England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		10/03/2009

Mr Justice Wyn Williams :

Introduction and Factual Background

1. The Claimant is a statutory sewerage and water undertaker, holding appointment under the Water Industry Act 1991 (hereinafter referred to as the "1991 Act"). By virtue of section 101A(1) of the 1991 Act it is the duty of the Claimant 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 certain conditions are specified. The conditions are laid down in subsection (2) which reads as follows:-

"(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 ……;

(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 ….. 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."

Sub-section (3) provides:-

"(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 cost 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.

2. Section 101A(7) makes provisions as to what should occur if a dispute arises between a sewerage undertaker and those persons who are seeking the provision of a public sewer pursuant to sub-section (1). The subsection reads:-

"(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;

(b) the domestic sewerage purposes for which any such sewer should be provided; or

(c) the time by which any such duty of the undertaker should be performed,

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."

3. As long ago as 1998 residents of the locality known as Freshwater East, Pembroke, Wales raised the issue of the sewerage system serving their homes. They sent a letter to Lamphey Community Council (the "Council") in which, in effect, they complained about the existing means of discharging sewage from their homes and asked that an efficient system for discharging sewage should be devised. Shortly after receipt of the letter the Clerk to the Council, Mr PT Lewis, sent it on to the Claimant with a request that the Claimant consider its terms.
4. The reaction of the Claimant was to commission an assessment by independent consultants, Faber Maunsell, as to whether a duty had arisen under section 101A of the 1991 Act. The consultants concluded that such a duty had not arisen and that conclusion was communicated to the relevant interested parties by letter dated 16 May 2000. The occupiers of two of the premises affected disputed the Claimant's decision. The Claimant accepted that a dispute thereby arose under section 101A(7). The Claimant's decision was referred to the Defendant in June or July 2000.
5. Some time after that reference had taken place but before the Defendant had resolved the dispute the Claimant indicated that it would review the decision which it had made to the effect that a duty had not arisen under section 101A(1). It seems clear that in the face of this indication the Defendant did not determine the dispute and the house owners affected did not press for such a determination.
6. Faber Maunsell conducted the review on behalf of the Claimant. By letter dated 21 February 2005 it notified Mr Lewis, the Clerk to the Council, of its conclusion. It is necessary to set out the letter in full:-

"As you are aware, on behalf of Dwr Cymru Welsh Water, we have recently undertaken a study to determine whether the Company has a duty to provide a public sewer in the area of Freshwater East. This assessment was carried out under recent legislation, in line with the requirements of section 101A of the Water Industry Act 1991.

In considering whether Dwr Cymru Welsh has this duty, we are required to examine the environmental problems which appear to arise, or may be likely to arise, as a result of the existing private drainage facilities. We are also require to consider the costs of installing and operating a public sewerage system compared with the similar costs associated with operating the existing system, and carrying out any necessary repairs.

In respect of the area of Freshwater East, I would advise you that it is considered appropriate to provide a public sewer.

Dwr Cymru Welsh Water will be preparing an outline programme for the design and construction of these works and this will be incorporated into a wider programme of similar schemes across the Company's area. …..

I enclose a copy of our report for your information, and should you have any queries in connection with this please do not hesitate to contact me ……….."

As the letter suggested a comprehensive report compiled by Faber Maunsell was enclosed. Thereafter, the Defendant closed its file on the dispute without adjudicating upon it.

7. Almost as soon as the Claimant had communicated its decision to Mr Lewis it began to have a change of heart. The basis for that change of heart was encapsulated in a letter dated 2 November 2005 written by Mr Bayliss, the Claimant's Sewer Network Strategy Manager to Mrs Sheila Sowerby the Technical Manager (Surface Water Quality Process) employed by the Defendant. The letter made it clear that the Claimant was contemplating a review of its decision to provide a public sewer not just in the location of Freshwater East but in relation to many other localities where it had accepted a duty to provide a public sewer under section 101A of the 1991 Act.
8. Mr Bayliss' letter to Mrs Sowerby met with a swift response. Of some significance to the present case is the following extract from Mrs Sowerby's letter in reply dated 14 November 2005:-

"The Agency's view is that where a Company has assessed an application, accepted that a duty exists under section 101A and informed the Applicant accordingly then it is not opened to the Company to revisit that decision."

