Scottish Court of Session Decisions

This was a Stated Case on appeal in an arbitration under the Workmen's Compensation Act 1906 (6 Edw. VII, cap. 58) between George Gibson & Company ( appellants), shipowners, 64 Commercial Street, Leith, and John Gorman ( respondent), coal trimmer, residing at 46 Kirkgate, Leith, against a decision of the Sheriff-Substitute ( Guy) at Edinburgh, acting as arbitrator.

The Case stated—“This is an arbitration under the Workmen's Compensation Act 1906 in which the respondent craved an award of compensation for injuries he received while in the employment of the appellants at the Albert Dock, Leith, on 7th October 1907. The facts proved or admitted are as follows

“1. On 7th October 1907 the s.s. ‘Quentin’ was lying in the Albert Dock, Leith.

2. The registered owners of the ‘Quentin’ are Robert Somerville and Campbell Gibson, both shipowners in Leith, two of the members of the appellants' firm. There are other partners of the appellants' firm who are not registered owners of the ‘Quentin.’ The appellants act as agents or managers or managing-owners thereof.

3. The appellants are shipowners and shipping agents in Leith, and their business includes the loading and discharging of vessels under their charge or management, including the s.s. ‘Quentin.’ The appellants have no tools to enable the work to be carried on by them direct, and they do not themselves load or discharge coal but employ workmen to do it.

4. The appellants had agreed, conform to charter-party produced, with Messrs Endemann & Company of Glasgow, to ‘reserve in their steamers, from Leith to Rotterdam and Amsterdam, for Messrs Endemann & Company,’ room for 12/14,000 tons of coal for shipment between January and December 1907 at a freight of 3s. 9d. per ton.

5. The cost of loading and trimming the coal was made a charge upon the freight, and the freight, less charges, was paid over by the appellants to the registered owners of the ‘Quentin.’

6. On 7th October 1907 the s.s.‘Quentin’ was being loaded with coal under said contract, and the appellants required the coal to be trimmed in the holds when being loaded.

7. For this purpose a squad of men, of which the respondent was one, was engaged.

8. While so employed in trimming the coal on said date the respondent met with an accident arising out of and in the course of his employment, by being struck and knocked down by a beam which was being placed in position by the said squad by means of the ship's crane, whereby he sustained personal injury which incapacitated him for work.

9. At the Albert Dock coals are loaded by means of fixed hydraulic cranes which belong to the Leith Dock Commissioners.

10. In order to secure regularity, good order, and properly qualified men, the Commissioners many years ago instituted the practice and system of allowing shippers to engage at the hydraulic cranes only these squads of trimmers the heads of whom the Commissioners approved, and that practice and system are still followed. One of their printed and issued regulations (No. 18) is as follows:—‘In every vessel, except lighters, using the cranes the trimming of the coal in the holds shall be done by a sufficient number of properly qualified men employed by the master, agent, or shippers, for whom and for whose actings or conduct the Commissioners shall not be in any way responsible.’ In order to secure said purpose the Commissioners do not themselves select or choose the men forming a squad of trimmers, but having confidence in one particular man they select him as head of the squad, and allow him to choose the other properly qualified men to form the squad. The head of the squad in question was Owen Hughes, who had been selected by the Commissioners forty years previously, and he had the

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power to dismiss any member of the squad. When the master, agent, or shippers require a squad of trimmers, they send notice of this to the office of the Commissioners, where the heads of the various squads obtain information as to trimming required.

11. When the master, agent, or shippers require the use of one of the Commissioners' cranes, application is made at the Leith Dock Commission Office, and a permit obtained which is handed over to the crane inspector. A plan showing the manner in which the coal is to be trimmed is handed over to the squad by the shippers or shipowners, or through their agents, either directly or through the medium of the crane superintendent.

12. The squad of which the pursuer was a member have a monopoly of trimming coals loaded at the Leith Dock Commission cranes in the Albert Dock, Leith.

