Scottish Court of Session Decisions

The Public Health (Scotland) Act 1897 (60 and 61 Vict. c. 38), sec. 133, enacts—“ … Where any special drainage district has been formed under this Act … the expense incurred by the local authority for sewerage or drainage within the same, or for the purposes thereof, and the sums necessary for payment of any money borrowed therefor either before or after the passing of this Act, together with the interest thereof, shall be paid out of a special sewer assessment which the local authority shall raise and levy on and within such … special district.”

John Duncan Iverarity, of Rosemount, Montrose, brought this action against the County Council of Forfarshire, concluding for declarator, inter alia—“(First) that a resolution of the said County Council at their meeting held on 5th October 1901, whereby, on a recommendation submitted as from the Brechin District Committee of said County Council, being the Local Authority under the Public Health (Scotland) Act 1897, and Acts therein incorporated, in terms of section 133 of the said Public Health (Scotland) Act 1897, they resolved to impose and did impose a special assessment to meet the expense of the sewerage and drainage incurred by the Local Authority within the special drainage district of Hillside during the year ending 15th May 1902, or for the purposes thereof, on all lands and heritages within the said special drainage district, at the rate of 7 1 2d. per £ of valuation on the owners of such lands and heritages and at the like rate of 7 1 2d. per £ of valuation on occupiers of such lands and heritages, was invalid, illegal, and ultra vires of the said County Council, and that the defenders were not entitled to impose the said assessment, and that the pursuer is not bound to pay said assessment or any part thereof, and the defenders ought and should be interdicted, prohibited, and discharged, by decree foresaid, from collecting or attempting to collect the said assessment, or any part thereof.”

The pursuer was proprietor of Rosemount and Hedderwick, both of which estates were situated in the Brechin district of the county of Forfar.

The Brechin District Committee, acting under the authority of the Public Health (Scotland) Act 1897, took steps to form a special drainage district for Hillside. The pursuer and certain other proprietors objected to the formation of the special district and to the inclusion in it of any part of their lands. By interlocutor of the Sheriff, dated 27th August 1900, the Hillside district was formed into a special drainage district, and the area of that district, as ultimately determined by the Sheriff, included a large portion of the pursuer's lands.

It being necessary to provide for the payment of the expense of the formation of this district by an assessment, the County Council of Forfar, on consideration of a report of the Finance Committee on the Hillside Special Drainage District, by resolution dated 5th October 1901, “in terms of section 133 of the Public Health (Scotland) Act 1897, and of the Local Government (Scotland) Act 1889, imposed and hereby impose a special assessment to meet the expense of the sewerage and drainage incurred by the Local Authority within the said Special Drainage District of Hillside during the year ending 15th May 1902, or for the purposes thereof, and the sums necessary for payment of any money borrowed for sewerage purposes within the said special drainage district, on all lands and heritages within the said special drainage district, as the value of such lands and heritages is specified in the valuation roll completed and in force for the current year, and that at the rate of 7 1 2d. per £ of valuation on the owners of such lands and heritages, and at the like rate of 7 1 2d. per £ of valuation on the occupiers of such lands and heritages.”

Notices of this assessment were sent to the various heritors, and a demand note was sent to, inter alios, the pursuer.

The pursuer appealed against this assessment to the Finance Committee of the County Council. His appeal did not raise any question of fact, but turned on the legal question whether the expenses attending the formation of the Hillside Drainage District were to be raised by an assessment laid on the Hillside district or by an assessment on the whole Brechin district.

The Finance Committee, by deliverance dated 22nd February 1901, dismissed the appeal.

The pursuer thereupon raised the present action.

