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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> McDonough & anor -v- Irish Water [2014] IEHC 646 (17 December 2014)
URL: http://www.bailii.org/ie/cases/IEHC/2014/H646.html
Cite as: [2014] IEHC 646
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Judgment
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Neutral Citation: [2014] IEHC 646 THE HIGH COURT JUDICIAL REVIEW [2013 No. 606 J.R.] BETWEEN MARK MCDONOUGH AND CAROLINE MCDONOUGH APPLICANTS AND
IRISH WATER RESPONDENT JUDGMENT of Ms. Justice Baker delivered on the 17th day of December, 2014 1. This judicial review relates to water and waste water charges levied by Meath County Council against the operators of a private caravan park at Bettystown Co Meath. The proceedings were commenced against Meath County Council, but following the coming into force on 1st January, 2014 of the Water Services Acts 2007 to 2013, the functions and powers of the local sanitary authority have been taken over by Irish Water, which has now been substituted as defendant pursuant to s. 15(2) of the Act of 2013. The case involves the interpretation of s. 65A of the Public Health (Ireland) Act 1878, as amended, and the extent of the exemption from water charges found in the legislation. The applicants claim that the respondent was not entitled to levy water charges in respect of the units at the caravan park as the water is supplied for domestic purposes and exempt from charges. The respondent says that as the water is supplied to the first applicant who conducts the business of caravan parks, the supply is for commercial purposes and not exempt from charges. 2. The matter has progressed by modular trial and this part of the action concerns the interpretation of the exemptions in the legislative scheme, and whether the applicants are entitled to the benefit of the legislative exemption from water charges. In this judgment, except where the context suggests otherwise, I use the expression “water charges” to refer to charges for the supply of water and the disposal of waste water or sewage. Facts 4. Many of the units are occupied as holiday homes, but one hundred and ten people live permanently in the park, ten of whom are children who go to school locally. Each of the units has a separate postal address and some of the residents have lived in the units for many years. 5. The caravan park is serviced with water, sewage disposal, electricity and other services commonly found in domestic or commercial premises, and two services are of particular note. The units had at the relevant times the benefit of mains water which was supplied by Meath County Council. The supply was brought to the entrance on the southern side of the site from where it was transmitted through conduits to the individual units. The units are also serviced by a public sewer which is situate outside the site on the north eastern corner, and the waste water is discharged into conduits on the site which feed into the public sewer at that point. Manholes are clearly visible on the ground and have been identified to me in the course of the hearing. 6. The owners of the units pay an annual licence fee to the park operator calculated at the beginning of every year, the fee being for the use of the site on which their individual unit is situate. The physical property in the units themselves is owned by the individual occupiers, and the licence fee is paid in consideration of an exclusive right to position a unit on an identified part of the park lands. The licence is created orally, but rules and regulations are made annually in a circular or letter sent to the individual owners identifying in any particular year the amount of the service charge, and the rules and requirements for the proper regulation of the caravan park. 7. The annual licence fee was for at the last identified year the sum of €2,600 plus VAT, and individual home owners are charged separately for electricity, but not for water or waste water disposal. 8. The park regulations, which do not take the form of covenants, include rules and regulations regarding the keeping of animals, the proper management of the pipes during winter months when some of the units are unoccupied, the proper maintenance of the parking areas etc. Of note is the fact that there is prohibited any subletting or other parting with possession of the unit, whether on a long or short term basis. Of note is also the fact that there is an express prohibition on the sale of a unit except through the managers or owners of the park, and what is envisaged is that a person may remove the unit entirely from a site, but if he or she wishes to dispose of the unit in situ the sale, with the benefit of the licence to occupy an identified site, can be done only through the park owners. There was no argument canvassed before me that the relationship of landlord and tenant exists between the park operators and the individual owners of mobile homes. 9. Having regard to the express prohibition on any class of subletting or parting with possession, it is clear that the intended use of the individual units is as either permanent or holiday homes for the owners who may not rent the units to tenants, whether on a short or long term basis. The caravan park is not operated as a commercial caravan park where holiday makers take a short term rental, whether from the owners of the units or the owners of the sites. 