Allen v Tobias

[5]

By the judgment of the Supreme Court of Victoria from which this appeal comes, the plaintiffs, who sued under s. 56 of the Local Government Act 1946 (No. 5203) Vict., recovered from the defendant certain penalties "to be paid into and form part of the municipal fund of the Shire of Mulgrave" and one-half of their taxed costs of the action including costs of pleadings and transcript of evidence and any reserved costs. The penalties amount to £34. Presumably an action for penalties is to be regarded as an action neither of contract nor of tort within the meaning of O. LXV r. 12 of the Rules of the Supreme Court, and accordingly the order for costs carries half the full costs of suit taxed in the ordinary manner. The trial occupied seventeen days. The questions which arose, both of fact and law, were dealt with in a very full and careful judgment by the learned judge who heard the suit, Sholl J. Nevertheless the defeated party, the defendant, sought and obtained from this Court special leave to appeal from the judgment, and the successful parties, the plaintiffs, took advantage of the appeal to give a notice of cross-appeal on the ground that the judgment did not go far enough in their favour. When the appeal came on to be argued, it occupied three days. The question for the determination of which all this has proved necessary is whether the circumstances in which land has been used as part of a rubbish tip by a shire council have disqualified one of three tenants in common of the land from sitting as a councillor within the period of time allowed for bringing such a penal action. About the period of time there is no doubt. The writ was issued on 8th February 1956, and, as a result of the operation of s. 5 (5) (a) and s. 35 of Act No. 5914 upon s. 81 of the Supreme Court Act 1928, penalties could only be recovered in respect of instances which occurred not earlier than 1st January 1955, of the defendant's acting as a shire councillor though disqualified: see Paine v. Loft [1] . Nor is there any doubt about his so acting within the period. He acted in that capacity on seventeen occasions and in respect of each occasion a penalty of £2 has been fixed. What is in question is the disqualification. That depends upon a provision which stands as sub-s. (1) of s. 53 of the Local Government Act 1946. Under that provision no person concerned or participating in any manner whether directly or indirectly in any contract with any municipality or in any work to be done under the authority of any such council or in the profit of such contract or work shall be capable of being or continuing a councillor of the municipality.

[6]

The precise ground upon which judgment was given against the defendant is that during the period for which penalties might be recovered under the present writ he was disqualified because he was concerned in a contract made by his neighbour with the municipality with reference to the rubbish tip. The defendant's neighbour is named Cornell. The defendant and his two brothers own in common a piece of land of about eighty-five acres, bounded on the west by Springvale Road and on the south by Washington Road in the Shire of Mulgrave. On the northern boundary is Cornell's land. The two pieces of land are contiguous and stretch back to an eastern boundary in the same line. Near this eastern boundary both pieces of land had been eroded by the flow of a natural watercourse. The erosion lay so to speak across the common boundary but there was, too, a depression or basin (or perhaps two basins) much of which lay in Cornell's land. The greater part of both pieces of land was used for growing vegetables. The defendant became a councillor of the Shire of Mulgrave in 1945 and was re-elected in August of 1948, 1951, 1954 and 1955. A re-subdivision of the shire caused an election to be held in 1955 of the whole council. The shire council being in need of a site for a rubbish tip, a proposal was made in 1952 that the eroded or scoured water channel and the basin should be used. The suggestion may have come from the defendant, but, if so, that does not bear very much on the question to be decided. The works committee and the defendant inspected the site and later the engineer conferred with Cornell and the defendant there. The result was that all three concurred in a proposal that the shire should be at liberty to tip rubbish upon the site for ten years, proceeding with the filling of the erosion of the watercourse from north to south. Cornell gave his assent to the shire's building a road on his land to run along the boundary of the defendant's land from Springvale Road to the tip for the trucks to pass over. This would mean a formal agreement between the shire and Cornell. The defendant too said that he would sign whatever agreement might be required of him. The engineer made a written report of all this to the council which, on 11th December, 1952, resolved that approval be given to "the proposal to enter into an agreement with Messrs. Cornell and Allen Bros. for the establishment of a tip at the south-eastern corner of land in Springvale Road owned by Cornell and the north-eastern corner of the adjoining property of Allen Bros". Strangely enough the defendant moved this resolution in spite of the possibility of his being regarded as having an interest. But whatever interest might have been imputed to the defendant it is clear that it could not be said that the interest was pecuniary. Accordingly s. 181 was not infringed. Some time later the shire secretary instructed the solicitors for the shire to prepare the necessary documents. "Both the owners concerned", so said the instructions, "have agreed to make the land available for the purpose required for a term of ten years with the option of a further renewal at the end of that time and are agreeable to enter into appropriate leases or agreements to meet the requirements of the council." On 30th April 1953, the solicitors sent in triplicate a document to be executed by the defendant and his brothers, by Cornell and by the council. It was a deed in which the defendant and his brothers were parties of the first part, Cornell was party of the second part and the shire was party of the third part. The parties of the first and second parts leased to the shire without fee the pieces of land described by a plan "as a depot for the reception and storage of garbage of all kinds thereon". Cornell (the party of the second part) agreed to permit the council to use the proposed road for the passage of vehicles depositing garbage, and in consideration of the lease by him and the parties of the first part the shire undertook to fence the lands in question and maintain the fences and "to supervise the disposition of garbage and other rubbish on the said lands so that the levels thereof will be improved for its general benefit". All three copies of this document were executed by Cornell and they then went into the defendant's possession. Of that Sholl J. was satisfied. The defendant denied that he or his brothers executed the documents but his Honour was "not satisfied in all the circumstances, to accept the defendant's denial of such execution". However, the learned judge was unable to say whether they were actually so executed or not. Ultimately the copies were destroyed by the defendant. His Honour said that this raised a suspicion that they were destroyed lest the fact of execution by one or more of the brothers might prove difficult for the defendant in anticipated litigation; he was not satisfied that he had heard the full truth about the documents. However, the learned judge did not think they had been executed on behalf of the shire council.

