to cesspools in paragraphs 21 and 22 of both decision letters as being illustrative of the Agency's failure to have regard to the individual facts of the case.

Conclusions – Llantilio Pertholey

52. I turn then to my conclusions relating to the Llantilio Pertholey decision, but they must be prefaced by a short summary of the submissions relating to the admission of the fresh evidence introduced by Mr Roberts on behalf of Welsh Water and replied to by Mrs Blacklidge on behalf of the Agency.
53. Mr Hockman QC submitted on behalf of the Agency that the position is governed by R v Secretary of State for the Environment, ex parte Powis, [1981] 1 WLR 584 where Dunn LJ, giving the judgment of the Court, stated at p. 595G:-

"Finally there was an application on behalf of the tenant to admit fresh evidence which the Divisional Court had refused to admit. Like the Divisional Court we considered the evidence de bene esse. What are the principles on which fresh evidence should be admitted on judicial review? They are (1) that the court can receive evidence to show what material was before the minister or inferior tribunal: Ashbridge Investments Ltd v Minister of Housing and Local Government [1965] 1 W.L.R. 1320, 1327, per Lord Denning M.R.; (2) where the jurisdiction of the minister or inferior tribunal depends on a question of fact or where the question is whether essential procedural requirements were observed, the court may receive and consider additional evidence to determine the jurisdictional fact or procedural error: see de Smith's Judicial Review of Administrative Action, 4^th ed. (1980), a pp. 140, 141 and cases there cited,; and (3) where the proceedings are tainted by misconduct on the part of the minister or member of the inferior tribunal or the parties before it. Examples of such misconduct are bias by the decision making body, or fraud or perjury by a party. In each case fresh evidence is admissible to prove the particular misconduct alleged: see Reg. V West Sussex Quarter Sessions, Ex parte Albert and Maud Johnson Trust Ltd [1974} Q.B. 24, 39, 43 per Orr and Lawton LJJ."

54. Dunn LJ then referred to the reliance placed by counsel for the appellant on various passages in the judgments in Secretary of State for Education and Science v Tameside Metropolitan Borough Council [1977] AC 1014, namely Scarman LJ in the Court of Appeal (at p. 1030E) and in the speeches of Lord Wilberforce (at p. 1047D) and Lord Diplock (at p. 1064). Dunn LJ stated:-

"It was said that those statements support the proposition that if the Secretary of State is misled by the failing of one party falling short of fraud to put before him evidence which should have been put before him, and on which he probably would have come to a different conclusion from that to which he came on the evidence which was put before him, then the court on judicial review should admit that evidence as fresh evidence. It was said that to fail to do so would be a breach of natural justice.

The Tameside case was a very special case. In effect the minister was himself reviewing the decision of the local authority and his decision was analogous to the position of the court on judicial review. The evidence was admitted in the Court of Appeal by consent. The case is not authority for the proposition relied on by Mr Rougier. Indeed there are indications in the speeches in the House of Lords to the contrary."

55. Mr Hockman submitted that the present case did not come within any of the three categories specified in Powis where fresh evidence would be admissible, nor did it come within the category mentioned by Scarman LJ at p. 1030E in the Court of Appeal in the Tameside case, namely where there was misunderstanding or ignorance of an established and relevant fact. Mr Hockman described an established fact in that context as one that was stark, indisputable, clear cut and so self-evident that the decision maker should in any event have been aware of it. He submitted that none of the matters about which Mr Roberts gave evidence could be so categorised.
56. Miss Lang, in the other hand, submitted that the law had moved on since the case of Powis which pre-dated error of material fact as being a ground of judicial review. She relied on the summary of the law on this topic by Michael Fordham in Judicial Review (March 2000) which met with approval in R v Secretary of State for the Home Department, ex parte Turgut [2001] 1 All ER 719. At paragraph 25, Mr Fordham stated:-

"The list of grounds for judicial review is not closed, and it would be dangerous to treat the Powis principles as a rigid or exhaustive account of grounds which might warrant resort to fresh evidence. Two examples of situations where further material may well be relevant, as going to a ground for judicial review, are as follows:

(e) Defective inquiry. Where it is alleged that the respondent has failed in its duty to acquaint itself with relevant information, it will often be essential for the applicant to demonstrate that there was material which was not before the decision-maker (but should have been) (see, e.g. R v Rochford District Council ex p. Ferdinando (unreported) 8 September 1992, Roger Henderson QC, where evidence was admissible "to show what could, upon proper inquiry, have been elicited…"). This is similar to the situation in R v Criminal as involving procedural unfairness (at pp. 345C and 347C)."

