Water Charges - Definitions & Cases Reviewed

Introduction

So what is this article about. It is probably one of the more important articles on this section of the web site about Water Charges.

It would appear that a very simple straight forward Law [The 2005 Water Act] is in the process of being perverted by a group of people which includes inter alia The Water Industry Commissioner for Scotland, some Directors [presumably] of Scottish Water, and various high level [???] minions in the Scottish Government who dislike the fiscal ramifications of said Act.

Note: This article is unlikely ever to be complete - due to the nature of the law - always changing.

So what is it that they dislike ? Simply put they have refused, or are unable, to say. But as it is said, Actions speak louder than Words.

So what are they doing that indicates what the problem is. It is pure supposition on our part but we suggest:

The income that can be generated by using the 1945 Act for Business and Shopping Centres is possibly TEN times higher than if the 2005 Act is applied correctly,
Scottish Water [SW] and subsidiary Business Stream have very deep pockets - lots and lots of money to waste on lawyers and legal fees,
The Scottish Courts administration seem to be unable to curb the excesses of Scottish Water Business Stream and the like in using due process for irregular reasons [in the view of reasonable people with experience in the Water Industry].

The net result is SW et al have the impression that the law can be manipulated by clever argument. It can. That's a sad fact of life, but what do you need to do be able to do to enable such manipulation. We suggest:

Cases [one or more] need to be found where a judgement can be made using arguments that are not able to be refuted at the time.
These judgements can then be used as an alternative to a pragmatic and sensible interpretation of the Law.

But it appears that some elements of the the legal profession are not quite as happy with the situation as the political and commercial proponents would like them to be.

Why do we say this ? Because the three judgments upon which we make comment are all quite different, but all follow a common cause. The result at the moment, of the three is:

Two cases sort of sensible - the first one [Chataroo] caused a "closing of the stable door" [the 2012 Act],
One case [Swanson] sort of grossly unreasonable ... in fact in the view of many knowledgeable people, it was an aberration.

So thank heaven for Reid's judgement. In our view he made the right order, but possibly for some of the wrong reasons.

So what are we attempting to do in this paper ? Easy: we are putting the Engineering Interpretation of the Law into public view. In fact we have already done this, but have been "undermined" by spurious legal argument that we think is more "through the looking glass" by Alice. Jam yesterday, jam tomorrow, but no jam today. So that means no jam ever, because today is the day we want jam - but the lawyer says we had it yesterday, and the politicians promise it for tomorrow. For another interpretation see Wikipedia.

So where do go from here ? A review of some definitions, then a review of the three cases in the light of a bit of uncommon common sense.

Definitions

Coherence

The following are taken straight off the web.

Cambridge Dictionary
- If an argument, set of ideas, or a plan is coherent, it is clear and carefully considered, and
  each part of it connects or follows in a natural or reasonable way.
Oxford Dictionary - Origin
- Mid 16th century (in the sense ‘logically related to’): from Latin cohaerent- ‘sticking together’,
  from the verb cohaerere (see cohere).
Collins Dictionary
- If something is coherent, it is well planned, so that it is clear and sensible and all its parts go well with each other.
Merriam Webster Dictionary
- logically or aesthetically ordered or integrated : consistent coherent style a coherent argument having the quality of holding together or cohering; especially : cohesive, coordinated a coherent plan for action

So if an Act of Parliament has parts which do not gel within itself, or other documents with it, it [they] can not be said to be coherent: to wit it is [they are] incoherent. When that happens people tend to complain and the courts are asked to make a judgement. If that judgement does not "fit the bill" then there is dissatisfaction all round.

An unsatisfactory law needs to be amended sooner rather than later.

Connection

Supply Point ID

Arrangements

Disconnection

Meter

Comments on Court Cases

Chataroo|inactive

The judgement is here: http://www.scotcourts.gov.uk/search-judgments/judgment?id=9b94eba6-8980-69d2-b500-ff0000d74aa7.

A premises with a physical connection is an Eligible Premises. The meter might show zero usage, but the connection has to be maintained for the future, and its capital cost of installation is probably amortized over 50 years - maybe more.

