Mount Murray Country Club Ltd v Department of Transport of the Isle of Man (Isle of Man) [2004] UKPC 57 (16 December 2004)

	Privy Council Appeal No. 5 of 2004

(1) Mount Murray Country Club Limited and
(2) Conrad Hotels Limited	Appellants
	v.
The Department of Transport of the Isle of Man	Respondent

	FROM

	THE HIGH COURT OF JUSTICE OF THE ISLE OF MAN
(STAFF OF GOVERNMENT DIVISION)
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	JUDGMENT OF THE LORDS OF THE JUDICIAL
	COMMITTEE OF THE PRIVY COUNCIL,
	Delivered the 16th December 2004
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	Present at the hearing:-
			Lord Hope of Craighead
Lord Millett
Baroness Hale of Richmond
Lord Carswell
Lord Brown of Eaton-under-Heywood
			[Delivered by Lord Carswell]
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1.	The first-named appellant Mount Murray Country Club Limited (“Mount Murray”) is a development company which planned to develop an estate in the parishes of Santon and Braddan in the Isle of Man, consisting of an hotel and associated leisure facilities and 175 dwelling houses.  In accordance with a requirement imposed as a condition of the planning permission granted to it, Mount Murray, before building the houses, constructed a system of drains and sewers, together with a sewage treatment plant, and the sewers and treatment plant subsequently vested in the respondent Department of Transport.  A partial connection from the sewer in the street, known as a tail pipe, was made into each house plot.  This pipe ran underground to a point within the plot, the end being stopped up.  When a house was built on a plot by Mount Murray or its successor in title Conrad Hotels Limited, the tail pipe was opened up and the house drains were connected up to it by a pipe termed a lateral pipe, so that foul and surface water and sewage could then discharge into the sewer.

2.	It was common case that the sewers in the streets vested in the Department on 31 March 1995, when a batch of house plots was sold by Mount Murray to Conrad Hotels Limited, and that the Department took over the running and control of the sewerage system on 8 August 1995.  The issue in this appeal is whether the Department has been entitled since either of these dates to charge a connection fee under Isle of Man legislation when each house was so connected to a tail pipe.  For the purpose of deciding upon the exemption from connecting fees claimed by the appellants it is not necessary to determine which of these dates is material for the commencement of the Department’s entitlement to charge, since it is agreed that all of the sewers and tail pipes were laid before March 1995.

3.	The appellants brought a petition to the Isle of Man High Court, seeking a declaration on an agreed statement of facts that on the true construction of the legislation they were exempt from payment of the connecting fees.  The petition was dismissed by Acting Deemster Roger Kaye QC.  The appellants appealed against this decision to the Staff of Government Division, but that court (Tattersall JA and Deemster King) dismissed the appeal.  The appellants appealed with special leave to the Judicial Committee.

4.	The legislation in question is contained in two Isle of Man statutes, which are to be construed together, the Local Government Consolidation Act 1916 and the Local Government (Special Drainage Districts) Act 1952.  The question is one of pure construction of the statutory provisions and little assistance is to be obtained from any previous judicial decisions.

5.	Most of the material provisions are contained in the 1952 Act. Section 1 empowers the Department to construct public sewers and sewage disposal works, all of which vest in the Department.  Section 2 gives the Department power to constitute an area to be a special district for the purposes of charging thereon exclusively the expenses of works of sewerage, which under section 3 is effected by rate throughout the special district according to the valuation of the real estate.  The estate was constituted a special drainage district by the Mount Murray District Drainage Order 1993, which came into force on 1 January 1994.  By virtue of section 4 of the Act such an order transfers to the Department all functions exercisable by the Parish Commissioners.  By section 5 the sewers and sewage works vested in the Department by virtue of the provisions of the Act belong to and are to be kept in repair by the Department.

6.	Section 6 of the 1952 Act makes provision for the connection of drains and private sewers in a special district to the public sewers and for the charging of connection fees.  Section 6(1) provides, so far as material:
“Subject to the provisions of this section, the owner or occupier of any premises or the owner of any private sewer within a special district shall be entitled to have his drain or sewer connected to any building made to communicate with the public sewers in the special district and thereby to discharge foul water and surface water from those premises …”

Subsection (2) requires a person desirous of availing himself of the “foregoing” provisions, viz subsection (1), to give notice to the Department of the proposals and before commencing work, to give facilities for superintending its execution, to comply with the Department’s requirements about “the mode in which the communications between such drain and sewer and the public sewer is [sic] to be made”, to pay the connecting fee payable under subsection (3) and to reinstate and make good after completion of the work any roadway, footpath or bridge broken open.  Connecting fees are provided for by subsection (3) in the following terms:
“The owner or occupier of any premises who causes any drain or sewer directly or indirectly to communicate with a public sewer shall in respect of each connection pay to the Department a connecting fee of such an amount as shall from time to time by order be fixed by the Department and approved by Tynwald and such order may fix different amounts for different purposes and in different cases but such order shall differentiate between existing buildings and buildings erected after the commencement of this Act.”