57. Paragraph 26 of Mr Fordham's summary states that there is some support for a narrow principle of "fundamental" error of fact, although such an error will usually be characterised as involving a failure to take account of relevant material or a defective inquiry.
58. In my view, there is force in the submissions of both sides on this point. On the one hand, judicial review is a developing area of the law where it can be said that the grounds of judicial review are not closed but, on the other hand, the principles in Powis provide an approved and sensible basis on which to proceed which should only be departed from in exceptional circumstances where it can be justified in order to achieve justice and fairness. One of the dangers of admitting fresh evidence in judicial review proceedings is that the court may thereby find itself put in the position of being asked to decide the merits of the case rather than acting as a court of review. That is particularly relevant in this case in view of the conflicting evidence of Mr Roberts and Mrs Blacklidge on a variety of topics.
59. The conclusion that I have reached in this case, having considered the fresh evidence de bene esse, is that it should be decided on the evidence that was before the Agency when it reached its decision.
60. It is accepted by both sides that it is open to both Welsh Water and the Agency to include premises in the duty to sewer which were not the subject of the initial application. Indeed, although it is not directly relevant to this case, it was accepted that, in certain circumstances, premises in the locality which are not giving, or are not likely to give, rise to adverse environmental effect could be included in the duty to sewer (see particularly paragraph 77 of the judgment of Tomlinson J. in the Anglian case). The possibility of including in the duty to sewer under section 101A premises in the locality in addition to those which were the subject of the initial application must therefore have been within the contemplation of both Welsh Water and the Agency. If, however, the Agency were contemplating including such additional premises within the duty, it should, in my view, ensure that the sewerage undertaker is aware that it is proposing to consider the inclusion of those additional premises and it should seek to ensure that it has what it considers to be the relevant information in relation to those premises, whether from the sewerage undertaker or otherwise.
61. In the Llantilio Pertholey case the Agency made it quite clear to Welsh Water in its letter of 28 May 1998 that it was concerned that Oscar Faber's report of October 1997 only considered 1 and 2 Mitre Cottages and the Old Mitre Inn. It pointed out that regard must be had to whether all the properties in Llantilio Pertholey served by septic tank systems were currently causing, or were likely to cause, problems. In order for all the premises to be considered, they requested, inter alia, the results of percolation tests carried out for the village as a whole as well as the soakaways considered in the report. The reply, which I have quoted earlier, was that geological maps for the area had been studied and that they indicated that the area was not suited to support soakaways and that was why percolation tests had not been undertaken. That information was consistent with the information provided by Hyder Consulting insofar as they stated that the geology of the area (which they described as sandstone overlain by glacial till and clay drift deposits of varying depths) showed deposits of very low permeability which was not suitable for the construction of soakaways. Furthermore, the Agency knew from one of the answers in the pro-forma accompanying Oscar Faber's October 1997 report that ground water levels were not so high as to inhibit effective drainage. There was no suggestion in the October 1997 report that the project manager was wrong in giving that answer, as is now suggested by Mr Roberts.
62. Based on the information supplied by Welsh Water, and bearing in mind that the Agency again asked Welsh Water on 8 December 1999 if there was any further information they felt the Agency should consider (indeed they did so yet again on 7 February 2000), I consider that the Agency was entitled to proceed to determine the dispute on the information that had been provided to it. Welsh Water was on notice that the Agency was considering the additional premises and they had supplied such information as they thought necessary in response to the Agency's requests. The Agency was well aware that Welsh Water had found no evidence of environmental or amenity problems associated with the discharge from St Teilo's Church or from Glebe Cottage – indeed, it expressly said so in paragraph 14 of its decision letter. Section 101(A)(2)(c), however, refers both to actual adverse effects and to likely adverse effects. The Agency concluded that the drainage from St Teilo's and Glebe Cottage was likely to give rise to adverse environmental or amenity effects as the area had been assessed as not suited to support soakaways. In view of the information that had been supplied to the Agency on behalf of Welsh Water to which I have referred, that was a conclusion which the Agency was entitled to reach.
63. I reject the suggestion that the information that was provided only referred to the area of 1 and 2 Mitre Cottages and the Old Mitre Inn. That is plainly not so from the context in which the information was provided and the terms of the information itself. In any event, St Teilo's Church and Glebe Cottage are in close proximity to those premises. It cannot be open to Welsh Water now to assert that the problem at 1 and 2 Mitre Cottages and the Old Mitre Inn was due to the water table level rather than the impermeability of the soil, particularly when the information provided to the Agency was that ground water levels were not so high as to preclude effective drainage. It is simply not good enough to say now that that information was incorrect and that the Agency has made material errors of fact resulting from a failure to make adequate inquiries. I am not in a position to resolve the dispute arising on the fresh evidence given by Mr Roberts and Mrs Blacklidge about the respective levels of the water table and the soakaways of the various properties, nor would it be appropriate for me to resolve such a dispute.
64. For all those reasons I do not consider that it would be appropriate to admit the fresh evidence relating to this aspect of the matter. In my view, the Agency was entitled, on the information before it, to reach the conclusion that the drainage from St Teilo's Church and Glebe Cottage was likely to give rise to adverse effects to the environment because the area had been assessed as not suited to support soakaways.
