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December 2009
Connecting New Developments To Sewer – At Whose Convenience?On 9 December 2009, the UK Supreme Court handed down its judgement in Barratt HomesLimited v Dwr Cymru Cyfyngedig1 . The Court held that "a sewerage undertaker has no right toselect the point of connection or to refuse a developer the right to connect with a public sewerbecause of dissatisfaction with the proposed point of connection".
Update
This judgement is likely to be used by developers as
justification for connecting to the public sewer at locations
that are more convenient and economical to them, at the
greater expense of sewerage undertakers. Water companies,
on the other hand, will now find it very difficult to stipulate
points of connection as a means of dealing with capacity
problems on their networks. This decision re-emphasises the
point that the burden of dealing with such capacity issues, at
potentially short notice, sits squarely with sewerage
undertakers.
As the judgment notes, this leaves the planning process as
the principal mechanism through which water companies
can seek to exercise control over developments that intend
to connect to an overloaded sewer network. The judgment
therefore strengthens the case for further formalisation of
the involvement of water companies in that process. Water
companies' position on connection may also be helped in the
relatively near future by the amendments to the Water
Industry Act 1991 proposed by the Flood and Water
Management Bill.
The Water Industry Act 1991
S106 of the Water Industry Act 1991 ("WIA") provides that
the owner or occupier of any premises is entitled to have his
drains or sewer communicate with the public sewer of any
sewerage undertaker. Notice must be given by that owner or
occupier under s106(3) that he intends to exercise this
entitlement. Under s106(4), the sewerage undertaker then
has twenty-one days to issue their own notice refusing to
permit the connection. This can only be done if it appears to
that undertaker that "the mode of construction or condition
of the drain or sewer (a) does not satisfy the standards
reasonably required by the undertaker; or (b) is such that the
making of the communication would be prejudicial to the
undertaker's sewerage system". In this case, the Supreme
Court interpreted the phrase "mode of construction"
narrowly, deciding that it does not include the point at
which connection to the public sewer is made.
The Facts
The case involved a development of 98 homes and a primary
school for which Barratt Homes Limited ("Barratt") had
obtained planning permission. Dwr Cymru Cyfyngedig
("Welsh Water") had objected to the planning application
for the development and a planning condition had been
imposed by the local planning authority stating that "no
development shall take place until a scheme of foul drainage
and surface water drainage has been submitted to and
approved by the Local Planning Authority… ".
Barratt subsequently issued a notice to Welsh Water under
s106(3) stating that they intended to make a connection to
the public sewer. Welsh Water responded (more than
twenty-one days later), indicating that connection to the
public sewer should be at a point significantly further away
than Barratt's suggested point of connection, due to
restricted capacity in the sewer at Barratt's preferred point.
Connecting at Barratt's preferred point would have put the
network at risk of overloading and, potentially, overflow.
Works to avoid this risk would have resulted in a substantial
cost for Welsh Water. Connecting at Welsh Water's preferred
point would have resulted in significant cost for Barratt.
Ultimately, Barratt responded stating that Welsh Water had
no right under s106 to set the point of connection and
asking for it to approve the connection. Following a response
from Welsh Water indicating that it did not approve the
1 [2009] UKSC 13 continued overleaf
connection, Ofwat wrote a letter stating that Welsh Water
had responded to the s106(3) notice too late and so was not
entitled to refuse the application for connection. Barratt
then succeeded in persuading the local planning authority to
consider the above planning condition as being discharged.
The issue subsequently proceeded to litigation and in an
August 2008 decision, Wyn Williams J found in favour of
Welsh Water. This decision was reversed by the Court of
Appeal in November 2008 and in December 2009 the
Supreme Court upheld the position adopted by the Court of
Appeal.
The Judgement
The Supreme Court held that "a sewerage undertaker has no
right to select the point of connection or to refuse a
developer the right to connect with a public sewer because
of dissatisfaction with the proposed point of connection".
Lord Phillips did indicate that it was arguable that the WIA
implicitly confers power on a sewerage undertaker's
superintendent to insist that the point of communication is
one where "it is technically feasible and sensible to make the
connection", and it may be that this offers water companies
some room for manoeuvre. Overall, however, it seems likely
that the usefulness of this comment will be curtailed by the
overall decision of the Court that a sewerage undertaker has
no right to select the point of connection.
