The Manchester Ship Canal Company Ltd v United Utilities Water Ltd

The Court of Appeal has given judgment in a high-profile case regarding potential avenues of redress in respect of discharges of sewage into waterbodies.

The appeal forms part of a long-running dispute about discharges into the Manchester Ship Canal from sewers operated by United Utilities Water Ltd (“UU”). After the proprietor of the canal (“the Canal Company”) threatened to bring a private law claim in nuisance and/or trespass against UU in respect of discharges of foul water, UU commenced a claim for a declaration, to the effect that no such cause of action was available to the Canal Company (absent an allegation of negligence or deliberate wrongdoing). The essence of UU’s argument was a contention that the proposed causes of action were impliedly ousted by the Water Industry Act 1991 (“WIA 1991”), which provides a statutory enforcement mechanism for breaches of duty by sewerage undertakers.

At first instance, Fancourt J found in favour of UU. The Court of Appeal dismissed the Canal Company’s appeal, essentially on the basis that the case was indistinguishable from Marcic v Thames Water Utilities Ltd [2003] UKHL 66, in which the House of Lords held that WIA 1991 precluded private law claims by a landowner in respect of escapes of sewage into his garden. The Court of Appeal rejected the Canal Company’s argument that it was a material point of distinction that the present case concerned discharges of sewage into a waterbody, rather than escapes of sewage onto land, notwithstanding the terms of some provisions in the WIA (notably s.117(5)-(6)) that apparently sought to preserve the ability to advance private law claims flowing from the discharge of foul water into waterbodies.  Such provisions had not been considered in Marcic.

The Court of Appeal also considered an appeal (in separate proceedings between the Canal Company and UU) in relation sewage outfalls which had originally been permitted by way of agreements that were on their face terminable by the Canal Company. Fancourt J had held that UU had a continued statutory right to drain through such outfalls, notwithstanding the Canal Company’s termination or purported termination of the agreements. The Court of Appeal allowed the Canal Company’s appeal on this issue.

It remains to be seen whether either or both parties will obtain permission to appeal from the Supreme Court. If they do, it will be the second time that the dispute between the Canal Company and UU has reached that Court: see [2014] UKSC 40.

Tom de la Mare QC and George Molyneaux acted for five NGOs with an interest in the environmental health of waterbodies, which intervened in the appeal to make arguments on the interpretation of s.117(5)-(6) WIA and other similar provisions. A copy of the judgment is available here.