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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Glasgow Gas Light co. v. Barony Parish Parochial Board [1867] ScotLR 5_246 (12 February 1867) URL: http://www.bailii.org/scot/cases/ScotCS/1867/05SLR0246.html Cite as: [1867] ScotLR 5_246, [1867] SLR 5_246 |
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Page: 246↓
Circumstances in which held that a public company had paid poor-rates assessed by a parochial board, on the footing that the board should repay such part of the assessment as might, according to a decision to be ultimately pronounced in an action then depending between the Company and another board, be found to be illegally imposed. Held that interest was due by the board on the sums overpaid. Opinion as to rate of interest.
These were conjoined actions of suspension and interdict and repetition, at the instance of the Glasgow Gas Light Company against the Parochial Board of the Barony Parish of Glasgow, the collector of parochial assessment, and the inspector of poor of that parish. It appeared that the Gas Light Company having appealed against an assessment imposed upon them by the respondents for poor-rates for the year from May 1855 to May 1856, on the ground that, in estimating the annual value of their lands and heritages, sufficient allowance had not been made to them for the annual average cost of the repairs, insurance, and other expenses necessary to maintain their property in their actual state, and all rates, taxes, and public charges payable in respect of the same, in terms of the 37th section of the Poor Law Act, 8 and 9 Vict., c. 83, and the respondents having dismissed the appeal, and threatened to enforce payment by poinding or otherwise, the Company threatened a suspension and interdict. A similar question was then depending in Court between the Company and the City Parish of Glasgow under a note of suspension and interdict at the instance of the Company against the Board of the City Parish, in which the Lord Ordinary had passed the note upon payment in the meantime of the rates charged for, and the charger undertaking to repeat the whole of the rates or such part as might be found to have been illegally imposed. In order to avoid unnecessary litigation, the Company and the respondents, in these circumstances, entered into an agreement dated 17th July 1856. That agreement narrated the assessment, the appeal to the Board, the dismissal of the appeal, the threats of litigation, the dependence of a similar question in Court between the Company and the City Parish of Glasgow, the interlocutor of the Lord Ordinary above set forth, and proceeded:—“ And whereas it has now been agreed between the said first party and the Parochial Board of the said Barony Parish of Glasgow that the decision to be ultimately pronounced in the said action of suspension and interdict at the instance of the said first party against the Parochial Board of the said City Parish of Glasgow, shall be held as applicable to the assessment for poor-rates on the said first party within the said Barony Parish of Glasgow: therefore the said first party hereby agrees to pay to the collector of the poor-rates for the Barony Parish of Glasgow the foresaid sum of £361, 0s. 2d. sterling; and, on the other hand, the said John Meek, inspector foresaid, for himself, and as specially authorised by the said Parochial Board of the said Barony Parish of Glasgow, hereby agrees to hold the decision to be ultimately pronounced in the said action of suspension and interdict at the instance of the said first party against the Parochial Board of the said City Parish of Glasgow, as applicable to the assessment leviable on the said first party within the said Barony Parish of Glasgow, and as regulating and fixing the principles on which the allowances to be given to the first party for repairs, insurance, and other expenses necessary to maintain their property assessed, and the rates, taxes, and public charges payable in respect of the same, and the amount of such allowances are to be ascertained, and the assessable rental or value of the first party's lands and heritages fixed: And the said John Meek binds and obliges himself, as inspector foresaid, and the said
Page: 247↓
Parochial Board of the said Barony Parish of Glasgow, to repay to the said first party the said sum of £361, 0s. 2d. sterling, or such part thereof as may, according to the decision so to be pronounced in the said action of suspension and interdict, or principles thereby established, be found to have been illegally imposed on or overpaid by the said first party.” The assessment for the year ending Whitsunday 1856 was paid, and a receipt granted, “subject to the agreement and conditions specified in the prefixed minute of agreement.” In the following year, ending Whitsunday 1857, an agreement to the same effect, though in some-what different terms, was entered into, and payment was made and a receipt taken as in the previous year. In the following years there was no such agreement, but the receipt granted for the year ending Whitsunday 1858 contained this clause— “Received payment subject to the terms of the interlocutor of the Lord Ordinary, dated 30th May 1856,” and the receipt for the following year had a similar clause. In the receipts for the years ending Whitsunday 1860, 1861, and 1862 there was no such clause. The assessments for the years ending at Whitsunday 1863 and 1864 were arranged on the footing of the Company paying only what they admitted was due, and binding themselves to pay whatever should be found to be payable in addition to what they paid.