65. I do not accept the submission that the Agency failed to carry out the necessary balancing exercise under section 101A(2) and (3) because it was under the impression that it had to sewer all the premises in the locality if it found that any of them were causing adverse environmental effects. If that had been so, the decision letter would have taken a different form and there would have been no reason to conclude that there were likely to be adverse environmental effects from the additional properties. Nor do I accept that there has been a failure to carry out the necessary balancing exercise under section 101A. It seems to me to be clear from the decision letter that the Agency considered the various relevant factors specified in section 101A(2) and (3). The ultimate decision and the weighing of the various factors are matters of judgment for the Agency as the decision maker. I do not consider that the decision could be said to be Wednesbury unreasonable.
66. I should say that, in coming to those conclusions, I have taken into account what I regard as an unsatisfactory aspect of the decision, namely the conclusion relating to St Teilo's House, St Teilo's Vicarage and Deri Farm Bungalow. I can understand Welsh Water seeking to rely on the Agency's conclusion relating to those properties as evidence of a failure to consider the matter properly. Those premises are geographically some way away from the other premises to which the decision relates and they are on the other side of the valley. I do not consider that the Agency was entitled to conclude on the evidence before it that there were likely to be adverse environmental effects from those premises. Having said that, however, it is quite clear from paragraph 15 of the decision letter that the Agency did not treat those premises as being within the "particular locality" under section 101A to which the decision related. It is not, therefore, a matter directly affecting the decision itself and, in my view, it is not, as a matter of degree, sufficient in itself to infect or taint the decision to the extent suggested on behalf of Welsh Water.
67. I come next to the way in which the Agency dealt with the issue of cost. In paragraphs 18 and 19 of the decision letter, the Agency set out the various cost figures relating to 1 and 2 Mitre Cottages and the Old Mitre Inn that were contained in Oscar Faber's October 1997 Report. In paragraph 20, which deals with the cost of cesspools, the Agency stated that, as they had found that there was likely to be adverse environmental effects from the drainage of St Teilo's Church and Glebe Cottage as well, the cost of the cesspool option would rise proportionately. That was undoubtedly correct. The main point made on behalf of Welsh Water was that there was no reference to the increased cost of providing public sewerage for St Teilo's Church and Glebe Cottage. That is also undoubtedly correct. It is clear that the reason for its absence in paragraph 20 is because that paragraph was dealing with the cost of the cesspool option. It would, however, had been better if the decision letter had also made reference to the fact that the cost of the public sewerage option would also be increased as a result of the inclusion of St Teilo's Church and Glebe Cottage. I do not, though, consider that to be fatal to the decision because it was a self-evident fact that would have been apparent to everybody and it is not suggested that the Agency were unaware of it. The Agency had not quantified the increased cost of the cesspool option in the decision letter, so they would have been unlikely to have done so for the increased public sewerage option even if they had mentioned it. They were plainly dealing with the increased cost in a broad way in the knowledge that detailed figures were already available for the comparative figures based on 1 and 2 Mitre Cottages and the Old Mitre Inn which showed the cesspool option to be cheaper than the public sewerage option. Whilst therefore it would have been better if the Agency had referred to the fact that the public sewerage cost would also be increased,, I am not persuaded that it was a matter which was not to be taken into account by the Agency and I do not consider that it is a justifiable ground for impugning the decision. The dispute between Mr Roberts and Mrs Blacklidge over certain aspects of the cost figures arises after the event and does not affect that general point arising from the decision letter itself.
68. The last matter to deal with in connection with the Llantilio Pertholey case relates to the Agency's cesspool policy. Put shortly, it is said that the policy was inflexibly applied without regard to the individual circumstances of the case. There is no dispute, nor could there be, that the Agency's cesspool policy, generally favouring public sewers over cesspools, is lawful – that point was decided by Tomlinson J. in the Anglian case. The point in issue is whether the Agency's application of the policy in this case was lawful.
69. I can understand Welsh Water's suspicions from the terms of the decision letter that the Agency were simply applying their policy in an inflexible way. As I have mentioned previously, the paragraphs of the decision letter dealing with the issue of cesspools are worded virtually identically in both the Llantilio Pertholey and the Rhoseberse Road decision letters. That gives rise to the suspicion that it is being trotted out in each case regardless of the circumstances. That, however, is an over-simplification of the matter. It is inevitable that general points about cesspools derived from the Agency's policy will need to be referred to in the decision letter. Paragraph 20 of the decision expressly purports to be referring to cesspools in connection with the circumstances of this case, and reference is made in paragraph 22 to the rural nature of the area and the roads themselves in connection with tanker movements. That shows that consideration has been given to the nature of the area. The fact that the same is said in the Rhoseberse Road decision letter is simply a reflection of the fact that both areas are rural areas. In paragraph 22 of the decision letter the Agency state that the individual circumstances of a case may indicate that cesspools are the proper, or perhaps the only, solution but that in this case public sewerage is the appropriate method of dealing with the problem identified in the evidence. Whilst the decision letter does not mention the number of premises involved in connection with the cesspool issue as being small, that is self-evident from the decision letter itself. The relevant cost figures for the cesspool option are given. There is no need to spell out the lawfulness and acceptability of cesspools – that is commonly accepted. The Agency does not have to refer expressly to its enforcement powers relating to cesspools. Paragraph 4.2 of its policy states that the enforcement powers are extremely difficult to use.
70. Overall, therefore, although I understand Welsh Water's concern over the application of the Agency's cesspool policy, I am not persuaded that the Agency has applied the policy inflexibly without regard to the individual circumstances of this case.
71. My conclusion relating to the Llantilio Pertholey decision, therefore, is that the grounds of challenge are not made out and that the decision was lawful.
72. Rhoseberse Road, Coedpoeth - facts

