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December 2009 Connecting New Developments To Sewer · December 2009 Connecting New Developments To Sewer – At Whose Convenience? On 9 December 2009, the UK Supreme Court handed

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Page 1: December 2009 Connecting New Developments To Sewer · December 2009 Connecting New Developments To Sewer – At Whose Convenience? On 9 December 2009, the UK Supreme Court handed

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

Page 2: December 2009 Connecting New Developments To Sewer · December 2009 Connecting New Developments To Sewer – At Whose Convenience? On 9 December 2009, the UK Supreme Court handed

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

Page 3: December 2009 Connecting New Developments To Sewer · December 2009 Connecting New Developments To Sewer – At Whose Convenience? On 9 December 2009, the UK Supreme Court handed

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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