Charges for water and sewage services

March 8th, 2016 by James Goudie KC

Newey J described the point in Jones v Southwark LBC [2016] EWHC 457 (Ch) as being one of “considerable importance”.  This was both because Southwark itself had numerous tenants who could be affected, and because it could have implications for other landlords.

The point arose in this way. For decades, Southwark had collected from many of its tenants, including the claimant, charges for water and sewerage services.  These services were supplied to the properties by Thames Water.

The questions raised by the case were, first, whether the Water Resale Order 2006 (“the 2006 Order”) applied to these arrangements, and, second, if it did, whether Southwark had charged its tenants more than was permissible under the 2006 Order. The answers turned, in part, on whether Southwark had been acting as an agent or had been buying and re-selling the services.

The Judge concluded that 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; as a result ,the 2006 Order did apply and served to limit what tenants could be charged; and the amounts that Southwark charged Miss Jones exceeded the “maximum charge” allowed under the 2006 Order.

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