The Mayor & Burgesses of the Royal Borough of Kingston-Upon-Thames v Moss (2020) EWCA Civ 1381

This was RB Kingston upon Thames’ appeal of the High Court’s finding that it was a ‘water reseller’ under the Water Resale Orders 2001 and 2006, and thus not entitled to keep the additional funds it had recovered from the water rates paid by its tenants as part of the rent, though discounts and void allowances by Thames Water (our note here). This is significant because some 69 London councils and housing associations had entered the same or similar agreements with Thames Water, and would be liable to repay sums to their tenants for the relevant periods.

The Court of Appeal dsimissed the appeal, finding:

There are many features of the 2003 agreement which, taken together, point unerringly to the conclusion that Thames supplied piped water and sewerage services to Kingston; and that the agreement is one which replaces the liability of the occupier under section 144.

Kingston’s reliance on the Court of Appeal finding in Rochdale MBC v Dixon (2011) EWCA Civ 1173 (our note) did not avail them. The terms of the relevant agreements were different, such that Rochdale was not the ‘customer’, and that case was not about the Water Resale Orders in any event. Besides, a previous case on a different agreement should not be used as basis for construction of contractural meaning.

Lastly, Kingston argued that

if the 2003 agreement meant what the judge said it meant, then Kingston had made a very bad bargain; and had also deprived its tenants of valuable rights which they would otherwise enjoy as “consumers”. He went on to say that the Water Resale Order 2001 was “reasonably available” to the parties at the date of the 2003 agreement; and that the parties cannot be taken to have intended that their agreement should fall foul of it.

The Court of Appeal was not attracted to this as a basis for contractural interpretation.

in this case, one must first interpret the 2003 agreement to see what substantive rights and obligations it contained; and then see whether it meets the terms of the Water Resale Orders. In my judgment it does. It may well mean that Kingston made a bad bargain but that cannot change the effect of the agreement. I might also add that, from the perspective of TWU, it was a matter of indifference whether the agreement did nor did not fall within the scope of the Water Resale Orders; so there is no reason to attribute to TWU any particular desire to avoid their effect.

As far as loss of rights is concerned, Mr Bhose’s point was that if Kingston was “the consumer” as defined by the legislation, then the obligations of the water undertaker were owed to it, rather than to the occupier. The loss of these rights seems to me to be more of a theoretical than a practical concern. In any event since the Act expressly permits the water undertaker to enter into an agreement placing liability for water charges on someone other than the occupier, that potential mismatch is inherent in the scheme of the Act. But even if I am wrong about that, the loss of those rights is simply a consequence of the agreement that Kingston in fact made.

Overall, there was no doubt that Kingston was a ‘water reseller’, and both this case and Jones v Southwark LBC [2016] EWHC 457 (Ch) (our note) were correctly decided.

Comment

As noted in our previous post, this means that every council or housing association (some 69 of them, it appears) with a similar agreement with Thames Water will continue to face challenges to rent arrears possession claims on the basis that the arrears figure is wrong, and all of them will have to prepare for the prospect of refunding their tenants any ‘commission’.