[7]

The road was made on Cornell's land in the early part of 1953 and vehicles began to cart rubbish over it to the tip. The shire however was not free to dispose of rubbish without reference to the Commission of Public Health: cf. General Sanitary Regulations 1950, Pt. III, particularly regs. 34, 35 (a), 36 and 38 and Schedules III and IV (Vict. Govt. Gazette No. 530 of 1950, vol. 2, p. 3505; Victorian Rules, Regns. etc. of Utility, 1949-1950, p. 495); and s. 90 of the Health Act, substituted by Act No. 4867, within which the operation was taken to fall. An application was made to the commission on 13th March 1953. Inspections followed and some discussion of features of the site which might be held objectionable, particularly an objection that there might be water flowing through the rubbish. In the result the shire council informed the commission that surface drainage would be diverted, that there would be a supply of water, i.e. in case of fire, that the channel of the watercourse would be diverted to prevent pollution and that a certain quantity of filling would be placed on the site. On 30th October 1953, the shire council was notified that the commission had approved of the establishment of the garbage tip. Some work was done at the site almost at once with a bulldozer, but how far it went is uncertain, and it would seem that it was not until February 1954, that there was any real attempt to fulfil the conditions subject to which the approval of the commission had been obtained. Under a resolution of the council work was done in February and March 1954, consisting of the cutting of a drain round the head of the erosion to the north and then east and south so as to divert the watercourse round the site. This ran some distance through the land of the defendant and his brothers. Surface water flowing from the north-west towards the site was intercepted by the digging of a drain on the land of the defendant and his brothers so as to prevent it flowing into the site and to channel it south into the watercourse further down. The rubbish trucks of the shire collected the garbage and deposited it at the tip site; it is true, however, at all events after July 1954, that until the area within Cornell's boundary was filled it was all deposited on his land. During the winter there was some scouring in the new diversionary channels. Eventually it was found necessary to improve the table drain along the road to the tip and to make a concrete drainage pit to take the water therefrom, so that it might discharge into the channel to the west of the tip constructed for the diversion of surface water. That work was carried out on the land of the defendant and his brothers during April 1955. Two small roads to the tip from the east-west road were also made.

