Property law issues

The issues of third-party access, wastewater service provision, sewer mining and recycling also raise some fundamental property-law issues that deserve further consideration. There is already, in other contexts, established law dealing with the ownership of, and access to, infrastructure, such as the pipes which lie on private land.[75] That law is based on statute (for example, Sydney Water Act 1994 s 37), the doctrine of fixtures, easements and licences. WICA also deals with the question of ownership of a licensed network operator’s water-industry infrastructure, deeming it to belong to the operator (WICA s 64). The more interesting question is the ownership of the sewage itself. This is particularly pertinent in the context of sewage being cast as a valuable asset. It excites interest in the related question of which party should be reimbursed, if any, for the sewage used to make profit through on-sold recycled water or treated sludge.

While water as a flowing natural resource is not the subject of property,[76] water in other circumstances may be. For example, trade in bottled spring water, treated tap water or ‘manufactured’ effervescent water all demonstrate the ability of water to be commodified and become the subject of property. Hence, an argument exists that a householder who pays for water to be supplied by a retailer, such as Sydney Water, purchases the water that is supplied. The water becomes his or her property. Subject to some restriction (for example, Sydney Water’s restrictions on hosing), the water may be used and enjoyed and transferred to another, while third parties may also be excluded from it. The householder may use the water to take a shower, boil some potatoes, wash clothes or mix with some lemons to make and sell as lemonade. Should the water have been captured by rainwater tanks on the householder’s property instead of purchased from a service provider, the conclusion that the water has become the householder’s property applies a fortiori. The householder, in capturing the water, has brought it into his or her possession and brought it under his or her control.

If the water is the property of the householder who purchased (or captured) it, this, in turn, raises the question of whether the water becomes any less his or her property once it has been despoiled by human and other waste and flushed into the sewerage system. To explain, the food scraps that ultimately flow into the sewerage system when the sink plug is released are certainly the property of the householder before they enter the sewerage system. Human bodily waste is also presumably the property of the householder before its entry into the sewerage system, although cases such as Moore v The Regents of the University of California raise important and interesting issues on the question of characterising body parts as property.[77] But do these proprietary rights terminate once the water is discarded?

On one analysis, the wastewater or sewage remains the property of the householder, who has merely contracted with the wastewater-service provider to perform only a service in relation to it. But that argument has its weaknesses, not the least of which is establishing that the householder/owner intended to continue exercising dominion over the wastewater once it entered the sewerage network. On another reading, the individual householder’s title may be said to be transferred to the wastewater-service supplier, directly or indirectly, by way of the wastewater-service contract[78] or any relevant legislation which governs the entity supplying the wastewater service (for example, Sydney Water Act 1994). Which view is better will depend on the terms and conditions of the contract. It is possible that the wastewater-service provider is only that, a ‘service’ supplier. Its role is to supply a service rather than acquire property rights. Hence, although it contracts to remove wastewater, on this line of reasoning it is unlikely to acquire property rights by way of simply performing the service.

Yet there is a weakness in the proposition that the wastewater-service supplier only provides a service in taking away the wastewater. It may mean that the water retailer may also only provide a service when it supplies clean water in the first place. If that is so, the householder would have no property in the water which has become the subject of a dispute. However, this may not be fatal. The householder’s proprietary rights in the water may not be dependent on a transfer of property rights from the supplier to him or her. Perhaps the property rights in question are created by the manner in which the householder uses the water and how effectively he or she demonstrates possession and exercises dominion over it.[79] (This is demonstrated even more clearly in relation to the person who collects water in the rainwater tank.)

Yet another, and perhaps more fruitful, way of looking at this question is through the legal doctrine of abandonment. This argument is based on an understanding that, whilst the householder may have held property rights in (a) the water supplied to him or her and (b) the waste matter with which he or she polluted the clean water supplied to him or her, once the sink plug is pulled or the toilet flushed, the householder has abandoned any proprietary rights that he or she may formerly have held.

