Limitation Act 1980 — Claim by local authority for expenditure — A landowner failing to comply with compulsory repair notices — Whether proceedings issued to recover expenditure statute-barred — Appeal by council dismissed
(as executor of the will of the late Mr H Glass) had control of 96 King Edward
Road, Swansea, a dwelling-house let to a tenant — Following the tenant’s
complaint about the condition of the property, the council issued two repair
notices under section 9(1)(b) of the Housing Act 1957 requiring the defendant
to put the dwelling-house in proper repair — The respondent did not appeal and
failed to comply with the notices — The council did the necessary work and
completed the works required by the first notice on September 7 1983 — The
council served a demand for the expenses in respect of the works required by
the notices, respectively on May 31 1984 and April 25 1985 — The defendant did
not pay and the council issued a summons seeking payment on May 30 1990 — The
summons was issued more than six years after completion of the works but less
than six years from the service of the demands — On a preliminary point, Judge
Michael Evans QC decided that the council’s cause of action accrued when the
works were completed — The council appealed
the Housing Act 1957 that a demand for expenses must be served by the local
authority before proceedings can be taken to recover them — A cause of action
may well accrue before, for procedural reasons, the plaintiff can bring
proceedings — A ’cause of action’ is every fact which it would be necessary for
a plaintiff to prove, if traversed, in order to support his right to the
judgment of the court: see Coburn v Colledge — The council had to
prove (1) that the repair notice was served on the person having control of the
house to execute works; (2) that he failed within the time specified to execute
them; (3) that the local authority have themselves carried out the works
specified in the notice; and (4) that they have incurred expenses in so doing —
Accordingly, time runs from the accrual of the cause of action, ie when these
four elements are complete — The requirement to serve a demand is a procedural
condition precedent to bringing proceedings; it is not part of the cause of
action
The following
cases are referred to in this report.
Central
Electricity Generating Board v Halifax [1963]
AC 785
Coburn v Colledge (1897) 1 QB 702
Read v Brown (1888) 22 QBD 128
Sevcon
Ltd v Lucas CAV Ltd [1986] 1 WLR 462; [1986]
2 All ER 104, HL
This was an
appeal by Swansea City Council against a decision of Judge Michael Evans QC
given in Swansea County Court on February 6 1991 on a preliminary point of law
in a claim against the defendant, Mr Martin Glass, to recover expenditure
incurred by the council in carrying out works the subject of repair notices
under section 9 of the Housing Act 1987.
Kenneth Thomas
(instructed by the solicitor to Swansea City Council) appeared for the
appellants; Robert Kirk (instructed by Peter Williams & Co, of Swansea)
represented the respondent.
Giving
judgment, TAYLOR LJ said: This is an appeal by Swansea City Council
against a decision of Judge Michael Evans QC, given in Swansea County Court on
February 6 1991. The learned judge had to consider a preliminary point
concerning the application of the Limitation Act 1980 to the appellants’ claim.
He decided in favour of the respondent defendant, Mr Martin Glass, but granted
leave to appeal.
The facts were
not in dispute. The respondent (as executor of Mr H Glass) was the person in
control of 96 King Edward Road, Swansea, for the purposes of the Housing Act
1957. The house was let to a tenant. In 1983 the tenant complained to the
appellant council about the condition of the property. As a result, the
appellants issued two notices under section 9(1)(b) of the 1957 Act
requiring the respondent to put the house into proper repair. The first notice
was served on June 1 1983 and the second on October 28 of the same year. The
respondent did not appeal and failed to comply with the notices. Accordingly,
the appellant council did the necessary work themselves. They completed the
works required by the first notice on September 7 1983. There is some
uncertainty as to when they completed the works required by the second notice
but the precise date is immaterial to the present appeal.
The appellants
served upon the respondent written demands for the expenses they had incurred
in respect of the works required under the notices, respectively on May 31 1984
and April 25 1985. The respondent did not pay. There was then a long delay for
which no explanation has been given. Finally, on May 30 1990 the appellant
council issued a summons in the county court seeking payment of both amounts.
The summons was thus issued more than six years after completion of the works
but less than six years from the service of the demands.
The local
authority were empowered to do the work themselves by section 10(1) of the Act,
which provided that if the person in control of the house did not comply with a
notice to execute work then, after specified periods of time, ‘the local
authority may themselves do the work required to be done by the notice . . .’.
