Before:
LORD CAMERON
LORD PROSSER
LORD MURRAY
 
 

B E T W E E N

JUDGMENT
 
DATED: 12 June 1997

LORD CAMERON:

Your Lordship in the chair has set out the circumstances which give rise to this action and I do not repeat them. On the matter of the proper construction to be given to the relevant parts of the 1991 Order I am in full agreement with your Lordship. It follows that the decision of the Lord Ordinary on that matter falls to be reversed.

The question then becomes one as to the proper disposal of the case on the basis that the buses operated by the petitioners on the service registration number PM/6226/4 during the relevant period between February 1992 and 31 May 1995 fell within the class of traffic defined in the 1991 Order as "Buses on registered local bus services" for which the toll to be levied on each south-going crossing of the bridge was £0.80p. I observe that from the terms of their answers there appears to be no dispute on the part of the respondents that the levying of a toll of £2 in respect of the petitioners' buses operating that service in the course of carrying through timetable services X59, X24 and X54, was carried out as a consequence of deliberate decisions taken by the respondents themselves, that is to say policy decisions, and not simply what might be termed operative decisions of their collectors made on their own initiative on each and every occasion. Indeed such is the basis upon which the petitioners have come into court and sought judicial review of those decisions. However, as your Lordship in the chair has noted, the petitioner no longer seeks to reduce such decisions. They are merely one of the background circumstances to which it is proper to have regard in determining what, if any, remedy should be available to the petitioners in the light of this court having declared that the decisions proceeded upon an erroneous interpretation of the 1991 Order by the respondents. I would also note that we are not concerned with any aspect of law of prescription. This was touched upon briefly by counsel for the petitioners but there is no issue in this case as to whether any claim for repetition of the moneys overcharged has prescribed.

We were presented with wide ranging submissions and citation of authority, more particularly by counsel for the respondents, on the issues of whether and to what extent the remedy of what is often referred to as the condictio indebiti was available to the petitioners in the circumstances of this case. It appeared to me as the arguments progressed that these submissions tended to lose sight of the point which was clearly focused by the Lord President Hope in the Morgan Guaranty case (Morgan Guaranty Trust Company of New York v. Lothian Regional Council 1995 SC 151). At p 155, having referred to the remedies represented by the actions of restitution, of repetition and of recompense, he said this:

"But the important point is that these actions are all means to the same end, which is to redress an unjustified enrichment upon the broad equitable principle nemo debet locupletari aliena jactura ... The nature of the benefit received by the defender and the circumstances on which the pursuer relies for his claim ought, in a properly organised structure for this branch of the law, to provide all that is needed for the selection of the appropriate remedy." Reference was also made to the case of Woolwich Building Society v. IRC [1993] AC 70.

But as the speech of Lord Goff makes plain, the House of Lords was there concerned only with the issue of whether there was to be a right to recovery in respect of taxes exacted unlawfully by the revenue. In the view of the majority it was irrelevant to consider whether the old rule in the law of England barring recovery of money paid under mistake of law should be abolished, for that rule could have no application where the remedy arose not from error on the part of the taxpayer but from the unlawful nature of the demand by the revenue. However it is to be observed that although the point did not arise for decision in the case, Lord Goff expressed himself as inclined to the opinion that the principle that money paid by a citizen to a public authority in the form of taxes or other levies pursuant to an ultra vires demand by the authority was prima facie recoverable by the citizen as of right, should extend to embrace cases in which the tax or other levy had been wrongly exacted by the public authority not because the demand was ultra vires but for other reasons, for example, because the authority had misconstrued a relevant statute or regulation. Similar expressions of view are to be found in the speeches of Lord Browne-Wilkinson and Lord Slynn. Lord Keith in his dissenting speech observed that he could draw no distinction between overpayment of tax under regulations later shown to be ultra vires and overpayment due to the erroneous interpretation of a statute. But he went on to say that he could find nothing in the way of improper pressure by the revenue or of duress, that is to say, compulsion, arising from the circumstances of the case. It is plain therefore that he considered that for both kinds of case such a circumstance was a necessary element for the pursuer to establish before being entitled to seek recovery of any overpayment.

The Woolwich case was concerned with the common law of England. So far as the common law of Scotland is concerned, since the decision in Morgan Guaranty error in law is no bar in itself to recovery. That being so and even on the basis that the petitioners also acted under error of law, I find no difficulty in the concept that if it can be shown that one party has been required by another party to pay that which was not due by reason of that other's erroneous interpretation of statute or regulation, so that the latter obtains payment without warrant, albeit in good faith, then once the error is acknowledged whether by judicial determination or otherwise, the good faith flies off and there is in the absence of any balancing equitable consideration no title, moral or legal, in that other party to retain what had previously been paid. In such circumstances the receiver cannot thereafter properly retain the moneys but ought to restore them. If he does not do so, then in principle I can see nothing against his being required to return that which he retains and which by virtue of the subsequent determination he knows was wrongfully received. This appears to me to be in accordance with the principle expressed in Bankton 1:8 when he says: "One, who possesses originally mala fide, or after his bona fides is found to cease is liable for all the fruits that could have been received out the subject, by the civil law: but the case is not extended further with us, than that he should be accountable for the rents of the lands conform to the rental, or for other real product of the subject ..." It is after that passage that Bankton goes on to consider the Roman condictiones. I would add that this same principle appears to me to be implicit in the statement of Lord Wright in the Fibrosa case cited in the speeches in Woolwich where he said:

"The claim was for money paid for a consideration which had failed. It is clear that any civilised system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is to prevent a man from retaining the money of or some benefit derived from another which it is against conscience that he should keep."

This statement is echoed in the passage from Lord President Hope's opinion in Morgan Guaranty already quoted.

Of course provision may be made by the relevant statute or regulations for recovery of overcharges. Reference to this is made by Lord Goff in the Woolwich case. But in their absence I see no justice in denying to the party who has been wrongfully charged and cannot otherwise obtain redress, an opportunity by way of action to seek recovery of the overcharge. The court will then determine whether the remedy sought is one which it is proper to grant having regard to the circumstances in which the payment of the overcharge came to be made and in which repetition of it is sought. That is to say, whether it is against conscience that he who received the benefit of the overcharge should be permitted to retain it. That question must inevitably raise questions of equity and so found the action in equity.

