Sewerage undertaker falls foul in discharging into Manchester Ship Canal

Introduction

When it opened in 1894 the Manchester Ship Canal (the Canal) was famous for being the largest river navigation canal in the world, and turned Manchester into a busy port. Since then, its use has decreased, although there are proposals to revive it as part of the Atlantic Gateway scheme. In recent years the Canal has become well known in legal circles for featuring in several important Supreme Court decisions involving property law.

In Manchester Ship Canal Co Ltd v United Utilities Water Plc [2014] UKSC 40, the Supreme Court looked at whether a sewerage undertaker under the Water Industry Act 1991 (the 1991 Act) had a statutory right to discharge surface water and treated effluent into private watercourses without the consent of their owners. It found there was the right for the sewerage undertaker through outfalls that were in use before 1 December 1991 (which was when the 1991 Act first came into force), but there was no general implied right of discharge through new outfalls without the agreement of the owner.

Then came Manchester Ship Canal Co Ltd v Vauxhall Motors Ltd (formerly General Motors UK Ltd) [2019] UKSC 46, where the Supreme Court looked at whether relief from forfeiture could be granted in relation to a licence to discharge surface water and industrial effluent into the Canal. It found that relief could be granted.

Now, in 2024, the Supreme Court has looked at the subject of unauthorised discharges of foul water into the Canal by a sewerage undertaker. The Manchester Ship Canal Company Ltd (the Canal Company) own the Canal, and United Utilities Water Limited (UU) serves as the statutory sewerage undertaker for the Northwest of England. UU’s network includes approximately 100 outfalls along the Canal where foul water is released into the waterway. The Supreme Court’s decision follows a long running dispute between the two parties, which began in 2010 after UU began discharging foul water into the Canal.

The Supreme Court was asked to decide whether the Canal Company could bring a claim in nuisance or trespass when the Canal is polluted by discharges of foul water from outfalls maintained by UU. Both parties agreed that the 1991 Act does not authorise UU to discharge untreated sewage into the Canal. UU’s argument was that the potential private law claims of the Canal Company were impliedly ousted by the statutory enforcement mechanism for breaches of duty by sewerage undertakers provided by the 1991 Act.

In 2021, the High Court decided that the Canal Company couldn't bring a claim in trespass or nuisance against UU in relation to the discharge unless there was an allegation of negligence or deliberate wrongdoing on the part of UU. This decision was upheld by the Court of Appeal in 2022.

In overturning the decisions of the High Court and the Court of Appeal, the Supreme Court considered two questions:

• Whether the Canal Company’s claims in nuisance or trespass were excluded by the 1991 Act
• Whether previous case law ruling in favour of sewerage undertakers, in what appeared to be similar circumstances, could be distinguished from this case.

The Supreme Court’s decision

In considering the first question, the Supreme Court started from the position that the owner of a canal or other watercourse has a property right in the watercourse, including a right to preserve the quality of the water. That right is protected by the common law. 

It then undertook an exercise of statutory interpretation, by analysing various provisions of the 1991 Act, to see whether this common law right had been excluded. It concluded that through the 1991 Act, which consolidated various enactments relating to the supply of water and the provision of sewerage services, it was not Parliament’s intention to authorise UU to cause a nuisance or trespass by discharging foul water through the outfalls into the Canal.

It said the language of the 1991 Act was not clear enough to interfere with the private law rights of the Canal Company. The Supreme Court referred to a person’s rights to the peaceful enjoyment of property, which is protected by common law and the Human Rights Act 1998, and the fact that fundamental rights cannot be overridden by general or ambiguous words. Another influential point was the fact that the discharge of untreated effluent was not an inevitable consequence of the sewerage undertaker's performance of its powers and duties in the 1991 Act; these could be addressed through improved infrastructure or treatment processes.

In considering the second question, the Supreme Court considered the House of Lords’ decision in Marcic v Thames Water Utilities Ltd [2003] UKHL 66, upon which UU relied. In Marcic, a claimant’s property was flooded with surface water when a sewer became overloaded. The flooding had been caused by the inadequacy of the sewers after additional housing had been connected. The House of Lords concluded that failure of Thames Water to enlarge the capacity of an overloaded sewer to enable it to deal with an increase of population, which led to back-flooding, does not give rise to an action for common law nuisance (or negligence).

In a similar vein, UU argued that the Canal Company had no cause of action because the only way to avoid the discharges of foul water into the Canal would be to construct new sewerage infrastructure. UU argued that expenditure on new infrastructure is a matter for the Secretary of State or Ofwat (as regulator) acting pursuant to the statutory enforcement mechanism contained in the 1991 Act, rather than the courts, and this implied that private law claims were not available to persons with an interest in a watercourse.

The Supreme Court distinguished the case of Marcic from this case; Thames Water was not alleged to have created or adopted the nuisance caused by the escape of sewage on to the claimant’s property but were said to have failed to take reasonable steps to avert the escape of sewage by constructing a new sewer. The duty to construct a public sewer could only arise under statute. In this case, however, UU was found to be responsible for having created or adopted the nuisance, as its outfalls were operating as designed when capacity is exceeded.

What will the impact of this case be?

In their judgment, the Supreme Court did state that it's unlikely that injunctions would be granted in cases such as this. When deciding on an appropriate remedy, the court is required to balance the public interest in the discharges continuing against the private rights of watercourse owners. However, the court did make a point to state that damages in lieu of an injunction would be available for continuing pollution, as well as previous acts of pollution.

According to data collected by the Environment Agency, raw sewage was discharged into rivers and seas for over 3.6 million hours in the year from March 2023, an increase of 105%. Owners of water courses where sewage is being discharged without consent will look to this case as providing legal remedies to counter pollution to their property.