Central Electricity Board v Halifax Corporation

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Reid,Lord Morris of Borth-y-Gest,Lord Hodson,Lord Guest,Lord Pearce
Judgment Date01 November 1962
Judgment citation (vLex)[1962] UKHL J1101-1

[1962] UKHL J1101-1

House of Lords

Lord Reid

Lord Morris of Borth-y-Gest

Lord Hodson

Lord Guest

Lord Pearce

Central Electricity Generating Board
and
Halifax Corporation

After hearing Counsel, as well on Tuesday the 9th, as on Wednesday the 10th and Thursday the 11th, days of October last, upon the Petition and Appeal of the Central Electricity Generating Board, whose principal office is at Bankside House, Sumner Street, in the County of London, praying. That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 30th of June 1961, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the Case of Halifax Corporation, 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 Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal, of the 30th day of June 1961, 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.

Lord Reid

My Lords,

1

By the Electricity Act, 1947, the assets and liabilities of electricity undertakings were transferred to Electricity Boards which were set up to carry on the nationalised industry. A number of local authorities, including the Respondents, were electricity undertakers, and special provision was made for the separation and transfer to the Boards of those parts of their assets and liabilities which pertained to their electricity undertakings.

2

The combined effect of sections 14 (1) and 15 (1) of the Act was that "property held or used by the local authority wholly or mainly in their capacity as authorised undertakers, and rights, liabilities and obligations acquired or incurred by the local authority in the said capacity" should "on the vesting date vest by virtue of this Act and without further assurance in such Electricity Board or Boards as may be specified in the following provisions of this section or determined thereunder". In general the assets and liabilities vested in the appropriate Area Board, but under proviso (iii) to section 14 (2) all investments and cash vested in the Central Authority of which the present Appellants are the successors.

3

The present case arises in this way. Before the "vesting date", which was 1st April, 1948, the Respondent had accumulated a fund of £34,500 out of the revenues of their electricity undertaking. On 31st March, 1948, they transferred that fund from their electricity account to their general rate account. It would seem that they relied on some provision in a Private Act. We do not know when this first came to the knowledge of the Electricity Authority, but nearly three years elapsed before a claim was made that this fund had vested in the Authority by virtue of the Act. The claim was denied by the Respondents, and for reasons which are not now material no further action was taken until 3rd January, 1957. On that date the dispute was referred to the Minister under section 15 (3), of which the relevant parts are—

"(3) Any question arising under this section as to whether any property is or was held or used by any such local authority wholly or mainly in their capacity as authorised undertakers … or whether any rights, liabilities or obligations were acquired or incurred by any such local authority in the said capacity … shall in default of agreement be determined by the Minister of Health".

4

By that time more than six years had elapsed since the vesting date. The Respondents contended that the Appellants' claim was barred by section 2 (1) ( d) of the Limitation Act, 1939. But the Minister rightly held that the question whether the claim was statute barred was not for him and he decided on 18th September, 1958, that this sum was held by the Respondents wholly or mainly in their capacity as electricity undertakers. The Respondents refused to pay this sum to the Appellants, and on 6th March, 1959, the present action was begun by the Appellants.

5

The Appellants' claim is for the sum of £34,500 due to them from the Respondents under the provisions of the Act. There were originally several grounds of defence, but the only defence now maintained is that based on the Limitation Act. Havers, J. decided this question in favour of the Appellants, but his decision was reversed by the Court of Appeal, and the Appellants now appeal to this House.

6

In the Court of Appeal a point was taken for the first time as to the competency of suing the Respondents for this sum. The point was that on the vesting date the bank held this sum, that the Act vested it in the Respondents, and that therefore the Appellants ought to have claimed it from the bank and not from the Respondents. The Respondents do not take this point before your Lordships, but I think I ought to deal with it. I think it is a bad point for two reasons. No one denies that this sum was cash within the meaning of the Act: if it was not, then it did not vest in the Appellants' predecessors but in the Area Board. It is general practice to regard a chose in action consisting of a right to claim money in the bank as being just as much cash as money in the till; and I cannot think that the Act makes any distinction between them, or requires the Authority to enquire where the cash is. Let me suppose that in this case the general rate account was overdrawn: it may have been so because no one thought it relevant to enquire into this at the trial. If it was, then, of course, the Authority could have claimed nothing from the bank, and they must have been entitled to claim the sum from the Respondents. I cannot believe that the Authority's title to sue the Respondents depended on whether or not their account with the bank was in credit to the extent of £34,500.

7

But even if I am wrong about that there is another reason. The Authority made no claim to this money for three years; they may have required a considerable time to discover that it was due. By that time the £34,500 had almost certainly been drawn out and spent by the Respondents. So the bank could only be sued if they had some duty to retain the money until the Authority claimed it. But I can find no ground for supposing that it became the duty of every bank on 1st April, 1948, to consider whether money at the credit of any local authority was electricity money and to refuse to pay it to the order of the local authority until any doubt was resolved. We now know that this sum did vest in the Appellants on 1st April, 1948: that is admitted by both parties. So when the Respondents drew it out they may have made themselves liable in tort or for money had and received. But that would make no difference to the decision of this case. I would agree with the Court of Appeal to this extent: if the Authority had gone to the bank before the bank had paid away the money they might have been entitled to claim it, and then the bank would have been stakeholders and the present parties would both have claimed the money. But it appears to me that there can be no valid criticism of the form of the present action. As the Court of Appeal did not base their decision on this point I need not deal with it further, and I turn to the sole issue between the parties—whether the action is barred by the Limitation Act, 1939.

8

The relevant provisions of that Act are—

"2.—(1) The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued, that is to say:—

… …

( d) actions to recover any sum recoverable by virtue of any enactment other than a penalty or forfeiture or sum by way of penalty or forfeiture.

… …

(3) An action upon a specialty shall not be brought after the expiration of twelve years from the date on which the cause of action accrued:

Provided that this subsection shall not affect any action for which a shorter period of limitation is prescribed by any other provision of this Act."

9

The first argument for the Appellants was that the period of limitation for this action was twelve years. If that were so the Appellants would succeed. Their cause of action cannot have arisen before the vesting date and their action was brought within twelve years of that date. The steps in the argument for a twelve-year period were these. First, this is an action upon a specialty—I shall assume that in the Appellants' favour. Secondly, the period is, therefore, twelve years unless a shorter period is prescribed by some other provision of the Act—that follows. Thirdly, the only other provision which could apply is section 2 (1) ( d)—I agree. Fourthly, section 2 (1) ( d) does not apply because this action is not to recover a sum recoverable by virtue of any enactment—that is where in my view the argument fails. If the words of section 2 (1) ( d) are given their ordinary meaning I have no doubt that they cover this case. The sum sued for is only recoverable because it vested in the Appellants' predecessors "by virtue of this Act and without further assurance" (see section 14 (1)), and this is an action to recover it. I doubt whether the words of section 2 (1) ( d) are capable in any context of bearing a meaning which would not cover this case, but I must try to explain the meaning which Counsel for the Appellants persuasively...

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