Top 3 Cases July 2024 01 August 2024
JULY 2024
Manchester Ship Canal Company Ltd v United Utilities Water Ltd (No. 2) [2024] UKSC 22
Summary
The Supreme Court determined that water companies may be liable in nuisance to owners of rivers and artificial watercourses if they discharge sewage into those waters.
The appellant is the owner of the Manchester Ship Canal. The respondent is a sewage undertaker. The appellant complained that its canal was being polluted with sewage and that the respondent was liable in nuisance. The respondent argued that the effect of the Water Industry Act 1991 was to preclude a common law claim, so it could discharge sewage into the canal as it wished, subject only to any enforcement action by the Secretary of State or Ofwat.
The Supreme Court, allowing the canal company’s appeal, found that the statutory scheme had not ousted the possibility of a claim at common law – although it expressed the view that injunctive relief was unlikely to be appropriate where it would cut across the Ofwat regime for capital expenditure.
Why it’s important
Although the actual dispute between these parties – which is the subject of long-running litigation – concerns payment terms, this decision is of wider importance for owners, users and possible polluters of watercourses more generally.
The Supreme Court’s reasoning, drawing on a detailed examination of the authorities regarding the tort of nuisance, focused in particular on the case of Marcic v Thames Water Utilities Ltd [2003] UKHL 66. The Court drew a distinction between the cause of action in that case – failure to construct an adequate sewage system, which was a statutory obligation with a statutory remedy only, and thus no remedy at common law – and the suggested cause of action in this case, nuisance. Unlike Mr Marcic’s purely statutory claim, common law had afforded a remedy for nuisance, and that remedy had survived the enactment of the statutory scheme. The decision is therefore useful in clarifying the correct approach to whether common law claims survive in parallel with statutory ones.
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Outotec (USA) Inc v MW High Tech Projects UK ltd [2024] EWCA Civ 844
Summary
The Court of Appeal upheld a judge’s decision that a claim should not be struck out for abuse of process.
The substantive dispute concerned the construction of a power plant. A company engaged a main contractor to build the power plant, and that main contractor in turn engaged a subcontractor to supply certain plant. There were significant delays. The company brought a claim against the main contractor, which defended that claim and also brought part 20 proceedings against the subcontractor.
The main contractor was broadly unsuccessful in both its defence of the claim and its Part 20 proceedings. The main contractor then brought fresh proceedings against the subcontractor and also its parent company guarantor, alleging that the subcontractor had misrepresented its ability to supply the plant and seeking in essence to recover its losses in the main action.
The Court of Appeal upheld the decision of the judge below not to strike out the misrepresentation action for abuse of process, notwithstanding that it could and should have been raised with the Court in the main action.
Why it’s important
Lord Justice Coulson’s leading judgment contains a careful review of the authorities regarding whether it was an abuse of process to bring proceedings where there had been previous litigation in which the claims could have been raised. Specifically, he indicated that although breach of the guidelines in Aldi Stores Ltd v WSP Group Plc [2007] EWCA Civ 1260 (which mandate that a party who realises that it has a connected claim not currently before the court should raise that issue with the court) will be a strong indicator that the subsequent proceedings are abusive, it is not in itself determinative; all the circumstances, including the consequences of that failure, must be considered. The approach was similar to a relief from sanctions application (so evidence as to why the Aldi guidelines were not followed should be adduced). The case provides a detailed illustration of the factors the Court will take into account. An important aspect is whether there is vexation, harassment or oppression, which could not be shown in the present case.
Of note is that although Arnold and Stuart-Smith LJJ agreed with the majority of Coulson LJ’s reasoning, they differed as to whether they should overturn the judge’s finding about the likelihood of the misrepresentation claim having been tried with the main action if raised earlier, and (in the case of Stuart-Smith LJJ) the significance of the claim against the parent company guarantor being against a different legal entity.
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EE Ltd & Hutchison 3G UK Ltd v AP Wireless II (UK) Ltd [2024] UKUT 216 (LC)
Summary
The Upper Tribunal determined the terms of a renewal under Part 5 of the Electronic Communications Code, in particular the terms of a break clause and the annual consideration.
The case concerned the renewal of an agreement in respect of a rural greenfield site. The site provider, a site aggregator, owned no surrounding land, but argued that it may wish to redevelop the site by removing the existing mast and erecting its own mast, via a related company which is itself an ‘operator’ for Code purposes and should have wide break rights. The operator argued that the policy of the Code was to give operators security for a sufficient period to justify expenditure on the site, and the Tribunal should not allow site providers to take sites out of the Code and create disputes which will not be resolved under the Code.
The operator argued that the rent should be in line with previous Tribunal guidance, updated for inflation to £1,000 per annum. The site provider argued that evidence showed this was too low, and contended for £2,850 per annum, on the basis of a base figure of £1.500 per annum plus £1,350 for the various burdens arising from the use of the site for telecommunications use.
The Tribunal determined that:
- The site provider would be entitled to break on each anniversary of the term from the 5th year, on 18 months’ notice, if (but only if) it could prove an intention to redevelop at the date of the hearing, without a limitation that it could only be exercised for non-telecommunications development. The site provider would not be entitled to break on the basis that the paragraph 21 test for imposition of an agreement was no longer met.
- The rent would be £1,750pa: the previous figure was, in light of the evidence, too low, but the site provider’s expert had been over generous in the adjustments to non-telecoms comparables that he made.
Why it’s important
As the Tribunal’s judgment notes, there have been many fewer references concerning consideration since the publication of the ‘Affinity Water table’ setting out typical figures for different kinds of sites, including the figure of £750pa for rural sites. This decision is significant because the Tribunal revised that figure upwards, both on the basis of inflation (which the Tribunal suggested should also be taken into account as regards the other figures in the table) and on the basis that the evidence demonstrated that £750pa was too low a figure for a rural site.
The Tribunal’s determination on the break clause will also be of interest to practitioners negotiating other telecommunications agreements; the Tribunal stressed that while it is no part of the policy of the code to stand in the way of genuine redevelopment, it was also not desirable to generate further opportunities for dispute.
STEPHANIE TOZER K.C
FERN SCHOFIELD
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