Nor any drop to drink

Velasquez Waterseller

This is potentially huge. There could be millions of pounds at stake and possibly many councils and housing associations affected. It might only mean a pound or so per tenant per week, but definitely 37,000 and potentially 375,000 tenants are involved, over periods of years.

Jones v London Borough of Southwark [2016] EWHC 457 (Ch)

Quite a lot of councils have agreements with water suppliers under which the council will collect water charges from their tenants, effectively as an addition to the rent. This case concerned a challenge to the nature and validity of Southwark’s agreement, at least before 2013.

We have seen such agreements raised before, for instance in London Borough of Southwark v Ofogba [2012] EWHC 1620 (QB), Lambeth LBC v Thomas (1997) 30 HLR 89 and Rochdale MBC v Dixon [2011] EWCA Civ 1173. The latter two cases concerned the vires of such agreements, which were taken to be ‘agency agreements’, while Ofogba raised a similar issue to this case, but was lost at County Court.

The key issue in this case was whether Southwark was acting as Thames Water’s agent in collecting water charges from their tenants, or whether Southwark was actually a ‘re-seller’ for the purposes of The Water Resale Order 2006. This is significant because the 2006 Order imposes maximum charges on re-sellers and allows only for modest administration charges.

Ms J had been a Southwark tenant since 1981 and paid the water rate to Southwark with her rent, as do some 37,000 tenants of unmetered Southwark properties. The rates vary, but are typically around £5 per week.

At issue was the period between 2000 and 2013. In 2013, following counsel’s advice in the wake of the Ofogba case, Thames Water and Southwark entered into a deed of clarification and amendment dated 23 July 2013. It was common ground that if effective, this deed would stop Southwark being a ‘re-seller’. The effectiveness of the deed was disputed, but as Thames Water were not a party to the present case, any decision on the validity of the deed was adjourned to enable Thames to be joined.

Key to the case were a 2000 Agreement between Southwark and Thames Water, and Thames Water’s ‘Charges Schemes’ between 2002 and 2010.

The charges schemes all contained a passage like:

“Person Chargeable

a) The person responsible for payment of charges under this scheme shall be the occupier of the relevant premises to which the supply is made except where some other person is liable by agreement with Thames Water.

b) Where there are two or more people occupying the relevant premises to which the supply is made, the occupiers shall be jointly and severally liable for the payment of the charges.

c) Where the relevant premises to which the supply is made is let on a tenancy of less than twelve months or licence, the owner of the premises shall be regarded as the occupier and be liable for charges except where some other person has paid the charges or is liable by agreement with Thames Water.”

All Southwark’s tenancies are weekly periodic, thus for less than 12 months. The Court held that while Southwark could not reasonably be considered to be an occupier:

I nonetheless take the view that a charges scheme can properly provide (as Thames Water’s charges schemes formerly did) for the owner of premises to be chargeable where they are “let on a tenancy of less than twelve months or licence”. In such a situation, the owner might be said to be a person “to whom the undertaker provides services or in relation to whom it carries out trade effluent functions” (within the meaning of section 142(1)(b) of the WIA) even if the occupier is also to be treated as receiving the services under section 144(1). Where that is so, it will, I think, be possible for a scheme to determine which of those to or in relation to whom services are being provided is to be responsible for the charges.

The significance is that Thames Water were charging Southwark as owner, and Southwark then charging its tenants. Effectively, a re-seller.

Then there was the 2000 Agreement. This was in terms as follows:

“1 Premises Affected
1.1 THIS Agreement covers all of the Premises where the water supply given by the Provider is not measured by a meter (‘the Unmeasured Premises’).
2 Liability For Charges
2.1 THE Customer shall pay for all of the Provider’s charges (‘the Charges’) in respect of the Services provided to the Unmeasured Premises.
2.2 THE Charges will be raised by applying the relevant tariffs (‘the Tariffs’) for the Services, less the allowances and reductions to which the Customer is entitled under Clause 3.
2.3 THE Tariffs will be those that are in force at the relevant time by virtue of inclusion in Charges Schemes made by the Provider under Section 143 of the [Water Industry Act 1991].
3. Allowances and Reductions
3.1 THE Tariffs will be reduced by 5% in recognition of the fact that in any given year a number of the Unmeasured Premises are likely to be unoccupied for a period of less than three months.
3.2 FOLLOWING the deductions under Clause 3.1 the balance of the Charges will be reduced by a further 18% by way of the Customer’s commission.”

And at clause 4.6: “THE Customer shall send the Provider an invoice … in respect of any Value Added Tax that is payable in respect of the Customer’s commission referred to in Clause 3.2.”

So Southwark paid Thames Water an overall sum for unmeasured properties (apparently quarterly), but with a voids rebate of 5% and a ‘commission’ of 18% deducted from the amount payable by Southwark. Southwark then demanded apportioned and weekly water rate payments from their tenants, in the full amount of the Thames Water listed charge for that property.

Southwark argued vigorously that this was an agency agreement, that Southwark were, in effect, simply doing debt collection on behalf of Thames Water. However, they did admit that the 5% voids rebate (actual voids currently about 1.35%) and the 18% commission, supposedly for administration and the risk of non-payment, were “an important source of funding for Southwark”, as Southwark got to keep any extra raised from direct demands on their tenants.

The Court held, after an excursus on contractual interpretation after Arnold v Britton, and on the findings in Lambeth v Thomas and Rochdale v Dixon, that this was not an agency agreement and that Southwark were indeed ‘the customer’. The list of reasons:

i) Clause 2.1 of the 2000 Agreement provided for Southwark to pay for “all of the Provider’s charges … in respect of the Services provided to the Unmeasured Premises”, reflecting a recital to the effect that Southwark would “pay for the Services in respect of the Premises”. It is common ground that Southwark was thereby obliged to pay “the Provider’s charges” regardless of what (if any) sums it received from its tenants. The alleged principal (Thames Water) was to have no interest in moneys collected by its alleged agent (Southwark);
ii) While calculated by reference to tariffs contained in charges schemes (see clauses 2.3 and 2.3 of the 2000 Agreement), the sums that Southwark had to pay to Thames Water did not correspond to the total of the sums that tenants were required to pay. What was due from Southwark was a net sum, after “allowances and reductions” had been deducted;

iii) A linked point is that the 2000 Agreement made no provision for Southwark to account to Thames Water. That is unsurprising since the idea was evidently that Southwark should have an unconditional obligation to pay “the Provider’s charges” and no liability to make any further payment. The absence of an accounting obligation is, however, significant. “[T]he duty to account is a typical feature of the agent’s position” (Bowstead & Reynolds on Agency, 20th ed., at paragraph 1-032, citing Michelin Tyre Co Ltd v Macfarlane (Glasgow) Ltd [1917] 2 SLT 205);

iv) In other respects, too, the usual incidents of agency were missing from the 2000 Agreement. There was, for example, no provision for Thames Water to exercise any control over Southwark (compare Bowstead & Reynolds, at paragraph 1-017) or for Southwark to exercise diligence, care or skill (compare Bowstead & Reynolds, at paragraphs 1-016 and 6-017);

v) The 2000 Agreement also omitted any reference to Thames Water giving Southwark authority to collect money from the tenants. Yet it is of the essence of agency that the agent should be able to affect the principal’s legal relations with third parties (see Bowstead & Reynolds, at paragraphs 1-001, 1-003 and 1-004);

vi) If I am right in thinking that Thames Water’s charges schemes imposed liability for water and service charges on Southwark between 1 April 2002 and 31 March 2010 (as to which, see paragraphs 30-37 above), there can have been no possibility of Thames Water authorising Southwark to collect such charges from its tenants on Thames Water’s behalf during this period. The tenants would not have owed any money to Thames Water;

vii) The 2000 Agreement referred to Southwark as “the Customer”. Although I doubt whether the parties should be taken to have had in mind the definition of “customer” to be found in section 219 of the WIA, the fact remains that an agent would not generally be termed a “customer”;

viii) Mr Bourne (for Southwark) noted that an unconventional meaning can be attributed to a word in a contract if the parties habitually used the word in that sense. While, however, there is evidence that the parties sometimes used the word “customer” loosely, Southwark has not come close to demonstrating that “customer” was habitually used in a particular way that could explain a true agent being so described in a formal document;

ix) The 2000 Agreement’s use of “Customer” is counterbalanced by its use of “commission”. However, “the mere use of labels … will not be decisive” (see paragraph 42 of Rix LJ’s judgment in Rochdale) and, unlike normal commission, this “commission” did not depend on any performance or the happening of any event. In practice, it simply served to reduce what Southwark had to pay Thames Water;

x) That leads to the next point: that the mere fact that the parties may have referred to their relationship as one of “agency” and to Southwark collecting water and sewerage charges “on behalf of” Thames Water is of no real importance. “[T]here is no magic in the word ‘agency’. It is often used in commercial matters where the real relationship is that of vendor and purchaser” (Ex p White, re Neville (1871) LR 6 Ch App 397, at 399; see too Bowstead & Reynolds, at paragraph 1-032);

xi) In the Lambeth case, the focus appears to have been on whether Lambeth was acting “on behalf of” the water company for the purposes of paragraph 20 of schedule 1 to the Water Consolidation (Consequential Provisions) Act 1991 rather than on whether a relationship of agency in the strict sense existed. In any case, “it is not entirely clear what issues were taken” (see paragraph 48 of Rix LJ’s judgment in Rochdale);

xii) How the parties have conducted themselves since entering into the 2000 Agreement can be of little or no significance (see e.g. Lewison, “The Interpretation of Contracts”, 6th ed., at 179-189), but, in case it matters, it can be observed that the parties’ behaviour has not obviously been entirely consistent with an agency relationship. By way of example, Southwark’s charges to its tenants have not accorded with Thames Water’s tariffs in every respect (e.g. as regards charging for garages); Southwark has considered itself to be entitled to make decisions without consulting Thames Water as to what, if any, steps it should take to recover charges from tenants; and Thames Water has sent bills to Southwark referring to its “Commitment to our customers” and “several Codes of Practice including a guaranteed standards scheme” and none to the tenants; and

xiii) Although the 2006 order may make a sale and re-sale arrangement disadvantageous to Southwark, no Water Resale Order had yet been made at the date of the 2000 Agreement.