The pursuer averred, inter alia, that no sewerage or drainage works had been as yet commenced in the said special drainage district; that (Cond. 3) the Brechin District Committee, in the years 1898–99 and during the year 1900 prior to 1st September, incurred expenditure principally, if not entirely, in legal expenses incurred by them in the proceedings before the Sheriff-Substitute and Sheriff and in attempts to get included in the special district certain lands, which were ultimately excluded from the special district. Such expenditure for the years 1898–1899 and 1899–1900 was met by a rate levied on owners and occupiers in the whole of the Brechin district, and the pursuer as one of such owners and occupiers has paid his share of such rate. It is averred the defenders have now transferred from the General Brechin District Account to the said Special District Account the said expenditure for the years 1898–1899 and 1899–1900, amounting to the sums of £35, 3s. 5d. and £155, 8s. 6d.

The pursuer also averred (Cond. 4) that, under colour of the resolution of the

Page: 436↓

County Council of 5th October 1901, “the defenders are about to levy the said rate and apply the proceeds thereof in payment not only of expenditure alleged to have been incurred in the year ending 15th May 1902, but also in payment of the expenditure incurred as aftermentioned and in previous years, and specially of the aforesaid sums of £35, 3s. 5d. and £155, 8s. 6d. Accordingly no assessment can be lawfully made on the special district.”

The defenders averred, inter alia, that the estimate and plan for the proposed works in the Hillside district were approved of by the Brechin District Committee as the Local Authority for that district on 1st April 1902, but that the approval of the Board of Trade to the said plan was still awaited before the works could be commenced.

They stated (Ans. 3) that the expenses incurred in connection with the matter “were charged in the first instance against the Brechin District Public Health Account, the only account against which they could at that time be charged, and the expenditure so charged was defrayed out of the share assigned by the defenders to the Brechin district of the Local Taxation Grants as in relief of rates. Had this expenditure remained so charged the result in the end would have been that it would have been paid by the ratepayers throughout the whole Brechin district. But by the Public Health (Scotland) Act 1897, sections 133 and 135, it is provided, as it had previously been provided by the Public Health Act of 1867, that preliminary expenses incurred in connection with the formation of a special drainage district, though properly chargeable in the first instance against the General Public Health Account for the whole district, become, if and when the special district comes into existence, a proper charge against the Special District Account, and fall to be repaid to the Public Health Account out of the special rate leviable on the special district. The defenders accordingly passed the resolution of October 5, 1901, and authorised the transfer of the amount of the said expenditure from the District Public Health Account to the Special District Account, and the transfer was given effect to in the accounts for the year ending Whitsunday 1902. No additional legal expense was incurred by the District Committee in respect of lands scheduled but not included in the special district as finally designated.”

The defenders admitted that they intended to levy the rate resolved on in the resolution of 5th October 1901, and to apply the proceeds in payment pro tanto of the whole expenses incurred in the formation of the Hillside Special District.

By interlocutor dated 7th July 1903 the Lord Ordinary ( Kincairney) found that the resolution by the defenders, dated 5th October 1901, whereby they imposed the assessment set forth on record was intra vires of the said defenders, and valid; therefore assoilzied the defenders from the first conclusions of the summons, and decerned.

Opinion.—“This case has at first sight an appearance of complexity and obscurity, which to a large extent disappears on consideration, and it appears that the questions or question (for I think there is substantially only one) fall within a short compass.

The pursuer is an heritor in the Brechin District of Forfarshire, and his property lies in whole or in part in the Hillside District, which forms part of the Brechin District. The Hillside District was formed into a special drainage district by interlocutor of the Sheriff pronounced in August 1900, and it became necessary to provide for the expense of that proceeding, amount-to £190 or thereby, the greater part of which consisted of legal or Court expenses. No question has arisen as to the amount of the expense, and there is no doubt that it has to be provided for by an assessment, the only question being whether the assessment should be laid on the Brechin District or on the Hillside District. The pursuer will require to contribute in either case, but the assessment falling on him will be considerably less if the assessment is spread over the whole of the Brechin District than if it is confined to the narrow area of the Hillside District.

