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Library Copy - Decision number 9

SECTION 181 WATER INDUSTRY ACT 1991

Demack -v- North West Water Ltd [Goyt to Audenshaw pipeline]

19920 Background

19920.1 Mr and Mrs Demack, Mr and Mrs Eckersley and Mr and

MrsTaylor(the"complainants")of31,29and35Park
Crescent, Furness Vale respectively have made
complaintstotheDirectorGeneralunders181ofthe
Water Industry Act 1991 (the "Act") in connection
withtheworkcarriedoutontheirlandbyNorthWest
WaterLtd(NorthWestWater)whenlayingtheGoytto
Audenshawwatermain.

19920.2 Itwasnecessarytolay26kilometresofpipeworkto
carry raw water between Goyt and Audenshaw as a
result of the proposed M66 motorway extension. The
workswerecommencedinAugust1990.

19920.3 Thechronologyofthekeyeventsisasfollows:
6February1990 Noticetoenterserved

26July1990 Entrytakenfollowingserviceof
warrants and works site fenced
off
LateAugust1990 Workonpipelinecommenced

513September1990 Pipelaying and backfilling

occurred

Spring1991 Firstcompensationpaymentsmade

May1991 Gardenshandedback

1993 North West paid what it

considered to be final
compensation under s 180 of
theAct.

19920.4 ThecomplainantswereadvisedbyFrankRMarshalland
Co in respect of Mr and Mrs Demack, Dunlop Heywood
in respect of Mr and Mrs Eckersley and Mr and Mrs
Taylor. WilliamHBrownAgricultural(Browns)acted
forNorthWestWater.

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TheComplaints

19920.5 There are three complaints common to all the

complainants in addition to complaints relating to
individual experiences. The common complaints are
considered in paragraphs 1 to 4, and the specific
complaintsinparagraphs5and6.

19920.6 Thethreecommongroundsofcomplaintare:

19920.6.1 noncompliance of North West Water's Code of

Practicebyfailingtoreplacethetopsoilwith
topsoilofequalquality

19920.6.2 delaysinrestoringthegardens

19920.6.3 delaysinpayingcompensation.

19920.7 Investigation into the complaints is based upon the

oralandwrittenrepresentationsofthecomplainants
and North West Water and their agents and the
evidence of Mr J.H. Allwood, of Ofwat, following a
sitevisittotheDemacks'property.

19920.8 Thesecomplaintshavealonghistory.Thereisavast
amount of evidence available, not all of which has
been formally submitted. This includes diaries
kept by the complainants, samples of contaminants,
videosofthepipelayingworks, photographspreand
post pipelaying, records of phone conversations and
filesofcorrespondence.Muchofthisrelatestothe
claims for compensation under Section 180 and
schedule 12 of the Act, but is relevant to the
complaint considered here. The amount of
compensationisnotamatterfortheDirector. The
ComplainantscanappealtotheLandsTribunal. This
report deals with those matters which can be
consideredunderS181.

19920.9 At the time the work was carried out water and
sewerageundertakerswererequiredtopublishaCode
ofPractice(theCode)onpipelayingonprivateland
applicable when they exercised their works powers.
TheCodewassubjecttotheapprovaloftheSecretary
ofState. Therequirementwasrelativelynewatthe
timeoftheworksandNorthWestWater'sCodewasnot
approveduntil27February1991.TheearlierCodeof
Practice (the 1988 code) issued to the complainants
contained significantly less information than the
CodesubsequentlyapprovedbytheSecretaryofState.

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Unlessthedifferencesaresignificanttothematters
complainedofthisreportreferstothelatter.

19921 Replacementtopsoil

19921.20304 Paragraph 20 of the 1988 code says that land

will be restored, as far as is practicable, to its
formercondition.

19921.20305 The complainants claim that the topsoil which

wasreplacedwascontaminatedandahealthhazardand
doesnotcomplywithBS3882.Thecomplainantsallege
thatvariousforeignbodies,includingbrokenglass,
asyringe,itemsofunderwear,aknifeblade,pieces
of material, a bowl, shoe heels, battery parts,
Bovrilbottlesandlaboratoryteststickswerefound
inthesoil.

