Scottish Court of Session Decisions

James Lindsay, miner, George Place, Cowdenbeath, by virtue of an extract registered memorandum of agreement under the Workmen's Compensation Act 1897, dated 6th July 1905, and recorded in the register kept under the Act in the Sheriff Court at Dunfermline on 17th July 1905, and in the Sheriff Court books of the county of Fife at Cupar, for preservation and execution, on 23rd February 1906, charged the Fife Coal Company, Limited, having their registered office at Leven, to make payment of the sum of 15s. 11d. per week as from and after January 10th 1906.

The Fife Coal Company, Limited, brought a suspension.

Execution having been sisted on consignation, and the note passed, a record was made up.

The following narrative of facts, as set forth in the averments of parties, is taken from the opinion of the Lord Ordinary ( Dundas)—“The complainers, the Fife Coal Company, Limited, seek to suspend a charge at the instance of James Lindsay, miner, Cowdenbeath. It appears that, on February 1904, the respondent, while in the course of his employment with the complainers, met with an accident, and claimed compensation under the Workmen's Compensation Act 1897 in respect of his consequent incapacity for work. The parties agreed that the amount should be 15s. 11d. per week, which was the statutory

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maximum; and this was duly paid from 18th February 1904 to 26th September 1905. A memorandum of this agreement was recorded in the special register in July 1905, and in the Sheriff Court books for preservation and execution in February 1906. The complainers go on to aver that, the respondent having partially recovered and returned to work, the parties on or about 23rd October 1905 by agreement varied the weekly payment, and entered into a new agreement whereby the compensation was fixed at 7s. 9d. per week as from 26th September 1905: that this agreement superseded the prior recorded agreement; and that it was acted upon by the parties for the period between 26th September and 21st October. The complainers further say that on or about 6th November 1905 the parties by agreement again varied the weekly payment and entered into a new agreement whereby the compensation was fixed at 5s. per week as from 21st October; that the agreement of 23rd October was thereby superseded; and that this latest agreement was acted upon by the parties for the period between 21st October and 9th December 1905. At the latter date the complainers proposed to reduce the compensation to 4s. 7d. per week; but the respondent declined to agree to this; and on 10th January 1906 he left their employment, and intimated to them that he was then totally incapacitated for any work whatever. The complainers admit liability to pay compensation at 5s. per week from 21st October 1905, till that rate shall be varied by agreement or review in terms of the Act. But the respondent has charged them for payment at the rate of 15s. 11d. from and after 10th January 1906, his charge being based upon the original agreement, which is the only one which has been recorded. Hence the present suspension.”

The complainers pleaded—“(1) The said charge is inept in respect ( a) that it bears to proceed upon a recorded memorandum of an agreement which has not been binding on the complainers since 26th September 1905, and which was superseded by the foresaid agreements of 23rd October and 6th November 1905; ( b) that the respondent's right to compensation at the rate charged for ceased from and after 26th September 1905, or at all events from 21st October 1905; and ( c) that in any event the respondent has not since 21st October 1905 had right to compensation at a higher rate than 5s. per week. (2) The respondent is barred by the foresaid agreement of 23rd October 1905 from claiming from the complainers compensation at the rate of 15s. 11d. per week, and is barred by the foresaid agreement of 6th November 1905 from claiming from the complainers compensation at any higher rate than 5s. per week without either coming to an agreement with the complainers for payment at a higher rate, or having the compensation reviewed and increased upon application to the Sheriff for that purpose, and the said charge should accordingly be suspended. (3) Separatim—The respondent not being entitled to recover from the complainers by way of compensation any higher sum than such a sum as, along with the average amount which he is able to earn after the accident, will equal his average weekly earnings before the accident, the amount charged for is excessive, and the charge should in the circumstances be suspended.”

The respondent pleaded, inter alia—“(1) The action is incompetent.”

On 2nd February 1907 the Lord Ordinary ( Dundas) pronounced this interlocutor—“Repels the reasons of suspension, finds the charge orderly proceeded, refuses the prayer of the note of suspension, and decerns: Finds the respondent entitled to expenses against the complainers: Allows an account thereof to be given in, and remits the same when lodged to the Auditor of Court to tax and to report: On the motion of counsel for the respondent authorises the Accountant of Court, on presentation of a certified copy of this interlocutor, to deliver to him the consignation receipt for £6, 9s. 8d., and the Commercial Bank of Scotland, Limited, also on presentation of a certified copy of this interlocutor, to make payment to the respondent of the sum contained in said consignanation receipt with all interest accrued thereon.”

