Scottish Court of Session Decisions

Lord M'Laren.—This is a carefully prepared case stated under the Workmen's Compensation Act, 1906, and coming from the Sheriff Court of Zetland. The question raised is this,—“Was the late Levie James Clark at the time of his death a workman in the employment of the appellants within the meaning of the Workmen's Compensation Act, 1906?” The actual contract on which this man Clark was engaged when he was drowned was one under which his services had been engaged by another boatman, Robertson, on behalf of the common principals, the appellants, to work a boat belonging to them which was to be used to carry produce and other cargo connected with the fishing industry, and also to land cargo at Sandwick from the vessels of the North of Scotland and Orkney and Shetland Steam Navigation Company. Prima facie this is very like a contract of service. The one party is the owner of the boat, the others are to work it. The owners were entitled to send the boat where they pleased, and when there was no work for the boat they were to provide work for the men on shore. But the specialty of the case is that instead of being paid by weekly wages, these men were to be paid a share of the gross earnings of the boat. It is said that the remuneration being of that character displaces the prima facie aspect of the case, and suggests that the contract was of some other description.

Two alternative suggestions have been made. The first alternative is that the boat was hired by the boatmen, and one-third of the earnings was to be paid as rent to the owners. That suggestion was not much pressed, but it was tabled for our consideration. The other alternative, which apparently Mr Constable thought the better view, was that the agreement constituted a joint adventure between the owners of the boat and the men who were to work it, the profits being divisible between them. I need not say much as to the first alternative, I mean the theory of hiring, because I think the findings of the Sheriff-substitute are absolutely inconsistent with such a theory. It is clear the owners never intended to part with the possession and custody of the boat. The boatmen were to be under the control of the owners. They were to go to such places and to do such work as the owners should direct. If the men were hirers of the boat it would have been for them to consider and determine where they should go and how they should use the boat to the best advantage. I think, therefore, that the theory of hiring is inadmissible.

The theory of joint adventure is more plausible, but it has no more solid foundation than the other. It would be a strange kind of joint adventure in which two out of three joint adventurers contributed nothing to the capital embarked, and were not liable to contribute anything or to defray any losses which might be incurred. Further, there was here no delectus personœ. I allude to the fact that Robertson was to find another man. He was not to report or to bring the man whom he might select to the owners and introduce him to them. One would like at least to see the face of one's partner before entering into a contract of joint adventure with him. These essential features of a contract of joint adventure are awanting. Joint adventure is just a partnership limited to a particular season or a particular enterprise, in which there is either no power in the partners to bind one another, or such power is limited to the particular adventure. Only one point remains. Each of these two men, Robertson and Clark, was to receive a share of the gross earnings of the boat—not a share of the profits, for that would have implied deductions for expenses of management, repairs, stores, and perhaps bad debts. But as I read the agreement it is the gross earnings that are to be divided. Now, the Partnership Act, 1890, which to a large extent is an embodiment of principles of the common law familiar to lawyers, says, sec. 2:—“In determining whether a partnership does or does not exist, regard shall be had to the following rules:—(2) The sharing of gross returns does not of itself create a partnership, whether the persons sharing such returns have or have not a joint or common right or interest in any property from which or from the use of which the returns are derived.” The provision is different in the case of sharing profits, because the statute declares as follows:—“(3) The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, but the receipt of such a share, or of a payment contingent on or varying with the profits of a business, does not of itself make him a partner in the business.” Perhaps this latter provision innovates somewhat upon the case of Cox v. Hickman . But the statement in the leading part of the subsection is so qualified in the subordinate paragraphs that the subsection as a whole embodies accurately the distinctions made in the Courts as to the effect of participation in profits. But we have nothing to do with sharing of profits; and as regards sharing of gross returns, with which we have to do, this under the statute is not even prima facie evidence of the existence of a partnership. I think the framers of the Act were well advised in so providing,

because it is known that managers of departments of houses of business are often remunerated by a share of the gross returns of their departments. As sharing in the gross returns of the boat does not constitute a partnership between the persons who share the gross returns, I think this is not a case of joint adventure.

The result is, what is sufficiently obvious even to one who is not a lawyer, that this is just a contract of service. That being so, the Workmen's Compensation Act applies, because the exception in section 7 (2) of that Act only applies to the fishing industry—(His Lordship read the subsection). But then as this was not a fishing-boat, and consequently does not fall within the exception, the case falls within the rule which applies to all kinds of service. I am therefore of opinion that we should answer the question in the affirmative and dismiss the appeal.

Lord Pearson concurred.

Lord Dundas.—I am of the same opinion, and do not desire to add anything to what has been said.