Scottish Court of Session Decisions

The Public Health (Scotland) Act 1897 (60 and 61 Vict. cap. 38), section 126, enacts—“With respect to districts other than burghs the following provisions shall have effect:—… (2) The local authority, if they have any surplus water after fully supplying what is required for domestic and sanitary purposes, may supply water from such surplus to any public baths and wash-houses or for trading or manufacturing and all other than domestic purposes, on such terms and conditions as may be agreed on between the local authority and the persons desirous of being so supplied: Provided that when water is thus supplied from such surplus it shall not be lawful for the local authority to charge the persons so supplied both with the portion of the special water assessment applicable to the buildings or premises supplied and also for the supply of water obtained; but the local authority may either charge the said assessment leviable on such buildings or premises, or charge for the supply of water furnished to the same, as they shall think fit, and the local authority shall have the same remedies and powers of recovering payment of such water rents or payments as are hereinafter provided with regard to the special water assessment.…’

The County Council of the County of Ayr, pursuers, brought an action against W. & J. Knox, Limited, thread manufacturers, Kilbirnie, defenders, whereby they sought to recover the sum of £117, 12s. 9d., being the owner's portion of water assessments for premises owned and occupied by the defenders,

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The pursuers averred—“(Cond. 1) The pursuers are the County Council of the County of Ayr, and under the Local Government (Scotland) Act 1889 fall to impose annually upon all lands and heritages within the county the rates and assessments necessary to meet the deficiency for County Council purposes for each year. The defenders are thread manufacturers at Kilbirnie in said county, and are heritable proprietors and occupiers of the subjects after mentioned situated within Kilbirnie and Glengrnock water supply district in the town and parish of Kilbirnie. (Cond. 2) The pursuers, as the rating authority foresaid, served upon the defenders assessment notices for the owner's proportion of the said Kilbirnie and Glengarnock special water supply district assessment for the year from 15th May 1916 to 15th May 1917, duly imposed upon and payable in respect of the following heritable subjects belonging to them, amounting said assessment to the sum of £117, 12s. 9d.

Subject.	Valuation.	Rate per £	Assessment.
Dennyholm Mills and works	£1442	9d.	£54 1 6
New dining hall and wood store	90		3 7 6
Garnock Mills	157		5 17 9
Stoneyholm Mill and flax stores	770		28 17 6
Do. net work	161		6 0 9
Gas-works	120		4 10 0
New flax stores and additions to net work	197		7 7 9
New net work	200		7 10 0
		£3137	£117 12 9

This sum became due and payable to the pursuers on 16th January 1917, and is the sum now sued for.”

In a statement of facts the pursuers averred—“(Stat. 4) By minute of agreement dated 11th and 19th July 1901, and entered into between the said Northern District Committee [of Ayrshire County Council] of the first part and the defenders and others of the second part, the parties thereto agreed, inter alia, as to the terms upon which the local authority should supply surplus water for other than domestic purposes to all consumers in the said district who might apply for the same. The said agreement as narrated therein followed upon disputes and legal proceedings between the said Northern District Committee and the defenders as to their claim for compensation water as riparian proprietors on the river Garnock and its tributaries, and embodied an arrangement between the said Northern District Committee and the defenders for the compromise of such disputes and proceedings. Briefly stated, the said Northern District Committee undertook to obtain parliamentary powers in connection with a scheme for new works for the supply of water to the Special Water Supply Districts of Kilbirnie and Glengarnock, and for compensation water to the defenders as riparian owners. The said agreement also regulated the terms and conditions for the supply of surplus water for other than domestic purposes as narrated in article sixth hereof as an alternative and optional mode of charging for the same in place of a special water assessment. The said agreement has been adopted by the pursuers and has all along been acted upon by them, and is binding upon them. (Stat. 6) By the fifth purpose of the said minute of agreement it is provided as follows:—‘ Fifth—Water for other than domestic purposes shall be supplied by the first parties to all consumers who apply for the same, in so far as the first parties have any surplus water beyond what is required for domestic purposes; where these supplies are by meter the rates to be charged shall be as follows:—( First) Under two hundred and fifty thousand gallons per annum, sixpence per thousand gallons; ( Second) Two hundred and fifty thousand gallons and under five hundred thousand, fivepence halfpenny per thousand gallons; ( Third) Five hundred thousand gallons and under one million, fivepence per thousand gallons; ( Fourth) One million gallons and under two millions, fourpence per thousand gallons; ( Fifth) Two million gallons per annum and upwards, threepence halfpenny per thousand gallons. The existing meter rates in the water districts shall continue to be charged until the new works referred to in article first hereof have been constructed, and if after their construction it shall be found that the cost price of water delivered in Kilbirnie and Glengarnock does not exceed threepence per thousand gallons, then in that case the minimum rate for water supplied by meter in quantities of two million gallons per annum and upwards shall be threepence per thousand gallons instead of threepence halfpenny as in above table.’”