The authorities to which we were referred also make clear that it is necessary for the pursuer in an action based upon the principle of unjust enrichment to exclude donation. This can arise where a payment is made voluntarily in the knowledge that it is not due. Thus Bankton 1.8 states :-

"The thing must be paid not only unduly, but likewise remain not due, at the time of suing restitution ... Where one knowingly pays or delivers what is not due, he is understood to gift it, by the rule of law cuius per errorem dati repetitio est, eius consulto dati donatio est; and consequently the same is not to be refunded."

On averment the petitioners' position is that the respondents in determining to levy the toll of £2 upon the petitioners' buses purported to act within their statutory powers, that through their collectors they demanded and received a greater sum than that which they were empowered to demand and that they were enriched to the extent of the total of the overcharges of £1.20p over the period between February 1992 and 31 May 1995. These overcharges were without statutory warrant and were thus unjust. The petitioners were of course well aware of the terms in which their bus services were registered. They were also well aware of the provisions of the 1991 order before it came into force on 1 January 1992. As the correspondence between the parties referred to during the appeal shows, by December 1991 the petitioners were contending that the appropriate charge for the service with which this petition is concerned was £0.80p. However it is said by the petitioners that had they failed to pay the tolls demanded of them at the toll booths, their services would have been unable to operate to their financial detriment and indeed that the collectors appointed by the respondents had power to prevent a person using the bridge if they failed to pay the toll demanded of them. That is to say, that they were obliged to do so by knowledge of the collectors' powers to refuse passage and from economic necessity since their buses were operating registered services of which routes and timetables were an essential part.

Such averments appear to me to reflect the situation to which Lord President Emslie referred in Unigate Foods (Unigate Foods Limited v. The Scottish Milk Marketing Board 1975 SC (HL) 75) when he said:

"If the true position is that the pursuers have simply been charged too much, wrongfully and without statutory warrant, by a statutory corporation, and had no alternative but to pay, no equitable considerations would be allowed to defeat their claim for repayment. (cf British Oxygen Company v. South West Scotland Electricity Board )".

I note that in that passage Lord President Emslie appears to use the word "wrongfully" in the same sense as Lord Goff in the Woolwich case refers to a tax or levy being "wrongly exacted" by a public authority, that is to say, a wrong which deserves to be redressed. Thus each introduces the element of common justice as being at the root of the remedy sought from and given by the courts in such circumstances.

In Unigate Foods in a passage just before that cited above, Lord President Emslie considered a submission that the assumed overpayments were made as a result of an error in law and had pointed out that any error was that of the defenders and their auditors. He then went on to say this:

"... in none of the cases cited to us on this chapter of the law is there any warrant for the proposition that an error of law by the defenders, in making an unwarranted demand for payment which the pursuers were bound to satisfy, can be prayed in aid to defeat a claim for repayment of overcharges".

In both passages Lord President makes clear reference to what may be termed "compulsion" as that is defined by Lord Goff in the Woolwich case, a term which, Lord Goff pointed out, may also embrace economic duress. Included within the particular types of situation identified by Lord Goff was that of money paid to a person for the performance of a statutory duty which he is bound to perform for a sum less than that charged by him. This is supported by reference to the decision on appeal to the House of Lords in the British Oxygen case cited by Lord President Emslie in Unigate. Under the same head of compulsion Lord Goff also refers to the situation where money is paid to a person in a public or quasi-public position to obtain the performance by him of a duty which he is bound to perform for nothing or for less than the sum demanded by him. In the present case the actual demand for payment of the tolls came as each of the petitioners' buses was at the toll booth, but it seems to be common ground between parties that although the collectors actually enforced the demand for the toll of £2, they did so on instruction from the respondents and not of their own volition. This therefore brings this case rather within the situation for which the British Oxygen case was cited by Lord Goff. The circumstances in which the petitioners aver that they were obliged to make the payments forming the overcharges prima facie fall within the ambit of such a situation and thus are capable of being regarded as a form of compulsion such as to make the overcharge recoverable. Such averments are sufficient, in my opinion, to exclude donation in the sense that the payment was voluntary and thus to found a relevant claim to repetition within the broad equitable principle to which the Lord President refers in Morgan Guaranty. The petitioners are therefore, in my opinion, entitled to make their claim for repetition on that basis.

It was urged for the petitioners, founding upon what Lord President Emslie said in the Unigate Foods, that as a general proposition where there was compulsion, then no equitable considerations would be allowed to defeat the claim for repayment. In my opinion, no such general proposition can be read out of what the Lord President there said. He was dealing with the particular circumstances of that case and nothing more. He was not concerned with matters such as could constitute acquiescence, personal bar, waiver or abandonment of the claim or could amount to mora, for example. Authorities cited to us clearly supported the submissions for the respondents that such factors may be placed before the court by the defender in answer to a claim for repetition. I return to this point later in this opinion. Nor was Lord President Emslie concerned to consider whether the court would refuse to countenance the action on other grounds.

Thus certain of the authorities to which we were referred make plain that the court will not lend its aid in any way to one who has to found on what he has illegally done or on his own turpitude. As Lord Patrick said in Jamieson v. Watt's Trustee in reference to a claim founded on recompense:

"It is a principle of equity by no means universally applied in Scots law. Considerations other than the mere fact that one party has benefited by the other's loss may prevent its application to a particular case. Where the transaction in relation to which the claim arises is prohibited by law, the enforcement of equitable adjustment as between two individuals may be outwith the province of the Courts".

