County of Monmouth v County Borough of Newport

County of Monmouth v County Borough of Newport

LOCAL GOVERNMENT

KING’S BENCH DIVISION

ATKINSON J

19 DECEMBER 1945

Local Government – Alteration of area – Extension of county borough to include part of county area – Loss to county ratepayers – Financial adjustments –

Increased burden on county ratepayers – Arbitration – Amount of compensation – Methold of assessing compensation – “Income” – Local Government Act,

1933 (c 51), ss 151, 152, Sched V, r 1 – Newport Extension Act, 1934 (c lvii), s 58.

By the Newport Extension Act, 1934, a certain area, profitable from the rating authority’s point of view, was transferred from the applicant county to the

respondent county borough, giving rise to a claim for financial adjustment between the two authorities. In ascertaining the amount of compensation to which

the applicant county was entitled, the Local Government Act, 1933, s 152, Sched V, r 1, provides: “Regard shall be had to (a) the difference between the

burden on the ratepayers which will properly be incurred by the local authority in meeting the cost of executing any of their functions and the burden on the

ratepayers which would properly have been incurred by the local authority in meeting such cost had no alteration of boundaries or other change taken place …

Provided that no alteration in income in consequence of an apportionment under the regulation … shall be taken into account.” The total expenditure of the

applicant county before the alteration of boundaries was £745,942, the burden of expenditure being £712,882 on the area retained, and £33,060 on the area

transferred. The Exchequer Grant was £355,744, and the ratepayers in the area retained benefited to the extent of £339,977. The area which had been

transferred benefited to the extent of £15, 767. If £339,977 be deducted from £712,882, the pre-transfer burden falling on the applicant county would amount

to £372,905. By the readjustment, consequent on the transfer, the income of the applicant county from the Exchequer Grant was reduced to £344,487. The

expenses which had been incurred by the applicant county in respect of the transferred area amounted to £8,385, with the result that the new burden on the

retained area was, therefore, £745,942 minus £344,487, leaving £393,070, an increase of £20,165. It was contended for the applicant county that the proper

method for calculating the increased burden was to deduct from the expenditure for the whole county the expenses which had been incurred on the area now

transferred, less the old income which the ratepayers had received, namely, £339,977. It was further contended that interest was payable to the applicant

county on the sum claimed as compensation from the date when the area in the applicant county was transferred to the respondent county borough. It was

contended for the respondent county borough that the income from the Exchequer Grant, even for that reduced area in the applicant county, must be deemed to

be the full grant of £355,744 which could be deducted from the total expenditure incurred by the applicant county, leaving a figure of £381,813 which showed

an increased burden of only £8,908:—

Held – (i) On a proper construction of the Local Government Act, 1933, s 152, Sched V, r 1, the word “income” referred to in the proviso there must be

regarded as the income of the ratepayers in the applicant county whose burden had been increased by the transfer of the area to the respondent county borough.

(ii) there was no ground for awarding interest in respect of the period between the date when the area was transferred to the respondent county borough

and the date when the compensation might be awarded to the applicant county.

Notes

This case deals with the construction to be put upon the word “income” in Sched V, r 1, of the Local Government Act, 1933, in assessing the amount of

compensation payable on alteration of boundaries. An examination of the various results arrived at by adopting different interpretations of the word leads to

the conclusion that the word is to be construed as referring to the income of the ratepayers in the area whose burden is increased by the alteration.

As to Adjustment of Burdens, see Halsbury, Hailsham Edn, Vol 21, pp 248–252, paras 450, 451; and for Cases, see Digest, Vol 33, pp 25–27, Nos

113–131.]

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Cases referred to in judgment

Fludyer v Cocker (1805), 12 Ves 25, 40 Digest 199, 1660.

Swift & Co v Board of Trade [1925] AC 520, 25 Digest 138, 558, 94 LJKB 629, 133 LT 49.

Fletcher v Lancashire & Yorkshire Ry Co [1902] 1 Ch 901, 40 Digest 197, 1650, 71 LJCh 590.

