The Manchester Ship Canal Company Ltd and another v United Utilities Water Plc

A sewerage undertaker has no general statutory right under the Water Industry Act 1991 to create new outfalls which discharge surface water or treated effluent into a privately owned watercourse without the owner's consent. Such a right cannot be implied merely because it would facilitate the undertaker's functions.

An undertaker may, however, continue indefinitely to discharge non-polluting water from an outfall which was in use on or before 1 December 1991. The statutory duties to operate existing public sewers, permit connections and avoid discontinuing a sewer without an equally effective alternative necessarily imply that limited right. Its exercise remains subject to statutory controls against pollution and nuisance, compensation for damage, and any binding agreement governing a particular outfall.

United Utilities Water Plc discharged surface water and treated effluent from public sewer outfalls into canals owned by the Manchester Ship Canal Company Ltd and another proprietor. The central issue was whether the Water Industry Act 1991 authorised those discharges without the canal owners' consent.

The Court of Appeal, [2013] EWCA Civ 40, rejected the undertaker's claim to an implied statutory right. On appeal, two possible rights were examined: a general right embracing new outfalls, derived from the undertaker's drainage and pipe-laying powers; and a narrower right to continue using outfalls which were already operating when the 1991 Act came into force.

The Supreme Court therefore had to determine whether either right was necessarily implicit in the statutory scheme and, if so, its temporal and substantive limits.

1. Appeal allowed unanimously. The Court declared that, subject to section 117(5) of the Water Industry Act 1991, a sewerage undertaker may discharge into a privately owned canal from any sewer outfall which was in use on or before 1 December 1991. The precise declaration was to be agreed by counsel. Existing binding agreements regulating particular outfalls remained unaffected.

2. Lord Sumption, with whom Lord Clarke and Lord Hughes agreed, held that statutory authority to do what would otherwise be a tort is implied only where necessary. Necessity ordinarily arises where the authority is implicit in express statutory language or the statutory purpose cannot otherwise be achieved. In particular, authority may be implied where a statutory power or duty cannot be exercised or performed without the relevant act.

3. No general right to create new outfalls could be implied from sections 94 and 159. Section 159 authorises the laying of pipes across private land, but says nothing about a right to discharge from them. A right derived from that section would evade the pollution controls and compensation arrangements applicable to specified sewerage provisions. It was also unnecessary because discharge rights could be obtained by agreement or compulsory purchase. The reasoning in British Waterways Board v Severn Trent Water Ltd [2002] Ch 25 on that issue was compelling.

4. A limited right concerning existing outfalls was necessarily implied. Sections 94 and 106 require effective drainage and permit premises to connect to public sewers. Section 116 prevents an undertaker from discontinuing an existing public sewer without providing an equally effective alternative. Those provisions would be legally incoherent if, immediately upon commencement of the 1991 Act, the undertaker had become obliged in tort to stop using inherited outfalls on which the sewerage system depended.

5. The right therefore extends indefinitely to outfalls already in use when the 1991 Act commenced. It is subject to section 117(5), which prevents the unauthorised conveyance of untreated foul water into a watercourse. Lord Toulson also emphasised section 117(6), requiring the relevant functions to be performed without creating a nuisance. Sections 186(3) and Schedule 12 paragraph 4 supply further protection concerning injurious affection and compensation.

6. Lord Neuberger, also with the agreement of Lord Clarke and Lord Hughes, reached the same result and additionally relied on the historical statutory scheme and section 16(1)(c) of the Interpretation Act 1978. Rights of discharge attached to existing outfalls before 1991 and survived the repeal of their former statutory basis. Lord Toulson regarded that route as unnecessary but agreed with Lord Neuberger's analysis if it was required.

1. United Kingdom Supreme Court: The appeal was allowed unanimously. The court declared a limited right to continue discharging from sewer outfalls in use on or before 1 December 1991, subject to statutory restrictions.
2. Court of Appeal: In [2013] EWCA Civ 40, the court rejected the sewerage undertaker's claim to an implied statutory right of discharge. Its decision was reversed to the extent that it denied the right relating to existing outfalls.