Thames Water Utilities Ltd v Ministry of Defence

This is an appeal by Thames Water (Utilities) Limited (“Thames Water”) against a decision of Her Honour Judge Kirkham on 19 January 2006 sitting in the Technology and Construction Court in Birmingham. It was a trial of preliminary issues in an action brought by the Ministry of Defence (“MoD”) to recover alleged overpayments made by them to Thames Water for sewerage services provided. Thames Water is the sewerage undertaker (and also the water undertaker) under the Water Industry Act 1991 (“the 1991 Act”) for an area which includes military barracks owned and operated by MoD.

MoD claim that, between 1996 and 2004, they were overcharged by Thames Water for sewerage services provided at the barracks. The central issue is a straightforward one; is Thames Water entitled to charge for sewerage services at the barracks by reference to the volume of water entering the sites, even though a lesser volume of water may be discharged from the sites to sewers? That issue is, however, overlaid by procedural issues which arise because of the course the litigation has taken. The parties agreed, and asked the judge to resolve, a number of issues on the basis of an agreed statement of facts. The statement of facts provided that leakage occurred from MoD’s pipework on site at the barracks so that a lesser volume of water was discharged than was received. The leakages were first notified to Thames Water in about September 2002 and gave rise to the present claim. MoD claims restitution on the basis that invoices were paid under a mistake of fact; MoD did not realise that it was being billed for sewerage services on the basis of the volume of water provided by Thames Water in performance of its statutory duties under the 1991 Act.

The litigation has been distorted by Thames Water’s acceptance, for the purpose of determination of preliminary issues, that there was a basis for MoD’s common law restitutionary claim (paragraph 6 of the judgment). In her findings, the judge also recorded that “the basis on which the MoD pursue their claim, namely repayment of sums paid by mistake, is not challenged by Thames Water”. Ten preliminary issues were drafted but the essential questions, as identified in the grounds of appeal, were, first, whether the court had jurisdiction to consider a restitutionary claim in the context of services provided under the 1991 Act and, secondly, if there was jurisdiction, whether Thames Water could charge for sewerage services on the basis of the volume of water entering the sites. The judge determined first, that the court had jurisdiction and, secondly, that Thames Water was not so entitled.

Having regard to the concessions made at the hearing, and the grounds of appeal, it is not open to the court to investigate whether, on the facts, a restitutionary claim is possible at all. The claim is based on the assertion that both military officers and civilians acting for MoD were unaware of the basis on which MoD was being charged. It is claimed that MoD’s general understanding of the meter readings set out in invoices reflected the actual volume of water exiting the site to sewer. Due to the nature of the military, personnel are rotated to different posts every three years and it is extremely unlikely, it is said, that any one individual would gain knowledge and understanding of the basis of charging.

Quite apart from the public’s expectation that Government Departments will check whether they are being charged correctly, it is extremely difficult to accept the claim to lack of knowledge and understanding. Thames Water’s bills, under the heading “Your Water Services Bill” and “Service Charges” plainly charge for the same volume of “waste water” as for “water” provided. On the sample bill submitted to the court, that of 14 January 2002, Thames Water charged for 18747m³ of water provided and exactly the same volume of waste water. I find it difficult to understand why this litigation has come so far without investigation whether, on those facts, a restitutionary claim can hope to succeed.

Put shortly, Thames Water submits, on the jurisdictional issue, that, under the statutory scheme provided by the 1991 Act, MoD’s remedy was to seek relief from the Director General of Water Services appointed under Section 1 of the Act. (Since 1 April 2006, and by virtue of provisions in the Water Act 2003 and Regulations made thereunder, the Director’s functions are performed by a body corporate known as the Water Services Regulation Authority (“the Authority”). I refer in this judgment to the Director, all material events having taken place before the statutory change. Decisions of the Director, it is accepted, were challengeable by way of judicial review. For MoD, it is submitted that nothing in the 1991 Act prevents recourse to the courts for a private law claim for restitution. Nor does MoD need to rely on breaches by Thames Water of its terms of appointment under the 1991 Act, and the Act provides no defence for Thames Water. The claim was, and the judge accepted the submission, “a common law claim in mistake for restitution”.

