Agodzo v Bristol City Council [1999] EWCA Civ 1517 (27 May 1999)

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MR. JUSTICE HOLMAN: Dr. Agodzo formerly owned a property at 249, Ashley Down Road, in Bristol. That property and several adjacent properties were served by a private sewer. In 1991 the Bristol City Council considered that the sewer needed repairing and, as I understand it, served a notice upon Dr. Agodzo and the owners of the adjacent properties pursuant to section 99(1) of the Building Act 1984, requiring him to execute the necessary works. Section 99(2) of that Act provides that:

Dr. Agodzo did not execute the works, nor, as I understand it, did the adjacent owners. Accordingly, in exercise of their power under section 99(2), the Bristol City Council did so. They then sought to recover the sum of just under £5,000, plus later interest accruing thereon, from Dr. Agodzo, being the proportion of the total cost of the works which they attributed to his property. He considered that the overall cost was not reasonably incurred, in that unnecessary work was done, unnecessarily or unreasonably high wages and plant hire charges were paid, and an unnecessary amount of time was spent by the workmen in actually doing the works.

Dr. Agodzo was clearly already in dispute with the Bristol City Council as to the reasonable scope and cost of the works even before they were begun, and by an originating application, issued on 6th June 1991, he applied to the Bristol County Court for certain declarations. Since then he has amended his originating application several times, and the current appeal concerns his "fourth amended originating application" which is dated 20th June 1997, but which is clearly an updated and modified version of the original proceedings which were commenced in June 1991.

The Bristol City Council themselves initially sued Dr. Agodzo, in fact in the High Court, to recover their expenses and interest, but they also registered them as a charge against the premises pursuant to section 107(1). In 1996, before the claim against Dr. Agodzo had been resolved, the mortgagees of the property repossessed it for arrears of mortgage instalments and in due course sold it. Upon sale, the mortgagees paid to the Bristol City Council the amount of expenses and interest that they had charged upon the property. There was apparently an overall shortfall between the net proceeds of sale and the total amount charged against the property, and Dr. Agodzo says that the mortgagee building society are pressing to recover this from Dr. Agodzo. In short, he is still being faced with the bill for the full amount of expenses and interest claimed by the Bristol City Council.

In the end, the Bristol City Council recovered the full amount of expenses and interest which they were claiming, and the issue between them and Dr. Agodzo as to whether such expenses were reasonably incurred has never yet been put to the test. However, Dr. Agodzo wishes to continue with his originating application which seeks a range of declarations, all, in essence, to the effect that the expenses which were incurred, or allegedly incurred, were not "reasonably incurred" within the meaning of section 99(2) of the Building Act 1984. As drafted, the declarations which he seeks all include the added proposition that, if the claimed expenses are unreasonable or contain excessive items (for example, for wages) within them, then the entire claim for expenditure is illegal and invalid. Indeed, Dr. Agodzo has conveniently summarised his claim in paragraph 7 of his skeleton argument as follows:

"The question to be answered is whether if the component parts of the Bristol City Council's total claim are proved to be invalid under the heads listed in [certain paragraphs of] my originating application and are for the reasons there stated not 'expenditure reasonably incurred', the total bill, because of these reasons, is vitiated by the invalidity of its parts and is not therefore 'expenditure reasonably incurred'. This is a question of law."

As I understand it, although I have not seen them, the originating application and the first and second amended originating applications included within them allegations of fraud, which the Bristol City Council accept were within the equity jurisdiction of the county court by virtue of section 23(g) of the County Courts Act 1984, which provides that:

However, in 1997, by his third, and soon after that his fourth amended originating applications, Dr. Agodzo has deleted any allegation of fraud. As a result, at what was listed as the final hearing of this case on 27th May 1998, the Bristol City Council submitted as a preliminary point that the county court had no jurisdiction to hear it. His Honour Judge Ticehurst accepted that submission, and his order of that date reads:

There is no doubt that the power of a county court under this section includes a power to make a declaration, even if no other relief or remedy is claimed in the action. I accept, however, that before section 38(1) comes into operation at all, there must be "proceedings in a county court" of a kind which a county court has jurisdiction to hear and determine. The judge considered that there was no jurisdiction in the county court to hear and determine proceedings whose subject matter or foundation is that raised by Dr. Agodzo in his pleadings.