So, that was that on the re-seller issue. At least for the period 2000-2013 Southwark were found to be a re-seller of water and sewerage services.

The significance of this, to return to the 2006 Order (and similar terms in a 2001 order), was that

paragraph 6(2)(b)(i) of the 2006 Order focuses on the “amount payable by the Re-seller to the Relevant Undertaker”. Under the 2000 Agreement, Southwark had to pay Thames Water only the net sum obtained by “applying the relevant tariffs … for the Services, less the allowances and reductions to which the Customer is entitled” (viz. the “commission” and “voids allowance”) (see clause 2.2). The tariffs were “reduced by 5%” (see clause 3.1) and “the balance of the Charges” was “reduced by a further 18%” (see clause 3.2). However the parties may have viewed the “commission”, the reality is that it simply served to reduce the amount that Southwark had to pay. It would be still more anomalous if the “voids allowance” were disregarded since that would mean that “voids” would be ignored when determining the “amount payable” yet still taken into account when considering how many properties the “amount payable” was to be shared between.

In the circumstances, it seems to me that, unless and until the 2000 Agreement was varied by the 2013 Deed, Southwark was charging Miss Jones (and other tenants with unmetered water supplies) more than was permissible under the 2006 Order.

And the conclusion:

i) Unless and until the 2013 Deed took effect, the relationship between Thames Water and Southwark was not one of principal and agent but involved Southwark buying water and sewerage services from Thames Water and re-selling them to its tenants;

ii) As a result, the 2006 Order applied and served to limit what tenants could be charged; and

iii) The amounts that Southwark charged Miss Jones exceeded the “maximum charge” allowed under the 2006 Order.

Comment

Oh my. Oh my, oh my.

The first thing is that an appeal is inevitable. The further hearing on the validity of the 2013 deed of amendment can wait.  It may only concern a pound or so a week per tenant, but that is 37,000 tenants for Southwark alone. I’d guess that Thames Water may want to intervene in any appeal too, given that their evidence was of similar arrangements with 69 councils and housing associations, covering some 375,000 properties. This is big money. Every one of those councils and housing associations had better be checking their agreements with Thames Water right now…

Second the water rates were levied as rent. In many Southwark rent arrears cases, this will form part of the arrears, in some cases all of the arrears (as housing benefit doesn’t cover the water rates element). So, a prospect for a counterclaim for overpaid/unlawfully levied water charges for at least 2010-2013 (given a 6 years limitation)? Or maybe an argument that the arrears claimed are uncertain? At first glance, this could potentially impact every rent arrears possession case Southwark has going, against tenants charged the water rates. (And of course, there are the other 68 councils and housing associations with so far  unexamined agreements).

How much the ‘overcharge’ was is going to have to be worked out. A certain level of administration charge by a reseller is permitted – according to Ofwat £5 per year, per property – but there will be argument about voids and the actual void rate, amongst other things.

Third, although Southwark will obviously not do anything pending an appeal, what will they do if an appeal fails? The immediate conclusion has to be that a repayment of some sums to the affected tenants would be necessary.

(And lastly and parenthetically, how I wish my case on estate heating charges and the Unfair Terms in Consumer Contracts regulations had not been settled)

The picture, by the way, is by Velaquez, the ‘Waterseller of Seville’.

About Giles Peaker

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London.
You can find him on Linkedin and on
Twitter. Known as NL round these parts, and still is Nearly Legal on Google +.

Posted in Housing law - All, secure-tenancy and tagged .

150 Comments

  1. So, if I have this right Giles, the Rochdale and Arnold cases were decided on different legal issues but they are per incuriam the 2006 Order?;

    If the water board first charges the undertaker then this is recovered as rent through the tenancy agreement, this invokes the 2006 Order and thus the undertaker is a ‘re-seller’ and not an agent as a matter of law;

    If the above applies, any charges in excess of those permitted under the Order are recoverable – para. 10 (1) and (2) of the Order and or as a primary statutory right under Section 150 (5) (a) and (b) of the WIA?.

    • That appears to be it, yes. Though it is not just ‘first charging the undertaker’ per se – it was the specific terms of the 2000 Agreement and the Thames Water charging schemes between 2002 and 2010 – the factors listed at para 52 of the judgment.

      On recovery 10. of the 2006 Order looks the most straightforward. However, I suppose that 6 year limitation applies, section 9 Limitation Act.

  2. See Hammersmith and Fulham water charges See local government lawyer council water rates, see also local government ombudsman Hammersmith and Fulham water rates charges . See also Surrey comet council water rates and for good measure disconnection of water as a default sanction was removed in 1999 for a person to state that they are collecting on behalf of private water companies and using the threat of eviction to enforce payment of the demand would do well to consider if they are in breach of section 21 of the theft act 1968.

  3. Is this the right one frank?

    ‘Sometimes the landlord is the customer liable to pay charges to the water company. The charges set by such a landlord to tenants are service charges that are in the first place a matter between landlord and tenant. Ofwat has made the Water Resale Order 2001, under section 150 of the Water Industry Act, limiting the charges that may be made for reselling water or sewerage services provided originally by a water company. Ofwat can advise but has no powers to determine disputes between landlords and tenants.’

    http://www.publications.parliament.uk/pa/cm200102/cmhansrd/vo011105/text/11105w10.htm#11105w10.html_sbhd4

  4. Yes, I agree. No ambiguity – no need to refer to hansard, well, for practitioner purposes anyway….

    None the less, it is shocking to think how such an important provision could have been overlooked, particularly given that many of the ‘payment schemes’ were introduced around the same time as the 2006 Order. Whilst I know many of them are done in good faith, it might have been better to have avoided introducing them from the start. I have heard similar bi-lateral ‘agreements’ being pushed onto tenants with ‘preferred’ energy suppliers, again, whilst in those cases the Electricity and Gas Acts will step in, it is not something the LA’s and HA’s should be meddling in for income purposes.

  5. I have a letter here from the secretary of state department of DEFRA stating that in the court of appeal Rochdale v Dixon Rochdale Council are acting as a reseller I also have a copy of the true contract between Rochdale Council and United Utilities it is quite a bit different from the draft presented to the courts. and the missing piece of my eleven year jigsaw just fell in place

  6. I’d be interested in viewing those frank. Are you aware of any similar / same agreement between “RBH” and “UU”?

  7. I have to confess that I struggle with the disctinction between Rochdale and Lambeth, save for one very crucial factor: if it is right that Southwark were liable to pay Thames Water the water charge for the majority of the ten year period, how on earth can they claim that they were acting as Thames Water’s agents? They must have been a re-seller.

    As for the other attempts to distinguish Rochdale, wouldn’t it have been easier to simply say no one took the 2006 Water Resale Order point? For all intents and purposes the arrangements are very similar; they do exactly the same thing.

    Also, presumably as s.150 gives Ms Jones and other tenants an express statutory right to claim back the overpayment, Southwark won’t even be able to rely on the usual restitutionary defences that I had originally thought would be available to it.

    This is a real problem for them. Especially as they won’t be able to raise the rents to meet the shortfall in the HRA (as per clause 21 Welfare and Work Bill which requires them to reduce rents by 1%).

    • S. Yes, this was why I said Rochdale was about vires. The reseller issue was not raised on appeal (and not clear if put that way at first instance). And the terms of the Agreement seem rather different.

      Both s.150 and s.10 of the 2006 order cover repayment.

  8. See water industry Scotland act 2002 section 30 water resale section 37 collection by L.A schedule 4 recovery method . See The water and sewerage services to dwellings collection of unmetered charges by Local Authority Scotland order 2014. section 11 WIA 1991 section 150 water resale. Collection by LA ? Recovery method ? accounting? miss Jones says Southwark are water reseller under section 150 WIA 1991 Southwark LA say we are collecting for Thames Water under section ?of the WIA 1991

  9. Sorry Mr Peaker i was simply pointing it out as a comparator section 38 of the local government act 1974 having been repealed by the water act 1989 i am trying to find where it has resurfaced otherwise your LA could demand that you pay them your water charges after all we are all consumers regardless of property status. its just i dont like being treated differently than any other resident of the borough unless there is a valid reason .Southwark are demanding Miss Jones money but under what document and under what section of the water act 1991 the answer is under the tenancy agreement and section 150 so the landlord answers to Thames water and miss Jones answers to the landlord and the landlord adheres to the water resale order or the tenant sues

  10. “….its just i dont like being treated differently than any other resident of the borough unless there is a valid reason”

    I probably don’t suspect that you were Frank, I can hazard a guess that there may have been others affected by this where the court would not have considered it reasonable to grant a possession order had the ‘rent’ arrears figures been correct. Given that (if upon further examination) they were not the correct figures, then the rest may speak for itself.