The entitlement to recover their expenses for doing the work derived, at the
relevant time, from section 10(3) of the Act, which provided, so far as is
relevant, as follows:
Any expenses
incurred by the local authority under this section, together with interest from
the date when a demand for the expenses is served until payment, may . . . be
recovered by them, by action or summarily as a civil debt, from the person
having control of the house . . .
The relevant
limitation period was prescribed in section 9 of the Limitation Act 1980 as
follows:
(1) An action to recover any sum recoverable by
virtue of any enactment shall not be brought after the expiration of six years
from the date on which the cause of action accrued.
The
preliminary point to be decided by the learned judge was: ‘when did the local
authority’s cause of action accrue?’ The
respondent contended it accrued when the works were completed, in which event
the action is statute-barred. The appellants contend the
operative.
It is
convenient first to consider an argument on behalf of the appellants that the
relevant statutory provisions are those contained in the Housing Act 1985. Mr
Thomas took this point before the learned judge, who rejected it. He has
repeated the argument before us. The 1957 Act was clearly in force at the time
of the notices, the works and the demands. It was repealed by the Housing
(Consequential Provisions) Act 1985, which came into force on April 1 1986, as
did the Housing Act 1985, which is a consolidating Act. Section 2 of the
Housing (Consequential Provisions) Act 1985 provides, so far as is relevant, as
follows:
(1) The re-enactment of provisions in the
consolidating Acts, and the consequent repeal of those provisions by this Act,
does not affect the continuity of the law.
(2) Anything done . . . or having effect as done,
under a provision reproduced in the consolidating Acts has effect as if done
under the corresponding provision of the consolidating Acts.
Section 5(1)
of the same Act provides that Schedule 3 has effect with respect to
transitional matters. The relevant provisions of Schedule 3 are as follows:
1. — (1) The general rule is that the provisions of
the consolidating Acts apply, in accordance with section 2 of this Act
(continuity of the law), to matters arising before the commencement of those
Acts as to matters arising after that commencement.
. . .
(4) The general rule does not apply so far as a
provision of the consolidating Acts gives effect to an amendment (in pursuance
of a Recommendation of the Law Commission and, in some cases, the Scottish Law
Commission).
The provisions
which replace those contained in section 10(3) of the 1957 Act are to be found
in section 193 of, and Schedule 10 to, the Housing Act 1985. In particular, if one
compares the provisions relating to recovery of expenses in section 10(3) of
the 1957 Act with those in Schedule 10 to the 1985 Act it is clear that the
whole scheme has been rewritten and amended in accordance with recommendations
in the Law Commission Report No 144 Cmnd 9515 dated May 1985. In those
circumstances, the learned judge held that the provisions in the 1985
legislation did not apply in the present case, which continued to be governed
by the 1957 Act. In my judgment, he was right. I should add that the outcome
would have been no different even if the 1985 Act had applied, since Mr Thomas
concedes that the time when the course of action arises must be the same under
both Acts.
Approaching
the crucial issue in this case by reference to the 1957 Act, Mr Thomas put
forward two propositions: (1) although the Act does not expressly say so, it is
implicit in sections 10 and 11 that a demand for expenses must be served by the
local authority before proceedings can be taken to recover them; (2) service of
the demand is not merely a procedural requirement but an essential ingredient
in the cause of action.
In my
judgment, his proposition (1) is correct. It is supported by reference to
section 10(4), section 11(1) and section 37(1) of the Act, which provide as
follows:
10. — . . . (4) In all summary
proceedings by the local authority for the recovery of any such expenses, the
time within which the proceedings may be taken shall be reckoned from the date
of the service of the demand or, if an appeal is made against that demand, from
the date on which the demand becomes operative.
. . .
11. — (1) Any person aggrieved
by —
(a) a notice under the foregoing provisions of
this Part of this Act requiring the execution of works,
(b) a demand for the recovery of expenses
incurred by a local authority in executing works specified in any such notice,
(c) an order made by a local authority with
respect to any such expenses, may, within twenty-one days of the service of the
notice, demand or order, appeal to the county court within the jurisdiction of
which the premises to which the notice, demand or order relates are situate,
and no proceedings shall be taken by the local authority to enforce any notice,
demand or order in relation to which an appeal is brought before the appeal has
been finally determined.
. . .
37. — (1) Any notice, demand or
order against which an appeal might be brought to a county court under this
Part of this Act shall, if no such appeal is brought, become operative on the
expiration of twenty-one days from the date of the service of the notice,
demand or order, and shall be final and conclusive as to any matters which
could have been raised on such an appeal, and any such notice, demand or order
against which an appeal is brought shall, if and so far as it is confirmed by a
county court judge, or the Court of Appeal, become operative as from the date
of the final determination of the appeal.