Before considering that issue in more detail, I turn to the other issue. Mr Onions QC, for MoD, accepts that, to succeed on the relevant preliminary issue, he must establish that MoD had paid for a service which was not provided. Having referred to Sections 142 and 143 of the 1991 Act, the judge stated, at paragraph 58:

“In my judgment, the service for which TW charge is the disposal of a volume of waste water ... Section 142 permits TW to charge for services provided. In my judgment, that means a service actually provided – that is disposal of a volume of water. In circumstances where it can be shown that TW are charging by reference to a service which they have not, in fact, provided TW are in my judgment acting beyond their power. Section 142(1)(b) limits an undertaker’s right to demand and recover charges from those to whom the undertaker has provided services. The Act does not permit an undertaker to charge a person to whom he provides no service or a lesser service than that for which it charges.”

For Thames Water, Mr Nelson QC submits that, under the 1991 Act, Thames Water is entitled to calculate sewerage charges on the basis of water supplied to the site.

Section 142 of the 1991 Act provides, insofar as is material:

“(1)

Subject to the following provisions of this Chapter, the powers of every relevant undertaker shall include power—

(a)

to fix charges for any services provided in the course of carrying out its functions and, in the case of a sewerage undertaker, charges to be paid in connection with the carrying out of its trade effluent functions; and

(b)

to demand and recover charges fixed under this section from any persons to whom the undertaker provides services or in relation to whom it carries out trade effluent functions.

(2)

Subject to subsections (2A), (3) and (3A) below, the powers conferred by subsection (1) above shall be exercisable—

(a)

by or in accordance with a charges scheme under section 143 below; or

(b)

by or in accordance with agreements with the persons to be charged.

(3)

…

(4)

Except in so far as this Chapter otherwise provides, a relevant undertaker may fix charges under this section by reference to such matters, and may adopt such methods and principles for the calculation and imposition of the charges, as appear to the undertaker to be appropriate.

(5)

…

(6)

…

(7)

…”

As originally enacted, Section 143, provided, insofar as is material:

“(1)

A relevant undertaker may make a scheme (“a charges scheme”) which does any one or more of the following, that is to say -

(a)

fixes the charges to be paid for any services provided by the undertaker in the course of carrying out its functions;

(b)

…

(c)

makes provision with respect to the times and methods of payment of the charges fixed by the scheme.

(2)

…

(3)

…

(4)

A charges scheme may—

(a)

make different provision for different cases, including different provision in relation to different circumstances or localities; and

(b)

contain supplemental, consequential and transitional provision for the purposes of the scheme;

and such a scheme may revoke or amend a previous charges scheme.”

Section 144 (1) provides, insofar as is material:

“(1)

Subject to the following provisions of this section and except in so far as provision to the contrary is made by any agreement to which the undertaker is a party—

(a)

…

and

(b)

sewerage services provided by a sewerage undertaker shall be treated for the purposes of this Chapter as provided to the occupiers for the time being of any premises which—

(i)

are drained by a sewer or drain connecting, either directly or through an intermediate sewer or drain, with such a public sewer of the undertaker as is provided for foul water or surface water or both; or

(ii)

are premises the occupiers of which have, in respect of the premises, the benefit of facilities which drain to a sewer or drain so connecting.”

The principal duties of sewerage undertakers are set out in Section 94(1) of the 1991 Act which, as originally enacted, provides:

“(1)

It shall be the duty of every sewerage undertaker –

(a)

to provide, improve and extend such a system of public sewers (whether inside its area of elsewhere) and so to cleanse and maintain those sewers as to ensure that that area is and continues to be effectually drained; and

(b)

to make provision for the emptying of those sewers and such further provision (whether inside its area or elsewhere) as is necessary from time to time for effectually dealing, by means of sewage disposal works or otherwise, with the contents of those sewers.”

That duty is reflected in the provisions of Section 144, already cited.

Section 106 creates an entitlement in the occupier of premises to have his drains or sewers communicate with the public sewers of the sewerage undertaker and to discharge foul water and surface water from those premises into the public sewers.

In the general interpretation section in the 1991 Act, Section 219, it is provided that “services” includes “facilities” and that “sewerage services” “includes the disposal of sewage and any other services which are required to be provided by a sewerage undertaker for the purpose of carrying out its functions”. Thus the services provided by the undertaker include sewage disposal and other services (which include facilities) required for the purpose of carrying out the functions of a sewerage undertaker. These may include pumping stations and sewage disposal works.

