The Manchester Ship Canal Company Ld United Utilities Water Ltd [2019] EWHC 1495 (Ch)

“8. Since the Canal was constructed and at all material times until 1 December 1991, the Defendant's respective predecessors in title and the Defendant have had statutory authorisation under the Public Health Acts 1875 and 1936 to discharge water into the Canal so long as the water discharged did not prejudicially affect the purity and quality of the water in the Canal. 9. Since 1 December 1991 the statutory scheme governing sewerage undertakers has been contained in the Water Industry Act 1991. In British Waterways Board v Severn Trent Water Ltd [2001] Ch 31, the Court of Appeal held that a sewerage undertaker, such as the Defendant, does not have statutory power to discharge water or other matter from its drainage pipes onto the land or into the waters of others. Accordingly, any discharge now made by a sewerage undertaker without the permission of a relevant land owner constitutes a trespass.”

“After well over a century in which sewerage authorities were entitled as of right to construct and discharge from such outfalls one would expect the degree of dependence to be significant. Unless the entitlement to discharge from existing outfalls into private watercourses survives the transfer to privatised water undertakers, the consequence is that in law such discharge must cease forthwith on 1 December 1991. Any continuing discharge thereafter will become tortious from that date. 18. Under the Water Industry Act, the statutory duties of a sewerage undertaker include a duty to operate the system of public sewers so as effectually to drain their area (section 94) and a duty to allow the owners or occupiers of premises to connect to the public sewer system (section 106). Moreover, the undertaker is not permitted to discontinue the use of a sewer until it has provided an alternative sewer capable of serving as effectually (section 116). The result, if the right to discharge into private watercourses ceases as the canal owners suggest, is to make it impossible for the sewerage undertakers lawfully to perform their statutory functions or observe the statutory restrictions on the discontinuance of existing sewers from the moment that the new Act comes into force.”

“I would accordingly allow the appeal to the extent of declaring that subject to section 117(5) of the Water Industry Act 1991, the Appellants are entitled to discharge into the Respondents' canals from any sewer outfall which was in use on or before 1 December 1991.”

“… sewerage undertakers have the statutory right to discharge surface water and treated effluent into streams and canals (subject to payment of compensation for any damage thereby caused), but only in respect of outfalls in existence before the coming into force of the 1991 Act. I agree with the reasons given by Lord Sumption and Lord Toulson although I would place greater weight on the assistance which can be gained from the provisions of the earlier legislation relating to public sewers and the Interpretation Act 1978 ("the 1978 Act").”

“16C.3 the statutory right impliedly conferred by the [1991 Act] to continue to discharge from Pre-1991 Outfalls does not authorise discharges of water and other materials through outfalls where the water and materials originate from sewers laid or adopted by [UU] on or after 1 December 1991, or from new connections made to existing sewers after 1 December 1991”

“MSCC could be expected to have put forward by that stage all the points that it wished to advance as entitling it to be allowed to continue the proceedings in respect of the 106 outfalls, the more so since Floyd J had directed MSCC to serve its evidence in answer to the application to [sic] for summary judgment by 18 November 2011. Further, as I recorded in my judgment, counsel then appearing for MSCC accepted at the hearing before me that the parties had had an adequate opportunity to address the issues and did not suggest that I lacked any relevant evidence. The claims that would be introduced by the proposed amendments could all have been put forward in time for the hearing before me in 2012. The Class 2 amendments have, I gather, been prompted by paragraph 75 of Lord Neuberger's judgment in the Supreme Court, but the passage in question did no more than suggest to MSCC a legal argument that had always been available to it… In short, the amendments were not dependent on the Supreme Court's decision; …The fact that additional arguments may have occurred to new counsel does not normally represent a compelling reason for granting permission to amend… The amendments would put United Utilities to a very great deal of work. A witness statement explains that, if the amendments were permitted, United Utilities: "would be required to undertake very substantial investigations into facts which it has not had to investigate as a result of any of the allegations raised in these proceedings to date, including without limitation as to the date of construction of sewers and properties which ultimately connect to sewers discharging through the outfalls in issue, as to the frequency and extent with which individual discharges can be said to have exceeded the statutory limits on [United Utilities'] authority to discharge, and as to its tankering operations…”

“The inescapable inference is that although there is no provision of the 1991 Act from which a general right of discharge into private watercourses can be implied, those rights of discharge which had already accrued in relation to existing outfalls under previous statutory regimes survived.”

