Court name
Supreme Court of Turks and Caicos Islands
Case number
CL 2 of 2022

Leeward Water Services Ltd v Provo Water Company and anor. (CL 2 of 2022) [2022] TCASC 33 (31 August 2022);

Media neutral citation
[2022] TCASC 33
Case summary:

On 8 July, 2022 the Court of its own motion directed that pursuant to Order 14A of the Civil Rules 2000 there be a hearing to determine the question of law as to whether the Water and Sewerage Ordinance CAP 8.03 (“the Ordinance”) prohibits the appointment of more than one water undertaker for any specific geographical area.

Headnote and holding:

The Court declared that the Water and Sewerage Ordinance CAP 8.03 does not prohibit the appointment of more than one water undertaker for any specific geographical area. As the Court of its own motion directed this hearing pursuant to Order 14A of the Civil Rules 2000, it made no order as to costs.

IN THE SUPREME COURT OF                                                   

THE TURKS AND CAICOS ISLANDS

CL2/22

BETWEEN:

                                                        

LEEWARD WATER SERVICES LTD.

Plaintiff

-and-

 

PROVO WATER COMPANY LTD
THE ATTORNEY GENERAL OF THE TURKS AND CAICOS ISLANDS

Defendants

        

__________________________________

JUDGMENT

__________________________________

 

Before:                                   The Hon. Mr. Justice B. St. Michael Hylton QC (Ag)

 

Appearances:                        Mr. Conrad Griffiths QC and Murray Snider for the Plaintiff

Mr. Jonathan Katan QC and Mark Harvey for the 1st Defendant

Khalila Astwood-Tatem for the 2nd Defendant

 

Hearing Date:                        23 August 2022

 

Venue:                                    Court No. 5, Graceway Plaza, Providenciales

 

Date Delivered:                      31 August 2022

 

 

  1. On 8 July, 2022 the Court of its own motion directed that pursuant to Order 14A of the Civil Rules 2000 there be a hearing to determine the question of law as to whether the Water and Sewerage Ordinance CAP 8.03 (“the Ordinance”) prohibits the appointment of more than one water undertaker for any specific geographical area. In a brief judgment ([2022] TCASC 16), I indicated that I was satisfied that “a determination as to whether the Ordinance allows the appointment of more than one undertaker for a specific geographical area, turns solely on the interpretation of the Ordinance, is suitable for determination without a full trial, and will finally determine the Plaintiff’s claim for a declaration on that issue”.

 

  1. I will therefore not set out the factual background to the dispute between the parties, since in my view, that is not relevant to the interpretation of the Ordinance.

 

  1. Section 22 of the Ordinance provides:

 

Appointment of undertakers

22. (1) Subject to the provisions of this Ordinance the Minister may appoint a company to be a water undertaker or sewerage undertaker or a water and sewerage undertaker for any defined geographical area of the Islands, and may on the application of a company holding an appointment under this Part, vary the appointment.

(2) Before making or varying an appointment under subsection (1), the Minister shall consult with the Board.

(3) The appointment of a company to be such an undertaker shall be by service on the company of an instrument in writing, containing the appointment, the conditions of the appointment, if any, and describing the area for which it is made.

(4) A company shall not be appointed a water undertaker or a sewerage undertaker or a water and sewerage undertaker unless it is a limited company registered under the Companies Ordinance or any re-enactment or modification thereof.

(5) It shall be the duty of the Minister to ensure –

      1. that any company appointed under this Ordinance to be a water or sewerage undertaker or a water and sewerage undertaker shall have the capability and resources necessary to carry out the functions of a relevant undertaker under the Ordinance; and
      2. that in making an appointment under this Part, he shall give preference to a company that is controlled by Belongers.
  1. It shall be the duty of the Minister to secure that such appointments are made under this Part as will ensure that for prescribed areas of the Islands there is at all times a company holding an appointment under this Part as a water undertaker or a sewerage undertaker.”

 

  1. The Plaintiff contends that the Ordinance only permits the Minister to appoint one water undertaker for a particular area, while the Defendants say there is no restriction on the number of undertakers the Minister may appoint for a particular area. The parties each relied on detailed written and oral submissions, which I would summarise in the following way.

