England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Rolls Building, Royal Courts of Justice 7 Rolls Buildings, Fetter Lane London, EC4A 1NL
		15/02/2016

Mr Justice Newey :

1. I have before me two sets of proceedings, relating respectively to the Manchester Ship Canal ("the Ship Canal") and the Bridgewater Canal. The claims concern the extent to which the defendant, United Utilities Water Limited ("United Utilities"), which is a sewerage undertaker, is entitled to discharge water into the canals via various outfalls. The claimants are the owner of both canals, the Manchester Ship Canal Company Limited ("MSCC"), and, in the case of the Bridgewater Canal proceedings, a lessee, the Bridgewater Canal Company Limited.
2. Argument before me was primarily devoted to whether MSCC should be granted permission to re-re-amend its particulars of claim in the Ship Canal proceedings. It was, I think, common ground that what should happen to the Bridgewater Canal case could be conveniently considered after I had given judgment on the application to amend the Ship Canal particulars of claim. This judgment therefore deals principally with the Ship Canal claim.

Context and issues

3. The Ship Canal claim was issued on 29 March 2010. As re-amended in late 2011, MSCC sought relief in respect of some 113 outfalls, as detailed in four schedules. The prayer asked for, among other things, a declaration that United Utilities "is not entitled to make any of the discharges set out in the Schedules, except (in the case of those marked with an asterisk) in accordance with a specific agreement" and damages "for trespass, and/or for breach of contract, and/or in lieu of an injunction under s.50 of the Senior Courts Act 1981, to be assessed". The essence of MSCC's case was explained as follows:

"8. Since the Canal was constructed and at all material times until 1 September 1991, the Defendant's respective predecessors in title and the Defendant have had statutory authorisation under the Public Health Acts 1875 and 1936 to discharge water into the Canal so long as the water discharged did not prejudicially affect the purity and quality of the water in the Canal.

9. Since 1 September 1991 the statutory scheme governing sewerage undertakers has been contained in the Water Industry Act 1991. In British Waterways Board v Severn Trent Water Ltd [2001] Ch 31, the Court of Appeal held that a sewerage undertaker, such as the Defendant, does not have statutory power to discharge water or other matter from its drainage pipes onto the land or into the waters of others. Accordingly, any discharge now made by a sewerage undertaker without the permission of a relevant land owner constitutes a trespass."

After referring to certain contractual agreements, MSCC said in paragraph 15 of the particulars of claim:

"However, in the case of each of the other discharges listed in the attached Schedules, the Defendant does not have the benefit of any express or implied agreement, or any statutory right, nor any common law right, entitling or authorising it to make such discharge into the Canal or drain into the Canal. Some discharges in particular locations may be the subject of statutory authorisation under sections 63-126 of the [Manchester Ship Canal Act 1885], but the Defendant is put to strict proof that any of its discharges benefit from such authorisation. Each of the individual discharges listed in the attached Schedules is unlawful and constitutes a trespass actionable by the Claimant."

4. In its amended defence and counterclaim, United Utilities asserted a "General statutory authorisation preserved under the privatisation scheme". It maintained as regards outfalls constructed before 1 September 1991 that it continued to enjoy rights of discharge that it and its predecessors had previously enjoyed by virtue of the Public Health Acts 1875 and 1936. It also alleged that it had relevant rights of discharge under local Acts of Parliament, the Manchester Ship Canal Act 1885 or certain agreements. The counterclaim sought a declaration that United Utilities' continued use of the various outfalls was lawful.
5. In October 2011, United Utilities applied for summary judgment in its favour as regards outfalls constructed before 1 September 1989. It sought both declaratory relief and an order dismissing MSCC's claim with respect to 106 of the outfalls. Its argument was to the effect that, whatever the position might be as regards the other outfalls at issue, it was entitled to discharge water through pre-1989 outfalls because it had inherited rights of discharge that its predecessors had enjoyed before the Water Act 1989 came into force.
6. On 4 November 2011, the proceedings in respect of the Bridgewater Canal were issued. The claim closely corresponds to that made in the Ship Canal case. In their present form, the particulars of claim allege that "any discharge from its sewers now made by a sewerage undertaker without the permission of a relevant land owner constitutes a trespass".
7. In December 2011, United Utilities issued an application for summary judgment in the Bridgewater Canal proceedings. It asked for declaratory relief as regards pre-1989 outfalls.
8. United Utilities' applications came before me in January 2012. Mr Jonathan Karas QC, who appeared for United Utilities with Mr Julian Greenhill and Mr James McCreath (as he still does), submitted, and I accepted, that the applications raised a point of law which I should decide. In that regard, I said the following in the judgment I gave on 14 February 2012 ([2012] EWHC 232 (Ch)):

"6. In the course of submissions, [counsel then appearing for the claimants] accepted that the parties had had an adequate opportunity to address the issue that United Utilities asks me to decide. Further, he did not suggest that I lacked any relevant evidence. The thrust of his submissions was rather to the effect that I should refuse to decide the 'short point of law' for reasons of case management, having regard to the overriding objective. He observed that the losing party would be very likely to challenge any decision I might arrive at. This, he said, could be expected to create practical problems given that the point of law does not affect all the outfalls in dispute and so cannot render a trial unnecessary.

7. Against that, the point that United Utilities wishes to have determined potentially affects some 106 of the 113 outfalls at issue in the Manchester Ship Canal case. A ruling on the point could thus have a substantial bearing on the length of a trial currently listed for 44 days. The point could also, I gather, be relevant to a majority of the outfalls in dispute in the Bridgewater … Canal case. In any event, I have now heard argument, over two days, on the legal question. That hearing would be wasted if I refused to rule on it."

9. I summarised my conclusions in these terms in my judgment:

"52. In all the circumstances, I have concluded that the 1991 water legislation did not affect United Utilities' entitlement to discharge water via outfalls dating from before 1 September 1989. United Utilities continued to enjoy the rights of discharge which their predecessors had had up to 1989.

