Lambeth London Borough Council v Thomas: CA 31 Mar 1997

There had been an agreement between Lambeth and Thames Water when Thames Water was still a public water authority and when Lambeth collected water rates properly so called from its tenants on behalf of the water authority. No evidence of it in writing remained. but it was found by the county court judge on the basis of the evidence in the case, and its essential outlines were found as facts. The tenant there, Mrs Thomas, was also a secure tenant who had failed to pay her water charges, which under her tenancy agreement were payable weekly together with her rent. A possession order was sought for some pounds 600 of water charges (and some pounds 100 of general rates). Her housing benefit had otherwise discharged all rent due from her. The judge regarded the water charges as rent, but refused to order possession on the basis that, although they were due, it would not be reasonable, at least normally, to use a possession order as a sanction to enforce payment of water charges for water supplied by a privatised third party.
Held: Water rates paid on by council ‘touched and concerned’ land and were recoverable as rent.
Mance J said: ‘The position is thus that the Council had at all material times the power to enter into an agreement for the collection and recovery by the Council on behalf of the water authority or company of any water charges payable or fixed for the supply of water by the water authority or company, at least in the Council’s area. The Judge, after hearing evidence, was satisfied that the Council had entered into such an agreement, currently with Thames Water Utilities Limited, whereby the Council ‘undertook to collect money from each tenant’. He described the origins of the agreement as ‘lost in the mists of time’, but set out certain of its characteristics which are worth mention. The Council, consistently with the statutory language, claims and seeks to collect from its tenants the amounts fixed by the water company in respect of their particular properties. The discounted lump sum is arrived at by negotiation and is based on the total water charges for all relevant Council properties, less a discount to take account of unoccupied premises and the costs of collection. Presumably, although this is not stated, the discount also takes account of the risks of non-recovery, since it appears that the Council undertakes to pay the water company the discounted lump sum, irrespective of what it recovers from its tenants. We were told that the discounting means in practice, and is designed to mean, that the Council achieves for the benefit of its housing revenue account a surplus through collecting on behalf of Thames Water Utilities Limited more by way of water charges than the amount for which the Council actually has to account to that company. It is always open to an agent to contract on such a basis, and I see no objection in the present statutory context to the arrangement made between the Council and the water company. Any surplus accruing to the Council’s housing account (which has been ‘ring-fenced’ under the relevant legislation throughout the 1990s) ensures [sc ensures] to the benefit of all its tenants, since it enables the Council to keep rents down . . The effect of the agreement between the Council as landlord and Mrs Thomas as tenant has been at all times such as to entitle the Council to claim from her the water rate or charges which the Council has arranged with the water authority or company to collect’ and
‘In the present case, the water charges are due from the tenant as occupier of the demised premises and a user of water there. Although the water supplies are made by the water company to Mrs Thomas and the statutory framework envisages the collection of the water charges by the Council on behalf of the water authority or company, the practical effect of the agreements made (a) between the Council and the water company and (b) the Council and Mrs Thomas is that Mrs Thomas answers for the water charges to the Council while the Council takes care of them vis-s-vis the water company. It was explained to us that this system not only provides a potential surplus in the Council’s housing account, to the benefit of all tenants including Mrs Thomas, it also corresponds with the Council’s policy that tenants who are less well off and, in some cases perhaps, less capable of looking after their own affairs should be protected from the risk of having their basic utilities cut off, due to failure to meet relevant charges. Some housing associations have, we were told, made similar arrangements, and the Council itself has some similar arrangements in relation to the supply of electricity and gas. There may be council tenants who do not approve or appreciate the policy or the making of such arrangements for their benefit, but the legislation clearly empowers it and the Council is clearly entitled to adopt such a policy. Where it has done so and has implemented it in the way described for the benefit of itself and its tenants, the resulting obligation on a tenant to pay to the Council the water charges must in my view be regarded as touching and concerning the demised house, and as an ‘obligation of the tenancy’, even if it is not anyway rent.’

Kennedy LJ, Mance J
Times 31-Mar-1997, (1997) 30 HLR 89
England and Wales
Cited by:
CitedRochdale Borough Council v Dixon CA 20-Oct-2011
The defendant tenant had disputed payment of water service charges and stopped paying them. The Council obtained a possession order which was suspended on payment or arrears by the defendant at andpound;5.00. The tenant said that when varying the . .

Lists of cited by and citing cases may be incomplete.

Landlord and Tenant, Local Government, Utilities

Leading Case

Updated: 01 November 2021; Ref: scu.82907