 

The Plaintiff’s submissions

 

  1. Counsel for the Plaintiff pointed out that section 22 (1) refers to “a company” in the singular, and there are no references to the plural “undertakers” in section 22. Furthermore, there is nothing anywhere in the language of the Ordinance which indicates that there may be more than one undertaker for a single specified geographical area.

 

  1. The Plaintiff relied on the decision by Neuberger J (as he then was) in Crest Nicholson v McAllister [2003] 1 All ER 46. A covenant prohibited using a property for purposes “other than those of or in connection with a private dwelling house”. The issue was whether the covenant meant a single private dwelling house.  Neuberger J held that it did, observing among other things, that “as a matter of ordinary language, the indefinite article ‘a’ tends to carry with it the concept of singularity as opposed to plurality.”[1]

 

  1. The Plaintiff’s counsel submitted that the court should consider other sections of the Ordinance and contended that many of them support their interpretation of section 22(1). They relied on section 34 of the Ordinance which provides:

 

34. (1) It shall be the duty of every water undertaker to develop and maintain an efficient and economical system of water supply within its area and to ensure that all such arrangements have been made –

(a) for providing supplies of water to premises in that area and for making such supplies available to persons who demand them;

(b) and for maintaining, improving and extending the water undertaker’s water mains and other pipes,

as are necessary for securing that the undertaker is and continues to be able to meet its obligations under this Part.

(2) The duty of a water undertaker under this section shall be enforceable under section 29 by the Minister.

(3) The obligations imposed on a water undertaker by the following sections of this Part, and the remedies available in respect of contraventions of those obligations, shall be in addition to any duty imposed or remedy available by virtue of any provision of this section and shall not be in any way qualified by any such provision.” [emphasis added]

 

  1. Counsel submitted that section 34(1) must envisage that only one company can be responsible for “all such arrangements” and that company has to comply with the statutory duties imposed by the Ordinance. It would be bizarre and unworkable, they contended, if there were to be competing water utility suppliers, each responsible for providing two or more sets of “all such arrangements”, or each able to blame the other for not meeting a statutory duty.

 

  1. They submitted that section 34(1) also defines the relevant area as belonging to only one undertaker by defining the area as “its area”. Section 34 would be unworkable if the duty was imposed on multiple undertakers. There would be no need to develop and maintain an efficient and economical system if a supply system already existed. Nor could it logically be economical to establish one or more duplicate systems, leaving at least one system redundant depending on the choice made by a customer.

 

  1. The expression “its area” is repeated in section 35 in relation to the duty to provide a water supply system, a duty which could only logically apply to one water undertaker. Similarly, section 39(1) refers to a duty to connect to a consumer “in the undertaker’s area” clearly indicating that the undertaker has exclusivity in that area, and a corresponding duty to supply water there.

 

  1. Finally, counsel relied on section 25 (7) which provides:

 

“(7) The appointment of a company to be a water or sewerage undertaker shall not be terminated or otherwise cease to relate to any area or to any part of any area except with effect from the coming into force of such appointments and variations replacing that company as an undertaker as to secure either––

  1. that another company becomes the undertaker for that area or part of an area that includes that area or part; or
  2. that two or more companies each become the undertakers for one of a number of different areas that together constitute or include that area or part.” [emphasis added]

 

  1. The submission was that section 25(7) is drafted on the basis that there will be only one water undertaker in an area, since an appointment cannot be terminated unless “… another company becomes the undertaker for that area …” or “…two or more companies each become the undertakers for one of a number of different areas…”

 

  1. Counsel also referred to section 10(2) of the Electricity Ordinance CAP 14.04.  That section provides:

 

10. (2) The Governor shall not grant a private supplier’s licence for the supply of electricity within the area of supply of a public supplier unless the Governor is satisfied that the regular and efficient supply of electricity by that public supplier to the applicant for the private supplier’s licence, or to any other person intended to be supplied with electricity under the private supplier’s licence, is not readily available on reasonable terms.” [emphasis added]

 

  1. The submission was that there could clearly only be one public supplier, yet (like the Ordinance) the Electricity Ordinance uses the expression “a public supplier”.