I turn then to deal with the Rhoseberse Road decision. The premises in Rhoseberse Road, Coedpoeth relevant to these proceedings are strung out along the road in a linear fashion. The northernmost properties consist of Homeleigh (thought to be 7 Rhoseberse Road) and 8 and 9 Rhoseberse Road on the west side of the road, together with Park Cottage standing on its own on the east side of the road nearby, whilst a short distance further south there are 8 premises consisting of 10 to 16 Rhoseberse Road on the west side of the road and 17 Rhoseberse Road on the east side of the road standing on its own opposite 16 Rhoseberse Road.

73. The application for a public sewerage connection in this case was made by Mr and Mrs O'Sullivan of 15 Rhoseberse Road and Mrs Saunders of 14 Rhoseberse Road. Those two properties share a septic tank, the effluent from which is piped under the road to a soakaway located in the field adjacent to 17 Rhoseberse Road.
74. Oscar Faber carried out technical assessments and prepared reports dated September 1997 and August 1998. The September 1997 report stated:-

"Whilst no porosity tests have been carried out, at the time of construction of the new soakaway [for nos. 14 and 15 Rhoseberse Road] it is understood that the ground conditions were considered to be unsuitable by its constructor…During the interview the applicants reported that the ground had a high clay content, and that the water table was generally high in this area. The ground around the applicant's property was observed by Oscar Faber to be relatively "marshy" at the time of inspection."

The area of the soakaway, which was in a cultivated field, was found to be wet with standing water present, although no odour was detected and no fungus visible.

75. The same report also stated that consultation with the local environmental health authority had revealed that there were also problems with the septic tank at 13 Rhoseberse Road with sewage effluent traced back to that septic tank being detected in the road gully and ditch between 12 and 13 Rhoseberse Road.
76. The report stated that that there was a potential risk for groundwater sources, a risk to public health and an effect on local agriculture. The report stated:-

"Whilst no percolation tests have been carried out, ground conditions are understood to be such as to preclude the effective use of a soakaway for the disposal of effluent from a septic tank."

77. Further information about the septic tanks of other residents in Rhoseberse Road was revealed, firstly, by questionnaires completed by some of them, which revealed that the septic tank at no. 17 operated adequately. The occupier at no. 9 said that he shared a septic tank with no. 7 which operated adequately but that there was some odour in the summer. However, the occupier of no. 8 said that he shared a septic tank with no. 9 which operated adequately. The occupier of Park Cottage described the condition of his septic tank as poor, stating that the outfall land drains were silted up and discharged into clay and that the excess liquid backs up the drain resulting in a bad smell and the need to empty the tank frequently. Secondly, the August 1998 report revealed firstly that nos 11 and 12 share a septic tank which had recently been reconstructed and was operating satisfactorily although there were some odour problems in the summer and, secondly, that the septic tank at no. 16 was operating satisfactorily. There was no information relating to no. 10 which was thought to be unoccupied.
78. The September 1997 report compared the cost of the private sewerage option of £141,500, consisting of the replacement of the septic tanks serving 13, 14 and 15 Rhoseberse Road with cesspools and the renovation of the septic tank at Park Cottage, with the cost of £161,000 for connecting all the premises in Rhoseberse Road to the public sewer.
79. A proforma completed by Oscar Faber's project manager gave an affirmative answer to the following two questions "Is there proliferation of existing discharges overloading the soakage capacity or watercourse leading to pollution or nuisance?" and "Do percolation tests/geology show that the soil conditions preclude effective disposal?"
80. Prior to the August 1998 report, the Agency, in a letter of 14 July 1998, had requested further information from Welsh Water arising out of their September 1997 report. The Agency said that regard must be had to whether all 11 properties in Rhoseberse Road with septic tanks were currently, or were likely to be, causing problems. It remarked that the September 1997 report had included the cost for connecting all of those premises to the public sewer but that the report had only considered replacing the septic tanks at 13, 14 and 15 Rhoseberse Road and renovating the septic tank at Park Cottage in the private sewerage option. The Agency asked why septic tank replacement was not considered necessary for the other premises in Rhoseberse Road, particularly bearing in mind the affirmative answers to the two questions in the pro-forma completed by the project manager to which I have just referred. They also asked to be supplied with:-

"the results of percolation tests/geology surveys carried out for the village as a whole as well as the soakaways considered in the report."

