Sheffield City Council v Graingers Wines Ltd
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE SCARMAN |
| Judgment Date | 24 February 1977 |
| Judgment citation (vLex) | [1977] EWCA Civ J0224-3 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 1975 S. No. 2296 |
| Date | 24 February 1977 |
[1977] EWCA Civ J0224-3
In The Supreme Court of Judicature
Court of Appeal
On Appeal from the High Court of Justice
Queen's Bench Division
Sheffield District Registry
(Mr. Justice Melford Stevenson)
The Master of the Rolls (Lord Denning)
Lord Justice Orr and
Lord Justice Scarman
MR.F.RADCLIFFE (instructed by Messrs. Sharpe, Pritchard & Co., Solicitors, London, agents for Samuel Jones, Esq. Solicitor, Town Hall, Sheffield) appeared on behalf of the Plaintiffs (Appellants).
Mr. B. McCARTHY (instructed by Messrs. Lucas, Styring & Appleby, Solicitors, Sheffield) appeared on behalf of the Defendants (Respondents).
The councillors of the city of Sheffield have got into trouble. Three years ago they determined to rate commercial properties which were standing empty. In the old days they did not rate empty properties, but they determined to do so from the 1st April, 1974. There were 1,108 unoccupied commercial properties in the Sheffield area. They charged rates on them. The total amount due for the year beginning the 1st April, 1974 was £373,289. Of that sum they collected £269,997. A balance remained yet to be paid of £103,292. Then someone concerned with the Sheffield Chamber of Commerce said that the demand was unlawful: that the officers of the City Council had not got the procedure right. So they could not go on to collect the outstanding £103,292; and it might be that the council would have to pay back the sum of £269,997 which they had already collected.
The point came before Mr. Justice Melford Stevenson. He held that the City Council had not complied with the legal requirements when they set out to rate unoccupied property. The Council appeal to this court.
Ever since the statute of Elizabeth I, empty properties were not liable to rates. But in 1967, under the General Rate Act 1967, Parliament said that a rating authority could resolve to rate unoccupied properties; and if they decided to do so, the provisions should come into operation on such day as may be specified in the resolution. Note those words "on such day as may be specified in the resolution". They are in section 17 of the General Rate Act 1967.
For six or seven years after that Act many local authorities did not take advantage of that power. The reason was that at that time, if they did not rate unoccupied properties, they would automatically get the money out of a government grant. So there was no advantage to them in ratingunoccupied properties. But then in 1974 the situation altered. It was generally realised that it was unfair to others that the owners of unoccupied properties should be free of rates. After all, the owners get the advantage of many of the local services, such as the fire services and the police. So they ought to pay their share of the rates. In consequence the local authorities were deprived of the government grant which they had previously received. Thenceforward it was advantageous for the local authorities to rate unoccupied properties. But they had to do it by a resolution; and they had to do it "on such day as may be specified in the resolution".
The point in this case is this: The Sheffield Chamber of Commerce say that the Sheffield City Council did not specify the day in the resolution. They did not specify the 1st April, 1974. If their resolution is to be construed very formally, that may be right. The judge so held. But is that the right approach? Ought the resolution to be construed so formally?
Much of the discussion before the judge, and before us, was whether or not the provision in section 17 "on such day as may be specified in the resolution" was mandatory or directory. That is always a matter of impression. I do not think that approach is at all helpful here. I would simply ask whether or not the resolution did make sufficiently clear the day from which it was to operate.
