Islwyn Borough Council (First Plaintiffs (First Respondents) and) Gwent County Council (Second Plaintiffs (Second Respondents) v Newport Borough Council (Defendant
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE GLIDEWELL,LORD JUSTICE HIRST,LORD JUSTICE ROCH |
| Judgment Date | 22 June 1993 |
| Judgment citation (vLex) | [1993] EWCA Civ J0622-12 |
| Court | Court of Appeal (Civil Division) |
| Date | 22 June 1993 |
[1993] EWCA Civ J0622-12
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Before: Lord Justice Glidewell and Lord Justice Hirst and Lord Justice Roch
MR N Macleod QC (instructed by J G Ashurst, Solicitor to the Council Civil Centre, Gwent) appeared on behalf of the Appellants.
MR M BISHOP QC (instructed by J C Rogers, Civil Centre, Gwent) appeared on behalf of the Respondents.
Tuesday, 22nd June 1993
This is an appeal against a judgment of Pill J given on 28 April 1992 when he found in favour of the Plaintiffs, Iswlyn BC and Gwent CC in this action against Newport BC. The Judge granted the following declarations:
1. That the Defendant is not lawfully entitled to withdraw from participation in the Risca Area Joint Committee for leisure services without the consent of the Plaintiffs and each of them.
2. That the Defendant is not lawfully entitled to refuse to pay less than 25% of the annual running costsof the Risca leisure complex. The Judge also dismissed the Defendant's counter-claim.
The action arose out of a dispute between the three Authorities as to whether an agreement made between them in 1977 for the construction and funding of a leisure complex is still binding upon all three Authorities. This question in turn depends upon whether the agreement was not terminable during the expected life of the complex or, alternatively, could be terminated by reasonable notice given by one of the parties to the agreement.
The leisure complex is in Risca, in Islwyn Borough, adjoining its boundary with Newport Borough. Both are in the County of Gwent. All these Authorities came into existence on 1 April 1974 under the provisions of the Local Government Act 1972. The predecessor Authorities in the area in which the leisure complex lies were:
Risca UDC —now Iswlyn, Monmouthshire CC —now Gwent, and Magor & St Mellons RDC —now Newport.
In 1970/71 Monmouthshire CC (as Local Education Authority) were considering the construction of a new comprehensive school on a site at Risca known as Pen-y-Fan. From that time onwards there were discussions with the UDC and the RDC about the prospect that the sports facilities at the school might be put to dual use, ie be available for use not only by school children but by other members of the public outside school hours. These discussions continued until 1977, with the assistance of periodic reports from joint meetings of officers of the three Authorities.
In 1977, the present parties to the action reached an agreement which provided for the funding of the construction and running of the leisure complex. That agreement was embodied in a Memorandum of Agreement which was intended to be formally executed by all three Councils. For reasons which have not been explained to us, none of the Councils did execute the agreement.
Nevertheless all three parties are agreed that the document exhibited in the papers before us as the Memorandum of Agreement contains the terms which they all agree and by which they are all bound.
The Memorandum of Agreement The preamble of the agreement reads as follows: "Whereas
"1. By section 19 of the Local Government Miscellaneous Provisions Act 1976 a Local Authority may (inter alia) acquire lay out provide with suitable buildings and otherwise equip and maintain land situate within or without their area for the purpose of gymnasiums, playing fields, or for the purpose of centres for the use of clubs, societies or organisations being athletic, social or educational objects and may manage those lands and buildings themselves…
"2. The Councils who are parties hereto are respectively Local Authorities within the meaning of the Act.
"3. By section 101 of the Local Government Act 1972 Local Authorities may discharge any of their functions jointly and where arrangements are in force of them to do so they may also arrange for the discharge of those functions by a Joint Committee of theirs except the power of levying or issuing a precept for a rate or of borrowing money.
"4. By section 103 of the Local Government Act 1972 it is provided that the expenses incurred by a Joint Committee of Local Authorities appointed under the said Act shall be defrayed by those Local Authorities in such proportions as they may agree.