13. The squad is paid by the master, agent, or shippers at a fixed rate per ton for the trimming of all coals in the Albert Dock. For the convenience of both shippers and trimmers the charges of the trimmers are payable at the office of the collector of harbour and dock rates, where the shippers pay in the total trimming charges and where the head of the squad receives the same, under deduction of a small commission for the trouble of receiving and paying said charges.

14. The money on being handed over to the head of the squad is divided equally among the members, except that the head of the squad by agreement among its members gets an extra share in respect that he provides and maintains the tools used in the work. This practice was followed on the occasion of the accident to the respondent by the appellants as shipping agents paying in the trimming charges and the said Owen Hughes receiving them for division amongst the squad. On some occasions members of the squad received extra remuneration direct from the appellants for doing work in connection with the ship, such as shifting the ship and putting on hatches.

15. The respondent's average weekly earnings prior to the accident were £2, 15s.

16. The respondent on or about 27th March 1908 brought arbitration proceedings under the Act against the Commissioners for compensation, on the ground that they were his employers, or alternatively under section 4 of the Act that he was in the employment of Owen Hughes, who had contracted with the Commissioners to do said trimming. My award in said arbitration was that the respondent was not in the employment of the Commissioners, and that the work of trimming said coal was not work undertaken by the Commissioners in the course of or for the purposes of their trade or business. No appeal was taken from this award.

17. In the course of that arbitration the said Owen Hughes and the appellants were made parties by being called in by the Commissioners under section 4 of the Act and section 7 of the Act of Sederunt of 26th June 1907. The appellants entered appearance, lodged answers, and took part in the proof and proceedings, and were well aware from that time of the whole circumstances of the respondent's accident.

18. No notice of the accident provided for by section 2 of the Act was given by the respondent to the appellants. The appellants were not prejudiced in their defence to the claim by the failure of the respondent to give said notice. The claim for compensation by the respondent against the appellants provided for by section 2 of the Act was not made until 10th August 1908, being more than six months from the occurrence of the accident. The failure to make said claim within said period of six months from the occurrence of the accident was occasioned by mistake on the part of the respondent or other reasonable cause.

19. The respondent had completely recovered his capacity for work on 12th January 1909. No objection is taken to the amount of compensation awarded. In the present proceedings I found in fact that the respondent was, along with all the members of the squad, employed by the appellants to do trimming of coals in the course of and for the purposes of their trade or business of shipping agents, and was not in the employment of the Leith Dock Commissioners.

20. In these circumstances I found in fact and law that the appellants were the employers of the respondent, and that the respondent was a workman in the employment of the appellants, all within the meaning of the Workmen's Compensation Act 1906, and that the appellants were liable to the respondent in compensation, which I assessed and awarded at £1 per week from 7th October 1907 until 12th January 1909, as from which date I ended it, and I found the appellants liable in expenses.”

The Case was heard before the Second Division on 19th October 1909, and was of that date remitted to the Sheriff-Substitute “to amend the same by stating in detail the actual facts as distinguished from practice regarding (1) the employment of the respondent to trim coals on board the s.s. ‘Quentin,’ and (2) the payment to the respondent of wages for said work; and to state, inter alia, (1) Whether in point of fact the said trimming of coal was or was not work falling to be performed by the owners of the s.s. ‘Quentin’ under their contract with the shippers of the coal; (2) Whether in fact the appellants had anything to do with the said trimming of coal except as agents for the owners of the s.s. ‘Quentin,’ and if so, what? (3) Were the appellants in point of fact ever brought into direct contact with the respondent, and if so, in what manner? (4) Were the wages paid to the respondent or the other members of the squad to which he belonged on the occasions in question paid out of money belonging to the said shipowners, or if not, out of whose money were they paid?”