“The first principle is that once a cause of action has been held to exist or not to exist, that outcome may not be challenged by either party in subsequent proceedings. This is "cause of action estoppel". It is properly described as a form of estoppel precluding a party from challenging the same cause of action in subsequent proceedings. … Fourth, there is the principle that even where the cause of action is not the same in the later action as it was in the earlier one, some issue which is necessarily common to both was decided on the earlier occasion and is binding on the parties: Duchess of Kingston's Case (1776) 20 St Tr 355. "Issue estoppel" was the expression devised to describe this principle by Higgins J in Hoysted v Federal Commissioner of Taxation (1921) 29 CLR 537, 561 and adopted by Diplock LJ in Thoday v Thoday [1964] P 181, 197-198.”

“The case before the committee was treated as one of issue estoppel, because the cause of action was concerned with a different rent review from the one considered by Walton J. But it is important to appreciate that the critical distinction in Arnold was not between issue estoppel and cause of action estoppel, but between a case where the relevant point had been considered and decided in the earlier occasion and a case where it had not been considered and decided but arguably should have been… “Arnold is accordingly authority for the following propositions: (1) Cause of action estoppel is absolute in relation to all points which had to be and were decided in order to establish the existence or non-existence of a cause of action. (2) Cause of action estoppel also bars the raising in subsequent proceedings of points essential to the existence or non-existence of a cause of action which were not decided because they were not raised in the earlier proceedings, if they could with reasonable diligence and should in all the circumstances have been raised. (3) Except in special circumstances where this would cause injustice, issue estoppel bars the raising in subsequent proceedings of points which (i) were not raised in the earlier proceedings or (ii) were raised but unsuccessfully. If the relevant point was not raised, the bar will usually be absolute if it could with reasonable diligence and should in all the circumstances have been raised.”

“25…Res judicata and abuse of process are juridically very different. Res judicata is a rule of substantive law, while abuse of process is a concept which informs the exercise of the court's procedural powers. In my view, they are distinct although overlapping legal principles with the common underlying purpose of limiting abusive and duplicative litigation. That purpose makes it necessary to qualify the absolute character of both cause of action estoppel and issue estoppel where the conduct is not abusive. As Lord Keith put it in Arnold v National Westminster Bank at p 110G, "estoppel per rem judicatam, whether cause of action estoppel, or issue estoppel is essentially concerned with preventing abuse of process." 26. It may be said that if this is the principle it should apply equally to the one area hitherto regarded as absolute, namely cases of cause of action estoppel where it is sought to reargue a point which was raised and rejected on the earlier occasion. But this point was addressed in Arnold, and to my mind the distinction made by Lord Keith remains a compelling one. Where the existence or non-existence of a cause of action has been decided in earlier proceedings, to allow a direct challenge to the outcome, even in changed circumstances and with material not available before, offends the core policy against the re-litigation of identical claims.”

“Two critical concepts which feature in the foregoing formulations of the legal position are those of a cause of action and of the limitation period. A cause of action in this context is not so much the label attaching to a claimant's claim (for example "breach of statutory duty" or "money paid under a mistake of law"). Rather, it is the set of facts which entitles the claimant to relief:- "Every fact which is material to be proved to entitle the plaintiff to succeed - every fact which the defendant would have a right to traverse". (Brett, J. in Cooke v Gill (1873) 8 CP 107 at 116). See also Diplock, LJ in Letang v Cooper [1965] 1 QB 232 at 242-3: "A cause of action is simply a factual situation, the existence of which entitles one person to obtain from the court a remedy against another person".” "Every fact which is material to be proved to entitle the plaintiff to succeed - every fact which the defendant would have a right to traverse". "A cause of action is simply a factual situation, the existence of which entitles one person to obtain from the court a remedy against another person".”