 

  1. Finally, the Plaintiff argued that licensed utility suppliers like water undertakers are natural monopolies and are universally treated as such. Counsel contended that against that background, the court should be slow to find that the legislators in the Turks and Caicos Islands could have intended to allow multiple water suppliers in the same geographic area.

 

The Defendants’ submissions

 

  1. Both Defendants relied on section 4 of the Interpretation Ordinance CAP 1.03 which provides:

General interpretation of gender and number

  1. In this Ordinance and in all Ordinances and other instruments of a public character relating to the Islands now in force or hereafter to be made, unless there is something in the subject or context inconsistent with such construction, or unless it is therein otherwise expressly provided—
    1. words importing the masculine gender include females; and
    2. words in the singular include the plural, and words in the plural include the singular.” [emphasis added]

 

  1. They submitted that in construing the Ordinance, the court should assume the drafters had the provisions of the Interpretation Ordinance in mind. Therefore, (according to the 1st Defendant) “the first matter which arises is whether there is an express disapplication of the Interpretation Ordinance. The 1st Defendant’s position is that the answer is clearly no; there is nothing in section 22 or indeed any other part of the Ordinance that would disapply the provisions of the Interpretation Ordinance at all, or in particular with respect to the rule in section 4, relating to the interpretation of singular as including the plural”.

 

  1. Secondly, the Defendants pointed out that in other similar legislation, the drafters used the phrase “the water undertaker” instead of “a water undertaker” when they intended to restrict the number of appointees to one. They relied on Water Industry Act 1991 (UK) which was enacted in England and Wales in 1991, three years before the Ordinance. Section 6(1) of the Water Industry Act is the equivalent of section 22(1) of the Ordinance, and it provides for the appointment of water or sewerage undertakers in the following way:

 

“Subject to the following provisions of this Chapter, a company may be appointed-

  1. By the Secretary of State; or
  2. With the consent of or in accordance with a general authorization given by the Secretary of State, by the Director,

to be the water undertaker or sewerage undertaker for any area of England and Wales.”

 

  1. Section 6(2) then states:

 

“Without prejudice to the obligations of a company holding an appointment under this Chapter to comply with the conditions of its appointment, the appointment of a company to be the water undertaken or sewerage undertaker for any area shall have the effect….”

(Emphasis added).

 

  1. The Defendants also pointed out that the Ordinance is in similar terms to the Water Industry Act in various respects, and it appears that the drafters of the Ordinance deliberately chose to use different language in section 22(1) when dealing with the power to appoint water and sewerage undertakers.

 

  1. The 2nd Defendant cited A (A) v B (B) (2003) 225 DLR (4th) 371 a decision of the Family Division of the Ontario Superior Court of Justice, and relied on Aston J’s observation at paragraph 34:

 

“[34] When the legislation uses a word such as “the”, it is presumed to do so precisely and for a purpose. It represents a choice of the definite article over the indefinite article. Considerable weight must be given to its clear and ordinary meaning.”

 

  1. The 1st Defendant added that section 33(5) of the Ordinance also uses the phrase “a water undertaker” instead of “the water undertaker”. That section states:

 

“In respect of any area for which a company has been appointed a water undertaker under Part IV of the Ordinance, the company shall be exempt from the requirement to hold a license under this section for that area”.

 

Discussion

 

  1. I will address these submissions and issues under the following headings:

 

    1. The Crest Nicholson case and the suggestion of singularity

 

    1. The Interpretation Ordinance

 

    1. Sections 34, 35 and 39 of the Ordinance

 

    1. Section 25(7) of the Ordinance

 

    1. The Electricity Ordinance

 

    1. The “Natural Monopoly” argument

 

    1. The Water Industry Act and the use of the words “the” and “a”

 

Crest Nicholson and the suggestion of singularity

 

  1. Counsel for the Plaintiff submitted that as a matter of normal language and when used in a statute, the use of the word “a” carries with it “an implication of singularity”. That is no doubt correct as a matter of normal language and in ordinary conversation. But it cannot be the case when one is construing a statute, because the Interpretation Ordinance effectively provides that the use of the word “a” does not necessarily suggest or imply singularity. This is therefore one case in which the natural and ordinary meaning of the word does not assist.