Birch v Joy (1852), 3 HL Cas 565, 40 Digest 198, 1656.

Re Richard & Great Western Ry Co [1905] 1 KB 68, 11 Digest 156, 367, 74 LJKB 9, 91 LT, 724.

Special Case

Special Case stated by an arbitrator under the Local Government Act, 1932, s 151. The facts are fully set out in the judgment.

Sydney G Turner KC, Erskine Simes KC and H B Williams for the applicants.

A S Comyns Carr KC, Maurice P Fitzgerald KC and E J C Neep for the respondents.

19 December 1945. The following judgment was delivered.

ATKINSON J. This is a consultative special case stated by an arbitrator who was appointed under the Local Government Act, 1932, s 151. By an Act passed

in 1934, the county borough of Newport had its boundaries extended incorporating part of what until then belonged to the county of Monmouth. By the

Newport Extension Act, 1934, s 58, a financial adjustment between the two authorities had to follow, carried out in accordance with the Local Government

Act, 1933, ss 151, 152.

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To follow the nature of this adjustment it is necesssary to go back to the Local Government Act, 1929. The Act discontinued certain Exchequer Grants

which had been made to local authorities, derated agricultural land, and partially derated industrial hereditaments. To make good the losses involved, sect 86

provided that there should be paid out of moneys provided by Parliament in respect of the year beginning on the appointed day, which was 1 April 1930, and

each subsequent year, an annual contribution towards local government expenses in counties and county boroughs to be called the “General Exchequer

Contribution.” This was, of course, to make good the losses brought about by the derating. The amount was to be periodically revised. The amount first fixed

was to be for the period of 3 years beginning on the appointed day, and the next amount for a period of 4 years, so this came into the second period. Sect 88

provided for an annual apportionment of the money voted by Parliament amount counties and county boroughs. First there was apportioned an amount equal

to a certain percentage of the losses involved by the derating provisions, and the balance was apportioned dependent upon the weighted population of the areas

involved. The amount apportioned to a county was called “the county apportionment.”

Sect 89 deals with what is to be done with a county’s apportionment. It provides that:

‘Out of the county apportionment of every county other than the county of London there shall be set aside such amount as will be sufficient to pay to

the councils of districts situate wholly or partly within the county the sums hereinafter directed to be so set aside, the residue of the county

apportionment after such sums as aforesaid have been so set aside, shall be paid to the council of the county and shall be called the “General Exchequer

Grant” of that council …’

The General Exchequer Grant was to be paid to the council of the county to be used for general county purposes, meaning purposes for which the whole

county is chargeable.

The question raised in this case concerns only the General Exchequer Grant which was to be used for general county purposes. A county does not levy

rates itself, various urban districts and councils do the levying. In a rate note which is exhibited to and forms part of the case, we see exactly how it was done.

It is a little important that it should be dealt with in some detail. Each rate note had on it, among other things, a description of the services administered by the

county council under a heading “General County Purposes.” Then there followed a list of those purposes, eight of them, with the rate in respect of each

purpose to arrive at the sum of 8s 5 1/4d, in the £, which represented the particular part of the total burden of the county each ratepayer had to pay. Then it sets

out the amount receivable by the county council from this Exchequer Grant in respect of which the ratepayer is entitled to a 􀂭 277􀀉 credit, namely, 3s 7d in

the £. Finally it is stated that” the rate in the pound actually called for by the county council for general county purposes is the difference between the two

amounts marked with a cross, namely, 4s 10 1/4d”. So that the form of the rate note (and it is one which has been picked at random, I gather, but relating to

the period in question) told the ratepayer of the county what his total responsibility was, and the extent to which that responsibility was relieved by his own

particular share of the grant.

It is necessary to observe that while rateable value is wholly irrelevant to the apportionment among counties and county boroughs, once the county has

got the Exchequer Grant allotted to it, it then has to be dealt with in accordance with rateable value. The county apportionment had been fixed and

apportioned as at 1 April 1933, and the amount apportioned to the county of Monmouth, the sum available for general county purposes, was £355,744.