In any event the erroneous argument over whether "arrangements for charging" had been made has been fixed by the 2012 Act.

That the service was previously physically arranged means that it must be paid for. The connection is attached to the property irrespective of the owner or tenant[s].

The most interesting thing about this case is Note 9. The first sentence of it reads:

As a preface to his submissions the Dean of Faculty pointed out that this was but one of a not insignificant number of debt recovery cases raised by the pursuers [Scottish Water Business Stream] in this court.

This appears to a public acknowledgement, or even complaint, that the pursuers are misusing the courts ... as most small business's simply cannot afford the lawyers costs. The alternative, the SPSO, is hardly a better alternative.

Sheriff Swanson

The judgement is here: https://www.scotcourts.gov.uk/docs/default-source/cos-general-docs/pdf-docs-for-opinions/2017scgla54.pdf?sfvrsn=0.

The case is interesting because it flies in the face of common sense: two documents - one a Law of Scotland, and one an administrative code [the Market Code] belonging to a company made up of those who are licenced to levy and collect Water Charges. The basis of the individual charges are apparently made by Scottish Water's Revenue Protection Department.

The questions which arise are:

Why did the Sheriff choose the rules from a majority English owned company over the Laws of Scotland ? The precedence of documents is clear: it is the rules that need to be fixed. It is often the case in the Engineering world that there are problems between documents - especially specifications. The normal procedure is that the documents are first considered as ruling on the basis of the importance. Where this would lead to a technical nonsense, the technical solution takes precedence - often at a cost.
Why did the Sheriff need to use "the Reasonable man" ? It needs an explanation - in the view of a Reasonable man ... being an Engineer [note the capital E] as opposed to being a lawyer [Note the lower case L].
Why did the Sheriff ignore the unfairness of the 1945 Act as pointed out by Lord Denning and Lord Scarman, which was very obviously rectified by the 2005 Act, to wit the introduction of Eligible Premises, and the discarding of rateable value charging in favour of meters.

The 1945 Act & the West Pennine Appeal|inactive

The 1945 Act was passed into law.

In March 1975, Lord Denning made comments on the 1945 Act in the Appeal known as West Pennine Water Board v. Jon Migaix (North West) Ltd. Lord Orr, and Lord Scarman concurred.

Lord Denning:

The shopkeeper's point is quite understandable. He says: 'There is no water pipe into my premises: so I ought not to be charged water rate.'

It is then "water supplied to any premises for domestic purposes'. That is the case here. The water rate Is therefore to be charged on rateable value.

This interpretation does give rein to unequal treatment. It means the same water rate Is to be paid by a shopkeeper who does not have a pipe into his premises as is paid by a shopkeeper who is connected up by a pipe. But such inequalities are inevitable when charges are made on rateable value. A person who uses little water pays the same rate as one who uses a lot.

The only way of avoiding inequality would be to charge by meter.

Lord Scarman:

Consideration should be given as to how the burden of paying for water supply should be apportioned as between tenants in shopping centres and landlords who provide communal lavatory facilities.

I am, like Lord Denning M.R., concerned as to the underlying problem of justice or 'rough justice', as it has been called, which the facts of this case reveal: for an occupier of premises which have no separate water supply will find himself paying a water rate no different from that payable in respect of premises which have such a supply and other shopping centres, and communal areas in multiple occupation but in private ownership are becoming a common feature of the modern environment; and it may be that Parliament should look at look at the way in which the burden of paying for water supply should be apportioned between tenants who occupy shops and landlords who provide in these centres the necessary communal facilities, one of which will be a water supply for the general use of the tenants and the public.

Note on the 1945 Act Section 38 Subsection 3.

This allows for disconnection on non payment. As it is not possible to effect a disconnection if there is no pipe, then clearly a person etc being accused of non payment is not the right person etc. The right person is the owner of the building where the pipe is connected.

There is therefore a lack of coherence in the 1945 Act, on the assumption that premises includes the right to take water [per the West Pennine Water Board v. Jon Migaix (North West) Ltd case], and thus be charged for it.