    In your case, if indeed you are the same Mr Dixon, in your shoes I would seek advice from a solicitor given the Southwark judgment. It is probably prudent to note the case of Young v. Bristol Aeroplane Co. Ltd. [1944] 1 K.B. 718 which gives the court jurisdiction in cases concerning statutory law or rules not having been presented before the court.

    https://en.wikipedia.org/wiki/Young_v_Bristol_Aeroplane_Co_Ltd

  11. Thank you .I am on with the contract for you it was provided to me through the councils external auditor i believe i need permission to use it for other purposes. Rochdale council was charged 19.082 pounds to deal with my complaint he went along with Lambeth and Rochdale i am now back on to him I actually meant by being treated differently was as a consumer of goods and services regarding my next door neighbour who owns his own home. I feel certain as a deemed customer of UU the same as him all the threatening demand letters and phone calls possession orders and evictions 1000 in seven years 2005-12 no reported figures since . Also on a freezing cold January morning at 11-oclock a man suffering from Crohn’s disease was due to be evicted by the bailiff and the housing officer for an amount of 584-pounds unpaid so called rent arrears, most likely not knowing how he was gong to cope with his illness without water and homeless, when they broke in he had hung himself.if UU want all this in their name due to my judgement then they are being very foolish My water charges have just arrived stating water charges are collected on behalf of UU and are payable by ALL tenants. Given all the above and i,m deemed to be trading with UU and under the Unfair consumer trading practices reg 2008 lets see if they agree with Rochdales judgement

  12. The date the poor man took his own life was Jan 2011 my appeal date was June 2011 and the people that knew this were at there. If, as is normal,payment of the water charge to the authority is either treated as and considered to be part of the rent,or is otherwise a requirement of the tenancy, failure to pay the water charge element of the rent gives rise to a ground for possession, which means that it contributes to (or in an extreme case,could at least in theory, even be solely causal of) the possibility of eviction,a possibility that does not arise where the debt is directly owed to the water conpany. (In this connection it maybe noted that payments are not differentiated, otherwise than in the annual notice of rent . At least Rochdale Council the LA obtained the judgement to carry on regardless.

  13. I’m assuming that if the principle (Thames Water) uses an agent (Southwark L.A) to collect on its behalf monies due to it for services provided to the premises, that the occupier being the user of the services, would also be the customer of the principle,and the book debtor ,on whom liability to pay would fall as the occupier as envisaged by section 144 WIA 1991. If however the occupier is not the customer of Thames Water and the liability to pay the charges due then no agency exists. Please now see Thames Water Scrutiny Southwark Council page two . Sorry i can’t post a link . To be continued .

  14. The allowances and reductions are Thames Waters avoidable retail costs, it is retailing to one customer( Southwark LA) as opposed to thirty seven thousand individual customers (the occupiers)

  15. Is it not possible that if you agree to vary the existing agreements between a HA/Council and the water provider to make clear that it is agency agreement, that agreement could operate retrospectively? Therefore, arrears would not be an issue.

    • No because that is akin to retrospectively applying a contract which doesn’t exist. In that sense what was was, and was is is, remembering that of course it isn’t just what the parties say the agreement status has (i.e. an agency agreement) but also the cooperation between the parties i.e. what the parties do. I contrast that with say, an employment relationship where one party says a person is self employment but having construed the relationship the party isn’t really self employed but a ‘worker’ despite the labelling given to the relationship.

  16. I have read the Southwark news article, was the forced disclosed agreement the same 2000 agreement put before the court for adjudication?. If so that is a contract of sale. To confirm this all that needs to be done is to insert the word seller for provider and buyer for the word customer in the clauses stated. and in clause 3.2 for the word commission insert the word undertaking. Southwark LA(buyer) has given an undertaking to Thames Water Utilities Ltd(seller) that it will pay the charges due on the premises contained in the agreement for the charging period of 2000-01 at the negotiated reduced price of the market value to Thames Water,and on payment terms agreed by the parties. I am certain that if Southwark LA default on payments Thames Water will sue. Now i ask is that to collect or is it to pay. regarding the VAT issue raised at clause 4.6 that is simply the seller asking the buyer if any of the water is being used at the premises for purposes that could be eligible for VAT(a laundrette or a hairdressers and beauty parlour) please see HMRC water sewerage charges. After the seller has raised his charges under section 143 WIA 1991 he provides the water he does not police the buyer he has achieved his financial intention. To reply to the comment made by Cllr Livingstone in the press i would simply say, go on to the shop floor for one month and live in one of the void properties,pay the rent as is expected of all tenants,and pay the water charges as is expected of all the users,and then put your wit to the test . From the first time you turn on the tap see how long it takes to answer yourself the following questions (1) Am i buying the water i am using from Thames Water or am i buying it from Southwark LA? could any one else answer the question.

  17. Just going back to the VAT issue at clause 4.6 the VAT would be payable on the price paid if charges on the use of water at individual premises are due.

  18. Follow the money and treat the audit trail as the road to the truth. At para 10 of the judgement is an invoice for Feb 2005 the figures are for one instalment comprising of ten. So before the court are a 15 year old agreement and a 10 year old invoice. Why was the current invoices not produced, the payments to Thames Water Utilities Ltd (vendor), these can be found at Southwark Council open data council spends. The payments for 2015-16 are ten instalments from April to Jan one payment of £ 1,316,565,36. followed by nine of £1,307,430,61. That is over 13m pounds payments, for previous years can be traced back to August 2010. and payments will have been made by the person who registered as the bill payer in 1989 at privatisation. now where is that agreement?. That is account of expenditure where is the account of income?. Are the payments gross or nett of allowances and deductions. The next payment to Thames will be about the 7th April with a rise of 3% that is before any monies have been extracted from users in the premises. The LAs section 151 officer should be looking into the authorisation of the next payment along with the head of paid services and borough solicitor. It would appear that the agreement is a commercial venture by Southwark LA as opposed to water resale or a collecting agency agreement. Now how it is supposed to work as opposed to actually working becomes clear.

    • Frank – the actual money involved is neither here nor there. it is the nature of the agreement, pure and simple.

      Payments to Thames Water are less the allowed deductions in the agreement, for ‘voids’ and for ‘admin’ – total is 23%. It is that discount, as opposed to the £5 per household per week allowed under the reseller order, that is the ‘profit’. Southwark paid it into the Housing Revenue account. They have publicly valued it at c £2,300,000. Working on a rough average of £45 per household per year, that looks about right.

      The position after 2013 has yet to be decided by the court, which is to decide on the validity of the amended agreement of that year.

  19. The water resale order , the amount for admin allowed is £5 per year for unmetered premises. 37.000 at £5 -£185.000

  20. Frank, I’ve now got a copy of the letter you referred to (albeit redacted of any other personal information) from the DEFRA confirming, in it’s opinion, RBH was acting as a reseller during the CA case, that is quite persuasive.

    As far as I can understand at the moment, if the position remains the same to date, they may still be acting the same.

  21. I’ve not done much digging to date, but Giles, are you aware of any prosecutions under the LTA where said landlord refuses to provide information?

  22. Where a tenant has received a summary of the service charges relating to the tenancy (such as the water charges) but upon request, the landlord refuses to provide a copy of, or an inspection of, documents as to how such charges have been calculated and any agreements which cover the charge under s.22 LTA 1985, thus failure to do so being a summary offence under s.23?

    • Nathan. First, it would have to be requested. Second, Local Authorities are exempt from prosecution (though not housing associations).

  23. Thanks Giles, I suppose in the end, that still captures most as most are probably now HA’s or non local authority.

    • But also trivially easy to satisfy. Could just hand over Water company’s assessment for that property. That would be all s.21 & 22 would require.

  24. I suppose in the end of the day, the best route to disclosure might have to be the usual civil process then

  25. Nathan i think you will find that the person from DEFRA says Rochdale council is acting as a water reseller in the agreement. My issues have always been with RMBC. RBH was only the ALMO sending out the bag men and women chasing a debt owed to United Utilities by Rochdale council as a consequence of its actions not those of RBH. If you like the scheme introduced in 2005 between United Utilities and RMBC .The same as Southwark only they started their scheme in 1989. Rochdale council agreed to purchase the water and sewerage services from UU value £3.6m at a knock down price of £2.9m. The 20% discount -3% for voids 5% off the total charges and 12% UU avoidable costs of collection issues. leaving RMBC with a profit margin of £700.000. RMBC billing the occupiers the same as if UU billed them. it seems Southwark are doing the same.,and the intention is to profit However you twist the above the lable of collecting on behalf of will never stick. Nor will water resale. Neither are the nature of the agreement. At clause 16.1 of my contract not put before the courts it states NATURE OF AGREEMENT-Not used I would now ask the question Was RMBC the claimant for my money as the vendor or transferee to myself and other occupiers aware of the true nature of the agreement between itself and UU. Nathan see para 37 Rochdale v Dixon. Post when you have read , I will then post the legislation that applies to Southwark from 1989 to date.

  26. At para 39 R v Dixon the three who else questions posed by the judge can now be answered by saying Rochdale/,and at para 50 Rochdale do somehow attempt to earn the charges concered .and at para 38 UU have dropped out of the picture,but in the case of Southwark Thames water never stepped into the frame.

