Varney (Scotland) Ltd v Burgh of Lanark
| Jurisdiction | Scotland |
| Judgment Date | 12 July 1974 |
| Date | 12 July 1974 |
| Docket Number | No. 26. |
| Court | Court of Session (Inner House - Second Division) |
SECOND DIVISION.
Lord Stott.
Administration of JusticeProcedureChoice of remediesCommon law and equityWhether party entitled to equitable remedy without first having exercised right of action available at common law.
ProcessForm of remedyRecompenseEquitable remedyAction at common law and under statute available but not raisedRelevancy of action based on recompense.
RecompenseHouses built by company in burghTown council refusing to construct necessary sewersNo action raised to enforce performance of statutory dutySewers constructed by companyCouncil refusing to reimburse companyAction by company against council for payment on basis of recompenseEquitable remedyRelevancy.
RecompenseWhether essential to claim based on recompense that claimant should have acted under error as to fact.
Between 1968 and 1971 a company of building contractors built in Lanark a number of houses for sale to the public. The town council having refused to construct the sewers for the drainage of the houses, the company constructed these themselves. In an action against the council for payment of the cost, they averred that they had requested the defenders to reimburse them the cost of the work; that the defenders had refused to do so; that accordingly, to ensure that the houses to be built would be effectually drained, they had, under protest and under reservation of their legal rights and pleas, constructed the sewers in 1968 at their own expense, in accordance with drawings approved by the defenders, and had thereafter built the houses; and that it was equitable that they should receive recompense therefor, since the defenders had benefited by their action, the cost of which the defenders should have borne themselves. The defenders pleaded that the action was irrelevant, their plea being based upon, inter alia, the contention that, before resorting to the equitable remedy of recompense, the pursuers should have raised an action for implement by them of their statutory duties, as declared in T. Docherty Ltd. v. Monifieth Town Council, 1970 S.C. 200, in relation to the drainage of the burgh.
Held (rev. judgment of Lord Stott, before whom that contention had not been advanced) (1) that in the circumstances of the case the pursuers had not been carrying out an operation in suo, so that their claim did not fail on that ground; but (2) that they could not claim a remedy in equity when they had one in law (by way of an action of declarator or a petition under sec. 91 of the Court of Session Act, 1868) and had chosen not to exercise it; and the actiondismissed as irrelevant.
Opinions that it is not in every case essential in a claim based on recompense that the claimant should have acted under an error as to fact.
Edinburgh and District Tramways Co. v. Courtenay, 1909 S.C. 99, and Secretary of State for Scotland v. Fife County Council, 1953 S.C. 257, distinguished.
Per Lord Fraser: "If the pursuers were entitled to succeed in the present action, it would open the door very wide for any party to short-cut proper procedure, by undertaking a duty which rested upon a local authority and then turning round and claiming reimbursement from the local authority. In principle, of course, the possibility would not stop at local authorities but could extend to other persons. That would introduce quite novel and, in my opinion, undesirable possibilities."
Varney (Scotland) Limited, a company incorporated under the Companies Acts and carrying on business as building and civil engineering contractors, brought an action against the provost, magistrates and councillors of Lanark, as the local authority for the burgh, for payment to them of the sum of 3458.10.
