Case No: HC02C01633
Neutral Citation Number :  [2002] EWHC 2417 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 15th November 2002

Before :

THE VICE-CHANCELLOR
- - - - - - - - - - - - - - - - - - - - -
Between :

	BRITISH WATERWAYS BOARD	Claimant	
	- AND -		
	(1)  LONDON POWER NETWORKS PLC
(2)  SECRETARY OF STATE FOR TRADE AND INDUSTRY	Defendants	

- - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - -

Mr. Joseph Harper QC (instructed by Messrs Eversheds ) for the Claimant
Mr. Guy Roots QC (instructed by Messrs Lewis Silkin) for the 1st Defendant
Mr. Tim Mould (instructed by the Treasury Solicitor) for the 2nd Defendant
Hearing date : 5th November 2002
- - - - - - - - - - - - - - - - - - - - -
Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

.............................
The Vice-Chancellor

The Vice-Chancellor : 
1.	The issue for my determination is whether the power conferred on the second defendant (“the Secretary of State”) by Paragraph 6(3) of Schedule 4 to the Electricity Act 1989 enables him to grant to the first defendant (“LPN”) a wayleave entitling it to install and maintain in the services tunnel owned by the claimant (“BWB”) running under Mill Wall cutting, Marsh Wall, London, E14 four cables for the transmission of electricity and associated telephone and signalling cables.   LPN and the Secretary of State invite me to give an affirmative answer.  BWB contends for a response in the negative.
2.	The area in question is in the Isle of Dogs.   It lies within the Docklands Urban Development Area and Enterprise Zone formerly managed by the London Docklands Development Corporation (“LDDC”).   LDDC was concerned to provide the necessary infrastructure for the regeneration of the area by the sale of serviced sites.   This involved, amongst much else, the construction of roads and the laying of electricity cables.
3.	One of such roads was Marsh Wall.  It runs in an east/west direction to the south of the West India docks.  It crosses the water filled cutting between the West India Docks, Main Section and Mill Wall Inner Dock.  At that point a new bascule bridge was provided with service tunnels to the north and south of the bridge.  Each tunnel consists of two vertical access shafts, about 14.5 metres deep to the east and west of the cutting connecting to a horizontal tunnel with a diameter of 1.8 metres running under the cutting.   Electricity cables were laid in ducts running under the street surface of Marsh Wall and through the northern tunnel under the cutting.
4.	At the time Marsh Wall and the service tunnels were constructed the supplier of electricity to the area was London Electricity Board (“LEB”).   In March 1990 the rights and liabilities of LEB were transferred to London Electricity plc pursuant to the Electricity Act 1989.   LPN is a wholly-owned subsidiary of London Electricity plc and the holder of a licence from the Secretary of State dated 1st October 2001 for the regulated distribution of electricity in the area.
5.	BWB was constituted by and pursuant to the Transport Act 1968.  Its duty, imposed by s.105, is to maintain waterways in a suitable condition for use by relevant vessels or craft.  By a transfer dated 10th October 1997 LDDC transferred to BWB its Dock Estate, including Marsh Wall and the Mill Wall cutting.   On 20th November 1997 BWB was registered as the proprietor thereof under Title No:EGL 365504.
6.	In April 2001 LPN commenced work laying further electricity cables along Marsh Wall by which to supply electricity to new customers.  The work stopped at the bascule bridge on 29th May 2001 because BWB intervened to prevent an inspection of the service tunnel to the north of the bridge through which LPN intended to install the cables.  LPN’s request to BWB for a wayleave for that purpose made on 18th January 2002 was refused by BWB on 6th February 2002.   
7.	On 5th April 2002 LPN made a further request and applied to the Secretary of State for the grant of the wayleave sought by LPN pursuant to Paragraph 6(3), Schedule 4 to the Electricity Act 1989.  BWB again refused.  The Secretary of State initiated the process by which he is required to consider LPN’s application.  That procedure was effectively stopped by these proceedings which were commenced by BWB on 18th June 2002.  The trial of the issue now before me was directed by Master Bowman on 19th July 2002.
8.	The Electricity Act 1989 was passed to make new provision with respect to the supply of electricity.  Such supply is unlawful unless licensed by the Secretary of State (s.4).  There are four types of licence, a generation, transmission, distribution and supply licence (s.6).  The licence granted to LPN on 1st October 2001 is a distribution licence.  Accordingly it is the duty of LPN to develop and maintain an efficient, co-ordinated and economical system (s.9).   Separate consent is required from the Secretary of State for the installation and maintenance of overhead lines (s.37).  Schedules 3 and 4 confer on distribution licence-holders the powers therein contained, if and to the extent that the licence so provides (s.10(1)).  It is common ground that the licence to LPN does so provide.