10. Another relevant factor is that the caravan park site has no commercial facilities and does not have, for example, a laundry, restaurant, gym or any other facilities that one might find in a holiday caravan park. 11. It can fairly be said that the units are used for domestic purposes by their owners, and there is no commercial element in their use. The basis of the proceedings Standing 14. Having regard to the possibility that different arguments as to standing might arise in regard to the damages claim, counsel for both parties agreed, and I accepted, that the trial would proceed as a modular trial, that I would first hear the question of the interpretation of the legislation and determine the application for declaratory relief, and consequent upon that I would, if appropriate, enter upon a hearing of the damages claim which in essence is a claim by the first applicant for a refund of the monies paid by him. Delay 16. I was referred to the considerable correspondence that occurred after the service of the disconnect notice, immediately upon the receipt of which Mr. McDonough sought legal advice and his solicitor engaged in correspondence with the County Council. Throughout this correspondence, the respondent sought to persuade the applicants’ solicitors not to move for injunctive relief or for judicial review, and expressly gave an undertaking at that stage that the water would not be disconnected. In some of this correspondence, the solicitor for the local authority suggests that in those circumstances there was no order that the applicants might seek to challenge, and I consider that this suggestion in correspondence is inconsistent with what is now sought to be argued by the respondent, namely that the applicants are out of time. The question of time might well be relevant to the issue of the recovery of damages in the form of the refund of payments already made but is not, in my view, determinative of the issue whether the applicants are out of time for the bringing of an application for declaratory relief in respect of the disconnection notice and for a declaration as to the true interpretation of the statutory provisions. If on a true construction of the application the review is in essence a review of the invoice, I consider that the time for bringing review should be extended. 17. The first point I consider relevant in this regard is that the applicants challenge a disconnect notice that served on 13th May, 2013, and this is when in essence the supply of the relevant service by the sanitary authority came to be in jeopardy. The case law is clear that I must have regard to the reason for the delay in commencing this judicial review within the time limit thereafter, and I am persuaded by the argument that the delay thereafter was caused and to a very large extent contributed to by the correspondence entered into between the solicitors for the parties. I consider that this correspondence was fulsome and frank on the part of both parties and it was clear that it was hoped the matter would resolve. Further, and this is critical to my conclusion, the proposition that the applicants are now out of time does not sit comfortably with the proposition clearly stated in the correspondence from the solicitor for the respondent that there was no purpose to be served by instituting review as the it was agreed not to activate the disconnect notice. I consider that the applicants were lulled into a false sense of security by this correspondence and that it would not be a proper exercise of my discretion to refuse to extend the time for the bringing of judicial review, and to borrow from the law of private estoppel, the respondents led the applicants by the correspondence to believe that a time point would not be taken and that belief led the applicants to delay unduly in seeking relief. I am fortified in this view by the judgment in Murphy v Wallace [1993] 2 I.R. 138 where Barron J. held that the circumstances were a justification for the delay which occurred, and that the applicant was justified in waiting for a decision by the prosecution as to how they would continue before taking any steps by way of seeking judicial review. 18. Equally in this case the applicants were entitled to and did in fact rely on the undertakings given on behalf of the respondent that the water would not be disconnected and they would arguably have been met by precisely the opposite argument than that made here had they gone for review sooner. 19. I hold then that the applicants are not out of time and that the first applicant has a sufficient interest in the matters now before me, namely the true interpretation of the statute and the legality of the disconnection notice to raise the matters raised in this module of the trial. 20. Different legislative provisions apply in regard to charges for the supply of water, and for the disposal of waste water and the judgment will consider each in turn. Historical context: the supply of water
23. The power to impose a charge for the supply of water is contained in s. 65 of the Act of 1878, as subsequently amended. The relevant amendment was made by insertion of a new section 65A by s. 7 of the Local Government (Sanitary Services) Act 1962:
a) a supply to any premises which are used wholly or in part for any business, trade or manufacture, b) a supply to any hospital, sanatorium, county home, home for persons suffering from physical or mental disability, maternity home, convalescent home, preventorium, laboratory, clinic, health centre, dispensary or any similar institution, or c) a supply to any club.”
a) the quantity of water supplied, b) the rateable valuation of the premises supplied, c) the purposes for which the water is required, d) the description of the premises supplied, e) any other matter which the sanitary authority consider suitable, and may be so fixed either without or subject to any maximum or minimum limit.”