Sect 108 of the 1929 Act provided that the Minister of Health should make regulations dealing with the way in which grants were to be readjusted on

alteration of boundaries. When the county lost its area incorporated in Newport, there had to be, and there was, a readjustment, and that sum of £355,744 was

cut down to £344,487. The transferred area had been a very valuable one to the county. The rateable share of expenses was 4.432 per cent of the whole. It

was responsible for £33,060 out of the £745,942, and the expenses incurred on the area only amounted to £8,385. Its share of the Exchequer Grant amounted

to £15,767, and it paid in rates £17,293.

The Newport Extension Act, 1934, s 58(1) provides:

‘Where in consequence of this Act any adjustment of any property income debts liabilities or expenses or of any financial relations is required an

adjustment shall be made between the councils or other authorities affected under and in accordance with sects. 151 and 152 of the Act of 1933 …’

So that what had to follow was that which the arbitrator in this case was called upon to do, a readjustment with regard to certain debts, liabilities or expenses.

The Local Government Act, 1933, s 151, which, so far as I can see, has not very much to do with this case provides:

‘(1) Any public bodies affected by any alteration of areas or authorities made by an order under this Part of this Act may from time to time make

agreements for the purpose of adjusting any property, income, debts, liabilities and expenses (so far as affected by the alteration) of, and any financial

relations between, the parties to the agreement.’

Subsect (2) says the agreement may provide for a whole list of things. Subsect (3) says:

‘In default of an agreement as to any matter requiring adjustment, such adjustment shall be referred to the arbitration of a single arbitrator …’

Sect 152 is more relevant:

‘(1) On an adjustment under the last preceding section the following provisions shall have effect … [I can leave out (a).] Provision shall, unless

otherwise agreed, be made for the payment to a local authority of such sum as seems equitable, in accordance with the rules contained in the Fifth

Schedule to this Act, in respect of any increase of burden which, as a consequence of any alteration of boundaries or other change in relation to which

the adjustment takes place, will properly be thrown on the ratepayers of the area of that local authority in meeting the cost incurred by that local

authority in the discharge of any of their functions.’

The dominant idea of that subsection is that the arbitrator is to ascertain, if it is not otherwise agreed, the increase of burden on the ratepayers left in the

non-transferred area.

The Local Government Act, 1933, s 152, Sched V, r 1 says this:

‘Regard shall be had to (a) the difference between the burden on the ratepayers which will properly be incurred by the local authority in meeting the

cost of executing any of their functions and the burden on the ratepayers which would properly have been incurred by the local authority in meeting

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such cost had no alteration of boundaries or other change taken place …’

The whole trouble here is caused by the proviso:

‘Provided that no alteration of income in consequence of an apportionment under the regulations made under para. (b) of subsect. (1) of sect. 108 of

the Local Government Act, 1929, shall be taken into account.’

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That means here, provided that no alteration of income in consequence of the re-apportionment whereby the £355,744 was reduced to £344,487 shall be taken

into account. If you are told you have to leave out one of the main factors bearing upon the burden, the result is bound to be at least somewhat artificial but

one has to do the best one can with it.

The first dispute with regard to which a question is raised in this case is, what is the effect of that proviso? Up to a point there is not any dispute and the

matter is easy. Dealing first with the old burden, what would have been the burden, the figures are all agreed. The total expenditure of the county in the year

before the alteration of boundaries was £745,942. That burden fell as to £721,882 on the area to be retained, and as to £33,060 on the area to be transferred.

The grant in aid was £355,744, and the ratepayers in the area to be retained benefited to the extent of £339,977. That was their share of the Exchequer Grant.

The area to be transferred benefited to the extent of £15,767. If £339,977 be deducted from £712,882, the pre-transfer burden is arrived at, and the sum is

£372,905. There is no dispute as to that figure.

The readjustment reduced the grant income to £344,487, a loss of £11,257. The expenses which had been incurred by the county council in respect of the

transferred area amounted to £8,385. The new burden on the retained area was, therefore, £745,942 minus the £8,385 minus the £344,487, leaving £393,070,

an increase of £20,165. That was the actual increase of burden, but that does not solve the problem because this proviso says that no alteration of income in

consequence of the re-apportionment is to be taken into account, and, therefore, that calculation has to be put on one side. Its only value is that it tells one

exactly what the real loss was.