Thames Water has exercised its power under Section 143 to make charges schemes. A scheme is promulgated annually and it is not suggested that there are differences between schemes which are material for present purposes. By way of example, the Charges Scheme for 2002-2003 provided, in so far as is material:

“Subject to the succeeding provisions of this scheme, there shall be payable to Thames Water in respect of connected premises where water supplied thereto by Thames Water or another water undertaker is measured by meter, an amount equal to the sum of the charges referred to in paragraphs (a) or (b) plus (c) below …

(a)

Volume charge – standard tariff

(i)

The amount produced by multiplying the water supplied as measured by meter … (“the measured quantity”) by a rate per cubic metre as shown in the Metered Charges Schedule. However, where it is shown to the satisfaction of Thames Water that more than ten percent of the measured quantity (excluding any quantity which in Thames Water’s opinion has been lost through leakage) is not discharged to a public sewer, then for the purpose of this calculation the measured quantity (“the abated quantity”) from the date on which this was brought to the attention of Thames Water.

…

(iii)

where the connected premises is not a house, the abated quantity should be the total quantity of water not discharged to a public sewer less any quantity which in Thames Water’s opinion has been lost through leakage.”

By virtue of Section 4 of the Water Industry Act 1999 (“the 1999 Act”), a sub-section (6) which came into force on 23 December 1999, was added to Section 143 of the 1991 Act. It provided: “A charges scheme shall not take effect unless it has been approved by the Director”. Subsequent schemes have been so approved and indeed earlier schemes did receive approval from the Director before the statutory requirement arose.

Section 6 of the 1999 Act provided for the insertion of a new Section 144A into the 1991 Act, which section came into force, in so far as is material, on 1 April 2000. It conferred on consumers from water undertakers a right to elect for charging by reference to volume, as distinct from charging in other ways. Section 144A (9) provides:

“If and so long as a water undertaker is obliged under subsection (2) above to fix charges for the supply of water in respect of any premises by references to the volume of water supplied, a sewerage undertaker is under a corresponding obligation to fix charges in respect of foul water drainage provided by the sewerage undertaker in respect of those premises by reference to that volume.”

Where that right is exercised, a statutory obligation is thus imposed on a sewerage undertaker to fix charges by reference to the volume of water supplied by the water undertaker.

Mr Onions submits that Thames Water can, under Section 142 (1), charge only for “services provided”. The service provided is dealing with the volume of water discharged from the sites into Thames Water sewers; to accept and treat waste water. Where it can be demonstrated, as it can in the present case, that Thames Water is making a charge for water not discharged into its sewers, it is purporting to charge for a service which it has not provided. Questions of breach of the conditions under which, by virtue of section 11, Thames Water was granted a licence under the 1991 Act, do not arise on this claim, it is submitted. While the basis for charging does come within the charges scheme made under Section 143 of the 1991 Act, it fails because it is beyond the power conferred on Thames Water under Section 142.

It is submitted that Thames Water has acknowledged its error in a reply, dated 12 December 2005, to a request from MoD for information: “The service that Thames provides is to accept and treat waste water from customers’ premises.” (It is right to add that the reply continues:

“In meeting this requirement Thames provides a network of sewers and treatment works including the facility for the discharge of treated effluent and disposal of sludge. Each element of the process requires capital investment, the maintenance of assets and the operating costs involved in providing the service.”)

I consider the submission that Thames Water may fix charges, under section 142 of the 1991 Act, only by reference to the amount of water entering their sewers from a customer’s site to be untenable. Section 142(4) confers a discretion on the undertaker as to the principles to be adopted when calculating charges under the section. The expression “services provided” has a much broader meaning than that for which MoD contends. Services provided, in accordance with the statutory duties in the 1991 Act, have a different and broader scope. The customer’s entitlement is to communicate with a system in which Thames Water is under a duty to provide sewers, maintain and empty those sewers and effectively deal with their contents. That is established by the provisions of the statute dealing with the duties of a sewerage undertaker and the definitions of services and sewerage services in the 1991 Act. Services provided in section 142 include facilities provided. The conclusion is reinforced by the obligation now imposed on sewerage undertakers under certain circumstances in Section 144A(9) of the Act.

To demonstrate that charges are based on a volume of water not all of which enters the sewers does not demonstrate that Thames Water is charging for services not provided. A charge based on the amount of water supplied to the site is not in my judgment beyond the powers of the Act. As to the document of 12 December 2005, the court is not bound, when construing the statute, by any apparent concession by a party to the action as to the meaning of the word ‘services’ in the statute.

It is not necessary to consider the charges schemes in detail for present purposes. Provision is made for discounts where it is shown that substantial amounts of water have been consumed on site, for example for industrial processes, and where leaks are discovered, and repaired within a prescribed time. Billing policies applied by Thames Water include concessions to customers outside the Charges Scheme and these include leakage allowances for a limited period, when leaks on the premises are repaired.