9. During the course of 2006 the Claimant took steps towards reviewing decisions it had made in which it had accepted a duty under section 101A. So far as the particular case involving Freshwater East is concerned it wrote letters to Mr Lewis on 30 November 2005 and 2 February 2006 which made it clear that the Claimant was contemplating reviewing the decision reached on 21 February 2005 to the effect that it would provide a public sewer. On 26 June 2006 the Claimant sent a circular letter to a number of persons (and I infer the letter was sent either to householders at Freshwater East or Mr Lewis) which informed the recipients of the letter of the concerns of the Claimant about whether schemes for the provision of public sewers were cost effective.
10. On 27 November 2006 Mr Lewis wrote to the Defendant. The letter was in the following terms:-

"In July 1998 Lamphey Community Council made an application for a section 101A assessment in Freshwater East and the survey was received by the Council in March 2005.

The Council found the survey accessible, well structured and very detailed: it concurred with the conclusion in the report.

The Council is now appealing against Dwr Cymru's decision not to proceed with the report's recommendations as previously Dwr Cymru had agreed that a public sewer be installed.

I attach a referral for determination of a dispute form duly completed with back up information."

11. The referral and accompanying documentation is not before me. It is clear, however, that in its original form it was incomplete. I say that on the basis of letters written by the Defendant both to Mr Lewis and the Claimant on 8 December 2006. In any event the letter written by the Defendant to the Claimant invited a response to the referral by 15 January 2007 (by which time it was anticipated that Mr Lewis would have provided a complete referral).
12. In its letter of 8 December 2006 to the Claimant, the Defendant sought information under a number of sub-headings so as to enable the Defendant to determine the dispute. The requests were:-

"(a) A copy of the original request for provision of a public sewer.

(b) A copy of your written decision and planned time-scale;

(c) A copy of all other relevant correspondence between your Company and the owners or occupiers of the relevant premises;

(d) Identify the steps necessary to enable provision of the scheme, by whom these steps are to be undertaken and the projected time table for each step. Identify particularly where third parties are involved;

(e) Provide the information requested in (d) for section 101A schemes already completed by the sewerage undertaker since 1 April 1996. A comparison should be made between the size and complexity of the scheme under dispute and completed schemes;

(f) Details of industry standard guidance and best practice relating to this type of scheme. Details of any Ofwat Levels of Service relating to this duty or other public sewer duty;

(g) Details of the project management structure in place to progress this scheme;

(h) Evidence of any impact associated with the delay;

(i) Any other data/information which you consider that the Agency should take into account when making its determination upon timescales."

13. The Claimant's response was a letter dated 16 February 2007. It was in the following terms:-

"We are pleased to provide the following information;

(a) A copy of the original request for provision of a public sewer from Lamphey Community Council dated 22 July 1998 is enclosed.

(b) A copy of the DCWW written decision dated 26^th June 06. We also attach a copy of the Environmental Benefit Calculations we have undertaken which indicate that the whole life value of the benefit to the environment is significantly less than the whole life capital cost of the scheme.

(c) We have consulted with DCWW on the matter and in view of the fact that this appeal is based on a refusal to provide a date for the provision of the scheme there is no relevant correspondence.

(d) We attach a programme for the scheme implementation which shows the necessary stages for the implementation of the scheme."

In respect of the request for information under paragraphs (e) to (h) the Claimant replied:-

"As in item (c) above, we see no added value from this information in this case".

14. On 23 February 2007 the Claimant sent out a further circular letter which obviously related to a number of schemes. In the letter, however, the Claimant communicated to interested parties that its earlier decision to the effect that the area in question qualified for the provision of the public sewer was "formally withdrawn".
15. In a document dated 18 May 2007 the Defendant determined the dispute which had been referred to it by Mr Lewis' letter of 27 November 2006. It is clear from the terms of the document that the Defendant treated the referral as relating to a dispute in respect of the time-scale for the provision of a public sewer – see paragraph 3 of the determination (Trial Bundle 2 page 293). The decision of the Defendant was that the Claimant should provide a public sewer for the locality of Freshwater East by 31 March 2010.
16. In these proceedings the Claimant seeks an order quashing that decision. As will become apparent, however, the debate before me ranged far and wide and, certainly, much further than would be necessary in order to deal with whether or not the particular decision should be quashed.