Subsection (4) provides for the recovery by the Department of connecting fees and subsection (5) for payment to the Treasury, while subsection (6) makes it an offence to cause a drain or sewer to communicate with a public sewer without complying with or in contravention of any of the provisions of the section.
7.	The word “drain” is defined by section 28 of the 1952 Act, the relevant part of which repeats verbatim the terms of the definition contained in section 3 of the 1916 Act:
“‘Drain’ means any drain of and used for the drainage of one building only, or premises within the same curtilage and made merely for the purpose of communicating therefrom with a cesspool or other like receptacle for drainage or with a sewer into which the drainage of two or more buildings or premises occupied by different persons is conveyed …”

For the definition of “premises” one must go back to section 3 of the 1916 Act:
“‘Premises’ shall include any house, tent, van, ship, or vessel, or any other premises used for human habitation.”

8.	The thrust of the argument presented by Mr Booth QC on behalf of the appellants was that the laying of the tail pipes and their connection into the sewers laid in the streets all took place before the sewers became public sewers and vested in the Department and that the connection of the lateral pipes to the tail pipes did not come within the terms of section 6(3) of the 1952 Act.  It is a necessary part of this reasoning that the communication of each house drain with the sewer took place when the tail pipe was laid, and that when the lateral pipe was joined to it the developer did not by that act cause the drain “directly or indirectly to communicate with a public sewer”.

9.	It is plain from the wording of section 6(1) that the laying of the tail pipe did not come within that subsection, since it did not constitute the communication with the public sewers of a “drain or sewer connected to a building”, each plot being merely a bare site at that time.  The appellant’s counsel sought to escape from this by arguing that section 6(3) is a free-standing provision with a wider ambit than subsection (1), and that the charge under it could arise independently of the opening procedure under subsection (1).  The appellants had not invoked subsection (1) or served any notice under that provision when they joined the lateral pipes to the tail pipes.  Counsel submitted that “premises” could include a bare site without buildings and that the tail pipe was a “drain” which the developer was then causing to communicate with the public sewer.  The formation of the tail pipes and their connection to the sewer accordingly constituted a communication within section 6(3), irrespective of the requirements of subsection (1).  As this had occurred before the sewers in the streets had become public sewers vested in the Department and governed by the provisions relating to special districts, a connecting fee did not have to be paid in respect of that communication.  Nor was a fee payable in respect of the subsequent connection of the lateral pipes to the tail pipes, for the communication of the house drains to the sewers had already taken place and the connection of the lateral pipes did not constitute a communication for which a fee was chargeable under subsection (3).

10.	Much of the carefully constructed argument advanced on behalf of the appellants, consideration of which formed a large part of the content of the judgments delivered by the Acting Deemster and the Staff of Government Division, revolved round the meaning to be attributed to the words “communicate” and “communications”. Their Lordships do not find it necessary, however, to decide this issue, for in their opinion the matter is determined by other points of construction of section 6 of the 1952 Act.

11.	In the first place, their Lordships cannot agree that section 6(3) is a free-standing provision which can be construed independently of the rest of section 6 and subsection (1) in particular.  The Acts of 1916 and 1952 were public health enactments, not provisions designed to govern the drainage of land.  Their context is that of drainage from buildings, as appears from the definition sections.  In their Lordships’ opinion the purpose of the Acts and the statutory definitions point the way to the true construction of section 6(1) and (3) of the 1952 Act.  Section 6(1) gives an owner or occupier an entitlement to have his drains or sewer which are “connected to any building” communicate with the public sewer on certain conditions.  The purpose of subsection (3) is to protect the Revenue on the making of such communications, although it will have the effect of imposing a charge if a person makes a connection to the public sewer without serving proper notice on the Department.

12.	Secondly, in this context the word “premises” is not in their Lordships’ view intended to include land without buildings.  Mr Booth submitted that it was so intended, relying on a statement of James J in Grandi v Milburn [1966] 2 QB 263 at 273-4 that the ordinary and natural meaning of the word “premises” connoted land or buildings on land.  The Staff of Government Division agreed with his submission and held at paragraph 50 of its judgment that in the 1952 Act the word could mean land without buildings on it.