I would decide the case on that ground. There has, however, been substantial argument as to whether a remedy in the courts was available at all to MoD. Thames Water contends that the customer’s only remedy was by way of recourse to the Director, with a possible remedy in judicial review in relation to any decision the Director took. I deal with the statutory scheme in outline only and do not need to set it out in the detail which might have been required had a complaint been made to the Director under the scheme.

The appointment of Thames Water as sewerage undertaker was under Section 6 of the 1991 Act. By virtue of Section 11, the Secretary of State has power to impose conditions on the appointment. Section 18 provides that the Director, if satisfied that an undertaker is contravening any condition of the appointment, shall by a final enforcement order make such provision as is requisite for the purpose of securing compliance with that condition. Section 22 provides a private law right of action in damages of breach of an enforcement order.

At the material time Section 18(8) provided:

“Where any act or omission constitutes a contravention of a condition of an appointment under Chapter I of this Part or of a statutory or other requirement enforceable under this section, the only remedies for that contravention, apart from those available by virtue of this section, shall be those for which express provision is made by or under any enactment and those that are available in respect of that act or omission otherwise than by virtue of its constituting such a contravention.”

I refer to section 150A of the 1991 Act, which came into force on 1 April 2006, only because of its possible impact, when regulations are made under it, on the right preserved in the closing words of Section 18(8) of the 1991 Act. The section has no impact, in my view, on the construction of the sections material to the decision in the present case and for present purposes.

The section empowers the Secretary of State by regulations to make provision for “billing disputes” to be referred to the Authority for determination (sub-section 1). These disputes are disputes concerning the amount of the charge which the undertaker is entitled to recover from the customer in connection with the provision of sewerage services (sub-section (2)). Regulations may provide for a determination to be final and enforceable as if it were a judgment of a county court (sub-section (6)). A dispute subject to proceedings before a court shall not be determined under this procedure but neither party to the billing dispute referred for determination shall commence proceedings in any court in respect of that dispute pending its determination (sub-section (7)). We are told that no such regulations under the section are in force.

Mr Nelson submits that where a charges scheme was claimed to be beyond the powers of the Act, the remedy available pursuant to Section 18(8) was a complaint to the Director and not an action for money paid under a mistake. It is submitted that the scheme of the Act is such that complaint to the Director is the only route by which a customer aggrieved by a charges scheme can proceed. The Director is an expert regulator well able to police the competing interests of the undertaker and the consumer. The need to balance the respective interests of the undertaker, which is a commercial company, and of customers, was recognised in Marcic v Thames Water Utilities Ltd [2004] 2 AC 42 per Lord Nicholls of Birkenhead at paragraphs 12 and 15 and Lord Hoffmann at paragraphs 63 and 64.

Mr Onions, in addition to pointing out how late in the day the jurisdictional point was taken, reiterates that MoD are not alleging a breach of licence conditions or breach of statutory duty. Section 18(8) preserves the right to make a claim such as the present one, as it would a claim based on an invoice which was inaccurate because of a faulty meter or an arithmetical error.

In Marcic, the claimant, whose garden had repeatedly been flooded by sewage discharged from Thames Water’s sewers, brought an action for damage to his property caused by the escapes. Because of its other commitments and priorities, Thames Water was unable to remedy the problem in the foreseeable future. The scheme under the 1991 Act was considered in the House of Lords and it was held that the common law should not impose on a sewerage undertaker obligations which would be inconsistent with the statutory scheme. A cause of action in nuisance would be inconsistent with that scheme.

Lord Nicholls stated, at paragraph 33:

“The common law of nuisance should not impose on Thames Water obligations inconsistent with the statutory scheme”.

Lord Nicholls held (paragraph 34) that the claim was a claim that Thames Water should build more sewers. He stated at paragraph 35:

“The existence of a parallel common law right, whereby individual householders who suffer sewer flooding may themselves bring court proceedings when no enforcement order has been made, would set at nought the statutory scheme”

Lord Hoffmann, at paragraph 70, rejected the existence of a common law duty to build new sewers. He stated:

“The 1991 Act makes it even clearer than the earlier legislation that Parliament did not intend the fairness of priorities to be decided by a judge. It intended the decision to rest with the Director, subject only to judicial review.”