Clearly
section 10(4) assumes a demand will be served before summary proceedings are
taken. There seems no good reason why the same should not apply before county
court proceedings are brought. Moreover, under sections 11 and 37, a person
aggrieved by a demand has a right of appeal against it and proceedings cannot
be brought until any appeal has been finally determined. It would be surprising
if the right of appeal depended on whether the local authority chose to serve a
demand before taking proceedings. It is of interest that the Law Commission, at
p 33 of their report (supra), were of the view that service of a demand was
implicit in section 10 of the 1957 Act. On their recommendation, the obligation
to serve a demand is imposed expressly in the 1985 Act.
However, given
that a demand must be served before proceedings could be taken, it does not
follow that Mr Thomas’ second proposition is correct.
The classic
definition of a cause of action is that originally propounded by Lord Esher in Read
v Brown (1888) 22 QBD 128 and repeated by him in Coburn v Colledge
(1897) 1 QB 702. He said at p 706:
The
definition of ’cause of action’ which I gave in Read v Brown has
been cited. I there said that it is ‘every fact which it would be necessary for
the plaintiff to prove, if traversed, in order to support his right to the
judgment of the Court.’ The language I
used obviously means this: the plaintiff in order to make out a cause of action
must assert certain facts which, if traversed, he would be put to prove.
Coburn was a
solicitor who did some work for the defendant Colledge in 1889. He sent a bill
of costs in 1889 which did not reach the defendant in Australia until 1891.
Action was commenced in 1896. Section 37 of the Solicitors Act 1843 provided
that no solicitor could commence an action for fees until one month after he
delivered to his client a bill of fees. The question was whether delivery of
the bill amounted to an ingredient of the cause of action or whether the cause
of action arose when the work was done and delivery of a bill was only a
procedural requirement. Lord Esher said at p 705:
Before any
enactment existed with regard to actions by solicitors for their costs, a
solicitor stood in the same position as any other person who has done work for
another at his request, and could sue as soon as the work which he was retained
to do was finished, without having delivered any signed bill of costs or
waiting for any time after the delivery of such a bill. Then to what extent
does the statute alter the right of the solicitor in such a case, and does the
alteration made by it affect or alter the cause of action? It takes away, no doubt, the right of the
solicitor to bring an action directly the work is done, but it does not take
away his right to payment, for it, which is the cause of action. The Statute of
Limitations itself does not affect the right to payment, but only affects the
procedure for enforcing it in the event of dispute or refusal to pay.
Similarly, I think, s 37 of the Solicitors Act, 1843, deals, not with the right
of the solicitor, but with the procedure to enforce that right. It does not
provide that no solicitor shall have any cause of action in respect of his
costs or any right to be paid till the expiration of a month from his
delivering a signed bill of costs, but merely that he shall not commence or
maintain any action for the recovery of fees, charges, or disbursements until
then. It assumes that he has a right to be paid the fees, charges, and
disbursements, but provides that he shall not bring an action to enforce that
right until certain preliminary requirements have been satisfied. If the solicitor
has any other mode of enforcing his right than by action, the section does not
seem to interfere with it. For instance, if he has money of the client in his
hands not entrusted to him for any specific purpose, there is nothing in the
section to prevent his retaining the amount due to him out of that money.
Coburn v Colledge was a case arising from a contract for services
and it is well established at common law that the cause of action in such cases
accrues when the work is complete. In the present case the cause of action
arises under statute and Mr Thomas argues that different considerations apply.
However, in Central
Electricity Generating Board v Halifax Corporation [1963] AC 785,
where a similar issue arose, the cause of action derived from statute. The
Electricity Act 1947 transferred the assets of electricity undertakings to
electricity boards and provided that the property held by local authorities in
their capacity as authorised undertakers should, on vesting day (April 1 1948),
vest in the relevant board. The question whether certain moneys had been held
by the respondent in the relevant capacity was referred under section 15 of the
Act to the minister, who decided on September 18 1958 that it was. The
appellants sought to recover the money. A limitation point was taken. The House
of Lords held that the cause of action accrued at vesting date, even though the
appellants could not
until the minister so decided. At p 801 Lord Reid said:
No new right
or liability came into existence at [the date of the minister’s decision]. It
is quite clear, and it is now admitted by the appellants, that the effect of
the Minister’s decision was merely to prove that this sum had belonged to the
appellants ever since the vesting date. It created no new right of property or
chose in action: it merely enabled a pre-existing right to be enforced.