Issues for my determination

17. It seems to me that the following principal issues arise for consideration:-

i) Is the Claimant entitled to revoke or withdraw a decision communicated to interested parties to the effect that a duty to provide a public sewer at a particular locality has arisen under section 101A of the 1991 Act?

ii) If the answer to that question is Yes, in what circumstances is revocation/withdrawal lawful?

iii) Assuming the answer to the first question is Yes, and depending upon the answer to issue ii), was the Claimant's withdrawal of its decision of 21 February 2005 by its letter of 23 February 2008 lawful?

iv) Procedural issues.

v) Is the Claimant entitled to a quashing order or any other relief?

Issue 1

18. In its letter of 14 November 2005 the Defendant adopted the unequivocal stance that once the Claimant had accepted that a duty existed under section 101A of 1991 Act it was not open to the Claimant to revisit that decision. In its determination of 18 May 2007 the Defendant adopted a somewhat different position. It asserted that in the event that the Claimant wished to review a decision to provide a public sewer "this should have been done by referring a dispute to the [Defendant] under section 101A(7)(a)" The Defendant's stance appeared to be that the Claimant could not, unilaterally, withdraw or revoke a decision to accept a duty under section 101A. Much the same stance was taken in the Defendant's summary grounds of opposition although the Defendant did appear to acknowledge that it was open to the Claimant, as a public authority, to reconsider a previous decision in certain circumstances.
19. As I understand it by the end of the oral hearing before me the Defendant was no longer contending that it was not open to the Claimant to revoke or withdraw an earlier decision. Further, I do not understand the Defendant's case to be that a revocation/withdrawal could not be effective unless it was referred to the Defendant and upheld by the Defendant.
20. In my judgment it cannot be the case as a matter of general principle that the Claimant, acting as a public authority, is precluded in all circumstances from reviewing a decision under section 101A of the 1991 Act and, thereafter, withdrawing or revoking that decision. There is no general principle of public law which would have that effect and, in my judgment, there is nothing in the terms of the 1991 Act (specifically section 101A) which necessarily leads to such a conclusion. Further, there is no basis to conclude that the withdrawal or revocation of the decision in question can only be effective if sanctioned by the Defendant. The Defendant's role in the context of Section 101A is to determine disputes between the Claimant and persons affected by its decisions. In any given case the persons affected by the Claimant's withdrawal or revocation of an earlier decision may accept it. Of course, if, as is more likely, the persons affected by a decision to withdraw or revoke do not accept that decision the Defendant may have a crucial role to play – as to which see below under the heading Issue 4.
21. In my judgment, therefore, the answer to the question posed as Issue 1 is Yes. To repeat, I do not believe there is now any disagreement about that conclusion.

Issue 2

22. There is nothing between Mr Sheridan on behalf of the Claimant and Mr Clarke on behalf of the Defendant about this issue. Essentially, they both agree that the Claimant is entitled to review a decision to assume a duty under section 101A and withdraw or revoke it following such a review if it is satisfied that its earlier decision was susceptible to be quashed on conventional public law grounds had a person with a sufficient interest sought a quashing order in relation to the earlier decision. In paragraph 21 of his written Skeleton Argument Mr Clarke submits:-

"In principle, a public law decision-maker may in certain circumstances revoke its decision, but there has to be a limit to the circumstances in which this may occur. The [Defendant] submits that a decision-maker ought only to be permitted to revoke a decision which engages rights and expectations when the circumstances are such that the decision would be susceptible to judicial review on ordinary public law principles of illegality, irrationality or unfairness, or where new circumstances compel a revocation."

Mr Sheridan does not take issue with that formulation. I agree with it. None of the authorities relied upon by Mr Sheridan in support of his submission that a public law decision-maker can, in certain circumstances revoke its own decision suggest that Mr Clarke's formulation is erroneous. In these circumstances no purpose would be served by substantial quotation from these authorities in this judgment.