    • Frank & Nathan

      Might I suggest that doing your working out of your case in public on this site is maybe not the best way to go about things?

  27. Frank, yes, I agree in your case it was still RMBC who were liable before RBH acquired the housing stock a few years ago. If that was the true nature of the agreement then it seems that all you need to do is calculate what you should have paid as a pose to what they demanded and what was included in the claim for possession. It is a shame that the legal issues were not discovered at the time you really needed them.

  28. Point taken Mr Peaker. If yourself and Nathan have a little spare time over the weekend, could you read, Water Affordability in England and Wales by Snell and Bradshaw. It shows the utter nonsense of treating water debt as rent arrears,also it would not be a bad thing for any councillors, council officers, or anyone in the legal profession from the bottom to the top, to bear the thing said in the report before serving NOSPs or granting suspended possession orders. Water inaffordability will never be solved by threatening eviction., nor is it confined to social housing. Pages 19-20-21 sum it up for me.I will learn to post a link Mr Peaker. If a cant pay, cant pay the water company, then the cant pay, cant pay the party thats paid the water company. The mind boggles

  29. Wow, that is a substantial figure. I have often said that I have thought at least, that some of these schemes
    are on a good faith basis, I am beginning to think that some of them may not be not withstanding the issues of
    illegality.

  30. Sorry about the mistakes. I am drained with these people, when they put me in court in 2010 they destroyed my credit rating,plus now after 44 years in my home i have lost my right to buy over a disputed water debt. 70% discount i could have bought it for £16.500. but i will win in the end.

  31. I must have messed up sorry. I have just been informed that Rochdale v Dixon has been cited in the United Kingdom supreme court in the case of Plevin v Paragon personal Finance 12th November 2014 para 30. I dont know if the Southwark judgement alters anything or not. in Rochdale.what i do know is that in all cases the bill should just be simply sent to the occupier, failing that a payment card for rent and a payment card for water services need to be issued. i am sure people would then take care of the rent first., and then the water. Council tenants do pay water bills in the lLAs that dont implement this scheme.and if they dont the water company apply for a CCJ order. and whatever follows from that. but it will never result in adults and children being made homeless . i need to read Pevin.

  32. Rochdale Council are still the customer of UU even though RBH took over the housing stock in 2012. The council could still send their demand(bill) to me direct but choose to send it through RBH. If i may i will post under Water under the bridge Nearly legal. so not to interfere with Southwark Thank you for the link to plevin.

  33. c) Where the relevant premises to which the supply is made is let on a tenancy of less than twelve months or licence, the owner of the premises shall be regarded as the occupier and be liable for charges except where some other person has paid the charges or is liable by agreement with Thames Water

    LAG article on Water (May 2016 p19, last paragraph) & cases where tenants are billed by the water co.

    In cases where a non 12 month tenant (e.g. a weekly tenant) has always paid the Thames and not the Landlord for water, the suggestion is that for the period 1/4/02 to 31/03/2010 the tenant can recover the money paid to Thames by deducting it from money now due (as limitation does not apply to defences).

    “the tenants have claims for restitution of the entire amount paid to the undertaker in error”

    I have now been looking at that suggestion more closely and in consequence I do not think that conclusion would be necessarily be correct.

    This is because there is an exception to the person chargeable being the Landlord (owner).

    “except where some other person has paid the charges or is liable by agreement with Thames Water”

    In this case some other person has paid the charges i.e. the tenant.

    Have I missed something?

  34. Southwark Council are now going to refund over 28 million pounds from 2001-12 to current and former consumers. The trouble with council officers is that they do not listen to what members of the public say. Having now spent many weeks reading the law on the supply of water and sewerage services as opposed to housing law, if i was in their shoes i would not act in haste., it appears that the demand is lawful or unlawful no in between.The question to ask is. Is the agreement between Thames and Southwark legal.

  35. In order to clarify my position with regard to water charges applied to Council House tenants in Rochdale plus the same status when these tenants transferred to Rochdale Boroughwide Housing [RBH]; I was the recipient of the letter from Dept for Environment Food & Rural Affairs dated 11 Feb 2013 – in reply to my letter. Hence I was the Councillor who took action on behalf of Frank Dixon when he challenged Rochdale Council about the legality of their water contract.
    It is useful to point out that the Water Contract is still with Rochdale Council today albeit they do not easily admit that – but this can be confirmed via United Utilities the Water company if you speak to the “right person”..
    Most will be aware that residents suffering from genuine inaffordability with respect to water charges can only seek financial assistance from a water company – who hold a Trust Account for that purpose. [No government department is allowed to give money to anyone for their water bill.]
    Alas, when a LA pays the water bill, as is the case in Rochdale, then the water bill is already paid = no debt, so a tenant is effectively barred from applying for help – even if they had a reference number with the water company as a customer – which they do not. Since over 80% of tenants are on Housing Benefit (Rochdale has many impoverished tenants) it means that thousands of tenants have been evicted for non-payment of their water charge – however, this charge has been merged with the rent account so it goes to Court as rent arrears!
    Having known of a mother with a baby being hounded for a “rent” payment and left with just £7.00 from a Tuesday to the following Friday to feed herself and her baby, it does rather bring it home to me that we are not talking about people on drugs and or alcohol who have been made victims.
    The chap who hanged himself just prior to officials calling to evict him had been a hard working lorry driver all his life then he became ill and was incontinent. Had he, like hundreds of others, been able to acquire aid from a Trust Fund OR been put on the published lower rates enjoyed by anyone whose account was with a water company – affording the water charges would not have been a problem to him as with thousands of others. People in high rise flats, for instance, are entitled to a discount too as they cannot have a water meter: yet not automatically in Rochdale.
    The injustices levied upon ex-council house tenants in Rochdale is profound.
    Finally, I wish to point out that the Appeal Case re Frank Dixon, which I attended, was unable to raise the issues concerning the legality of the Water Contract as these had not been included in the legal bundle used by the QC who represented Rochdale Council.

  36. We currently have a case in which we act for a tenant of RBH in a Defence and Counterclaim to a rental possession action.

    United Utilities have been joined into the proceedings as an Intervener and the case has been transferred to the High Court Chancery Division for the trial of a preliminary issue namely ;

    “Is the Claimant a “reseller “ within the meaning of the Water Resale Order 2006 by reason of the agreements (s) entered into between the Claimant and the Intervener “

    It is anticipated that the issue will be determined in early 2017 subject to any appeal.

    • The trial of the preliminary issue namely ;

      “Is the Claimant a “reseller “ within the meaning of the Water Resale Order 2006 by reason of the agreement(s) entered into between the Claimant and the Intervener “

      This has now been listed for a 2 day hearing in the High Court Chancery Division in Manchester on 8 and 9 February 2017

  37. The following is a reply from United Utilities to the question i asked, Who am i the customer of ? Dear Mr Dixon. Thank you for your telephone call on the 9th of January 2007, regarding payment of water services charges at the above address. Please allow me to explain the situation. Rochdale Council has an agreement with United Utilities to pay for water services charges at their properties,and the council then has to recover these costs from the tenants of the properties. Therefore, it is your responsibility as a tenant, to pay Rochdale Council for water services charges at the above address. As this is a third party dispute, United Utilities cannot become involved and you will need to contact Rochdale Council directly to resolve this matter. I hope this is satisfactory for you.

  38. What is the situation in a case where someone is liable under in use and occupation, rather than a weekly periodic tenant?

  39. Might Water Company and Water and Sewerage Company ‘arrangements’ in areas where two separate companies provide water and sewerage services to shared customers, but only one company bills customers, also breach the Water Resale orders?

  40. 37 Councils are undergoing a ‘legal clarification’ through LGA, do you have a list of those Councils ?

  41. That’s interesting Giles, because LGA have been talking to me, even though they don’t consider they need to respond to FOIR. My first asked them what advice they are giving to the 37, they answered none to date. My second asked for the list of the 37 involved in so-called ‘legal clarification’, no answer to date.
    Notwithstanding that, they claim ‘legal professional privilege’ and that no ‘powerful countervailing interest’ exists. Clarification (ie seeking loopholes) is not sub-judecae and water company customers, albeit second-hand, being overcharged with their sanction (they provide the factors to apply to RV) is powerful enough for me.
    I have been involved with this most of this year and have now formed Southend Water Action Group to continue the fight, since I am probably about to be sacked as Block Voice. We need to crowdfund to raise cash for legal advice and a good solicitor who knows the case(s). Any offers ?

  42. One prudent thing you might do is to make a freedom of information request to your landlord for copies of the agreements with the water companies.. When you get it, it will probably be a redacted version but you will be able to compare it with the LBSouthwark agreement (looked at in report of the judgment in the case of Jones).

    At the same time a request should be made using the resale order provision for them to explain how they calculated your water charge. There is a penalty if they don’t provide this within 28 days.

