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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Transco Plc v. Glasgow City Council [2005] ScotCS CSOH_79 (21 June 2005) URL: http://www.bailii.org/scot/cases/ScotCS/2005/CSOH_79.html Cite as: [2005] CSOH 79, [2005] ScotCS CSOH_79 |
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Transco Plc v. Glasgow City Council [2005] ScotCS CSOH_79 (21 June 2005)
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OUTER HOUSE, COURT OF SESSION [2005] CSOH 79 |
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A1214/03
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OPINION OF LORD HODGE in the cause TRANSCO PLC Pursuers; against GLASGOW CITY COUNCIL Defenders:
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Pursuers: D. R. Ross; Tods Murray LLP
Defenders: W. J. Wolffe; G. Lindsay
21 June 2005
[1] This is an action to reverse unjustified enrichment. The remedy sought is payment in recompense for the performance by the pursuers of the defenders' statutory obligation. The defenders challenge the relevancy of the pursuers' claim in a procedure roll debate.The facts as averred
[2] The defenders are a roads authority and have a statutory duty to maintain public roads. The pursuers aver that the Skaethorn Bridge over the River Kelvin at Maryhill, Glasgow, falls within the definition of a public road. The pursuers also have statutory duties under the Gas Act 1986 in relation to the provision and maintenance of gas pipelines. I discuss the relevant statutory provisions in paragraphs [4] and [5] below. The Skaethorn Bridge carries two major gas pipelines which serve the northern part of Glasgow. In 1987 a new road bridge was built to the north of the Skaethorn Bridge and the latter bridge ceased to be used by motor vehicles. Part of Skaethorn Road leading to the old bridge was stopped up in 1999 in terms of the Stopping Up of Road (Glasgow City Council) (Skaethorn Road) Order 1999. Thereafter the bridge itself was stopped up in terms of the Stopping Up of Road (Glasgow City Council) (Skaethorn Bridge) Order 2000. I was also informed that the defenders had removed the bridge from their list of public roads but this was not averred nor was it admitted by the pursuers. It is therefore a fact which I cannot take into account in considering the relevancy of the pursuers' pleadings. Thus the alleged enrichment of the defenders arises from the fact that the pursuers plead that the Skaethorn Bridge remains a public road. [3] The pursuers aver that they and their predecessors had been concerned about the state of the Skaethorn Bridge since the 1970s. They instructed structural engineering reports in 1979 and again in 1991. There were serious concerns after a flood in December 1994 which caused the collapse of the retaining wall and the slippage of the embankment. The pursuers appointed a consultant in 1996 to produce a proposal for the repair of the bridge. Thereafter works were carried out on two occasions to mitigate a risk to public safety. The first works were carried out in the summer and autumn of 1998 and, including professional fees, cost £225,938.47. Further remedial works were carried out between October 2003 and May 2004 at a cost, including professional fees, of £757,340.Statutory Provisions
[4] In this case both of the parties had statutory duties. The defenders had certain powers and duties under the Roads (Scotland) Act 1984. In particular under section 1 of that Act the defenders as roads authority were under a duty to manage and maintain all roads which were for the time being entered on their list of public roads. A bridge may be a road (section 151) and at the material time the Skaethorn Bridge was entered on the defenders' list of public roads. A local roads authority nevertheless has power under section 1(4) to delete a road from its list in certain circumstances which include a deletion in consequence of the stopping up of the road. Under section 68 the roads authority has power to make an order stopping up a road which it considers is unnecessary. The procedure to achieve that end is set out in the Stopping Up of Roads and Private Accesses and the Re-determination of Public Rights of Passage (Procedure) (Scotland) Regulations 1986 (S.I. 1986 No. 252). [5] The pursuers also were subject to statutory duties. In particular, in terms of section 9 of the Gas Act 1986 it was the duty of the pursuers to develop and maintain an efficient and economical pipe-line system for the conveyance of gas.Defenders' submissions
[6] The defenders' challenge was three-fold. First it was argued that the defenders were not enriched by the pursuers' actions as the defenders could not have been compelled to carry out the works which the pursuers chose to carry out. In response to a demand by the pursuers to maintain the bridge, the defenders could have chosen to stop up the bridge and remove it from their list of public roads: sections 1(4) and 68 of the Roads (Scotland) Act 1984. It was submitted that the pursuers should not be permitted, by carrying out the works at their own hand, to impose upon a public authority a liability to pay for work which that authority could legitimately have decided not to incur. [7] Secondly, it was submitted that a claim on the ground of unjustified enrichment seeking recompense as a remedy was not available as the pursuers had a statutory remedy under section 45(b) of the Court of Session Act 1988, which empowers the Court of Session to order specific performance of any statutory duty. Public authorities such as the defenders had limited resources and required to prioritise