Issue 3

23. The duty under section 101A arises if the conditions specified in sub-section (2) are satisfied. In the instant case the conditions specified within paragraphs (a) and (b) of subsection (2) have always been satisfied.
24. Subsection 2(c) calls for the exercise of judgment on the part of the decision-maker. The decision-maker has to decide whether the drainage of any relevant premises is giving, or is likely to give, rise to such adverse effects on the environment or amenity that it is appropriate to provide a public sewer for the drainage for domestic sewerage purposes of those premises. In reaching its decision the decision-maker is "to have regard" to guidance issued by the Secretary of State and "all other relevant considerations".
25. Subsection (3) identifies five considerations to which the decision-maker shall have regard in reaching its decision "so far as relevant". The use of this latter phrase, of course, is an express acknowledgement that one or more of the factors in subsection (3) may not be relevant on the facts of a particular case.
26. Section 101A (4) is the following terms:-

"(4) Guidance issued by the Secretary of State under this section may –

(a) relate to how regard is to be had to the considerations mentioned in paragraphs (a) to (e) of sub-section (3) above;

(b) relate to any other matter which the Secretary of State considers may be a relevant consideration in any case and to how regard is to be had to each such matter;

(c) set out considerations, other than those mentioned in paragraph (a) to (e) of sub-section (3) above, to which (so far as relevant) regard shall be had in determining whether it is appropriate for any sewer to be provided by virtue of this section;

(d) relate to how regard is to be had to any such consideration as is mentioned in paragraph (c);

(e) without prejudice to paragraphs (a) to (d) above, relate to how a sewerage undertaker is to discharge its functions under this section"

This subsection is directed to the content of guidance issue by the Secretary of State. It is possible to envisage circumstances in which a debate may occur as to whether the guidance actually issued is within the terms of the subsection. However, that debate has not arisen in this case. It is common ground that guidance has been issued and no suggestion has been made that the guidance is in any sense inconsistent with subsection (4).

27. However, during the course of the oral submissions there was a debate about the status or weight to be attached to the guidance issued by the Secretary of State. At some points in his submissions, Mr Sheridan seemed to be suggesting that the decision-maker was obliged to follow and/or apply such guidance as is issued by the Secretary of State.
28. In order to analyse and determine the validity of this submission and in the light of subsection (4) it is first necessary to consider the terms of the guidance which has been issued. In April 1996 the Department of the Environment and the Welsh Office jointly issued a document entitled "Guidance on the provision of a public sewer under section 101A of the Water Industry Act 1991". In the "Preamble" the purpose of the guidance is described as follows:-

"To assist Sewerage Undertakers to determine whether the new duty to provide a public sewer under section 101A of the 1991 Act has arisen." See paragraph 1.1

Paragraphs 1.3 provides:-

"Although this Guidance is issued primarily for the use of sewerage undertakers, anyone requiring the provision of a public sewer under this new duty may wish to take account of its contents. The Environment Agency (the Agency) will also need to have regard to the contents of this Guidance in determining any dispute about the new duty referred to then under section 101A(7)."

29. I have scrutinised the document with care. In my judgment it contains nothing which suggests that a decision-maker is bound to accept the guidance within the document. Further, it contains nothing which suggests that the guidance is to be given any special weight or greater weight than other circumstances found to be relevant by the decision-maker.
30. Section 101A(2)(c) requires a decision-maker to have regard to the guidance "and all other relevant considerations". There is nothing within that subsection which suggests that a decision-maker is bound to follow the guidance issued or is bound to give it particular weight or greater weight than other relevant considerations.
31. As I read section 101A(2)(c) the process which a decision-maker must follow when reaching its decision is as follows. First, it must identify the relevant parts of any guidance issued by the Secretary of State. Second, it must identify all other considerations which are relevant to the decision in question. Third, it must take account of the guidance and relevant considerations and, giving such weight to each as the decision-maker thinks reasonably appropriate in the particular case, it must reach a decision.
32. I accept that by virtue of sub-section (4) it is possible for guidance to be issued which would affect that decision-making process: for example, the guidance might provide that particular weight should be afforded to one or more relevant considerations. To repeat, however, there is nothing in the guidance actually issued which does that.
33. I am fortified in my view of the decision making process required under section 101A by Section 2 of the published guidance. I quote in full:-

"2. ASSESSMENT OF CASES

2.1 The following paragraphs describe criteria and factors to be used for the assessment of cases to judge whether a public sewer should be provided under the new duty in section 101A.

2.1 The sewerage undertaker should, when carrying out detailed technical and economic assessments, consult local authorities, health authorities and the Environment Agency as appropriate. The extent of the technical and economic assessments should be in proportion to the overall scale of the works involved.

2.3 The assessment of cases should cover "technical" criteria and "economic" factors. The criteria and factors set out in this Guidance are not exhaustive; nor do they all necessarily apply to every case. The need or otherwise of providing a public sewer should be judged on the balance of the totality of the evidence available from all sources and that which can be gathered in accordance with the sewerage undertaker's procedures and policies, which should take into account this Guidance and any other guidance or direction from bodies such as the Environment Agency.

