Water Industry Act 1991 Action: Whether sewage discharge into canal was actionable in private law (Manchester Ship Canal Company Ltd v United Utilities Water Ltd - 2021)

When assessing an action against a water and sewage undertaker in respect of sewage discharge, is the claim actionable under the Water Industry Act 1991 or under private law?

Water Industry Act 1991 Action: Whether sewage discharge into canal was actionable in private law (Manchester Ship Canal Company Ltd v United Utilities Water Ltd - 2021)

The background

In Manchester Ship Canal Company Ltd v United Utilities Water Ltd [2021], this present action arose as part of a series of proceedings between the parties relating to United Utilities’ (“UU”) right to discharge sewage into the Manchester Ship Canal, operated by the Manchester Ship Canal Company Ltd (“MSC”). UU was appointed as a water and sewage undertaker under the Water Industry Act 1991 “WIA”).

In 2014, the Supreme Court found that UU enjoyed a statutory right, in principle, to discharge water and treated sewage into the canal. As part of that judgment, five specific outfalls were excluded and instead were subject to agreements between the parties, for which MSC held an express right of termination. In 2010, MSC served notice on UU to terminate these licences.

In its first application in the present decision, MSC requested determination as to whether UU had a right vested in it under the WIA to discharge sewage into the canal and whether rights had been terminated in accordance with the terms of a licence. A second application was made by UU, which sought a declaration that MSC’s complaint regarding the discharge of sewage was actionable under the WIA rather than as a private law action.

The decision

The High Court found in favour of UU on this decision, considering two issues:

  1. Whether MSC’s complaint regarding the discharge of untreated sewage into the canal was only actionable under the WIA.

Heavy rainfall had been responsible for flooding, exceeding the capacity of the sewage system and which resulted in the contaminated drainage affecting the canal. UU had not caused the contamination, and could not take any lawful action to stop it other than through significant capital expenditure investment in making improvements. UU’s breach was a breach of duty under the WIA s.94 to make provision for the effective dealing with sewage in its region. There was no negligence, malfunction or misconduct, and therefore MSC had no private law action in trespass or nuisance against UU.

  1. Whether termination of licence had terminated UU’s right to discharge into the canal.

MSC had served notice on UU to terminate licences in respect of the five specific outfalls. The High Court found in this case that UU continued to enjoy the right to drain through these outfalls, and the termination and reinstatement provisions of the licences that MSC relied upon were void.

Advice and action for landlords

This is an important series of litigation, and a decision of note for water companies and statutory undertakers that provides reassurance on the extent of powers enjoyed under the WIA, and delivers some protection against actions from landowners and other watercourse owners.    

Where there is no negligence or misconduct on the part of the undertaker, any alleged breaches of duty are actionable under the WIA rather than as a private action.

The High Court found in favour of United Utilities. There was no negligence or misconduct on the part of UU, and therefore MSC had no private law action in trespass or nuisance against the undertaker.

Author

Katie Orr
Katie Orr
Trainee Solicitor

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