The Court also indicated that the twenty-one day time limit
set out in s106(4) for the sewerage undertaker to respond to
a connection notice under s.103(3) should be strictly applied.
Sewerage undertakers will need to quickly respond to
connection notices, if they are to benefit from the limited
grounds of refusal set out in s106(4).
The Issues
Two principal issues arise out of the case. The first area of
concern, in light of the UK's vulnerability to flooding as a
consequence of climate change, is the re-assertion of the
fact that s106 confers an "absolute right" of connection to
the public sewer. The issues here are well known. The
sewerage undertaker only has twenty-one days to refuse a
notified connection for a very limited set of reasons. As a
sewerage undertaker's programme of capital expenditure and
charging have to be agreed by Ofwat at five yearly intervals,
there is only limited capacity for sewerage undertakers to
deal with connections to overloaded networks which were
not planned for through that process.
The second issue lies with the planning regime. Whilst the
local planning authority may impose conditions to do with
connection to the public sewerage system, it is not required
to consult the sewerage undertaker in relation to any
application for development. In addition, discharge of any
condition also lies with the local planning authority. In this
case, the local planning authority was satisfied that the
condition imposed on Barratt's development relating to a
sewerage scheme could be discharged. This is unlikely to
have been the decision that Welsh Water would have made if
it were they who were deciding whether or not the condition
had been complied with.
The Future
The decision serves to re-emphasise the importance of the
planning process to protect a water company's position.
Sewerage undertakers will need to revisit their procedures
for engagement in the planning process, ensuring that all
necessary arrangements are in place to enable them to raise
objections to development that would overload the public
sewer and to ensure that they are consulted in the discharge
of any conditions. With Lord Phillips' endorsement, they
may wish to go further than that and seek greater
formalisation of their involvement in the planning process.
Two of the amendments to the WIA proposed by the Flood
and Water Management Bill, (which received its second
reading on 15 December 2009) are also relevant here. First,
the Bill proposes to limit the absolute right to connect to
the public sewer for surface water drainage, so that any
surface water drainage systems must meet standards for
sustainable drainage before they can be connected. Whilst,
at first blush, this may appear to offer increased control over
discharge of run-off to sewer, upon closer inspection it
seems that the position of the sewerage undertaker is not
significantly improved. The undertaker is only a consultee:
the final approval of the drainage system sits with the
unitary authority or county council. In addition, the overall
volume of discharge of surface water to sewer may increase,
since it is possible that the drainage system will drain more
than the buildings and their curtilages that are currently
entitled to connect to sewer and which (when the standards
are met), the undertaker is obliged to connect.
Secondly, the Bill proposes to limit the right to connect new
development to sewer to circumstances where (i) a s104
agreement for the adoption of the drain or sewer by a
sewerage undertaker is entered into in respect of that drain
or sewer and (ii) the agreement includes provisions about
the standards to which the drain or sewer is to be
constructed and adoption of the drain or sewer by the
sewerage undertaker. It remains to be seen whether this
provision could indirectly be used by undertakers to stipulate
the point of connection. Developers may argue that if the
agreement covers the matters at (ii), it should be agreed.
Water companies may argue that they are entitled to
include provision in the agreement relating to capacity
continued overleaf
and/or point of connection. However given that the
intention behind the amendments to the WIA is primarily to
ensure the build quality of the pipe being connected, water
companies could well face the same arguments as in the
Barratt Homes case, that only the standards of construction
of the pipe being connected, not the point of connection,
can legitimately be made conditions of the agreement. In
any event, provision is made for further regulations and
guidance on the agreements to be issued by the Secretary of
State and we must hope that this gives the clarity required.
If not, ultimately this will be a matter to be decided by
Ofwat on appeal of the terms of the agreement.
The future position, then, remains uncertain. For the
moment, developers are well placed to use the Supreme
Court's judgment to support their preferred point of
connection to sewer. Water companies, on the other hand,
ought to be carefully ensuring that their procedures for
engagement in the planning process are clear and thorough
and that they respond to connection notices in good time.
This note does not constitute legal advice. Specific legal advice should be taken before acting on any of the topics covered.
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