A judgment was pronounced by the Lord Ordinary in the suspension and interdict between the Company and the City Parish on 13th May 1862, which was adhered to by the First Division on 23d March 1863, and an ultimate judgment was pronounced in March 1864.
The Gas Light Company now suspended a poinding at the instance of the Board for payment of the assessment for the year ending at Whitsunday 1865, and sued the Board at the same time for repetition of over-payments of assessment from 1856 to 1862. They pleaded inter alia—
“1. The assessments above set forth are erroneous and excessive, in respect that, in estimating the annual value of the complainers' lands and heritages within the Barony Parish for the purpose of poor-rate assessment, deduction was not made of the probable annual average cost of the repairs, insurance, and other expenses necessary to maintain such lands and heritages in their actual state, and all rates, taxes, and public charges payable in respect of the same.
2. The respondent, as representing the Parochial Board of the Barony Parish of Glasgow, is, in respect of the agreement and obligation condescended on, bound to repay to the complainers, with interest from the respective dates of over payment, the whole sums which they paid to the said Parochial Board on account of poor-rates for the several years libelled on in the summons, over and above the amount justly due, according to the principles given effect to and decision pronounced in the process of suspension and interdict at the complainers' instance against the City Parish of Glasgow.
3. The assessments made on the complainers for the said several years having been imposed on erroneous data, and having been illegal and unwarrantable, and the sums and interest concluded for in the summons forming the over-charge made by and through such illegal and unwarrantable assessment, and being justly due by the respondents to the complainers, they are entitled to decree in terms of the conclusions of the libel with interest and expenses.”
The Parochial Board pleaded inter alia—
“1. The defender is not liable to repay to the pursuers any part of the assessments for the years ending 1860, 1861, and 1862, in respect these assessments were paid by the pursuers unconditionally, and without any obligation to repay.
4. The pursuers are not entitled to interest on the sums which may be found to have been overpaid by them for the period prior to 4th March 1864, when the foresaid decision was pronounced.”
The Lord Ordinary ( Barcaple), after a proof, pronounced an interlocutor, in which, after findings of the facts of the case, he found “it proved that the pursuers paid the amount of said assessment for each of these years in the belief and on the understanding that the same was to be subject to correction according to the principles to be established by the judgment in the said action against the Parochial Board of the City Parish, and that any excess in the assessments so paid was to be repaid to them by the defenders under the arrangement and agreement contained in said minute of agreement: Finds that the defenders must be held to have received the amount of said assessments for each of these years, subject to the agreement expressed in said minute of agreement, that the decision to be ultimately pronounced in the action against the Parochial Board of the City Parish should be held as applicable to these assessments, and on the footing and understanding that the defenders should repay any part of said assessments which, according to such decision, should be found to have been illegally imposed, and that whether there was a separate obligation granted by them to repay any excess of assessments for each of the said years or not: Finds that interest is due on any sums which may be found to have been overpaid by the pursuers for any of said years: Repels the first and fourth pleas in law stated for the defenders: Reserves all questions of expenses, and appoints the cause to be enrolled for further procedure.”
The defenders reclaimed.
Burnet (Fraser with him) for reclaimers.
Young and Mackenzie, for respondents, were not called on.
Lord President—I have formed a clear opinion on this case, and as I understand your Lordships have done the same, it is unnecessary to prolong the discussion.
It appears that a question of considerable importance and of general application as regards public companies had arisen in regard to certain allowances and deductions from the assessment to be paid by this company. And that question had arisen and had come into Court between this company and the Parochial Board of the City Parish. A note of suspension and interdict had been presented to the Lord Ordinary against the City Parish, and the Lord Ordinary had granted interim interdict as craved, on payment in the meantime of the rates charged for—the charger undertaking to refund whatever might afterwards be found to be illegally imposed. It was quite understood that that was a process brought for trying this question as a question of principle in which many parties were interested-—companies on the one hand, and parochial boards on the other. In these circumstances, an agreement was entered into on 17th July 1856, and the terms of that agreement appear to be very important. I cannot accede to the plea that this is not a binding agreement, because subs-cribed
Page: 248↓
Taking this, then, as a concluded agreement, it sets out that the Parochial Board had charged the pursuers for poor-rates for the year ending May 1856 the sum of £361, 0s. 2d.; that the company had appealed against that on the ground that they had not been allowed sufficient deductions, but the Board would not listen to the appeal: that a similar question had been raised between the Company and the City Parish, in which the Lord Ordinary had pronounced an interlocutor on 30th May; that it had been agreed [reads agreement.] Now, as regards the payment to be immediately made by the pursuers, and the obligation of repetition contained in this agreement, these are no doubt confined to the £361 of rates due for the year ending May 1856, and could apply to nothing else, for there was nothing else then payable for which the defenders could come under any obligation of repayment. But it is impossible to read the rest of the agreement without seeing that it was an obligation on both parties to abide by the decision to be pronounced in the suspension and interdict, as fixing the principle on which this was to be settled for the future. If for the future—that is for all time after concluding this agreement—the principle there fixed was to apply, is it not plain that it must have been meant to apply to the years when this litigation was going on as well as after? It would be unjust if it were not so intended to apply, and therefore the agreement of 1856—whatever may be said as to the literal application—undoubtedly binds the parties to give full effect to the principle fixed between the pursuers and the City Parish, so soon as it was fixed.