Again, in Sevcon
Ltd v Lucas CAV Ltd [1986] 1 WLR 462, the House of Lords had to
consider section 13(4) of the Patents Act 1949, which provided:
After the
date of the publication of a complete specification and until the sealing of a
patent in respect thereof, the applicant shall have the like privileges and
rights as if a patent for the invention had been sealed on the date of the
publication of the complete specification: Provided that an applicant shall not
be entitled to institute any proceedings for infringement until the patent has
been sealed.
It was held
that an applicant for a patent has all the rights which a holder has from the
moment the complete specification of the patent is published. Accordingly, his
cause of action for an infringement before the date of sealing accrues at the date
of the infringement but cannot be enforced until the procedural requirement of
sealing is met. Lord Mackay said at p 467E:
If he were to
institute proceedings for infringement before the patent for the invention was
sealed, the procedural requirement of the proviso would not be satisfied but a
statement of claim could not be struck out as disclosing no cause of action
although it might be liable to be struck out as an abuse of the process of the
court.
Although not
on all fours with the present case, these decisions show that a cause of action
may well accrue before, for procedural reasons, the plaintiff can bring
proceedings. Where the cause of action arises from statute, the question as to
what is merely procedural and what is an inherent element in the cause of
action is one of construction.
In the present
case, the learned judge carefully analysed the provisions of section 10(3) and
(4) and, in my judgment, reached the correct conclusion as to when the cause of
action arose. Section 10(3) gives the right to recover ‘any expenses incurred
by the local authority under this section’. The local authority must therefore
prove: (1) that notice in accordance with section 10(1) was served on the
person having control of the house to execute works; (2) that he failed within
the time specified to execute them; (3) that the local authority have
themselves carried out the works specified in the notice; and (4) that they
have incurred expenses in so doing. A statement of claim alleging those matters
could not, in my view, be struck out as disclosing no cause of action.
The phrase
‘together with interest from the date when a demand for the expenses is served
until payment’ in section 10(3) shows that interest runs only from the date of
the demand and (by implication) not from the date when the cause of action
arose.
Section 10(4)
provides expressly that where the local authority opt to take summary
proceedings to recover their expenses, the limitation period runs from the date
of service of the demand or, if there is an appeal, the date when the demand
becomes operative. Again, by implication, since no such provision is applied to
proceedings in the High Court or county court, time in those proceedings does
not run from the date when the demand is served or becomes operative. It will
run from the accrual of the cause of action which, ex hypothesi, is a
different time.
The rationale
of the distinction between summary and other proceedings probably lies in the
respective limitation periods. In summary proceedings the period is six months.
If time were to run from the accrual of the cause of action, ie when the
expenses were incurred, summary proceedings might often be statute-barred
before they could be brought, especially where there was an appeal against the
demand. In other proceedings, however, the limitation period of six years
gives, or should give, the local authority ample time to sue even after an
appeal against their demands. In my judgment, the expression, special to
section 10(4), that time runs from service of the demand or when it becomes
operative is intended to distinguish summary proceedings from other
proceedings. Inclusio unius, exclusio alterius. In other proceedings,
time runs from the accrual of the cause of action, ie when the four elements
identified above are complete. Thus, I conclude that the requirement to serve a
demand is a procedural condition precedent to bringing proceedings. It is not
part of the cause of action.
I am fortified
in this view by consideration of what could result if the appellants were
right. Upon their argument, the local authority could delay service of a demand
indefinitely. Then, having served their demand long after the works were
complete, they would have a further six years in which to take proceedings in
the High Court or the county court. In Coburn v Colledge (supra)
Lopes LJ said at p 709:
There is
nothing in the section, so far as I can see, inconsistent with the view that
the cause of action arises when the work is completed. It was urged that, if
this construction were adopted, a solicitor would have a shorter time during
which he may abstain from bringing his action for work done than the rest of
Her Majesty’s subjects. That may be so; but on the other hand, if the
plaintiff’s contention is correct, the solicitor may abstain from delivering
his bill for twenty years, and then at the end of that time he may deliver it
and sue after the expiration of a month from its delivery. It seems to me that
that would be a very anomalous and inconvenient result.
For the
reasons given above, I am of the opinion the learned judge’s answer to the
question posed was correct and I would dismiss this appeal.
RALPH
GIBSON and PURCHAS LJJ agreed and did not
add anything.
Appeal
dismissed with costs.
For
further cases on this subject see p 185
