Magistrates of Stonehaven v Kincardineshire County Council
| Jurisdiction | England & Wales |
| Judge | The Lord Chancellor,Lord Thankerton,Lord Romer,Lord Porter |
| Judgment Date | 20 August 1940 |
| Judgment citation (vLex) | [1940] UKHL J0820-3 |
| Docket Number | No. 5. |
| Court | House of Lords |
| Date | 20 August 1940 |
[1940] UKHL J0820-3
House of Lords
Lord Chancellor
Lord Atkin
Lord Thankerton
Lord Romer
Lord Porter
After hearing Counsel as well on Tuesday the 2d, as on Wednesday the 3d and Thursday the 4th, day of July last, upon the Petition and Appeal of The Provost, Magistrates and Councillors of the Burgh of Stonehaven, praying, That the matter of the Interlocutor set forth in the Schedule thereto, namely, an Interlocutor of the Lords of Session in Scotland, of the First Division, of the 19th of July 1939, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Interlocutor might be reversed, varied, or altered, or that the Petitioners might have 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 County Council of the County of Kincardine, 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 Interlocutor, of the 19th day of July 1939, 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: And it is also further Ordered, That unless the Costs, certified as aforesaid, shall be paid to the parties entitled to the same within One Calendar Month from the date of the Certificate thereof, the Cause shall be, and the same is hereby, remitted back to the Court of Session in Scotland, or to the Judge acting as Vacation Judge, to issue such Summary Process or Diligence for the recovery of such Costs as shall be lawful and necessary.
My Lords,
I have had the advantage of seeing and studying the opinion which has been prepared in this Appeal by my noble and learned friend, Lord Thankerton, and, inasmuch as I agree with his conclusion that the sums claimed from the County Council by the Appellants fall within Section 21 of the Local Government (Scotland) Act 1929, and with the reasons that he has given for coming to that conclusion, I do not find it necessary to prepare a reasoned judgment of my own. I prefer to base my view on this construction of Section 21, which provides sufficient ground for the failure of the Appeal, rather than to buttress this conclusion further by expressing a final opinion upon the proper construction of Section 6(2) of the Act.
I move that the Appeal be dismissed with costs.
My Lords,
The only question in this Appeal is whether the Appellants, as pursuers in the action, have stated a relevant case for repetition of sums which they have paid to the Respondents as part of contributions levied by the Respondents on the Appellants on various dates from January, 1931, to March, 1937, under and in terms of Section 21 of the Local Government (Scotland) Act, 1929.
Further, I should add that the question of relevancy is confined to the Appellants' averments as to the wrongful inclusion of the sums under challenge in the levies when made; if these averments are relevant, the Respondents concede that the Appellants have relevantly averred facts sufficient to support a right to repetition, but the Respondents dispute these averments, as summarised in their sixth plea-in-law, and a proof would be necessary on that point.
As already stated, the contributions in question were levied by the County Council under Section 21 of the Act of 1929, which provides as follows:—
"21.—(1) Subsections ( 3) and (4) of Section sixty of the Act of 1889 and Section ten of the Act of 1926 (which relate to contributions by burghs to the county fund) shall cease to have effect, and the expenditure (to which this subsection applies) of the county council for each purpose for which any burgh is included within a county, whether under this or any other Act, shall be apportioned and allocated as between each such burgh and the landward part of the county according to the rateable valuation in the valuation roll of the respective areas so far as within the county, and the amount of the contribution apportioned and allocated to a burgh shall not be rated for by the county council on the several lands and heritages within the burgh but, except in so far as defrayed out of the common good or other revenues of the burgh, shall be paid by the town council out of such rate payable by owners and occupiers in equal proportions as the town council may determine.
The expenditure to which this subsection applies is, in the case of a large burgh, expenditure which falls to be met out of rates and grants under Part III of this Act, and, in the case of a small burgh, expenditure which falls to be met out of rates."
The Burgh of Stonehaven is a small burgh within the meaning of the Act, and the Appellants are admittedly liable to make such contributions as are lawfully imposed on them by the County Council under this provision.
Taking the Appellants' averments pro veritate, along with any admissions in the answers to the condescendence, the main facts are as follows:—The sums objected to by the Appellants represent the proportion, calculated as their contribution under Section 21, of amounts applied in liquidation of a sum of £35,344, which stood to the debit of the County's Roads and Bridges Account in respect of expenditure on classified roads as at 15th May, 1930, the day before that on which the Act of 1929 came into operation for this purpose. In the Outer House, the main case made by the Appellants, which they supported by averments as to certain statutory provisions, was that the debit balance of £35,344 arose as the result of under-assessment by the Respondents in preceding years, which was in breach of their statutory duty to cover each year's expenditure by a full assessment, and that they could not legally be assessed on the County's ratepayers in subsequent years, from which it followed that the Appellants would not be liable to contribute thereto. The Lord Ordinary held that the Appellants' averments were relevant and allowed a proof.
In the Inner House, a passage in the opinion of the Lord President states the course of the debate:—
"The argument on the relevancy of these averments before the Lord Ordinary seems to have followed a somewhat different line from that which we heard. At all events he held that Section 21 of the Act of 1929 authorises the County to levy for such expenses as were incurred with reference to classified roads as from the passing of the Act, and that, while such expenditure would necessarily include such charges as were necessary to defray loans raised in the past with reference to such roads, it does not include debit balances which arise from under-assessment in past years. He therefore allowed enquiry into the facts alleged. Counsel for the Burgh before us found themselves unable to support the Lord Ordinary's opinion on this point, and they conceded at the outset that the County Council was entitled to carry on a deficit from one year to the next at least. After the argument developed and it was pointed out by the counsel for the County that 'deficiency' in Section 27 (1) of the 1889 Act means only a deficiency after taking into account borrowing powers which it is intended to exercise, counsel for the Burgh asked leave to amend. No decision was therefore given on the point of relevancy discussed at the first hearing before us, and what has happened since has had the effect of withdrawing the point from our consideration. The next stage was the amendment of the record, the result of which is that the averments which I have set forth were struck out. In their place, the Burgh now avers that in addition to rating powers, the old County Council were empowered to borrow for road purposes subject to certain statutory conditions, but that they did not use the statutory borrowing powers to meet expenditure not met by rating, but borrowed ultra vires for that purpose, and that the accumulated deficiency as at 15th May, 1930, of some £35,000 had been met by raising ultra vires loans which were not a liability of the old County Council within the meaning of Section 6 (2)."
It was held by the First Division that even if the loans were known by the lenders to be ultra vires of the County Council, the latter would be under a liability to recompense the lenders for the amounts advanced, and that such liability fell within the terms of Section 6 (2) of the Act of 1929. They accordingly sustained the present Respondents' plea to the relevancy, and dismissed the action.
On the hearing of this Appeal, the Appellants expressly abandoned their averments that the loans were ultra vires, and therefore it is unnecessary to consider the views of the First Division as to the right of a lender, who is aware of the ultra vires nature of the loan, to recompense from the borrower, or to express any opinion as to their correctness. But the Appellants' averments that the deficit of £35,344, as at 15th May, 1930, was represented by loans from the bank and short-term mortgages still stands.
Before this House, the Appellants submitted arguments which they admitted had not previously been submitted, which naturally led counsel for the Respondents to object that these new arguments were not within the Appellants' record, and, in any event, that, in view of the course of the case in the Courts below, the Appellants should not be allowed to...
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