The provision prohibits the arbitrator taking that figure into account. He has to deal with it in another way, and the county’s contention is this. The new

burden is obviously £745,942 minus £8,385. That is a figure of £737,557, less, as they say, the old grant income which these particular ratepayers had

received, that is to say, the sum of £339,977. Their contention is: Give us credit in this calculation for just precisely the same income as we got before; allow

us that and you get a burden of £397,580, which is £24,675 over and above our old burden of £372,905.

The borough challenges this method only with regard to the last figure. It claims that the income from the grant, even for the reduced area, must be

deemed to be the full grant of £355,744. They agree, of course, there is no question about it, that the load of expenses is the £737,557, but, on the other hand,

the borough contends that they can deduct the full £355,744 from that and get a figure of £381,813 which shows an increased burden of only £8,908.

To that contention counsel for the applicants says the words “no alteration of income” in the proviso must mean no alteration of the income of the

ratepayers whose burden is being considered, and it cannot mean that they are to be deemed in the “will be” calculation to receive an income from grant, not

merely that never would or could be received in the future, but one which never had in fact been received by them in the past. If I may just read a passage

from his argument, because he put his point more clearly than I have, I have no doubt, he said:

‘Now, my Lord, this is not true, because if you look at sect. “A” para. 2, you see that the reduced county, after the Minister’s apportionment, is

going to get a smaller amount, and even without the Minister’s apportionment, in our submission, you would not be driven by the proviso to so absurd a

result as an assumption that the statute means that the reduced county is notionally to be regarded as in receipt of the same grant as the unreduced

county used to get. Putting the case in a nutshell, our submission is that the proviso does not force the arbitrator to any such conclusion.’

Then came rather an interesting remark from counsel for the respondents: “Nor, of course, is that the way in which we put it.” But, as I read the case,

and as I have read his argument, he does put it in that very way both in his argument in the case and in his argument before me. That is the first issue which is

raised in this case: What is the proper deduction in respect of the grant with which the arbitrator has got to credit this body of ratepayers? If one bears in mind

again the form of the rate demand note, you get this: let us conceive that the arbitrator has the exhibited rate note in front of him, 􀂭 279􀀉 and the one for the

year following after the change had been made. He has got in front of him for the first of those two years a general county purpose rate of 8s 5 1/4d wanted.

That will be bigger in the second because now a larger amount has to be raised from fewer people. He sees in the second rate note the new figure of £344,487,

properly apportioned, but he has to shut his eyes to that and say: “I am not allowed to look at that, that is not to come into the account. What am I to do? I

have to deal with it as if there were no change. Why should I make a change? There is the 3s 7d in the first rate note. Why is not that my guide as to how the

benefit of this grant income is to be calculated?” Yet, the other side say: “Oh no, you must ignore that. You must now divide the whole £355,000 odd among

this smaller number of people and see what that produces.” Counsel for the applicants says that that is doing the very thing the proviso says you must not do.

The proviso says there is to be no change of income. It does not say no change of grant, there is to be no change of income, and, therefore, he argues, and it

seems to me with very great force, that the arbitrator has got to take as the same grant that by which these particular ratepayers had benefited before.

Counsel for the respondents took a lot of trouble to show, as he suggested, that the county’s contention would lead to absurd results. He said you would

get the same increase of burden if there was no block grant at all, and also if there was a block grant of 100 per cent, and, of course, no readjustment. The first

thing to be said about that is that if the proviso does not apply, you are not driven to formulae, or anything of that sort; you get at the exact figure. At any rate,

he says here you start with £745,942 as the burden where there is no grant at all. The retained area pays £712,882, and the transferred area £33,060. The new

burden is clearly £737,557. Take the £712,882 from that, and the increase of burden is £24,675, which is the figure the applicants would arrive at, and always

will arrive at, if there is to be no change. That figure is absolutely accurate; that that would be the measure of the increased burden is beyond question.

