Scottish Court of Session Decisions

[1] In 1991, members of the Royal Air Force Association Club applied to Dumfries & Galloway Council for relief in respect of rates for their licensed social club premises on the ground floor of 20 English Street, Dumfries. The club premises were quite separate from premises on the upper floor occupied by the Royal Air Force Association, a registered charity. As a charity, the Association qualified for mandatory rates relief. However the Club's application had to be determined on its own merits.

[2] During 1991 to 1993, there was an exchange of correspondence and views about the Club's application for relief. As was noted in a Report by the Council's Director of Finance dated 9 December 1993:

[3] The Club's application was duly considered by the Council's Central Services Committee at a meeting on 21 December 1993. The application was refused. The Committee also re-affirmed the Council's general policy of refusing relief to licensed social clubs. The minutes of the meeting recorded the decision and re-affirmation of policy as follows:

1. to grant 100% relief of the Regional and District rate in respect of the premises occupied by the Association;
2. not to grant relief in respect of the premises occupied by the Club and re-affirmed the Council's policy of not granting relief to licensed clubs;...
3. not to refer consideration of payment of arrears of rates to a Sub-Committee; and
4. FURTHER AGREED that the rates on the premises owned by the Club be paid over an extended period."

[4] A letter from the Council dated 22 December 1993 to the Club's treasurer, Mr. Martin, advised of the decision as follows:

1. to grant 100% relief of the Regional & District Rate in respect of the premises occupied by the Association;
2. to refuse the application in respect of the club premises and reaffirm the Council's policy of not granting relief to licensed clubs; and
3. to require payment of the rates due, albeit over an extended period. ..."

[5] Mr. Martin was dissatisfied with the decision, particularly as he had understood from an officer of the Council that relief would be granted. Accordingly Club members carried out some lobbying, and the question of relief for the Club was raised again at a Regional Council meeting on 25 January 1994. The minutes of that meeting recorded:

1. Application for Relief of Rates - RAF Association and Club

[6] A letter to Mr. Martin from the Council's Chief Executive dated 28 January 1994 stated:

[7] A report by the Chief Executive dated 11 February 1994 stated inter alia:

1. to grant 100% relief of the Regional and District rate in respect of the premises occupied by the Association;
2. not to grant relief in respect of the premises occupied by the Club and re-affirmed the Council's policy of not granting relief to licensed clubs;
3. not to refer consideration of payment of arrears of rates to a Sub-committee; and
4. that the rates on the premises owned by the Club be paid over an extended period.

[8] Thereafter the issue of rates relief for the Club featured again at the meeting of the Central Services Committee on 22 February 1994. The minutes recorded inter alia:

1. to re-affirm existing policy; and
2. to receive a further report on discretionary relief.

1. RAF ASSOCIATION AND CLUB - DISCRETIONARY RELIEF OF RATES - Report dated 11 February 1994 by Chief Executive

Decision -

1. RE-AFFIRMED decision to grant 100% relief of Regional and District Rate in respect of the premises occupied by the Association; and
2. AGREED to write-off all arrears, excepting those relating to Water and Sewerage, up until 22 February 1994 ..."

[9] A subsequent letter to Mr. Martin dated 28 February 1994 stated:

[10] Thereafter the Council took steps to collect rates due from the Club. The rates remained largely unpaid. In a further letter to Mr. Martin dated 17 July 1995 the Council wrote:

[11] The Council proceeded with summary warrants, diligence, and an action of furthcoming against the Club in Dumfries Sheriff Court. On 1 April 1999 decree for £4,106.60 passed against the Club.

[12] In 1999 the Club raised the present petition for judicial review, seeking a variety of remedies including suspension and reduction of inter alia the summary warrants and the decree of furthcoming; and declarator, interdict, and payment. At a first hearing on 17 and 18 February 2000, counsel for the Club stated that, for the purposes of that hearing only, and without making any concession, it was accepted that the question whether mandatory relief could be granted to the Club could not be resolved at the first hearing. For the purposes of that hearing, the Club's argument was that they were entitled to discretionary relief in respect of the years from 1993-94 onwards, in terms of s.4(5) of the Local Government (Financial Provisions) (Scotland) Act 1962. Further, both counsel concurred in stating to the court that the issues raised at the first hearing should, if possible, be decided upon the basis of the pleadings and productions. It was also agreed that the court, if able to decide the issues without a proof, should give a judgement, but should put the case out By Order before pronouncing any interlocutor.

[13] At the end of the first hearing, counsel for the petitioners undertook to amend the petition within seven days by adding to the instance the names and addresses of the Club committee members. The possibility of further amendment of the instance to include the names and addresses of all members of the Club (for example by way of an Appendix to the petition) was to be further explored and discussed at the By Order hearing.