2.4 In accordance with the considerations laid down in section 101A(3), the duty to provide a public sewer will deemed to have arisen if: -

a) by virtue of one or more technical criteria set out in paragraph 3 below, it can be demonstrated that the actual or likely adverse effect on the environment and amenity cannot be overcome practicably by repair, proper maintenance or reconstruction of the existing system(s) to solve the problem in the long term other than by the provision of a private sewer (see also paragraph 1.5 above), and then;

b) by reference to the economic factors in paragraph 4 below, it can be shown that a public sewer is the cost effective solution.

2.5 The main technical criteria and economic factors set out in paragraphs 3 and 4 below are cross referenced to show the provisions of section 101A(3) to which they relate. In addition, the other criteria and factors not cross referenced have been included under the provisions of section 101A(4)(b) and (c) and they should also be taken into account where relevant. The Guidance does not specify the weights, if any, to be applied to the criteria and factors. If, in complex cases, the circumstances require, sewerage undertakers may wish to use an appropriate impact scoring system when assessing cases."

It seems to me that the guidance issued by the Secretary of State is entirely consistent with my conclusions as to the decision making process under consideration.

34. Against this analysis of the statutory provisions I turn to the basis upon which the Claimant alleges that its decision of 21 February 2005 can be withdrawn. It alleges, first, that it failed to have regard to a relevant consideration, namely the likely use of the public sewer ("take-up") by house owners whose drainage was giving or was likely to give rise to adverse effects upon the environment or amenity. Second, the Claimant suggests that it ignored the concept known as Environmental Cost Benefit Analysis – a further relevant consideration.
35. Before dealing with each in turn I should make this general observation. A court is bound to be somewhat sceptical about a submission made by a decision-maker that it failed to have regard to relevant considerations when making a decision about whether it was under a statutory duty to provide a facility which, if provided, would be of environmental benefit albeit at a financial cost. That is especially so in relation to a submission advanced by a specialist decision-maker which engages a specialist independent consultant to advise it upon the relevant decision. In this case such scepticism is compounded by the fact that there is no witness evidence placed before the court from Faber Maunsell. After all, it was that organisation which carried out the assessment in order to decide whether the conditions specified in the 1991 Act were met and, presumably, it was better placed than anyone to inform the court about what it did or did not consider when carrying out its assessment under section 101A.
36. The decision of 21 February 2005 was communicated by letter from Faber Maunsell to Mr Lewis. The letter itself provides a very short summary of the issues which Faber Maunsell considered before reaching its conclusion that it was appropriate to provide a public sewer. As I indicated earlier in this judgment, however, Faber Maunsell enclosed with its letter a copy of the report upon which its conclusion was based.
37. Mr. Sheridan and Mr. Clarke do not agree about whether or not the report deals with the issue of take-up. It is certainly the case that the report identifies the properties whose drainage is likely to pollute. It is also clear (see appendix E) that Faber Maunsell engaged in correspondence and/or communications with relevant house owners/occupiers and that one of the purposes of so doing was to ascertain their views about existing drainage arrangements. All that said, it does not seem to me that the report contains any express reference to take-up as a relevant consideration in the assessment undertaken by Faber Maunsell.
38. In my judgment, however, that omission does not necessarily establish that take-up was not considered as one of the factors leading to the decision in February 2005. Indeed I have reached the conclusion that the issue of take-up probably was considered and taken into account. I say that for these reasons. In June 2000, shortly after the Claimant had announced that it would not provide a public sewer, the local MP, Mr. Ainger, wrote to the Chief Executive of the Claimant's predecessor in title. In his letter, which is dated 26^th June 2000, he wrote:-

"My understanding, ……. is that the reason it has failed the Economic Test is because of the limited number of properties which would connect to it. However, I know that all the properties in the rest of the village of Freshwater East are also on private sewerage and may well be prepared to connect the public sewer. My understanding is that Oscar Faber only contacted residents of Hodgeston Road in Freshwater East and did not extend their survey to the rest of the village. I will be grateful …… if further surveys could now be carried out throughout the village of Freshwater East to establish first of all if there are any other sources of pollution from private sewerage systems, and also how many of the residents of Freshwater East would be prepared to connect to a new public sewer….."