81. In a letter dated 7 September 1998, Welsh Water replied to the Agency's request for percolation tests/geology surveys for the village as a whole by stating:-

""Geological maps for the area were studied prior to the commencement of the Technical Assessment and the information obtained indicated that the area is generally glacial till (boulder clay) with underlying coal measures. This geology can lead to significant variations in the suitability of the ground for soakaway operation, therefore percolation tests were not undertaken. However, no evidence of pollution was found in the Park Cottage area and the soakaways were assumed to be functioning correctly."

82. Oscar Faber's August 1998 report also dealt with costings. In that report, however, unlike the September 1997 report, they excluded the renovation of the septic tank at Park Cottage from the private sewerage option, and the public sewerage option was restricted to 13, 14 and 15 Rhoseberse Road. The cost of the private sewerage option was £109,600 compared to the cost of the public sewerage option of £128,900.
83. Hyder Consulting prepared an environmental report dated September 1998. That report referred to the geology of the area in the following terms:-

"The high clay content of the ground, and the high water table level in this area indicate that relocation of the soakaway would not remove the pollution problem. British Geological Survey maps indicate that the geology of the area is generally glacial till (boulder clay) with underlying coal measures. This geology can lead to significant variations in the suitability of the ground for the operation of soakaways. It is considered, based on this information, that replacement is unlikely to be a feasible solution to the problems."

The report compared the environmental effects of the cesspool option and the public sewerage option both during construction and afterwards, including the effects of emptying the cesspools once a month. Overall, the public sewerage option was found to have a minor negative impact. The report concluded that septic tanks at 13, 14 and 15 Rhoseberse Road should be replaced by cesspools which would result in no negative impacts from the construction or operational phases, and substantial benefit to the environment during operation.

84. Welsh Water concluded, after weighing up the environmental, social and economic factors that the private sewerage option, rather than the public sewerage option, should be adopted. They notified the applicants, Mr and Mrs Sullivan and Mrs Saunders, that their application for public sewerage had been unsuccessful. The applicants referred the dispute to the Agency who, on 9 February 1999, held that Welsh Water was under a duty to provide a public sewer for the locality of Rhoseberse Road. That decision was also quashed by consent in the High Court at the same time and for the same reason as the Agency's previous decision relating to Llantilio Pertholey.
85. The Agency then reconsidered its decision and made a fresh decision on 21 August 2000, holding that Welsh Water was under a duty to provide a public sewer to the properties in Rhoseberse Road. That is the other decision which Welsh Water seek to impugn in these proceedings.
86. Paragraph 14 of the decision letter stated that there were substantial and serious adverse environmental and amenity impacts associated with the drainage from 13,14 and 15 Rhoseberse Road and from Park Cottage. The same paragraph referred to the fact that no. 8 had reported odour problems in the summer (in fact, it was no. 9 not no. 8) and that nos 11 and 12 had recently reconstructed their soakaway but still reported odour problems in the summer. Reference was made to the fact that Welsh Water had assessed the area as having ground conditions such as to preclude the effective use of a soakaway for the disposal of effluent from a septic tank. The Agency therefore found that there existed, or were likely to exist, serious and substantial adverse environmental and amenity impacts associated with the drainage from all those premises.
87. In paragraph 15 of the decision letter, the Agency identified the "particular locality" referred to in section 101A(1) as being formed by nos 8, 9 and 10 and Park Cottage, and nos 11 to 17 inclusive, the distance between the furthermost properties being approximately 300 metres. The same paragraph referred to the information provided by Welsh Water about the geology of the area and the ground conditions precluding a soakaway to which I have previously referred, leading to the conclusion that all premises served by septic tanks and soakaways in the locality of Rhoseberse Road were likely to give rise to adverse effects to the environment or amenity, and in several cases already were doing so. The Agency took the view that all the premises in the locality should have been included in the assessment.
88. Paragraphs 19 and 20 of the decision letter refer to the two different costing exercises carried out on behalf of Welsh Water which I have already summarised. In paragraph 20 the Agency pointed out that in the second costing exercise contained in the August 1998 report the renovation of Park Cottage was not included. It stated:-

"If renovation of Park Cottage septic tank were left in, the private option would be £141,500 and public would be £128,900. Therefore a duty would exist to provide a public sewer."