53. This result seems to me to make sense. Were the Canal Companies' submissions correct, United Utilities' use of pre-existing outfalls would suddenly have become unlawful. I agree with Mr Karas that Parliament is most unlikely to have intended that. There is, furthermore, no clear indication that it did. On the Canal Companies' case, use of the outfalls became unlawful by virtue of the 1991 legislation, but that legislation was intended to consolidate the law except as to the Law Commission's recommendations [in its 'Report on the Consolidation of the Legislation Relating to Water' (Cmnd. 1483, April 1991)], and no one suggests that the Law Commission recommended the removal of sewerage undertakers' ability to discharge from pre-existing outfalls. Further, there is a sound basis for distinguishing between new and old sewers. The British Waterways Board decision means that sewerage undertakers have no right to discharge from new sewers without the consent of affected landowners. It is quite another matter to say that sewerage undertakers must stop discharging from existing outfalls unless landowners consent. [Counsel for MSCC] suggested that the successors to water authorities had effectively been given a couple of years in which to sort out the position in relation to discharges, but nothing I have been shown demonstrates that that was how matters were seen at the time. On the face of it, there was no indication that the 1991 legislation would deprive sewerage undertakers of the (doubtless very valuable) powers of discharge which they had previously enjoyed, both before and after the Water Act 1989."

In paragraph 56 of my judgment, I said this:

"United Utilities asks me not only to grant declaratory relief reflecting the conclusions I have arrived at, but to dismiss the claim in respect of many of the outfalls into the Manchester Ship Canal. So far as the latter is concerned, United Utilities has adduced evidence that 106 of the relevant outfalls had been laid by 31 August 1989, and nothing I have seen casts any doubt on that. On the face of it, therefore, it is appropriate to dismiss the claim so far as it relates to these outfalls. Looking at the pleadings, however, it seems possible that the point on which I express a provisional view in paragraph 50 above might be argued to have a bearing on what I should do. If either party takes that view, I shall hear further submissions on that aspect."

In paragraph 50 of my judgment, I had said this about the decision of the Court of Appeal in British Waterways Board v Severn Trent Water Ltd [2002] Ch 25:

"The licence pursuant to which the defendant and its predecessor had been discharging could be brought to an end on six months' notice. While the point has not been the subject of argument, my provisional view is that any 'right' to discharge which the defendant or its predecessor might have derived from pre-1991 legislation will not have endured beyond the licence."

10. The proceedings came before me again on 8 March 2012 for, among other things, argument as to the terms of the orders that I should make to give effect to my judgment. In its final form, the order in the Ship Canal proceedings included two declarations, of which the first read as follows:

"Upon the true construction of the Water Act 1989, the Water Industry Act 1991, the Water Consolidation (Consequential Provisions) Act 1991, and/or the Transfer Scheme of the North West Water Authority ('the Transfer Scheme'):

(a) where the North West Water Authority as sewerage undertaker was entitled pursuant to the Public Health Acts 1875 and/or 1936 to discharge water and/or other matter into the Manchester Ship Canal ('the Canal') immediately prior to 1 September 1989 the Defendant continued after that date, including after 1 December 1991, to be entitled so to discharge water and/or other matter into the Canal; and/or

(b) where the Defendant as sewerage undertaker was entitled pursuant to the Public Health Act 1936 to discharge water and/or other matter into the Canal immediately prior to 1 December 1991, the Defendant continued after that date to be entitled so to discharge water and/or other matter into the Canal".

The second declaration related to particular outfalls and there followed an order for the dismissal of MSCC's claim as regards the outfalls listed in a number of schedules. Counsel then appearing for MSCC had confirmed during the hearing that no points of substance arose on the draft order.

11. As regards the Bridgewater Canal proceedings, I granted a declaration along the same lines as that set out in the previous paragraph.
12. With my permission, the claimants appealed to the Court of Appeal, which allowed the appeal and (subject to an exception that is not material) set aside my order. However, the Court of Appeal's decision was itself reversed by the Supreme Court in judgments given on 2 July 2014.
13. Lord Sumption, with whom Lords Clarke and Hughes agreed, concluded in paragraph 23:

"I would accordingly allow the appeal to the extent of declaring that subject to section 117(5) of the Water Industry Act 1991, the Appellants are entitled to discharge into the Respondents' canals from any sewer outfall which was in use on or before 1 December 1991. For the avoidance of doubt, I should make it clear that this in no way affects any binding agreement under which the parties may have regulated for themselves the use of particular outfalls. We were informed that there may be such agreements with some proprietors, but we have not been concerned with them. I would leave the precise form of the declaration to be agreed between counsel."

Earlier in his judgment, Lord Sumption had said this:

"18. Under the Water Industry Act [1991], the statutory duties of a sewerage undertaker include a duty to operate the system of public sewers so as effectually to drain their area (section 94) and a duty to allow the owners or occupiers of premises to connect to the public sewer system (section 106). Moreover, the undertaker is not permitted to discontinue the use of a sewer until it has provided an alternative sewer capable of serving as effectually (section 116). The result, if the right to discharge into private watercourses ceases as the canal owners suggest, is to make it impossible for the sewerage undertakers lawfully to perform their statutory functions or observe the statutory restrictions on the discontinuance of existing sewers from the moment that the new Act comes into force. This state of affairs will continue thereafter for a considerable period while the existing sewerage system is partially redesigned and rebuilt or the necessary easements are acquired by negotiation or compulsory purchase. When pressed to say how a sewerage undertaker was to comply with this view of the law immediately after 1 December 1991, the canal owners had no answer except that the law would not in practice be enforced by injunction but that if it was they must block the outfalls and allow surface water and treated effluent to backwash through the system into the streets. In fact, section 116 of the Act would rule out even that possibility. This is not just a practically inconvenient way of dealing with an issue which engages an important public interest. It is legally incoherent. Without the clearest possible indication that Parliament intended such a preposterous result, I decline to accept that it is the effect of the current legislative scheme.