Opinion.—“… [ After the summary of the averments of parties above quoted] … The parties are at issue upon two matters of fact, viz. (1) the nature and constitution, if any, of the alleged ‘agreements’ in October and November 1905, and (2) the alleged incapacity of the respondent as at 10th January 1906. The complainers' counsel moved for a proof on these heads. For reasons which I shall state, I think that motion must be refused. It appears to me that the recent case of Davidson (November 24, 1906, 44 S.L.R. 108) has a very material bearing here, and indeed comes near to ruling—though it does not absolutely and in terms rule—the present case. The Court there laid down that a recorded agreement is not displaced as a warrant of charge by a subsequent unrecorded agreement. That pronouncement seems to carry one a long way towards refusing this suspension. But the complainers point to differences in fact which they say are sufficient to distinguish the two cases. In Davidson the workman charged his employers in virtue of a recorded agreement for compensation at a reduced rate, fixed by a subsequent unrecorded agreement which he admitted to have been made by the parties, and it was not therefore decided that a charge would be good though it was for a sum greater than that which the charger had agreed to accept by an unrecorded agreement. But the decision and the dicta in Davidson's case appear to me to neutralise this suggested distinction. Then the complainers argued that the respondent, by having accepted the lesser rates for periods of weeks, is barred from now charging for payment at the higher rate originally agreed upon. But the respondent avers that his acceptance of these lesser rates was

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not in virtue of agreements to vary, as alleged by the complainers, but merely a matter of voluntary and temporary modification, and without prejudice to his right to demand the full amount originally agreed upon, in the event—which he says has occurred—of his becoming once more totally incapacitated. Now these, as already pointed out, are just the matters of fact upon which the parties are at issue, viz., the alleged agreements and the alleged incapacity. Now I think that to allow a proof in this Court upon either of these heads would be to run plainly counter to the policy of the Workmen's Compensation Act 1897, which aims at providing summary and inexpensive methods of inquiry where parties do not agree on matters of fact. It is provided—section 1(3)—that ‘if any question arises in any proceedings under this Act as to the liability to pay compensation under this Act, … or as to the amount or duration of compensation under this Act, the question if not settled by agreement shall, subject to the provisions of the First Schedule to this Act, be settled by arbitration in accordance with the Second Schedule to this Act.’ Now, all questions as to the alleged constitution of agreements to vary can, failing agreement, be brought to the sharp and speedy test afforded by Schedule II (8), by the party interested presenting such agreement to be recorded. Similarly, all questions as to a workman's capacity or the reverse can be speedily determined, failing agreement, by the statutory machinery. The present suspension does not, of course, take the form of ‘any proceedings under this Act.’ But where the Act provides specific and effective machinery for determining the questions at issue I do not think that one of the parties is at liberty to have these raised and expiscated in a process which might run its course through the courts up to the House of Lords. The complainers say that hardship will result if the suspension is refused. But the truth, in my opinion, is that the complainers have, or had, the remedy in their own hands, and have themselves to blame if, by not resorting to it, they are obliged to meet a claim which they could otherwise have defeated. There was nothing, so far as I see, to prevent them from recording the alleged subsequent agreements, if they were genuine, as provided by Schedule II (8), or from setting afoot the machinery of Schedule I (12) to have the payment reviewed. The former of these remedies was pointed out by Lord Ardwall in Davidson's case in the last paragraph of his opinion, and I agree with and adopt his Lordship's observations. I may add that I think it is clear that the complainers, and not, as was suggested in argument, the respondent are the ‘party interested’ within the meaning of Schedule II (8). During the discussion the following cases were referred to— Colville, 1905, 8 F. 179; Steel, 1902, 5 F. 244; Cavaney, 1903, 5 F. 963; Morton, 1902, 2 K.B. 276; Binning, 1906, 8 F. 407; Blake, 1904, 1 K.B. 503; Beath, 1903, 6 F. 168; Cammick, 1901, 4 F. 198; and Dunlop, 1901, 4 F. 203. I do not think it necessary to analyse or to comment upon these cases—though some of them at least have a material bearing on the questions here raised—further than to say that Blake's case, decided in England, to which the complainers' counsel referred, seems to me to be adverse and not favourable to their argument. Upon the whole matter I am of opinion that the complainers, in resorting to this procedure by way of suspension, have taken a course which, however ingenious, is not in the circumstances open to them to adopt, and that the suspension must be refused.”

