High Court rules on private companies’ discharge rights

21st July 2022


Two points have been considered in the appeal of The Manchester Ship Canal Company Ltd v United Utilities Water Ltd, which concerned a claim by the Manchester Ship Canal Company (MSC) against United Utilities Water (UU) in relation to discharges made into the canal.

The appeal considered two points from earlier separate cases: a 2018 case that decided discharges made into the canal by UU did not entitle MSC to private law action in trespass or nuisance, and a 2010 case that determined the effect of MSC’s alleged termination of contractual licences which allowed UU to use five licensed outfalls to discharge into the canal.

Regarding the 2018 case, the judge upheld the decision against the availability of private law action, stating that it could not be distinguished from Marcic v Thames Water Utilities Ltd, and that to hold UU liable for trespass or nuisance for unauthorised discharges into the canal would be “inconsistent with the statutory scheme” applicable to them.

In both cases, discharges were a result of the capacity of an inherited infrastructure being exceeded after heavy rainfall, and not something the undertakers could be held responsible for by way of a tort claim. The judge dismissed the 2018 appeal.

In relation to the 2010 case, in which the previous judge had held that UU had a continued statutory right to drain through the outfalls even if MSC terminated the agreements, the appeal was allowed. The judge stated that to accept “that the licences were valid, but the termination provisions were not, the practical effect would be … to convert what was a precarious grant into a permanent deprivation of property. That seems to me to be a very striking consequence”.

The judge was “not aware that it has previously been held (or even suggested) that the ultra vires doctrine can have the effect of turning a limited and determinable contractual right into a permanent one, and as far as

I can see without any compensation being payable.” The 2010 appeal was allowed.

Image credit | Shutterstock

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