The possibility of a common law action against Thames Water by a customer was, however, preserved in Marcic. Lord Nicholls stated, at paragraph 22:

“Since the claims asserted by [the claimant] do not derive from a statutory requirement, Section 18(8) does not rule them out even though the impugned conduct, namely, failure to drain the district properly is on its face a contravention of Thames Water’s general statutory duty under section 94. The closing words of Section 18(8) expressly preserve remedies for any causes of action which are available in respect of an act or omission otherwise than by virtue of its being a contravention of a statutory requirement enforceable under Section 18”.

Lord Hoffmann stated, at paragraph 52:

“Mr Marcic chose not to avail himself of this route [complaint to the Director]. Instead, he issued a writ claiming an injunction and damages for nuisance. Section 18(8) does not exclude any remedies “available in respect of [an] act or omission otherwise than by virtue of its constituting … a contravention [of a duty enforceable under section 18]”. It follows that if the failure to improve the sewers to meet the increased demand gives rise to a cause of action at common law, it is not excluded by the statute. The question is whether there is such a cause of action.”

Lord Steyn and Lord Scott of Foscote agreed with Lord Nicholls and Lord Hoffmann.

In this case, and for the purpose of deciding the preliminary issue, it has to be accepted that a restitutionary claim is possible. However, for such a claim to succeed, MoD has to establish that it was overcharged. There can be no claim for recovery of the money unless MoD was overcharged. MoD was not overcharged; upon a correct construction of the term “services provided” in section 142 of the 1991 Act, MoD was lawfully charged under a charges schemes promulgated under Section 143 of the Act which was within the powers conferred by Section 142. The claim in nuisance in Marcic failed because a common law claim in nuisance was inconsistent with the provisions of the Act. A common law claim based on overcharging in invoices was not at the material time, and by virtue of the saving words in Section 18(8), contrary to the scheme of the Act; it fails simply because there was no overcharging on the basis alleged.

A complaint could have been made to the Director that Thames Water had misconstrued the expression “services provided” in Section 142. Had he refused relief on the ground that the charge made was within the powers of the Act (and charges schemes which he had approved), I would not have expected, and for the same constructional reason, a claim for judicial review to have had any real prospect of success. It is not necessary or appropriate in this case to consider how the statutory scheme could operate in other circumstances.

The preliminary issues are numerous and, in some cases, somewhat elaborate. It is necessary only to deal with the finding that Thames Water was not entitled to charge on the basis it did. All I would propose to direct is that the charges imposed by Thames Water on MoD were lawful and that MoD had no right by this action to recover the money paid.

I would allow this appeal.

I agree. I have also had the benefit of reading the judgment of Moses LJ in draft, with which I also agree.

I agree. This appeal gives rise to two questions, as Pill LJ explains ( in paragraph 3 of his judgment), which the judge determined as preliminary issues. It seems to me that the decision to adopt that course has led to bizarre results, which should have been avoided. It is necessary, therefore, as briefly as I can, to follow the course these proceedings took.

The MoD claimed that the charges imposed by Thames Water should have been calculated by reference to something it described as “the volume of waste water services actually provided by Thames Water”. This was “by virtue of Sections 142 and 143” of the 1991 Act ( paragraph 38 of the Particulars of Claim). Thus, the claim was founded on a contention that on the true construction of the relevant provisions of the 1991 Act, Thames Water was not entitled to charge on the basis of the volume of water supplied, but only on the basis of the volume of water discharged from MOD barracks into the Thames Water sewage system.

Surprisingly, the MOD alleged that it had, for a period of eight years between 1996 and 2004, paid in full the charges rendered as a result of a mistake of fact. The result of investigations, described in the Particulars of Claim, was to establish :

“that a significant volume of water entering (the barracks) was not returning as waste water to the sewers.”

It was, apparently unknown to the MOD, lost through leakage.

The mistake of fact relied upon was that :-

“the volume of clean water entering the (barracks) did not equate to the volume of water being discharged into the sewers.”

This mistake was denied in the defence but this court is, apparently, required to assume, for the purpose of determining the relevant preliminary issues, that a mistake of fact had been made. This is said to be the result of Thames Water not suggesting that there was no basis for the MOD’s restitutionary claim (paragraph 6 of the judgment). I am bemused. Firstly, it remains beyond my understanding as to how it can be said there was any mistake of fact whatever. Pill LJ has said that the litigation has been distorted by Thames Water’s acceptance. The salutary effect of his courtesy should restrain me from expressing my reluctance at being compelled to accept the absurd.

