Manchester Ship Canal Co Ltd v United Utilities Water Ltd (No 2)

Environment – Sewerage – Discharge – Appellant canal owner threatening to bring claim in trespass against respondent sewerage undertaker concerning unauthorised discharges into canal – High Court declaring that complaint premised only on alleged fact of discharge not actionable as private law claim – Court of appeal dismissing appeal – Appellant appealing – Whether common law remedies surviving where statute providing remedial and enforcement schemes – Appeal allowed The appellant owned the Manchester Ship Canal. The respondent was the water and sewerage undertaker for the North West region, appointed under the Water Industry Act 1991. It owned an extensive network of sewers and drains. Under section 116 of the 1991 Act, the respondent had an implied right to discharge effluent into the canal. Following heavy rainfall, the capacity of the sewerage system was temporarily exceeded and inadequately treated effluent was discharged from some of the respondent’s outfalls into the canal. Such discharge was unlawful since, under sections 117(5) and 186(3) of the 1991 Act, the respondent was not authorised to discharge foul water into or cause injurious affection to any canal. The appellant threatened to issue proceedings in trespass, claiming damages for the unlawful discharge of inadequately treated sewage effluent. The respondent sought a declaration that the statutory scheme of powers and duties, regulation, enforcement and remedies in the 1991 Act excluded common law remedies for otherwise tortious conduct of a sewerage company. The High Court granted the declaration. It held that any breach of duty by the sewerage undertaker was a breach of its duty under section 94 of the 1991 Act to provide for effectually dealing with the contents of sewers in its area, which could not be enforced by private action: [2021] EWHC 1571 (Ch); [2021] PLSCS 109. The Court of Appeal upheld that decision: [2022] EWCA Civ 852; [2022] EGLR 33. The appellant appealed. Held: The appeal was allowed. (1) Bodies exercising statutory powers, such as the respondent, enjoyed no dispensation from the ordinary law of tort, except in so far as statute gave it to them. Unless acting within their statutory powers, or granted some statutory immunity from suit, they were liable like any other person for trespass, nuisance, negligence etc. It was necessary to distinguish between interferences with private rights which parliament could, and could not, be taken to have authorised. Two important and related principles had to be borne in mind. First, an individual’s right to the peaceful enjoyment of their property was a fundamental right, long recognised by the common law and protected by the Human Rights Act 1998. Secondly, parliament would not be taken to have intended that powers should be exercised, or duties performed, in a way which caused interference with private rights where such an interference could have been avoided. Where, on the other hand, private rights would inevitably suffer, no cause of action would arise. (2) The appropriate starting point was to recognise that the owner of a watercourse had a right of property in the watercourse, including a right to preserve the quality of the water. That right was protected by the common law of tort. The discharge of polluting effluent into a privately owned watercourse was an actionable nuisance at common law if the pollution interfered with the owner’s use or enjoyment of its property. The question was whether the 1991 Act excluded common law rights of action in nuisance and trespass which was a question of statutory interpretation. The respondent’s entitlement to use the outfalls into the canal, for the discharge of clean water only, derived from section 116 of the 1991 Act which gave the sewerage undertaker power to close or restrict the use of a public sewer, but only where it provided another sewer which was equally effective. In Manchester Ship Canal Co Ltd v United Utilities Water plc [2014] UKSC 40; [2014] PLSCS 199; [2014] 1 WLR 2576, the court held that section 116 by implication gave sewerage undertakers authority to discharge treated effluent from existing sewers and outfalls into watercourses. But section 117(5) provided that nothing in the relevant sections of the Act, including section 116, authorised a sewerage undertaker to use a sewer, drain or outfall to convey foul water into a watercourse. (3) The 1991 Act contained no express ouster of all common law causes of action and remedies to protect the enjoyment of the property of the persons to whom section 186(3) referred, ie, those who would have been entitled by law to prevent or be relieved from the injurious affection of the watercourse. Nor did the Act oust those rights and remedies by necessary implication. On the contrary, sections 117(5) and (6) and 186(3) and (7) envisaged that common law rights survived and that a common law remedy remained available to protect those property interests. Those provisions were consistent only with the preservation of a common law remedy for polluting discharges. A further factor in that direction was the incoherence of the statutory arrangements that provided compensation for damage if those common law rights and remedies were removed. (4) The only ouster, by section 18(8), was of causes of action of which a contravention of a condition of an undertaker’s appointment or licence, or of a statutory or other requirement enforceable under that section, formed an essential ingredient. A cause of action in trespass or nuisance brought against a sewerage undertaker on the basis of the discharge of polluting effluent from its sewers, sewage treatment works or associated works into a watercourse did not normally include, as an essential ingredient, the contravention of a statutory requirement, and was therefore not excluded. Accordingly, the 1991 Act did not prevent the appellant from bringing actions in nuisance or trespass if the water was polluted by discharges of foul water from the infrastructure of the respondent, as a statutory sewerage undertaker, even in the absence of negligence or deliberate misconduct. (5) The decision in Marcic v Thames Water Utilities Ltd [2003] UKHL 66; [2003] PLSCS 268; [2004] 2 AC 42, on which the respondent relied as establishing that parliament’s intention was that the construction of new sewerage infrastructure was a matter for the secretary of state or Ofwat, not the courts, had no bearing on the present case. An essential ingredient of the cause of action in that case was that the defendant was under a duty to build a new sewer pursuant to section 94(1) of the 1991 Act; whereas the appellant’s proposed claim against the respondent was not based on a breach of section 94(1), or any other requirement enforceable under section 18, but on independent common law causes of action in trespass and nuisance: Marcic distinguished. Thomas de la Mare KC, Charles Morgan, Nicholas Ostrowski and George Molyneaux (instructed by BDB Pitmans LLP) appeared for the appellant; Jonathan Karas KC, James Maurici KC, Richard Moules KC and James McCreath (instructed by Pinsent Masons LLP, of Manchester) appeared for the respondent; Stephen Hockman KC and Tom Cleaver (instructed by Hausfeld & Co LLP) appeared for the Environmental Law Foundation (intervening). Eileen O’Grady, barrister Click here to view a transcript of Manchester Ship Canal Co Ltd v United Utilities Water Ltd (No 2)