Magistrates of Stonehaven v Kincardineshire County Council
| Jurisdiction | Scotland |
| Judgment Date | 19 July 1939 |
| Docket Number | No. 73. |
| Date | 19 July 1939 |
| Court | Court of Session (Inner House - First Division) |
1ST DIVISION.
Ld. Stevenson.
Local GovernmentCounty governmentRelations between burgh and countyTransfer of function from small burghs and district committees to county councilsHighway authority for classified roadsLevy on burgh for proportion of district committees outstanding debtTitle of burgh to resist levyAverment that debt caused by ultra vires borrowingWhether such debt a transferred "liability"Lender's right to restitutionRates and AssessmentsRoads and StreetsRecompenseLocal Government (Scotland) Act, 1929 (19 and 20 Geo. V, cap. 25), secs. 2 (1), 6 and 21.
LoanRepaymentUltra viresRecompenseLoan made in knowledge that transaction ultra vires of borrowerLender's right to recover by legal procedure.
The Local Government (Scotland) Act, 1929, by sec. 2 (1), transferred to the reconstituted county council from the district committees of the county and from the town councils of small burghs within the county the function of highway authority for classified roads; and, by sec. 6, transferred any liabilities which had been incurred by such committees or burghs for the purposes of the function. Sec. 21 provides that the expenditure of the county council for the purposes of the function shall be apportioned between the small burghs and the landward part of the county, and that the proportion allocated to any burgh shall not be rated for by the county council on the lands and heritages within the burgh but shall be requisitioned from the burgh; and power is given to the town council of the burgh to meet such requisition either out of the common good or other revenues, or by means of a rate.
The magistrates of a small burgh brought an action against a county council in which they claimed repayment of sums requisitioned from them by the county council for the purpose of meeting certain outstanding liabilities incurred by district committees. They maintained that these liabilities had not been transferred by the statute, in respect that they had been due to under-assessment in the past by the previous county council. The defenders pleaded, inter alia,that the pursuers had no title to raise this question.
The Lord Ordinary having allowed a proof on the question of under-assessment, the defenders reclaimed, and the pursuers amended their pleadings to the effect of substituting for the averment that the liabilities were due to under-assessment an averment that they had been caused by ultra vires borrowing by the previous county council to meet the liabilities of the district committees.
Held (1) that the pursuers had a title to raise the action, in respect that they were not mere collectors of the sums requisitioned by the defenders, and were therefore entitled to question the defenders' authority; but (2) that, even if the borrowing had been ultra vires and known to the lender to be so, the resulting debt was one which the lender might have recovered by action under the principle of recompense, and accordingly was a "liability" within the meaning of sec. 6 of the Act, for which the defenders were entitled to requisition the pursuers in terms of sec. 21; and actiondismissed.
The Provost, Magistrates And Councillors Of The Burgh Of Stonehaven brought an action against the County Council of the County of Kincardine for payment of the sum of 7119, together with certain interest.
The pursuers, inter alia, made the following averments (the words printed in italics being added by way of amendment in the Inner House):(Cond. 2) [After a reference to the provisions of the Local Government (Scotland) Act, 19291]"Since
the passing of the said 1929 Act the defenders have made annual requisitions upon the pursuers and other small burghs within the County. The defenders included in the said requisition sums representing expenditure for which, as afterwards condescended upon, the defenders have no statutory warrant to requisition the pursuers. In so far as the requisitions included such sums they were illegal and ultra vires and made by the defenders without statutory or any other warrant. " (Cond. 3) "As at 15th May 1930 there was a debit balance on the defenders' roads and bridges account of 27,986, 1s. 9d. There was also a debit balance on an account known as the Cove Quarry account of 10,358, 8s. 7d. and both these sums were carried to the defenders' roads and bridges account making a total debit balance on that account of 38, 344, 10s. 4d. It is believed and averred that on a date unknown to the pursuers the defenders resolved to include annually during the three years ended 15th May 1934 in their estimates of expenditure on classified roads such sums as would be sufficient to liquidate 23,259 of the said debit balance. Later the period for liquidating the said deficit was extended by the defenders from three to four years. The pursuers have discovered from an examination of the defenders' books and accounts and aver that, in making requisitions upon the small burghs and by assessing the landward area within the county, the defenders have between 1930 and 1935 included in and recovered by requisitions 35,344 of the said debit balance of 38,344 on their roads and bridges account as at 15th May 1930. The defenders have deducted from said sum of 38,344 a sum of 3000 upon the view, it is believed and averred, that the said sum of 3000 represents expenditure on unclassified roads for which they admit that the pursuers and other small burghs are not in any event liable to be requisitioned. [Here followed details of sums totalling 7119 which the defenders recovered from the pursuers by requisition and applied towards liquidation of the said 35,344.]" (Cond. 4) "The defenders had no statutory or other warrant to requisition the pursuers for any sums to meet the said deficit on the roads and bridges account as at 15th May 1930. Such sums are not expenditure for which the defenders are legally entitled to requisition under section 21 of the said Act of 1929. In so far as the requisitions made upon the pursuers included such sums, they were illegal and ultra vires of the defenders. By subsection (4) of section 26 of the Local Government (Scotland) Act, 1889, the County Council are empowered to levy rates to meet any deficiency in respect of roads expenditure. By subsection (6) of section 26 of the said Act the finance committee of the County Council are bound to prepare annual estimates of the sums required to be raised to meet any deficiency on the County funds. By subsection (1) of section 27 of the said Act the County Council are directed annually to fix the rate necessary to meet this deficiency. In addition to these powers of meeting expenditure by rating, the County Council were also empowered to borrow for certain road purposes. These powers are contained in section 67 (1) of the Local Government (Scotland) Act, 1889, and section 19 of the Local Government (Scotland) Act, 1908. These provisions along with the rating provisions already referred to are the sole means by which the County Council are legally entitled to finance their expenditure on roads as highway authority. The pursuers believe and aver that the defenders, instead of meeting their estimated yearly expenditure either by rating year by year or by rating and borrowing in terms of said sections, failed to meet said expenditure as they were bound to, but allowed deficits between their estimated yearly expenditure and estimated revenue to accumulate and be carried forward from year to year until the accumulated deficit on their road accounts as at 15th...To continue reading
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