Supreme Court upholds developers' rights
9 December 2009
The Supreme Court's decision today in the case of Barratt Homes Limited v Dwr Cymru Cyfyngedig (Welsh Water) has helpfully clarified the right to connect development sites to the public sewers.
Developers will be pleased to note that the Supreme Court decided that section 106 of the Water Industry Act 1991 ("the 1991 Act") provides a property owner with an absolute right to connect their drains to a public sewer. The Court held that the sewerage undertaker could not refuse to permit that connection even if the public sewer did not have the capacity to accept additional flows of foul water and even if there was a risk of flooding from the sewer or from a nearby pumping station. Welsh Water had sought the right under the 1991 Act to either refuse to permit the connection or to designate where it should be made. The dispute arose because Welsh Water sought to force Barratt to make the connection to the sewer in a location that would avoid a bottleneck in the system. The choice given to Barratt was either to cure the capacity problem caused by the bottleneck, or to divert the drains from the development around it. Both options were inevitably significantly more expensive than the connection Barratt had sought.
Welsh Water's argument was based on section 106(4) of the 1991 Act, which empowers sewerage undertakers to refuse to permit a connection to the public sewer. Under section 106(4) such a refusal can only be given on the ground that the 'mode of construction or condition' of the private sewer which drains the development is unacceptable. In addition, where a sewerage undertaker refuses to permit connection,it must notify the property owner of the refusal within 21 days of receiving notice from the developer of its intention to make the connection.
In considering this argument, the Supreme Court concluded that a sewerage undertaker's right to object to the 'mode of construction' was only referable to the condition of the drains in the development connecting to the public sewer, not of the condition of the public sewer itself. The Supreme Court held that a developer should be entitled to connect to the public sewer within a reasonable proximity to the development and that the sewerage undertaker cannot require a developer to make the connection at an unreasonably inconvenient location.
The Supreme Court also made it clear that the 21 day time limit for refusal should be strictly adhered to (Welsh Water had failed to respond within 21 days). Consequently a sewerage undertaker's right to refuse a connection to the public sewer expires where it fails to respond within 21 days.
There is a very clear benefit for developers as the Supreme Court has made it clear that they cannot be ransomed by a sewerage undertaker that requires them to undertake expensive additional works designed to cure capacity problems with the public sewer system. The Supreme Court made clear that there were procedures available to local planning authorities to deal with such issues and that a local planning authority can, in appropriate circumstances, impose a planning condition that requires a developer to deal with a lack of capacity in the sewerage system as a pre-condition before development is allowed to commence (this type of condition is known as a Grampian condition). The advantage for developers is that negotiations and decisions about potentially very expensive sewer improvement works should take place at a very early stage in the development life cycle. Agreement, or the imposition of conditions at this stage of the process will allow developers to properly consider and budget for such works and to make an informed decision as to whether a development makes economic sense or not. Water companies will no longer be able to ransom developers once a development has commenced, they are committed to it and they will no longer simply have to absorb the extra cost.
For further information on any of the issues raised, please get in touch with your usual Osborne Clarke contact, David Powell or David Shakesby
These materials are provided for general purposes only. Osborne Clarke does not accept liability for the contents of these materials and legal advice should be taken in respect of a particular matter.
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