In their pleadings the respondents derive from a statement made by counsel for the petitioners at the first hearing before the Lord Ordinary, an allegation that in registering the services as they did, the petitioners acted unlawfully. It is said that the timetable services X59, X24 and X54 were regular services for the carriage of passengers on routes exceeding 50 kilometres in length and that the registration and operation of such services without complying with the applicable rules as to drivers' hours in the relevant regulations was unlawful. The respondents go on to make this averment. "In the foregoing circumstances the respondents believe and aver that the petitioners registered and operated their services without complying with the said regulations". At the end of the day senior counsel for the respondents conceded that the allegation that the registration of their services by the petitioners was unlawful, was unwarranted and that there was no impropriety in the petitioners' having acted as they did in the matter of registration. However it was said that nevertheless the petitioners' claim was tainted by turpitude because the applicable rules would be breached by drivers operating buses on these particular services. I have to say that in the light of the concession made by counsel, I find it surprising that the respondents have so contended. The allegation is unaccompanied by any detailed averments. It depends in part upon an assertion of illegality which was withdrawn in the course of the submissions before us. Moreover it alleges conduct which could, if proved, constitute a criminal act. It is trite law that where such conduct is to be alleged, fairness demands that there be clear and specific averments made to that end. There are none such here.

The respondents also argued that notwithstanding that his decision on the matter of construction was not well-founded, the Lord Ordinary was nevertheless correct in dismissing the petition on the alternative basis which he set out in his opinion, namely that even if the petitioners' construction were correct, it would have been inequitable for the monies claimed to be repaid. It is sufficient to say that since the respondents now accept that there was no impropriety in the manner in which the services were registered, it being noted that the registration was effected before the 1991 Order was made and there being no suggestion that it was sought in order to circumvent the order, the matter of the explanation given by counsel at the first hearing ceases to have any bearing upon any exercise of the court's discretion as to whether or not to order repetition of any sum found to have been overcharged.

Both for these and for the other reasons which your Lordship in the chair has given, I would refuse probation to the averments identified by your Lordship.

In the course of their submissions the case of Bell v. Thomson was substantially founded upon by counsel for the respondents. There the court held that no case had been made for repetition because an action could hold good only to the amount of the benefit actually received by the party against whom it was maintained and the ratepayers against whom the action had been brought, had neither directly nor indirectly received any part of the fund which it was sought to recover from them. However Lord Justice Clerk Patten went on to consider the effect of the ratepayer's negligence in making returns which erroneously asserted that his property lay within the burgh of Wishaw. He was careful to say that it was not necessary for the case to consider whether such negligence would or would not be enough to bar the claim for repetition. He did however refer to the fact that the objection for the pursuer to the levying of the rate could have been taken sooner than it was and at a time when the rate might have been corrected by levying the amount from the parties truly liable. He then continued:

"If the pursuer was negligent, and his negligence led to results rendering a right adjustment of the amount among the proper parties impossible, the consequences must be visited on himself."

In the same case Lord Cowan makes reference to the fact that delay in making a claim may serve to bar the demand for repetition and so exclude the claim. Again, protest beforehand at the imposition of the charge may not be sufficient if payment of the charge is thereafter made. In that event the court may hold that the payment was made in the knowledge that it was not due. In the Dalmellington Iron Co case Lord Rutherford Clark pointed out that when there was a question whether money was due and when it was paid in the knowledge of the facts on which that question depended, it might be reasonably inferred that all objections were waived and that the debt was admitted. These authorities satisfy me that the court before determining whether an order for repetition be made, is entitled to look into and have regard to the circumstances which gave rise to the payments being made, the payer's state of knowledge at the time that the payments were made, as well as any action or inaction on the payer's part subsequent to payment and after he has become aware that the payment was not due at the time it was paid. The circumstances can thus extend to consideration of the nature of any prior challenge to the proposed charge as being excessive, including reservations of the would be payer's position in the face of future demands for payment of the charge, actings, including protests, at the time of payment and the parties' actings thereafter. In the end of the day, as I understood the position that was being adopted by them, counsel for the petitioners did not seriously dispute that the respondents' pleadings raised matters which went to establishing acquiescence, personal bar or mora on the part of the petitioners. Nor did they dispute that these were matters which could properly be placed before the court by respondents in resisting a claim for repetition on the ground that they had received the payment in good faith and had changed their position to their prejudice in reliance thereon before repetition was sought. Counsel accepted that the court was entitled to have regard to the passage of time between the payments and the subsequent challenge to the correctness of the charge, in addition to considering whether it could be said that the petitioners had known that the money was not due at the time of payment or had subsequently acknowledged such to have been the case and had waived any claim to recover it at least to the extent of payments made prior to 28 June 1993.

Counsel for the petitioners argued in the alternative that even if the circumstances in which the petitioners paid did not measure up to the test of compulsion, the petitioners were not barred from seeking repetition. As I understood the submission, it proceeded on the basis that there is no distinction in principle between the situation where a subject makes a payment in response to an unlawful demand for tax for which he at once acquires a right to recover the amount so paid as money had and received to the subject's use (the Woolwich case) and that where a statutory body, such as the respondents, makes an unlawful demand for payment based upon an erroneous interpretation of the statutory order which gave it power to demand the payment. It is sufficient for the present to note that in the Woolwich case the House of Lords was careful to limit the effect of their decision to the former situation. Notwithstanding the views expressed by their Lordships in the Woolwich case that such a distinction may be difficult to support, I am not at present persuaded that our law allows that without a measure of compulsion at the time of payment a person in the position of the petitioners would be entitled to repetition of any overcharge. The petitioners' submission does not seem to accord with authorities such as the British Oxygen or Unigate cases. In any event, it is an issue which is better explored after proof. For instance, the payments made might, depending upon the circumstances in which the petitioners authorised their drivers to pay tolls and the manner in which the individual payments came to be made, be regarded as voluntary in the sense that Lord Goff referred to in the Woolwich Equitable case; that is to say, where a sum has been paid which is not due, but it has not been paid under a mistake of fact (to which must now be added mistake of law in the light of the decision in the Morgan Guaranty case) or under compulsion or, more particularly, where the payer had the opportunity of contesting his liability but instead gave way and paid. In the respondents' averments reference is made to arrangements whereby bus operators could pay a quarterly sum for the use of the bridge by specific local services and their bus drivers would give the respondents' collectors a ticket. It is said that no such agreement was sought by the petitioners for the service in question, but that nevertheless their drivers operating the services X59, X24 and X54 on numerous occasions presented such tickets and paid a toll of £0.80p or altered the destination boards of the buses so as to cause the collectors to charge such a toll. In the course of submissions reference was made by the parties to correspondence between the parties concerning payment of tolls for these services in December 1991 and subsequently in June 1993. It is said that the petitioners have delayed unreasonably in bringing the present proceedings, that they have since January 1992 when any cause of action first arose, paid a toll of £2, except on the occasions mentioned above, and that they did so without reservation or the qualification that payment was made under protest. It is said that in reliance upon such lack of reservation or protest and upon such acquiescence, the respondents have altered their position to their prejudice. These matters provide the basis for the respondents' pleas directed to personal bar and to mora, taciturnity and acquiescence in respect of tolls paid by the petitioners prior to 28 June 1993 when intimation was given by the petitioners to the respondents of their intention to mount a legal challenge to the respondents' construction of the 1991 Order. They also provide the substance for the respondents' more general defence that repetition would be inequitable. The matters of fact upon which they are founded are in part disputed. Since the petitioners' counsel did not seek to challenge the relevance of such averments to the considerations which the court might properly take into account in determining whether to order repetition of any sum proved to represent the sum of the overcharges, then at least on the petitioners' alternative position, that is to say, on the assumption that there had been no compulsion as such, the legal issues and the legal effect which may arise out of them if well founded in fact, cannot be determined until after proof.