[14] Counsel for the Club contended that, on a proper construction of the minutes and correspondence, the Council had, by means of their Central Services Committee at the meeting on 22 February 1994, either (1) made no decision at all, merely putting matters "on hold" (reference was made to a local journalist's interpretation of events in the Dumfries & Galloway Standard dated 23 February 1994); or (2) implemented a fixed policy, without having regard to, or exercising discretion in relation to, the individual circumstances of the Club. Counsel contended that the only possible construction of paragraphs 12.1 and 12.2 of the minutes of the Central Services Committee dated 22 February 1994 was either that the question of discretionary relief had been left unanswered; or alternatively that the fate of the Club had been subsumed in the re-affirmation of policy such that a fixed policy had been implemented without the application of any discretion to the particular circumstances of the Club. In either case, the Council had acted ultra vires, illegally, and unreasonably in the Wednesbury sense.

[15] No argument was presented in support of paragraphs 1, 2, 3, and 6 of statement 10 of the petition, relating to an alleged decision in 1991; legitimate expectation; and the absence of the requisite statutory notice. Nor was the decision made by the Central Services Committee on 21 December 1993 challenged, either on the ground that no decision had been made, or on the ground that there had been an application of fixed policy. Rather it was submitted that, on a proper construction of the documents, the decision of 21 December 1993 had been abrogated, quashed or overturned by the Council on 25 January 1994. Accordingly it was the subsequent committee meeting on 22 February 1994 which was the crucial one, so far as judicial review was concerned.

[16] In relation to the first alternative (failure to make any decision), counsel referred to C.C.S.U. v Minister for Civil Service [1985] 1 A.C. 374, Lord Diplock at p.410:

Counsel also drew attention to the time-scale envisaged in s.4(6) of the 1962 Act, and the definition of "year" in s.43 of the Valuation and Rating (Scotland) Act 1956. Parliament's intention was that councils should not delay in relation to any application for relief so as to put it outwith their power to exercise their discretion in respect of any rating year. In the present case, the decision on 22 February 1994 appeared to address the question of the arrears of rates, but not to address the point of principle. The minutes were prima facie evidence of what had occurred at the meeting: s.43 and Sched.7 of the Local Government (Scotland) Act 1973. The relevant excerpt had been sent to Mr. Martin by letter dated 17 July 1995. Nowhere in the minutes, the correspondence, or even the pleadings, was it said that a decision had been taken on 22 February 1994 in relation to the point of principle (i.e. whether or not the Club were to be given discretionary relief). Thus there had been a failure to exercise the discretionary power in that there had been a failure to make a decision.

[17] In relation to the second alternative (implementation of a fixed policy without exercising discretion in relation to the particular case), counsel drew attention to British Oxygen Co. Ltd. v Board of Trade [1971] AC 610, at p.625, where Lord Reid stated:

[18] In anticipation of an argument likely to be put forward by the Council, counsel for the Club submitted, in relation to the remedy of reduction of the decree of furthcoming, which was a decree in foro, that the Club had not failed to exhaust their remedies. He referred to Bain v Hugh L. S. McConnell Ltd. 1991 S.L.T. 691; Adair v David Colville & Sons Ltd. 1926 S.L.T. 590, at p.695-6; and Zannetos v Glenford Investment Holdings Ltd. 1982 S.L.T. 453 at p.456. There had been no remedy available in the inferior courts. Appeal in the Sheriff Court would not have provided appropriate review. Section 238 of the Local Government (Scotland) Act 1947 was of narrow compass. It did not cover the circumstances of the present case. It did not affect or oust the supervisory jurisdiction of the Court of Session in respect of actings which were ultra vires or fundamentally invalid: cf. Mensah v Secretary of State, 1992 S.L.T. 177; British Railways Board v Glasgow Corporation 1976 S.C. 224. Further it was not appropriate that a rating authority should review its own actings: Hope v Corporation of City of Edinburgh (1897) 5 S.L.T. 195. There were exceptional circumstances entitling the Club to reduction in the context of the judicial review: Bain v Hugh L. S. McConnell Ltd. cit. sup.

[19] Subject to the agreement that the case be put out By Order before any interlocutor was pronounced, counsel for the Club sought declarator that the Council were bound to exercise the discretion vested in them under s.4(5)(c) of the Local Government (Financial Provisions) (Scotland) Act 1962, and to receive and consider representations from the Club, all as set out in head (b) of statement 3 of the petition under deletion of the reference to establishing a sub-committee. The other remedies specified in statement 3 were either not necessary in hoc statu as a result of certain undertakings given by the Council, or could not be granted meantime in view of a dispute about amount.

[20] Counsel for the Council argued that the decision to refuse discretionary rates relief, taken on 21 December 1993, had never subsequently been abrogated, quashed, or overturned. It had survived the Council meeting of 22 February 1994. A proper construction of the minutes, correspondence, and newspapers indicated that the decision had survived. The necessary power to take such decisions had been delegated to the Central Services Committee. The committee did not require retrospective approval or authorisation by the Council. Reference was made to a letter from James S. Smith, Secretary to the Council, dated 18 February 2000 (lodged in the course of the first hearing) relating to the powers of the Central Services Committee. Reference was also made to the letter to Mr. Martin dated 28 February 1994, in which the tables of figures clearly demonstrated that the decision of 21 December 1993 stood, subject to an ex gratia waiving of arrears due at that date.