The 2005 Act

Ministerial Directions

The question is whether the Ministerial Directions coincide with the law - in particular section 27 of the 2005 Act. The underlying question is of course how was it intended that the 2005 Act be interpreted ?.

The Ministerial Directions are contained in documents issued and published by the Scottish Government Administration. The associated scereen captures are at the end of the srticle - Water Charges - The Law Explained. The first screen capture was made in April 2016 - it relates to 2014. The others were made in September 2018, but relate to the dates shown in the capture..

In the capture relating to 2014, the basic principle is stated as "All non-domestic customers are metered unless it is not not prcaticable to do so. For those non-domestic customers who are not metered, the charge is set on the basis of the amount of water thay are likely to use."
- This means that charges will NOT be set in relation to rateable values. This is in line with Section 27 of the 2005 Act.
This is repeated in the Wayback Machine screen capture dated 3rd Ocober 2016. In addition, there is a statement that "From 1 April 2017, vacant non-domestic properties will be charged for water, sewerage, and drainage services."
- Thus Landlords will be charged in the same manner as Tenants, unless of course some agreement has been made which will be unsatisfactory to the general public and tenats in particular.
The Wayback Macine capture for January 6th 2017, apart from repeating the above statements, includes one which reads: "From 1 April 2018, the rateable values most recently assigned by the Assessor will be used to calculate unmeasured water and sewerage charges."
- This flies in the face of the metering statement, and is wholly contrary to Lord Denning's and Lord Scarman's comments in the West Pennine case. It is a public statement that is not coherent.
This continues until the last capture in February 2018.

The conclusion that is made by a reasonable man - to wit an Engineer with knowledge of charging for water - is that there is a deliberate attempt is being made to get around Section 27 of the 2005 Act.

The answers to the three questions posed above have not been adequately answered.

It is contended that the arguments presented in the Sheriff's judgement are more of a political nature than a legal one. That is the legal profession's problem, or more properly one for the Courts Adminstration. The cause is the incoherence within in the Ministerial Statements, and within other documents such as the uncorrected Market Code, and this judgement.

The following statement in the judgment would probably have risked the ire of both Lord Denning and Lord Scarman. It is certainly met with the ire of a reasonable Engineer as it is very definitely NOT common sense. Noted that the Sheriff has used the word reasonable in two other places - as opposed to making properly reasoned arguments.

If the reasonable man was asked whether the defender occupied both its office space and the toilets and kitchen he would say that it did. Common sense would be outraged were it otherwise.

This is unsatisfactory in the extreme, bad for Scotland, and even worse for the small business community on which the future of Scotland will increasingly come to rely on more and more not only for employment, but for tax revenue on their profits. History has shown for many thousands of years that taxation not on profit leads ro a collapse of society. Currently, the public and civil service costs are roaring out of control.

Sheriff Reid

A much simpler and understandable judgement, which it is considered applies to the vast majority of multi tenanted Eligible Premises much as was envisioned by Lord Denning and Lord Scarman in the West Pennine case referenced above.

This HTML page is a text copy of part of the pdf published by The Scottish Courts and can be downloded here: https://www.scotcourts.gov.uk/docs/default-source/cos-general-docs/pdf-docs-for-opinions/2017scgla47.pdf?sfvrsn=0

The Summary is presented below.

It is clear and concise and seems to be applicable to the vast majority of small business's who are tenants in business centres and the like.

SHERIFFDOM OF GLASGOW AND STRATHKELVIN AT GLASGOW - [2017] SC GLA 47 - SA3155/16

NOTE BY SHERIFF S REID

SCOTTISH WATER BUSINESS STREAM LIMITED - Pursuer
MR CHRISTOPHER PHILLIPS - Defender

Glasgow, 22 August 2017

Summary

[1] The pursuer is a water services provider and sewerage services provider, in terms of the Water Services etc. (Scotland) Act 2005. That means that it is authorised, under a statutory licence, to make arrangements with the occupier of any eligible premises for the supply of water and the provision of sewerage services through the Scottish public water supply and sewerage systems, respectively.

