Kemp v Glasgow Corporation
| Jurisdiction | England & Wales |
| Judgment Date | 06 May 1920 |
| Date | 06 May 1920 |
| Docket Number | No. 5. |
| Court | House of Lords |
Viscount Haldane, Viscount Finlay, Viscount Cave, Ld. Dunedin, Ld. Moulton.
Burgh—Burgh accounts—Objections to accounts—Illegal payments from Common Good—Payment of electioneering expenses in adjoining municipalities—Statutory petition by dissatisfied elector—Glasgow Corporation Act, 1909 (9 Edw. VII. cap. cxxxvii.), sec. 14—Glasgow Boundaries Act, 1912 (2 and 3 Geo. V. cap. xcv.), sec. 80.
An elector of the City of Glasgow, in a petition to the Sheriff under sec. 14 of the Glasgow Corporation Act, 1909, complaining of the Common Good accounts, averred that the Corporation of Glasgow had illegally paid out of the Common Good the election expenses of candidates for the municipal councils of adjacent burghs who supported a proposed scheme for the inclusion of these burghs within the City of Glasgow, and he craved that these payments should be disallowed. The Glasgow Boundaries Act, 1912, by which the inclusion was subsequently effected, provided by sec. 80 that ‘the costs charges and expenses of and incident to the preparing for obtaining and passing of this Act or otherwise in relation thereto’ should be paid by the Corporation of Glasgow.
The defenders having pleaded that the pursuer's averments were irrelevant, the First Division sustained that plea, and dismissed the action.
Held (rev. that judgment) that the pursuer's averments were relevant, in respect that the payments alleged were illegal as being contrary to public policy, and were not covered by sec. 80 of the Act of 1912, and proof allowed; dub. Viscount Haldane and Lord Dunedin, who were of opinion that the better course would be to allow a proof before answer.
(In the Court of Session, 16th November 1918—1919 S. C. 71.)
The pursuer appealed to the House of Lords.
The appeal was heard on 16th and 18th March 1920.
Argued for the appellant;—There was no distinction between the payments here complained of and the payment of a bribe. To spend the Common Good for the purpose of influencing public opinion in the manner alleged was unlawful. The appellant did not contend that no form of expenditure by the Corporation on propaganda work in favour of the scheme for enlarging the city boundaries could be legal; but he did contend that it was a misapplication of the Common Good to pay the election expenses of candidates pledged to support annexation. The action of the Corporation was struck at by the principle laid down by Lord Shaw of Dunfermline in the House of Lords and by Fletcher Moulton, L.J., in the Court of Appeal in the OsborneELRELR case.1 The appellant was
entitled to call for a full explanation, with all details, of the item of the accounts complained of in condescendence 3, viz., ‘Parliamentary Expenses, Session 1912, Glasgow Boundaries Act, 1912.’ That right was given him by the Glasgow Corporation Act, 1909.1 Upon this point the appellant respectfully adopted the reasoning of Lord Salvesen in his dissentient opinion in Eadie v. Corporation of Glasgow.2
Argued for the respondents;—In considering the relevancy of the pursuer's averments it must be remembered that the Common Good, certain expenditure of which was here challenged, was the property of the Corporation, and could be dealt with by the Corporation as their private property, subject only to the condition that it must be used for some purpose in connexion with the benefit of the community. From the earliest times royal burghs possessed property, known as the ‘Common Good,’ and held and expended by the provost and magistrates for the benefit of the burgesses, who, in early times, had no means by which they could challenge the administration or call for audit.3 By the Royal Burghs (Scotland) Act, 1822,4 section 3, it was provided that an annual account of the Common Good should be made up, which was to be open to the inspection of the burgesses, to whom a right was given to call for any particular vouchers. No right, however, was given to them to control the expenditure, and no restriction was imposed upon the discretion of the corporation. The drawback to this Act was that it was liable to cause much needless expense, due to the audit of the account by numbers of unskilled individuals. The Act of 1822 was to some extent superseded by the Royal Burghs (Scotland) Act, 1833,5 which, however, did not affect the audit question. The Town Councils (Scotland) Act, 1900,6 made provision for a public audit of the accounts, but Glasgow continued to be governed by the Acts of 1822 and 1833 until the year 1909, when the Glasgow Corporation Act, 1909,7 was passed, which superseded the previous Acts. The Act of 1909 provided for a public audit, and, as regarded individual burgesses, their rights were regulated by sections 13 and 14. The question therefore came to be whether the pursuer's demands were warranted by these sections. They were not. Under these sections he was entitled to an account stated with all reasonable detail, and he could complain of any particular item; but he was not entitled to the production of vouchers. The question therefore was whether the pursuer had made a relevant statement of dissatisfaction with any particular item in the accounts. This he had failed to do, and the case was ruled by Eadie v. Corporation of Glasgow.8 There was nothing per se illegal in the expenditure, which was similar to the expenditure constantly made, and legitimately made, by the promoters of a parliamentary bill. It might have been different if the Corporation had definitely said that it would pay the candidate's expenses