19. In my opinion, when the Water Industry Act 1991 (i) imposed on the privatised sewerage undertakers duties which it could perform only by continuing for a substantial period to discharge from existing outfalls into private watercourses, (ii) at the same time applied to them the statutory restrictions in section 116 on discontinuing the use of existing sewers, it implicitly authorised the continued use of existing sewers. A restriction on discontinuing the use of an existing sewer until an alternative has been constructed is not consistent with an obligation to discontinue its use forthwith under the law of tort. The inescapable inference is that although there is no provision of the Act of 1991 from which a general right of discharge into private watercourses can be implied, those rights of discharge which had already accrued in relation to existing outfalls under previous statutory regimes survived.

20. The basis of this implication is not section 30 of the Public Health Act 1936, whose statutory predecessor was the basis of the decision in [Durrant v Branksome UDC [1897] 2 Ch 291], but section 116 of the 1991 Act viewed against the background of the general duties of sewerage undertakers under the Act. It follows that the repeal of section 30 by the Water Consolidation (Consequential Provisions) Act 1991 is irrelevant. In any event, its repeal would not affect rights of discharge which had already accrued by virtue of the use of existing outfalls: see section 16(1)(c) of the Interpretation Act 1978.

21. It is true that although over a period of time after the coming into force of the Water Industry Act new rights of discharge could have been acquired by negotiation or compulsory purchase or existing sewers or outfalls replaced, the effect of the conclusion which I have reached is that a sewerage undertaker is entitled under the Water Industry Act 1991 to continue discharging into private watercourses from existing outfalls indefinitely. The solution is therefore more extensive than the problem. But that is a lesser anomaly and one which is inherent in the nature of the issue. Once one concludes that because of the time required to do these things after the law was changed, the right of discharge for existing outfalls must survive, it is not possible to arrive by a process of construction at a positive obligation to address the issue after transfer in a different way by acquiring new easements or replacing sewers or outfalls."

14. Lords Clarke and Hughes also agreed with the judgment given by Lord Neuberger. In paragraph 70, Lord Neuberger expressed the view that "the sewerage undertakers had an implied right (subject to payment of compensation in case of damage) to discharge from existing outfalls from the sewers vested in them in 1989, because (i) the provisions of the [Water Act 1989] conferred such a right on them by implication in accordance with the reasoning in Durrant or, if that is wrong, (ii) the implied right to discharge from those outfalls enjoyed just before the 1989 Act came into force was transferred by the water authorities to them". Lord Neuberger went on to explain in paragraphs 71-74 that he considered that "the existing right of discharge from existing outfalls survived the repeal of section 30 (and the replacement of section 278) of the 1936 Act by the 1991 Act". In paragraph 75, he concluded:

"In these circumstances, it appears to me to follow that sewerage undertakers had, and therefore continue to have, a statutory right to discharge surface water and treated effluent from existing outfalls from sewers which had been vested in them by the time that the 1991 Act came into force, but not from subsequently created outfalls or outfalls from sewers which they may have laid after that date."

15. Extensive submissions were filed as to the form of the order. On 24 March 2015, the Supreme Court made an order paragraph 1 of which was in these terms:

"The Orders of the Court of Appeal made on 7 February 2013 and sealed on 12 February 2013 be set aside save that paragraph 1 only of each of the Orders made by Mr Justice Newey on 8 March 2012 and sealed on 28 March 2012 be restored."

Paragraph 6 of the Supreme Court's order stated that, save as provided for above, the proceedings were to be remitted to me.

16. It can be seen from the Supreme Court's order that it restored the declaration that I have set out in paragraph 10 above. In other respects, however, my orders of 8 March 2012 no longer stand. An officer of the Supreme Court explained in an email to the parties of 20 March:

"As setting aside the CoA order seems to restore Newey J's order it is made explicit in the order that para 1 only of each of Newey J's orders is to be restored. Lord Sumption's view is that as the Court heard no argument about specific outfalls it should say nothing about his paragraph 2. It follows from that that the costs of the claims and counterclaims fall to be dealt with by Newey J in due course."

17. On 19 June 2015, United Utilities issued one of the Ship Canal applications that are before me. By it, United Utilities sought, among other things, a declaration along the lines of the second of the declarations contained in my order of 8 March 2012 and an order dismissing MSCC's claim as regards the outfalls listed in three schedules. It also asked for the determination of preliminary issues as to:

i) Whether, if the contractual licences in respect of five specified outfalls were terminated, United Utilities would still have statutory rights of discharge; and

ii) Whether four outfalls were constructed before 1 December 1991.

18. The other Ship Canal application before me was issued by MSCC on 7 December 2015. This asked for permission to re-re-amend the particulars of claim. It further proposed three preliminary issues, relating to (a) outfall 61, (b) whether United Utilities has any (and, if so, what) right of discharge in the case of five outfalls that were subject to contractual licences and (c) whether seven outfalls were constructed or first came into use after 1 December 1991.
19. Also on 7 December 2015, MSCC served notice of discontinuance in the Ship Canal case in respect of 14 outfalls.
20. Broadly comparable applications have been issued in the Bridgewater Canal proceedings by, respectively, United Utilities and the claimants.
21. The amendments for which MSCC asks for permission in the Ship Canal case involve the deletion of the last sentence of the existing paragraph 9 (viz. "Accordingly, any discharge now made by a sewerage undertaker without the permission of a relevant land owner constitutes a trespass"). A new paragraph 16A alleges that the use of each of eight outfalls that are said to have been created or physically extended on or after 1 December "is or will be a trespass unless … it is authorised by a private or local Act of Parliament or a subsisting agreement". A new paragraph 16C asserts that United Utilities' rights in respect of pre-1991 outfalls are subject to three limitations:

"16C.3 the statutory right impliedly conferred by the [Water Industry Act] 1991 to continue to discharge from Pre-1991 Outfalls does not authorise discharges of water and other materials through outfalls where the water and materials originate from sewers laid or adopted by the Defendant on or after 1 December 1991, or from new connections made to existing sewers after 1 December 1991;