 

  1. This also disposes of counsel’s reliance on Crest Nicholson. In some respects, the same considerations may apply when a court is construing a commercial contract or similar instruments and when it is construing a statute, but there are fundamental differences. One difference is that the Interpretation Ordinance applies to the latter but not the former.

 

  1. Neuberger J was no doubt right when he said that “as a matter of ordinary language the indefinite article “a” tends to carry with it the concept of singularity as opposed to plurality”. But that was in the context of a restrictive covenant, a context in which it would be appropriate to consider the ordinary meaning and usage of a word.

 

  1. I therefore did not find this argument or the decision in Crest Nicholson persuasive.

 

The Interpretation Act

 

  1. The First Defendant put its case too high. One does not need to find that there is an express disapplication of the Interpretation Ordinance. It would be enough if other provisions in the Ordinance indicate that there was a contrary intention. As the Interpretation Ordinance itself states, it applies “unless there is something in the subject or context inconsistent with such construction”.

 

  1. However, section 4 of the Interpretation Ordinance is very important in this case because in effect, it places the burden on the Plaintiff to persuade the court that there is something in the Ordinance which is inconsistent with the plurality that section 4 mandates. 

 

  1. In this case the Plaintiff argues that there is nothing in the Ordinance that allows plurality, and the Defendants argue that there is nothing in the Ordinance to require singularity. Unless the Plaintiff can show that there is something in the Ordinance that requires singularity, the Defendants must succeed because of the plurality required by the Interpretation Ordinance.

 

Sections 34, 35 and 39 of the Ordinance

 

  1. The Plaintiff’s counsel was correct in submitting that the court should not limit itself to section 22(1) of the Ordinance, but should consider the entire ordinance to determine the legislative intent.  However, I did not find sections 34, 35 and 39 to be of much assistance.

 

  1. First, the reference to “its area” does not necessarily suggest that the area belongs to only one undertaker (i.e., ownership). It could equally mean the area in relation to which that undertaker has been appointed.

 

  1. The Plaintiff’s counsel also pointed out that the section imposes a duty on every water undertaker to develop and maintain an efficient and economical system of water supply and to ensure that suitable arrangements have been made for the supply of water.  I am not persuaded that there is anything unworkable or bizarre about those obligations being placed on more than one water undertaker.

 

  1. Each undertaker would be required to ensure that its system is efficient and economical and that it has made suitable arrangements to provide supplies of water in the area. The fact that another undertaker has done so in relation to its system would not be a defence or an excuse.

 

  1. The court accepts that if multiple undertakers are appointed there may be practical problems depending on the size of the area and other factors, but those considerations may raise questions as to the Minister’s decision. In my view, they do not raise questions as to the Minister’s power.

 

Section 25(7) of the Ordinance

 

  1. The terms of section 25 (7) of the Ordinance may be one of the stronger points in the Plaintiff’s favour. As its counsel argued, that section appears to suggest that there would only be one undertaker in each area, hence the prohibition on terminating its appointment unless a replacement is appointed. Defendants’ counsel’s response was that the section could also be interpreted as only applying in a case where there is one undertaker. While I do not agree that this response adequately addresses this point, I am unable to accept that the Plaintiff’s argument sufficiently swings the pendulum in favour of the meaning of section 22 for which the Plaintiff contends.  I comment further below on this issue.

 

The Electricity Ordinance

 

  1. The Plaintiff’s submission in relation to the Electricity Ordinance was very brief and is summarized in paragraphs 13 and 14 above. It seems to me however, that to some extent the Plaintiff was comparing apples and oranges. The regime under the Electricity Ordinance is entirely different. It envisages a public supplier and private suppliers of electricity. The Ordinance does not take a similar approach in relation to the supply of water.

 

  1. It is also not clear why the Plaintiff’s counsel says it is obvious that there can only be one public supplier of electricity.  They did not point to anything in the Electricity Ordinance that demands that conclusion. If the reason is that it is a public supplier, the analogy fails since the Ordinance does not envisage public suppliers. If the reason is the unique nature of an electricity supplier, the analogy again fails because that reasoning would not necessarily extend to water suppliers.