[9]

The second thing that occurred was the holding of the municipal elections late in August 1954. At these the defendant was re-elected to office and he made the declaration under s. 54 of the Local Government Act 1946, on 3rd September 1954. Section 62 of that Act says "Nothing herein contained shall prevent any person from being immediately or at any time re-elected to the office of councillor if he for the time being is capable under the provisions hereof of being and continuing a councillor." It seems to follow from this provision that unless at the time of re-election there presently existed a cause of disqualification, he would not thereafter be "incapacitated" for the purposes of s. 56 (1) until, by reason of the occurrence of new or further facts, a state of things was found then to exist which satisfied the tests of disqualification or incapacity. Sholl J. adopted the view that Cornell's new contract could not be put into effect, were it not for the fact that the defendant allowed the continued use of the drains and diversionary channels over the land owned by himself and his brothers for the purpose of taking the flow of the watercourse and of the surface waters, and that therefore the defendant was concerned in the contract. If this be correct, the defendant was under a continuing disqualification at the time of the election in August 1954, and afterwards. His Honour regarded the defendant as having been "concerned" in the "work" done in February and March 1954, of making the diversionary drains and so on and inasmuch as that work was done under a resolution of the council there could be no doubt that he had been "concerned in work to be done under the authority of (the) council" within the meaning of s. 53 (1). Having thus become disqualified, as the learned judge held, the defendant remained disqualified until his re-election in late August 1954, but his "concern" in that "work", now that it was complete, would not continue his disqualification beyond his re-election. For that reason the judgment of Sholl J. against the defendant rests on the finding that the defendant was concerned in Cornell's contract with the council.

[10]

It was in April 1955 that the road to the rubbish tip from Springvale Road, passing through Cornell's land at the edge of the land of the defendant and his brother, was given a better table drain and the concrete drainage pit was made. Both these pieces of work involved an encroachment on the land of the defendant and his brothers. By October 1955 so much refuse had been tipped into the eroded bed of the old watercourse within the confines of Cornell's land and had been covered that it became inevitable that the rubbish trucks should tip their loads on the defendant's side of the boundary. The overseer for the shire graded and metalled a track from the road running east, which had been extended. The extension had been kept within Cornell's land but the metalled track made by the overseer went south from it into the land of the defendant and his brothers, so that the rubbish could be tipped into their part of the scoured watercourse. It appears that the overseer in making the track did not consult the engineer but acted on his own responsibility and without the latter's knowledge. Tipping went on there, a number of truck loads a day being emptied into the eroded part of the land of the defendant and his brothers. It has been found that the defendant must have known that this was being done. It went on until February 1956. In May 1955 a step had been taken with a view to place the council's use of the land of the defendant and his brothers on what no doubt was considered a sounder basis. The municipal atmosphere seems to have been somewhat clouded and the defendant remarked to the shire engineer about this time that perhaps it might be safer or wiser not to tip on his land. A recommendation was made by the engineer on the advice of the solicitor of the shire that the council should compulsorily acquire "a right over the land in order to tip rubbish in the scour". The council approved the engineer's recommendation on 19th May 1955, but no formal steps towards an acquisition were taken before the issue of the writ on 8th February 1956. Some days before its issue the solicitors for the defendant and his brothers had written to the shire secretary a letter which one may assume was "for the record". They complained that in using as a tip land adjoining their clients' property the council had lately commenced to encroach on the land owned by their clients, pointed out that no permission had been given by their clients to the encroachment and that they objected to it and finally sought an assurance that no further refuse would be deposited on any portion of the land owned by their clients.

[17]