(8) A charge under this section for water supplied by measure shall be payable on demand by the sanitary authority and, in default of being so paid, shall be recoverable as a simple contract debt in any court of competent jurisdiction.”
a) the cost of the discontinuance shall be recoverable in any proceedings for the recovery of the charge, b) the cost of re-connection shall be payable by the person liable for the charge.” 30. Since 1997 then a local sanitary authority ceased to have power to levy a charge for the supply of water for domestic purposes, defined in s. 7 of 1962 Act as amended by the Act of 1997:
a) a supply for agriculture or horticulture, b) a supply for any trade, industry or business, c) a supply for any purpose incidental to a dwelling-house or private garden (including washing a private vehicle) if the water is drawn otherwise than from a tap inside a dwelling-house or if a hosepipe or similar apparatus is used, d) a supply for central heating other than central heating of a dwelling- house, e) a supply for apparatus depending while in use upon a supply of continuously running water, not being an apparatus used solely for heating water, f) a supply to a sanitary authority.”
‘dwelling house’ means a building or part of a building used by a person as his or her place of private residence (whether as his or her principal place of such residence or not) and includes accommodation provided in such a residence to one or more students to enable them to pursue their studies but does not include any part of a building used for the provision, for the purposes of reward, with a view to profit or otherwise in the course of business, of accommodation, including self-catering accommodation, (other than accommodation provided in a place of private residence aforesaid to one or more students for the purposes aforesaid) unless the person to whom the accommodation is so provided uses the accommodation as his or her principal place of private residence”. 33. A supply to a group water scheme was also exempt from charges. This additional category of exemption was added by s. 12(2)(b) of the Act of 1997. A group water scheme is defined in subs. (13) as:
35. As can be seen, the legislation since 1878 has made reference to the purpose for which water was supplied and has expressly made reference to domestic purposes. There is no definition in the legislation of what might be regarded as a domestic purpose and the matters to which regard must be had, contained in s. 65A (11) as quoted above at para. 30, are to some extent a definition of those purposes which are not domestic. The definition refers to “ordinary household purposes”, and gives examples of drinking water and sanitation but excludes supplies for agriculture, horticulture or supplies for trade industry or business. 36. It is important also to note that subs. (12) of the amended s. 65A gives power to a sanitary authority to apportion or estimate that part of the water supplied which is for domestic purposes, and permits a charge to be levied for those purposes which are not domestic.
The arguments 39. The applicants argue that a harmonious and purposive interpretation must be given to the legislation, and in particular it must be asked what the Oireachtas intended in the legislation which expressly excluded from the entitlement to levy a charge for the supply of water for domestic purposes. In particular, the applicants argue that the definition in subs. (11) of s. 65A of the Act of 1878 is central and that the respondent is incorrect in its assertion that for a supply of water to be one of domestic purposes there must be a direct supply from the public mains to a dwelling house, and that this definition would, of itself, exclude developments of apartment complexes, or private housing developments where the common areas are owned and managed by a management company and where the water is supplied to an identified point to the privately owned common areas. It is argued that were I to construe the legislation in such a narrow way that a significant number of private dwellings would be excluded from the provisions and would be liable to water charges. The applicants argue that the water supply to the caravan park was destined for each of the individual units, to be used by each of them for their individual and domestic purposes, and that the water was used by the owners of the units and by them alone. 40. It was not doubted that the purpose for which the individual unit, owner or occupier required the water was domestic, and it is accepted that the water was used for drinking, sanitation, washing, and that there was no commercial, industrial or recreational use such that would take the use of the water outside the definition of domestic purpose. The respondent however argues that the supply is to the park, and that the water travels from the public water mains immediately outside the caravan park through a private network for distribution to the individual caravan unit. It is contended that the supply can properly be characterised as one to the park taken as a whole, from where distribution takes place according to the contractual arrangements between the park owners and the individual unit owners. The respondent argues that the water was supplied to the caravan park and the ultimate destination of the water is not a matter to which the local sanitary authority needs to have regard. Discussion 42. The applicants have argued, inter alia, that were I to hold that the supply of water was to the caravan park and not the individual units that such an interpretation of the legislation would have implications for how local authorities were entitled to treat the supply of water to apartment complexes or other private estates. 