Scottish Court of Session Decisions

John Macrae, civil engineer, Edinburgh, in December 1884 raised this action against the Edinburgh Street Tramways Company, concluding for payment of £1516, 5s. 1d., being the amount of two accounts of £1083, 6s. 8d. and £432, 18s. 5d. for professional work done by him on their behalf. He had been for a considerable time their engineer.

The defenders while admitting certain of the items claimed, averred that the claim made was overcharged, and not in conformity with an arrangement entered into with the pursuer. They offered in their defence £225, 18s. 2d. as the balance truly due.

On 22d May 1885 the defenders made a judicial tender to the pursuer of £565, with expenses, in full of the conclusions of the action.

On 3d June 1885 the Lord Ordinary found, after proof, that an arrangement as to the manner of the pursuer's payment which defenders alleged, was not proved, and that he was therefore entitled to make the usual professional charges, and quoad ultra, both the parties having lodged a joint-minute referring the whole cause, so far as not thereby disposed of, to G. Miller Cunningham, C.E., interponed authority thereto, and remitted to him as judicial referee, with power to take such further probation as might be required, reserving meantime all questions of expenses.

On 4th August Mr Cunningham's report was ready, and intimation of this was given to both parties by the clerk to the reference, who wrote that it would be delivered on payment of the referee's fee and his clerk's account.

Neither party borrowed the report, but from a copy it appeared that the effect of Mr Cunningham's findings was to give to the pursuer a sum of £467, 17s. 1d., or nearly £100 less than the defenders had tendered. He did not deal with expenses.

On 20th October 1885 the pursuer lodged a minute by which he accepted the defenders' tender of 22d May for £565 The Lord Ordinary by interlocutor of 28th October, in respect of the minute of acceptance of the tender of 22d May and of the said tender, decerned against the defenders for £565, being the amount tendered. He found pursuer entitled to expenses up to 22d May, but reserved to defenders to move for expenses subsequent to that date.

“ Opinion.—The pursuer has raised an action for payment of two accounts for professional business done by him for the defenders. The record having been made up, I allowed a proof, which was in part taken on the 27th of May 1885.

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The proof was not concluded, but parties requested me to pronounce judgment upon a single point in the case, and I accordingly did so upon 3d June 1885. Thereupon a joint-minute was lodged, whereby the parties ‘concurred in stating, under reference to the Lord Ordinary's interlocutor of this date (June 3, 1885), that the parties agreed to refer, and hereby refer, the whole cause, so far as not disposed of by the said interlocutor, to George Miller Cunningham, Esquire, Civil Engineer, Edinburgh.’ I remitted the case to Mr Cunningham as referee, and he proceeded to do his work as such; and upon 4th August 1885 the clerk to the reference, Mr Robert B. Blyth, wrote a letter to the defender's agents as follows:—‘Mr Cunningham's report in this matter is now completed, and I have written Messrs Dundas & Wilson that it will be delivered upon payment of his fee and my account. I have returned the process to them, and I now hand you a bundle of papers—nine in number—which were laid before the referee by you. Please acknowledge receipt.’ The letter that was sent to Messrs Dundas & Wilson, the pursuer's agents, has not been produced, but it may be taken to be of the import here stated. An intimation was thus given to the parties that the referee's report was ready to be given to them. It still however, lies in the hands of the clerk to the reference, neither party having taken it up; but the clerk has communicaied a copy of it to the defenders, which has been produced by them, and from which it appears that the whole sum found due by the referee to the pursuer is £467, 17s. 1d. Now, upon 22d of May 1885, before the proof was commenced, the defenders tendered to the pursuer £565, with expenses. The tender therefore largely exceeded the sum found due by the referee, and apparently the pursuer having surmised that this would be the result, tendered, on 20th October 1885, a minute to the judicial referee declaring his acceptance of the tender of 22d May 1885. The referee declined to receive this minute, on the grounds stated by the clerk to the reference in his letter of 21st October, as follows:—‘I am now instructed by the judicial referee to return to you the accompanying minute of acceptance of tender by the pursuer; he is of opinion that the minute of reference by the parties submitting the matter to him had the full effect of a reference to him of the whole cause, and that it therefore superseded all proceedings in the action prior to its date. The tender made by the Tramways Company accordingly, in his view, thereby fell, and the minute of acceptance is therefore now incompetent. That is the matter which of course must be decided by the Court, but the judicial referee in the circumstances does not think it advisable that I should mark the minute of acceptance as a step in the proceedings before him.’ The ground here taken up by the referee is erroneous. The judicial reference did not make the tender which was lodged invalid. But the question still remains, Whether it is competent, at the stage at which the case has arrived, for the pursuer now to accept it? In an ordinary submission it has been determined that until the award of the arbiter has been issued or put upon record the arbiter may cancel it; nay, even where it has been handed by the arbiter to the clerk to the submission, and a copy of it handed by the clerk to the parties, he has the same powers over it—(Bell on Arbitration, p. 210). But this must be taken with a qualification. In the case of M'Quaker v. Phœnix Assurance Company (19th March 1859, 21 D. 794) Lord Ivory made this remark in reference to a case where the award had been signed and given to the clerk to be delivered—‘The only other position to be considered is where the award has been sent to the clerk, or come into his hands. The effect of that depends on the purpose for which it has come into his hands. If the arbiter has sent it within the time allowed for issuing the decree, and for the purpose of giving it to the parties, the clerk becomes the trustee or officer of the parties, and ceases to be the officer of the arbiter. That is issuing the decree to all intents and purposes.’ Now, in the present case, if the referee directed the clerk to deliver the report, and, if the same law applied in this matter to a judicial reference as was thus applied to an ordinary award in an ordinary submission, then the report would be held to have been issued, and to be beyond the power of alteration by the referee, and after that there could be no acceptance of the tender. But I cannot apply the same rule. Until the report has been submitted to the Court the referee has power to change it. The judicial reference does not put an end to the process—which may fall asleep and be awakened while the reference is pending—and motions may be made in Court—as for diligences—and the report may be sent back to the reporter to be amended, as probably would have been the case here if it had not come to a close by the acceptance of the tender.

