Scottish Court of Session Decisions

In this action the pursuers, the Great North of Scotland Railway Company, sued the defenders, the Highland Railway Company, for the sum of £135, 10s. 8d., with interest, being one-half of the wages, from 31st August 1864 to the date of the summons, of an additional porter employed at the joint station of the two Companies at Keith, alleged to be due in terms of certain agreements.

Keith being a joint terminus of the Great North of Scotland Railway and the Inverness and Aberdeen Junction Railway (in whose room the Highland Railway now stands), the Act passed in 1856, incorporating the Inverness and Aberdeen line, contained the following clause:—“57. Arrangements and agreements may in like manner be made between the Company and the Great North of Scotland Railway Company for the formation, maintenance, arrangement, management, regulation, and joint use of a station at Keith, for the accommodation of the respective traffic of those Companies; …. and it shall also be lawful for those Companies to appoint a joint committee, composed of such number of their directors respectively as they think fit, for the regulation and management of the joint station, and to agree on regulations as to the appointment and duties of such joint committee, and to depute to such joint committee powers to agree to, and from time to time to vary or rescind, regulations respecting the management and use of such joint station.” This provision was followed by a clause, on which the present question mainly turned:—“58. If any questions, disputes, or differences shall arise between the Company and the Great North of Scotland Railway Company in regard to the construction, arrangement, management, or use of the said joint station at Keith, or in relation to the lands acquired, or to be acquired, for the purposes of the said station, or in regard to any agreement as to the matters aforesaid, or any of them, or otherwise in relation thereto, the same shall from time to time, so often as they shall arise, be settled by arbitration in the manner provided by ‘The Railways Clauses Consolidation (Scotland) Act 1845' with respect to the settlement of disputes by arbitration.”

At a meeting of the directors of the two Companies, held on 3d September 1858, upon an estimate that the cost of maintenance and working the joint station at Keith would amount to an annual sum of £1300, it was agreed that the Inverness and Aberdeen Company should pay the sum of £500 for the joint use; it being further agreed that, if found necessary by the joint station committee to increase the present staff of servants or the station accommodation, each Company should contribute thereto in equal proportions. At the same meeting a joint traffic committee, consisting of three directors of each board, was appointed, the said joint traffic committee to be also the joint committee for the management of the Keith Station. At a meeting of this joint committee held shortly afterwards, on 20th November 1858, it was agreed that the services of an additional porter were required at Keith Station, and that one should accordingly be employed, “his wages to be paid jointly by the Companies.” A formal agreement was entered into by the two Companies on 29th November and 2d December 1859, embodying the results of the above mentioned and other meetings of directors. The wages of the additional porter employed in accordance with the above resolution of the joint committee were disbursed by the Great North of Scotland Railway Company, and the half due from the other Company was regularly recovered from the Inverness and Aberdeen Junction Company, and subsequently from the Highland Railway Company, up to 31st August 1864, but since that time no part of the said wages had been paid by the Highland Railway Company.

Upon 5th June 1865 Mr Dougall, the secretary of the Highland Railway Company, addressed the following letter to Mr Milne, the manager of the Great North of Scotland Railway Company:—

Inverness, 5th June 1865.

“ Keith Station.

“I observe that you are still charging us, in addition to the £500 of rent which we pay for the above station, one-half the wages of an extra porter, amounting to £20, 13s. 4d. per annum.

As this Company's traffic at Keith is now much less than it was when we consented to the extra porter being appointed, I hope you will be able to relieve us of this charge.—I am, &c.,

(Signed) And. Dougall.”

No answer was returned to this letter, and the employment of the additional porter was never cancelled by the joint station committee.

In these circumstances the pursuers pleaded in support of their action—“(1) The porter having been an extra porter appointed by the joint committee, and never having been dispensed with by them, the pursuers, who have regularly paid his wages, are entitled to repayment of one-half of the same, with progressive interest, as sued for. (2) The clauses of arbitration referred to do not apply to the present claim.”