9.	Schedule 3 contains powers of compulsory purchase.   Schedule 4 paras 1 to 5 confer powers to carry out and alter street works in both England and Scotland, for the alteration of such works and for the avoidance of interference with telecommunications.   The relevant provision is paragraph 6.
10.	Paragraph 6(1) provides
 “This paragraph applies where –
(a) for any purpose connected with the carrying on of the activities which he is authorised by his licence to carry on, it is necessary or expedient for a licence holder to install and keep installed an electric line on, under or over any land; and
(b) the owner or occupier of the land, having been given a notice requiring him to give the necessary wayleave within a period (not being less than 21 days) specified in the notice –
(i) has failed to give the wayleave before the end of that period; or
(ii) has given the wayleave subject to terms and conditions to which the licence holder objects;
and in this paragraph as it so applies “the necessary wayleave” means consent for the licence holder to install and keep installed the electric line on, under or over the land and to have access to the land for the purpose of inspecting, maintaining, adjusting, repairing, altering, replacing or removing the electric line.”
Subparagraph (2) contains a similar provision enabling the licence-holder to keep an electric line.  
11.	Sub-paragraphs (3),(4) and (5) are in the following terms:
 “(3) Subject to sub-paragraphs (4) and (5) below, the Secretary of State may, on the application of the licence holder, himself grant the necessary wayleave subject to such terms and conditions as he thinks fit; and a necessary wayleave so granted shall, unless previously terminated in accordance with a term contained in the wayleave, continue in force for such period as may be specified in the wayleave.
 (4) The Secretary of State shall not entertain an application under sub-paragraph (3) above in any case where –
(a) the land is covered by a dwelling, or will be so covered on the assumption that any planning permission which is in force is acted on; and 
(b) the line is to be installed on or over the land.
(5) Before granting the necessary wayleave, the Secretary of State shall afford –
(a) the occupier of the land; and
(b) where the occupier is not also the owner of the land, the owner, 
an opportunity of being heard by a person appointed by the Secretary of State.”
Sub-paragraph (8) makes it clear that the expression dwelling-house includes its garden and any outhouses or other appurtenances belonging or usually enjoyed with it.
12.	Paragraph 7 headed “Provisions supplemental to paragraph 6” deals with compensation.  Sub-paragraph (1) entitles the occupier and, if different, the owner to recover from the licence-holder compensation in respect of a grant under paragraph 6.  By paragraph (2) any person interested in land or moveables may recover from the licence-holder compensation for any damage caused or disturbance in his enjoyment thereof in the exercise of any right conferred by the wayleave.   Sub-paragraph (4) refers any dispute over compensation to the Lands Tribunal for determination in accordance with the Land Compensation Act 1961.
13.	The word “land” is not defined in the Electricity Act 1989.  Accordingly resort must be had to Interpretation Act 1978 s.5 and Schedule 1 which provide that, “unless the contrary intention appears”, “”land” includes buildings and other structures, land covered with water, and any estate, interest, easement, servitude or right in or over land”.  It is not disputed that the service tunnels are land within the principles of Elitestone Ltd v Morris [1997] 1 WLR 687 and, in the absence of a contrary intention, fall within this definition of land.
14.	The submissions for BWB rely on what their counsel described as “a bizarre hypothesis”.   He submitted that if the word “land” comprehended anything and everything attached to it then paragraph 6 would authorise the routing of an electricity supply through conduits in any building (other than one within para 6(4)) such as an office block because there is no power to control the route chosen by the licence-holder.   Counsel compared these provisions with provisions in the Telecommunications Act 1984.   He submitted that the context warranted a departure from the definition, as exemplified in Payne v Barratt Developments Ltd [1986] 1 WLR 1 and Starke v IRC [1996] 1 WLR 622.   He suggested a number of departures, namely (1) in the context of the Electricity Act 1989 the word “land” does not include installations or equipment attached to the land, (2) the words “on, under or over [any][the] land” where they appear in paragraph 6(1) and (2) of Schedule 4 to the Electricity Act 1989 do not include “through installations or equipment” on that land and (3) Schedule 4 paragraph 6 does not entitle the applicant for a wayleave to stipulate the route across the land to be taken.