The referee has misconstrued the reservation as to expenses contained in the interlocutor of 3d June 1885. The expenses that were then reserved were the expenses incurred up to that date, but the referee had full power to dispose of all the other expenses that have been incurred. Now, in these circumstances there does not seem to have been any valid ground upon which there shall be refusal to recognise the acceptance of the tender made on 20th October 1885 by the pursuer. So long as the tender remains in process it stands there as a judicial offer which may be accepted at any time. It may be recalled no doubt by lodging another minute expressly recalling it or modifying it, but if there be no such recal or modification the pursuer may at any time he pleases accept it, of course subject to the rules as to expenses incurred after the date of the tender. Therefore I grant the motion of the pursuer for decree for the sum of £565, with expenses to the 22d May 1885.”

The defenders reclaimed, and argued that the tender fell when the parties agreed to enter into a judicial reference which had the effect of taking the case out of the hands of the Court. The acceptance of the tender came too late, as it was not made until the findings of the arbiter had become known.

Authorities— Shiel v. Shiel's Trustees, Feb. 11, 1874, 1 R. 502; M'Laren v. Shore, July 3, 1883, 10 R. 1067; Rogerson v. Rogerson, Jan. 31, 1885, 12 R. 583; M'Nair v. Gray, May 31, 1827, 5 S. 686; Colquhoun v. Haig, Jan. 13, 1825, 3 S. 298.

Replied for pursuer—The circumstance of a cause being remitted to a judicial referee did

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not in any way affect a tender, because a judicial reference is merely a step of procedure in a depending action. [See Bell on Arbitration, p. 269]. The matter was not affected by the mere intention of the referee to decide one way or other, and at the time when the letters were written by the clerk to the reference the referee would have been entitled to withdraw his award, as it had not been delivered to the parties.— Mackenzie v. Girvan, Dec. 19, 1840, 3 D. 318; Taylor v. Burns, May 17, 1839, 1 D. 743; Gillon v. Simson, Jan. 14, 1859, 21 D. 243.—A tender is an offer in the cause. While the one exists, the other holds good. The decree-arbitral is not a final decree; this award never became final.— Paul v. Springfield, 21 D. 206.