19921.20306 North West Water had explained to the

complainantsthatitwasnotpracticabletostorethe
topsoil on site because of the restricted area of
work. Alternative arrangements were made to store
the topsoil off site. North West Water indicated
thatthesametopsoilmaynotbereinstated.

19921.20307 The specification prepared by North West Water

for its contractor provided that the replacement
topsoilwouldcomplywith BS3882. DunlopHeywood
wereadvisedthatBS3882wouldapplytothetopsoil.
19921.20308 The gardens were handed back in May 1991. On
23rdJuly1991DunlopHeywoodwrotetoBrownssaying
that the Eckersleys were "generally concerned about
theconditionandlevelofthesoil;glass,piecesof
metal have been found in the soil and weeding has
becomeasignificantproblem"andaskedforcomments
abouthavingathirdpartysortoutthesoil.On24
OctobertheyalsowroteregardingtheTaylorssaying
theTaylorshadnotclaimedanycompensationforthe
extremely poor quality top soil used and said that
they had not referred to the matter specifically in
the hope that the water authority would be more
reasonableonotheritemsofclaim.Theyreservedthe
right to claim. On 18th December 1991, the Taylors'
solicitorwroteto Brownsrequestingthetopsoilbe
replaced.

19921.20309 North West Water say that the letter of 18th

December1991was thefirstindicationithadthat
the complainants wanted the topsoil replaced was
rather than dealt with by compensation. No
explanation has been provided to suggest why North

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WestWaterwerenotmadeawareoftheJulyletter.

19921.20310 Aninvestigatorymeetingwasheldon27February
1992atthepremisesoftheTaylors,attendedbythe
Taylorsandtheiragents, NorthWestWaterandits
agentsandthelocalEnvironmentalHealthDepartment.
NorthWestWaterdidnotadoptaposition.

19921.20311 On26March1992NorthWestWaterwrotetoOfwat
andsaiditwasnotappropriatetoremoveandreplace
the soil but it was prepared to deal with their
complaintbycompensation.On6April1992theChief
Environmental Health Officer of the Borough of High
Peak wrote to the Taylors that he had investigated
thesourceofthesoiland wassatisfiedthatsoil
from that source would not contain any hazardous
waste. It would be quite possible for soil to
contain pieces of glass, ceramic and other inert
material. The EHO pointed out that the analysis of
thesoilsampletakenfromtheaffectedareaofthe
Taylor'sgardenwassimilarincontenttothesample
takenfromanunaffectedareaofthegardenselected
bythecomplainants.

19921.20312 ThedissatisfactionwiththereportoftheChief
EnvironmentalHealthOfficerleadtoapproachesbeing
made by the complainants to the British Standards
InstitutionandDerbyshireCountyCouncil.

19921.20313 DerbyshireCountyCouncilalsotooksamples,at
the invitation of the complainants, and found that there
was evidence of slight metal contamination, but no
evidenceofthepresenceofindustrialwaste.

19921.20314 Despite the findings of both the Chief

EnvironmentalHealthOfficerandDerbyshireCountyCouncil
to the effect that the soil was not hazardous, the
complainants continued to be concerned. They obtained
quotationsforthecompleteremovalandreplacementofthe
soil by hand barrowing it to the front of their
properties,asvehicularaccesstotherearwasnolonger
possible. NorthWestWater,however,refusedtoagreeto
this,buton29thJuly1992,NorthWestWateracknowledged
toDunlopHeywoodthatthenecessaryremedialactionwould
include hand hoeing, removal of debris, importation of
additionalsoiltomakeuplossesandspreadingofbagged
compostoveropenbeds. Forthiswork,NorthWestWater
waspreparedtopayanamountperm2.(1.85to2)

19921.20315 The complainants were advised by their agents

thatitwouldbetotheiradvantageforthecomplaintsto

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be dealt with by way of compensation rather than

insistenceuponthesoilbeingreplaced.

19921.20316 Iconcludethatbecauseofthecircumstancesof
the site, it was not unreasonable for the company to
decide that the original top soil could not be reused.
However, its specification was that the replacement top
soilshouldcomplywithBS3882. Thatspecification was
notmet.

