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

A compulsory purchase order may confer an express right to create a new outfall and discharge into a private watercourse without reproducing statutory protections applicable to pre-existing outfalls. The two regimes are materially different. A public inquiry examines the necessity and public interest of the new outfall, environmental permits regulate the discharge, and compensation is payable for interference with property rights.

For A1P1 purposes, the court must assess lawfulness, legitimate aim and proportionality. A measure is proportionate where it serves an important environmental objective, has been subjected to rigorous inquiry, is regulated by the Environment Agency and is accompanied by a fair compensation scheme. The court left open whether common law nuisance or negligence claims would remain available absent the discharge proviso.

The appellant, the owner and statutory undertaker of the Manchester Ship Canal, challenged the Secretary of State’s confirmation of a compulsory purchase order under section 155 of the Water Industry Act 1991. The order authorised United Utilities Water Limited to acquire rights for a new pipe discharging water, soil and effluent into the canal.

The inspector recommended confirmation after a public inquiry, and the Secretary of State confirmed the order without a proposed discharge proviso reproducing protections in sections 117(5) and 186(3) of the Water Industry Act 1991. The High Court dismissed MSC’s challenge under section 23 of the Acquisition of Land Act 1981: [2022] EWHC 3282 (Admin). The appeal concerned alleged misunderstanding of MSC’s case, the application of A1P1, and the effect of the later Supreme Court decision in MSC (No.2).

1. Appeal dismissed. Dingemans LJ, with Laing LJ agreeing and Males LJ agreeing in the result, held that the judge had not misunderstood MSC’s submissions. The judge correctly understood that MSC sought the discharge proviso on a general parity-of-protection basis, while also recording that private law remedies had not been developed before the inspector.
2. The inspector was entitled to conclude that the CPO was necessary without the discharge proviso. There was no clear evidence of what the proviso would achieve, how it would operate alongside the express right created by the CPO, or whether it would secure MSC’s objectives. The second ground, which depended on the first succeeding, therefore did not arise.
3. The judge’s description of the pre-existing nuisance and negligence law was inaccurate in the light of MSC (No.2), which distinguished Marcic and held that common law causes of action were not ousted in the circumstances considered there. That error did not affect the judge’s conclusion, because no party had developed the logically prior question whether a common law claim would be available for discharges under this CPO.
4. In any event, confirmation of the CPO without the proviso was lawful and proportionate under A1P1. The CPO pursued the legitimate aim of improving water quality; the new outfall had been rigorously examined at a public inquiry; discharges would be monitored and regulated by the Environment Agency; breach of an environmental permit could constitute a criminal offence; and compensation was available under the compulsory purchase regime. Equivalent protections for pre-1991 outfalls were not required because those outfalls had not been subjected to the same inquiry and statutory scheme.
5. Males LJ added that the statutory regime for a new outfall differs fundamentally from the regime for pre-existing outfalls. The CPO expressly authorises the new right and may extinguish contrary property rights. Compensation need not equal common law damages, and Parliament’s detailed statutory scheme was a factor to which the court should give great weight. There was no breach of A1P1. The court left open the availability of nuisance or negligence claims absent the proviso.

• Court of Appeal (Civil Division): Appeal dismissed. The court upheld confirmation of the compulsory purchase order without the discharge proviso.
• High Court of Justice, King’s Bench Division, Planning Court: MSC’s challenge under section 23 of the Acquisition of Land Act 1981 was dismissed: [2022] EWHC 3282 (Admin).