89. Paragraphs 21 to 24 of the decision letter, dealing with the disadvantages of cesspools and giving the decision of the Agency, are in virtually identical form to paragraphs 21 to 24 of the decision letter relating to Llantilio Pertholey, save for the reference to the different location. I have previously summarised paragraph 21 and quoted paragraphs 22 to 24 of the Llantilio Pertholey decision letter when dealing with that decision letter. I do not therefore do so again when dealing with the Rhoseberse Road decision letter. Paragraph 25 of the decision letter concluded by saying that the Agency found that the duty to provide a public sewer applies to "the whole village" of Rhoseberse Road, Coedpoeth. It is accepted by the Agency that the reference to "the whole village" was a mistake and that the duty was only intended to apply to the locality of Rhoseberse Road as identified in paragraph 15 of the decision letter.
90. 
     
    
     
    Submissions - general
91. As I have already mentioned, the main grounds of challenge are the same in the case of Rhoseberse Road as they are in the case of Llantilio Pertholey. I have already described those main grounds of challenge when dealing with the Llantilio Pertholey decision and I do not repeat them again. I turn then to deal with the grounds of challenge as they relate to the particular facts of the Rhoseberse Road decision.

Submissions – Rhoseberse Road

(i) 8, 9, 11, 12, 16 and 17 Rhoseberse Road

92. Miss Lang submitted that, in concluding that adverse environmental impacts existed, or were likely to exist, in connection with the drainage from 8, 9, 11, 12, 16 and 17 Rhoseberse Road, the Agency made material errors of fact and/or failed to take into account material considerations and/or made a perverse decision. It was contended that there was no evidence of pollution from those premises and no basis for finding a duty for providing a public sewer to them. This was another area in respect of which Welsh Water sought to adduce fresh evidence.
93. On the basis of Mr Roberts' evidence it was submitted that the Agency had made a material mistake of fact about, or failed to take into consideration, the geology of the area. According to Mr Roberts, the underlying geology of the Rhoseberse Road area is glacial till or boulder clay, which is not suitable for soakaways because of the high proportion of clay which has poor permeability. However, that only applied, in his view, to the area of 13-15 Rhoseberse Road where problems were reported. The geology of that area was varied, as shown by the fact the nos. 16 and 17 had not reported problems. Although nos. 7, 8 and 9 and Park Cottage further north were shown on the geological map as being within the notation of glacial till (boulder clay), the map showed an outcrop of sandstone to the north. Test holes dug in the area of nos. 8 and 9 Rhoseberse Road in January 2001 when carrying out percolation tests had revealed an underlying sandstone as fractured cobbles which, Mr Roberts said, was highly permeable and suitable for soakaways. Mr Roberts also expressed the view that the sewerage problem at Park Cottage was a problem with the soakaway, not the suitability of the land, and that it could be overcome by the reconstruction of the soakaway.
94. Based on that evidence, Miss Lang submitted that the Agency's decision that Welsh Water should provide a public sewer to the whole of Rhoseberse Road was based upon a false premise, namely that the ground conditions throughout that area were unsuitable for septic tanks and soakaways, and that the Agency had failed to take into account that there was no history of pollution from other premises in Rhoseberse Road apart from nos. 13, 14 and 15 and Park Cottage. She submitted, in the same way as she had in relation to Llantilio Pertholey, that the Agency had acted on the assumption that, having found adverse environmental effects at those premises, there was a duty to sewer the whole of Rhoseberse Road.
95. Mrs Blacklidge denied that the Agency failed to take the geology of the area into account. She referred to the description of the ground conditions in the Oscar Faber report of September 1997 and also the description of the geology given by Welsh Water in their response to the Agency's request for the results of the percolation tests and geology surveys carried out for the village as a whole, both of which I have quoted earlier. She also pointed out that the owner of Park Cottage had told Welsh Water that his septic tank discharged into clay. She therefore contended that the Agency was justified in proceeding on the basis that septic tanks and soakaways were not a proper solution for premises within the locality of Rhoseberse Road.

(ii) Cost

96. Miss Lang submitted that the Agency had made a material error of fact , failed to take into account relevant considerations and reached a perverse conclusion in paragraph 20 of the decision letter by stating that, if the renovation of Park Cottage were included in the private sewerage option, the total cost of that option for the four premises would be £141,500, without taking into account that the public sewer would have to be extended to Park Cottage thereby increasing the public sewerage cost to £161,000. In other words, the Agency were not comparing like with like.
97. Mrs Blacklidge's evidence was that, on Oscar Faber's cost figures for pipework, the extra basic cost of extension to Park Cottage was likely to be about £3000. She did not consider that the comparative public sewerage option would increase to the cost of the private option of £141,500. However, her main point was that there were an additional 8 premises now identified by Welsh Water as being in poor percolation ground so that, at £36,500 per cesspool, derived from Oscar Faber's cost figures, the total cost of cesspools for those additional premises alone would be about £292,200, far in excess of the public sewerage cost of £161,000.
98. Mr Roberts, in reply, criticised Mrs Blacklidge's figure of £3000 for the additional basic cost of extending the public sewer to Park Cottage. Allowing for wider pipes, the depth of the sewer and other additional costs, he suggested that the extra cost would exceed £19,000. He arrived at NPV calculations for the 4 premises comparison of £146,100 for the cesspool option and £154,700 for the public sewerage option.
99. The response of Mrs Blacklidge was that the cost of cesspools at £36,500 per unit, whether it be just for the additional 8 premises or for the total 11 properties, was plainly far in excess of the public sewerage option of £161,000 for the 11 premises.