Then counsel for the respondents took the other case where the grant is 100 per cent, and he said that to apply the same test there you would get again a

benefit of £24,675, when, of course, there has been no loss at all because the area is going to get a much bigger amount than it got before. It is going to get the

full £355,000 odd. To my mind that does not help because where there has been no new apportionment, the proviso does not come into it; you deal with exact

figures. But it did lead me to this very interesting calculation. Supposing there had been 100 per cent available grant, and supposing 40 per cent of it were

wiped out by the readjustment. What do we find? There the new burden is the £737,000 odd, the new grant would be £705,942, and there would in fact be an

increased burden of £31,612, but that has to be ignored: still that would be in fact the increased burden. If you apply the method put forward by counsel for

the applicants, of course you get the same result as before, £737,557, less the proportion of the whole 100 per cent grant, that is, £712,882, and you get an

increased burden of £24,675. But, applying the other test, £737,557 burden, less the full 100 per cent of £745,942, and you are better off by £8,385. Counsel

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for the respondents talked about methods leading to absurdities, but a method of calculation which proves that the area is £8,385 better off, when the fact is

that the area will be £31,000 worse off, does not appeal very much to me.

The main way in which counsel for the respondents put his case in argument, departing from the contentions in the case, was this—I suppose the idea

would be a very useful one if it were sound, and it would enable the arbitrator to by-pass the proviso altogether—ascertain what value the transferred area had

been to the retained area. The rate contribution of the transferred area was £17,293. The expenditure saved was £8,385. Deduct one from the other and you

get a loss of £8,908. If I may quote his exact words: “A simple way of looking at it is to say what have the ratepayers in the reduced area lost? They have

lost £17,293, but have saved £8,385, so that their net loss is £8,908. That is the actual truth of the matter.” But is that the actual truth? It seems to me on the

face of it that there are two fallacies involved. What have the ratepayers lost? They have lost £17,000, but they have saved £8,385. That implies that the

£8,385 had been the burden, or part of the burden, on the 􀂭 280􀀉 reduced area. Of course, it had been no such thing. It had been part of the burden on the

whole area, and only a portion of it would be included in the £712,882. Only a portion of it had fallen on the reduced area. Then the contention implies that it

has been paid for out of the £17,293, when, of course, it has not. We know that the grant in aid paid for 4.46 per cent of all the expenses, and that rates had

only to pay 54 per cent of them. So that very nearly half of all the expenses including this sum had been paid for by the grant in aid. That is one criticism.

But one may look at it perhaps in another way. The argument implies that the only value of the transferred area to the whole county had been the £17,000 odd

paid in rates. But in truth the transferred area had had another value as well. There can be no doubt that it had attracted grant to the county when the £355,744

was apportioned to the county. I do not know whether it is possible for an arbitrator to ascertain how much it attracted, but we do know that when it was taken

away, £11,000 odd was knocked off.

Let me assume for the sake of illustration that the area had been responsible for adding £11,000 to the county apportionment. If the county got additional

grant which more than covered the cost of the services rendered to the transferred area, it is plain that there was some grant income benefit accruing to the

county over and above the amounts paid in rates. The county administration before the transfer could have truly said: “This area is bringing us in £11,000 in

grant at a cost of £8,908. There is £2,000 old to the good there and we are getting over £17,000 in rates. This area is worth over £19,000 to the county.” That

line of argument has, to my mind, been altogether insufficiently explored. It is not dealt with in the case. I do not think that it is sound. I have come to the

conclusion that the contention of the county must be well founded. I think that in applying the proviso the income referred to must be the income which had

been received by the people whose burden the arbitrator has got to consider. If they are going to be deemed to have received an income from grant they never

have received, the proviso would not be applied properly because there would be a change to be brought into account when the proviso says there is to be no

change. I think that the arbitrator must deal with the matter on the footing that these ratepayers receive precisely the same grant that they received before.