16C.4 by reason of ss.117(5) and 186(3) of the WIA 1991, the statutory right impliedly conferred by the WIA 1991 to discharge water and other materials into the Canal does not authorise the Defendant:

16C.4.1 to use any sewer, drain, or outfall in contravention of any applicable provision of the Water Resources Act 1991 or the Environmental Permitting (England and Wales) Regulations 2010 made pursuant to the Pollution Prevention and Control Act 1999;

16C.4.2 to use any sewer, drain, or outfall for the purpose of conveying foul water into the Canal (or any stream or watercourse flowing into the Canal);

16C.4.3 to use any sewer, drain, or outfall for the purpose of conveying foul water into the Canal (or any stream or watercourse flowing into the Canal) without the water having been so treated as not to affect prejudicially the purity and quality of the water in the Canal; or

16C.4.4 injuriously to affect the Canal or the supply, quality or fall of water contained in, or in any feeder of, the Canal, without the consent of the Claimant.

16C.5 The statutory right impliedly conferred by the WIA 1991 does not authorise the discharge through outfalls into the Canal of water and other materials from wastewater treatment works of the Defendant where the water and other materials so discharged are taken to those works by means other than through sewers laid pursuant to the Public Health Acts 1875 and 1936 and provided by the Defendant pursuant to their duty under s.94 of the WIA 1991 or under any other provision of the WIA 1991, for example the conveyance of domestic or trade effluent or industrial waste (often pursuant to separate commercial agreements for the disposal of such water for a fee) from within or outside the defendant's area by road transport to the treatment works."

22. Paragraph 16E of the draft re-re-amended particulars of claim introduces an additional schedule of outfalls. It is explained that different columns in the schedule state "whether the Claimant believes that the outfall was constructed before or after 1 December 1991", "whether the discharge from the outfall is now in whole or in part from new sewers laid or adopted by the Defendant on or after 1 December 1991", "whether the outfall is used at any time in contravention of the limits found in ss. 117(5) and 186(3) WIA 1991" and "the outfalls where the discharges to the Canal do, or are likely to, contain water or materials which originate other than from public sewers".
23. Put briefly, MSCC wishes to continue the Ship Canal proceedings in respect of 98 outfalls in five overlapping categories:

i) Outfalls constructed on or after 1 December 1991. According to MSCC, eight outfalls fall into this category ("Class 1") (see paragraph 16A of the draft re-re-amended particulars of claim);

ii) Outfalls constructed before 1 December 1991 ("Pre-1991 Outfalls") where new sewers have subsequently been laid or adopted by United Utilities that connect directly or indirectly to the outfalls (see paragraph 16C.3 of the draft re-re-amended particulars of claim). 90 outfalls are said to come within this category ("Class 2");

iii) Pre-1991 Outfalls through which foul or wholly or partly untreated sewage is discharged, at least intermittently, in contravention of the limits found in sections 117(5) and 186(3) of the Water Industry Act 1991 ("the WIA") (see paragraph 16C.4 of the draft re-re-amended particulars of claim). This category is alleged to comprise 48 outfalls ("Class 3");

iv) Pre-1991 Outfalls receiving water and other materials from waste water treatment works where material has been transported to the works by road tankers rather than through pipes or sewers (see paragraph 16C.5 of the draft re-re-amended particulars of claim). Three outfalls are claimed to be within this category ("Class 4"); and

v) Pre-1991 Outfalls in respect of which an agreement for discharge has been determined by notice. This category ("Class 5"), on which the point on which I expressed a provisional view in paragraph 50 of my judgment of 14 February 2012 (as to which, see paragraph 9 above) has a bearing, is said by MSCC to cover five outfalls.

24. The proposed amendments would, in effect, enlarge Class 1 and introduce Classes 2, 3 and 4 for the first time.
25. For its part, United Utilities does not object to the amendments that MSCC wishes to make as regards three of the outfalls alleged to have been constructed on or after 1 December 1991 and, hence, to be within Class 1. Taking the view that two of the three outfalls post-dated 1 December 1991, United Utilities did not seek summary judgment in respect of them in 2012. So far as the third is concerned, United Utilities now considers that further investigation is merited.
26. United Utilities resists all the other proposed amendments. It contends that permission to make them should be denied on the basis that the application comes too late. In respect of certain of the amendments, it also maintains that they (a) do not disclose a case with a reasonable prospect of success and/or (b) are not adequately particularised and/or (c) are in part time-barred.
27. As regards the second of the preliminary issues that United Utilities asked to have determined by its application of 19 June 2015 (viz. whether four outfalls were constructed before 1 December 1991), this, it was explained to me, has been overtaken by events. There is now, it appears, no issue between the parties as to when the relevant outfalls were constructed.

Principles relating to applications to amend

28. A convenient summary of some of the principles applicable to applications to amend is to be found in the judgment of Carr J in Quah v Goldman Sachs International [2015] EWHC 759 (Comm). At paragraph 38, Carr J said this:

"Drawing these authorities together, the relevant principles can be stated simply as follows:

a) whether to allow an amendment is a matter for the discretion of the court. In exercising that discretion, the overriding objective is of the greatest importance. Applications always involve the court striking a balance between injustice to the applicant if the amendment is refused, and injustice to the opposing party and other litigants in general, if the amendment is permitted;

b) where a very late application to amend is made the correct approach is not that the amendments ought, in general, to be allowed so that the real dispute between the parties can be adjudicated upon. Rather, a heavy burden lies on a party seeking a very late amendment to show the strength of the new case and why justice to him, his opponent and other court users requires him to be able to pursue it. The risk to a trial date may mean that the lateness of the application to amend will of itself cause the balance to be loaded heavily against the grant of permission;

c) a very late amendment is one made when the trial date has been fixed and where permitting the amendments would cause the trial date to be lost. Parties and the court have a legitimate expectation that trial fixtures will be kept;

d) lateness is not an absolute, but a relative concept. It depends on a review of the nature of the proposed amendment, the quality of the explanation for its timing, and a fair appreciation of the consequences in terms of work wasted and consequential work to be done;

e) gone are the days when it was sufficient for the amending party to argue that no prejudice had been suffered, save as to costs. In the modern era it is more readily recognised that the payment of costs may not be adequate compensation;

f) it is incumbent on a party seeking the indulgence of the court to be allowed to raise a late claim to provide a good explanation for the delay;

g) a much stricter view is taken nowadays of non-compliance with the CPR and directions of the Court. The achievement of justice means something different now. Parties can no longer expect indulgence if they fail to comply with their procedural obligations because those obligations not only serve the purpose of ensuring that they conduct the litigation proportionately in order to ensure their own costs are kept within proportionate bounds but also the wider public interest of ensuring that other litigants can obtain justice efficiently and proportionately, and that the courts enable them to do so."