The complainers reclaimed, and argued—(1) The respondent was barred from charging the full amount in the recorded agreement by the subsequent agreements where by lesser sums were accepted in name of compensation. These subsequent agreements operatedas contracts to replace the recorded agreement— Fife Coal Co., Limited v. Davidson, 1907, S.C. 90, per Lord Kyllachy at p. 94, 44 S.L.R. 108. (2) The respondent was not, they averred, totally incapacitated, and accordingly could not claim the maximum amount, for that plus what he could earn would make him better off than before the accident, contrary to Beath and Keay v. Ness, November 28, 1903, 6 F. 168, 41 S.L.R. 113; Nimmo & Co. v. Fisher, 1907, S.C. 890, 44 S.L.R. 641. They were entitled to a proof of this averment. The workman was charging for the full amount and ignoring the subsequent agreements, and this differentiated the case from Fife Coal Co., Ltd. v. Davidson ( cit. sup.) (3) The suspension and the inquiry were competent, because where an injustice would be otherwise done they were entitled to a common law remedy— Blake v. Midland Railway Co., [1904] 1 KB 503; Beath and Keay v. Ness ( cit. sup.); Nimmo & Co v. Fisher ( cit. sup.)—especially as the respondent had by charging upon the registered agreement invoked the aid of the common law. The suggested remedy of application for review under sec. 12 of the First Schedule would have been inconsistent with their position that the new agreements superseded the registered agreement. As to the suggested remedy of registering the new agreements under section 8 or section 14 ( b) of the Second Schedule, it would have been useless to attempt to do so, for the Sheriff, who could not take a proof as to a disputed verbal agreement— Binning v. Easton & Sons, January 18, 1906, 8 F. 407, 43 S.L.R. 312—would have refused (following Lord Salvesen's opinion in Hughes, cit. inf.) to register it. It was true that they could then have brought an action of declarator that the verbal agreement had superseded the recorded agreement, and for reduction of the latter— Hughes v. Thistle Chemical Co., 1907, S.C. 607, 44 S.L.R. 476—but if so they were entitled to raise the same question in a suspension.

Argued for the respondent—There was no relevant averment of an agreement to accept reduced compensation permanently. The receipts merely showed acceptance of a reduced rate for certain particular weeks. Such acceptance could only bar the respondent

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from claiming full compensation for these particular weeks, but he was putting forward no such claim. Nor was it averred that the respondent was earning anything, but merely that he could earn something. The question of his capacity to earn could not be competently raised in a suspension. In Beath & Keay v. Ness and Fisher v. Nimmo & Co. ( cit. sup.) there were, practically, admissions that incapacity had ceased, and the ground of judgment was that in these circumstances the workman's claim was unconscionable. Here disputes as to the amount and duration of compensation had arisen in January 1906, and under section 1 (3) of the Act such questions must be settled by arbitration. If distinction were attempted, and it were said that the disputes were regarding the existence of the verbal agreement, that was similarly a matter to be settled by arbitration— Field v. Longden & Sons, [1902] 1 KB 47, Collins. M.R., at p. 54. The complainers had alternative remedies open to them under the Act, and in these circumstances the suspension was incompetent. If they had believed they could establish an agreement to accept 5s. per week, their proper course was to register it under section 8 of the Second Schedule, as was done in Cammick v. Glasgow Iron and Steel Co., Limited, November 26, 1901, 4 F. 198, 39 S.L.R. 138; Dunlop & Rankin v. Blackmore, November 27, 1901. 4 F. 203, 39 S.L.R. 146; Blake v. Midland Railway Co. ( cit. sup.)—or under section 14 ( b) of the Second Schedule. If, on the other hand, they knew they could not substantiate any such agreement, then they should have proceeded under section 12 of the First Schedule for review of the registered agreement. It was for the party who wished the subsisting agreement varied to make application. The subsisting agreement was not the verbal one alleged, but the registered agreement. A registered agreement was in a higher position than a mere verbal agreement— Colville & Sons, Limited v. Tigue, December 6, 1905, 8 F. 179, Lord Low at p. 189, 43 S.L.R. 129—and was not displaced as a warrant of charge by a subsequent unrecorded agreement— Fife Coal Co., Limited v. Davidson ( cit. sup.) A renunciation or variation of a decree-arbitral could only be proved by writ or oath—Dickson on Evidence, sec. 627; vide also Binning v. Easton & Sons, cit. sup. Lord Kyllachy at 8 F. 415. Hughes v. Thistle Chemical Co. ( cit. sup.), was merely a corollary of Binning v. Easton & Sons ( cit. sup.), and decided that since the latter mentioned case had determined that when a Sheriff decided that an agreement should be recorded an appeal did not lie against his decision, an action of reduction might be brought to prevent injustice being done. Here, on the contrary, as above pointed out, the complainers did have a remedy under the statute. [ Powell v. Main Colliery Co., Limited, [1900], A.C. 366, referred to.]

At advising—