19921.20317 The complainants were justified in being

concerned as to the quality of the topsoil and in
particular whether it was a health hazard. They told
Ofwatthattheyhadbeencomplainingorallytotheirown
agentsandtoBrownsthroughoutthesummerof1991buton
the evidence before me the first time it was intimated
thatcompensationwasnotasatisfactorymeansofdealing
withtheproblem wasnotuntiltheletterof18December
1991.However,despiteacknowledgingthattheircomplaint
was serious, the site meeting was not held until 27
February. The water company could have acted more
promptly.

19921.20318 The principle of paying compensation to cover

the cost of hand hoeing and replacing and adding more
topsoil appeared to be the best and most pragmatic
solution. Thecomplainants'requirementthatthetopsoil
be removed and replaced would have necessitated removing
areasofestablishedturftogetherwithshrubsandtrees,
and would therefore cause more disturbance to the
complainants. However, despite hand hoeing etc the top
soil will never be quite what complainants could have
expected.

19922 DelaysinReinstatingGardens

19922.20648 The complaint is that the complainants

understoodthattheworkwouldtakenomorethansix
weeks, but in the event, it carried on for nine
months.

19922.20649 Both codes are silent on the length of time

reinstatementshouldtake.However,itisreasonable
toexpectthecompanytomakearrangementsforfinal
reinstatement as soon as practicable after the
completion of the pipelaying. In the interests of
allofitscustomersithasanobligationtoensure
theworkiscompletedatareasonableandcompetitive
cost. Weather conditions need to be taken into
account. However, it should consult with (and take
into account any representations by) the landowner,

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whomayeitherwishtodotheworkhimself,oremploy
a contractor known to him, or wish to leave it
entirely to the company. These wishes ought to be
considered.

19922.20650 Beforeworkbegan,atasitemeetingheldon
26 July 1990, the works programme was discussed.
Inevitablythereissomeconfusionsolongafterthe
event about what was said, but it would seem, and
thisisadmittedbyNorthWest,thatthecompanyand
itsagentsfailedtomakeclearthatwhiletheactual
pipelaying would take approximately six weeks, the
reinstatement would take much longer. As a result
the complainants were left believing that their
gardenswouldbereturnedtotheminashortwhile.

19922.20651 Itisnotsuggestedthattheweatherconditions
in the summer/autumn of 1990 would have caused
excusable delays in the work or reinstatement.
Althoughtheworkschedulewasdelayedbytheneedto
obtainwarrants,therewasanopportunitytheautumn
of 1990, following completion of the pipelaying and
beforetheonsetofwinterwhenthereinstatementof
the soil, wall and fence erection and lawn
replacementcouldhavetakenplace.

19922.20652 The complainants say that there were delays

becauseoftheconfusioncausedbyindecisiononthe
part of North West Water. They have said that the
companywasindecisiveoverwhetherthecomplainants
could employ their own contractors for some of the
reinstatement; and that when they were asked to
submit quotations they were rejected without
explanation only to be accepted at a later date.
There was similar indecision over whether
compensationshouldbepaidinsteadofreinstatement
and Mrs Eckersley has cited the example of mature
appletrees.

19922.20653 North West Water has acknowledged that there

werefailingsonitspartandthatbecauseofthis,
compensation of over 2000 was paid to the
complainants to reflect the loss of use of the
gardensandtheinconvenienceandworrycausedbythe
wayinwhichthematterwashandled.

19922.20654 Becauseofitspreviousneedtoobtainwarrants
forsomeoftheaffectedproperties,NorthWestWater
waswellawareofthehostilitythatthisschemehad
caused,andIconcludethatitshouldhavebeeneven
more aware of the need to deal with the pipelaying

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and restoration as quickly and efficiently as

possible. However, I amsatisfiedthattheamount
ofcompensationadequatelyreflectstheinconvenience
causedbythewayinwhichthecompanydealtwiththe
reinstatement.