    You can use the redacted agreement to see if it matches the Southwark agreement and would be a resale and not agency AND to see from the redactions if discounts exist even tho you don’t know how much

    the response to the transparent request will tell you if they did the calculation without making any discount
    .
    The Water Resale Order 2006
    Transparent charging
    9. (1) The Re-seller shall inform the Purchaser of the charges which are payable in respect of any supply or service to which this Order relates and how that charge has been calculated or estimated.
    (2) If the Purchaser so requests in writing, the Re-seller shall furnish the Purchaser in writing with the following information-
    (a) All information used by the Re-seller to calculate the charges referred to in subparagraph (1) (including, but not limited to, the charges payable by the Re-seller to the Relevant Undertaker or licensed water supplier in respect of the supply or supplies of water or sewerage services supplied or provided, directly or indirectly, by the Relevant Undertaker by means of which the Re-seller supplies or provides services to the
    Purchaser); and
    (b) The method by which the Re-seller has calculated the charges referred to in sub-paragraph (1).
    (3) Where –
    (a) the Purchaser makes a request under sub-paragraph (2); and
    (b) the Re-seller fails to furnish the Purchaser in writing with the information required by sub-paragraph (2) within four weeks from the date of the request, the charge recoverable by the Re-seller from the Purchaser shall not exceed one half of the average bill for a water supply (and, if appropriate, sewerage service) payable by the Relevant Undertaker’s own domestic customers, as from time to time published by the Director (“the reduced charge”).
    (4) The reduced charge shall be adjusted pro rata in proportion to the period to which the Re-seller’s bill to the Purchaser relates.

    (5) The Re-seller may recover from the Purchaser no more than the reduced charge in respect of the period between the last date on which the Re-seller is required to furnish the information required by sub-paragraph (2) and the date on which the Re-seller does in fact furnish the Purchaser with that information.

    In passing, I have an outstanding application to the information commissioner challenging a redaction

    • This is interesting, because while I already have the calculation, I find that it depends on factors provided by the water companies to be applied to RV, making then intrinsic in the overcharge. Not sure the agreement would help, didn’t Jones v. Southwark outlaw such in favour of the Council being re-seller ?
      I could really use some opinion on the ‘legal clarification’ being used as a block to discussion and some wording as a sledgehammer to crack it. Also, has anyone succesfully challenged the Companies on those factors, if they were lowered the calculation would balance with other charging methods. I consider my evidence is stacking up and the Council (Southend) is running scared otherwise they wouldn’t be hiding behind same.

    • PS. I also have a section 50 challenge through ICO for bills from the Companies on grounds of reasonable to so request.

  43. Alan see Surbiton resident wins water bills battle against Kingston Council. This is another LA that would not reveal its agreement with the private water company. Would that be to prevent other overcharging issues coming to light,as in Lambeth lost in the mists of time. Regarding the Charges when metering is not possible maybe Southwark have been reselling to some consumers on a higher tariff Which would require a refund and then a refund of the correct amount. Why was the Surbiton resident paid by the Council? because she claimed it from the person who demanded her money.

    • Thank you Frank,

      More cases come to light by the minute !

      I am still concerned with the water companies collusion in the overcharge, they provide the factors applied to RV by councils, they must accept some responsibility even if the actual cash is retained (and considered as Revenue) by the councils.

      I have just come across the Walker Review 2011 which stated ‘The way we currently charge for (water) services is creaking at the seams. It also means …….. the current RV system is unwinding so that those who remain unmetered ……. already have higher bills’.

      Alan, SWAG

  44. The Walker Reviews are June 2009 Interim and December 2009 final Alan are you aware of both.

  45. Frank

    Walker Review is predominantly aimed at reducing wastage, the excerpt and accompanying email from CCWater suits our case best. They tagged it as published December 2011.

    Thanks.

  46. Apparently Thames Water Utilities are ceasing their collecting agreement with Southwark from April 2017,if indeed a collection agreement has existed from 2013. Has the hearing of the validity of the 2013 deed of amendment taken place,the amendment having to show a variation of section 52 5b to 52 5a of the Water Industry Act 1991,the occupier becoming liable for the charges from 2013,and a variation of tenancy agreement resulting in water charges ceasing to be an obligation of the tenancy. If you like nature of the agreement .Payment or Collection

    • The validity of the 2013 amendments to the agreement has not been determined yet (and I suspect it may have settled). There has been no variation of tenancy agreements yet, but I would anticipate this would be done for April 2017, with the annual rent changes.

      Assuming that the 2013 variation did succeed in establishing an agency agreement, rather than a reseller agreement, then of course the water company can end it. Indeed, I understand that Thames are ending all of the ‘agreements’ with councils and housing associations – some 69 of them.

  47. The above variation negates section 150 water act 1991 the owner being the customer to engages section 144 the occupier becoming the customer of the water company,it is for the owner to end the agreement to pay the charges not the water company, and not the occupier.

  48. As you say above Mr peaker,assuming that the 2013 did succeed in establishing an agency agreement,rather than a reseller agreement,what the two parties the Water Authority the first Authority(the principle).The Local Authority the second authority(the agent) must do is re-enact what Parliament repealed in 1989 The Water act 1989 repealing Schedule 6 Part 1 section 5 2(c). Water Act 1973.Water Authorities being abolished at privatization 1989,local authorities no longer having the power to perform functions on behalf of private profit making companies. No agency Mr peaker, Water Resale by Local Authorities in the Thames Water charging supply area.

    • Sorry Frank, I don’t think that is right. It would be perfectly possible for a local authority to have an agency role, under the general power of competence, if nothing else.

      Whether it was in fact an agency role is another question entirely. As I said, the 2013 change does not yet appear to have been ruled upon by the court. And Thames Water is terminating all the agreements anyway (which it most assuredly can, unless prevented by specific contractual terms in the agreements).

    • Gentlemen,

      With the demise of all those Thames agreements and the strong implication in Jones v. Southwark that such are not acceptable, does this not add strength to the obvious, namely that in practical terms the Councils are reselling middle men ?

      The following from Defra and my response to them :-

      All resellers are covered by Ofwat’s Water Resale Order and this includes any local authorities that send a water bill to tenants on behalf of a water company. The Water Resale Order establishes that anybody who resells water or sewerage services must charge no more than the amount they are charged by the water company. They are also allowed to charge a reasonable administrative charge. Ofwat produce a guide to the rules that protect customers of water resellers, which can be found here:
      http://www.ofwat.gov.uk/wp-content/uploads/2015/10/prs_lft_guidetowresale.pdf,
      alongside further information on its website. (from Defra)

      In simpler terms, Southend Borough Council have provided accounts showing that they are billed by the water companies and pay those accounts, whilst taking money from tenants with rent payments to cover the cost of same. (An unqualified allowance is deducted for voids and commission.) If this were a simple supply chain, the water companies would be wholesalers supplying, in the first instant, the Council, who then retail the product to consumers. I can see no difference between this situation and a supermarket, which would certainly not claim to be agents for their suppliers. Again simply stated, any middle ‘man’ is a reseller and I believe ‘Southwark’ confirms this. That Council certainly did not see fit to appeal and have completed refunds. (from SWAG)

      Alan Hart, Southend Water Action Group

    • But is it Giles, there is a strong moral question here as well, tenants are being charged a grossly excessive amount for a service that Council’s buy much more cheaply and the question of non-eligability to disabled discount makes that worse. I’m still not convinced that the factors provided by the water companies are not the real villain.

    • Moral questions tend to be neither here nor there when it comes to actually challenging such arrangements.

      In the Southwark case, the eventual refunds were about 22% of the bills paid. This was because Southwark had not passed on discounts that it had received from the water company. Whether a direct billing to the tenant would have been 22% lower than the charge Southwark made to each tenant is another question altogether (although the answer is almost certainly no)

    • You may have reinforced my point Giles, in my case the excess charged over all other methods of charging is 100% and certain tenants have been refunded. Finance Director has admitted this, but clearly Council is scared of the cost of wider settlement, although the details are the same in other cases. There is no doubt that costs would be lower other than RV and that calculation depends upon the water companies figures. For this reason I seek co-operation from Council, it may not be their problem. It is also the case that the annual cost is divided evenly amoung the total number of properties, regardless of beds or occupants.

    • On the contrary Frank, they have stated that certain information is not available to me since I have no account with them. Certain generalisations have been provided, but requests for accounts passed to Council have been refused and lie with ICO on a wobbly FOIR basis.

    • Frank,

      What was the relevence of your question as to my being admitted as a customer of the water companies ?

  49. An interesting point that affects Rochdale MBC is that its water charge payments to United Utilities is GUARANTEED. As over 80% of the tenants in question are on Housing Benefit, it will be evident that a lot of tenants suffer from genuine “inaffordability”. As already stated, no tenant can apply for financial assistance nor can they be given help by going onto a lower rate as published by United Utilities (this is something every other domestic customer can do). Consequently, these “social housing” customers are singled out in Rochdale Met. Borough for having their water debt treated as “Rent” – and thus be evicted – which they are. Be minded also, that once listed as “Rent debtors” they are also immediately unable to acquire any credit. In sheer desperation, some have gone to a Loan Shark – with disastrous results – including suicide.
    I would remind everyone that the Judges at the Appeal Court told Mr Dixon that if he was proved correct (about the water contract being illegal) he would get all his money back. The nature of the appeal brought by Rochdale MBC was to have Mr Dixon evicted – which failed of course. However, the Barrister representing Mr Dixon, though implying that he would “consider taking the case to appeal to have the contract itself examined” – only advised the CAB senior solicitor at the eleventh hour that he would not be doing so.
    The questions here are: 1. “Should Rochdale Council not collect the necessary revenue to pay its obligation to the water company, from where does it acquire the funds?” Further, if it did have an arrangement as a Local Authority: 2. “How can it pass its contract on to a private company – albeit a former ALMC – RBH?” Even the Appeal Court judges expressed their view that it sounded a “very risky” undertaking! In fact, it could not – thus it is still obligated to United Utilities who are sitting pretty as a private company with a guaranteed income courtesy of the taxpayers.
    Finally, I would like to point out that Mr Dixon had never failed to pay his water charges before Rochdale MBC took ownership of the water bill. It was only when Mr Dixon studied the situation and concluded that the water contract had to be illegal that he stopped paying the Council’s demands for his water payments. The CAB have been mortified by the results so far.