15.	I do not accept any of these submissions.   I do not find any assistance in the provisions of Electricity Act 1919 or Telecommunications Act 1984.  The former was superseded by the new provisions contained in Electricity Act 1989.  The latter is in different terms and deals with a different subject matter in a different context.   I accept, of course, that the definition of “land” contained in the Interpretation Act 1978 yields to a contrary intention, as shown by the two cases to which I have referred, but I do not find any such intention in Electricity Act 1989 whether in Schedule 4 paragraph 6 or elsewhere.
16.	First, the scheme of the Act is to provide compensation under paragraph 7 for any wayleave granted by consent under paragraph 6(1) and (2) or by the Secretary of State under s.6(3).   The parties, that is licence-holder and land-owner, might well agree to the grant of a wayleave through a service tunnel but leave the compensation to be determined by the Lands Tribunal.   If the circumstances come within paragraph 6(1) or (2) so as to authorise the award of compensation under paragraph 7(1) in the case of agreement then the same wayleave granted by the Secretary of State must come within paragraph 6(3).   In other words a wayleave for an electric line through a tunnel, such as the service tunnel in this case, must be in respect of an electric line “on, under or over...land” within all of subparagraphs (1) to (3) or none of them.
17.	Second, the provisions of paragraph 6(4) demonstrate a legislative method by which a category of wayleave is excluded.   It is not done by altering the meaning of any part of the phrase “on, under or over...land” for that would or might affect the operation of paragraphs 6 (1) and (2) and 7.   Had it been intended to exclude wayleaves “through installations or equipment on, under or over any land” then it is to be expected that the same method would have been used.
18.	Third, the “bizarre hypothesis” does not call for any modification of the composite phrase either.   Paragraph 6(3) confers a discretion on the Secretary of State.  True, he must be satisfied that “it is necessary or expedient for the licence-holder to install” the electric line.   In that event he “may...himself grant the necessary wayleave”.    Moreover he is entitled to impose “such terms and conditions as he thinks fit”.   In exercising his discretion the Secretary of State must balance the interests of the licence-holder with those of the owner and occupier to whom he is obliged to afford a hearing under paragraph 6(5).   If he concludes that he should refuse the application then the owner and/or occupier can have no cause of complaint.  If he grants it then he may impose conditions to ameliorate the effect on the owner and/or occupier under paragraph 6(3) and compensation will be payable under paragraph 7(1).  I see nothing bizarre about such a procedure and certainly nothing to suggest that the word “land” as used in paragraphs 6 and 7 of Schedule 4 should be given a meaning different to that set out in the Interpretation Act 1978.
19.	Fourth, the procedure envisaged by paragraph 6 necessarily involves the applicant specifying the route of the wayleave he wants.  If he does not he will not obtain an agreement under paragraph 6(1) or (2), nor will he be able to discharge the onus on him in an application under paragraph 6(3) to demonstrate that the wayleave is necessary or expedient.   But it does not follow that he will obtain the wayleave so specified.  The owner may not agree and the Secretary of State may refuse it.  Thus there is, contrary to the bizarre hypothesis, power to control the route of the wayleave.
20.	In summary, in my view the existence of both the discretion of the Secretary of State and the right to compensation undermines the “bizarre hypothesis”.   In its absence and in the context of Schedule 4 as a whole I see no ground for restricting the ambit of the word “land” as defined in the Interpretation Act 1978 or the normal meaning of the phrase “on, under or over..land” in any of the ways suggested by counsel for BWB.
21.	For these reasons I will make a declaration to the effect that the power conferred on the Secretary of State by Paragraph 6(3) of Schedule 4 to the Electricity Act 1989 enables him to grant to LPN a wayleave entitling it to install and maintain in the services tunnel owned by BWB  running under Mill Wall cutting, Marsh Wall, London, E14 to the north of the bascule bridge four cables for the transmission of electricity and associated telephone and signalling cables.