19923 Delaysinpaymentofadvancepaymentandcompensation

19923.20992 Thecomplainantsallegethat

19923.20992.1 advancepaymentswerenotmadewhenrequested

19923.20992.2 there were excessive delays in agreeing

compensation. They say it took over two years
from the date of entry to make what were, in
NorthWestWater'sview,thefinalcompensation
payments.

19923.20993 The Water and Sewerage (Works) (Advance

Payments) Regulations 1989 came into force on 1
September 1989 and required companies to pay 90% of
the agreed or the company's estimate of the
compensationwithinthreemonthsofawrittendemand
fromthelandowner,providedthatthelandownergives
to the company sufficient information to enable the
compensationtobeassessed.

19923.20994 The complainants' agents say that although

requestsforadvancepaymentsweresubmittedinJuly
1990,paymentwasnotmadeuntiltheendofJanuary
1991,aperiodofmorethan6months.Thefactthata
claimant may receive financial compensation (or
interest on compensation, from 25 September 1991
unders80ofthePlanningandCompensationAct1991)
isnotajustificationforslowhandlingofaclaim
oranadvancepayment.

19923.20995 It is usually only possible to negotiate a

recognitionpaymentinrespectofthedepreciationin
value of the land prior to entry. Loss and damage
can usually only be properly assessed after the
event. On the evidence available the only
compensationthatwouldclearlybecomepayableatthe
outsetoftheworkswastheclaimfordepreciationof
the land itself. Actual loss and damage would not
become fully apparent until the restoration of the
gardenswascompleted. Evenifthecompanydidnot
consider the amount requested as an advance payment
reasonabletherewasarequirementforthemtopayon
theirownestimate,andIcanfindnoreasongivenas
towhyanamountwasnotpaidwithinthethreemonth

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periodallowed.

With regard to the payment of compensation the

complainantsallegethattherewereexcessivedelays
of over two years before the final payments were
made.Therewerethreemainreasonsforthedelays.

19923.20996 First,aclaimforcompensationcannotbemadeor
determineduntiltheextentofalossisknown.This
can depend on whether there is to be full
reinstatement, or partial reinstatement and some
compensation. The delays in deciding whether to
reinstate(describedinpara4above),andifsohow
andbywhom,hadaknockoneffectonthedelaysin
making payment for such disputed items. There is
evidence of considerable discussion and
correspondence between Browns, the complainants and
thecomplainant'sagents.Thisisillustratedbysuch
items as the Eckersleys' apple trees and the panel
fencing.Inaddition,thedecisionwhethertoaccept
partialreinstatementandsomecompensationobviously
depended on the amount of compensation. There were
instanceswhereNorthWestagreedtoamountsonlyto
changeitsmindatalaterdate.

19923.20997 Second,itisclearthatsomeitemsinrespectof
which payments were eventually made had not been
included in the original claim submitted by the
complainants' agent. When these items were brought
to North West's attention, it said that it would
considerthem.ExamplesaretheDemacks'treehouse
andgardenswing.

19923.20998 Third, the complainants were reluctant to agree

compensation while the issue of the topsoil was
unresolved. Also, the evidence shows that the
complainants' agents did not always quantify claims
for certain items .(for example see paragraph 3.5
above).

19923.20999 As has been indicated earlier, where the

compensation itself is in dispute, complainants can
appeal to the Lands Tribunal; these are not matters
theDirectorcandecide. NorthWestWatersaythat
late in 1993, in an attempt to finalise the
outstandingclaims, andbecauseofitsinabilityto
agree final sums with the complainants (although
largely in agreement with the complainants' agents)
it assessed compensation on the basis of the claims
beforeitandsentchequestothecomplainants.

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19923.21000 I conclude that there was fault on both sides.

However, North West Water and its agents acted
unreasonablyinbeingunablefor considerablelengthsof
time to reach conclusions on whether to reinstate or
compensateforcertainitems,andevenafteritdidreach
conclusions, it changed its mind. This resulted in
unnecessarydelays.NorthWestWaterhasacceptedthatit
did not deal with the matter in a satisfactory way and
paid additional compensation. I have concluded that the
additional amounts of compensation paid to the
complainantsbyNorthWestWater(butnotagreed)forloss
ofuseofgarden,lossofamenity,general inconvenience
andtimeandexpense,recognisedthatunreasonableness.

