PART III.-VOL. IV.

JULY-SEPTEMBER, 1899.

63 J. P. 404.

HOUSE OF LORDS.

February 17, 21; May 16.

MAYOR, ETC., OF TYNEMOUTH v. ATTORNEYGENERAL (ON THE RELATION OF NEWCASTLE BREWERIES, LIMITED) AND THE NEWCASTLE BREWERIES, LIMITED.

Municipal Corporations Act, 1882 (45 & 46 Vict. c. 50), ss. 140, 143, sched V.-Licensing appeals-Payment of costs of chief constable in opposing-Borough Funds Act, 1872 (35 & 36 Vict. c. 91), s. 2.

A town council have no power under the Municipal Corporations Act, 1882, or the Borough Funds Act, 1872, to pay out of the borough fund the expenses incurred by the chief constable in appearing by counsel at quarter sessions to oppose licensing appeals. The effect of section 140 of the Municipal Corporations Act, 1882, and schedule V. thereto, does not extend to expenses incurred by the chief or head constable of a borough in discharging duties outside the functions of the town council or the functions of the chief constable as their officer. The administration of the licensing laws is outside the functions of a town council. An improper payment by the order of the town council may be called in question by injunction at the suit of the Attorney-General on the relation of a person interested as well as by certiorari under section 141 of the Municipal Corporations Act, 1882. The only proper respondents to a licensing appeal are the licensing justices. If any other person appears to oppose such an appeal he can only be heard by the permission of the bench, and can neither receive nor be ordered to pay costs.

This was an appeal by the mayor, aldermen, and burgesses of Tynemouth from a decision of the Court of Appeal, reported at 62 J. P. 292, under the title of AttorneyGeneral and the Newcastle Breweries, Limited, v. Mayor, &c., of Tynemouth.

The action was brought by the AttorneyGeneral on the relation of the Newcastle Breweries, Limited, and the said Newcastle

Vol. iv., Part 3.

63 J. P. 404. Breweries, Limited, against the defendants the mayor, aldermen, and burgesses of Tynemouth, in which the plaintiffs claimed (a) a declaration that any agreement by the defendant corporation to indemnify the chief constable against costs he may have or may have had to bear or pay in connection with licensing appeals from the borough justices to quarter sessions, and any payment pursuant thereto or any payment of such costs by the defendant corporation, is ultra vires and void; and (b) an injunction restraining the defendants from making or acting on any such agreement or for making any such payment.

The questions involved in the litigation were stated in the form of a special case pursuant to an order of Master Archibald, The dated the 21st of December, 1896. special case is as follows:

1. This action was commenced by a writ of summons issued on the 18th of November, 1895, whereby the plaintiffs claimed (1) a declaration that any agreement by the defendant corporation to indemnify the chief constable against costs he may have or may have had to bear or pay in connection with licensing appeals from the borough justices to quarter sessions, and any payment pursuant thereto, or any payment of such costs by the defendant corporation, is ultra vires and void, and (2) an injunction restraining the defendants from making or acting on any such agreement, or from making any such payments.

2. Pursuant to the aforesaid order the parties have concurred in stating the questions of law arising herein in the following case for the opinion of the court.

Limited, are ratepayers in the borough 3. The plaintiffs, the Newcastle Breweries, of Tynemouth, and as such were and are interested in preventing any misapplication of the borough funds.

4. The defendants are the corporation of the borough of Tynemouth.

5. At a meeting of the watch committee of the council of the corporation of the borough of Tynemouth, held on the 13th of August, 1895, a resolution was passed authorising the chief constable of the said borough to obtain legal assistance at the ensuing brewster sessions for the said borough. A similar resolution was passed at the meeting of the council held on the 21st of August, 1895. 6. At the brewster sessions held at North Shields on the 23rd of August, 1895, the chief

MAYOR, &C., OF TYNEMOUTH v. ATT.-GEN. constable of the borough of Tynemouth raised objection to the renewal of certain alehouse or full licenses under the Licensing Act for the sale of intoxicating liquors held by persons in respect of premises situate in the borough of Tynemouth.

7. After hearing the said objections the justices at such sessions refused to renew the said licenses.

8. The holders of five of the said licenses gave notice of appeal from such refusal to the quarter sessions.

9. On the 27th of September, 1895, at a meeting of the said watch committee it was resolved:-That the opinion of counsel be obtained whether the "watch committee or the council have power to authorise the chief constable to act as respondent in the several licensing appeals, and also if the chief constable should be ordered by the court of quarter sessions to pay his own costs, or the appellants' costs, in any of the cases, and whether the council have power to pay out of the borough fund or borough rates the costs which he may be ordered to bear or pay."