only if he promised to vote for the scheme. Such a promise was not alleged. If the expenditure was not per se illegal, it could be challenged only on the ground that it was not in the interest of the inhabitants. That, however, could not be maintained, it being in the interest of the community that public opinion should be influenced in favour of any scheme which was for the benefit of the community; and the payment of election expenses was just one way, and a legitimate way, of influencing public opinion. It could not be said that the transaction amounted to a bargain of the kind condemned by Lord Shaw of Dunfermline in the OsborneELR case.1 The question was not whether the Corporation were well advised in acting as they had done; it might be that, from certain points of view, they would have been wiser to have refrained from employing the Common Good for this purpose. That, however, was not the point in the present case. The Corporation had the widest discretion over the expenditure of the Common Good, and the Court would interfere only in the case of a clear abuse in the exercise of that discretion.2 The averments here did not set forth any such case.3
At delivering judgment on 6th May 1920,—
Viscount Haldane.—The Glasgow Corporation Act of 1909 directs the Corporation to prepare yearly accounts of the revenue, expenditure, and balances arising from their Common Good, as well as from rates and other assets. These accounts must show, among other things, all sums paid. They are to be audited, and any municipal elector is to be permitted to inspect and examine them, along with the auditor's confirmation or report. An elector who is dissatisfied with ‘any of the accounts or any item therein’ may petition the Sheriff, specifying the grounds of objection, and the Sheriff is to hear and determine the matter of complaint, and his decision may be the subject of appeal. In 1912 an Act was passed extending the boundaries of Glasgow. Section 80 provided that the costs, charges, and expenses of and incident to the preparing for, obtaining, and passing the Act, or otherwise in relation thereto, were to be paid by the Corporation. The accounts of revenue and expenditure, as presented under the statute, contained an item of £6666, 14s. 10d. under the heading of ‘Parliamentary Expenses, Session 1912,’ and referred to as fees for professional services. The appellant, who is a municipal elector, made inquiry, and ascertained that the item contained, inter alia, two payments of £1157 and £795, 9s. 5d., made to two writers in Glasgow, Mr Robert Kyle and Mr David Crawford, respectively. He alleges that these sums were paid for services rendered in organising a movement for securing support in areas outside Glasgow which were
sought to be, and in the end were, brought within the enlarged area of the city proposed by the bill, which afterwards became the Act of 1912. He alleges further that the money was, in part at least, spent in defraying the election expenses of candidates for membership of the councils of burghs outside Glasgow in the areas sought to be included, and that such expenditure was illegal. He presented a petition in the Sheriff Court at Glasgow craving that the item might be disallowed. The Sheriff-substitute allowed a proof, but his interlocutor was recalled by the Sheriff, who decided that the averments so made were not relevant. This decision was affirmed by the First Division. It was there held that it was in the interest of the City of Glasgow to make such expenditure for the purpose of developing public opinion, and that it could therefore properly be made out of the Common Good which the Corporation administers.
It is quite true that, by the law regulating the title of a royal burgh in Scotland to the Common Good, the Town-council has a wide discretion in making payments out of it, so long as these are made for the benefit of the burgh. But this latitude of course does not enable payments to be made for purposes that are not legal. Expenditure made by the Corporation of Glasgow with the direct object of influencing a candidate for the representation on the council of a burgh outside Glasgow to stand, and to vote, if returned, for incorporation, may well be illegal as being contrary to public policy. If the purpose really is that he should act in the interest, not of the burgh which he is seeking to represent in its...
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