The fact that the only remedy which Dr. Agodzo seeks is a declaration or declarations is, in my view, to some extent a red herring. If, instead of his house being repossessed, he had sold it himself and the expenses claimed by the Bristol City Council had been directly recovered by them under their land charge, he might have wished to amend his proceedings to recover the sum from the Bristol City Council as a claim for restitution. The point which Bristol City Council now take as to jurisdiction would, so it seems to me, have been exactly the same. In short, what goes to jurisdiction is not the fact that Dr. Agodzo seeks a bare declaration, but the fact that the underlying subject matter of his claim is not, so it is submitted, one which is within the jurisdiction of the county court at all.

I have already quoted section 23(g) which gives jurisdiction to the county court to hear and determine proceedings for relief against fraud or mistake. None of the several other provisions in the County Courts Act 1984 which confer jurisdiction upon county courts, could conceivably apply to the present case, and Mr. Levy for the Bristol City Council submits, as His Honour Judge Ticehurst accepted, that none of the statutory bases of jurisdiction, which I have quoted above, can apply in this case. There is now no claim based on fraud, and Mr. Levy submits that Dr. Agodzo could not be regarded as seeking "relief against mistake" for the purposes of section 23(g). He submits that from the outset Dr. Agodzo has been alleging that the charge was excessive, and that there can be no question of Dr. Agodzo having paid anything under mistake. Mr. Levy submits that section 16 confers jurisdiction to hear and determine an action "for the recovery of" a sum recoverable by virtue of an enactment. So he submits that section 16 would have afforded jurisdiction to the Bristol City Council to sue for their reasonable expenses in the county court, such expenses being recoverable by virtue of section 99(2) of the Building Act 1984, but that it affords no jurisdiction to Dr. Agodzo, since he does not seek to "recover" anything by virtue of any enactment.

Mr. Levy further submits that there is no jurisdiction under section 15 since, he submits, Dr. Agodzo's action is not "founded on contract or tort". Dr. Agodzo's action seems to me to be founded, underlyingly, on unjust enrichment. In view of the decision of the House of Lords in Kleinwort Benson Limited v Glasgow City Council [1999] 1 AC 153, it might, in the absence of statute, be very difficult to characterise the action as being founded on either "contract" or "tort". However, section 107(4) of the Building Act 1984 provides as follows:

Mr. Levy submits that the effect of those words is not to create the fiction of some notional contract between the parties, but simply to attach the incidents of a claim in contract, for example, the limitation period applicable to claims in contract and the availability of procedures for summary judgment. In my judgment, however, the effect of section 107(4) goes further than this. The effect of the words "may be recovered as a simple contract debt" is that, for procedural and other purposes connected with litigation, a sum claimed under section 99(2) of the Building Act 1984 is to be treated as a simple contract debt. No doubt, a local authority can bring an action in the county court for the recovery of such a sum in reliance upon section 16 of the County Courts Act, but it could equally well bring one in reliance upon section 15. If, by statute, a sum may be recovered "as a simple contract debt", then an action to recover that sum is an "action founded on contract" within the meaning of section 15. It happens that the Bristol City Council did not need, in the circumstances of the present case, to persist with their action to recover the sum which they claimed, because of the adventitious effect of the repossession and sale by the mortgagees. But the sum which they claimed is the very sum upon which Dr. Agodzo's action is founded. If it was recoverable as a simple contract debt by the Bristol City Council, I see no reason why Dr. Agodzo's action in relation to the same sum is not an action "founded on contract" for the purposes of section 15 of the County Courts Act 1984.

An action for a declaration may be commenced pre-emptively by one party before he is sued by the other, and in this very case Dr. Agodzo originally commenced his action in 1991 on this basis. At that time he sought declarations in relation to the very sum which was recoverable as a simple contract debt. In my judgment, his action was manifestly founded on contract, and the fact that the Bristol City Council have since, adventitiously, recovered the sum, does not deprive the county court of its jurisdiction.

