A recent case from Edinburgh Sheriff Court has shed new light on the correct approach in dealing with claims raised by the various non-domestic water and waste water service providers in Scotland.
In Scottish Water Business Stream Limited v Mr. Deodat Chataroo (SA978/14), the Sheriff Principal recalled a previous judgment against a small business owner in an action brought by Scottish Water Business Stream Limited (“Business Stream”).
The facts are fairly simple. Mr. Chataroo leased a newsagents that had water and waste connections – thereby, on the face of it, satisfying the definition of “eligible premises” in terms of section 27 of the Water Services etc. (Scotland) Act 2005 (the “2005 Act”). So far, so good for Business Stream. Indeed, Business Stream won the case before the Sheriff. However, neither party appears to have been pleased with the outcome, and each appealed different matters to the Sheriff Principal.
On appeal, Mr. Chataroo advanced three arguments: (1) there was no contract or agreement between himself and Business Stream; (2) there was no basis for the charges levied by Business Stream, as there had been no usage; and (3) that the court that had decided the original matter had no jurisdiction to hear it.
Whilst Business Stream’s advocate appears to have been at pains to argue that this case was not a “test case”, there do appear to be statements of law that can be applied to other similar cases.
“Arrangements” and Statutory Charges
In terms of section 6 of the 2005 Act, Business Stream (and other licensed providers of non-domestic water and waste water services) require to “make arrangements” with occupiers of “eligible premises” before they are entitled to demand payment. Whilst the Sheriff Principal held that “arrangements” is a wider term than “agreement”, she held that for there to be an arrangement something positive must be done. The example given was a letter, sent to the service consumer, setting out the tariffs and rights of the consumer etc. The absence of such a letter will not, itself, prove fatal to their having been arrangements made, but will certainly assist a defender in arguing that there have been no arrangements (para. 26).
The Sheriff Principal went on to state that simple occupation of a premises does not give rise to an arrangement to pay, which would be akin to a tax (para. 26).
If Business Stream (or another provider) were able to prove that they had taken steps sufficient to prove that they had “made arrangements”, that would render this defence very weak.
Charging Where There is No Usage
The Sheriff Principal went on to consider whether, had she found that there were arrangements in place, the lack of usage of the water and waste water services would have been a defence.
For the reasons set out in the judgment (para. 27), it was held that the charges could be levied even where an occupier chooses not to use the water and waste water services. Interestingly, the Sheriff Principal notes that this would be the case in either of two different potential interpretations of section 6 of the 2005 Act (either the charges are levied on the occupier, or the person for whom the rights are made available).
Contract
Business Stream mounted a further attack, and argued that it should be inferred that there was a contract (as opposed to “arrangements” and a statutory entitlement to charge). The Sheriff Principal held that in Mr. Chataroo’s case, there was no contract. Further, she held that as there was a statutory method of charging, predicated on “arrangements”, it was not necessary to infer that there was a contract between the parties (para. 34).
Obviously if a party has entered into a contract with Business Stream (or another provider), that would alter the picture.
Jurisdiction
Mr. Chataroo had argued all along that the court in Edinburgh did not have jurisdiction to hear the case. Business Stream had sued in Edinburgh on the basis that, they said, payment ought to have been made under their contract (or, one supposes, “arrangements”) at Edinburgh – where Business Stream are based. If, however, there was not a contract, or there was a contract and it was a “consumer contract”, the action ought properly to have been heard in the defender’s local court (being Airdrie) (para. 36).
“Consumer contracts” are a particular type of contract, and one would usually on the face of it not expect them to apply to business to business contracts (such as Business Stream and a newsagent). However, the Sheriff Principal held that the fact the water and waste services were non-domestic in nature, this related to the premises and not to the user or the user’s trade. The Sheriff Principal noted that the question cannot be determined by the mere facts that there is a non-domestic premises involved, or that the premises are used for a business – the real question is whether the purpose of the contract is outwith the user’s trade. It was therefore held that any water contract would be outwith Mr. Chataroo’s trade, and accordingly a consumer contract.
Whilst this case is fairly fact sensitive in some areas, it is a useful analysis of the law in this area and can be applied to present, and future, cases.
If you would like advice on your liability for non-domestic water and waste, or if you have been sued by a non-domestic provider, please get in touch.
This article is for general information only. Nothing in this article should be taken as legal advice. If you have any queries on the content of this article please contact us.