    • Whatever the contract was in Rochdale, it is not illegal. It may be in the wrong amounts because a reseller contact – as per Southwark – or it may not, but not illegal.

      I’m afraid the bit about ‘counsel only advising at the eleventh hour that he would not be taking the case to appeal to have the contract examined’ makes no sense at all. That is simply not how it works.

    • There are a number of legal people who define the water contract as “Illegal” – and to be fair, there are those who have doubts. The three Appeal Court Judges said that they were glad that they were not required to determine the position due to Frank Dixon having voluntarily offered to pay meanwhile; they expressed their gratitude for that – otherwise they would have had to decide how to conclude the matters before them rather than leave the matter of eviction open-ended.

    • ‘Illegal’ means a criminal offence. Unlawful? – potentially, as that was what Southwark’s ‘agency agreement’ was found to be, but that is a public law and civil matter, not criminal one.

  50. I agree Mr Peaker that in the case of Southwark that it most probably is not illegal.the local statutory provision as of yet not having been revoked. W.I.A.1991 Section 144(8) and the 2013 deed as yet not adjudicated. I myself was not surprised when Southwark when they did not challenge and also allocated refunds prior to the 31st July 2002 the crucial date for Rochdale who’s scheme commenced April 2005. Please see now W.I.A.1991 section 66(i) also The Water Supply(exceptions from supply systems prohibitions regulations)2005 Section 3 1(c) and explanatory memorandum. Their are two strict liability offence 1 not being licensed 2 the premises being domestic and therefore ineligible. So the Per Incurium now is breach of a statutory prohibition, not the Water Resale orders.

    • Sorry Frank. I can’t see the breach. WIA s.66I does not make it an offence – look at 66I(2). Ditto with 66J(2). The water supply system is retained by the water company.

  51. Later i will negate the agency defence of Southwark as Thames Water(the principle) are in breach of their statutory conditions of appointment 1989.G and H which obviously cannot be provided to a person who is not a water company customer,and if any landlords are renting properties to generate additional income fro the water utility bill i would suggest the read the court case of Alexander v Rayson. now i need a bath in the water i am purchasing from R.B.H who as purchased the wares of the incumbent supplier at wholesale price to sell to me at retail price,and if i prove to be unprofitable i am out.

    • There is no need to negate Southwark’s agency defence. The court found against them on it. Southwark were a reseller, not an agent.

      I don’t understand why you keep going around in circles on this – there the decision is!

    • Gentlemen,

      There-in lies my concern at the emphasis on the legal as opposed to the moral and logical. Legal or illegal. Lawfull or unlawfull. ‘Simply not how it works’ – but it did. ‘Southwark are a reseller …..’ – there the decision is. I don’t intend to mock, it seems that the matter gets more complicated as time goes by, with a straight-forward decision, not appealed, that has set a precedent. In my case, Council employed Counsel states that the decision in Jones v. Southwark is wrong, as if that were some kind of revision of the Court set precedent.

      This and the risk to my personal finances if I were to lose a Court action, as well as risking changing the earlier precedent, is why I trust to morals and logic.

      I am currently concentrating on unlocking ‘refusal to respond’, such as attempts to end correspondence and failing to clarify inadequate FOIR responses. This debate has been useful.

    • I’m very sorry Alan, but it sounds like your council have dug in, so it is legal proceedings or nothing.

      Local Authority Ombudsman may be of assistance, though.

  52. Mr Peaker Before i reply to you on section 66i please see ofwat self supply license or water licencing

    • I do, of course, accept completely your reasoning Mr Peaker when you state that if any offence that may have been committed would be deemed to be “unlawful” rather than “Illegal”. (My experience does not extend beyond criminal law).
      My approach was directed towards the act of “intent” when I became embroiled in the Rochdale case. It had appeared that “profit” was the prime motive – an article published and distributed to tenants stated as much – yet the Act or Statute which described the various ways of dealing with water supply payments specifically excludes making a “profit” in the prevailing circumstances in Rochdale (I’m not ignoring the reasonable parameter for covering expenses, etc.)
      A study of the contract made in Rochdale – after the 1989 and 1991 Acts – specifically disallowed certain arrangements being entered into – the claimed action being one of them.
      When compared with the method that requires a Licence to supply water – which most legal representatives seem to favour is taking place at Rochdale, it is a fact that Rochdale MBC has not applied for a Licence.
      It simply seemed to be logical to conclude that anyone or anybody doing something that is specifically disallowed by Statute in order to take a pecuniary advantage is illegal. Not being an expert on Local Government Law I am quite prepared to be told by someone who knows better that I am wrong in this respect – and I thank you for you valued reply to my remarks.

    • Peter, this just gets increasingly circular. The problem you and Frank have got is that the issue was taken to the Court of Appeal, and they decided that Rochdale had a form of agency agreement. (They didn’t avoid the issue, they decided it). Now, that may well be wrong – and the Southwark judgment would suggest that it is – though that was also specific to the contractual terms of that agreement,

      But the Court of Appeal decision stands. The time to try to appeal it to the Supreme Court is long gone.

      So unless someone else (and it has to be someone else) is willing to take a case all the way back to the court of appeal at least, the rest is by the by.

  53. Water supply licensing guidance on eligibility Ofwat Now that informs the person who wishes to enter into the water industry a part of the process of obtaining a retail license. Fact- In 2005 all ocuppiers of the councils residential lettings who since privatization had purchased their services from the appointed water company(the undertaker) Ceased to do so,the occupiers ceased to be customers of the water company. Fact- There was a customer transfer to the council. who then became the seller of the water services to the occupiers. Fact- The intention being having negotiated the best possible wholesale purchase price ,to then to retail to its newly aquired customers at the same price as the water company was selling to his retained customers and would have sold to its former customers. Fact- The person who now needs to sell to the customers in the premises he as purchased the water services for must get it from the pumping station to the premises. Fact- To achieve this the person who wishes to retail needs to use the Supply system. The Law- Off top of my head i do not want to lose all i have typed The Law-No person shall use the supply system unless they are an undertaker or a licensee. United Utilities Claim for his dues as an undertaker for mine and others monies was a lawful demand up to 2005 the question is was and is the demand lawful by the two other parties since 2005?. Let me put it this way. Say my water bill is £400 the seller to me has paid £320 he then demands £400 from me,as i know unlike many others the discount, i say here there is £320 your outlay and here £80 your profit paid at the pay point shop you use as your collecting agent. You have now got £80 profit less your agents fee. now show me your authorisation to trade in water services ie a license,or can any person just get on with it.

  54. I have the basic from Jones.
    I have superficially perused the recent commentary.
    For the lazy like me, it would be helpful if the recent discussions including the licensing issue could be comprehensively addressed.

    while writing, your general toil in the housing field is appreciated
    happy new year
    kjetilniki

    • The full judgement is available on line and I beleive the licensing issue is not relevent.

    • It is fact that Council’s treat any withholding of water charges as arrears of rent and have evicted tenants over rent arrears that may not have occured when you compare that to monies ‘owed’ through the overcharging. Rochdale was earlier, was it not, therefore Southwark is the current precedent (subject to comparable agreements).

    • I am well aware of the issues around water charges as rent. And that was why many rent arrears possession claims were suspended in Southwark until there was clarity on any repayment amount.

      That is not, I’m afraid, how precedent works in these cases. Rochdale was earlier, but Court of Appeal, Southwark more recent, but High Court. The important point on both is that they were decided on the specific agreements involved – particularly in the Southwark case as that was what distinguished it from Rochdale judgment.

      So there is no single binding decision. It will depend on the facts and effect of the contract between council and water company. However it appears that Thames Water have or had another 68 in very similar terms, so there would be a strong argument there.

    • Thank you Giles,

      Regarding ‘strong argument’, presumably not with water companies other than Thames ?

    • Sutton & East Surrey Water Company’s agreement with Tandridge DC is fairly similar to Thames Water’s agreements and I didn’t find any material difference for the issue reseller or agent

    • That’s of interest, others will no doubt be comparable, but establishing this in the Courts carries risk of loss and costs. Don’t suppose anyone has compared Southwark/Thames agreement (14 pages) with Southend/Essex and Suffolk (3 pages) ?

  55. What Peter is concerned about is that there is no safety net once the landlord pays the bill. The water company cease to have any dealings with the occupier. Housing staff are not trained in water debt recovery,if i check i doubt they would have a debt recovery license.to pursue water debt. Now what ever you label it still remains what it is.If the court has decided that the tenants are customers of the water company on Rochdale then the water company had better start treating them as such, and explain why they have not done so since the introduction of this scheme between themselves and a third person and how that can evict for an unsettled water bill on their behalf, and explain to the regulator why they have omitted to perform their statutory conditions of appointment under section 18 W.I.A 1991. The four judges even if unintentionally by ruling that the tenants remained water company customers afforded them all the protection they need the same as owner occupiers who are customers of the company. So with every demand for payment(the bill) draw the attention to the customer of the code and practice of debt recovery procedure and provide a copy to any person requesting it, and where it can be viewed. Would that be its agents offices in Rochdale or do or would customers have to travel to water company registered offices. Appointment condition H.