The pursuers pleaded, inter alia—“1. The defenders being justly indebted and resting-owing to the pursuers as condescended on in the said sum in respect of water assessment, the pursuers are entitled to decree as concluded for, with expenses. 2. The pursuers being the local authority charged with the duty of levying and collecting rates and assessments for the county of Ayr, are entitled to decree as concluded for.”

The defenders pleaded, inter alia—“2. Upon a sound construction of the 126th section (and particularly of sub-section 2 thereof) of the Public Health (Scotland) Act 1897, and of the fifth clause of the said minute of agreement, the pursuers are not entitled in the circumstances condescended upon to impose upon the defenders as proprietors the assessment in question in addition to charging them for the supply of water to their premises at the meter rate under the said minute of agreement, and the defenders are accordingly entitled to decree of absolvitor.”

On 30th November 1917 the Lord Ordinary ( Hunter) assoilzied the defenders.

Opinion.—“In this action the County Council of the County of Ayr seek to recover from W. & J. Knox, Limited, thread manufacturers in the county, the sum of £117, 12s. 9d. as the owner's proportion of water assessments for premises owned and occupied by them.

By minute of agreement dated 11th and 19th July 1901 an agreement was entered into between the Northern District Committee of the County Council of Ayrshire and the defenders and others under which the local authority should supply surplus water for other than domestic purposes to

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all consumers in the district who might apply for the same. This agreement compromised certain questions in dispute between the parties. The defenders have always paid to the pursuers the amount payable in terms of said agreement for the water supplied to them. The rate by which said amount is determined is a meter rate which applies to all the water consumed by the defenders both for domestic and trade purposes. The pursuers have now for the first time demanded payment from the defenders of the portion of the water assessment applicable to their premises payable by the owners in addition to the amount determined by meter. Liability is disputed by the defenders.

The Public Health (Scotland) Act 1897, section 126 (2), enacts—‘… [ quotes, v. sup]…’ In interpreting a similar clause in a local Act in Burgh of Motherwell v. David Colville & Sons, Limited, 1907 S.C. 1203, 44 S.L.R. 851, the First Division of the Court held that it was not competent for a local authority to charge an occupying owner not merely with an agreed meter rate but also with the owner's portion of the assessment upon the buildings. Lord Dunedin said—‘I think the fair reading of the section is, as counsel put it, that it settles that when water is wanted for more than merely domestic purposes a supply may be arranged in respect of the premises for which the supply is wanted, and then the burgh is entitled to get a rate per gallon for the water so supplied. In that way every gallon is paid for, including in the quantity the gallons that would be used for domestic supply.’

In interpreting the proviso in section 126 of the Act it has to be kept in view that the assessment upon premises is one and indivisible although it is recoverable one-half from the owner and the other half from the occupier. The ‘portion of the water assessment applicable to the buildings’ refers to both parts of the assessment payable by owner and occupier. The alternative given at the close of the section is to charge water either at meter rate or to levy an assessment in respect of the buildings. If water is paid for at agreed-on meter rate the local authority cannot charge any part of the assessment against anyone, and that whether the owner is occupier or not.

A difficulty is said to have been created by the decision in Dickson v. District Committee of Upper Ward of Lanarkshire, 1916 S.C. 940, 53 S.L.R. 710. In that case a local authority were in the habit of assessing non-occupying owners for the owner's half of the water assessment leviable against premises that were supplied with surplus water at meter rate. No one challenged their right to do this, though on a fuller consideration of the provisions of the statute and of the decision in the Motherwell case I do not think they were entitled to do so. In order to put occupying owners in the same position as non-occupying owners they supplied them with surplus water only on their undertaking to pay annually in addition to certain special rates set forth in a schedule a sum equal to the amount of owner's assessments that would have been exigible from the said subjects had there been no agreement. As the case was argued to me the pursuer maintained that he had an agreement to get water at these schedule rates, and that he was therefore entitled to certain general declaratory conclusions. He founded on the Motherwell case, but I held that the cases were distinguishable in respect that he had no agreement with the local authority to get water at any meter rate, and I dismissed the action as irrelevant. As the case was presented to me it appeared that the pursuer's object was to gain a preference for his premises in the matter of water supply over premises where the owner was not also occupier. I do not think that the general question as to the right of the local authority to charge any owner, occupier, or non-occupier the portion of water assessment leviable against premises that are supplied with surplus water at meter rate was raised before me. In the Inner House some passages in the opinions of the Judges may appear inconsistent with the decision in the Motherwell case, but the soundness of that decision is not even doubted. It appears to me to govern the present case, and I shall therefore assoilzie the defenders.”

The pursuers reclaimed, and at the hearing counsel referred to the following authorities— Govan Commissioners v. Armour, (1887) 14 R. 461, 24 S.L.R. 324; Burgh of Motherwell v. David Colville & Sons, Limited, 1907 S.C. 1203, 44 S.L.R. 851; Dickson v. District Committee of Upper Ward of Lanarkshire, 1916 S.C. 940, 53 S.L.R. 710; Public Health (Scotland) Act 1897 (60 and 61 Vict. cap. 38), sections 126 and 135.

At advising—