43. The respondent argues that the significant difference between the arrangement that operates in the caravan park, and that which operates in an owners’ management company is that the owners of the individual units in the caravan park have no legal right or interest in the common areas and no legal right in the form of an easement to the water pipes. It has not been argued that the owners of the mobile home units have a lease or other propriety interest in the individual stand on which their units are situate. In those circumstances, counsel for the respondent is correct that no argument could be made by the individual owners that they have a proprietary interest which might be served by an easement over the services. 44. It seems to me that this particular distinction, and whether easements or proprietary interests exist over the conduits supplying the water, does not answer the question raised before me. The legislation identifies two classes of supply which are excluded from water charges. The first is a supply to a domestic dwelling and the second is a supply to a group water scheme. I note that the legislation refers in the singular to a supply to a dwelling house, and not to a group of dwelling houses in an estate or other formal or informal grouping, and the only supply to a collective which is exempt is one to a group water scheme. It is accepted by the applicants that the scheme operated within the park is not a group water scheme and the respondent agrees that the operation cannot be properly so characterised. I consider that some guidance can be got from an analysis of what is meant by a group water scheme for the purpose of the legislation. Group water schemes 46. The legislation defines group water schemes and the definition, recited above at para. 33, is quite broad and makes no reference to the legal basis by which the water is supplied within a private area, for example whether there exists or can be said to exist an easement of wayleave for the flow of water within a defined area. What is required is that there exist a scheme, or an arrangement, by a group of persons for the provision or operation of a supply of water from a common or shared source and the water must be distributed through a common distribution system. 47. The definition of a group water scheme is not in my view confined to a group water scheme as it is colloquially understood, that is a scheme which is operated through trustees, or informally, for the purpose of supplying water to privately owned premises within a rural area. The definition of group water scheme seems to me to be broad enough to encompass the type of scheme or arrangement that exists in a privately owned apartment development, gated community, or other housing development where the common areas are vested in a management company or in an entity which operates and controls the supply of services. I consider that an owners’ management company is a scheme within the meaning of the definition, and the activity carried out by the management company is an activity by which a common or shared source of the supply and distribution of services is managed and regulated. Such owner managed schemes are in my view exempt from water charges under s. 12(2)(b), as they are group water schemes within the meaning of the legislation, but this does not result in the inclusion of the type of water distribution system operated in the park by analogy with the type of scheme operated in a private housing development of the types analysed above. 48. It follows that the legislature intended to include a certain class of shared services and supply within the definition of those persons or bodies who would be regarded as exempt from water charges. The inclusion of a group water scheme in the legislation was likely to have been done precisely to allow a group water scheme and a management company to claim exemption from charges, so that the legislation did not confine the exemption to water supplied to a single dwelling house. I consider that for me to interpret the legislation as also excluding a supply to other collectives or groups of dwelling houses who, whilst they share a common source of supply, do not have a common distribution system, would be to extend the express category of users to which the legislation was stated to apply. To do this would be impermissible and would be to ignore the will of the Oireachtas embodied in with what seems to be a clear statutory provision. Certain canons of interpretation guide me. Canons of construction
51. Further to hold otherwise would be to offend the maxim expressio unius exclusio alterus explained by David Dodd at para 5.89 of his text Statutory Interpretation in Ireland (2008, Dublin):
Historical context: sewage disposal charges 55. The Act of 1878 gave power to local sanitary authorities to regulate sewers within its functional areas. Section 30 of the Act empowered a sanitary authority to construct sewerage works within their district and to receive store or otherwise dispose of such sewage. A sewerage system may be one which carries any form of waste water not merely sanitary water but also waste water from bathrooms, kitchens etc 56. The general power to impose charges for the disposal of waste water is also found in s. 2 of the Local Government (Financial Provisions) (No. 2) Act 1983, quoted at para. 24 above. It is accepted by the respondent that the power to levy a charge for the disposal is not a derivative of the power to charge for the supply of water, and the power to levy these charges is expressly stated as a distinct power. 57. Section 12 of the Local Government (Financial Provisions) Act 1997, abolished the power of the sanitary authority to levy a charge “for the disposal by it of domestic sewage”, and the express language of the section makes no reference to the source of the water, and no express link is made to a domestic dwelling, or organised group of dwellings as is found in the case of the abolition of the power to charge for the supply of water. 