their expenditure. If persons were allowed by self-help to incur expenditure and then seek to reverse unjustified enrichment by seeking recompense from the public authority, this could unfairly skew the allocation and use of public money. Mr Wolffe recognised that the existence of a common law or statutory remedy was not an absolute bar against the pursuers seeking a remedy for unjust enrichment but he submitted that the pursuers required to plead special and strong circumstances to explain their failure to use the available remedy. The pursuers had not done so and the action was accordingly irrelevant. [8] In support of his second submission Mr Wolffe referred me to Shilliday v Smith 1998 SC 725 and Dollar Land (Cumbernauld) Ltd v CIN Properties Limited 1998 SC (HL) 90 for modern statements of the structure of the law of unjustified enrichment. On the general rule requiring the exercise of a remedy under statute or at common law before seeking the remedy of recompense to reverse unjustified enrichment I was referred to Varney (Scotland) Limited v Lanark Town Council 1974 SC 245, City of Glasgow District Council v Morrison McChlery & Company 1985 S.C. 52, Property Selection & Investment Trust Limited v United Friendly Insurance plc 1999 S.L.T. 975 and Commissioners of Northern Lighthouses v Edmonston 1908 16 S.L.T. 439. I was also referred to Lawrence Building Company Limited v Lanark County Council 1978 SC 30. [9] The defenders' third submission was that in any event the pursuers in repairing the bridge had carried out an operation for their own benefit and that accordingly a remedy to reverse unjustified enrichment was excluded. I was referred to Edinburgh and District Tramways Company Limited v Courtenay 1909 SC 99 and also Varney (Scotland) Limited v Lanark Town Council 1974 SC 245. In the course of discussion Mr Wolffe accepted that it was appropriate to reserve this argument for a proof before answer if he were unsuccessful on his first two submissions. Accordingly I say nothing further on this third submission.The pursuers' response
[10] Mr Ross for the pursuers submitted that the pursuers had averred that the Skaethorn Bridge was a road in terms of section 1(1) of the Roads (Scotland) Act 1984 and that averment required to be accepted in a debate on relevancy. So long as the bridge was a road under the 1984 Act, the defenders were under a statutory duty to maintain it and could be compelled to perform that duty. As the pursuers had incurred expenditure on the repair works at a time when the bridge remained a road, the theoretical possibility that the defenders could de-list the bridge was neither here nor there. The court required to look at the whole circumstances in a proof before deciding whether there had been unjustified enrichment. [11] In response to the defenders' second submission, namely that the remedy of recompense to reverse unjustified enrichment was subsidiary to any other legal remedy, Mr Ross submitted that there was no absolute requirement in an action for recompense that the pursuers should have pursued another remedy open to them. He argued that in the circumstances of this case it was not appropriate that the action be dismissed on this ground alone. He accepted the statements of the law in Varney and City of Glasgow District Council v Morrison McChlery & Company. He accepted that the pursuers required to plead special and strong circumstances but took issue with Lord Macfadyen's statement in Property Selection & Investment Trust Limited (at page 985F-G) that it was incumbent on a pursuer to invoke the exception to the general rule expressly and to set out clearly the special and strong circumstances on which he founds. It was, he submitted, sufficient to aver those circumstances without stating the purpose for which those facts were averred. In this case he founded on two averments as amounting to the necessary special and strong circumstances for the purposes of relevancy. First, the pursuers were carrying out their statutory duty as the deterioration of the bridge was endangering the gas mains and the pursuers averred that they did not wish to close the pipes crossing the bridge and divert the mains to another route because of the cost of doing so. Secondly, the pursuers averred that they acted to mitigate a risk to public safety. Neither of those circumstances occurred in the other cases where a claim on the ground of unjustified enrichment had been rejected because of the availability of another remedy. It was not appropriate to dismiss the action on this ground alone as the weight to be attached to these factors could only be determined after enquiry.Discussion
[12] The Scots law of unjustified enrichment has been redefined in recent years principally in three cases, Morgan Guaranty Trust Company of New York v Lothian Regional Council 1995 SC 151, Shilliday v Smith 1998 SC 725 and Dollar Land (Cumbernauld) Limited v CIN Properties 1998 SC (HL) 90. In particular, in Dollar Land (pp. 98H-I and 99D-E), Lord Hope of Craighead stated:"The event which gives rise to the granting of the remedy is the enrichment. In general terms it may be said that the remedy is available where the enrichment lacks a legal ground to justify the retention of the benefit. In such circumstances it is held to be unjust... I think that Lord Rodger stated the matter correctly in the present case at page 353D when he said that the pursuers must show that the defenders have been enriched at their expense, that there is no legal justification for the enrichment and that it would be equitable to compel the defenders to redress the enrichment."
