Boots UK Ltd v Severn Trent Water Ltd

For purposes of section 141(1) of the Water Industry Act 1991, a liquid partly produced in trade or industry may be a mixture. Once trade effluent and surface water have mixed, the resulting liquid is treated as a single mixture and is not separated into its former components. The statutory definition excludes domestic sewage, but does not exclude surface or storm water merely because it forms part of the mixture. Potential unfairness in consent conditions is for OFWAT through the statutory appeal mechanism. Case-specific drainage difficulties cannot change the proper construction of the definition.

Boots operated a factory where trade effluent was mixed with surface water before passing through a meter and entering a public foul-water sewer. Severn Trent charged on the full volume of the mixed liquid. Boots sought recovery of alleged overpayments, arguing that only the trade-effluent component was chargeable.

The High Court granted Severn Trent summary judgment in [2018] EWHC 53 (Comm), reported at [2018] PTSR 1245. Boots appealed. The Court of Appeal considered whether the mixed liquid was trade effluent under section 141(1) of the Water Industry Act 1991. A further issue concerning the charging scheme and contractual arrangements did not arise.

Appeal dismissed unanimously. Lewison LJ gave the reasons with which King LJ and David Richards LJ agreed. The court decided the statutory-definition issue against Boots, so the alternative issue concerning the charging scheme and contractual arrangements did not arise.

1. Section 141(1) of the Water Industry Act 1991 defines trade effluent to include liquid wholly or partly produced in the course of trade or industry. The reference to liquid partly produced in that course contemplates a mixture. The definition expressly excludes domestic sewage, but does not expressly exclude surface or storm water.
2. Trade effluent mixed with surface water is treated as one mixed liquid, not separated into its former components. The approach was supported by Yorkshire Dyeing and Proofing Co Ltd v Middleton BC [1953] 1 WLR 393 and Thames Water Authority v Blue and White Launderettes Ltd [1980] 1 WLR 700. The latter decision’s reasoning that the whole liquid could attract trade-effluent charges where only part was trade effluent was treated as part of Stephenson LJ’s ratio.
3. This construction fitted the statutory scheme. Without the trade-effluent consent regime in Chapter III, a mixed liquid could not necessarily be discharged into a public sewer under section 106. It made little sense to impose two concurrent approval regimes on one body of liquid.
4. The possibility of unfair consent conditions caused by rainfall was a matter for OFWAT’s review and appeal powers under section 122, not a reason to alter the statutory definition. The supposed anomaly under the Water Resources Act 1991 did not justify Boots’ construction. The court therefore dismissed the appeal.

• Court of Appeal (Civil Division): Appeal dismissed unanimously. The court upheld the High Court’s summary judgment on the interpretation of section 141(1) of the Water Industry Act 1991.
• High Court of Justice, Commercial Court: Mr Daniel Toledano QC, sitting as a Deputy Judge, granted Severn Trent summary judgment in [2018] EWHC 53 (Comm), reported at [2018] PTSR 1245, and granted Boots permission to appeal.