To meet that expense the defenders the County Council of Forfarshire, as the rating authority, imposed a special assessment. They did this by a resolution dated 5th October 1901, which is to be found in the print of the proceedings of the County Council between 5th October and 17th October 1901. This resolution specifies (1) the object of the assessment; (2) the time when the expense to be met by the assessment is stated to have been incurred, viz., 15th May 1901 to 15th May 1902; (3) the area of assessment, viz., the Hillside Special District; and (4) the rate of assessment, viz., 7 1 2d. per £.

Notices of this assessment were issued to the various heritors, and No. 7 of process is the demand-note which was served on the pursuer. It has not been disputed that the assessment intimated in this demand-note was correctly deduced from the resolution of 5th October, and expressed correctly the amount payable by the pursuer if that resolution was valid. But the pursuer was dissatisfied with the assessment, and he appealed against it. His appeal lay, under the statute (the Local Government Act 1889), to the Finance Committee of the County Council. It appears clearly that the pursuer's sole objection, and the only ground on which he appealed, was that the assessment was laid on the Hillside District instead of the Brechin District. I understand that his appeal raised no question of fact, but only the legal question as to the body to be assessed to meet the expense attending the formation of the Hillside Drainage District.

I do not know whether that general question was proper for the consideration of the Finance Committee. I rather think it was not. I think that the function of the Finance Committee on appeal was only to deal with questions of detail arising on the demand-note. But however that may

Page: 437↓

be, the Finance Committee, by deliverance dated 22nd February 1902, dismissed the appeal.

The pursuer then raised the present action, and it is necessary to attend specially to the very peculiar character of its conclusions. The main conclusion is the first, which is thus expressed, that it should be declared that the resolution of the County Council dated 5th October 1901, whereby they imposed ‘A special assessment to meet the expense of the sewerage and drainage incurred by the local authority within the special drainage district of Hillside during the year ending 15th May 1902, or for the purposes thereof, on all lands and heritages within the said special drainage district, at the rate of 7 1 2d. per £ of valuation on the owners of such lands and heritages, and at the like rate of 7 1 2d. per £ of valuation on occupiers of such lands and heritages, was invalid, illegal, and ultra vires of the said County Council, and that the defenders were not entitled to impose the assessment, and that the pursuer is not bound to pay it.’

This is a very peculiar conclusion, because if the resolution were to be challenged, it would seem that the natural conclusion would have been a conclusion for reduction of the resolution. There is, however, no conclusion in this action for reduction either of the resolution of 5th October 1901 or of the deliverance of the Finance Committee dismissing the pursuer's appeal against the demand-note following on that resolution. It may be that if the pursuer could make out that the resolution of 5th October was funditus null, as being ultra vires of the County Council, no conclusion of reduction might be necessary, but otherwise it would appear that the demand-note must be complied with.

The main question whether the expense attending the formation of the drainage district falls to be levied from the Hillside District or paid otherwise—or rather whether it was within the power of the County Council to impose an assessment to meet that expense on the Hillside District—must, I take it, depend entirely on the 133rd section of the Public Health Act, 1897. Parties were, I think, agreed as to that.

The 133rd section provides ‘that where any special drainage district has been formed under this Act or any of the Acts hereby repealed, the expense incurred by the local authority for sewerage or drainage within the same or for the purposes thereof, and the sums necessary for payment of any money borrowed therefor, either before or after the passing of this Act, together with the interest thereof, shall be paid out of a general sewer assessment which the local authority shall raise or levy on or within such … district.’

This section permits or rather directs special assessments on special drainage districts, whether they existed before the Act or were formed under the Act; and it is maintained that it authorised the assessment of which the pursuer complains. The pursuer maintained that it did not, and that on two grounds, (1) that it related only to expense incurred in special districts after they had been formed, and not to expenses incurred in these districts before they were formed or during the course of their formation; and (2) that the section did not authorise an assessment for expenses of litigation or other legal proceedings.

