Birkdale District Electric Supply Company v Southport Corporation
| Jurisdiction | England & Wales |
| Judge | Earl of Birkenhead,Lord Atkinson,Lord Sumner,Lord Wrenbury,Lord Carson |
| Judgment Date | 12 February 1926 |
| Judgment citation (vLex) | [1926] UKHL J0212-1 |
| Date | 12 February 1926 |
| Court | House of Lords |
[1926] UKHL J0212-1
Earl of Birkenhead.
Lord Atkinson.
Lord Sumner.
Lord Wrenbury.
Lord Carson.
House of Lords
After hearing Counsel, as well on Monday the 14th, as on Tuesday the 15th, days of December last, upon the Petition and Appeal of the Birkdale District Electric Supply Company, Limited, whose Registered Office is situate at 88, Kingsway in the County of London, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 28th of April 1925, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be reversed, varied, or altered, and that the Petitioners might have the relief prayed for in the Appeal or such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of the Mayor, Aldermen and Burgesses of the County Borough of Southport, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 28th day of April 1925, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
This is an appeal from an Order of the Court of Appeal dated 28th April 1924, reversing an Order made by Mr. Justice Astbury dated 11th November 1924, in an action in which the Respondents were Plaintiffs and the Appellants were Defendants.
The Plaintiffs in this action claimed an injunction restraining the Defendant Company from charging the Plaintiff Corporation, or any other private consumer of electrical energy, any price for the energy so supplied, exceeding the price charged by the Plaintiff Corporation for a similar supply of electrical energy to a private consumer within the area which on the 31st December 1901, and 2nd of August 1904, constituted the Borough of Southport, or from otherwise committing a breach of the provision contained in Clause 4 of a certain Indenture dated the 1st December, 1901, styled a Supplemental Indenture, or of the provisions of Clause 1 of another Indenture dated the 2nd of August 1904.
By the Birkdale Electric Lighting Order, 1898 (confirmed by the Electric Lighting Orders (Confirmation No. 8), Act 1898), styled in the case the Birkdale Lighting Order, the Birkdale Urban District Council, called for shortness, "the Council," were empowered to supply and distribute electricity for all public and private purposes within the Urban District of Birkdale, as the same was constituted at the commencement of that Order. It is alleged in the 8th paragraph of the Plaintiffs' statement of claim, and admitted in the 2nd paragraph of the Defendants amended statement of defence, that the Appellant Company is now carrying on an Electric Lighting undertaking under and by virtue of the said Birkdale Lighting Order within an area which at the two dates aforesaid constituted or included the Borough of Southport. The 59th section of the Birkdale Lighting Order of 1898 provided that the Undertakers ( i. e., the Council) might at any time after the making of the Order, with the consent of the Board of Trade by a deed approved of by them, transfer their powers, duties and works to any company or person subject to such exceptions or modifications (if any), and for such period, and on such terms as might be specified therein, either as to the whole or any part or parts of the area of supply, and during the said period, but subject to the provisions of the Order, the Company or person should to the extent of the powers, duties and liabilities so transferred be the Undertakers for the purposes of this Order.
By the 71st section of this Order, it is provided that nothing in the Order shall exempt the Undertakers or their undertaking from the provision of, or deprive the Undertakers of the benefits of any general Act relating to electricity, or to the supply of or price to be charged for energy which may be passed after the date of the Order. The 20th section of the general Act (the Electric Lighting Act of 1882), enacted that the Undertakers should not in making any agreement for a supply of electricity show any undue preference to any local authority, Company or person, but save as aforesaid they might make such charges for the supply of electricity as might be agreed upon, not exceeding the limits imposed in pursuance of the Licence Order or special Act authorising them to supply electricity. The 11th section of this same general Act of 1882 apparently indicates what were then considered to be the kind of transactions which might involve the divesting of a local authority of the powers given to it. The section runs thus:
"Any local authority who have obtained a licence, order or special Act for the supply of electricity may contract with any Company or person for the execution or maintenance of any works needed for the purposes of such supply or for the supply of electricity within any area mentioned in such licence, order or special Act or in any part of such area but no local authority, company or person shall by any contract or assignment transfer to any other Company or divest themselves of any of the legal powers given to them or legal liabilities imposed on them by this Act or by any special Act without the consent of the Board of Trade."
The Acts which the section deals with are positive Acts, contracts for the execution or maintenance of works or the supply of electricity within an area, and could not, I think, by any stretch of its wording, be held to apply to the negative act of contracting only to charge for a term a price for the commodity it vends, which price it was in itself perfectly entitled to charge. It would appear to me that such a contract is really a contract by a local authority to exercise the power given to it in a particular area, and in a particular way, rather than a contract to transfer those powers to another authority or person.
However this may be, the restriction imposed by this section was evidently considered too wide, for by the Electric Lighting Act of 1909 (9 Ed. 7. c. 34) the words from the words "but no local authority" to the end of the section are by section 14 struck out from it, and the following provision is made:
"A local Authority, Company or person who have obtained a licence, Order or special Act for the supply of electricity shall not by transfer or otherwise divest themselves of any of the powers, rights or obligations conferred or imposed upon them by the Electric Lighting Act, or by any licence, Order or special Act otherwise than under and in accordance with a provision contained in a licence Order or special Act authorising such divestiture."
The 25th and 26th sections of the Order must, I think, be examined closely in order to determine what was the condition of things, what the rights and obligations of the respective parties, when on the 31st December, 1901, the Urban District Council transferred its undertaking to the Birkdale District Electrical Lighting Co., Ltd. The sections run as follows:—
"25. The prices to be charged by the Undertakers for energy supplied by them shall not exceed those stated in that behalf in the Fourth Schedule in the first and second sections thereof respectively or in the case of a method of charge approved of by the Board of Trade such price as the Board shall on approving such method determine."
"26. Subject to the provisions of this Order and of the principal Act and to the right of the consumer to require that he shall be charged according to some one or other of the methods above mentioned the Undertakers may make any agreement with a consumer as to the price to be charged for energy and the mode in which those charges are to be ascertained and may charge accordingly."
I turn now to the Indenture of the 31st December 1901, made between the Birkdale Urban District Council, referred to as "the Council," and the Birkdale Electrical Supply Co. Limited. It begins by reciting the Birkdale Provisional Order, thereinafter referred to as "the Order" and its confirmation Act of 1898. It then recites the 59th section of this Order. It then recites that the Council in consideration of 700 l. have agreed to transfer to the Company the undertaking authorised by the Order and all their powers, duties and liabilities, subject to the exceptions and modifications and upon the terms thereinafter appearing, and that the Company have agreed to accept this transfer. The Council then proceed to transfer their undertaking and all its rights, duties and liabilities under the Order to the Company, who, save as hereinafter appears, shall be the Undertakers for the purposes of the Order. It is then provided that six of the sections of the Order shall not apply to the Company. Section 52 is one of those but that is the very section of the Order which provides elaborately for the application of all the monies received by the Undertakers, and by its last two lines it enacts that any deficiency of income in any year not answered out of the reserve fund shall be charged upon and payable out of the local rates. That provision is swept away. It does not affect the Company at all. There are many other provisions in this deed which are irrelevant to the question for decision. The result of them, however, is that...
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