Brendon International Limited v Water Plus Limited & Anor

A sewer is private unless it is vested in a sewerage undertaker as a public sewer. Where an undertaker asserts a right to charge for sewerage services, it bears the evidential burden of establishing that the sewer is public. A customer need not prove positive ownership of a sewer or establish a prima facie case that it is private.

Charges cannot be recovered where the sewer is private and the services are not provided. Payments made under the reasonable belief, induced by invoices, that chargeable services were being provided are recoverable for mistake. Limitation runs from discovery, or reasonable discoverability, of the mistake.

Brendon operated premises on an industrial estate. It paid United Utilities, and later Water Plus, surface-water and highway-drainage charges over a period beginning in 2000. The drainage passed through a sewer which was not shown as public in the relevant records for much of the period.

The defendants contended that the sewer was public, principally because it had allegedly been reconstructed by a local authority acting as United Utilities’ agent. Brendon sought restitution, alternatively damages for breach of contract or statutory duty. The central issues were the sewer’s legal status, the burden of proof, mistake, limitation and the amount recoverable.

1. Sewer status and burden of proof. Under Water Industry Act 1991, a public sewer is one vested in a sewerage undertaker, while a sewer that is not public is private. The evidential burden therefore lay on the defendants, who asserted that the sewer was public, to establish vesting on the balance of probabilities. The claimant bore the legal burden of proving payment under a mistake, but did not have to prove that the sewer was private.
2. Private sewer. The alleged reconstruction and enlargement of the sewer were not proved. The defendants’ pleaded inference that reconstruction by the local authority had vested the sewer under section 179 was therefore unavailable. A separate, unpleaded argument based on the sewer’s size, location and use by several properties also failed. The evidence did not establish construction or adoption by the local authority as statutory delegate. The sewer was private throughout.
3. No entitlement to charge. Because the sewer was private, the defendants were never entitled to charge for its use and did not provide the services for which payment was made. There was no deemed contract, no statutory basis for liability and a complete absence of basis or consideration. The defendants’ retention of the payments was unjust.
4. Mistake and limitation. The claimant’s officers paid in the reasonable belief, induced by the invoices, that the services were being provided. This was a mistaken belief rather than mere ignorance. The claimant did not discover the mistake, and was not put on inquiry requiring reasonable diligence, until receiving Cadantis’s report in February 2018. Section 32 of the Limitation Act 1980 therefore prevented the pre-10 February 2014 claim from being time-barred.
5. Disposition. The claimant was entitled to recover the sums calculated in its schedule, divided between United Utilities and Water Plus according to the periods for which each charged. The alternative contract and statutory-duty claims did not require determination. Simple interest at 4% was appropriate, subject to agreement or further calculation.