It is noteworthy that the survey undertaken by Faber Maunsell in advance of its decision in 2005 (summarised in Appendix E in its report) was much more extensive than the survey previously undertaken. That is a clear indicator, in my judgment, that Faber Maunsell was seeking to establish the extent of the potential take-up of the public sewer.

39. It is also of some significance, in my judgment, that as of February 2005 the Claimant had a policy of "incentivisation." I fully accept that the Claimant need not have such a policy. However, to repeat, as a matter of fact one existed in 2005. The policy was that the Claimant would provide connections to a newly installed public sewer for relevant house owners at a nominal fee. As a matter of common sense, there is likely to be significant take-up of the use of a public sewer if the connection to that sewer is provided, essentially, free of charge. Faber Maunsell must have known of the Claimant's policy and must have had it mind when it reached its decision of February 2005. Even if it did not, the Claimant must certainly have known of its own policy and taken it into account when it authorised Faber Maunsell to make known its decision in February 2005.
40. In these circumstances, to repeat, I am not persuaded that Faber Maunsell and the Claimant failed to have regard to take-up in reaching the decision of 21 February 2005.
41. I am fortified in this conclusion by the terms of section 101A(3)(b). In my judgment that paragraph requires the decision-maker to have regard to take-up. It may be that the phraseology of the paragraph is such that it is aimed at a wider concept than simply take-up. In my judgment, however, there can be little doubt that the paragraph is apt to include the concept of take-up. I would take a great deal of persuading that independent consultants of the stature of Faber Maunsell and a specialist decision-maker like the Claimant had simply ignored a factor which the statute, expressly, requires should be taken into account. The evidence in this case falls far short of what would be required to support such a conclusion.
42. I turn to the issue of Environmental Cost Benefit Analysis.
43. In his first witness statement Mr Bayliss, the Claimant's Sewerage Network Strategy Manager asserts that the Faber Maunsell Report did not consider whether "whether the provisions of a public sewer represented effective value for money in terms of the value of the potential environmental benefits that would be brought about by the connection of polluting properties, compared with the costs of the public sewerage solution that would be needed to serve them."
44. In section 5.3 of its report under the heading Economic Assessment Faber Maunsell wrote:-

"The Economic Assessment is carried out to compare the costs of providing public sewerage against the cost of removing the pollution problem other than by the provision of public sewers. In this case the private option would be to reclaim the existing unsuitable septic tank systems with cesspools with adequate capacity to hold the affluent for collection.

The costs are calculated over a 60 year design life. The costs are then discounted using a 7% interest rate to enable a net present value (NPV) to be compared. The NPV calculations are included in Appendix F.

Where schemes are marginal as either a pass or fail (where marginal is defined as having a cost ratio between 0.85 and 1.15) the environmental benefits associated with each option will also be assessed and included within the final cost comparison.

COST RATIO (PUBLIC-PRIVATE)

Option P1 – Option D1 (2279K – 3472K) = 0.67"

As I understand it the economic assessment undertaken by Faber Maunsell as set out in the quotation above showed that the scheme at Freshwater East was not "marginal" (as defined) since the cost ratio was less than 0.85. I should have said that Option P1 was the provision of public sewerage and Option D1 was the option which was described as a private drainage option.

45. Since, upon that analysis, the economic benefit was, apparently, clear cut in favour of the provision of a public sewer, the environmental benefits associated with each option were not assessed.
46. The Faber Maunsell Report could not have been clearer (at least to the Claimant) in its description of its methodology. It should also be noted that its methodology was not just described in the passage quoted above but is set out step by step in Appendix A which is a check list of the steps undertaken in the carrying out of the assessment required by section 101A. It beggars belief that the Claimant did not understand that there had been no assessment of the environmental benefits of the scheme in conjunction with the economic assessment actually undertaken. Despite that, to repeat, the Claimant now asserts that the assessment actually carried out was unlawful by reason of that failure.
47. The guidance published by the Secretary of State contains a whole section devoted to an appropriate economic assessment. It is to be noted that the guidance says in terms that the extent of any assessment should be proportionate to the overall scale of the works. Further:-

"This assessment should, as necessary, be based on the likely costs and benefits, both quantitative and qualitative, arising from proposed works included in each case."

