North Western Gas Board v Manchester Corporation
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SELLERS,LORD JUSTICE DONOVAN,LORD JUSTICE RUSSELL |
| Judgment Date | 18 July 1963 |
| Judgment citation (vLex) | [1963] EWCA Civ J0718-2 |
| Court | Court of Appeal |
| Date | 18 July 1963 |
[1963] EWCA Civ J0718-2
In The Supreme Court of Judicature
Court of Appeal
(From: Mr. Justice Megaw — Middlesex)
Lord Justice Sellers
Lord Justice Donovan and
Lord Justice Russell
Mr. J. RAMSAY WILLIS, Q. C. and Mr. C. N. GLIDEWELL (instructed by Messrs. Chamberlain & Co., Agents for Mr. L. Cattell (Manchester) appeared on behalf of the Appellants (Plaintiffs).
Mr. PATRICK BROWNE, Q. C., Mr. DEREK HODGSON. Q. C. and Mr. D. G. WIDDICOMBE (instructed by Messrs. Sharpe, Pritchard & Co., Agents for Mr. Philip B. Dingle, Town Clerk, Manchester) appeared on behalf of the Respondents (Defendants).
The form of the plaintiffs' remedy sought against the defendant Corporation is by way of declaration but the substance of the dispute is that the plaintiffs claim that they are entitled to a credit or allowance against a sum of £90, 819. 5s. 4d. which is an agreed balance on a new basis of assessment, which was made retrospective, and which was substituted for rates over a period of four years. The plaintiffs have paid £51, 042 and have claimed that the balance of £39, 777 is not recoverable. In the course of the proceedings it was conceded that the plaintiffs were entitled to a small reduction and the sum now in issue is £37, 281, of which £36, 812 relates to the plaintiffs' occupation of part of the Manchester Town Hall extension. The balance relates to the occupation of other premises which can more conveniently be dealt with separately. Alternatively, if the balance of £90, 819. 5s. 4d. falls to be paid under the new assessment, without the credit claimed being taken into consideration in reduction, the plaintiffs by a third declaration seek to establish a right to recover the sum of £36, 812, an amount admittedly paid to the defendants during the relevant period.
The matter arises from the transition consequent upon the nationalisation of the gas industry and particularly upon some statutory provisions which made a new rating standard retrospective. I do not repeat all the relevant facts, which are clearly stated in the careful judgment of Mr. Justice Megaw, from whom this appeal comes.
Manchester Corporation had had their own gas undertaking until the 1st May, 1949, when under the Gas Act, 1940, and in particular sections 17 and 18 thereof, all the property, rights, liabilities and obligations of the defendants held or used by them wholly or mainly for the purposes of their gas undertaking vested in the plaintiffs. The premises in question in the Town Hall extension were thereafter occupied by the plaintiffs on the same financial basis as had existed before. The Gas Committeeor Department had been charged for accounting purposes with (a) rent of £9, 366, (b) a fluctuating service charge for heating, lighting etc., (c) rates charged on a rateable value of £7, 805, being five-sixths of the rent of £9, 366.
The Town Hall and the extension were at all material times subject to an inclusive valuation and appeared as one rated hereditament in the Valuation List and in the Rate Book at a rateable value of £62, 497. Until the 30th January, 1956, when £7, 805 was deducted from this amount (presumably because of the occupation of the plaintiffs of that portion of the premises which the Corporation had occupied before the vesting in 1949) rates had throughout the period been levied on an assessment including the premises occupied by the plaintiffs and at all material times the plaintiffs had paid the Corporation the rates demanded by them at the current poundage on the valuation of £7, 805.
What had not been done was that the plaintiffs' premises had not been separately assessed and had therefore not appeared in the Valuation List and the customary demand note for rates based on the Valuation List had not been sent to them. It may well be that if that had been done for the years 1952-1956 inclusive, the four years in question, the rateable value would have been different and not £7, 805. It might have been less or more. But throughout that period the premises bore rates as part of the whole rateable liability of the Town Hall and extension and the plaintiffs made their quarterly contribution towards that liability. The Corporation's obligation for rates was neither increased nor diminished as a matter of demand and payment by reason of the occupation of the plaintiffs instead of themselves and they themselves had assessed and agreed the allocation and basis of contribution.