“The classic definition of a cause of action was given by Brett J in Cooke v Gill (1873) LR 8 CP 107 at p. 116:- “Cause of action” has been held from the earliest times to mean every fact which is material to be proved to entitle the plaintiff to succeed - every fact which the defendant would have a right to traverse” (my emphasis). In the Thakerar case Chadwick J cited the more recent definition offered by Diplock LJ in Letang v Cooper [1965] 1 QB 232 CA at pp. 242-3 and approved in Steamship Mutual Underwriting Association v Trollop & Colls [1986] 33 BLR 77 at p. 92:- “A cause of action is simply a factual situation the existence of which entitles one person to obtain from the court a remedy against another person”

“As regards Stage 2 (new cause of action) from the recent analysis of the authorities by Longmore LJ in Berezovsky v Abramovich §§59 to 69, the following principles arise: (1) The "cause of action" is that combination of facts which gives rise to a legal right; (it is the "factual situation" rather than a form of action used as a convenient description of a particular category of factual situation: Lloyds Bank v Rogers at 85F and Aldi Stores at 21). (2) Where a claim is based on a breach of duty, whether arising in contract or tort, the question whether an amendment pleads a new cause of action requires comparison of the unamended and amended pleading to determine (a) whether a different duty is pleaded (b) whether the breaches pleaded differ substantially and (c) where appropriate the nature and extent of the damage of which complaint is made: Darlington at 370C-D and see also Berezovsky §59. (Where it is the same duty and same breach, new or different loss will not be new cause of action. But where it is a different duty or a different breach, then it is likely to be a new cause of action). (3) The cause of action is every fact which is material to be proved to entitle the claimant to succeed. Only those facts which are material to be proved are to be taken into account; the pleading of unnecessary allegations or the addition of further instances does not amount to a distinct cause of action. At this stage, the selection of the material facts to define the cause of action must be made at the highest level of abstraction. Berezovsky §60 citing Cooke v Gill (1873) LR 8 CP 107 and Paragon Finance, supra. (4) In identifying a new cause of action the bare minimum of essential facts abstracted from the original pleading is to be compared with the minimum as it would be constituted under the amended pleading: Berezovsky §§61 and 62. (5) The addition or substitution of a new loss is by no means necessarily the addition of a new cause of action: Berezovsky §64 and Aldi §26. Nor is the addition of a new remedy, particularly where the amendment does not add to the "factual situation" already pleaded: Lloyds Bank v Rogers per Auld LJ at 85K.”

“The court can properly award damages once and for all in respect of future infringements because it awards them in substitution for an injunction and to compensate for those future wrongs which an injunction would have prevented. Since the practical consequence of withholding injunctive relief is to authorise the continuance of an unlawful state of affairs, the doctrine of res judicata operates to prevent the claimant and their successors in title from bringing proceedings thereafter to recover even nominal damages in respect of further wrongs for which the claimant has been fully compensated.”

“Where, as here, a cause of action or issue was not raised in the previous proceedings but could have been so raised, the court has a discretion not to apply cause of action estoppel or issue estoppel if there are "special circumstances". The judge relied on this exception in relation to Mr Sealy. There is, of course, no exhaustive definition of what constitute special circumstances but they must by definition be circumstances which make it unjust to insist on the estoppel applying. This may occur where a party obtains relevant new material which was not previously available, as in Arnold itself. Sometimes the same result is achieved by granting permission to appeal out of time from the first decision.”

“Secondly, there is the principle, which is not easily described as a species of estoppel, that where the claimant succeeded in the first action and does not challenge the outcome, he may not bring a second action on the same cause of action, for example to recover further damages: see Conquer v Boot [1928] 2 KB 336.”

“(a) ensuring that the parties are on an equal footing; (b) saving expense; (c) dealing with the case in ways which are proportionate - (i) to the amount of money involved; (ii) to the importance of the case; (iii) to the complexity of the issues; and (iv) to the financial position of each party; (d) ensuring that it is dealt with expeditiously and fairly; (e) allotting to it an appropriate share of the court's resources, while taking into account the need to allot resources to other cases; and (f) enforcing compliance with rules, practice directions and orders.”

