By means of a firm and final ruling issued on 6 May 2022 in Case no. M 3939–21, the Land and Environment Court of Appeal dismissed an action relating to adjustment of an installation fee for connection to the public water and drainage system. The action was dismissed because the property in question was located outside the municipal operational area for water and drainage services and the connection to the public water and drainage system was based on an agreement. That meant that the Land and Environment Court, in its capacity as a special court, did not have jurisdiction to hear the dispute and the action should instead have been brought before a general court.
Background
Two property owners sued a municipal water and drainage company (the water and drainage principal) pursuant to section 31 of lagen om allmänna vattentjänster (“LAV”) [the Public Water Services Act] and requested adjustment of an installation fee charged for connection to the public water and drainage network The property was located outside the municipal operational area for public water services and connected to a municipal water and drainage system through an agreement between the property owners and the water and drainage principal.
The application for a summons was filed with the Land and Environment Court in Växjö. The water and drainage principal filed an objection contesting jurisdiction and requested that the application for a summons be dismissed because the Land and Environment Court was not the correct forum for the dispute. The objection contesting the jurisdiction was dismissed by the Land and Environment Court and the decision of the Land and Environment Court gained legal force. After the Land and Environment Court handed down its judgment, which means that the property owners’ action for adjustment was partially successful and the installation fee was adjusted, the water and drainage principal appealed the judgment and maintained its objection contesting the court’s jurisdiction.
JUDGMENT OF THE LAND AND ENVIRONMENT COURT OF APPEAL
In the reasons for its ruling, the Land and Environment Court of Appeal initially states that, in accordance with Chapter 10, section 19 of the Code of Judicial Procedure, a higher court must examine the question regarding jurisdiction. That means that, despite the Land and Environment Court’s assessment and firm and final decision not to dismiss the application for a summons, the Land and Environment Court of Appeal must carry out an independent assessment of the question regarding jurisdiction. When issuing the reasons set out below, the Land and Environment Court of Appeal issues the opposite assessment to the Land and Environment Court and finds that the application for a summons must be dismissed.
Initially, the Land and Environment Court of Appeal states that the Land and Environment Court has jurisdiction to hear cases and matters in accordance with the provisions of the Environmental Code, the Real Property Formation Act, the Planning and Building Act and other laws. The Public Water Services Act states that the Land and Environment Court hears cases concerning matters governed in the Public Water Services Act and the regulations accompanying it.
The Land and Environment Court of Appeal further notes that the definition of “property owner” in section 2 of the Public Water Services Act does not include owners of a property located outside the operational area. Even though an agreement under section 5 of the Public Water Services Act can be entered into between the principal and a party other than the property owner, this, according to the Land and Environment Court of Appeal, is about usufructuaries of properties within the operational area or multiple property owners who, in association, act together against the principal. It would therefore be unreasonable, according to the court, if section 5 of the Public Water Services Act could enable the Act to be directly applicable to property owners outside the operational area.
In the reasons for its ruling, the Land and Environment Court of Appeal states that an additional important starting point for applying the obligations under the Public Water Services Act in circumstances relating to water and drainage is whether there is a need for an operational area where the municipality is required to both determine the operational area and arrange a water and drainage system within it, which means that property owners will be required to pay fees for the water and drainage installation under certain conditions. The property must be located within the operational area as a prerequisite for both the right to use a public water and drainage system and the requirement to pay a fee. Otherwise, the relationship between the principal and the property owner who connects to the public water and drainage system is based on voluntariness, i.e. a civil law agreement between the parties. Therefore, according to the Land and Environment Court of Appeal, the property owners cannot cite the obligations under the Public Water Services Act in support of their action in a water and drainage relationship when that relationship is based on civil law.
Finally, the Land and Environment Court of Appeal notes that it has also not emerged that the municipality intended, or had any obligation, to extend the operational area to include the property with which the case is concerned.
To sum up, the municipality was therefore not considered to have any obligation to connect the property in question and the connection was therefore voluntary and based entirely on the agreement between the parties. That means that the Land and Environment Court therefore had no jurisdiction to hear the case and the Land and Environment Court of Appeal therefore set aside the judgment and dismissed the property owners’ action.
Comments
According to previous case law, it was sufficient for a property to be located in an area where public water services would be arranged or had largely already been arranged in order for the property to be considered to be located within the operational area. Decisions on the establishment of an operational area are only a formality in such cases. The Land and Environment Court of Appeal’s reasons for the ruling to set aside could form a basis for arguing that this still applies since the reasons for the ruling expressly state that the municipality in question did not intend to extend the operational area to include the property in question. The municipality’s intention to establish an operational area can therefore still be decisive for an assessment of whether a water and drainage dispute should be heard by the Land and Environment Court or a general court.
To sum up, the Land and Environment Court’s final ruling provides an expected but important clarification of the Land and Environment Courts’ jurisdiction to hear and examine cases for water and drainage customers outside the operational area who are connected on the basis of an agreement.
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