There is one other point I want to say a word about on that which is not without its importance. It will be observed that the Local Government Act, 1933,

s 152, Sched V, r 2, says this:

‘The sum payable to a local authority in respect of the increase of burden shall not exceed, or, if payable by instalments or by way of annuity, the

capitalised value of the instalments or annuity shall not exceed, the average annual increase of burden multiplied (a) so far as that increase of burden is

attributable to the cost of maintenance of roads, by twenty-one; and (b) in other cases, by fifteen.’

The words are “shall not exceed” that 21 years’ purchase and 15 years’ purchase. If an arbitrator is satisfied that a formula which he has been driven to adopt

has perhaps given more than the burden has in fact been increased by, he can, I think, make allowance for that in the number of years’ purchase he applies.

All it says is “shall not exceed the average annual increase of burden” multiplied by 21 or 15. On the other hand, if he has adopted a meaning which has given

too little, he has no way of putting it right. The governing words in sect 152(i)(b) are “such sum as seems equitable,” and it obviously must be that he must get

as near as he can to the real fact. He has got to get at it in a certain way. I do not pretend to know why that proviso is there. At any rate, he has to follow it,

but if he feels it has led him to a too generous result, he has it in his power to say: “It would not be equitable to give you the maximum number of years’

purchase, I give you something less.” But, at any rate, that is a thing which the arbitrator may bear in mind.

Now comes the second question asked. It is a long time since 1934 when this change was made, and for one reason or another it has only come up for

settlement now some 10 or 11 years after the change was made. There is no suggestion that anybody is to blame on one side any more than the other, there is

no hint of that. There is no suggestion that anybody has been at fault about it.

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There are two arguments advanced by counsel for the applicants in support of his claim for interest. He says that the county ought to get interest, at any

rate that the arbitrator ought to be told that he has power to give such interest as he thinks right dating back right to the time of the transfer until the time when

he fixes the amount of compensation. Two arguments have been advanced. The first rests on equitable principles, and the second rests on the terms of the

section. It is not suggested that the terms of the Civil Procedure Act, 1833, or the Law Reform (Miscellaneous Provisions) Act, 1934, are of any help, but it is

said that in equity interest may be recovered in a number of cases where it was not recoverable at law; for instance, certain cases where a particular

relationship exists between creditor and debtor, or where money has been obtained or retained by fraud, or where the defendant ought to have done something

which would have entitled the plaintiff to interest at law. On a contract for the sale and purchase of land it is the practice to require the purchaser to pay

interest on the purchase money from the date when he took, or might safely have taken, possession of the land. This practice rests upon the view that the act

of taking possession is an implied agreement to pay interest: see Fludyer v Cocker, and Swift & Co v Board of Trade. The view has been extended to cases of

compulsory purchase under the Lands Clauses Consolidation Act, the notice to treat being treated as creating the relation of vendor and purchaser. That was

an interesting extension because in an ordinary case of vendor and purchaser the amount is ascertained; but it was extended to a case where the amount was

not ascertained at the date of notice to treat and might not be ascertained for a considerable time.

It is urged that the rule ought to be extended to this case, as Newport has had the benefit of the area since the appointed day, whereas the county has not

had the benefit of the compensation money. The words “compensation money” have been perhaps used a little loosely. The word “compensation” does not

occur in the Act, but we all know what it means. The county has lost a profitable rate-paying area and probably has had to borrow money for capital purposes,

which it would not have had to borrow if it had had the money payable under this award.

The best case for the county is Fletcher v Lancashire and Yorkshire Ry. There the defendant company was the owner of a canal, and the plaintiffs were

the owners of mines under the canal and the adjacent land. Under the provisions of a private Act, when the plaintiffs got within a certain distance of the canal

they had to give two months’ notice to the company of their intention to proceed with their mines. If the company were willing to purchase and make

compensation for the coal under and near the canal, it could give a counter notice, in which case the owner was bound to sell, and the amount to be paid was to

be settled by arbitration. It was held that the plaintiff was entitled to interest in the same way as if it had been an ordinary purchase and sale, from the date of

the counter notice. But it is to be observed that this decision went absolutely on the fact that it was a purchase. Buckley J said ([1902] 1 Ch 901, at p 908):

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‘But the question remains, what are the mine-owner’s rights as regards interest under the general law? The principle laid down in the House of

Lords in Birch v. Joy is perfectly plain. When such a state of things arises between a vendor and purchaser as that the latter has become entitled in

equity to the thing purchased and to the receipt of the rents (if there be such), or to the enjoyment (if there can be enjoyment) of the thing purchased,

there arises in equity a correlative right in the vendor to have interest on his purchase money if remaining unpaid.’