The parties averred, inter alia:(Cond. 2) "About the beginning of 1968 the pursuers proposed to construct an estate of houses for sale to the public at The Marches, Lanark. The said estate was situated wholly within the burgh of Lanark. The houses to be constructed on said estate required for their effectual drainage the construction of main and other sewers to receive the outflow from the houses. In or about the beginning of February 1968 the defenders' burgh surveyor informed the pursuers that said main and other sewers would require to be executed by the pursuers. The pursuers requested the defenders to make reimbursement of the cost of said main and other sewers, but the defenders refused to make any reimbursement. Reference is made to the pursuers' letter to the said burgh surveyor dated 6th February 1968 and to the Town Clerk's letter to the pursuers dated 14th May 1968. In these circumstances, in order to ensure that the houses to be constructed were effectually drained the pursuers proceeded to install said main and other sewers at their own expense, but expressly reserving their legal rights and pleas The pursuers constructed said sewers at their expense from about June 1968, and in accordance with drawings approved by the defenders. The cost of construction of said sewers, together with the cost of construction of manholes and general items incidental thereto, was 3458.10 Thereafter the pursuers proceeded with construction of the houses. Said estate was completed in August 1971. By about the end of November 1971 the houses on said estate had been sold by the pursuers and were in the occupation of their purchasers. The purchase price in respect of each house did not include an element reflecting a proportion of the cost of constructing said sewers." (Ans. 2) "Believed to be true that in or about 1968 the pursuers commenced a development of an estate of houses for sale to the public at The Marches, Lanark Believed to be true that the pursuers have constructed sewers on said site. Believed to be true that the said estate was completed in or about August 1971 Not known and not admitted that all said houses of said estate have been sold. Quoad ultradenied." (Cond. 3) "It was the duty of the defenders to construct said main and other sewers, and that at their own expense. Reference is made to section 219 of the Burgh Police (Scotland) Act, 1892. The defenders were unwilling to construct the said main and other sewers, with the result that the pursuers, in order to ensure that the houses to be constructed on said estate were effectually drained, were compelled to construct said main and other sewers at their own expense. They did so under protest and under reservation of their legal rights and pleas. The defenders have benefited by the pursuers' action, in that the pursuers have borne the expenditure which fell to be borne by the defenders. In these circumstances it is equitable that they should receive recompense therefor." (Ans. 3) "Section 219 of the Burgh Police (Scotland) Act, 1892, is referred to for its terms.Quoad ultra denied." (Cond. 4) "The pursuers have called upon the defenders to make payment of the sum of 3458.10 but this they refuse or delay to do. The action is consequently necessary. The defenders' averments in answer are denied." (Ans. 4) "Denied. Explained and averred that the sum sued for is excessive "
The pursuers pleaded, inter alia:"(1) The defenders having benefited by the expenditure of the pursuers in the circumstances condescended upon, it is equitable that the pusuers should receive recompense therefor. (2) The sum sued for representing the extent of the defenders' benefit, decree should be pronounced therefor. (3) The defences, being irrelevant et separatim lacking in specification, should be repelled."
The defenders pleaded, inter alia:"(1) The pursuers' averments being irrelevant et separatim lacking in specification, the action should be dismissed."
On 4th September 1973, after a Procedure Roll discussion on 12th July 1973, Lord Stott issued a judgment in which he repelled the first plea in law for the defenders and allowed a proof before answer.
At advising on 12th July 1974,
LORD JUSTICE-CLERK (Wheatley).This is a reclaiming motion from an interlocutor of Lord Stott, who repelled the defenders' first plea in law to the effect that the pursuers' averments were irrelevant et separatim lacking in specification and allowed a proof before answer. It is unfortunate that what I consider to be the most important point in the argument addressed to this court was not presented to the Lord Ordinary, due, it appears, to the fact that there was a change in the defenders' counsel. In the result, we have not had the benefit of the Lord Ordinary's opinion on that point.
The facts of the case are fairly straightforward. The pursuers are a company carrying on business as building and civil engineering contractors, and in the course of that business they construct houses for sale to the public. About the beginning of 1968 the pursuers proposed to construct an estate of houses for sale to the public in Lanark. For the effective drainage of these houses it was necessary to construct main and other sewers to receive the outflow from the houses. It appears that communings took place between the pursuers and the defenders regarding the construction of such sewers, and in early February 1968 the defenders' burgh surveyor verbally informed the pursuers by telephone that they, the pursuers, would require to execute the work. The pursuers then wrote to the defenders on 6th February 1968 referring to this telephone conversation and asking how they would be reimbursed for the cost of the work. On 14th May 1968 the defenders replied, stating that they were not prepared to make any reimbursement. The pursuers aver that in these circumstances, in order to ensure that the houses to be constructed would be efficiently drained, they proceeded to install the main and other sewers at their own expense, but expressly reserving their legal rights and pleas. Their intention to install the sewers under this reservation was communicated to the defenders by letter dated 28th May 1968. The pursuers aver that in June 1968 they commenced...
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