Tort actions against sewerage operator for discharging foul effluent

Supreme CourtPublished August 30, 2024
United Utilities Water Ltd v Manchester Ship Canal Co LtdBefore Lord Reed, Lord Hodge, Lord Lloyd-Jones, Lord Burrows, Lord Stephens, Lady Rose and Lord Richards[2024] UKSC 22Judgment July 2, 2024
The owner of a watercourse was not prevented by the Water Industry Act 1991 from bringing an action in trespass or nuisance against a sewerage undertaker for damages in respect of the discharge of foul effluent into its watercourse.
The Supreme Court so held in allowing the appeal of the canal owner, Manchester Ship Canal Co Ltd, against the upholding by the Court of Appeal (Lady Justice Asplin, Lord Justice Arnold and Lord Justice Nugee) ([2023] Ch 1) of a declaration made by Mr Justice Fancourt ([2021] 1 WLR 5871) that the canal owner could not bring an action in trespass or nuisance against the sewerage undertaker, United Utilities Water Ltd.
Thomas de la Mare KC, Charles Morgan, Nicholas Ostrowski and George Molyneaux for the canal owner; Jonathan Karas KC, James Maurici KC, Richard Moules KC and James McCreath for the sewerage undertaker; Stephen Hockman KC and Tom Cleaver for the Environmental Law Foundation, intervening.
LORD REED and LORD HODGE, with whom the other members of the court agreed, said that United Utilities’ sewerage network included about 100 outfalls from which material emanating from sewers, sewage treatment works and pumping stations was discharged into the Manchester Ship Canal. At times when the sewerage system was operating within its hydraulic capacity, the discharges were of surface water or treated effluent.
At times when the hydraulic capacity of the system was exceeded, at least some of the discharges were of foul water. That was how the system had been designed to operate.
The background to the proceedings was a dispute between the parties over whether United Utilities required the consent of the canal owner to discharge foul water into the canal, and had therefore to pay the canal owner for a licence, or could pollute the canal without the consent of the canal owner and free of charge, because the canal owner was barred by the Water Industry Act 1991 from bringing actions in nuisance or trespass.
However, the appeal had a wider importance. The implication of the judgments in the courts below was that, absent an allegation of negligence or deliberate wrongdoing, no owner of any watercourse or body of water could bring any claim based on nuisance or trespass against any sewerage undertaker in respect of polluting discharges into the water, however frequent and voluminous the discharges might be, and however damaging they might be to the owner’s commercial or other interests or to the owner’s ability to use or enjoy its property.
The appropriate starting point was to recognise that the owner of a watercourse, or a riparian owner, had a right of property in the watercourse, including a right to preserve the quality of the water. That right was protected by the common law of tort.
There was no doubt that the discharge of polluting effluent from sewers, sewage treatment works and associated works into a privately-owned watercourse was an actionable nuisance at common law, if the pollution was such as to interfere with the use or enjoyment of the relevant property.
The question whether a common law claim arising out of an interference with property rights by the discharge of untreated sewage into a watercourse had been excluded by a legislative scheme was one of statutory interpretation.
The 1991 act did not authorise sewerage undertakers to cause a nuisance or to trespass by discharging untreated effluent into watercourses. Section 116 by implication gave sewerage undertakers authority to discharge treated effluent from existing sewers and outfalls into watercourses. But section 117(5) provided that nothing in the relevant sections of Chapter II of Part IV of the act, including section 116, authorised a sewerage undertaker to use a sewer, drain or outfall to convey foul water into a watercourse.
The sewerage undertakers therefore did not have statutory authority to discharge untreated sewage into watercourses.
Section 186(3) provided further protection for the owners of a watercourse, riparian owners, and other persons entitled at common law to prevent injurious affection of the watercourse, by stating that nothing in the relevant sewerage provisions authorised a sewerage undertaker injuriously to affect the watercourse without the consent of that person. The definition of “relevant sewerage provisions” included section 116.
The conclusion that the 1991 act did not authorise sewerage undertakers to cause a nuisance or to trespass by discharging untreated effluent into watercourses also followed from the application of the inevitability test. The discharge of untreated effluent into watercourses could not be taken to be the inevitable consequence of the performance of the powers and duties imposed on sewerage undertakers by the Act, given the terms of sections 117(5) and (6) and section 186(3).
Nor was such a nuisance inevitable in fact. In the present case, it was accepted that the discharge of polluting effluent could be avoided by means of investment in improved infrastructure and better treatment processes.
Sections 117(5) and 186(3), in setting limits to the authority conferred by the Act, were predicated on the existence of common law remedies where those limits were exceeded: otherwise, they would have no purpose.
Furthermore, section 117(6) prohibited a sewerage undertaker from carrying out its functions under the relevant sections, including section 116, so as to create a nuisance.
A further indication of the survival of common law rights could be found in section 186(7) which provided for arbitration of the question whether the quality of water in a watercourse was injuriously affected by the exercise of powers under the relevant sewerage provisions. Since there was no statutory remedy for such unauthorised injurious affection, one had to ask: what was the purpose of the arbitration, unless there was a common law claim available to the party complaining?
The question whether common law remedies in trespass and nuisance had been preserved by the 1991 act was put beyond doubt by section 18(8), which was a qualified ouster of common law remedies but not an absolute ouster.
There was therefore no basis for excluding a common law claim or an award of damages at common law. Further, section 50 of the Senior Courts Act 1981 provided that the court could make an award of damages “in addition to, or in substitution for”, an injunction or specific performance where the court had “jurisdiction to entertain an application for an injunction or specific performance”.
As a result, the court had the power at common law to award damages for past invasions of property rights, and the power in equity to award damages for future or repeated invasions of those rights.
The power to award damages was not curtailed when a court, exercising its discretion, did not grant an injunction. So long as the court had jurisdiction to grant an injunction, it might award such damages under section 50.
The 1991 act did not remove that jurisdiction. It constrained by implication the court’s exercise of its discretion as to the grant of injunctions that would be inconsistent with the operation of the statutory mechanisms for the allocation of capital expenditure and the enforcement of the sewerage undertaker’s general duty, pursuant to section 94, to provide a sewerage system, but it did not remove the court’s jurisdiction.
In so far as the court was implicitly constrained by the scheme of the 1991 act from granting such an injunction, it had the power to award damages both at common law and, in equity, in substitution for the injunction.
Even if there might well be cases where it was not appropriate to grant an injunction as a remedy for claims of nuisance or trespass concerning the pollution of watercourses by sewerage undertakers, a remedy could nevertheless be given in such cases in the form of an award of damages. Such an award did not cut across the statutory scheme in the 1991 act: on the contrary, it gave effect to express provisions in that act, including sections 117(5) and 186(3).
Further, the award of damages did not force the sewerage undertaker to depart from the prioritisation of capital investment on improvements to the sewerage system that it had agreed with the regulatory authority. The award of damages vindicated the property rights in relation to watercourses until the sewerage undertaker was in a position, with the approval of the regulator, to invest in a long-term solution to prevent the harm to the claimant’s property.
A successful claim for damages for an incident or incidents of pollution of a watercourse would impose costs on a sewerage undertaker; but the effect was merely to prevent it from externalising the costs of its operations by leaving them to be borne by the victims of its unlawful behaviour.
Solicitors: BDB Pitmans LLP; Pinsent Masons LLP, Manchester; Hausfeld & Co LLP.