A little earlier in her judgment, Carr J had noted that an application to amend will be refused "if it is clear that the proposed amendment has no real prospect of success" (paragraph 36).

29. Briggs LJ had commented on the significance of lateness in Hague Plant Ltd v Hague [2014] EWCA Civ 1609, [2015] CP Rep 14, where permission to amend particulars of claim had been refused by Judge Behrens (sitting as a Judge of the High Court) at first instance. In paragraph 32 of his judgment, Briggs LJ observed that the fact that the amendments "would cause existing work to be wasted and substantial further work and expense to be incurred" had "weighed in the judge's mind". Briggs LJ went on:

"33 I consider that the judge was entitled to approach the relevance of lateness in this way. Lateness is not an absolute but a relative concept. As [counsel for a respondent] put it, a tightly focussed, properly explained and fully particularised short amendment in August may not be too late, whereas a lengthy, ill-defined, unfocussed and unexplained amendment proffered in the previous March may be too late. It all depends upon a careful review of the nature of the proposed amendment, the quality of the explanation for its timing, and a fair appreciation of its consequences in terms of work wasted and consequential work to be done. A fair reading of the judgment as a whole shows that this is how the judge took lateness into account. When dealing with specific matters sought to be introduced he never said merely that it was 'too late' but rather that the manner of pleading it, or the lack of satisfactory explanation for it not having been pleaded earlier meant that it was being introduced at too late a stage ….

34 Lateness, used in this way, is a factor of almost infinitely variable weight, when striking the necessary balance in determining whether or not to permit amendments."

30. I was referred by Mr Karas to a number of cases dealing with the circumstances in which, where judgment has been given but no order perfected, it can be proper for the judge to change his mind or to grant a party permission to amend. The question of when a judge can revisit a decision was considered by the Supreme Court in In re L (Children) [2013] UKSC 8, [2013] 1 WLR 634. After noting that the Court of Appeal had said in In re Barrell Enterprises [1973] 1 WLR 19 (23-24) that a "successful party ought save in the most exceptional circumstances to be able to assume that the judgment is a valid and effective one", and referring to subsequent cases, Baroness Hale (with whom the other members of the Court agreed) said (in paragraph 27):

"Thus one can see the Court of Appeal struggling to reconcile the apparent statement of principle in the Barrell case [1973] 1 WLR 19, coupled with the very proper desire to discourage the parties from applying for the judge to reconsider, with the desire to do justice in the particular circumstances of the case. This court is not bound by the Barrell case or by any of the previous cases to hold that there is any such limitation upon the acknowledged jurisdiction of the judge to revisit his own decision at any time up until his resulting order is perfected. I would agree with Clarke LJ in Stewart v Engel [2000] 1 WLR 2268, 2282 that his overriding objective must be to deal with the case justly. A relevant factor must be whether any party has acted upon the decision to his detriment, especially in a case where it is expected that they may do so before the order is formally drawn up. On the other hand, in In re Blenheim Leisure (Restaurants) Ltd, Neuberger J gave some examples of cases where it might be just to revisit the earlier decision. But these are only examples. A carefully considered change of mind can be sufficient. Every case is going to depend upon its particular circumstances."

31. The report of the Blenheim Leisure case mentioned by Baroness Hale attributes this to Neuberger J (The Times, 9 November 1999):

"The instant application related to a decision in an interlocutory matter. Even in relation to an interlocutory judgment in which the order had not been drawn up, it seemed to his Lordship undesirable for a court to be asked to reconsider an earlier decision unless there were strong reasons for doing so.

His Lordship said that those strong reasons included: a plain mistake on the part of the court; a failure of the parties to draw to the court's attention a fact or point of law that was plainly relevant; or discovery of new facts subsequent to the judgment being given. Another good reason was if the applicant could argue that he was taken by surprise by a particular application from which the court ruled adversely to him and that he did not have a fair opportunity to consider."

32. Stewart v Engel [2000] 1 WLR 2268, to which Baroness Hale also referred, involved an application to amend a statement of claim after the judge had delivered a judgment acceding to an application by the defendants for summary judgment and, accordingly, ordered the action to be dismissed. Before, however, the order was perfected, the plaintiff applied for and was granted permission to amend. An appeal was allowed by a majority, Roch LJ and Sir Christopher Slade taking the view (in the words of the headnote) that:

"although a judge hearing an application for summary judgment or to strike out a pleading had a wide discretion to permit amendments in the interests of justice, once judgment had been given on such an application the jurisdiction to reopen it was to be sparingly exercised and only where there were exceptional circumstances or strong reasons for doing so, since finality and the doing of justice required justice to all parties in the litigation".

33. Baroness Hale's reference was, however, to the dissenting judgment of Clarke LJ. He said this (at 2283-2284):

"This issue raises the question whether the judge misdirected himself in principle in the exercise of his discretion in reopening his previous order on the facts of the present case and, if so, whether this court should exercise its discretion by declining to reopen it and refusing the plaintiff permission to amend her pleading.