The doctrine of abandonment involves ownership of a chattel being divested in circumstances where it can be shown that: (a) the original owner intended to renounce his or her title and (b) the chattel lawfully fell into the possession of another.[80] Perhaps it could be argued that when the householder flushes the toilet, he or she is divesting him or herself of any title (by way of the doctrine of abandonment) to the wastewater which he or she might have had in it, rather like the householder who takes his goods to the local rubbish tip and leaves them there.[81] Once the householder dumps his or her goods, the tip operator acquires a possessory title to them by means of the strict control the operator exercises over the tip site (K. and S. Gray 2004: 55). It is possible to conceive of the householder flushing the toilet in a similar manner. Accordingly, once the toilet is flushed, the householder relinquishes his or her title and the wastewater becomes the property of the sewerage-network operator, who can resist the claim of a householder if he or she later tries to claim title over his or her sewage.

The recent decision of R (Thames Water Utilities) v South East London Division, Bromley Magistrates’ Court dealt with the issue of whether wastewater which had accidentally escaped from a sewerage system constituted waste within Directive 75/442 EEC. In that case, it was alleged that the Thames Water Utilities deposited untreated sewage constituting ‘controlled waste’ on land in the county of Kent, as well as into controlled waters in that county.[82] The Court found that, although the escape of sewage was accidental, it did not preclude it being ‘discarded’ (by the Utility) and, in turn, from being characterised as ‘waste’. However, the case did not discuss whether waste was inside or outside the property paradigm and nor did the Court decide the issue by reference to the language of property law. Instead, it referred to the ‘producer’ of waste and the ‘holder’ of waste. This would tend towards waste being seen, at least in the context of an accidental discharge and the relevant European Community Law, as outside property law.[83] Perhaps this conclusion is supported by the fact that authorities such as Sydney Water do not currently charge for the sewage that a sewer miner removes from the network. This suggests that, to date, sewage has been regarded as worthless, something that could not be given away and, accordingly, there has been little incentive to conceive of it as property or to bring it within the parameters of a trading regime valid at law. However, that may well change if the resource of sewage becomes the subject of pricing. If a price is attributed to raw sewage and commodification follows, a Benthamite analysis would suggest that property will be born. ‘Property and laws were born together and die together. Before laws there was no property; take away laws and property ceases.’ (Bentham in Macpherson 1978: 52).

If property can exist in ‘thin air’, as it does in strata schemes, for example, there would seem to be little reason preventing wastewater from being construed as property.[84] Yet, the next question is, whose property is it? Is it the third-party accessor’s, the sewer miner’s, the incumbent wastewater-service provider’s or the householder’s, for example?

Further, if individuals find that sewage is valuable, this may result in them wishing to retain it as ‘their property’ rather than ‘giving’ it to wastewater-service providers, third-party access seekers or sewer miners. One possibility is that the desire to retain sewage could result in a trend towards individual households or neighbourhoods seeking to set up their own infrastructure to treat sewage in order to enjoy the benefit of recycled water or treated sludge themselves. Governments and legislators may need to consider the implications of this.

We also could find that sewer miners, third-party access seekers, infrastructure owners and individual households may all end up competing with each other for sewage. Sewer miners, such as local councils, may want sewage to recycle, with a view to using the recycled water in public spaces, such as parks and golf courses. Third-party access seekers who wish to pursue recycling businesses may wish to acquire sewage so that they can on-sell recycled water and treated sludge. Incumbent wastewater-service providers may wish to retain the sewage they collect and either enter into or expand their recycling activities while individual households and local communities may wish to retain sewage so that they can recycle it at a micro level. If so, all these parties could conceivably be in competition for the resource. However, this scenario is not likely to occur unless it seems a profit can be made out of entry into the market. At the moment, concerns about access pricing for third parties seem to be causing would-be investors to display timidity and tentativeness about entry into the market.

Of course, another scenario completely is that legislators may decide that there are strong policy reasons not to construe sewage as property ‘owned’ privately but, rather, to characterise it as a right akin to either res nullius (property belonging to no-one) or as res commune (property belonging to everyone). On one view, the present Australian passion for privatisation and the commodification evident in the water sector would seem to make this unlikely. However, on another view, if the assertion of proprietary rights by water utilities (public or private) were driving up the price of sewage as a resource and distorting the allocation of recycled water in times of water scarcity, then governments and parliaments may see the public-policy benefit in legislating to assert public ownership of sewage and regulate the allocation of this wonderful new resource!