Counsel for the petitioners also criticised averments that appear in the respondents' answers to the effect that the respondents had altered their position to their prejudice in that the moneys received had been disbursed in the ordinary course of their expenditure in terms of the Tay Road Bridge Order Confirmation Act 1991. At this stage and more particularly since the issue of mora remains to be determined in relation to the petitioners' claim for repetition, it is sufficient to say that such a matter of prejudice may, if proved, be one that will bear upon the issue of mora and the weight to be given to that issue in balancing the various considerations that may be advanced by parties for and against repetition.

In the whole circumstances, I agree that the reclaiming motion be disposed of as proposed by your Lordship in the chair.

LORD PROSSER:

During the period between 1 December 1991 and 31 May 1995, the petitioners provided bus services in Fife and Tayside Regions, certain of which crossed the Tay Road Bridge. The petitioners required to pay tolls to the respondents in respect of those services which crossed the Bridge, in terms of the Tay Road Bridge (Revision of Tolls) Order 1991. In terms of the Order, the authorised tolls in respect of traffic using the Bridge (levied only in respect of southbound traffic) are specified in a Schedule. The Schedule distinguishes between a number of specific categories of traffic, one of which is "buses on registered local bus services", for which the authorised toll is stated as 80 pence. The Schedule provides further that the authorised toll for vehicles not falling within any of the other classes described is £2. Putting the matter shortly, the respondents levied a toll of £2 in respect of certain of the petitioners' bus services, which the petitioners contend were registered local bus services for which the authorised toll was only 80 pence. In this petition for judicial review, the petitioners sought reduction of the respondents' decision that certain of their services were not registered local bus services; but in presenting the reclaiming motion, counsel for the petitioners informed the court that he no longer sought reduction, being content with the declarator which was also sought (to the effect that the services in question were registered local bus services and that the proper toll was 80 pence) together with decree for payment to the petitioners of £20,871.60 with appropriate interest, that figure representing the amount which the petitioners claim was taken from them by way of overcharging of tolls during the period in question. By interlocutor of 14 June 1996, the Lord Ordinary dismissed the petition, sustaining pleas-in-law for the respondents to the effect that the petitioners' averments were irrelevant and that the respondents had charged the petitioners the tolls properly due. The petitioners' reclaiming motion is against that interlocutor.

As I have noted, the 80 pence toll is appropriate for a "registered local bus service". By paragraph 2 of the Order, it is provided that in the Order, that expression means "a service registered under section 6 of the Transport Act 1985 for operation only within Tayside and Fife Regions". The primary issue between the parties is as to the proper interpretation of these words. However, before coming to that issue, it is appropriate to consider the system of registration under the 1985 Act, the nature of the various services operated by the petitioners and the way in which those of their services which crossed the Tay Bridge were registered.

In terms of section 6(1) not here in point) a local service. Section 6(2) provides that subject to regulations under the section, no service shall be provided in any traffic area in which there is a stopping place for the service unless certain requirements as to registration have been met. In particular, it is a requirement (a) that the prescribed particulars of the service have been registered with the Traffic Commissioner for that area by the operator of the service, and (b) that the service is operated in accordance with the registered particulars. Section 6(6) provides that "In this Act any reference to a service registered under this section is a reference to a service in respect of which the prescribed particulars are registered under this section". Section 6(7) provides for variation or cancellation of registration. Section 6(9) provides for making regulations for the purpose of carrying the section into effect. The expression "local service" employed in section 6(1) is the subject of the provisions of section 2 of the Act. Section 2(1) provides that in the Act, "local service" means a service, using one or more public service vehicles, for the carriage of passengers by road at separate fares, subject to an exclusion contained in section 2(4) (which is not here in point), and under exception also (in terms of section 2(1)(b) and section 2(2)) of a service in relation to which (except in an emergency) one or both of two specified conditions are met with respect to every passenger using the service -- the conditions being that the place where each passenger is set down is 15 miles or more, measured in a straight line, from the place where he was taken up, and that some point on the route between those places is 15 miles or more, measured in a straight line, from either of those places. By section 2(3), it is provided that where a service consists of one or more parts with respect to which one or both of the conditions are met, and one or more parts with respect to which neither of them is met, each of those parts shall be treated as a separate service for the purposes of subsection (1). It is to be noted that what makes a service a "local service" is not that its overall route is confined to any limited locality, but that it sets down passengers within a relatively short distance of where they have been picked up. It is that characteristic which defines a "local service" and brings it within the registration requirements of section 6. Moreover, if within its total length a service has one or more parts which have these characteristics, and other parts which do not, those parts which have the characteristics of a "local service" in this way will be treated as a separate service for the purposes of section 2(1), and thus for the purposes of section 6 and registration of the 1985 Act, "service" means (subject to certain exceptions which are not here in point) a local service. Section 6(2) provides that subject to regulations under the section, no service shall be provided in any traffic area in which there is a stopping place for the service unless certain requirements as to registration have been met. In particular, it is a requirement (a) that the prescribed particulars of the service have been registered with the Traffic Commissioner for that area by the operator of the service, and (b) that the service is operated in accordance with the registered particulars. Section 6(6) provides that "In this Act any reference to a service registered under this section is a reference to a service in respect of which the prescribed particulars are registered under this section". Section 6(7) provides for variation or cancellation of registration. Section 6(9) provides for making regulations for the purpose of carrying the section into effect. The expression "local service" employed in section 6(1) is the subject of the provisions of section 2 of the Act. Section 2(1) provides that in the Act, "local service" means a service, using one or more public service vehicles, for the carriage of passengers by road at separate fares, subject to an exclusion contained in section 2(4) (which is not here in point), and under exception also (in terms of section 2(1)(b) and section 2(2)) of a service in relation to which (except in an emergency) one or both of two specified conditions are met with respect to every passenger using the service -- the conditions being that the place where each passenger is set down is 15 miles or more, measured in a straight line, from the place where he was taken up, and that some point on the route between those places is 15 miles or more, measured in a straight line, from either of those places. By section 2(3), it is provided that where a service consists of one or more parts with respect to which one or both of the conditions are met, and one or more parts with respect to which neither of them is met, each of those parts shall be treated as a separate service for the purposes of subsection (1). It is to be noted that what makes a service a "local service" is not that its overall route is confined to any limited locality, but that it sets down passengers within a relatively short distance of where they have been picked up. It is that characteristic which defines a "local service" and brings it within the registration requirements of section 6. Moreover, if within its total length a service has one or more parts which have these characteristics, and other parts which do not, those parts which have the characteristics of a "local service" in this way will be treated as a separate service for the purposes of section 2(1), and thus for the purposes of section 6 and registration.