"5. The County Council and the Borough Councils have agreed to act jointly through a Joint Committee established under the provisions of section 101 of the Local Government Act 1972 for the purpose of the functions hereinafter referred to in clause 11 hereof. "Now it is hereby agreed between the parties hereto in pursuance of the powers conferred upon them by virtue of the herein before recited enactments and every other power (if any) enabling them respectively as follows:"
The Memorandum of Agreement then contained the following material provisions.
"1. There shall be constituted a Joint Committee of the said County Council and the said Borough Councils consisting of 12 members, four members to be appointed by each Council, having the functions, powers and duties upon and subject to the terms and conditions hereinafter set forth and the name of the Joint Committee shall be"Risca Joint Committee for Leisure Services" (hereinafter referred to as "The Joint Committee")."
Clauses 2 —10 of the Memorandum of Agreement dealt with the membership, meetings, Standing Orders, and accounts of the Joint Committee.
"11. The Joint Committee shall discharge the following functions subject to the terms and conditions of this Agreement and to the proper discharge of statutory obligations imposed on the County Council by the Education Acts and the education facilities being administered in accordance with the policy of the County Council acting the Local Education Authority and subject to the overall policy of the County Council and Borough Councils on leisure matters: … (b) To advise concerning the administration and manage the Risca Leisure Centre… (e) To appoint and dismiss such staff as the Councils agree are required for the jointly provided facilities. The terms and conditions of such staff shall be affixed by agreement by the Councils."
Clause 12 dealt with the appointment of the Clerk of the Joint Committee.
"13. (i) Proposals by the Joint Committee for expenditure whether or not of a capital nature shall be considered by the said Councils and such expenditure shall not be incurred unless approved by those Councils.
(ii) Not later than the first day of November in every year the Joint Committee shall estimate the amount of money required by it for all expenditure which will be incurred during the financial year beginning on the first day of April next following and the same shall be referred for consideration and approval to the Councils who can apportion the same between them as they shall from time to time agree."
Clauses 14, 15 and 16 dealt with meetings and minutes of meetings of Joint Committee.
"17. All disputes between the parties hereto on the interpretation of the clauses of this Agreement and all disputes or differences in any way or at any time arising hereon shall be referred to some competent arbitrator to be agreed between the parties and failing agreement to an arbitrator appointed on the nomination of the President for the time being of the Law Society and the Arbitration Act 1950 or any statutory modification for re-enactment thereof for the time being in force shall apply to any such arbitration.
18. Co-ordination between School Governors and the Joint Committee shall be achieved through a committee comprising the Chairmen and the Vice-Chairmen of the Governors and the Joint Committee."
By the time this agreement was reached the construction of the school, incorporating the sports or leisure complex, was almost complete.
The documents before the court include a copy of a Joint Report by officers of Newport BC and Gwent CC dated April 1975 relating to the joint planning of leisure facilities in Newport. It is agreed between the parties that contained in this document is a description of the leisure complex and more detail as to the agreement between the Councils about the sharing of finance for it. The section relating to the Risca leisure complex reads as follows:
"1.1. Risca Comprehensive School Recreation Complex(See Plan 1) This joint project is based on the provision of a new Comprehensive School to serve a local catchment. As this is a completely new school and a new site there is very great potential for developing a large and all-embracing joint scheme. …
"1.1.1. Facilities The jointly provided facilities within the recreation block of the complex will comprise:
a) swimming pool …
b) a multi-purpose sports hall
c) a gymnasium
d) two squash courts
e) an administration suite and foyer
f) a large bar and cafeteria
g) a floodlit "all-weather" pitch.
In addition the specification of school drama/theatre space will be raised to allow public use.
"1.1.2 Capital cost The capital cost of these facilities, including furniture, equipment and professional fees is estimated at £540,000.
This cost will be shared equally between the participating Authorities (and there then follows a calculation of £180,000 as the contribution of each Authority) …
"1.1.3 Running costs It was originally agreed that the net running costs be shared between the County...
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