10. On the 10th of October, 1895, at a meeting of the said watch committee, the town clerk read the case submitted to counsel, with his opinion thereon. It was moved by Alderman Elliot and seconded by Councillor Swann :-"That the council be asked to authorise the chief constable to act as respondent in the licensing appeal cases from the decision of the borough justices, and to indemnify him against any costs which he may have to bear or pay." Alderman Elliot and Councillor Swann voted in favour of the motion. Councillors Bolton, Spencer, Daglish, and Eskdale voted against the motion. Alderman Whitehorn did not vote. The motion was declared lost. The chief constable asked for permission to take his witnesses to the quarter sessions on the appeals. It was moved by Alderman Elliot and seconded by Councillor Swann, that the necessary permission be given to the chief constable. Alderman Elliot and Councillor Swann voted in favour of the motion. Councillors Spencer, Daglish and Eskdale voted against the motion. Alderman Whitehorn and Councillor Bolton did not vote. The motion was declared lost.

11. On the 15th of October, 1895, at a meeting of the council of the corporation

63 J. P. 404.

of the borough of Tynemouth it was resolved: "That the chief constable, who is the respondent in the licensing appeals from the decisions of the borough justices, be authorised to oppose such appeals, and that the council agree to indemnify him against any costs which he may have to bear or pay in connection with the appeals as such respondent."

12. On the hearing of the said appeals the said chief constable appeared by counsel and opposed the said appeals, and the said appeals were dismissed with costs.

13. The costs incurred by the chief constable in and about opposing the said appeals exceeded the amount of the costs which on taxation he recovered from the appellants by the sum of 1327. 58.

14. On November, 1895, at a meeting of the said watch committee in the matter of the said licensing appeals, and in the matter of the respondents' costs, it was resolved :"That the committee direct payment of Messrs. Adamson and Adamson's account amounting to 1321. 5s., being the difference between the fees paid to counsel and the amount allowed on taxation.

15. The state of the borough funds of the said borough at the date of the resolution mentioned in paragraph 11 is shown by the two books containing abstracts of the accounts for the years 1894-95 and 1895-96 respectively, marked respectively "A" and "B," and by the reports of the borough accountant for the said years copies whereof

are

marked respectively "C" and "D," and also by two balance-sheets dated respectively the 15th of October, 1895, and the 19th of November, 1895, and marked respectively "E" and "F." The said books, reports, and balance-sheets form part of the special case, and it is agreed that the same may be used and referred to by either party on the argument of the case.

16. The pleadings in the action are to be deemed to form part of this case, and may be referred to by either party. The question for the opinion of the court is whether the said resolution of the council or agreement by the defendant corporation to indemnify the chief constable against the said costs was ultra vires, and if any payment pursuant thereto, or any payment of the said costs by the defendant corporation pursuant to the direction of the watch committee would be

MAYOR, &C., OF TYNEMOUTH v. ATT.-GEN. ultra vires and void. It is agreed that the court may enter such judgment and make such order as to injunction, costs, or otherwise as shall be proper in accordance with its decision on the above question.

The case was argued before a Divisional Court consisting of Grantham and Wright, J.J., on the 20th of May, 1897, who directed judgment to be entered for the respondents, namely, the Attorney-General and the Newcastle Breweries Company, Limited.

This decision was affirmed on appeal by the Court of Appeal (A. L. Smith, Chitty, and Collins, L.JJ.), and, as already stated, is reported at 62 J. P. 292.

The Mayor, &c., of Tynemouth appealed. Asquith, Q.C., Macmorran, Q.C., and W. L. Williams appeared for the appellants. Lawson Walton, Q.C., Willes Chitty and D. H. Crompton appeared for the respondents.

The House took time to consider.

May 16.] Lord MACNAGHTEN.-My lords, on this appeal your lordships are called upon to determine whether a municipal corporation is justified in applying the borough fund, when the fund depends for its sufficiency on a borough rate, in payment of costs incurred by the chief constable under the order of the council in opposing a renewal of a publican's license at quarter sessions. The question was argued very fully and very ably on both sides. In his opening address the learned counsel for the appellants suggested considerations of a general character which at one time led me to think that the appeal might perhaps be supported without straining unduly the language of the Acts relating to municipal corporations. That municipal corporations have been constituted to the intent that cities, towns, and boroughs might be "well and quietly governed" is no more than what is declared in the preamble of the Municipal Corporations Act, 1882. The proper regulation of licensed houses within a borough is essential to its good government and to the peace and quiet of the inhabitants, and that an increase in the number of public-houses out of proportion to the wants of the neighbourhood may come to be a nuisance and a public mischief are propositions which most men of moderate views would, I suppose, admit. Then it was observed that the appointment of borough constables and the care and superintendence of the constabulary