There are three of what the petitioners refer to as their "timetable services" which are in point. These have the timetable service numbers X59, X24 and X54. The X59 is the relevant service for the period up to 5 April 1993. The X24 is in point from 5 April 1993 until 31 May 1995 (when a new unified rate of toll was introduced) and the X54 was also in point, along with the X24, until 31 May 1995. The routes of these services are to be noted. The X59 service commenced in Dundee and terminated in Edinburgh, using a single vehicle for the complete journey. It is a matter of admission that passengers could remain on the bus throughout the journey, although there is no averment as to whether any ever did so. From Dundee, the bus apparently went to St Andrews, and thereafter from St Andrews to Kirkcaldy and from Kirkcaldy to Edinburgh. The X24 ran between Dundee and Glasgow, going from Dundee to Glenrothes, Glenrothes to Kincardine and Kincardine to Glasgow. The X54 ran between Dundee and Edinburgh, going from Dundee to Glenrothes, from Glenrothes to Dunfermline, and from Dunfermline to Edinburgh. Each of the three overall timetable services X59, X24 and X54 evidently had the characteristics of a "local service" over its entire route, so that there was no requirement to treat parts as separate services in terms of section 2(3) of the 1985 Act. However, in relation to each of the three overall services, in applying for (and obtaining) registration, the petitioners treated the overall local service as composed of three separate local services.

Registered services have registration numbers. In relation to the X59, there is thus a registered local service between Dundee and St Andrews, with the registration number PM/6226/4, and two further registered local services (with which we are not primarily concerned), between St Andrews and Kirkcaldy and Kirkcaldy and Edinburgh, each with a different registration number. The petitioners' position is that the registered local bus service PM/6226/4 is the relevant service for the charging of tolls. Similarly, when the X24 came into service, the first of the three registered local bus services of which it was composed was the service from Dundee to Glenrothes, bearing the registration number (previously applicable to the X59 Dundee/St Andrews service) of PM/6226/4. Other registration numbers were applied to the Glenrothes/Kincardine and Kincardine/Glasgow services respectively. In relation to the X54, the first of the three registered services of which it was composed ran from Dundee to Glenrothes, with the same registration number PM/6226/4, but with different registration numbers for its second and third stretches, between Glenrothes and Dunfermline and Dunfermline and Edinburgh. It is to be observed that while the original PM/6226/4 service ran from Dundee to St Andrews, from April 1993 onwards the service bearing that number ran from Dundee to Glenrothes, originally as part of the X24 service, and thereafter, as the petitioners aver, "as part of two of their timetable services, namely, X24 and X54".

In turning to the contentions of the parties, I would note at the outset that the respondents do not dispute that the prescribed particulars of the service PM/6226/4 (in the various successive forms which I have mentioned) were indeed registered with the Traffic Commissioner as required by section 6(2) of the 1985 Act, and that the service was operated in accordance with those registered particulars. That being so, and in the absence of any attack upon the legal validity of such registration, it appears to me that in the present proceedings one must proceed upon the basis that the service PM/6226/4, in its various forms, is indeed a service registered under section 6, in terms of subsection (6) of that section.

That being so, the petitioners' position is a simple one. 80 pence is the prescribed toll for "buses on registered local bus services". The petitioners' service registered as PM/6226/4 is not merely a "registered local bus service" in ordinary language, but it meets the definition of that phrase contained in paragraph 2 of the 1991 Order: "A service registered under section 6 of the Transport Act 1985 for operation only within Tayside and Fife Regions". In all its forms and at all times, PM/6226/4 is revealed as being for operation only within Tayside and Fife Regions. The fact that the actual bus providing that service also provides other registered local bus services, over further stretches of a single "timetable service", does not alter the scope or nature of the service PM/6226/4. That service fits the definition, and attracts the 80 pence toll. That being so, and the petitioners having been forced to pay a £2 toll, they are entitled to repetition of the sums overcharged.

The submissions advanced on behalf of the respondents took a number of different forms; but the fundamental contention throughout was to the effect that the relevant service was not PM/6226/4, but the "timetable service" -- X59, or X24 or X54. None of these timetable services was "for operation only within Tayside and Fife Regions", and they would accordingly fail to meet the special definition of "registered local bus service" contained in the 1991 Order.