[21] Counsel for the Council also argued that judicial review was not open to the Club. He contended that there had been a failure to exhaust remedies, and that, even if the court were not satisfied that there had been such a failure, the history of the case was such that the court should be slow to exercise its discretion in favour of the Club. British Railways Board v Glasgow Corporation 1976 S.C. 224 was wholly in point. Section 238 of the Local Government (Scotland) Act 1947 provided machinery for appeal. There was no jurisdictional difficulty. Nor were there any exceptional circumstances entitling the Club to judicial review. Bearing in mind the length of time it had taken the Club to raise the present petition (over five years since February 1994) the court should not exercise discretion in favour of the Club.

[22] I consider that, on a proper construction of the documents (including the minutes and correspondence but excluding a local journalist's interpretation, to which I feel unable to give much weight without hearing evidence), the original decision taken by the committee on 21 December 1993 "not to grant relief in respect of the premises occupied by the Club" was never quashed, abrogated or overturned. I have reached this view for the following reasons:

[23] (a) Minutes and correspondence:

The letters and minutes were compiled in the course of day-to-day business. They should not in my view be construed as conveyancing documents. Thus a tendency to describe what was being referred back to the Central Services Committee as a "decision" at one moment, and as an "application [for relief]" at another moment, is not in my opinion of major significance. Similarly the fact that paragraph 12.1 of the minutes expressly records a re-affirmation of the decision to grant the Association 100% relief, but paragraph 12.2 does not contain an express re-affirmation of the decision not to grant the Club relief, does not, in my view, mean that the only possible construction is that the decision taken on 21 December 1993 somehow ceased to have effect. On the contrary, nowhere in the minutes or correspondence is there any indication, either express or implied, that the Central Services Committee's decision of 21 December 1993 was cancelled or quashed at either the Council meeting on 25 January 1994 or at the Central Services Committee meeting on 22 February 1994. In my view, on a proper construction of the minutes and correspondence, what occurred on 25 January 1994 was a referral back of the matter concerning the rates due by the Club without alteration to or quashing of the committee's decision to refuse the Club rates relief; and what occurred on 22 February 1994 was a further decision taken by the committee to waive, ex gratia, the Council's right to recover the rates arrears outstanding at that date, although the Council could in law have insisted on recovery of these arrears.

[24] (b) Letter from James S. Smith dated 18 February 2000:

The letter from James S. Smith, Secretary to the Council, dated 18 February 2000, indicates that certain clear procedures would have to be followed before a decision of the Central Services Committee on a matter properly delegated to them could be quashed by the Council. In particular the letter states:

[25] As the original decision taken on 21 December 1993 was not challenged by counsel for the Club on the ground either of implementation of a fixed policy without the exercise of discretion in relation to the particular facts, or of a failure to make a decision in the exercise of a discretion, it follows that the petition for judicial review is ill-founded and falls to be dismissed. Even if counsel for the Club had sought to attack the decision taken on 21 December 1993 on either ground, I would have held such an attack to be without foundation, as there is nothing in the pleadings or productions to support such an argument. For example, paragraph 3.6 of the Report by the Director of Finance dated 9 December 1993 (which was before the committee on 21 December 1993) merely draws attention to the possible consequences of a particular decision. Paragraph 3.6 does not in my view demonstrate that the decision taken on 21 December 1993 was the result of the implementation of a fixed policy without considering the circumstances of the Club.

[26] While the decision reached above is sufficient for a determination of the case, it may be necessary that I express a view on the arguments relating to failure to exhaust remedies.

[27] If, contrary to the decision reached above, it were to be assumed that the Club's arguments relating to ultra vires, illegality, and unreasonableness were well-founded, I would not be satisfied that s.238 provided an adequate remedy for the Club. One of the Club's grounds of judicial review was that of ultra vires. In British Railways Board v Glasgow Corporation, cit. sup., Lord Wheatley specifically referred to averments of ultra vires as an exception to the general principle that the provision of a statutory form of review ousts the jurisdiction of the Court of Session; see too Mensah v Secretary of State cit. sup. Had I found the Club's petition to be well founded in relation to the complaint of ultra vires, I would have held that the Club was entitled to seek redress by way of reduction in a judicial review. The length of time which the Club allowed to elapse before bringing the present petition is unsatisfactory, but would not in my view bar them from seeking such reduction. It might have been preferable had the Sheriff Court proceedings been sisted pending judicial review in the Court of Session; however the fact that such a course was not adopted, and that decree in the Sheriff Court was allowed to pass, could properly be reflected in awards of expenses.

[28] As requested by the parties, the only order which I shall make meantime is to put the case out By Order.