19924 ComplaintsspecifictotheDemacks.

19924.21672 InadditiontothecommoncomplaintstheDemacks,
in their letter of 23 February 1993 complain of 11
items.Theseinclude:
1 failuretoreinstategardeninaccordancewiththe
preentrysurvey,
2 two silver birches replaced in wrong positions,
onesincedied
3 treehousenotreplacedorcompensatedfor
5 stonewallrebuilt3'higherthanoriginalheight
4 gardenswingnotcompensatedfor
6 MODmarkerburied
7 lossofprivacy
8 washinglinenotreplaced
9 laburnumtreesnotreplaced
10 shrubberyandpampasgrassesnotreplacedandpond
notfinishedoff

19924.21673 Items2,3,4,5,6,8,9,and10areallspecific
and quantifiable items for which the remedy is a
claim for compensation in accordance with s 180 of
theWaterIndustryAct1991(theAct).

19924.21674 Item7(thelossofprivacy),isaheadofdamage
forwhichcompensationcanbeclaimed.Icannotdeal
withtheseitemsunders181.

19924.21675 Paragraph6considersitem1.

19925 Failure to reinstate the garden in accordance with

thepreentrysurvey.

19925.1 TheDemacksallegethattheshrubberyandtreeswere
replaced haphazardly. It is alleged that the
landscapegardeneremployeddidnothavethebenefit

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ofaccurateinformationfromapreentrysurvey.

19925.2 TheCodeofPracticerequiredapreentrysurveyto
be done. Photographs of the garden prior to the
works have been provided. These photographs show a
certainamountofneglectwhichisunderstandableas
the Demacks had only moved into the house shortly
beforetheworkscommenced.

19925.3 ThesitevisitbyMrAllwoodon21September1993in
the presence of the parties showed that there was
wellestablishedturfintherestoredarea,butthat
both the restored and the original area were soggy
whichconfirmedthehistoricallypoordrainageofthe
area. The bushes, trees and shrubs were well
establishedbutwerenotnecessarilythesamespecies
andinthesameplaces. Thestonewallwasrebuilt
toabetterstandardthanthatindicatedinthepre
entry photographs. However, the land had been
restoredtoahigherlevel,andthiscoupledwiththe
different placing of some shrubs resulted in some
loss of privacy, which should be alleviated as the
plantsgrow.

19925.4 North West Water say that every effort was made to
restorethegardentoitsoriginalstate. MrBaker
ofFrankRMarshall'scommentsthatthereinstatement
wascarriedoutbyalandscapecontractor,andwhile
itprovidesanattractivealternativetotheoriginal
garden,bearsnoresemblancetoit.

19925.5 Asampleofapreentrysurveyforthisschemeshowed
that descriptions of plants could have been fuller,
forinstancetodescribethehabitandcolourofthe
species.Betterconsultationwithboththepreentry
photographs and the complainants by the landscape
gardeners doing the restoration of the garden may
well have ensured that the replacement plants were
sited in their former positions (or possibly in
alternativepositionsacceptabletotheDemacks)and
mayhaveprevented theresultingaggravationcaused
bythereinstatement.

19925.6 I conclude that because of the nature of the land

and the restricted area available in which to work,
that this was a difficult scheme to execute.
Althoughitwasinevitablethatthegardencouldnot
be restored to its original state the final
reinstatementcouldhavebeenclosertotheoriginal.
However, I consider that this is recognised in the

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paymentofcompensationof850forlossofamenity.

19926 Conclusion

19926.1 I conclude that the company acted unreasonably in

that it failed to reinstate the topsoil to the
standard it promised, delayed unnecessarily in
completing the reinstatement and delayed
unnecessarily in making advance payments and
compensation.

19926. 2 Therefore , in respect of these failings I direct North West

Water Ltd to pay Mr and Mrs Demack the sum of three
hundred and fifty pounds.

M Saunders

for Director General of Water Services

Jul 1994

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