There can be little doubt that at an earlier time the defendant incurred a disqualification under s. 53. He was party to an arrangement by which the shire council should establish a rubbish tip on an area of land in portion of which he held an interest, doing whatever was required for the purpose. The full use of the tip would result in the levelling of the land in which he was interested and, although the advantage from that might be remote and contingent still it was a prospective advantage. It was the subject of an intended contract to which the neighbouring landowner committed himself and to which, in the view expressed in this judgment the defendant and his brothers must be taken to have committed themselves. Although the formal document was never executed by the shire council it had been authorised by that body, which, moreover, had acted on its terms. The road had been made pursuant to the terms of the document by the shire council and as an incident of the establishment of the tip the conditions imposed by the Health Commission had been carried out by the making of the diversionary channels and drain. None of these things may have brought any immediate benefit to the defendant. The prospective or possible benefit of a filling and levelling of the land in which he was interested could accrue only by the final completion of the use of the land as a tip, but these were steps towards that end. The ultimate benefit might not be important, it might prove of little significance. But it is a material benefit which might be expected to accrue and, so far as the law looks for benefit at all in a case under s. 53, it is enough that it is material and appreciable. Section 53 is a provision expressed in wide terms and in kindred provisions such terms have not been narrowly interpreted notwithstanding their privative and penal effect. The general or central purpose of s. 53 (1) is no doubt to disqualify a councillor if, when a contract is let by a council he stands with or behind the contractor so that he may have an interest on the other side. To this is added the case where work is to be done for the council though without a contract, no doubt because it is one possessing a complete analogy; the councillor must not stand on the other side in such a case any more than he may if there be a formal contract. But contracts with municipalities cover many subjects and take many forms and the operation of s. 53 (1) is not confined to the simple cases of an undisclosed principal or partner, an assignee of a share of the profits and a person entitled to some beneficial interest in the profits or proceeds of the contract. A person supplying for reward the materials to the contractor to enable him to perform the contract may be "concerned in" the contract: per Hodges J., Middleton v. Marks [1] . In Nutton v. Wilson [2] a member of a local board was held disqualified because being a joiner he did some joinery work on the board's premises for a plumber who had contracted with the board to install a warming apparatus and because he put in two frames for another contractor who was installing a water tank for the board. "With regard to the words in question", said Lopes J. in the Court of Appeal, "in my opinion, a person employed to do work, which another has entered into a contract with the board to do, is a person concerned in the contract" [3] . To Mann J. in Sloane v. Sambell [4] this case seemed "to mark the lowest degree of pecuniary interest which will bring a defendant within a prohibition of being "in any manner concerned in" a contract with the public body of which he is a member" [5] . But the "interest" which the defendant in England v. Inglis [6] possessed was less definite. See too Towsey v. White [7] and Barnacle v. Clark [8] and Todd v. Robinson [1] . These decisions do no more than illustrate the variety of situation in which the "concern" of a councillor in a contract or in work to be done under the authority of a council may appear. The words are general and must be applied to varying facts reasonably but with a proper conception of their purpose. Cf. Holden v. Southwark Corporation [2] ; Everett v. Griffiths [3] ; Lapish v. Braithwaite [4] ; Lane v. Atkin [5] ; and Paine v. Loft [6] per Barry J.

[24]

The difficulty of supporting the order as to costs arises wholly from the harsh but rigid provision made by s. 56 (1) on the subject of costs. The term "full costs" means only ordinary costs taxed as between party and party, not as between solicitor and client: see Jamieson v. Trevelyan [1] ; Avery v. Wood [2] . But whatever are costs of the action must be awarded to the plaintiff who recovers a penalty under s. 56. It is no doubt proper to construe the provision as relating to the costs of the action considered as an action for the penalty or penalties in fact recovered. Costs which relate to other causes of action are not necessarily to be treated as part of the "full costs of suit" specified by s. 56. Whether it might have been possible for Sholl J. to impose upon the plaintiffs as a term of allowing the amendment a condition that they should forgo half the costs of suit need not be considered. For his Honour did not do that and, in the view which this judgment takes of the case, an amendment was unnecessary. But consistently with s. 56 (1) it seems difficult to support any order which is the result of an exercise of discretion. It is quite legitimate to exclude what may be called costs ultra, that is to say costs not belonging to the suit if it were confined to the penalties actually recovered. In the present case that would mean all costs which were not costs of and incidental to the recovery of penalties confined to the period from 1st January, 1955, to the issue of the writ. But nothing further is reconcilable with the strictness of s. 56 (2). The foregoing reasons mean that the appeal should be dismissed with costs: the cross-appeal should be allowed with costs and for the order relating to the costs of the action there should be substituted an order that the plaintiffs should recover their costs of the action excluding all costs which would not have been allowable had the action been confined to the recovery from the defendant of penalties for acting as a councillor during the period from 1st January, 1955, to the issue of the writ on the ground that the defendant was incapacitated at that time to be or continue such within the meaning of s. 56 (1) of the Local Government Act 1946 and that such costs be taxed in the Supreme Court.

Allen v Tobias - [1958] HCA 13 - HCA 1958 case summary — Zoe

At a glance

Court

Decision date

Before

Source

Judgment (25 paragraphs)

Parties