 

  1. Finally, if the reason is merely that the public electricity supplier is a licensed utility supplier and that the nature of such suppliers means they should be monopolies, reference to the language of the Electricity Ordinance takes us no further; this point is simply a restatement or another iteration of the “natural monopoly” argument.

 

 

The Natural Monopoly Argument

                                              

  1. Counsel for the Plaintiff made this point repeatedly throughout their submissions. They argued that licensed utility suppliers or at any rate, water suppliers, are natural monopolies and are treated that way throughout the world, and it is inconceivable that it could have been intended to create a different regime in the Turks & Caicos Islands.

 

  1. No evidence was adduced to support these submissions and I was effectively invited to take judicial notice of the unique status of licensed utility suppliers.

 

  1. There is judicial support and statements for the view that licensed utility providers are a natural monopoly. In Albion Water Ltd v Water Services Regulation Authority (formerly Director General of Water Services) (Aquavitae (UK) Ltd and others intervening) - [2006] All ER (D) 222, the Competition Appeal Tribunal observed[2]:

“It is contended by the Authority, and we accept, that the transportation element of the water supply system (i.e. the distribution of water though pipes and mains) has strong natural monopoly characteristics, mainly as a result of the high cost of duplicating the infrastructure. However, other activities such as water abstraction from underground or surface sources, or customer-facing services such as retailing do not exhibit the same “natural monopoly” characteristics.”

 

  1. Then, in R (on the application of Welsh Water Ltd) v Water Services Regulation Authority [2009] EWHC 3493 (Admin) Mitting J said[3]

 

“The water supply industry is vertically integrated. Suppliers of water undertake all activities from extraction to delivery to the end user by a fixed infrastructure. The industry is therefore a natural geographically bounded monopoly on a regional or local scale.”

 

  1. I ultimately concluded, however, that I could not properly conclude that:

 

    1. in a jurisdiction like the Turks & Caicos Islands a water supplier would be a natural monopoly;

 

    1. at the time of enacting the Ordinance, the legislators were aware of that fact; and

 

    1. the legislators therefore would probably not have intended to create a different and unique regime in the Turks & Caicos Islands.

 

  1. In the absence of direct evidence, I do not know whether different considerations would apply in this jurisdiction. I therefore did not treat this as a factor in coming to my ultimate conclusion.

 

The Water Industry Act and the use of the words “the” and “a”

 

  1. One of the stronger arguments in favour of the Defendants’ interpretation is the fact that section 22(1) refers to the appointment of “a water undertaker” as opposed to “the water undertaker”. One can reasonably debate, whether given the application of section 4 of the Interpretation Ordinance the indefinite article “a” denotes a single undertaker or more than one. But the definite article “the” would plainly indicate a singular undertaker.

 

  1. If the legislators had intended to restrict the Minister’s powers to a single undertaker, they would not have had to include another section spelling that out. They could have simply used the word “the”.

 

  1. This is even more striking when one considers the fact that the Water Industry Act was enacted in 1991 and the Ordinance was enacted a few years later and adopted a number of similar provisions. In fact, section 22(1) of the Ordinance is very similar to section 6(1) of the Water Industry Act.

 

  1. The striking difference is that the latter refers to the appointment of “the water undertaker” for an area while the subsequent Ordinance refers to the appointment of “a water undertaker” for an area.

 

  1. The issue is not free from doubt, and I recognize that section 25(7) can arguably support the contrary view. However, when I considered all factors set out above, I concluded that the better view is that on its true interpretation, the Ordinance does not prohibit the appointment of multiple undertakers for a specific geographical area.

 

Disposition

 

  1. For the reasons set out above, I hold and declare that the Water and Sewerage Ordinance CAP 8.03 does not prohibit the appointment of more than one water undertaker for any specific geographical area.

 

  1. As the Court of its own motion directed that there be this hearing pursuant to Order 14A of the Civil Rules 2000, there shall be no order as to costs.

 

 

 

B. St. Michael Hylton QC

Acting Judge of the Supreme Court

31 August 2022

 

 

[1] At paragraph 14. The decision was reversed on appeal, but the Court of Appeal expressly approved Neuberger J’s interpretation of the covenant – [2002] EWCA Civ 410.

[2] At paragraph 474.

[3] At paragraph 7.