The guidance then goes on to inform the reader that detailed guidance on appropriate appraisal methodologies could be found in publications such as "Economic Appraisal in Central Government (the Green Book)" and "The Department of the Environment's Policy Appraisal for the Environment".

48. The Green Book is in evidence before me. It is a detailed document describing cost-benefit analysis in general terms. It is not specific, in any sense, to the 1991 Act and decisions made thereunder but, rather, it provides guidance on how proposals of all kinds should be appraised before significant public funds are committed. No doubt, in an appropriate case, a decision-maker faced with a decision under section 101A would be fully entitled and indeed well advised to have the guidance contained within the Green Book well in mind.
49. In my judgment, however, there is nothing in the 1991 Act or the guidance published thereunder which suggests that any particular cost-benefit methodology is appropriate. In this case, to repeat, the decision-maker took the view that since the economic case was apparently robust there was no need to evaluate the environmental benefits of the provision of a public sewer compared with a private drainage scheme. It seems to me that Mr Clarke is right when he submits that all that has happened, in reality, is that the Claimant chose in February 2005 to conduct a cost-benefit analysis on one basis but subsequently decided that it wished to use a different method. The statutory position is clear. The decision-maker is to have regard to "the costs of providing the sewer." How it does so in any particular case must be for the decision-maker to decide provided always, of course, that its chosen method is rational.
50. In my judgment, the Claimant has not proved that it failed to have regard to a relevant consideration in relation to this part of this case.
51. It is also of significance, in my judgment, to consider the terms of the letter of 23 February 2007 in which the Claimant withdrew its decision of 21 February 2005. In that letter the Claimant said:-

"Our specialist counsel has advised us however that there is at least one issue that we did not consider when undertaking the required technical economical assessment for the above area, that is the level of anticipated or committed connection of relevant properties, where a public sewer to be provided. We are advised that generally the 'willingness of property owners to connect' is a material factor which we should have taken into account in making our decision which we did not do as the Guidance is unclear on this point. We are advised that our decision should be re-considered fully in accordance with the statutory requirements and that this should include a re-consultation of property owners/ occupiers on their willingness to connect."

It is noteworthy that this is the only reason given in the letter of 23 February 2007 for the Claimant's decision to withdraw its earlier decision. The fact that cost-benefit analysis is not even mentioned in the letter of 23 February 2007 is, in my judgment, a further indicator that the Claimant's reliance upon that issue in these proceedings is misplaced.

52. In the light of the conclusions expressed in this section of my judgment it follows that the Claimant has failed to establish any legal basis upon which it was entitled to withdraw or revoke its decision of 21 February 2005.
53. In the summary grounds of opposition and in Mr Clarke's Skeleton Argument the point is taken that even if grounds existed upon which the Claimant could lawfully withdraw or revoke its decision of 21 February 2005 nonetheless it was not entitled to do so since it had created a legitimate expectation in the minds of the relevant property owners that it had assumed a duty under section 101A of the 1991 Act which it would not thereafter disavow. This point does not now need to be considered and I do not propose to deal with it. The plain fact is that the doctrine of legitimate expectation is usually relied upon by parties who allege that they would suffer detriment in the event that a decision upon which reliance has been placed is withdrawn or revoked. In this litigation the parties affected by the Claimant's withdrawal of its decision of 21 February 2005 are not before the Court. Further, in the context of section 101A careful consideration would need to be given to how the doctrine of legitimate expectation might co-exist with the statutory procedure for referring disputes between the Claimant and affected house owners to the Defendant for determination. It seems to me that these difficult issues should be addressed in a case where a party is present and alleging reliance upon legitimate expectation rather than in a case of this kind when, to repeat, on the basis of my conclusions above, the point need not be resolved.