In submitting that the definition in the 1991 Order was primarily concerned not with services as registered, but with services as operated, counsel for the respondents submitted that the words "for operation only within Tayside and Fife Regions" qualified the word "service": the reference was to a service for operation only within the specified regions. One was not concerned with whether the service was registered for operation only within those regions. The benefit of the reduced toll was intended to go, and to go only, to services whose area of operation was limited to the specified regions. If the services started further afield, or went on further afield, they were not intended to obtain this benefit, since some of their passengers would not be on journeys thus restricted to those regions. The Lord Ordinary had been right to see the ordinary or natural meaning of "service" as being the provision of transport between the two most distant points served, and to take the service as having been the service operated between Dundee and either Glasgow or Edinburgh. As the Lord Ordinary had held, the particulars of the whole of each inter-city service were, one way or another, registered. That must be seen as the service which the petitioners had been operating, and if it failed to meet the requirements of the definition (as it did, running beyond the specified regions) the £2 toll would be applicable. Looking to the purpose of the provision, the Lord Ordinary had rightly seen it as clear: there was no intention to benefit travellers outside these regions.

Counsel submitted further that to give any other meaning or reference to the word "service" would be to allow the operator to choose, and in effect define, the "service" or services which he would register, simply by so registering them. What was plainly meant to be a restrictive requirement, as to operation only in the two regions, would become wholly ineffectual. Any operator could tailor his registrations so that the service crossing the Bridge would be limited to a stretch of the overall journey, chosen at will, beginning and ending within the two specified regions. The obviously intended distinction between services operating only there, and services operating more widely would be completely frustrated. The word "only" would have lost all effect.

So far as any supposed legislative intentions are concerned, I am not disposed to seek for them beyond what is evident from the terms of the Order itself and the definition which it contains. But if there was an intention to benefit (through the bus operators) people whose journeys did not run beyond the two specified regions, it is not clear to me why that benefit should go to buses whose termini lay within those regions, and not to buses with a perhaps identical series of stops within the regions, but running on beyond the regional boundaries. And while for descriptive purposes one may describe a bus "service" in terms of its termini, in real or functional terms the service or services which a bus provides can be seen as a set or series of services, from any one point to any other point, anywhere between those termini. To say, for example, that the X59 was a service from Dundee to St Andrews (or from and to other intermediate stops) would in my view be true. (And in practical terms, I am less sure that it is true to say that the X59 provided any real service from Dundee to Edinburgh). I would not therefore come to the problem of construing the definition with any initial, far less fixed, view that any "service" with which it is concerned must be defined in terms of the ultimate termini of a particular timetable service or a particular bus.

In any event, however, the construction of the crucial definition does not seem to me to be problematic. I feel quite unable to read it as referring to a "service ... for operation only within Tayside and Fife Regions", with the reference to registration under the Act as merely parenthetical. The words "for operation only within Tayside and Fife Regions" seem to me plainly to be related not to the word "service", but to the word "registered". That seems to me the natural reading as a matter of language. Moreover, it seems to me to reflect the way in which section 6 of the 1985 Act requires registration of prescribed particulars, and operation in accordance with registered particulars. In addition, it appears to me that if a reduced toll is to be permitted to certain services, it will be a matter of some importance that the qualifying characteristics of that service should be discoverable by reference to some fairly formal, precise and incontrovertible source such as the register. It may well be that those who drafted the definition had not foreseen how easy it might be for operators to obtain separate registration for a service which met the requirements of the definition, treating further sections of the same route as separate services. But that possibility does not induce me to read the definition differently, or to impose upon it a meaning which I do not think it can naturally bear. And even if the words could bear the meaning, I should be very reluctant to read a definition of this kind as directing one's attention away from the precision of a register, towards an enquiry at large into the unity or otherwise of timetable services. The possibilities of "tailoring" timetable services seem to me to be as great or greater than they are in relation to formal registration. And the requirement that the qualifying services must be registered for operation "only" within Tayside and Fife Regions, even if it can be met quite easily, at least concentrates attention on what is the functionally important part of any wider timetable service, and provides a clear answer, without further investigation, as to whether the reduced toll is appropriate or not.

In my opinion, the Lord Ordinary has erred in his construction of the 1991 Order. The registered service PM/6226/4 was properly registered, and registered for operation only within the specified Regions. The petitioners' averments disclose a relevant case to the effect that the respondents charged excessive tolls. But there remain issues relating to remedy: do the petitioners' pleadings contain a relevant ground for seeking repayment, and if so, do the respondents' pleading contain relevant grounds for denying that remedy? Obviously, not all situations where there has been overcharging give rise to a claim for repetition. In the present case, it is for the petitioners to aver and prove that they did not pay the excess charges voluntarily, but were in effect forced to pay. And even if they were, the remedy of recovery by repetition might be denied to them, either as being inequitable, or as being barred.

I do not think that it was really disputed, before the Lord Ordinary or before us, that the petitioners' pleadings, if relevant on the fundamental issue of overcharging, contained sufficient averments of having been forced to pay to provide a prima facie basis for their claim to repetition. But both before the Lord Ordinary and before us, it was contended by counsel for the respondents that any such prima facie claim should be denied, on the basis that repayment would be inequitable, and that this being evident on the petitioners' own pleadings, dismissal on that basis was appropriate. The questions of bar, and in particular questions as to acquiescence, turn upon the respondents' pleadings as well as the petitioners', and along with the related question of whether the petitioners were forced to pay the excess tolls, are matters which in my opinion would require proof before answer, unless dismissal without proof is appropriate now upon the basis that the petitioners' own pleadings show that they should be denied repayment in any event, on equitable grounds.

As I have noted, the Lord Ordinary disposed of the case on the basis that the respondents had charged the tolls properly due. However, his Lordship was also presented with a submission to the effect that it would have been inequitable for these monies to be repaid, and stated that he would have been disposed to accept this submission. It is to be noted that in the Outer House, counsel for the petitioners had expressly conceded that whenever repetition is sought, the courts would have a discretion to refuse it on equitable grounds. In presenting the reclaiming motion, counsel intimated that he wished to withdraw that concession, and to contend that there was no such discretion in situations such as the present. I shall return briefly to that contention, but would note now that we allowed the concession to be withdrawn.