(iii) The Agency's cesspool policy

100. I have already referred to the Agency's cesspool policy when dealing with the Llantilio Pertholey case. As I mentioned when referring to the decision letter relating to Rhoseberse Road, the paragraphs of that decision letter dealing with cesspools were in virtually identical terms to the equivalent paragraphs in the Llantilio Pertholey decision letter. Not surprisingly, therefore, Miss Lang's submissions on this topic were the same as those she made in respect of Llantilio Pertholey, albeit adapted to the number of premises concerned in the Rhoseberse Road case, so I do not set them out again here.

Conclusion – Rhoseberse Road

101. I turn then to my conclusions relating to the Rhoseberse Road decision.
102. I have already dealt with the general principles relating to the admission of fresh evidence when dealing with the Llantilio Pertholey decision. Applying those principles to the facts of the Rhoseberse Road decision, I reach the same conclusion.
103. In this case, the Agency's letter of 14 July 1998 pointed out to Welsh Water that, whereas Oscar Faber's September 1997 report had considered all 11 premises served by septic tank systems in Rhoseberse Road in the costing for the public sewerage option, they had only considered replacement of the septic tanks at 13, 14 and 15 Rhoseberse Road and renovation of the septic tank at Park Cottage in the private sewerage option. The letter made it clear that it was necessary to have regard to whether all of the 11 premises in Rhoseberse Road with septic tanks were currently, or were likely to be, causing problems. The words "likely to be causing" were actually underlined in the letter, which then went on to request further information relating to the other premises in Rhoseberse Road, referring to the answers given by the project manager in the proforma document and specifically asking for the results of percolation tests/geology surveys carried out for the village as a whole. Whilst Welsh Water's reply in their letter dated 7 September 1998 did state that the answers given in the pro-forma were referring to the local area around 13, 14 and 15 Rhoseberse Road and that all other septic tanks except Park Cottage were functioning correctly, the specific answer to the request for geological information relating to Rhoseberse Road as a whole was as I have quoted earlier in this judgment, namely that the area was generally glacial till (boulder clay) with underlying coal measures which can lead to significant variations in the suitability of the ground for soakaway operation which was the reason why percolation tests were not undertaken. Furthermore, that description of the geology of the area was repeated in Hyder Consulting's report of September 1998. Also, the occupier of Park Cottage had told the Agency that his septic tank discharged into clay and that he was having problems with it. On top of that, the Agency knew, as mentioned in their decision letter, that there were odour problems in the summer at 8 or 9 Rhoseberse Road and at the soakaway serving 11 and 12 Rhoseberse Road. Although the statements in Oscar Faber's report that the ground had a clay content, that the water table was generally high in the area and that ground conditions precluded the effective use of a soakaway may have been intended to refer to the area around 13, 14 and 15 Rhoseberse Road, that information put together with the other information relating to Rhoseberse Road to which I have just referred would entitle the Agency to reach the conclusion that it did, namely that there existed, or was likely to exist, adverse environmental effects in the other premises in the locality of Rhoseberse Road.
104. In my view, Welsh Water had plainly been put on notice that the Agency were considering the other premises in Rhoseberse Road in addition to numbers 13, 14 and 15 and Park Cottage. Further information had been requested and supplied in relation to the other premises in Rhoseberse Road and the Agency was entitled to proceed to determine the dispute on the totality of the information that had been provided to it. The decision made by the Agency was one that was reasonably open to it on that information. I do not consider that it could be said to be Wednesbury unreasonable.
105. I do not accept the submission that the Agency failed to take into account the geology of the area. It specifically requested that information which was then provided and taken into account. The Agency was well aware that there had not been any problems with the soakaways of some, though not all, of the additional properties, but its conclusion related to the likelihood of adverse environmental effects in the future. It cannot now be open to Welsh Water to assert that the geology in the area of the northern premises in Rhoseberse Road is different, based on test holes in percolation tests undertaken in January 2001, five months after the decision in this case, in circumstances where information relating to percolation tests was requested as long ago as July 1998. For the same reasons as I gave when dealing with the Llantilio Pertholey decision, I also do not accept the submission that the Agency was under the impression that it had to sewer all the premises in the locality if it found that any of them were causing adverse environmental effects.
106. For all those reasons, I do not consider that it would be appropriate to admit the fresh evidence relating to this aspect of the matter. In my view, the Agency was entitled to reach the conclusion, on the information before it, that there was likely to be adverse environmental effects from the other premises in the locality of Rhoseberse Road.
107. I deal next with the ground of challenge relating to the Agency's consideration of the cost comparison of the private and public sewerage options for Rhoseberse Road. I have already mentioned how Oscar Faber's September 1997 report compared the cost of the private sewerage option of dealing with numbers 13, 14 and 15 and Park Cottage with the cost of the public sewerage option relating to all 11 properties in Rhoseberse Road, and how, in their August 1998 report, they compared the comparative cost of two options relating solely to 13, 14 and 15 Rhoseberse Road. Those two exercises, and the costings resulting from them., were all set out in the decision letter. The main point made on behalf of Welsh Water is that the Agency, having referred to the second exercise and the absence of the renovation of Park Cottage from it, went on to state that the private option would be£141,500 if the renovation of Park Cottage had been left in, and that the public option would be £128,900. As Miss Lang rightly pointed out, the figure of £128,900 does not include the cost of connecting the public sewer to Park Cottage so that it is not a like for like comparison.
108. That point is undoubtedly well founded. Expressed in that way in the decision letter, the two cost figures quoted are not like for like. However, it is absolutely clear that the Agency's decision was that all eleven premises should be connected to the public sewer, not just nos. 13, 14 and 15 and Park Cottage. The proper cost comparison is therefore between the private and public sewerage options relating to those 11 properties. The cost of the public sewerage option for the 11 premises had already been given in Oscar Faber's first costing exercise as £161,000. As Mrs Blacklidge has pointed out, it is quite clear from the unit cost of £36,500 per cesspool, derived from Oscar Faber's costing of the cesspool options, that the cost of the cesspool option for the 11 premises would be very significantly higher than the cost of the public sewerage option for those premises. Whilst it would have been better if that had been spelt out in the decision letter, I am satisfied that the faulty cost comparison that was mentioned in the decision letter was not, in the event, a matter that was relevant or material to the ultimate decision. This ground of challenge must, therefore, fail.
109. I should mention that I have not been assisted by the disputed evidence of Mr Roberts and Mrs Blacklidge about various cost figures because it arises after the event and is not relevant to the central point which I have decided, except for the evidence of Mrs Blacklidge relating to the unit cost of a cesspool which is not fresh evidence because it is derived from material that was before the Agency when it made its decision.
110. The final matter to deal with relating to Rhoseberse Road is the issue relating to the Agency's cesspool policy. I have already dealt with that issue when dealing with the Llantilio Pertholey decision. As mentioned previously, the wording of the relevant paragraphs of the two decision letters dealing with issue of cesspools is virtually identical. Although a larger number of premises and different costing figures are involved, there is no reason to reach any different decision than that which I reached on the Llantilio Pertholey decision on this aspect of the matter. I do not, therefore, repeat the reasons for the conclusion which I reached in relation to the Llantilio Pertholey decision. In short, although I understand Welsh Water's concern on that issue, I am not persuaded that the Agency has applied the cesspool policy inflexibly without regard to the individual circumstances of the case.
111. Having considered all matters raised in relation to the Rhoseberse Road decision, my conclusion is that the grounds of challenge are not made out and that the decision was lawful.

