DWR Cymru Cyfyngedig (Welsh Water) v Corus UK Ltd

A defendant may generally challenge the validity of a public-law decision collaterally when defending private-law proceedings founded on that decision. Such a challenge is not ordinarily an abuse of process merely because judicial review might previously have been available, or because the decision affects other persons. The procedural exclusivity principle is directed principally at proceedings whose sole aim is to challenge a public-law act. It does not prevent a defendant from disputing liability by questioning the validity of the decision on which the claimant’s private-law claim depends. A contractual provision referring to determination under section 56 of the Water Industry Act 1991 does not require statutory charges to be determined by the regulator where an applicable charges scheme is lawfully in force.

DWR Cymru Cyfyngedig sought summary judgment under CPR r.24.2 for unpaid charges for non-potable industrial water supplied to three Corus sites after special supply agreements expired. It also sought a declaration that it remained entitled to charge the applicable tariff under annual charges schemes made under the Water Industry Act 1991.

Corus argued, among other things, that a contractual renewal clause preserved a right to have terms, including charges, agreed or determined under section 56, and that the charges schemes and their approval were invalid. DWR Cymru contended that any public-law challenge should have been brought promptly by judicial review and was abusive in private-law proceedings. The central issues were the construction of the renewal clause and whether Corus had a real prospect of defending the claim by challenging the validity of the charges schemes.

1. Summary judgment. The application was refused. Corus had a real prospect of success on its challenge to the validity of the charges schemes, so the claim was unsuitable for disposal under CPR r.24.2.
2. Contractual renewal clause. Clause 17 of the Llanwern agreement did not confer an independent contractual right to a fresh special agreement or require the Director to determine charges. Its express reference to section 56 meant that the statutory machinery applied. Section 56 excludes determination of charges by the Director where an applicable charges scheme is in force, and requires those charges to be fixed by a scheme under section 143. No implied term prevented DWR Cymru from introducing a lawful charges scheme.
3. Collateral public-law challenge. It was not an abuse of process for Corus to challenge the validity of the charges schemes in these proceedings. The reasoning in Wandsworth LBC v Winder [1985] AC 461 was not confined to cases where a public authority itself brought proceedings dependent on the validity of its decision. The principle also applied where a defendant in private proceedings questioned the public-law decision underlying the claimant’s asserted right to payment.
4. The same conclusion was supported by Boddington v British Transport Police [1999] 2 AC 143, which recognised that procedural exclusivity does not apply where private-law rights cannot be determined without examining the validity of a public-law decision, or where a defendant merely seeks to defend civil proceedings by questioning that validity. The analogy with Cocks v Thanet District Council [1983] 2 AC 286 was not apt.
5. It was therefore unnecessary to decide the competition-law issues. DWR Cymru was not entitled to summary judgment.