As I indicated above, it is my view that this question depends upon the application of the overriding principle to all the circumstances of the case. I agree with Sir Christopher Slade that [counsel for the defendants'] submission that it makes no difference to the exercise of that discretion whether the application was made before or after the judge orally announced his order to dismiss the action cannot be accepted. The fact that it was made after and not before he did so is to my mind an important factor in deciding whether to grant permission.

On the other hand, I respectfully differ from the suggestion that this court is bound by In re Barrell Enterprises [1973] 1 W.L.R. 19 to hold that permission to amend should only be granted in exceptional circumstances where the application is made after the order is announced orally but has not been drawn up and sealed. In deciding how to apply the overriding objective that factor is simply one consideration to be taken into account, albeit an imperative one. I am therefore unable to agree that we have to look to see whether in November 1999 there existed exceptional circumstances sufficient to justify the judge in exercising 'the Barrell jurisdiction'."

The present case: general

34. Mr Karas maintained that MSCC's application to amend can be disposed of simply on the basis of lateness. In contrast, Mr Michael Barnes QC, who appeared with Miss Janet Bignell QC and Mr Benjamin Faulkner for MSCC, argued that a number of general factors militate in favour of granting MSCC permission to amend. Among other things, he submitted that MSCC could not realistically have framed its case in the ways now proposed until after the Supreme Court had given judgment; that, no trial date having been set, there can be no question of the amendments causing such a date to be lost; that the amendments raise issues of public importance which, if not decided in the present case, will almost certainly have to be addressed in other proceedings; and that there is no reason to think that, if the amendments were permitted, United Utilities would suffer any substantial prejudice which could not be compensated in costs. The grant of permission to amend would, Mr Barnes said, accord with the overriding objective.
35. On the other hand:

i) MSCC sent United Utilities a letter of claim as long ago as 12 March 2008. Over the next two years, there was extensive pre-action correspondence before the claim form was issued on 29 March 2010. That is now almost six years ago;

ii) The application that came before me in January 2012 was not dealt with, as was suggested on behalf of MSCC, as "in effect a series of preliminary issues". As I have already said, United Utilities was seeking final judgment in its favour, including the dismissal of the claim as regards 106 outfalls, on the strength of the argument that it had inherited pre-existing rights of discharge;

iii) MSCC could be expected to have put forward by that stage all the points that it wished to advance as entitling it to be allowed to continue the proceedings in respect of the 106 outfalls, the more so since Floyd J had directed MSCC to serve its evidence in answer to the application to for summary judgment by 18 November 2011. Further, as I recorded in my judgment, counsel then appearing for MSCC accepted at the hearing before me that the parties had had an adequate opportunity to address the issues and did not suggest that I lacked any relevant evidence;

iv) The claims that would be introduced by the proposed amendments could all have been put forward in time for the hearing before me in 2012. The Class 2 amendments have, I gather, been prompted by paragraph 75 of Lord Neuberger's judgment in the Supreme Court, but the passage in question did no more than suggest to MSCC a legal argument that had always been available to it. So far as Class 3 is concerned, United Utilities itself pleaded in its defence that it had rights to discharge water "so long as the water discharged did not prejudicially affect the purity and quality of the water in the Canal" (echoing paragraph 8 of the particulars of claim) and there was nothing to prevent MSCC from checking the quality of the water discharged and its effects on water in the Ship Canal. As regards Class 4, there is uncontradicted evidence that United Utilities has for many years advertised a service of the relevant kind. In short, the amendments were not dependent on the Supreme Court's decision;

v) The fact that additional arguments may have occurred to new counsel does not normally represent a compelling reason for granting permission to amend (compare paragraph 47 of Carr J's judgment in the Quah case);

vi) The fact that no application to amend was made until after I had given judgment on United Utilities' application for summary judgment is of importance. In Stewart v Engel, Clarke LJ agreed with Sir Christopher Slade that a "submission that it makes no difference to the exercise of that discretion whether the application was made before or after the judge orally announced his order to dismiss the action cannot be accepted";

vii) In the event, MSCC did not make any reference to the possibility of applying for permission to amend until after the Supreme Court had given judgment in 2014;

viii) While no trial date has yet been fixed, allowing the amendments would be likely to delay the final disposal of these proceedings as regards many of the outfalls substantially (quite possibly by years rather than months);

ix) The amendments would put United Utilities to a very great deal of work. A witness statement explains that, if the amendments were permitted, United Utilities:

"would be required to undertake very substantial investigations into facts which it has not had to investigate as a result of any of the allegations raised in these proceedings to date, including without limitation as to the date of construction of sewers and properties which ultimately connect to sewers discharging through the outfalls in issue, as to the frequency and extent with which individual discharges can be said to have exceeded the statutory limits on [United Utilities'] authority to discharge, and as to its tankering operations."

It is, moreover, reasonable to assume, I think, that Mr Karas is correct that past work would be wasted (because some would inevitably need to be done again in going over historic documents);

x) Even if it were the case that the amendments would occasion no prejudice to United Utilities that could not be compensated in costs, "gone are the days when it was sufficient for the amending party to argue that no prejudice had been suffered, save as to costs" (to quote Carr J); and

xi) The fact that, if denied permission to amend, MSCC may seek to litigate some or all of the points raised by the proposed amendments in fresh proceedings does not seem to me to provide an adequate justification for allowing it to introduce them into proceedings issued nearly six years ago, especially since the points have not been the subject of pre-action correspondence.

36. In all the circumstances, it seems to me that the fact that the application to amend was not made at an earlier stage, while not necessarily an absolute bar to permission to amend being given, must weigh heavily against the grant of such permission.