58. The respondent accepts that the sewage or waste water produced by each individual unit is domestic sewage in as much as it is produced in a residential context and is a by-product of normal domestic activity. The dispute is whether the sewage or waste water is to be characterised as domestic sewage after it leaves the individual unit. The factual circumstances are as outlined above, namely that the sewage leaves the individual unit and passes through conduits and pipes in the common areas of the caravan park from where it is transported to the public sewer immediately outside the north-western boundary of the site. 59. Counsel for the respondent argues that while the waste water is properly characterised as domestic sewage at the time it leaves the individual unit, it becomes sewage of a non-domestic type by virtue of the manner in which it is managed before it passes into the public sewer mains. It is asserted that as the sewage passes through private mains owned and operated by the first applicant, the local authority may levy a charge for the collection of the waste water at the point it is deposited in the public sewer. 60. The applicant argues that the waste water or sewage remains domestic sewage as it is a by-product of the occupation and use by individual owners of their units in the park and arises from the normal occupation of the units as domestic units. I accept that the applicant is correct in this assertion. There is no waste water treatment activity of any sort carried on in the park, and the waste water passes into the public sewer in an untreated form, and as it was when it was deposited by the unit. But it is appropriate to consider whether the respondent is correct in asserting that the character of the water is not the sole question before me, as the question relates to the charge for the disposal of the waste water and sewage at the point at which it enters the public mains. 61. A feature of the legislation is that, while the exemption from charges for the supply of water applied only when the cumulative test was satisfied, and when the water was supplied to a dwelling house for domestic purposes, the removal of the power to levy charges for the disposal of domestic sewage is not linked to the source of the fecund matter, but merely to its nature as foul water. The exemption applies when the sewage is domestic in nature, and there is nothing in the legislation that limits the exemption to sewage which is disposed of by a dwelling house, or by a group of dwelling houses. 62. The respondent argues that as the individual unit owners pay a charge for the disposal of waste water as part of the annual licence fee, that the sewage loses its character as domestic sewage, and for me to hold otherwise would enable the applicant to evade the statutory obligation to pay the charge. It is argued that I should seek to avoid giving a statutory provision an illogical interpretation, or one which results in an obligation being evaded. In the case of Revenue Commissioners v. Associated Properties [1951] I.R. 140 the Supreme Court was asked to read the words shareholders in s. 14(9)(b)(i) of the Finance Act 1944 as meaning “all shareholders jointly”, which would have resulted in the respondent to the claim evading a taxation liability under the statute. In coming to a conclusion that the words should not be so construed the Supreme Court stated following:-
64. I also reject the argument by the respondent that to hold that the Oireachtas intended to exempt the disposal of waste water in this instance from charges would in effect give the applicant a windfall, in that charge for the disposal of waste water had been included in the annual licence fee. This private contractual arrangement is not a matter that could affect the interpretation of the statutory scheme, and further were it to so affect the sanitary authority would have to concern itself with these internal and private contractual matters, a process which would be cumbersome and not consistent with the proper and smooth operation of the charging regime. 65. The Oireachtas envisages two separate charging schemes, and in fact in this case the park operators received invoices from Meath County Council which itemised separately the charges for supply and disposal. The park continues to receive invoices for the disposal of waste water after it has become self sufficient in fresh water. It is reasonable to conclude that two separate exemption provisions could also be enacted. 66. In Athlone Urban District Council v Gavin 1985 I.R. 432 the Supreme Court interpreted the power to make a charge for the supply of water contained in the Act of 1983 as a separate statutory power, distinct from the power to charge for waste water disposal and refuse collection. The power to levy the charge may exist only and insofar as it is created by legislation. 67. The public health interest in the proper and effective disposal of sewage has long been given legislative effect and for that reason the Oireachtas could rationally have intended to set a less stringent bar for the exclusion of charges for the disposal of waste water. Indeed, the power or duty of a local authority or water authority to drain for the purposes of the Public Health Act 1878, included in some cases an obligation to drain offensive water. The underlying rationale for such can easily be discerned in public health concerns. 68. Accordingly as the legislation expressly excludes the power to levy a charge for the disposal of domestic sewage, I conclude that the imposition of waste water charges from the park was ultra vires Meath County Council. |