I will now state the facts. Everything happened quite quickly because time was important. The relevant amending statute only came into force on the 4th March, 1974 under the Local Government Act 1974. In anticipation of it, I expect that the Government department sent out a circular to local authorities. At any rate, on the 6th March, 1974 the policy committee of the Sheffield City Council had a special meeting. The city treasurer made a report on the new situation. He saidthat the council must come to its decision now quickly so as to apply from the 1st April, 1974; and that it had to pass a resolution before the 31st March. He recommended that there should be the rating of the unoccupied properties. A resolution was put forward. An amendment was proposed. A vote was taken. The members were divided according to their political parties. The Labour members wanted to rate the unoccupied commercial premises (omitting ordinary domestic houses, shops with rooms above, lock-up garages and museums) as from the 1st April. Four Conservative members proposed an amendment to try and get the plan deferred. It went to a vote. A dozen Labour members voted for it. Four Conservatives voted against it. The Labour councillors succeeded. The resolution was then put to the meeting and it was carried. This was the resolution: "Resolved: (1) That every relevant hereditament, as defined in Paragraph 15 of the 1st Schedule of the General Rate Act 1967, excluding the following classes of property" - that is all the private houses, and so forth - "be rated in accordance with Section 17, as amended, and the 1st Schedule of the General Rate Act 1967 at a rate of 100% of the charge applying to occupied properties within the area". That is all I now read. It will be seen that it does not include the words "as from the 1st April, 1974". That was an error of the draftsman. He ought to have put in those words. The discussion had been on the one point - should the rating start from the 1st April, 1974 or should it be deferred? It is clear that the resolution was intended to operate as from the 1st April, 1974. That was what was resolved. But the draftsman unfortunately missed out the words "as from the 1st April, 1974".
The minute was drawn up. The policy committee sent it forward on the same day to the city council; and they approved it. The Press were there. They were under no misapprehension.They knew that the rating of unoccupied property was going to take place from the 1st April, 1974. On the next day, the 7th March, 1974 the local papers all came out with the announcement that the rating of unoccupied properties was to take place straight away. The comment was: "Won't this turn people away from coming to Sheffield?" So the newspapers made it known to the public at large that the charge was to operate from the 1st April, 1974.
There was more to be done. Subsection (3) of section 17 said: "As soon as may be after a resolution is passed by a rating authority under this section, the authority shall cause a copy of the resolution to be published in the London Gazette and in one or more newspapers circulated in the area of the authority". The Sheffield City Council did so: and in those publications, the omission was remedied. In the local newspaper "The Morning Telegraph" for Friday 29th March, 1974, the notice ran: "Notice is hereby given that the Sheffield District Council at its meeting on the 6th day of March, 1974 made a Resolution in the following terms to take effect as from the 1st day of April, 1974" - and it set out the resolution. It was signed "S. Jones, Head of Administration and Legal Department". There was a notice in exactly the same terms in the "London Gazette". So when it came to those formal notifications to the public, words were inserted which made it clear that it was intended to take effect from the 1st April, 1974.
In addition Sheffield City Council issued a notice telling everybody what they were doing in respect of the rating of unoccupied properties. They sent it round to all the unoccupied and unused properties. The first sentence said: "The Rating Authority has resolved that the provisions of schedule 1 of the General Rate Act 1967, as amended, withrespect to the rating of unoccupied or unused buildings shall apply the area of the City of Sheffield Metropolitan District from the 1st April 1974". So they told everyone concerned the correct date.
Then they issued all their rate demands. Most of the demands were met. Over a quarter of a million pounds was paid in respect. Everything seemed to be in order until eleven months later. Then someone, who was buying property, made an enquiry at the council offices about the rates. He looked through the formal documents. He checked them and said: "They have not fulfilled the statute. In their formal resolution they have missed out the requirement 'such day as may be specified in the resolution'. They have missed out the words '1st April, 1974'. May be it was a drafting mistake, but that does not matter. They have missed it out. They have got it all wrong, so they cannot collect the extra £100,000-odd that is due and they will have to pay back all they have collected".
The judge held that that objection was correct.
I think that is far too technical a way in which to construe the resolution. It is a well known maxim of the law that documents and transactions are to be construed so as to give them validity; and not perish or fall.
Let us see what would happen if the judge is right - if all this is held to fall to the ground by reason of the drafting error. It means that all the people who have not paid yet - the bad payers or the late payers - get off and do not have to pay that £100,000. All those who have already paid may or may net get their money back. The burden will have to be put back on to all the ordinary ratepayers of occupied...
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