“Protective provisions in respect of flood defence works and watercourses etc. (1) Nothing in this Act shall confer power on any person to do anything, except with the consent of the person who so uses them, which interferes— (a) with any sluices, floodgates, groynes, sea defences or other works used by any person for draining, preserving or improving any land under any local statutory provision; or (b) with any such works used by any person for irrigating any land. (2) Without prejudice to the construction of subsection (1) above for the purposes of its application in relation to the other provisions of this Act, that subsection shall have effect in its application in relation to the relevant sewerage provisions as if any use of or injury to any such works as are mentioned in paragraph (a) or (b) of that subsection were such an interference as is mentioned in that subsection. (3) Nothing in the relevant sewerage provisions shall authorise a sewerage undertaker injuriously to affect— (a) any reservoir, canal, watercourse, river or stream, or any feeder thereof; or (b) the supply, quality or fall of water contained in, or in any feeder of, any reservoir, canal, watercourse, river or stream, without the consent of any person who would, apart from this Act, have been entitled by law to prevent, or be relieved against, the injurious affection of, or of the supply, quality or fall of water contained in, that reservoir, canal, watercourse, river, stream or feeder. … (6) A consent for the purposes of subsection (1) above may be given subject to reasonable conditions but shall not be unreasonably withheld. (7) Any dispute— (a) as to whether anything done or proposed to be done interferes or will interfere as mentioned in subsection (1) above; (b) as to whether any consent for the purposes of this section is being unreasonably withheld; (c) as to whether any condition subject to which any such consent has been given was reasonable; or (d) as to whether the supply, quality or fall of water in any reservoir, canal, watercourse, river, stream or feeder is injuriously affected by the exercise of powers under the relevant sewerage provisions, shall be referred (in the case of a dispute falling within paragraph (d) above, at the option of the party complaining) to the arbitration of a single arbitrator to be appointed by agreement between the parties or, in default of agreement, by the President of the Institution of Civil Engineers.”

“3. The Manchester Ship Canal Act 1885 was the first of the Manchester Ship Canal Acts and Orders 1885 to 2009 pursuant to which the Canal was constructed and maintained. The Canal allowed the heavy tariffs imposed by the Liverpool docks and railway companies to be avoided and, consequently, trade flourished in Manchester. The feature of its construction which is of particular significance in this appeal is that the river courses, particularly those of the Irwell and Mersey, were canalised. The Canal also intercepted or shared the flow of other rivers such as the Irk and the Medlock and, in the Lower Reaches, the Weaver. 4. The canalisation of the rivers gave the Canal another important role besides navigation. It enabled flood water to pass safely down the Canal to the Mersey Estuary and thus provided land drainage for the Manchester conurbation and beyond, a total catchment area of 3,000 km². Before the Canal was built there was a history of flooding in the Manchester to Warrington area (in 1729, Daniel Defoe described a bridge in Manchester built 'so high because floods could cause the river to rise four or five yards in a night'). Since 1894, when the Canal was completed, the canal structure and its associated systems have safely passed all flood flows to the Mersey Estuary. This success in flood prevention fulfilled and surpassed the statutory obligations of the undertaker, the Manchester Ship Canal Company Limited, to allow the passage, discharge and escape of flood waters from rivers and land, (see sections 71(13), 84(5), 84(16), 101(6), 114(1) and 118(2) of the 1885 Act). The width and depth of the channel formed by the Canal far exceeded the natural river channels it replaced; the Canal with its associated structures improved the flow of the rivers and thereby reduced the risk of flooding. 5. The sluices control the water level by enabling the waters which enter the Canal from rivers and other sources to pass down the Canal in a regulated manner. They are electrically powered and are normally operated automatically from a central control room, but can, as a back-up, be operated electrically, hydraulically or manually from equipment located on the structure of the sluices. The respondents emphasise the reliability of the sluices; the annual probability of all the sluices failing to operate in a 1% probability flood is less than 0.01%.”

"It seems to me that the decision whether to take a strict approach to pleading and therefore to bring this aspect of the claim to an end is essentially discretionary but must be exercised rationally, that is on some sensible basis. I do not in my judgment have to have, for example, a draft amended pleading before me. I take the view that in principle a credible request from counsel could in some circumstances be enough to persuade me to allow an effort to amend appropriately, but in this there is more material than that to go on."