No-one, least of all those responsible in the MoD for the efficient management of the disposal of waste, can seriously expect a case to proceed, even in the Court of Appeal, on the basis that someone believed that the volume of water discharged into sewers from a barracks would be the same as the volume of water supplied to that barracks. It does not matter whether the difference between the volume of water discharged and the volume of water supplied is the result of an unknown leak or of water used to refresh flowers outside the Sergeant’s Mess. We have been asked to assume such a belief, even in the minds of the military, no doubt familiar with the history of Apthorpe’s thunder box (acquired from a High Court Judge when drains were put into the Government buildings in Karonga, (see Waugh’s Sword of Honour trilogy, Vol I, Men at Arms, Book Two, Apthorpe Furibundus)).

The contention of mistake of fact is hardly improved by the factual assertion of the Colonel responsible for utility matters at Divisional Level that he was misled by the invoices, which, as Pill LJ has explained, made it clear that the charge was calculated on the basis of the volume of water supplied; there could be no other explanation for the fact that the volume of cubic metres of water discharged shown in the invoices was the same as that which was supplied.

If there was any confusion, the Charges Scheme for all the relevant years, cited by Pill LJ at paragraph 14, put the basis of charge beyond all reasonable doubt.

This case demonstrates the dangers of advancing preliminary issues without regard to the plausibility, or otherwise, of the underlying assumptions upon which they are based. This approach served merely to confuse the proceedings. The MoD is well aware of the shortcomings of a TEWT; a tactical exercise without troops requires an assumption of the ability of the forces available for deployment to achieve the tactical objective. But a TEWT, just like a preliminary issue, is pointless if it requires an assumption beyond the bounds of reality.

The real dispute, as it seems to me, was whether a charge based on the volume of water supplied, rather than the volume of water discharged, was consistent with the provisions of the 1991 Act. Since that was the question requiring resolution, MoD’s entitlement to repayment depended on the contention that it had made payments under a mistake of law not fact, namely that Thames Water was entitled to charge on the basis of water supplied, when, on a proper construction of the statutory scheme, it was not. On that analysis, it makes no sense to assume any mistake, since the real question was whether there had been any mistake whatever as to Thames Water’s right to charge on the basis of the volume of water supplied. In short, the concession was inconsistent with the very issue which had to be resolved. If there was no inconsistency between Sections 142 and 143 of the Act and charges calculated by the measurement of water supplied, there was no mistake of law and no right to restitution.

Pill LJ has demonstrated that the services provided by an appointed sewerage undertaker, which may not be the same as the water undertaker, in the context of the statutory scheme as a whole, are not limited to the acceptance and treatment of waste water. “Services” are not defined, but the matter is put beyond any doubt by the provisions of Section 219. Since April 2000, a sewerage undertaker is obliged to fix charges by reference to the volume of water supplied in the circumstances identified by Section 144A.

This brings me to a further point I wish to emphasise. Section 18(8), as explained by Lord Nicholls in Marcic (paragraph 22), does not exclude the right to bring an action which does not derive from the statute. If there was a genuine claim for restitution of sums overpaid, for example by virtue of the faulty operation of a meter, designed to measure the volume of supply, it is not barred by the 1991 Act. But this case concerns the statutory authority for a basis of charge adopted over many years by many sewerage undertakers. Whilst accepting the exigencies imposed on military personnel by posting, one would have expected one of the highest offices of State to be aware of a statutory scheme supervised, even prior to 23 December 1999 (when Section 143(6) came into force), by an appointee of a Secretary of State. The assessment of a fair basis of charge is highly complex and skilled. It can only properly and fairly be undertaken by experts, such as the Director and now the Water Services Regulation Authority. Its complexity is amply demonstrated even by a brief perusal of the Director’s report on Tariff Structure and Charges for 1999/2000. The suggestion advanced that the sewerage undertaker was obliged only to charge on the basis of the volume of water discharged amounts to a fundamental challenge to the legality of the basis of charge adopted for many years. It is to be hoped, at least, that the MoD has been aware throughout that time that there were no meters, on the sites of their barracks, measuring the volume of water discharged. Difficult questions would arise, if it were proposed that such meters should be installed to form the basis of charge (see the discussion at part 6 of the 1999-2000 Report). I mention these factors because this case appears to me to represent a challenge by one branch of the Executive on the legality of a scheme introduced and administered by another. The court did not spend further time in enquiring how this has come about or how it was that the Treasury Solicitor appears never to have been instructed to advise or to have been involved in any way. But perhaps, one lesson may have emerged. The proper engagement of the Government Legal Service is likely to have ensured that this dispiriting litigation would have been avoided.