The proposed amendments

37. I turn, then, to consider the various amendments for which permission is sought in the Ship Canal case.

Class 1

38. The question here is whether MSCC should be allowed to amend to allege that eight outfalls, rather than just the three in respect of which United Utilities has raised no objection to permission to amend being granted, were constructed on or after 1 December 1991.
39. A witness statement filed on behalf of MSCC explains why all eight outfalls are now believed by MSCC to date from 1 December 1991 or later. In the course of his submissions, Mr Karas accepted that the statement provides some evidence that the outfalls at issue post-date November 1991, but he queried whether the evidence is strong enough to warrant MSCC being permitted to amend. He also argued that MSCC ought to have provided more of an explanation for why it was only now alleging that the relevant outfalls were constructed on or after 1 December 1991, having previously proceeded on the basis that they were of earlier date.
40. On the other hand, the Class 1 amendments, even if allowed in full, would not of themselves enlarge the scope of these proceedings all that greatly or call for an immense amount of investigation; three of the eight outfalls are anyway going to be addressed in the present case; it is, as I have said, accepted that there is some evidence in support of MSCC's case on the remaining five; and it is not suggested that in this respect the draft amendments lack particularity.
41. In all the circumstances, notwithstanding the late stage at which permission to amend is sought, it seems to me that the balance comes down in favour of allowing all the Class 1 amendments, subject only to the limitation point considered in paragraphs 53-58 below.

Class 2

42. The Class 2 amendments are, as I have mentioned, prompted by paragraph 75 of Lord Neuberger's judgment in the Supreme Court. He referred to sewerage undertakers having the right to discharge from "existing outfalls from sewers which had been vested in them by the time the 1991 Act came into force, but not from subsequently created outfalls or outfalls from sewers which they may have laid after that date". MSCC contends that the words I have underlined indicate a limitation on United Utilities' entitlement to discharge through Pre-1991 Outfalls. It maintains, moreover, that such a restriction is consistent with the scheme of the WIA and the basis on which the Supreme Court held sewerage undertakers to have implied rights of discharge.
43. Mr Karas suggested that I should decline to allow the Class 2 amendments on the basis that MSCC's argument is wrong in law. It would, he argued, be legally incoherent to suppose that discharges of material originating from connections to United Utilities' sewers after 1 December 1991 are unlawful. In this connection, he stressed section 106 of the WIA, which (he said) confers an "absolute right" to connect premises to a public sewer (as to which, see Barratt Homes Ltd v Dwr Cymru Cyf (Welsh Water) [2009] UKSC 13, [2010] 1 All ER 965).
44. In my view, however, it would not be appropriate for me to attempt to determine whether United Utilities' rights of discharge are (or are not) restricted in the way suggested by MSCC. For understandable reasons, argument on the point was quite limited before me. I am not confident that the issue was addressed fully. I do not, in the circumstances, feel that I should "grasp the nettle" and decide it.
45. However, other objections that Mr Karas put forward to the Class 2 amendments strike me as more compelling. It is fair to say (as Mr Karas did) that the amendments are wholly unparticularised: MSCC baldly asserts in respect of the 90 relevant outfalls that the discharge from each of them "is now in whole or in part from new sewers laid or adopted by [United Utilities] on or after 1 December 1991". Further, Mr Karas must surely be right that, unless at least MSCC's claim were dismissed as legally unsustainable at a very early stage, the Class 1 amendments would put United Utilities to a great deal of work. As to this, a witness statement filed on behalf of United Utilities says:

"Even if proper particulars are provided, I understand from [United Utilities] that, at present, there is no obviously satisfactory way of establishing which sewers connecting into sewers discharging into the Canal were constructed after that date. If this amendment were to be permitted, it is at this stage unclear to [United Utilities] precisely what factual investigations would be best undertaken. However, whatever method was chosen, given the sheer amount of infrastructure in issue, it is clear that a very significant amount of investigation would be necessary, and [United Utilities] would request an initial period of 6 months to respond following the provision of proper particulars, although anticipates that a request for a further extension is likely to be necessary."

46. Taking such matters in conjunction with the lateness of the application to amend (on which I have commented above), it seems to me that I should not grant MSCC permission to make the Class 2 amendments. The claim that MSCC wishes to put forward should, in my view, be pursued, if at all, in new proceedings.

Class 3

47. The Class 3 amendments proceed on the basis that the 48 material outfalls have been "used at any time in contravention of the limits found in ss. 117(5) and 186(3) WIA 1991". Taking these provisions in turn, section 117(5) of the WIA provides:

"Nothing in sections 102 to 109 above or in sections 111 to 116 above shall be construed as authorising a sewerage undertaker to construct or use any public or other sewer, or any drain or outfall—

(a) in contravention of any applicable provision of the Water Resources Act 1991 or the Environmental Permitting (England and Wales) Regulations 2010 (S.I. 2010/675); or

(b) for the purpose of conveying foul water into any natural or artificial stream, watercourse, canal, pond or lake, without the water having been so treated as not to affect prejudicially the purity and quality of the water in the stream, watercourse, canal, pond or lake."

Section 186(3) of the WIA states:

"Nothing in the relevant sewerage provisions shall authorise a sewerage undertaker injuriously to affect—

(a) any reservoir, canal, watercourse, river or stream, or any feeder thereof; or

(b) the supply, quality or fall of water contained in, or in any feeder of, any reservoir, canal, watercourse, river or stream,

without the consent of any person who would, apart from this Act, have been entitled by law to prevent, or be relieved against, the injurious affection of, or of the supply, quality or fall of water contained in, that reservoir, canal, watercourse, river, stream or feeder."

48. The allegation of "contravention of the limits found in ss. 117(5) and 186(3) WIA 1991" thus encompasses a number of possibilities. To take some examples, MSCC could be complaining of a particular breach of the Water Resources Act 1991 (section 117(5)(a)), that "foul water" had been conveyed into the Ship Canal without the water having been "so treated as not to affect prejudicially the purity and quality" of the water in the canal (section 117(5)(b)) or that United Utilities had "injuriously" affected the quality of water in the Ship Canal. The draft re-re-amended particulars of claim nowhere spell out which of these things (or others) are being alleged in respect of which of the outfalls. Nor is it apparent from the draft amendments whether as regards each outfall (or any of them) any contravention is said to have taken place on specific occasions (and, if so, when) or continuously (and, if so, from when). MSCC does no more than baldly assert "contravention of the limits found in ss. 117(5) and 186(3) WIA 1991".
49. That fact would, in my view, of itself make it inappropriate for me to grant permission for the Class 3 amendments. Taken together with (a) the lateness of the application to amend, (b) the investigative work that would have to be undertaken and (c) the fact that the case that MSCC wishes to advance is quite distinct, and different, from that to be found in the existing version of the particulars of claim, the case for refusing permission to amend becomes, as it seems to me, still more overwhelming. The Class 3 allegations should be pursued, if at all, in fresh proceedings.