These contentions raise somewhat difficult questions. I think the general view on which the provisions as to special districts are framed is of this kind, that when certain parts of a county are separated from the rest and are accorded separate and favourable treatment to meet their special requirements, it is held to be fair that these districts should bear the exceptional expense thereby occasioned, and that such exceptional expense should not fall on the rest of the county; and, on the other hand, such special districts are exempted from the drainage expenses incurred in other parts of the county. Now, there must always be expenses attending the formation of a special district which are incurred before the district is formed. There are legal expenses without which the formation of the district cannot be effected; the authority of the sheriff must be obtained in the ordinary way; and there are or may be preliminary expenses of another kind, such as the cost of surveys and of various inquiries which have to be made; seemingly such expenses should fall under the general equitable rule just as much as exceptional expenses incurred in the district after it had been formed, and taken out of the rest of the county. The expense particularised in the section is for sewerage or drainage, under which word it might be difficult to include litigious and other legal expenses. But to these special words there are added the general words ‘or for the purposes thereof,’ which words, it is contended, are sufficient to include legal expenses and preliminary expenses. The section re-enacts section 93 of the Public Health Act 1867, where the same words are employed, and I was informed that they had been treated in practice as covering such preliminary expenses as are here in question. There does not seem much authority or precedent on the question. Reference was made to Tolmie v. Parochial Board of Urray, 8th June 1890, 17 R. 1027, and to Ayr County Council v. Walker, 8th June 1895, 3 S.L.T. 40, in which a similar question was brought before Lord Low, arising under section 93 of the Act of 1867.

The pursuer referred to section 135, which relates to general assessments, and where the wider expression ‘all charges and expenses’ is used instead of the expression ‘expense incurred for sewerage or drainage.’ I do not, however, find that contrast sufficient, and I think that the language of section 133 is sufficiently wide, if due effect be given to the words ‘or for the purposes thereof,’ which are not in section 135.

On the whole, I come to the conclusion that the resolution of 5th October 1901 gave in this matter due effect to the

Page: 438↓

statute, and cannot be declared to be ultra vires of the County Council, but was a good resolution, imposing the assessment on the heritors who reaped the benefit of the formation of the drainage district, and was within the competency of the County Council.

The pursuer further maintained that the rate was bad on the ground that it was retrospective. I do not doubt that a rate may be relevantly objected to on the ground that it is retrospective. The pursuer quoted the case of Saul v. The Wigton Rural Sanitary Authority, November 20, 1886, 51 J.P. Cases, 406, where a rate imposed to pay a debt incurred fourteen years before was held bad for that reason.

But I do not see how that objection can be entertained in this case. In the first place there is, I think, no record for it, neither plea, nor averment, nor conclusion on which the argument can be rested. It is a special plea dependent on special circumstances, and I think it cannot be entertained unless it is specially pleaded.

Further, it seems impossible that it can be pleaded in support of the main conclusion. It seems impossible to maintain that the resolution of 5th October imposed a retrospective rate, seeing that it specially bore that the rate was imposed to meet expenses incurred during the year ending 15th May 1902.

If the County Council seek to apply the sums raised under this resolution to different purposes, that would raise a totally different question. But there is in my opinion no such question before me.

Besides, I am not at all satisfied that, even on the statement of the pursuer, the circumstances raise any question of retrospective rates. If they did, it may be that inquiry would be necessary, but I think that objection is not relevantly stated.

It appears therefore that in this case there exists a valid resolution of the County Council imposing for the purposes therein mentioned a rate of 7 1 2d. per £ on the property in the district of Hillside. It was within the power of the Council to impose it, and it is not said that it did not warrant the assessment laid on the pursuer and the demand note. There is no conclusion for reduction of it, and if the demand note be in accordance with it it is difficult to see how it can be objected to.”

