Successful challenge to the water service charge levied on a social tenant by the Royal Borough of Greenwich

Tuesday 7 March 2017

Tim Baldwin represented the defendant in Royal Borough of Greenwich v KW claim number 2PA32115 in an application to suspend a warrant for possession concerning rent arrears at Woolwich County Court on 2 March 2017. This case has been reported in Local Government Lawyer.

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An issue arose in respect of the extent of the defendant’s liability to pay rent as the rent contained a service charge for the provision of a supply of water and sewerage charges. The defendant has been a social tenant of Greenwich since 2008. As part of the application to suspend the warrant the defendant sought disclose of the details of the agreement for water and sewerage charges with Thames Water, as in Jones v Southwark Council [2016] EWHC 457 (Ch).

On disclosure of the agreement and in evidence, the Royal Borough of Greenwich accepted that under their tenancy agreement the decision in Jones v Southwark Council [2016] EWHC 457 (Ch) applied in respect of the agreement for water charges they had with Thames Water from 2006. As applied to the defendant’s tenancy the defendant was entitled to a 20% discount, subject to a small administration fee.

On the suspension of the defendant’s warrant for possession, DDJ White held – in open court – that although the term of the tenancy agreement for levying water service charges on unmetered tenants purported to be an agency term, that in fact the Royal Borough of Greenwich were re-sellers of water and that the defendant had been overcharged unlawfully. On the evidence presented by Greenwich and on the documentation presented, the defendant was entitled, subject to a small administration fee, to a set-off of 20% with interest on all of the water charges from the outset of the tenancy.

Furthermore, unlike in Jones v Southwark Council, where Southwark had purported to change their agreement with Thames Water, under the terms of the agreement between Thames Water and the Royal Borough of Greenwich the defendant was entitled to the discount on future charges levied.

DDJ White identified in his judgment that the overcharging and future overcharging for water services by Greenwich did not merely apply to this case but applied to all unmetered tenants of Greenwich who were paying for water services.

As a result of Jones v Southwark Council, an estimated 48,000 tenants were affected in Southwark between 2001 and 2013 with Southwark having to find £28.6 million to compensate their affected tenants. At present, the number of Greenwich tenants who have been affected (or continue to be affected) and over what period is unknown since the water services agreement remains in place. However, given the numbers affected in Southwark it is likely to be considerable and a high level of compensation paid out.

Tim Baldwin is a member of the Housing Team at Garden Court Chambers and was instructed by Nik Antonides of Powell & Co LLP.

The case was reported in Nearly Legal.

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