The amendment on the Stated Case

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stated, inter alia—“The Sheriff-Substitute … humbly begs to report that he has considered all the findings in fact stated by him in the case, and now reaffirms them as facts proved in the arbitration; … that in the arbitration proceedings condescendence by the respondent and answers by the appellants were duly given in obedience to interlocutor; that in these, although no record was formally closed, no point was raised by the appellants that they were only agents either for the actual owners of the ship or for the persons for whom the cargo of coal was at the time being shipped, the points expressly raised by the appellants being, that either the Leith Dock Commissioners on the one hand were the actual employers of the respondent within the meaning of the Workmen's Compensation Act, or that the respondent was, as a member of a trimming squad, in the employment of the head of the squad—neither of which contentions was proved.…

The Sheriff-Substitute, in obedience to said interlocutor, now amends the Stated Case by adding the following statements of facts—( a) The appellants are ‘shipowners and managing owners of the s.s. Quentin,’ as expressly admitted by them in their answers in the arbitration.

( b) The appellants ‘give instructions with regard to the trimming of any coals which may be loaded as cargo,’ as deponed to by their superintendent, and they did so give instructions in the present case.

( c) The appellants ‘issue a plan for the loading of the steamers as to how the different parcels are to be separated,’ and that because ‘it is necessary to deliver a plan showing how the work is to be done,’ also as expressly deponed to by their superintendent, and they did in the present case issue and deliver such a plan.

( d) The appellants ‘superintend the loading of the cargo, including the loading of coals’ also as expressly deponed to by their superintendent, and they did so superintend the loading of the cargo of coal in the present case.

( e) The appellants are the only persons who asked for the services of the squad of which the respondent was a member, and are the only persons who obtained the services of the squad.

( f) The appellants paid, and are the only persons who paid, the respondent for his work as a trimmer, though, as formerly stated, the payment was made for the convenience of all concerned through the office of the Leith Dock Commissioners.

( g) There was no contract between the owners of the s.s. ‘Quentin’ (if the appellants are not to be regarded as the owners) and the shippers of the coal. As is set forth in the Stated Case, the contract was between ‘Messrs George Gibson & Company, shipowners, Leith’ ( i.e., the appellants) and ‘Messrs Endemann & Company,’ the actual words of contract being, ‘It is this day mutually agreed between Messrs George Gibson & Company, shipowners, Leith, and Messrs Endemann & Company that Messrs George Gibson & Company shall reserve in their steamers from Leith to Rotterdam and Amsterdam for Messrs Endemann,’ &c. The trimming of the coal was not work falling to be performed by the actual owners of the ship, but fell to be performed by the appellants as the contracting parties.

( h) Nobody but the appellants had anything to do with the trimming of the coal, and in connection therewith they instructed it, superintended it, paid for it, and controlled it in every way as the contracting parties, as managing owners, as shipping agents, and in pursuance of their business of shipping agents, from which they derive their income, and as having full control of the vessel while in the port of Leith.

(i) The appellants were brought into direct contact with the respondent by contract. It was they who asked for his services along with the services of the other members of the squad, who obtained said services, and who paid for said services. The respondent had no knowledge who the actual owners of the ship were or who were the persons whose coal was being shipped or trimmed, and never came into contact with anybody but the appellants or their dock representatives.

( j) The wages paid to the respondent and to the other members of the squad to which he belonged on the occasion in question were paid by the appellants out of their own money, and, as is stated in the fifth finding of the Stated Case, that payment was made a charge upon the freight—that is to say, that all Messrs Endemann & Company had to pay was ‘freight’ at a rate per ton. The interest of the actual owners was only represented by the profit and loss account arising out of the management of the ship by the appellants.”

The questions of law, inter alia, were—“(2) Whether the appellants were employers of the respondent within the meaning of said Act. (3) Whether the appellants are liable in compensation to the respondent under said Act.”

Argued for the appellants—The respondent was not employed by the appellants. They had nothing to do with his selection or dismissal. They did not pay him. They had no power of superintendence over his work. The respondent was in the employment of Hughes, who was an independent contractor. Alternatively, the persons who should have been sued were the registered owners of the ship. It was the shipowners ultimately who paid the men engaged in the loading, it was out of their pockets that the wages came, and it was for their benefit that the work was done.

Counsel for the respondent were not called on.