Newsagent wins appeal against Scottish water company over liability to pay for unwanted and unused services

A newsagent has successfully challenged a sheriff’s decision that a water services company was entitled to charge him for water supplied to the premises even though he never wanted or used the services provided.

The Sheriff Principal of Lothian and Bordersallowed an appeal by Deodat Chataroo, a newsagent who trades from premises in Coatbridge, Lanarkshire after ruling that the defender was not liable to the pursuers Scottish Water Business Stream for payment of the invoiced water and waste water charges.

Sheriff Principal Mhairi Stephen QC also refused a cross-appeal by the pursuers, after ruling that there was “no contract” between the parties.

She further held that the action ought to have been dismissed by the sheriff at Edinburgh due to “lack of jurisdiction”, and that the action should have been raised in his local sheriff court at Airdrie.

The court heard that the pursuers, a separate undertaking to Scottish Water who are licensed to provide of water and sewerage services to non-domestic customers in terms of section 6 of the Water Services (Scotland) Act 2005, supply those services to “eligible premises” as defined in section 27 of the 2005 Act.

In April 2014 the pursuers raised small claims proceedings in this court for recovery of more than £1,500 said to be outstanding in respect of invoices for water, waste water and drainage services provided to the defender’s shop at 159 Old Monkland Road in Coatbridge since 1 April 2005.

The pursuers also sought £70 as late payment compensation in terms of section 5A of the Late Payment of Commercial Debts (Interest) Act 1998.

However, the defender – who appeared on his own behalf without legal representation – stated that he had no contract with the pursuers, claiming that the necessary agreement or consensus was lacking and could not, on the facts, be implied.

He disputed liability to pay the amounts claimed, arguing that that he “never used or wanted” to be supplied with the water services.

The sheriff found that the shop premises occupied by the defender were served by a water supply and a waste drain and that although the defender did not consent to or enjoy any benefit from that supply, he could have water at any time by turning on the tap.

But the defender challenged the sheriff’s finding in fact and law that concluded that the pursuers were entitled to charge the defender for water and waste water services supplied to the premises.

Further, the defender challenged the jurisdiction of the court on the basis that there was no contract between him and the pursuers which would entitle the pursuers to found jurisdiction in the place where payment of the sums due by the defender ought to have been made, namely the defender’s registered office in Edinburgh.

The Dean of Faculty, on behalf the pursuers, submitted that if the statutory provisions were applied to the facts and circumstances of the present case, it led to the conclusion that the sheriff was “correct” to hold that the pursuers had a proper statutory basis for charging the defender.

The appellant was the occupier of premises; there was a supply of water to the premises; there were fixed charges in respect of water, waste water and drainage and “simply because the defender chose not to draw water he did not avoid liability to pay for these services being provided”.

The pursuers also cross-appealed against the sheriff’s findings in fact and law that there was no contract express or implied between the parties which would entitle the pursuers to claim payment in terms of the contract at this court.

However, the sheriff assoilzied the defender from the claim after allowing his appeal and dismissing the pursuers’ cross-appeal.

In a written judgment, Sheriff Principal Stephen said: “In my opinion, had the pursuers satisfied the requirement to make arrangements with the occupier then they had a good statutory basis for charging for the supply of water which the defender could draw upon even though he chose not to do so. It follows that the sheriff is correct to take the view that the defender’s argument that he had not asked for and did not want the water/waste water services did not amount to a complete defence.

“Nevertheless, the conclusion I draw is that the pursuers’ averments and the sheriff’s findings in fact do not support the statutory case. I come to that conclusion whether the correct interpretation of section 6 means that the person who can be charged is the ‘occupier’ or the person for whom the services are performed, facilities provided or rights made available… Accordingly, the defender’s first ground of appeal has merit and I answer the final question of law in the stated case in the negative.”

The Sheriff Principal also observed that the notions of consensus ad idemand intention to create legal relations were “strikingly absent”.

She continued: “Accordingly, it would strain language indeed to accept that the pursuers have shown that it is ‘necessary’ to imply a contract in the circumstances of this case. I am of the view that the sheriff was entitled to reject the pursuer’s propositions as to contractual liability.”

The third question which arose was whether the sheriff was correct to conclude that “any lack of jurisdiction was in any event cured by the defender’s appearance, amounting to submission to the jurisdiction of this court” and whether the sheriff was correct to conclude that “it is too late, at proof, to contest jurisdiction”.

The Sheriff Principal held that the sheriff was correct to state that it is too late to challenge jurisdiction at proof if raised for the first time at that stage, but she added that the background to this case “strongly points” to jurisdiction having been an issue from the outset.

“I am satisfied that this court’s jurisdiction has been challenged from the beginning. In these circumstances, Mr Chataroo’s appearance does not confer jurisdiction on the court.

“Accordingly, in my view the sheriff’s observations as to jurisdiction are incomplete. This may well be as a result of not being addressed fully as to the procedural background and the rules as to jurisdiction.

“However, the result is that the action ought to have been dismissed due to lack of jurisdiction standing the sheriff’s findings as to the contractual basis for charging the defender, with which I agree.”