13.	The actual decision in Grandi v Milburn is not of assistance, since it was merely that a petrol tanker standing on a filling station forecourt was not “premises” for the purposes of the Petroleum (Consolidation) Act 1928.  The conveyancer’s use of the word “premises” was the subject-matter of the habendum in a lease.  The basis for this usage was explained by Lord Goddard CJ in Gardiner v Sevenoaks Rural District Council [1950] 2 All ER 84 at 85:
“‘Premises’ is, no doubt, a word which is capable of many meanings.  How it originally came to be applied to property is, I think, generally known.  It was from the habit of conveyancers when they were drawing deeds of conveyance referring to property and speaking of ‘parcels’.  They set out the parcels in the early part of the deed, and later they would refer to ‘the said premises’, meaning strictly that which had gone before, and gradually by common acceptance ‘premises’ became applied, as it generally is now, to houses, land, shops, or whatever it may be, so that the word has come to mean generally real property of one sort or another.”

14.	It is clear, however, that in modern usage the word “premises” is one whose meaning will depend largely on the context.  As Viscount Dilhorne said in Maunsell v Olins [1975] AC 373 at   383-4:
“‘Premises’ is an ordinary word of the English language which takes colour and content from the context in which it is used … It has, in my opinion, no recognised and established primary meaning.  Frequently it is used in relation to structures of one kind or another.  No one would, I think, in the ordinary use of the English language refer to farm land as premises though farm buildings may often be referred to as farm premises.  I do not think that it is right, when Parliament uses that word in a statute to conclude that it is intended to have the meaning that conveyancers attach to it unless a contrary intention appears.”

In the Australian case of Turner v York Motors Proprietary Limited (1951) 85 CLR 55 at 75 Dixon J said in the context of a landlord and tenant case:
“The word ‘premises’ is no doubt a vague one but in legislation of this sort there are great advantages in a test of its application which is objective and consists in a readily ascertainable physical fact.  Having regard to the history of the provision and the dictionary meaning of the word ‘premises’, I think that we should adhere to the rule laid down that bare land without buildings, if let for the purpose of occupation as bare land, does not constitute premises.  If land is let on terms that the tenant shall or may erect buildings … then I should say that the land and buildings when erected would form premises.”

15.	In some decided cases the context does show that “premises” is intended to include land without buildings.  In Bracey v Read [1963] Ch 88 downland gallops were held to come within the meaning of “premises” in the Landlord and Tenant Act 1954, so that they were held on a business tenancy which attracted the rights of renewal provided for by that enactment.  In other cases the context showed that “premises” mean land with buildings: see, e.g., Metropolitan Water Board v Paine [1907] 1 KB 285, in which it was held that land still vacant on which the owner proposed in the future to erect buildings did not qualify as premises within section 79 of the East London Waterworks Act 1853.

16.	There are several pointers to the meaning to be attached to “premises” in the context of the legislation presently under consideration.  The context of the 1916 and 1952 Acts is that of drainage from buildings.  The definition of “premises” in section 3 of the 1916 Act extends the meaning by including habitations which would not constitute buildings, and points away from a construction which would include vacant land within the definition. It might also be said that the reference in section 3 to “lands, premises and hereditaments” makes a distinction between lands without buildings and premises.  In the definition of “drain” in section 28 of the 1952 Act the use of the word “premises”, which occurs twice in the definition, is not such as to be sensibly capable of including vacant land.  Moreover, the phrase “used for drainage of one building only, or premises within the same curtilage” appears to connote a drain carrying water or sewage from a building.  Their Lordships conclude that in the 1916 and 1952 Acts the word “premises” does not include land without buildings on it.

17.	Thirdly, the tail pipes led to nothing when they were laid and stopped up.  No doubt it was envisaged or hoped that houses would be built in the course of time on all the sites, but that might or might not have eventually taken place.  To come within the definition of a drain in section 28 of the 1952 Act the drain must be “used for the drainage of one building only”.  This may have to be construed as including a drain leading to a building which, when the drain is connected to the sewer, is still only partly built, the drain at that point being intended to be used for the drainage of the building when the latter is completed though not yet actually in use. Be that as it may, their Lordships do not consider that a length of pipe laid in the ground and running from the sewer into an empty building site, where it is left stopped up, can on any construction constitute a drain within the meaning of section 28 of the 1952 Act.

18.	It must follow from the foregoing reasoning that since the vacant plots were not “premises” and the tail pipes were not “drains”, the connection of the tail pipes to the sewer before the sewer vested in the Department did not come within section 6(3) of the 1952 Act, with the consequence that the foundation of the appellant’s argument disappears.  The inevitable consequence is that since the laying of the tail pipes and their connection to the sewer did not on the true construction of section 6(3) constitute a communication of drains from premises to a public sewer, the subsequent connection of the lateral pipes to the tail pipes did constitute such communication.  Their Lordships accordingly agree with the conclusion reached by the Staff of Government Division of the High Court, although for somewhat different reasons.

19.	They will humbly advise Her Majesty that the appeal be dismissed with costs.