This view gains support, in my judgment, from the judgment of Lord Evershed MR in Great Yarmouth Corporation v Gibson [1956] 1 QB 573, in which he was considering the similar provision in section 293 of the Public Health Act 1936. In fairness to His Honour Judge Ticehurst, I mention that Mr. Levy, who appeared for the Bristol City Council before the judge, as he does before us, has frankly said that this authority was not drawn to the attention of His Honour Judge Ticehurst. The issue in that case was also one as to the jurisdiction of the county court. The principal argument was that jurisdiction was excluded by virtue of section 293 of the Public Health Act 1936, in that section 24 of that Act made provision for summary proceedings in relation to this kind of claim by a local authority for expenses reasonably incurred by them. However, it is clear from the argument of counsel for both parties, as reported, that each of them regarded it as relevant to the question of jurisdiction that section 293 of the 1936 Act, just as section 107 of the 1984 Act, provided that expenses of this kind may be recovered as a simple contract debt in any court of competent jurisdiction. Counsel for the local authority, who were contending that the county court did have jurisdiction, submitted that:

With that I agree; but in my view it is made quite plain from a general conspectus of the Act that the words 'as a simple contract debt' do not mean 'where the debt is properly one of contract' but do mean 'as though it were a simple contract debt'; the object being to determine the nature of the claim and, particularly in a county court case, thereby to define the limits of the jurisdiction."

It is true, as Mr. Levy has submitted to us, that nowhere in the report of the case is there any express reference to the section of the then relevant County Courts Act, namely the County Courts Act 1934, which was being regarded as affording the jurisdiction. But it nonetheless seems to me that Lord Evershed MR himself was regarding the fact that statute provided that the sum in question was recoverable as a simple contract debt as being relevant to the question of jurisdiction.

The grant of a declaration is a discretionary remedy. Quite apart from the underlying merits of Dr. Agodzo's case on both the facts (as to which we know nothing) and his propositions of law, there may be reasons why the court should decline, as a matter of discretion, to grant declarations in this case. But His Honour Judge Ticehurst never reached the point of exercising any discretion which, in any event, is usually more appropriately exercised as a conclusion of a hearing rather than as a preliminary point. At this stage the action has been snuffed out on the basis of want of jurisdiction, which was incorrect. I would allow the appeal and set aside the whole order made by His Honour Judge Ticehurst on 27th May 1998.

LORD JUSTICE HENRY: I agree. Dr. Agodzo is liable under the Building Act for his share of the sewerage work done for the benefit of him and his neighbours by the local authority, now a very long time ago. He is liable for his proper proportion of those works for the reasonable cost of doing them. He submits, and it is and has for a long time been his case, that the charges made by the local authority were not reasonable but they were excessive. If the local authority had proceeded against him to recover these charges, which they would have done, as my Lord has said, in the county court, he could then have had his day in court challenging the reasonableness of the charges. That did not happen because, as my Lord has explained, the local authority registered the local land charge for the entire sum due on Dr. Agodzo's house. He fell into arrears on his mortgage. As a result of those arrears the mortgagees repossessed. They sold the house which had a negative equity, but in order to sell the house they had to discharge the liability as claimed under the charge. Dr. Agodzo's fear is that the mortgagees might even now bring proceedings against him for the sum they paid to satisfy the charge. For that reason he wishes to bring these proceedings to establish what sum was reasonably due from him and wishes a declaration on the basis that that declaration would be binding against the world, including obviously the mortgagees. He wishes to limit his liability on any future claim to the right figure and not have to pay excessively.

For the reasons given by my Lord, I believe that the county court would have jurisdiction to examine the reasonableness of those charges. However, I question most emphatically whether it makes any economic sense to litigate the issue of reasonableness. It may be that mediation would be the cheapest and most effective remedy here in the interests of all parties, especially Dr. Agodzo, but the benefit would not be limited to him. However, that is not within the remit of this court. Our judgment is that the appeal should be allowed.

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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Agodzo v Bristol City Council [1999] EWCA Civ 1517 (27 May 1999) URL: http://www.bailii.org/ew/cases/EWCA/Civ/1999/1517.html Cite as: [1999] EWCA Civ 1517, [1999] WLR 1971, [1999] 1 WLR 1971

England and Wales Court of Appeal (Civil Division) Decisions