The argument about "equitable considerations" in this case has a somewhat unusual origin. In the course of the hearing before the Lord Ordinary, counsel for the petitioners gave an explanation as to why his clients had chosen to register their services in the way they did. As the Lord Ordinary narrates the matter the explanation was that it was a "device", which "avoided, or was thought to avoid" the application of the Drivers' Hours (Harmonisation with Community Rules) Regulations. The relevant regulations would have been applicable to a service in excess of 50 kilometres. On that basis, counsel for the respondents was apparently prepared to argue that the employment of this device involved "illegal activity" on the part of the petitioners. This new line of argument would plainly have required an adjournment; but the Lord Ordinary held it unnecessary to resolve the question of possible illegality. However he expressed the opinion that it would have been sufficient for the respondents to succeed on this branch of the argument that "the manner in which registration was effected was simply a form of device and had nothing to do with the nature of the services actually being operated". He went on to say that these services were quite clearly inter-city services, and (in a passage I have already mentioned), that it was equally clear from the terms of the 1991 Order that there was no intention to benefit travellers outwith the Tayside and Fife Regions. These considerations led on to the Lord Ordinary's opinion that the overall situation was one in which it would have been proper to deny effect to the device on the grounds of equity.

Following upon this, the respondents by amendment added a passage to their pleadings stating that at the first hearing of the petition the petitioners informed the Lord Ordinary that their services X59, X24 and X54 were registered in the manner averred as a device that was adopted by them "in order to avoid or to seek to avoid the application of" the Drivers' Hours (Harmonisation with Community Rules) Regulations 1986. The respondents go on to make certain inferential averments, and to assert that the registration and operation of such services without complying with the applicable rules as to drivers' hours in the said regulations "was and is unlawful". They conclude by saying that in the foregoing circumstances they believe and aver that the petitioners registered and operated their services without complying with the said regulations, and that in so registering and in so operating their services the petitioners were "acting unlawfully". (I would note that the relevant regulations appear to be those contained in SI 1986/1458, rather than the 1978 Regulations apparently cited originally to the Lord Ordinary).

Along with these averments, the respondents have a plea-in-law to the effect that esto the respondents have overcharged the petitioners, "repetition being inequitable decree of absolvitor, which failing, decree of dismissal, should be pronounced". While there are other grounds on which repetition may not be due (in terms of bar, or if the petitioners fail to prove compulsion) the only averments founding this plea appear to be those concerning the drivers' hours Regulations and the "device" adopted by the petitioners in registering their services as they did.

The question of whether and when repetition could in principle be refused upon equitable grounds was the subject of very extensive submissions. However, even upon the assumption that in some situations there can be equitable grounds for refusing repetition, I am satisfied that the respondents' pleadings in relation to equity, founded upon the regulations and the "device", are wholly unfit for probation. The broader discussion of "equitable" refusal of repetition thus becomes entirely academic: there is no sufficient material in the case to call for any decision as to the equity of repayment.

The allegations of unlawful conduct were eventually conceded, by senior counsel for the respondents, to be unjustified so far as the actual registrations of the services was concerned, and indeed in the absence of any attack on their validity, or any attempt to reduce them, this concession seems inevitable. The allegation that the petitioners' operation of these services was unlawful was founded upon an assertion that the petitioners had in fact operated the services in breach of the Regulations. This appears in the pleadings as a reference to operation of the services "without complying with the applicable rule ... in the said Regulations". But the respondents' pleadings seem simply to slide, by an unexplained inference, from averments about the purposes of this form of registration into the averment of operation in breach of the Regulations. There is no indication that the respondents have any knowledge of any occasion upon which the petitioners may have been in actual breach of the Regulations. The contention appeared to be that having registered with that in mind, the petitioners must be assumed to have carried the process through to actual operation in breach. That appears to me to be quite baseless; but even if it were in some sense justified as an inference, it would be too vague to be useful: senior counsel for the respondents accepted that this plea could not be invoked in respect of any legitimate journeys, where the drivers were not in breach of the regulations, and the pleadings make no attempt to quantify the number of occasions, if any, upon which the imagined breach might have taken place.

In any event, I am at a loss to understand why the adoption of a method of registration which is ex hypothesi valid and legal "in order to avoid or to seek to avoid the application of the ... Regulations" should be seen as raising some point of equity weighing against the petitioners. There must be countless situations in which a citizen may arrange his affairs in a given way, in order to avoid or seek to avoid the application of some statutory or other provision. He is perfectly entitled to do so. If the provisions which he hoped would not apply to him in fact do apply to him, he will be disappointed. But I see no reason in equity why he should not have the full legal advantages of whatever arrangement he entered into, along with any disadvantages flowing from the application of the rules in question. Breach of regulations is another matter, for which no doubt there would be undesirable consequences for him. Whether there are situations in which a breach of the law in this way might render it inequitable for the remedy of repetition to be granted, in respect of a sum which he could otherwise reclaim, I do not know. What appears to me to be clear in the present case is that the respondents' pleadings on this matter are irrelevant and should not go to probation.

I would only add that the Lord Ordinary's opinion upon this matter was not only hypothetical (since he had decided the construction point in the respondents' favour) but was based not upon anything then in the pleadings, but upon the explanation given to him at the bar for the form of registration adopted by the petitioners. That seems to me to have put him at something of a disadvantage in considering the matter, and his comments upon it are very brief. With matters having been incorporated into the pleadings, we are essentially dealing with a new question, rather than considering whether the Lord Ordinary was justified in reaching the conclusion which he did reach. On the material available to us, however, it appears to me that he erred, seeing the legitimate forms adopted by the petitioners as in some sense discreditable or improper. From what he says, it appears that there may be a relationship between his view upon this matter and the view which he reached as to the nature of the bus services in question, when dealing with the construction point. Be that as it may, I am satisfied that his conclusion on this matter cannot stand.

