Monday, 2 December 2019

Bonanza for Council Tenants: Refunds for Water and Sewerage Overcharging


The result of a High Court test case decided last week involving a Kingston-upon-Thames council tenant (Royal Borough of Kingston-upon-Thames v Moss [2019] EWHC 3261 (Ch))
is likely to mean money back for hundreds of thousands of local and housing authority tenants who have been supplied with unmetered water and sewerage services as part of their rent.

In the Kingston case, for over 14 years up to August 2017, an agreement between the Council and Thames Water provided for the council to pay for supplies and to enjoy a voids allowance (to reflect times when properties were vacant) of 3.5% and commission of 9.3% less the voids allowance. The commission was intended to cover the administrative costs of collection and any losses through non-recovery. What were added to tenants’ rent were the gross charges and the reductions were not passed on.  

The High Court judge ruled that as the council was bound by the Water Resale Orders 2001 and 2006, it had charged in excess of the permitted sums and there was a statutory right of tenant recovery. The tenant also had a contractual claim on the basis of a varied standard agreement which obliged him to merely pay ‘the exact amount payable for the property to the water authority.’  

There may be a strong argument that a claim for overcharged services can only go back for six years immediately before the start of civil proceedings for the return of money although the council did not take this point in last week's case.

If Kingston council decides to try and appeal the decision, I will let you know. By the way, the decision follows a similar case against Southwark London Borough Council in 2016 which has so far cost the council £28.6m in overcharges it has repaid to tenants.

STOP PRESS
The council has been refused permission to appeal by the High Court judge. It can now go to the Court of Appeal and seek permission there. It has been granted an extension of time for seeking the Court of Appeal's permission. I will keep you posted as to whether it will follow that through and, if it does, as to the outcome.