Environment Agency v Anglian Water Services Ltd

Under s.101A of the Water Industry Act 1991, “premises in a particular locality” need not include every premises in that locality. The statutory duty may concern the premises being considered for public sewerage, whose number and identity may change during the decision-making process.

An authority determining a dispute under s.101A(7) must act impartially and with an open mind. A prior statement cannot create a legitimate expectation that the authority will adopt an unlawful or presumptively biased approach. In assessing whether private sewerage is practicable, the bare unwillingness of residents to co-operate is legally irrelevant, although their reasons may be relevant. A decision driven by that irrelevant consideration is unlawful.

The Environment Agency challenged the Administrative Court’s decision quashing four determinations made under s.101A(7) of the Water Industry Act 1991. The appeal concerned only the determinations relating to Wretton and Bent Hill.

At Wretton, the Agency had required public sewerage for the whole village, including an area which did not itself require a public sewer, based on its construction of s.101A(1). The respondent also relied on a prior Agency letter as creating a legitimate expectation.

At Bent Hill, the Agency rejected a private treatment plant as impracticable because there was no evidence of an agreed site or resident co-operation. The central issues were the construction of s.101A and the legality of the Agency’s approach to legitimate expectation and practicability.

1. Wretton: construction of s.101A. The appeal was dismissed. The expression “the premises in question” in s.101A(2)(a)–(c) refers back to “premises in a particular locality” in s.101A(1), but that expression does not necessarily mean all premises in the locality. It refers to premises within the locality being considered for public sewerage by the sewerage undertaker and, on a dispute, by the Agency. Their number and identity may change as the case is considered.
2. The contrary construction would create an inflexible rule requiring sewerage for premises where it was not needed, increasing costs and potentially causing artificial disputes about the definition of the locality. The Agency’s Wretton decision therefore depended on an erroneous construction of s.101A and was properly quashed.
3. Legitimate expectation. The respondent could not legitimately expect the Agency to approach the statutory dispute impartially in accordance with an earlier representation. Once a dispute was referred under s.101A(7), the Agency had to bring an open mind to contested facts. A legitimate expectation could not require it to adopt an unlawful presumptive bias. The legitimate-expectation argument was therefore misconceived. The judge’s reliance on Coughlan [2000] 2 WLR 622 did not alter that conclusion.
4. Bent Hill: practicability. The Agency unlawfully treated the absence of evidence of an agreed site and resident agreement as conclusive that a private treatment plant was impracticable. The bare unwillingness of residents to co-operate was legally irrelevant to whether public sewerage should be provided. Their reasons for refusing co-operation might be relevant, depending on the circumstances. The Agency had therefore failed to consider objectively whether a private scheme was practicable and had taken an irrelevant consideration into account.
5. The Administrative Court had not substituted its own merits decision. It had identified a legally erroneous premise underlying the Agency’s decision. The Bent Hill decision was rightly quashed.
6. The appeal was dismissed with costs. The respondents’ notice costs were set off against the appeal costs. Leave to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division): dismissed the Environment Agency’s appeal against the Administrative Court’s quashing of the Wretton and Bent Hill determinations. The appeal concerned part of Tomlinson J’s judgment given on 27 October 2000; no citation for that judgment was stated.