In the redefinition effected by these three cases, causes of action such as recompense are now treated as remedies which apply in various situations where redress of unjustified enrichment is sought.
[13] In my opinion the redefinition of the law of unjustified enrichment has not superseded the old rules relating to the law of recompense such as the general rule that the remedy is not available where a pursuer had a legal remedy whether under the common law or under statute and had chosen not to exercise it. If, as appears to be the case, the law is developing towards the position that an enrichment is unjustified where there is no legal basis for it rather than because there exist specified "unjust factors", there may be a need for robust defences to a claim to reverse unjustified enrichment (see Peter Birks, "Unjust Enrichment" (2nd Ed.) (2005) Chapters 2, 9 and 10). Similarly, there may also be a need to preserve preconditions before a pursuer's own acts may ground a claim for recompense. Otherwise inequitable results may follow. Thus I consider that counsel were correct in this case to advance their arguments on the basis that the general rule and the exceptions thereto remained good law. [14] In this case the remedy which the pursuers seek is recompense for the performance of an obligation which the pursuers assert was that of the defenders. Parties were agreed that for the remedy of recompense, five elements must occur: (1) the pursuer must have suffered loss, (2) the pursuer must have had no intention to make a gift to the defender; (3) the defender must have gained as a result of the pursuer's loss; (4) the pursuer must not have carried out the operation for his own benefit (in suo), and (5) except in special circumstances, the pursuer must have no other legal remedy. See Gloag & Henderson (11th Ed.) paragraph 28.13 and Property Selection & Investment Trust Limited, Lord Macfadyen at 985B-C. The surviving issues in this debate are (1) whether there are relevant averments of enrichment and (2) whether a relevant case has been pleaded for reversing unjustified enrichment by recompense where there was available the statutory remedy of an application for judicial review invoking section 45(b) of the Court of Session Act 1988 (see, for example, Elmford Limited v City of Glasgow Council (No. 2) 2001 S.C. 267). [15] In relation to the defenders' first submission, it is clear that the pursuers could have applied for judicial review seeking specific implement under section 45(b) of the Court of Session Act 1988 and that, if the bridge were a road as the pursuers aver, the defenders could be compelled to maintain it. It is possible that when challenged to maintain the bridge the defenders could have initiated the stopping up procedure which would have led to the de-listing of the bridge, but as a matter of relevancy of the pursuers' pleadings it cannot be said that so long as the bridge was a road the defenders could not be compelled to maintain it. I therefore reject the defenders' first submission. Nonetheless the fact that the defenders had the option of stopping up and de-listing the bridge is relevant in relation to their second submission. [16] As I have said, the parties did not dispute the subsidiarity of the remedy of recompense. In Varney Lord Fraser set out a reason for the general rule excluding recompense if the pursuer had failed to pursue another remedy either at common law or under statute. In that case, which concerned an attempt by building contractors to recover from a local authority monies which the contractors had spent constructing sewers for the drainage of houses which they had built, the Second Division refused the pursuers a remedy in recompense where they had failed to pursue a common law action of declarator or a petition under the statutory predecessor of section 45(b) of the Court of Session Act 1988. Lord Fraser stated (at page 259):"The pursuers had a legal remedy by raising an action of declarator, or with other suitable conclusions, before carrying out the work. If they now find themselves in the position of being unable to raise an action on a strict legal basis, that position is one of their own making, because they failed to raise an action when they could have done so. 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."
Lord Fraser went on to state (at pages 259-260):
"I do not know that it is absolutely essential to the success of an action for recompense that the pursuer should not have, and should never have had any possibility of raising an action under the ordinary law, but in my opinion it would at least require special and strong circumstances to justify an action of recompense where there was, or had been, an alternative remedy open to the pursuer."
The Lord Justice Clerk, Lord Wheatley, made similar comments at pages 252-253. In particular, Lord Wheatley stated (at page 253):
"It seems to me that it would militate against the concept of recompense if a person under no error of fact could ignore his legal remedy at the appropriate time and commit himself to work and consequential expense which he was under no legal obligation to incur, but which he could have obliged the other party to undertake, and then turn round and say that a new legal remedy of recompense of his own creation had arisen...
In the context of the present case the practical repercussions of allowing such unilateral action to supersede the duty imposed by statute upon a local authority to secure a planned and efficient system of sewerage within the burgh need only be stated for the dangers to be manifest."