In contrast to that there is Re Richard & Great Western Ry Co, where the headnote says:

‘Where an owner, lessee, or occupier of mines or minerals lying under or near a railway gives notice to the railway company, under sect 78 of the

Railways Clauses Act, 1845, of his intention to work the same, and the company give notice of their willingness to make compensation, and the amount

of compensation is determined by arbitration under the Lands Clauses Act, 1845, the arbitrator has no power to award interest, in respect of the time

between the giving of notice by the company and the making of the award, upon the sum awarded as compensation.’

I do not want to read what was said, but the distinction was drawn between a sale and purchase, and a mere payment of compensation. It was held that 􀂭 282􀀉

interest did not run. Counsel for the applicants quoted this passage to me from the judgment of Collins MR ([1905] 1 KB 68, at p 72):

‘The matter is simply the assessment of compensation, and at no stage in the discussion until the amount due has been ascertained can any

implication as to interest arise. Neither, in such circumstances, is there any foundation for a claim for breach of contract in not paying over the money

in a reasonable time. Such a question could only arise after the amount had been ascertained in manner provided by the Act of Parliament.’

Then there is Swift & Co v The Board of Trade. Certain food had been seized under statutory powers. Compensation had to be assessed. There was a lot

of delay in assessing compensation, and the question arose whether interest could be given and it was held that interest could not be given; to hold otherwise

would be giving compensation for something which was done in accordance with the law. Therefore, I think that on the equitable principle argument the

claim for interest must fail.

The argument which rested on sects 151 and 152, was that a great many things can be agreed upon under sect 151, and that in default of agreement as to

any matter requiring adjustment the matter could be referred to the arbitrator; in other words, the arbitrator can award anything that the parties could have

agreed to pay. It is said that if Newport borough had agreed to pay interest as from the date of the taking over, it would be a pefectly sound agreement. I

cannot see myself that sect 151 helps. I do not see any very apt words there relating to the matters arising in this arbitration. I think sect 152 is the relevant

one. What does it say?

‘… the following provisions shall have effect … (b) provision shall, unless otherwise agreed, be made for the payment to a local authority of such

sum as seems equitable … in respect of any increase of burden …’

Interest has nothing to do with the increase of burden. I do not myself see how the words “such sum as seems equitable … in respect of any increase of

burden” can be held to include power to an arbitrator to give interest because interest has nothing to do with the increase of burden, it would be awarding

interest, not in respect of matters in dispute, but in respect of the delay in the ascertainment of the increase of burden. I quite agree it is very easy to say: “Oh,

this is a case in which interest ought to be paid” meaning by “ought” bearing in mind ordinary fair dealing between man and man. But, after all, by to-day the

occasions on which interest can be given are well established, even in equity. It is certainly not for a judge of first instance to create a totaly new ground for

giving interest. I do not think under the law as it is the arbitrator has any power to do that, and that question must be answered accordingly.

Holding that view the third question as to whether, if interest is given, it is controlled by the last clause of the Fifth Schedule, does not arise.

Turning to the questions, I answer the first question in para 5 by saying that the contentions of the county council are correct in law, and that the

arbitrator has no power to award interest in respect of the period between the appointed day and the date of the award.

Solicitors: Torr & Co agents for Vernon Lawrence, Newport, Mon (for the applicants); Rees & Freres agents for S M T Burpitt, Town Clerk, Newport, Mon

(for the respondents).

P J Johnson Esq Barrister.

􀂭 283􀀉

[1946] 1 All ER 284