[2] The defender is a tattoo artist. He trades from a single room “suite” located on the second floor of large commercial premises in Glasgow city centre. These large commercial premises (which I shall refer to as “the Block”) are sub-divided into various units (including the defender’s room) occupied by a variety of trading entities. The defender occupies his 2 room in terms of a contractual licence dated 21 October 2014 granted by Dunaskin Properties Limited in favour of the defender (item 5/40 of process).

[3] There is a water supply to, and there are sewerage services to and from, the Block.

[4] However, the interesting feature of the present case is that there is no water supply to, and there are no sewerage services to or from, the room occupied by the defender in terms of his contractual licence. There is no tap, sink or water pipe, and no drain, sluice, or gutter of any description, into, out of or serving the defender’s single room suite.

[5] In addition, the defender’s contractual licence confers no right of access to, or use of, any other part of the Block served by any such water supply or sewerage services (such as communal toilets, kitchen facilities or the like).

[6] In this small claim, the pursuer seeks payment of £1,215.95, being charges levied by the pursuer upon the defender for the alleged supply of water and sewerage services to the defender at his Business Premises.

[7] The pursuer’s power to levy and recover such charges (from non-domestic customers) derives from the Water Services etc. (Scotland) Act 2005 (“the 2005 Act”). It authorises the pursuer, under a statutory licence, inter alia:-

(a) to “make arrangements with the occupier of any eligible premises for or in relation to the supply of water to the premises through the public water supply system”; and
(b) to “fix, demand and recover charges for or in relation to the supply of water to any premises in respect of which the person has made such arrangements” (section 6(1)(a), 2005 Act).
A similar provision applies in relation to the provision of sewerage to, or the disposal of sewage from, any eligible premises (section 6(3)(a), 2005 Act).

[8] In this context, “eligible premises” means premises which are (or are to be) “connected” to the public water supply or public sewerage system (section 27(1)(a)&(b), 2005 Act).

[9] Separately, the Water Industry Commission for Scotland, which is the statutory regulator, is empowered to issue directions to licensed providers such as the pursuer. Such directions have been issued in a document known as the “Market Code”. Paragraph 5.15 of the Market Code makes specific provision to determine the number of “supply points” at certain types of “eligible premises”. In broad terms, the Code deems that, within certain types of “eligible premises” (being eligible premises that are in multiple occupancy as at the “Go Live Date”), any “tenantable unit” within such premises is deemed to have a supply point for water and sewerage services, notwithstanding that there is no sub-meter measuring water usage by that unit; and that the charges applicable to any such unit may be calculated by reference to the rateable value of that unit.

[10] Having heard evidence and submissions at proof, I concluded

(i) that the premises occupied by the defender under his contractual licence are not “eligible premises” in terms of 2005 Act;

(ii) that the pursuer has not made “arrangements” with the defender, as the purported occupier of any eligible premises, for or in relation to the supply of water to, or the provision of sewerage services to, or the disposal of sewage from, the premises; and

(iii) that, on the evidence, it was not established by the pursuer that paragraph 5.15 of the Market Code applies in the present case.

[11] Accordingly, I granted absolvitor in favour of the defender. I gave an ex tempore judgement briefly explaining the basis of my decision. I issue this note in order to explain my reasoning more fully.

In our view this suports the contentions that have been made on this web site regarding Section 27 of the 2005 Act.

See these two articles:

It also mentions one or two other matters, which in our view are only ancillary to the main point: if you are NOT in an Eligible Premises as defined in the 2005 Act, then you do not have any liability to pay for Water Charges.

Noted: That if Scottish Water don't get round to putting in a meter to the Landlord's account in a building let out to tenants each NOT in an Eligible Premises, that in the view of any reasonable person, cannot make such premises eligible. It is just negligence and or idleness on Scottish Water's part.

Noted: The infrastructure records held by the four water companies who were amalgamated into Scottish Water are known to have been in some disarray. Meetings were held regarding document registration and control over many years:

East of Scotland: 1997 to 2002
West of Scotland: 1993 to 2002
Strathclyde: Unknown.
North of Scotland: 1993 to 2002