Overall conclusion

112. My overall conclusion, therefore, is that, for the reasons that I have given, this application to quash the decisions relating to Llantilio Pertholey and Rhoseberse Road must be dismissed.
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MR JUSTICE HARRISON: For the reasons contained in the judgment that has been handed down to the parties, this application to quash the decisions relating to Llantilio Pertholey and Rhoseberse Road will be dismissed.

MR HOCKMAN QC: Your Lordship, I hope, will have received some editorial corrections from me yesterday.

MR JUSTICE HARRISON: I have not only received them, but they are incorporated.

MR HOCKMAN QC: I just noticed on the first page that there is one which has not been, which is what caused me to rise, because Mr Stephenson's initial is incorrect.

MR JUSTICE HARRISON: That should be "G Stephenson" on the front page. Perhaps that could be noted by the shorthand writer.

MR HOCKMAN QC: My Lord, otherwise I have not had a chance to check, but I am sure the other points were incorporated. My Lord, may I respectfully ask for judgment accordingly, with costs in favour of the defendant, the Environment Agency of Wales.

MR JUSTICE HARRISON: Thank you very much. Mr De Marco, what do you say about that?

MR DE MARCO: My Lord, we do not oppose the application.

MR JUSTICE HARRISON: Thank you very much. Then there will be an order that the claimant should pay the defendant's costs.

MR HOCKMAN QC: I think that should be to be assessed in the normal way.

MR JUSTICE HARRISON: Yes. Is there anything else? Thank you very much.