The Rating Department is, of course, part of the Manchester Corporation itself but it is convenient, if somewhat artificial, to recognise these separate functions and activities. Either party could have required a separate assessment and taken theprocedure of a proposal to that end but there appeared to be no particular purpose in doing so. Until such a course was taken it was conceded by learned counsel for the Corporation that they remained liable for the whole of the rates of the premises in the Valuation list, part of which was occupied by the plaintiffs and so that part of the premises remained rated. If the Rating Authority (of the Corporation) had wished to get more rates or rates paid directly by the plaintiffs in respect of the premises in their occupation they too could have taken steps to have had a separate and fresh assessment. The Manchester Corporation had full knowledge of the plaintiffs' occupation and I cannot see that this was not the knowledge of the Corporation as Rating Authority.
Section 19 sub-section 1 of the Gas Act, 1948, provides that in circumstances such as existed here where a Gas Board took over the gas undertaking of a local authority and there had been accounting as there had been here, the Gas Board must continue to make payment to the local authority as had been done before. That was done up to 1952. Section 19 sub-section 2 provided that the application of sub-section 1 could be determined by agreement between the Board and the local authority.
The learned judge finds, in my view correctly although the argument for the Corporation urged otherwise, that in the circumstances the plaintiffs' liability under section 19 sub-section 1 ceased on or after 1st January, 1952, because it was superseded by a lease dated July, 1953, which was expressed to be a lease for ten years from the 1st January, 1952, and payments in accordance with the terms of the lease were demanded and made as from then.
The circumstances established that the parties no longer relied in their relationship on the obligations imposed by section 19 sub-section 1. By agreement the rent was increased to £12, 500; the service charge was to be £9, 152, subject to variation, and the plaintiffs paid rates to the Corporation on the valuation of £7, 805 as before. The lease formally included theseterms and the judgment sets out that part of clause 2 (b) where-by the plaintiffs covenanted to pay the rates "taxed charged assessed or imposed upon the demised premises". On the 25th December, 1952, a yearly account was rendered on that basis, except that the service charge was £9, 192. Rates were a total of £8, 390. On the 22nd July, 1953, a quarterly account was rendered which included rates at 233. 6d., £2, 292. 10s. 0d. Thereafter the plaintiffs paid quarterly on similar demands from the Manchester Corporation and in respect of the second item, "Rates", the total for the relevant period is £36, 812, the sum in dispute in this case.
In the events which arose and having regard to the attitude which the Manchester Corporation has taken with regard to the matter it is important, I think, to observe what had happened. The plaintiffs made a proposal dated the 28th March, 1950, for a separate assessment of the premises they occupied in the extension and claimed a reduction to a rateable value of £1, 951. By a letter dated the 6th June, 1950, the Town Clerk of Manchester told the plaintiffs' agents that "With reference to our previous correspondence it seems to me that there is not at present the requisite degree of permanency about the North Western Gas Board's occupation of the premises to justify a separate assessment of the Gas Offices and Showrooms. You are probably aware that I have been negotiating for some time with the Secretary of the North Western Gas Board about the terms for the Board's occupation of the premises, and it has been agreed that there shall be a lease to the Board for nine years from May, 1949. The payment for this lease is to be made up of rent, rates and a charge for services, but the Board have not yet agreed to the figure to be paid for rent. You may think it desirable to suggest to the Board that if they wish to have a separate assessment, it would be advisable for the lease to be concluded as soon as possible, or at all events for the proposed terms to be finally agreed"; and so the matter was left. From then ontwards notwithstanding the new basis of payment in accordance with the leasewhich was eventually entered into, demands were made by the Corporation and met by the plaintiffs in the way I have indicated from January, 1952, onwards.
It is in these circumstances that the Rating and Valuation (Miscellaneous Provisions) Act, 1955, has to be applied. In so far as that Act altered the basis of rating of the plaintiffs it is sufficient to say that the plaintiffs were assessed on a thermal basis according to the consumption of gas in their area and that this gave rise to a liability of £90, 819. 5s. 4d. over the years 1952-1956 inclusive, subject to the matter which is here in dispute.
Section 6 sub-section 1 of the Act is as follows: "For the purposes of the making and levying of rates for any rate period beginning after the thirty first day of March nineteen hundred and fifty six, each Gas Board who supplied any gas to consumers...
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