Scottish Court of Session Decisions

By lease dated 22nd June and 20th July 1870, John Jackson, proprietor of little udston, lanarkshire, let to William Smith Dixon, Govan Colliery, Glasgow, and his heirs, assignees, and sub-tenants, the whole coal, ironstone, limestone, fireclay, and all other mines, metals, and minerals in the lands of Little Udston for the period of thirty-one years from and after the term of martinmas 1867. in 1873 a limited company under the name of William Dixon, limited, was formed for the purpose of acquiring the whole business and undertakings of William Smith Dixon, including the said lease, which was duly assigned to the company. the company worked the coal, &c., in said lands until martinmas 1898, when the lease came to an end and notice to remove was given. by the lease it was provided, inter alia, “With reference to the working of the said minerals, the second party [the lessee] hereby binds and obliges himself and his foresaids fairly and properly to work the said minerals, with liberty to him or them to adopt the long-wall, stoop-and-room, or any other mode of working the same, as he or they may deem most advantageous for the complete excavation of said minerals, and also at the expiry or other termination of this lease to leave the workings of such pits as are then in operation in good order and condition; declaring further, that the said

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first party and his foresaids shall have full power and liberty to inspect the workings of the said minerals in the said lands either by themselves or by others to be employed by them for that purpose, and to make plans thereof for their own use, but that always at their own expense, and in such way and manner and at such times as shall not interfere with the operations of the said second party and his foresaids.”…

The lease further provided that the second party should be bound, notwithstanding any and every assignation or subtack and intimation of the same, in payment of the rent and performance of all the obligations thereby undertaken by him during all the years of the lease.

On 7th February 1900 Arthur Jackson, the sole surviving trustee of the late John Jackson, under his trust-disposition and settlement, and others, who had succeeded to the estates of Barnhill and Little Udston under burden of certain provisions by virtue of the said settlement, raised this action against William Dixon, Limited, and the testamentary trustees of the late William Dixon, in which they concluded for the sum of £3521, 6s. 8d. in name of damages.

The pursuers averred—“(Cond. 3) By the said lease the tenant was taken bound ‘fairly and properly to work the said minerals, with liberty to him or them to adopt the long-wall, stoop-and-room, or any other mode of working the same as they may deem most advantageous for the complete excavation of said minerals.’ The first-named defenders in working the splint coal seam at first adopted the stoop-and-room system, by which the whole seam would have been exhausted had the stoops been extracted. But the system of working was soon after altered to the long-wall method. The change in the method of working took place after the lease had been assigned to the first-named defenders. No work was done in this portion of the mineral field by the said William Smith Dixon. Instead, however, of working the bottom portion of the seam first, and making the top portion of the seam a second working back towards the pit, the first-named defenders wrongously, improperly, and negligently worked the upper portion first, leaving the bottom portion of the seam unworked in the pavement, covered with debris and broken strata, rendering it in future perfectly unworkable. The firstnamed defenders did not work the said minerals fairly and properly, and the system they adopted, as above condescended on, was one which they knew, or ought to have known, was not advantageous for the complete excavation ofsaid minerals. The first-named defenders worked the said minerals in the said improper and unfair manner with a view and result of making greater profits than they could have done had they worked the minerals fairly and properly. The defenders well knew that in working the minerals in the way they did a large quantity of coal would be lost. (Cond. 4) The system of working above condescended on was not a fair and proper working of the said minerals, and in consequence of said improper working of the said minerals the bottom portion of the seam has been left quite unworkable. This bottom portion is 3 feet 6 inches thick, and its area extends to 329·76 acres. The quantity of coal lost to the trust estate in respect of this improper working amounts to 150,284 tons of coal and dross. On various occasions the first-named defenders' attention was drawn to the way in which they were working the said minerals, and to the loss which would ensue to the landlords thereby. (Cond. 5) In addition, the firstnamed defenders wrongously and improperly left two ranges of pillars unworked in the splint seam on the Udston Colliery march. It was their duty to have removed the said pillars, or at anyrate to have left the workings in such a condition as would enable the pursuer to extract the said coal. It is now impracticable to win the coal contained in the said pillars. The quantity of coal and dross contained therein amounts to 39,792 tons, which with the tonnage condescended on in article 4 amounts in toto to 198,076 tons. The pursuers believe and aver that if the said coal had been extracted there would have been lordship payable upon 105,640 tons of 22 1 2 cwts. Calculating the royalties at the rates stated in the lease of 8d. per 22 1 2 cwts., brings out a sum of £3521, 6s. 8d., which has been lost by the failure of the first-named defenders to work the said coals in a fair and proper manner.”…

The pursuers pleaded, inter alia—“(1) The defenders William Dixon, Limited, being bound in terms of the said lease to work the coals in a fair and proper manner, and having failed to do so, with the result that the trust estate administered by the pursuer Arthur Jackson has suffered loss and damage to the extent condescended on, the said pursuer, as trustee foresaid, is entitled to decree in terms of the conclusions of the summons.”

The defenders pleaded, inter alia—“(2) The pursuers' averments being irrelevant and insufficient in law to support the conclusions of the summons, the action should be dismissed.”

The Lord Ordinary ( Kyllachy) by interlocutor dated 8th December 1900 sustained the defenders' second plea-in-law and dismissed the action.

Opinion.—“In this case I have considered the record with reference to the recent argument on relevancy, and I have come to the conclusion that the defenders, having by the lease been made the judges as to the method of working most advantageous to the complete excavation of the minerals, the pursuers have not made averments relevant to entitle them to the proof which they ask. It is not, in my opinion, the just construction of the lease that the defenders were bound to adopt a mode of working which should in fact, or in the opinion of the Court, be most advantageous for complete excavation. Their obligation was to adopt the mode which they deemed most advantageous; and even assuming that their judgment might be reviewed on the ground that their professed judgment

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was not their real judgment, or in other words that they were dishonest, I find no averment, or at all events no averment sufficiently specific, to support an inquiry on that ground. Further, assuming that it is the just construction of the lease that, within the mode or method adopted, the defenders were bound without qualification to work ‘fairly and properly,’ I am unable to find in this record any averment, or at all events any sufficiently specific averment, of such unfair or improper working.

“I propose, therefore, while repelling the defenders' plea to no title, as to which I heard no separate argument, to sustain the defenders' second plea—the plea to relevancy, and dismiss the action.”

The pursuers reclaimed, and argued—The action was relevant. Assuming that the tenants were by the terms of the lease to be the judges of what was the proper system of working the minerals, they were bound, whatever system they might adopt, to work it “fairly and properly.” The pursuers' case was that the tenants had not worked the system which they adopted fairly and properly, and they had specifically set forth the grounds of their contention. The question in dispute was a question of fact to be determined by evidence, and the case was thus distinguished from Houldsworth v. Brand's Trustees, May 18, 1875, 2 R. 683, and Guild v. M'Lean, November 20, 1897, 25 R. 106, where the sole criterion was the opinion of the landlord.

Argued for the defenders—The Lord Ordinary was right in dismissing the action. No objection was taken to the defenders' method of working during the currency of the lease, and they were entitled to assume that the pursuers were satisfied with what was being done. The fact that the pursuers had the right to inspect the workings during the lease had a material bearing on the relevancy of their claim for damages made after the lease had expired— Faill v. Wilson, July 20, 1899, 36 S.L.R. 941, per Lord President. In the circumstances they must be held to have waived their right to complain. Moreover, evidence which might have been available while the defenders were working the minerals in the manner complained of could not now be obtained. The question in dispute was one really of skilled opinion and not a question of fact.