63 J. P. 404. force have been entrusted to the watch committee of the borough council, and it was shown that in various ways in connection with the administration of the licensing laws the services of the police are made use of either under the express directions of some statute or as a matter of convenience, if not necessity. All this is perfectly true, and if nothing appeared to the contrary it might well be inferred, as your lordships were asked to infer, that the action of the borough council, which has been challenged in this suit, was fairly within the scope of municipal government. But a careful consideration of the licensing laws with the light thrown upon the subject by the recent case of Boulter v. Kent JJ., [1897] A. C. 556; 61 J. P. 532, leads to the conclusion that the administration of those laws has been committed not to the municipal councils as such, but to another body-the justices of the peace. There is no warrant that I can find for borough councils taking upon themselves the functions of the justices. The ground having been so far cleared, it would seem to follow that the expenditure objected to by the respondents does not come within the description of

expenses necessarily incurred" in carrying into effect the Act of 1882, and, further, that the argument in favour of the appellants' contention cannot be made to depend in any measure on considerations lying outside the Acts which deal expressly with the application of the fund known as the Borough Fund. I turn therefore to the provisions of the Municipal Corporations Act, 1882, and the Borough Funds Act, 1872, on both of which the learned counsel for the appellants relied. It is not necessary to trouble your lordships with a detailed examination of those Acts. They are very fully discussed in the judgment of A. L. Smith and Chitty, L.JJ., [see 62 J. P. 293], and I cannot see any reason to differ from the conclusions at which those learned judges arrived. In the first place your lordships' attention was called to the provisions found in schedule V. of this Act of 1882, relating to the payments to be made in respect of the borough police. By the conjoint operation of section 140 and schedule V. the borough fund is made applicable to certain specified payments falling under that head, and then comes in the schedule a comprehensive clause which expressly includes "all other charges and expenses which the watch committee, subject

MAYOR, &C., OF TYNEMOUTH v. ATT.-GEN. to the approbation of the council, direct to be paid for the purposes of the borough constabulary force." That clause would cover all expenses in connection with the raising, equipping and maintaining the constabulary force, but it seems impossible to extend it to expenses incurred by the chief constable in discharging duties outside the functions of the borough council and the functions of the chief constable as their officer. The next argument was certainly a very bold one. The payment in question has the sanction of an order of a borough council. That sanction it was said was enough for the present purpose. All payments by the order of the council must be held good unless and until they are disallowed by the order of the Queen's Bench Division of the High Court under the provisions of section 141. This argument, which seems to be contrary to the spirit and intention of the Act and would tend to place the borough fund very much at the mercy of an unscrupulous majority in the borough council, is founded on the letter of sub-section (3) (b), in section 140. Schedule V., to which I have already referred, divides payments out of the borough fund into two classes-those which may and those which may not be made without an order of the council. Section 140 begins by saying that the borough fund shall be applicable to and charged with the several payments specified in schedule V. It declares(sub-section(2)) that the payments specified in part 1 of the schedule may be made without order of the council, and that those specified in part 2 may not be made without such order; and then it enacts (sub-section (3)) that no other payment shall be made out of the borough fund except in five specified cases, one of the excepted cases is this: "(6) By order of the council." It is not very easy to understand why section 140 is framed in the way in which it is expressed. To a great extent the excepted cases seem to be a repetition of cases to be found in schedule V. But it must be borne in mind (as A. L. Smith, L.J., points out) that sub-section (3) is a restraining and not an enabling section. It does not say that the borough fund may be drawn upon by the order of the council for any purpose they think fit, but that no payments shall be made thereout other than those specified in schedule V., except by the order of the council, and in the four other excepted cases. Now, certainly there are cases not

63 J. P. 404.

specified in schedule V., and not falling within the order of excepted cases in subsection (3), in which payments may be made out of the borough fund, as, for example, there are payments which may be made under section 143 when the borough fund has a surplus. But still those payments must be made by order of the council, and the order must be authenticated by the signature of three members of the council countersigned by the clerk. That, I think, is what sub-section (3) (b) of section 140 was intended to point to and emphasise. The obscurity, such as it is, has arisen, I think, from the superabundant caution of the draftsman, and not from any intention to relax the fetters imposed on borough councils as trustees of the borough fund. It would be absurd to suppose that in an Act which carefully defines and specifies the payments to be made out of the borough fund, and which had certainly for one of its objects economy in the administration of that fund, there should have been designedly inserted a provision which would obviously leave a loophole for unlimited extravagance. Lastly, the learned counsel for the appellants relied on the Borough Funds Act, 1872. That Act authorises in certain cases the application of the funds of municipal corporations and other governing bodies to purposes to which they would not otherwise be applicable, one of those cases is when in the judgment of the governing body in any district it is expedient for such governing body to prosecute or defend any legal proceedings necessary for the promotion or protection of the interests of the inhabitants of the district. It was objected on behalf of the respondents that the proceedings on which the appellants embarked in the case of the appeal to the quarter sessions were not "legal proceedings" within the meaning of the Act, and that if they could be properly so described they were not necessary for the protection of the interests of the inhabitants. I am inclined to agree with them on both points. But it is not necessary to express a final opinion on the subject or to define the proceedings to which the Act extends. It is enough to say that if the appellants could have brought themselves within the protection of the Act they have not done so. Whatever may have been the views of individual members of the council it is clear that the governing body as a body have