The Manchester Ship Canal Company Limited v Secretary of State for Environment, Food and Rural Affairs & Anor

A compulsory purchase order granting a sewerage undertaker a right to discharge into a private canal need not reproduce statutory protections applicable to implied rights of discharge. The decision-maker may assess the need for additional protection by reference to the public inquiry, the statutory and environmental regulatory regimes, the evidence concerning environmental effects, and the availability of compensation.

In the compulsory purchase context, proportionality requires a balancing exercise based on a compelling case in the public interest. The measure need not be the least intrusive possible, provided that a less intrusive alternative would unacceptably compromise the objective and the overall interference strikes a fair balance. The court conducts an objective proportionality assessment but affords the decision-maker an appropriate, context-sensitive margin of judgment.

The claimant, owner and navigation authority of the Manchester Ship Canal, challenged confirmation of a compulsory purchase order under section 23 of the Acquisition of Land Act 1981. The order authorised United Utilities Water Limited to acquire a right under section 155 of the Water Industry Act 1991 to discharge water, soil and effluent into the canal from Eccles Wastewater Treatment Works.

The claimant accepted that there was a compelling public interest in the scheme but sought protective provisions replicating sections 117 and 186 and Schedule 12 of the 1991 Act. It argued that their exclusion involved legal error and disproportionate interference with its property rights under Article 1 of the First Protocol to the Convention. The central issues were whether the decision-maker applied an erroneous necessity test and whether the confirmed order struck a fair balance.

1. Claim dismissed. The Inspector and Secretary of State had not applied necessity as a legal test. Their conclusion that the proposed protective provisions were unnecessary was an evaluative judgment reached after considering the parties’ evidence and submissions.
2. The statutory distinction between implied and express rights of discharge was material. The protective provisions did not apply to a right granted under section 155 of the Water Industry Act 1991. A section 155 acquisition is preceded by negotiation or an independent public inquiry, enabling case-specific consideration of the protection required for the affected landowner.
3. It was lawful to give weight to the Environment Agency’s detailed environmental permitting regime, backed by criminal sanctions, and to evidence that the scheme would improve or have a net beneficial effect on water quality. The public inquiry was an appropriate forum for balancing the acquiring authority’s functions, the claimant’s interests and the wider public interest.
4. Arguments concerning the inadequacy of compensation and the availability of private-law remedies had not been properly advanced before the Inspector. The court would not permit section 23 review to become a second opportunity to present a materially different case requiring further evidence and factual findings.
5. For Article 1 of the First Protocol, the structured proportionality framework in Bank Mellat must be applied consistently with the underlying requirement of fair balance. The question whether a less intrusive measure could be used is one of degree. The alternative need not be the least intrusive if it would unacceptably compromise the public objective.
6. The order pursued important and legitimate sewerage and environmental objectives and was rationally connected to them. The proposed proviso had limited practical value: a nuisance claim was treated as unavailable under the applicable statutory scheme, while a negligence claim remained available without the proviso. The interference was largely theoretical on the evidence, and compensation remained relevant. The order therefore struck a fair balance.

First-instance judicial review under section 23 of the Acquisition of Land Act 1981. The claim challenging confirmation of the compulsory purchase order was dismissed.