Class 4

50. The premise of the Class 4 amendments is that any right of discharge that United Utilities enjoys is to provide for the drainage of its area or parts of that area. United Utilities is not, MSCC alleges, entitled to discharge water that has been brought to treatment works by road rather than through sewers.
51. Once again, I have concluded that any such complaints should be the subject of new proceedings. Having regard in particular to the lateness of the application to amend and the fact that (as with the Class 3 amendments) the case that MSCC wishes to advance is quite distinct, and different, from that to be found in the existing version of the particulars of claim, I do not think it appropriate to grant permission to amend.

Other amendments

52. The draft re-re-amended particulars of claim include various other, less significant, amendments, some of which might be described as tidying-up. Unsurprisingly, these received little attention at the hearing. It may be that some such adjustments can be agreed between the parties. If points of difference remain, I shall hear further argument on them.

Limitation

53. United Utilities opposed MSCC's application for permission to amend on limitation grounds as well as those discussed above. For example, the skeleton argument filed on behalf of United Utilities stated (in paragraph 64):

"MSCC tries to introduce new claims for damages by amendment outside the relevant limitation period. Even if amendments might otherwise be permitted (which they should not) MSCC should not be permitted to amend its Re-Amended Particulars of Claim so as to recover damages in respect of Category A, B or C trespass for any period in excess of 6 years prior to the date of this amendment."

Categories A, B and C corresponded to what I have called Classes 2, 3 and 4.

54. Since I have decided against granting permission to make the Class 2, Class 3 and Class 4 amendments for other reasons, I do not need to consider whether they were also open to objection on a limitation basis. Limitation remains relevant, however, if the Class 1 amendments are said to be statute-barred.
55. Notes that Mr Karas helpfully provided by way of summary of his oral submissions said this (among other things) in relation to the Class 1 amendments:

"In any event, the amendments create claims where previously there were none on the pleadings. This is clearly a case where limitation must preclude pre-March 2010 claims."

This sentence plainly suggests that United Utilities' limitation arguments are intended to extend to Class 1 as well as Classes 2, 3 and 4.

56. So far as I can see, however, no mention of limitation in the context of Class 1 is to be found in United Utilities' skeleton argument. Paragraph 64, which I have quoted above, referred to what I have termed Classes 2, 3 and 4 (corresponding to MSCC's Categories A, B and C). Similarly, paragraph 75 asserted that there could be "no real doubt that MSCC's new categories A, B and C are in each case 'new claims' which do not arise out of substantially the same facts as the cause of action already pleaded". Paragraph 76 concluded:

"Now the questions become, 'are these discharges in whole or in part of a particular nature or quality viz. originating from new connections (Category A)?' 'do they include foul or partly foul water (Category B)?' 'do they originate in tankered waste arriving at a WwTW by road (Category C)?' Understood in this way, it is clear that new claims are made and the amendments should be refused."

57. Mr Karas also focused on Classes 2, 3 and 4 when addressing limitation issues orally. For example, he said:

"If I can take you to paragraphs 75 to 76 of the skeleton argument, which is really the way we put it. We say … there is no real doubt that the new categories A, B and C are each new claims because they don't arise out of substantially the same facts as those already pleaded. Each of these categories will necessarily depend on new facts which weren't previously pleaded, weren't relied upon by [MSCC] and indeed weren't material to the claim as currently put in its re-amended particulars…. I think the point we make is at the end of paragraph 76. Previously the question for the court and the factual investigation was simply 'Are the discharges from each outfall the responsibility of United Utilities and if so is there anything that authorises the use of that outfall?' Now that goes, they have deleted paragraph 9, they now have to answer the following questions, we need to undertake the following factual allegations. In relation to category A 'Are the discharges in whole or part of a particular nature or quality, in other words originating from new connections?' They need to establish where that water comes from in order to show that it's a trespass, that essentially must be part of their case. If they don't establish that, there's no trespass. The next question is 'Does it include foul or partly foul water' -- in fact they need to show more than that, they need to establish … is there prejudice to their canal? … That's a new factual investigation. And thirdly, in relation to category C, they need to establish a completely new fact: 'where did the waste come from, was it tankered in?' These are entirely new facts and without proof of those, the onus being on the claimant, they cannot have a cause of action. These are new claims."

58. In the circumstances, my impression is that, notwithstanding the passage I have quoted in paragraph 55 above, United Utilities was not intending to suggest that a limitation issue arises in relation to the Class 1 amendments. In case, however, I am mistaken about this, I should say that, in my view, the Class 1 amendments are not open to objection on a limitation basis. As they stand, the particulars of claim allege that discharges through all the Class 1 outfalls are trespasses. In its defence, United Utilities claims to have inherited statutory authorisation to use outfalls constructed before 1 September 1991. In so far as MSCC is now suggesting that certain outfalls previously thought to have been constructed by 1991 were in fact of later date, it seems to me that it is not seeking to add or substitute a new cause of action but merely to modify its response to a defence advanced by United Utilities.

Conclusions

59. I can summarise my conclusions as follows:

i) MSCC should be granted permission to make the Class 1 amendments to the Ship Canal particulars of claim, but not those relating to Classes 2, 3 or 4;

ii) If the parties are unable to reach agreement on other, minor amendments to the Ship Canal particulars of claim, I shall hear further argument on them;

iii) I shall dismiss the Ship Canal claim as regards outfalls in respect of which, having regard to my conclusions on the amendment application, the proceedings will not now be continuing; and

iv) I shall hear further argument on what directions should be given for the future conduct of both sets of proceedings.