The defenders founded upon the clause of reference contained in the statute above quoted; and also upon the following clause of the agreement of 1859—“All disputes or differences regarding the true intent and meaning of this agreement, or arising out of the same in any manner of way, shall be referred to and settled by arbitration in the manner provided by the ‘Railways Clauses Consolidation (Scotland) Act 1845.’”

They therefore pleaded, as a preliminary defence,—“(1) In terms of the statutes referred to in the defenders' statement of facts, and also of the agreement referred to in article 4 of pursuers' condescendence, the question raised in this action falls to be determined by arbitration, and the action should therefore be dismissed. (2) The present action is barred by the clauses of reference in the said Act of Parliament, and in the said agreement.”

They farther pleaded on the merits—“(3) The defenders are not liable as concluded for, in respect that, in June 1865 they intimated that they did not for the future require the services of the porter, and called on the pursuers to relieve them from the expense of the same”

The Lord Ordinary ( Mure) pronounced the following interlocutor:—

“27 th October 1871.—The Lord Ordinary having heard parties' procurators, and considered the closed record and productions, sustains the first plea in law for the defenders, dismisses the action, and decerns: Finds the defenders entitled to expenses, of which appoints an account to be given in, and remits the same, when lodged, to the Auditor to tax and report.

Note.—This action is rested on the allegations—1 st, That by a resolution of the Joint

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Traffic Committee of the Great North of Scotland Railway Company and of the Inverness and Aberdeen Junction Railway Company, the latter of which is now represented by the defenders, relative to the station at Keith, which was passed in November 1868, and confirmed by an agreement entered into between the parties in December 1859, in regard to the joint management and use of Keith Station, an additional porter was appointed for that station, whose wages were to be paid jointly by the companies; 2d, that this resolution has never been recalled; and 3 d, that the wages of this porter have been regularly paid by the pursuers, who were re-paid the one-half of the wages by the defenders down to the end of August 1864; but that since that date no part of the wages have been paid by the defenders. And the summons concludes against the defenders for payment of one-half of the wages paid since that date, and progressive interest thereon.

In the defences it is not denied that the above resolution was passed, and that an agreement of the nature founded on was entered into and has been acted on; and it is admitted that under this arrangement the defenders have paid their share of the wages up to the end of August 1864. But they dispute their liability for any part of the wages paid after the month of June 1865, because they allege that the services of an extra porter were at that date no longer necessary, and that they made an intimation to that effect to the pursuers. And they plead that in respect of this intimation, to which no answer was made, they cannot now be called on to pay any part of the extra porter's wages subsequent to the month of June 1865.

Now the question thus raised appears to the Lord Ordinary to be one arising out of the resolution and agreement founded on in regard to the management and use of the station of Keith, and to resolve substantially into a dispute or difference relative to that agreement. Whether the defence thus raised against the pursuers' claim is well founded, the Lord Ordinary does not consider himself entitled to offer any opinion. Because he is precluded, as he conceives, from doing so by the terms of the 13th article of the agreement founded on by the defenders, which provides that ‘all disputes and differences regarding the true intent and meaning of the agreement, or arising out of the same in any mannmer of way, shall be settled by arbitration, in the manner provided by “The Railways Clauses Consolidation Act 1845,”’ and also by the 56th section of ‘The Highland Railway Act,’ which appears to him to exclude the jurisdiction of courts of law in all such questions or differences relative to agreements about the management and use of the Keith Station, by making them the subject of statutory arbitration. The Lord Ordinary has therefore sustained the first plea in defence, and dismissed the action.”

Against this judgment the pursuers reclaimed.

Solicitor-General ( Clark) and Birnie, for them, contended that this was not the kind of dispute intended by the Legislature or the framers of the agreement to be referred to arbitration.

Shand and Lancaster for the respondents.

At advising—