The pursuer reclaimed, and argued—The question was whether the County Council, having lawfully paid the expenses of forming the Hillside district into a special drainage district out of the funds of the Brechin district, were entitled, after the new special drainage district was formed, to impose an assessment on the new special district for the expenses so incurred and paid. This question could competently be raised by a declarator, and reduction of the resolution imposing the assessment was unnecessary— Wordie's Trustees v. County Council of Lanarkshire, November 22, 1895, 23 R. 168, 33 S.L.R. 91. Sec. 133 of the Public Health Act 1897 did not authorise the carrying forward against the new special district, on its creation, of all expenses previously incurred, but only expenses incurred in the special district after its formation. The scheme of the statute, where equitable considerations required, gave the County Council ( e.g. section 122) power to allocate a proportion of the past costs, of which the benefit survived, to the new district, but under sec. 133 there was no such provision, and it was not to be supposed that ipso jure the new district on coming into existence should start in life weighed down, and with the possibility of being strangled, by a load of debt, to which, on the defenders' construction of sec. 133, there was no limit or measure. It was noteworthy that there was no provision in the Act for a rectification of the accounts, such as was necessary if what had been done here was valid. It was in itself a relevant objection to the rate imposed by the resolution that it was retrospective— Saul v. Wigtown Rural Sanitary Authority, November 20, 1886, 51 J. P. Cases, 406. There was certainly a presumption against a rate being retrospective unless it was expressly stated to be so, as in Harrison v. Stickney, 1848, 2 H. L. Cases 108. The natural reading of sec. 133 was that it referred to what happened after a special district “has been formed,” i.e., expenditure after formation; that natural meaning was consistent with the reason of the thing. The words of sec. 133—“expenses incurred … for sewerage or drainage” pointed out the special kinds of expenses contemplated by the section, and the additional words “or for the purpose thereof” must be read as covering only purposes ejusdem generis, e.g., the purchase of lands and payment of compensation necessary for sewerage or drainage. Legal expenses were admitted to be proper administrative expenses, but they were not within the compass of the words of sec. 133. If the reclaimer's argument that the section included legal expenses was right there was no limit to the burdens that might be imposed on a new special district.

Argued for the respondents—As there was no conclusion for reduction of the resolution imposing the assessment, no operative decree could be pronounced in this action. The effect of sec. 133 was to authorise the local authority to raise the expenses necessarily and reasonably incurred in the formation of a special drainage district by an assessment on such district. Apart from this enactment there was no provision in the Act for the payment of such preliminary expenses. It was equitable that when part of a county was separated off for special treatment suited to its particular needs, it should bear the exceptional expense arising therefrom as it enjoyed the exceptional advantages accruing. The particularising in sec. 133 of “sewerage or drainage” did not limit the generality of the words “or for the purposes thereof,” i.e., of the new special district. Legal expenses were necessary to bring a new special district into being, and it was reasonable that the special district, after being formed, should bear the expense of its formation. The

Page: 439↓

assessment in question was not, properly speaking, retrospective, but if it were, the mere fact that it was retrospective created no difficulty. Such a case could be sanctioned by Parliament, and was indeed expressly sanctioned in the Public Health Act 1897 itself, e.g., in sec. 109— Saul v. Wigtown Rural Sanitary Authority, supra; Harrison v. Stickney, supra. In the formation of a public company the statutes authorised the expenses of its promotion, &c., being made debts of the company, though there was at the time of incurring these expenses no company in existence. So here the intention clearly was that the district assessment should cover all expenses properly incurred, whether surveying or legal expenses, in forming a special district under the Act. In Tolmie v. Parochial Board of Urray, June 21, 1890, 17 R. 1027, 27 S.L.R. 922, the point, though not decided, was assumed on all hands in favour of the respondents' contention—cf., Ayr County Council v. Walker, June 8, 1895, 3 S.L.T. 40, and Poor Law Magazine [1895] p. 365. The practice, as stated in Skelton's Public Health Acts—note to sec. 133 of 1897 Act—had been in favour of the course followed by the County Council here. The Local Government Board had also expressed the opinion that the course followed was competent.