  56. Sorry i can not do links i am just a slow person. Instrument of appointment Conditions conditions G and H united utilities.I do not believe the threat of eviction would be a debt recovery tool.

    • Frank, again this is all circular. I’m not arguing about the problems and unfairness of having the water charges expressed as rent – Yes, that does put tenants at risk of eviction for water charges (but it is not ‘water debt recovery’, it is as rent arrears – this is the unfairness).

      But, but… Unless or until someone gets to the court of appeal or indeed Supreme Court for a different finding to that in your case, there is a binding court of appeal precedent that the Rochdale arrangement is an agency agreement.

  57. Mr Peaker you say. I’m not sure what people are actually meaning by water licensing.That is honesty Mr peaker a thing that i will bet a lot of people questioning the water charges have not encountered. Maybe because water law is not your field. Alan your council’s counsel is correct Jones v Southwark is wrong see my post on the 09-08-2016-8-30pm, seems someone else knows what i know. Alan that does not mean Southend is right,unless Thames Water is the provider for Southend. I asked are you a water company customer, if you are not then there can be no agent, the water company bill the landlord and the landlord claims the amount paid from you. If it is for a block of flats he is billed for the block. If it is a service charge you could try The landlord Tenant Act 1985 i think section 18 onwards. If he is not cheating on the water utilities why not just show what he is being charged?. Mr Peaker I have been assured by a gentleman in Birmingham from The Consumer Council For Water that his department in London Are dealing with the transfer of tenants to customers of Thames Water as of Tuesday seven L.As.the aim to protect the vunerable none ever having been customers of Thames water before.Its credit reference agencies, debt collectors, bills demanded in two instalments not weekly, CCJs and the rest, and the deed of clarification still not proffered up which still leaves Southwark as a reseller until it is, with maybe another 9 million to refund and the decision wrong as Southwark will be aware of but have refunded 28 million that if they had checked the law as i did they would have known. That’s four judges in the Rochdale case one in Southwark who even if they are wrong the decision stands until overturned. Who overturns it Southwark?.

    • Frank, you and others were using ‘licence’ in various different and vague ways.

      Now, the Southwark position is not clear unless or until there is judicial determination of the 2013 amendment. Your assertion may be correct, or it may not, but it is absolutely certain that Southwark will not be refunding for the post 2013 period until there has been a judgment on the issue. Your comment of 9 August 2016 frankly makes no sense – the Southwark agreement was found to be lawful as a reseller agreement, but the amount Southwark had charged tenants under it was unlawful.

      As far as I have been able to make out what you seem to be trying to argue, I’m afraid that it doesn’t, if you’ll pardon the expression, hold water.

      Secure tenants cannot challenge service charges by the way, that is an explicit exclusion from the 1985 Act and subsequent acts. It is grossly unfair, but remains in law. Which is why I’ve had to bring challenges on estate heating charges, being expressed as rent, under Unfair Terms in Consumer Contracts regulations.

    • actually the exclusion (in s26 LTA85) does not exclude secure tenants but excludes all tenants of LAs (whether or not secure tenants unless a long tenancy (principally over 21 years)) and in particular does not exclude secure tenants of HAs (unless they have a non-variable regd rent)

    • Gentlemen,

      Is there or is there planned a judicial determination of the post 2013 amendment ? This may be irrelenent now the Thames agreements are closing.

      In the case of Southend, refunds have been made to some tenants for excess water, heating (communal) and service charges, folowing petitions from tenants.

    • There was to be one in the Southwark case – which is the only known instance of a 2013 amendment. But I hve heard nothing further (and I would have heard if there was one). I strongly suspect the whole case settled and that there will be no determination.

    • Frank,

      Why would it matter what a Counsel says regarding a Court established precedent ? This is not to disregard the differing Courts involved as previously advised, but it must be significant that Southwark did not appeal and have not only refunded existing tenants, but feel obliged to trace former tenants (possibly those ‘illegally’ evicted).

      I am not a customer of a water company, it is Essex & Suffolk in my case (with Anglian dealing sewage).

      Since I am convinced that the water companies colluded in the matter, I am after explanations of the factors sent to ALMO to be applied to RV and for documents redacted on the spurious grounds of ‘commercial sensitivity’ to be released in full. There-in lies the potential undue benefit in unqualified (to date) ‘commission’ allowance. I note that Southwark received 18% back this way.

    • Alan, you really don’t understand how precedents work.

      This was a case specifically on Southwark’s agreement. It does not automatically apply to any different council’s agreement. Each different agreement would have to be tested in court.

      It was a High Court judgment which Southwark did not appeal. Other councils may take the view that it is wrong, even if their agreements are similar to Southwark’s (pre 2013) agreement. The only option then is to take them to court. It would be likely that they would lose in the High Court, but they would then bet on winning in the court of appeal. That would make the Southwark precedent meaningless.

      Now, the best plan to take on a council on their agreement is as follows.

      A tenant facing a possession claim for rent arrears, including water rates payments, defends the claim on the basis that the arrears are uncertain because the water charges were unlawful – because the discount to the council as reseller was not passed on to tenants. This tenant should be eligible for legal aid and represented.

      If the defence is successful, the council will have to appeal, or all rent arrears possession claims will become uncertain.

      Any appeal will then be appealed further, whether by tenant or council, depending on who won the first appeal. At that point, there is a major and binding decision.

      This will not apply to Rochdale tenants, because of the previous court of appeal decision.

    • Thank you Giles,

      I am aware of the risk of challenging the agreement in Court, I suspect that is what Southend want me to do – and lose.

      I’m not about to become that ‘tenant in arrears’ either. If that scenario depends on the Council being re-seller, does that not come back to the Agreement ?

      Currently, therefore, I am looking to break the silence, the Council have cut me off with inaccuratly and inadequatly answered FOIR’s. As much as this advice and debate has been useful, Law is not my answer. Publicity may be, but that is also a double edged sword.

      Thank you Gentlemen, I will keep you advised of progress (if any) and outcome.

      Regards,

      Alan Hart

  58. Alan see Essex and Suffolk Household Charges Scheme 2016-2017 Section 8.Payments. Assistance schemes not available to you and others due to their agreement. See also Southend on Sea Conditions of Tenancy,the relevant sections. Forget the ALMO that is not who the agreement is with. write to the head of the housing department, ask for an explanation how the scheme works stating you thank him in advance for his assistance under their Code of Conduct(in their tenancy conditions). Then write to the CEO. and the Company Secretary Of the water company and copy in the Chairman.Ask them the same and point out that as you are paying the full amount in their charges you fully expect to receive the same level of service regardless of property status as you are opposed to any form of discrimination and that if any other service treated you with this could’t care less attitude you would take your custom elsewhere, but as you are a local monopoly supplier this is a blatant abuse of a dominant position.Alan after full amount in their charges 3 lines insert scheme.Will give you a little more info later.If it does not make sense Alan it is not true.and don’t let the costs runaway and dont let it make you ill.treat it as an hobby.They have put you in this position make them sort it out. You cold also point out to the council that as a taxpayer you are concerned about public expenditure with this issue.

    • Morning Frank,

      I will study your reply in greater detail later, meanwhile regarding ALMO :-

      Fact – Southend BC CEO passed my dossier to ALMO CEO for response.
      Fact – ALMO Finance Director is otherwise the main correspondent.
      Fact – Refunds to other complexes came from the ALMO.
      Curiously – SBC attempt to leave the money, collected by ALMO, with them and reduce their management fee.
      (This was in a Cabinet Report, but not enacted).
      Fact – FOIR are answered by the ALMO (many inaccurate).
      Likely – SBC would ‘dump’ the problem on the ALMO and possibly take back management of the properties. Fact – I have come to refer to SBC/SEH, not either/or.

      FACT – Water Companies are resistant to information requests since I am not their customer, I don’t wish to argue that because, if i am not their customer, ergo I am the SBC/SEH customer – the Council are selling (re-selling) the product to me.

      Comments from others ?

      Thanks,

      Alan

  59. Alan in the 9th line from the bottom of my post after charges insert scheme. Just worked 19 hours sorry tired.

    • Thanks for the correction Frank,

      I have neither a disabled person or a handy evicted one for the recent suggestions, but noted re. Charges Scheme and Tenancy Agreement.

      Already in some contact with CEO’s, SBC defers to ALMO, but not letting that rest.

      The idea of discrimination against social tenants is interesting, but where’s the comparison, ALMO has none that are not social ?

      Monopoly supplier important regarding redaction of FOIR responses, this is going to Legal and/or ICO.

      This is no hobby – I have better things to do !!! What it is, is a matter of interest to potentially every social tenant in the country, but I must concentrate on my street (and advising others accordingly).

      Finally – ‘public expenditure’ – good one !! ALMO accused me of taking up valuable time that should belong to other matters under their control, I will turn that around and highlight their (intentional) inefficiancy in responses as an unnecessary cost factor. Also rapid settlement will stop cost escalating (especially interest ?).

      Gentlemen, thanks again.