Issue 4

54. It seems clear that the Claimant withdrew its decision of 21 February 2005 by the letter of 23 February 2007. Equally clearly, by then, a dispute as to the timing of the provision of a public sewer had been referred to the Defendant by Mr Lewis. The Claimant had treated this dispute as one of timing (see its letter of 16 February 2007 as quoted above). In those circumstances it is not entirely surprising that the Defendant, by its decision of 18 May 2007, simply resolved the timing issue.
55. It is to be observed, however, that the letter of 23 February 2007 in which the Claimant withdrew its earlier decision was sent to the Defendant. Reference to the Claimant's withdrawal of its earlier decision is actually contained within the Defendant's decision upon the timing issue. In the light of this judgment what should happen, procedurally, henceforth in the event that a sewerage undertaker withdraws an earlier decision by which it has assumed a duty under section 101A?
56. There are two possible scenarios to consider. The first is that the Defendant has not been asked to adjudicate upon a dispute between the undertaker and property owners, at all, by the time of the withdrawal. I have in mind a case where the sewerage undertaker has been asked to provide a public sewer and it has accepted a duty under section 101A but, thereafter, it has withdrawn or revoked that decision. In these circumstances, clearly, any person with a sufficient interest can mount a challenge by way of judicial review to the withdrawal or revocation of the earlier decision. Alternatively, there may be no challenge to the lawfulness of the withdrawal or revocation but, nonetheless, a person or persons affected may wish to refer a dispute to the Defendant under section 101A(7).
57. Ordinarily, if a dispute is referred by an interested person under section 101A(7). I would expect the Defendant to resolve the dispute. In so doing, of course, the Defendant would not be making a judgment about the lawfulness of the withdrawal or revocation but, rather, it would be sitting in judgment upon a dispute about whether or not a public sewer should be provided.
58. It is possible that circumstances might arise which persuade the Defendant that it should challenge the lawfulness of a decision to withdraw or revoke an earlier decision even though no interested party has taken that step. It is not for me to attempt to set down the circumstances in which such a course would be appropriate. Presumably, however, I say nothing which is particularly controversial by suggesting that the cases will be comparatively rare where the Defendant considers a judicial review to be appropriate even though no person affected by the withdrawal or revocation wishes to take such a course, especially since it is within the power of the Defendant to determine, on the merits, whether a public sewer should be provided.
59. What is to happen if, as here, the Defendant is seized of a dispute as to the timing of the provision of a public sewer and the sewerage undertaker purports to withdraw or revoke its decision to assume a duty under section 101A?
60. In those circumstances the Defendant should not attempt to determine the lawfulness of the withdrawal or revocation as part of its resolution of the timing dispute. Apart from anything else any decision made by the Defendant about the lawfulness of a withdrawal or revocation would, itself, be susceptible to judicial review. If, as here, the Defendant, effectively, ignores the withdrawal or revocation then, no doubt, in the event that it sets a time for the provision of a public sewer the sewerage undertaker will be compelled to proceed by way of judicial review if it wishes to have its withdrawal or revocation declared lawful. Such a course is potentially unsatisfactory and might lead to unnecessary delay. Accordingly, it seems to me that if a sewerage undertaker withdraws or revokes a decision to assume a duty when a timing dispute is before the Defendant, the Defendant should take the initiative in ascertaining the stance which the opposing party to the dispute wishes to take. It should ascertain whether the opposing party is content to accept the lawfulness of the withdrawal or revocation. If it establishes that unlawfulness is not in issue it can then resolve the dispute by considering whether or not a public sewer should be provided. If the Defendant is told that lawfulness is in issue but that the opposing party to the dispute does not have the means or inclination to challenge the lawfulness of the withdrawal or revocation by way of judicial review it should proceed to determine the dispute upon the assumption that the withdrawal or revocation is lawful unless it considers that the case is one in which it should test the lawfulness of the withdrawal itself.
61. I stress that the views expressed about procedure are not intended to be set in stone. Each case will have to be considered individually and a procedure adopted which is appropriate in all the circumstances. It does seem to me, however, that the views expressed in paragraphs 56 to 60 above ought to cater for most cases.

Issue 5

62. As is apparent, I have concluded that the Claimant was not entitled to withdraw its decision of 21 February 2005. In those circumstances, there can be no basis for the grant of a quashing order in respect of the Defendant's decision of 18 May 2007. The Defendant acted lawfully in setting a time by which a public sewer should be provided since the Claimant was under a duty to provide such a sewer. Accordingly, I refuse the Claimant's application for a quashing order.
63. I am also of the view that there is no need for declaratory relief in this case. The possibility of some form of declaratory relief was mentioned in oral submissions but, quite deliberately, it was thought appropriate by everyone that I should produce a judgment before any final conclusion was expressed upon the need for declaratory relief. My current view is that the terms of this judgment sufficiently answer the questions which arose in the course of these proceedings (save for the issue relating to legitimate expectation which I have declined to consider). If, however, either Counsel consider that some form of declaratory relief would be appropriate I would be prepared to consider submissions to that effect at the handing down of this judgment.