Yesterday, on 6 August 2020, the Government published the above White Paper. The purpose of the White Paper is to do the following: “Planning for the future, landmark reforms to speed up and modernise the planning system and get the country building”.
It leads to the prospect of defended arrears possession claims and counterclaims for alleged overpayments.
The facts of the case and its impact is reviewed below:
1. What were the core facts of this case?
The decision relates to 37,000 properties without water meters where Thames Water (TW) supply water and sewarage services. Southwark entered into an Agreement with TW in 2000 to make payments for water supply and services. These payments were made regardless of whether Southwark was able to recover any payments from tenants or not. Southwark received a discount on the water bill by way of a commission charge and void allowance. (Southwark estimated that ending their agreement with TW would cause a £2.3m loss to their Housing Revenue Account).
The Agreement did not contain any reference to tenants or to the collection of water charge payments by Southwark from the tenants nor did it place any duty of care on Southwark.
The High Court held that at least until 2013 Southwark was acting as a ‘re-seller’ of water services and not acting as an Agent for TW.
(The question of the status of a Deed of Clarification entered into between the parties in 2013 to confirm that the relationship was an Agent/Principal relationship and not one of Re-seller was adjourned as TW are not yet and needed to be a party to the proceedings to argue that issue.)
2. How did the court approach the legislative framework and the Water Resale Order?
The legislation the Court reviewed is the Water Industry Act 1991 and the Water Resale Order 2006.
The Water Re-Sale Order 2006 limits the amount that a purchaser of water can charge when re-selling the water to the final consumer (in this case Southwark’s tenants). The Order only entitles re-sellers to impose very modest administration charges. This decision found that if an amount above the maximum is charged then repayment to the tenant is required.
Section 150 of the Water Industry Act 1991 gives water consumers a right to recover any charges paid in breach of the amounts allowed by the Water Re-Sale Order.
The Court decided that a “consumer” under the Water Industry Act 1991 did not need to be the person who was in occupancy of the premises benefiting from the services.
A previous case Rochdale BC –v- Dixon in 2011 involving a similar but not identical agreement had found the opposite –that Rochdale were the Agent not a Re-seller.
3. How did the court approach the 2000 Agreement?
The Court considered the 2000 Agreement on the basis of the rules for construction of contracts and previous case law. The Court considered whether it contained the necessary requirements for an Agency relationship. The Court placed weight on the fact that the Agreement did not contain any reference to Southwark owing any duty of care to TW with regards to the collecting and charging of the water charges and as a result it was not construed as an Agency agreement. Southwark was therefore a “re-seller”.
4. Practical implications of this decision?
First landlords who have agreements with water authorities need to consider those agreements in light of this decision. If their agreements cannot be Agency agreements then landlords need to: -
- Check the amount they are charging tenants does not exceed the maximum amount chargeable under the legislation;
- Consider whether to terminate existing agreements and require tenants to pay for their water supply directly which may require variation of tenancy agreements;
- Pending an appeal by Southwark which seems inevitable, take advice on how to deal with rent arrears possession proceedings where water rates are part of the rent arrears as defences and counterclaims should be expected.
For more information
Please contact Zishaan Saleem
The Johnny Depp -v- News Group Newspapers trial concluded last week and has been widely publicised and reported on around the World.
On 30 June 2020, Boris Johnson announced radical changes to the planning system.
Six months after the first recorded case of COVID-19 in the UK, it is clear that charities, community organisations and volunteers have played a huge role in the UK’s response to the COVID-19 pandemic
This article is further to our previous e-briefing (published on 22 July 2020) where we informed you that there are new temporary measures (a new Practice Direction PD55c) that have been brought into deal with possession claims, following the stay being lifted on possession claims on 22 August 2020.
A podcast from Alex Loxton and Sumi Begum from our housing litigation team, discussing injunction applications and the courts approach in light of COVID-19 and the ban on possession proceedings.
We have asked colleagues in the Employment Law team to highlight what they think is key to managing a redundancy programme well.
The use of video remote witnessing of Wills will become law.
There’s no doubt about it, the COVID-19 pandemic has placed incredible pressure on the NHS.
Chancellor Rishi Sunak’s £3.8 billion SDLT giveaway may bring benefits for registered providers of social housing, according to ACS experts in the sector.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.