  60. I believe R.B.H. are in court today,as to are they a reseller within the meaning of the Water Resale Order 2006, that being under Chapter 1 Part V WIA 1991 Section 150. That does not consider or are they a reseller under Chapter 1 or Chapter 1a, or Chapter 2a WIA 1991. These issues are the remit of the regulator appointed by the secretary of state to protect consumers,so as not to waste the courts time dealing with these issues. I would also add that the level of indebtedness to R.B.H. for rent arrears and water debt as of March 2016 of 8.25 million pounds on its housing stock of 13.700 properties suggests to me that no agency agreement with United Utilities exists.My file and evidence is now ready to present to the regulator regardless of any court decisions.and with all due respect to judges unless they are aware of all material facts it is easy to reach a wrong judgement.

    • I don’t believe the Regulator has the remit to determine whether or not a body is a reseller.

      Obviously we’d be interested to hear the outcome of the court proceedings!

  61. The simple fact is if you contract to pay and the fulfilment of your contract depends on you being paid by another person, and the other person is delinquant and you must still pay, you are in financial dire straits.

  62. The regulator can easily determine the difference between water resale not for profit(pass it on), and retail purchase and resell for profit and to take action if the critera for doing so has not been met.Do i want any money back, no. Am i purchasing the services from UU? no. can i purchase the services from UU? no. Why can i not purchase the services from UU,because he has sold his wares to a third party who then retails for profit or loss to his aquired customers. Does the third party purchaser have the authorisation to retail the purchased wares on. that is now the remit of the regulator.To protect the consumer from mavericks.

    • It is not an issue that is within the Regulator’s remit to decide. And an agency doesn’t have to be not for profit. Sorry Frank, the Regulator is not going to be of much use.

      As far as Rochdale goes, the Regulator would in any event be bound by the Court of Appeal decision in your case.

  63. Mr Peaker. I assume that you are aware that on the 31st March 2005 15,000 accounts held by customers of UU since privatisation the occupiers of the councils housing stock were closed down, all set up direct debits cancelled,all payment plans cancelled including mine which was by UU payment card payable at the post office.Which resulted in a refund to me of overpayments that could not be carried forward for the year 2005-06.,due to the fact that myself and others would cease to hold accounts with UU. And that being so from that date to this, If you like no bill no account number, no accounting to, no rights or liabilities either way.So on the 31st March 2005 its goodbye god bless and good luck from UU to the occupiers and welcome to the owner RMBC. Then from March 2012 goodbye to RMBC and welcome to the purchaser and new owner of the housing stock RBH. as the party liable for payment of water services provided. RBH then send out demands(bills) stating ,Water charges are collected on behalf of United Utilities and are payable by ALL tenants. Which to the most worldly wise of the housing stock is a gift to obtain free water services, its a shrug of the shoulders and well tell Unitied Utilities to sue me. Which to me is fair comment after all they are only telling the agent to tell the principle to sue. That is never going to happen simply because there is no principle or agency relationship.I believe it would be a wise move by the owner to be honest with the consumer in its tenanted properties that if they don’t pay the owner is out of pocket instead of using the heavy hand by threatening to use the default sanction of eviction on behalf of UU which only serves to get peoples backs up.Mr Peaker do not be sorry for me its RBH i feel sorry for thats why i just gave them £1005s but i am going to have to deal with this threat of eviction on behalf of a utility provider those type of threats are unwarranted unneeded and an overreaction for an unpaid utility bill

  64. If people log on to Unitied utilities web site, the last thing they need is an agent to collect for them.I bet they would even pick up the money if asked.

  65. Pingback: Greenwich has problems with water - Nearly Legal: Housing Law News and Comment

  66. Thank you for the above link Mr Peaker. I have been busy with some issues with United Utilities and today during a conversation with the head of claims and recovery i informed him that his company should be extremely proud of itself, along with RMBC and RBH due to the article in the Big Issue Magazine for the homeless, as it appears on reading the article that they actually contribute homeless persons. I suppose making people homeless and then dealing with the people you have made homeless is one way of having job security. The article can be read at Mark Metcalf Evicted Over Water Bills.Still cannot post a link Mr Peaker will learn

  67. Just to add the £30,000 pounds mentioned in the article was my legal aid costs, i believe RMBCs costs were over £70,000 What an utter waste of public money.

  68. Pingback: Water and youth - Nearly Legal: Housing Law News and Comment

  69. Kingston Council have compiled a report on water charges it can be viewed on google. Kingston water charge for tenants 8th March 2017. Please Note Legal Implications Para 19 the elevation of a non priority debt to a priority debt. See also Wandsworth water charges refunds to tenants,it appears without the need to sue, but refunds will only be made from April 2010,not from start of water resale order 2001 or 2006. Two points that i find strange.1 Councils refunding rather than face judgement,and not challenging the resale judgement’s. 2 the silence of the Water Company.

    • There are other cases underway on Thames Water agreements. Rumour has it that London councils looking to take test case to court of appeal to overturn Jones v Southwark, but settling rent arrears possession cases in the meantime. Also heard of Manchester High Court judgment with a Housing Assocation, but not got judgment yet (soon!).

      Water company is not a party to any of these proceedings, so of course silent.

  70. Bear with me on this now Mr Peaker, And trust me their will be a conclusion. Am i right in saying it was Kim Jones V Southwark?. At para 11 Mr Young gave a witness statement for Southwark. At Para 16 Jill Jones gave a witness statement as to Thames Waters perception of the agreement,so i assume Thames Water participated in the Southwark case. Kim Jones’s contention being it was a resale agreement, Southwark and Thames that it was a collection agreement

    • Frank, I now have the High Court judgment in Rochdale BH Ltd v Izevbigie (United Utilities intervening). Despite Jones, Rochdale BH are found not to be a reseller, on the interpretation of its specific agreement with United Utilities. A post will follow.

      Unless this goes to the court of appeal, that is that for Rochdale.

      And Thames Water were not a party in Jones, so could not appeal it themselves. Hence the silence.

    • Been a while since I heard anything on the water issue, I’ve been gathering information from other Council’s and it appears that only Thames and Northumbria are involved with RV/agency.
      Current info is that certain Council’s are in contact with LGA to challenge Jones v. Southwark, meanwhile Ofwat have stated that ‘if social tenants pay their local authority or HA directly for water rather than the water company they are in a water resale situation’ (source Ofwat website).
      Meanwhile, up to and as far as Watrs, no-body wants to challenge the water companies on the factors applied to RV, the greater offence in my book.
      Seems the Water Industry Act is greatly open to abuse and profiteering, whilst the Water Orders did not make it clear what a re-seller is in practice.
      Comments ?

  71. The Secretary of State for the Environment and the Secretary of State for Wales,in exercise of the powers conferred upon them by subsections (1)(a) and (2)(c) of section 254 of the Local Government Act 1972, as applied by section 34(1) of, and schedule 6 to,the Water Act 1973, and of the powers so conferred by the provisions of the said section 254 as so applied and as extended by paragraph 5(2)(c) and (cc) as inserted by paragraph 14 of schedule 7 to the Local Government Act 1974 of the said schedule 6,and of all other powers enabling them in that behalf, make the following order 1-(1) This order may be cited as The Water Authorities (Collection of Charges) Order 1975 and shall come into operation on the 27th March 1975. This is Statutory Instrument No 396 1975. Prior to this 1974 No 448 later are 1976 No 514 and each year up to the final one in 1981 No 130. Now find me Rochdale LA in 2005 Enabling it to perform its duties and powers to demand collect and recover my money on behalf of The Water Company Water Authorities ceasing to exist in 1989. And the same can be said for the 37 London LAs No wonder no appeals.A scheme by two parties to extract monies from third parties, and the default sanction being homelessness never is this on the statute books. The explanetry notes are at the end of each instrument. Lambeth v Thomas the original agreement was lost in the mists of time, This would have been what they had to produce ,and all the above having been repealed by the Water Act 1989 due to privatization they was powerless to demand monies from occupiers for the supply of water services regardless of property status, and still are to this day and if the threat of eviction were to be removed it would still be an unenforceable demand.

  72. Just to add i have lived this from 1973-89 i don’t make it up and from 2005 i started living it again.

  73. Surely all commercial businesses have to rely upon the courts for the collection and enforcement of all outstanding debts. i cannot see any reason why the water and sewerage businesses should be an exception to the rule by enlisting the aid of other parties.

    • I’ll have the post on the High Court judgment on Rochdale BH Ltd water agreement up soon. But I’m afraid that, unless there is an appeal to the court of appeal, that is that for Rochdale.

  74. In a duty case, I am advising a long standing tenant of a Housing Association. The home was ex local authority stock transferred to a Housing Association. Until this month the water was paid to the Landlord and the transfer took place after 2001. As a Thames Water area Jones v Southwark should bite.

    I was uncertain whether we could deduct any overpayment made pre the stock transfer.

    I though I’d post a comment to help anyone else who hasn’t yet had to research this point. (I should have known the answer from disrepair matters but if I did know, I have forgotten.) It would appear that as the obligation and thus any over payment would touch and concern the land it is not a personal covenant and thus on assignment, the new Landlord should be liable to setoff not only re matters post transfer but also re matters pre transfer.

    Lotteryking Ltd and another v AMEC Properties Ltd
    Estates Gazette July 15 1995[1995] 28 EG 104
    Chancery Division March 31 1995 Lightman J

    “A tenant’s right to set off (against any liability to make payment to the landlord due under the lease) his claim for damages for breach of a provision in a collateral contract which runs with the reversion is exercisable (equally with his right to set off a claim for damages for breach of such a covenant contained in the lease) not merely against the person entitled to the reversion at the date of breach, but also against any successor in title.”

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