In these circumstances, I would repel the respondents' sixth plea-in-law, seeking absolvitor or dismissal on the basis that repetition would be inequitable. Correspondingly, I would refuse to remit to probation the averments contained in Answer 8 for the respondents, from the fifth line of page 14 of the reclaiming print (as amended) to the second line of page 15 thereof. In the absence of these parts of the respondents' pleadings, it appears to me that there is no basis for dismissal at this stage and that proof before answer is appropriate, reserving all other pleas for the parties.

I have come to the view that I should not say much more. I have already mentioned the fact that the question of whether and when repetition might be refused upon "equitable" grounds was the subject of very extensive submissions, which I see as having been rendered academic, in the absence of any pleadings which could call for a decision upon that matter. Having heard the submissions, I have considered whether I should discuss them, notwithstanding my conclusion that this aspect of the case must be disposed of on the simple ground that the pleadings do not merit probation. I have however come to the view that only very limited comment is appropriate in the circumstances. With no context of averred inequity, this does not seem to me to be an appropriate case for analysis or discussion of the place of equitable considerations in actions of repetition. The fact that proof before answer is required, on questions of compulsion and bar, makes me all the more reluctant to comment at this stage on what may or may not prevent repetition. In addition, I would note that the submissions moved (or perhaps strayed) over such topics as the taxonomy of unjustified enrichment, the unity or separation of remedies in Scots law, the problem of error in law, and such cases as Woolwich Building Society v. IRC [1993] AC 70 and Morgan Guaranty Trust Company of New York v. Lothian Regional Council 1995 SC 151. These are topics where there has been no shortage of discussion in recent years; and I do not think it would be helpful for me to add to that discussion, in a case which does not require it.

Against that background, I would only make certain broad comments. First, it can of course be said that the principle underlying all remedies for unjustified enrichment is one of equity or fairness. That is one reason why I would not wish to embark upon issues of taxonomy: I regard it as very improbable that there is any taxonomy of fairness; and if there is none, I find it hard to envisage a taxonomy of unjustified enrichment, or of remedies when it occurs. Secondly, however, that general point does not to my mind mean that in cases where a remedy is sought for allegedly unjustified enrichment, there are no known categories, or principles, or rules, or that everything becomes a matter of mere ad hoc discretion. A wide variety of situations has been recognised by institutional writers and the courts as showing that an enrichment or benefit, derived from another, is at least usually to be regarded as unjust or unjustified, so that in such cases, again at least usually, the enrichment or benefit should not be retained, and a remedy in the form of repayment should be provided. Notwithstanding the underlying principle of equity or fairness, therefore, the question of whether, prima facie, a remedy should be granted is not at large: whether one is concerned (as in other cases) with error, or (as in this case) with compulsion, as the explanation for benefit having been conferred but not justified, the decision as to whether there is a prima facie entitlement to repetition does not appear to me to be merely an ad hoc discretionary decision, but will be resolved by reference to existing decisions or statements as to the law. Thirdly, it seems to me that the ordinary rules of law governing personal bar, acquiescence and delay may well lead to the courts refusing an admittedly "fair" remedy for unjustified enrichment, just as they may lead to the courts refusing a remedy to someone who has been wronged in any other circumstances. In addition, however, fourthly, as a reflection of the fact that all remedies for unjustified enrichment have their roots in equity and fairness, it appears to me that in principle the courts will always be willing to consider specific averments of individual features of a given case, which are alleged by a defender to make it inequitable in that particular case (notwithstanding that it falls within a category of case which in general, as a matter of fairness, demands a remedy) for repayment or any similar remedy to be allowed. While this seems to me to be true in principle, there are in my view certain kinds of situation in which retention of a benefit is so obviously and fundamentally unfair, that it will be difficult to imagine any particular features of a specific case which could thus reverse the position, and make it inequitable for the remedy to be granted. While in such cases I see no problem in denying a remedy on the ground of personal bar, through subsequent acquiescence in the retention of funds, or through silence while the other party acts to their own detriment, it will I think be true that the original circumstances may be such that, as Lord President Emslie expressed it in Unigate Foods Limited v. The Scottish Milk Marketing Board 1975 SC (HL) 75 at page 90, "no equitable considerations would be allowed to defeat their claim for repayment". Fifthly, therefore, while the concession made by the petitioners in the Outer House may have been expressed too broadly, I am reluctant to believe that there are cases where one can both categorise the situation as one of unjustified enrichment, and exclude a priori the possibility of specialities which would make repayment inequitable. However, in the absence of specific averments indicating that repayment would be inequitable, and in advance of any resolution of the issues as to compulsion and bar, I would not wish to go further in expressing a view upon these matters.

In the whole circumstances, I am satisfied that a proof before answer is appropriate in the present case, subject to the exclusion from probation of the averments which I have identified, and the repelling of the respondents' sixth plea-in-law, which I regard as limited to those averments, and inapposite for the general issues of compulsion and bar which remain.

LORD MURRAY:

The key issue between the parties in this reclaiming motion is the proper interpretation of the provisions of the 1991 Order to which reference has already been made. The Lord Ordinary accepted the interpretation for which the respondents contended. Your Lordships have accepted the petitioners' interpretation. Agreeing with your Lordships' line of reasoning, I too prefer the petitioners' interpretation. I would, however, comment that it is unfortunate that the drafting of these provisions has left them less than clear and intelligible, qualities which are at least as desirable in secondary legislation as in Acts of Parliament; particularly where, as here, the Order is intended to give practical directions to those concerned with the running of the road transport network.

As there will require to be a proof on recalling the Lord Ordinary's interlocutor dismissing the petition, an issue arises as to the respondents' averments in answer. I agree that their defence based on the alleged unlawful action of the petitioners is misconceived and irrelevant and should be excluded from probation. I concur in the disposal of the case proposed by your Lordship in the chair.

In light of the foregoing it is unnecessary to reach a concluded view on the application of the various cases cited to us. However I would expressly reserve my opinion on whether equitable considerations really have any place where the immediate wrong for which the remedy of repetition is sought is the unlawful exacting of money which is not due. It appears to me that this is a somewhat different wrong from retention of money against a claimant who maintains that he is entitled to it. The latter may well give scope for equitable considerations which do not arise with the former.