The Manchester Ship Canal Company Ltd v United Utilities Water Ltd

A landowner cannot maintain a claim in trespass or nuisance against a sewerage undertaker where the substance of the complaint is that inadequate infrastructure should be improved through capital expenditure. Such a claim would subvert the statutory system for enforcing sewerage duties and determining investment priorities.

Statutory provisos withholding authority for polluting discharges prevent reliance on statutory authority. They do not themselves create or preserve a private cause of action inconsistent with the wider statutory scheme.

A public authority empowered to acquire drainage rights by agreement may accept rights that are limited or determinable. The Water Industry Act 1991 preserves previously accrued statutory discharge rights, but does not create new implied rights or enlarge a terminable contractual licence into a permanent right.

The canal owner and the statutory sewerage undertaker disputed discharges from sewer outfalls into the Manchester Ship Canal. In proceedings begun in 2018, the undertaker sought a declaration that the owner could not sue in trespass or nuisance for untreated foul-water discharges contravening sections 117(5) or 186(3) of the Water Industry Act 1991, absent negligence or deliberate wrongdoing. Fancourt J granted that declaration in [2021] EWHC 1571 (Ch).

A second appeal arose from proceedings begun in 2010. Five outfalls had been installed under agreements granting drainage rights that were terminable by the canal owner. Fancourt J held that the termination and reinstatement provisions were void because they conflicted with statutory restrictions upon discontinuing public sewers.

The central questions were whether private tort remedies were inconsistent with the statutory regulatory scheme and whether public authorities could validly acquire limited, terminable drainage rights.

1. The 2018 appeal was dismissed. The principle in Marcic applied where the substance of a trespass or nuisance complaint was that a sewerage undertaker should have constructed a larger or better sewerage system. Allowing an individual landowner to obtain relief or financial leverage through tort proceedings would undermine the statutory allocation of responsibility for enforcement and capital-investment priorities.

2. An unauthorised discharge prejudicially affecting water quality would ordinarily indicate that the contents of the sewers had not been effectually dealt with under section 94(1)(b) of the Water Industry Act 1991. A definitive conclusion was unnecessary, however, because the decisive inquiry concerned consistency between the alleged private remedy and the statutory scheme as a whole.

3. Sections 117(5) and 186(3) withhold statutory authority for polluting discharges. They prevent an undertaker from relying upon the statutory-authority defence merely because it exercises statutory sewerage powers. They neither confer a distinct cause of action nor answer whether an otherwise available tort claim is impliedly excluded by the statutory scheme. The possibility of criminal environmental regulation did not remove the incompatibility identified in Marcic.

4. It was unnecessary to decide whether the discharges were independently trespasses. On the assumed facts, however, discharges which the undertaker had not deliberately or negligently caused, and which it could not lawfully prevent without expanding the inherited system, were involuntary and would not constitute trespass.

5. The 2010 appeal was allowed. Local authorities possessed power to acquire drainage rights by agreement. They could accept limited and determinable rights instead of exercising compulsory statutory powers. Termination of such a right was the consequence of the bargain, rather than an unlawful exercise of the authority’s statutory power to discontinue a sewer. The termination provisions were therefore valid.

6. The Water Industry Act 1991 preserved statutory discharge rights which had accrued before its commencement. It did not create new implied rights on 1 December 1991, nor could an implied statutory right coexist with a contractual obligation to remove an outfall when its licence ended. The respondent’s alternative case was rejected. The declaration below was to be replaced, and the proceedings concerning the five outfalls were to continue so that the undertaker’s remaining defences could be determined.

1. Court of Appeal: In [2022] EWCA Civ 852, the court unanimously dismissed the appeal concerning private tort remedies, allowed the appeal concerning terminable outfall agreements, and rejected the respondent’s alternative case.
2. High Court: Fancourt J decided both preliminary issues in favour of the sewerage undertaker in [2021] EWHC 1571 (Ch).
3. Earlier proceedings: Separate issues in the 2010 proceedings had previously reached the Supreme Court. Those decisions concerned statutory rights associated with pre-1991 outfalls, rather than the two issues determined in this appeal.