The agreement was renewed in 1857, and I think that was unnecessary. It would have been sufficient to make some reference in the receipt to that arrangement of 1856. The repetition of this agreement year by year seems uncalled for. But it is worth while to observe, as to the agreement in 1857, that it is conceived in different terms from that of 1856, and that is very material, for it shows that it was merely a supplementary agreement carrying on the agreement of 1856 to 1857—the obligation of 1856 being the principal obligation. The parties apparently becoming more loose in their view as to the necessity of keeping up their stipulation, did not renew it in 1858 or 1859, but in these years the receipts of the collector bear reference, not to the agreement, but to the interlocutor of the Lord Ordinary in the case between the pursuers and the City Parish, on the basis of which the agreement had been constructed. The first receipt says [reads], and so in 1859. Now, in the three subsequent years the payments are made as usual, but in drawing out the receipts this reference is omitted, and it is because of the omission of that reference in the three years 1860, 1861, and 1862, that the defenders say they are no doubt bound to give effect to the judgment in so far as regards all the other years, but, in consequence of these stipulations not being inserted in the receipts for the last three years, they are not bound to give effect to the principle of the agreement as regards them. That is a plea which cannot be listened to. That it is a plea against the good faith of the agreement no one can doubt. It would have been very much to be regretted if we had been bound by the letter of the agreement to deny justice to the parties. But I think the agreement binds the parties in so many words to give effect to the principle of the judgment to be ultimately pronounced between the pursuers and the City Parish, and it is impossible that full effect can be given to that principle unless all monies paid in the meantime on an erroneous principle shall be repaid in conformity with the true principle as afterwards settled. And it is in reference to this view that the third plea of the pursuers is so important. In adhering to the interlocutor of the Lord Ordinary, and repelling the first plea of the defenders, I cannot leave out of view the principle of that plea, and I go the full length of saying that, if this agreement had been made in 1856, and then there had been no more about it, and if it had been in express terms limited to that year and incapable of being extended, I should have held that on the principle involved in that plea, the party was bound to repeat all payments made on an erroneous principle. On this ground I am clearly of opinion that we ought to adhere as to the first branch of the interlocutor.
As to the farther plea regarding interest, the matter is very simple. The Lord Ordinary has not determined that question, but he has found that repayment must be made with interest, and I see no reason to doubt that that is the true rule. A party receiving payment of money, reserving the question of his title to receive it, is surely bound to repay it with interest, when he is found to be in the wrong. There can be no clearer case of interest being due than that. A party may receive money in good faith, believing it to be his own, from a party who thinks he is bound to tender it, and in that case there may be good reason for the recipient saying, “I got payment from you on your offer of payment, and am not to be held answerable for the use of the money when it was in my possession.” But here the party says, “I pay under the compulsion of diligence, but you are not entitled to the money and I am going to litigate the matter in order to determine your right.” Surely a party found liable in such circumstances must repay with interest, and the fact that the party is a public board makes no difference. It may be argued that as the board must keep the money in bank—if it is said that they in fact did so—they should only be liable in bank interest, and there may be force in that contention. But we don't require to determine that at present. That, however, does not affect the principle of the judgment, that this repayment must be with interest. On the whole matter, therefore, I am for adhering.
Page: 249↓
As to the matter of interest, I agree that when money is paid on the footing of being repaid in a certain event, the natural result is that interest runs. It may perhaps be different in the case of a parochial board if they showed that they must pay away the money to the poor, but here they have not said that they have spent the money on the poor, and therefore they have not laid the foundation for such a claim. At the same time, I do not see how more than bank interest can be exacted from them. Whether that can be decided now or not, I think that is the limit of their liability.
Page: 250↓
Solicitors: Agents for Pursuers— A. G. R. & W. Ellis, W.S.
Agent for Defenders— John Thomson, S.S.C.
