Scottish Court of Session Decisions

Hugh M'Donald Aldin, Muir of Turtory, Bridge of Marnoch, Banffshire, pursuer, on 17th July 1914 brought an action of damages for personal injuries against R. W. Stewart, Abbey Park Place, Dunfermline, defender.

The defender pleaded, inter alia—“(2) The pursuer having recovered compensation from his employers within the meaning of section 6 (1) of the Workmen's Compensation Act 1906, is statutorily barred from raising the present action.”

The facts are given in the opinion ( infra) of the Lord Ordinary ( Dewar), who on 3rd June 1915, after proof, repelled the second plea-in-law for the defender and quoad ultra continued the cause.

Opinion.—“This is an action of damages for injuries which the pursuer sustained through being knocked down by a motor car, which he alleges was carelessly driven by one of the defender's servants. At the time of the accident the pursuer was employed by the Dunfermline and District Tramways Company, and was injured while in the course of his employment.

In addition to a defence on the merits, the defender avers on record that the pursuer claimed and received half his weekly wage from his employer as compensation under the Workmen's Compensation Act 1906, and he pleads that the pursuer has thus recovered compensation within the meaning of section 6 (1) of said Act, and is therefore barred from pursuing this action.

A proof of this averment was allowed ab ante, and the question for decision is whether, on the evidence, it has been established.

The material facts—about which there is very little dispute—are briefly as follows:—

At the date of the accident the pursuer was about eighteen years of age. He was admittedly injured while in the course of his employment. When he had partially recovered from his injuries he called, on 25th December 1913, at the Tramway Company Office, and had an interview with the manager. He expected that the company would give him something while he was unable to work, but he did not ask for anything. He did not require to do so, because the manager told him that the company, which was insured against such accidents, had arranged to pay half his average weekly wage until he was better. The manager then handed him the sum of 30s., and prepared a receipt which he asked the pursuer to sign. The pursuer accepted the money and signed the receipt. He knew in a general way that he was entitled to something from his employers when he was injured, and had heard of the Workmen's Compensation Act, but he did not know any of its provisions, and was not aware that if he accepted compensation from his employers he could not sue the defender for damages. Indeed it had not occurred to him to sue anybody. He expected that he would soon be well again and able to work, and he accepted the payment from the manager as something to tide him over the period of convalescence. But he appears to have received internal injuries, and has not yet recovered. He states that he has been medically advised that his injuries are permanent, and it was after he became aware of this, and was informed that he had a right of action against the defender, that he raised this action. He still regularly receives half his weekly wage—which amounts to about 11/3—from his employers, but he states that he intends to refund them all the payments they have made to him.

The first receipt which he signed is in the following terms, viz.:—

‘ Dunfermline and District Tramways Company.

Tramways Depot,

Cowdenbeath, 25th Dec. 1913.

I have received from the Dunfermline and District Tramways Company the sum of one pound ten shillings, being compensation for accident sustained on Saturday, 6th December.

£1, 10s.

H. Aldin.’

The subsequent receipts are simple acknowledgments of money received, without reference to ‘compensation,’ until 26th November 1914, when the words ‘without prejudice' are added. And from and after 8th February 1915 the words ‘without prejudice, and under reservation of any claim against third parties,’ are used in all the receipts. The receipts were qualified in this way when the pursuer became aware that he had a choice of actions, and that if he ‘recovered’ compensation from his employers he could not sue the defender.

The question is whether in these circumstances the pursuer has ‘recovered’ compensation within the meaning of clause 6 (1) of the Act. That clause provides that a workman who has been injured by the fault of a third party while in the course of his employment shall have a choice of remedies. He may either proceed against his employer under the Act, or against the third party at common law; and he is not obliged, as he was under the 1897 Act, to decide before proceeding which is likely to be the better claim. He may proceed against both concurrently, but he cannot recover against both. If he recovers compensation his right to claim damages is barred, or if he recovers damages he has no longer a right to claim compensation.

The pursuer argued that the words ‘proceedings’ and ‘recover’ used in the section show that it was not intended to bar a workman from suing for damages unless he had already recovered compensation under legal proceedings taken against his employer in Court. But that reading is, I think, too narrow. I do not see why the word ‘recover’ should be limited to mean recover under legal proceedings. I think the fair meaning is this—If it can be shown that the workman has really exercised his option, and has claimed and received compensation

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or damages against one of the parties, he is barred from proceeding against the other— Page, [1908] 2 KB 758. The question therefore comes to be whether the pursuer did in fact exercise his option and finally elect to accept compensation rather than damages. I am of opinion on the evidence that he did not.

He accepted money from his employers shortly after the accident, and signed a receipt acknowledging ‘compensation.’ That is very important, and in most cases would probably be regarded as conclusive evidence that he had finally made his choice. But I do not think that it is so in this case. The pursuer did not ask for compensation or payment of any kind. The manager is quite emphatic on that point. He did not prepare the receipt and did not know what it signified. He did not know that he had a choice of actions, or that acceptance of compensation barred him from proceeding against the defender. I do not see how a man can be held to have exercised an option who did not know that there was any option open to him, and I am quite satisfied on the evidence that the pursuer did not in fact know at the time he signed the receipt; and in view of the fact that he was a minor and had no advice I do not think that it ought to be presumed that he did know. It would, I think, be contrary to the true intention and spirit of the section to hold that a minor was barred from exercising the option which he was clearly entitled to have because he had signed a receipt which he did not know the meaning of. In the case of Wright v. Lindsay, 1912 S.C. 189, 49 S.L.R. 210, where a workman of full age had claimed compensation from his employers and had granted receipts which bore that he had elected ‘to take compensation under the Workmen's Compensation Act,’ and which further bore that they were granted ‘under reservation of any claims against third parties,’ it was held that he had not ‘recovered’ compensation within the meaning of section 6 (1), and was not barred from suing a third party delinquent. The Lord Justice-Clerk said that the compensation paid must be regarded as ‘of the nature of a sum advanced by the employers under conditions which exclude the idea of its being a final acceptance of compensation under the Act.’ This, I think, is how the payments made in this case ought to be regarded also. It is true that the workman in Wright's case had specially reserved his claim against third parties. If the pursuer had had the same experience or advice it is possible that he too would have taken similar precautions. But in any case I think the only importance which can be attached to the qualification of the receipt is that it proves that the workman had not finally exercised his option. That in my opinion has been proved in this case also. The pursuer has never claimed payment from his employers. He does not ask for both compensation and damages. He does not propose to retain the money which he has received from his employers. He has undertaken to repay that from the damages which he hopes to recover from the defender, and his employers are apparently satisfied with this undertaking.

In these circumstances I do not think that the pursuer has recovered compensation within the meaning of section 6 (1), and I am accordingly of opinion that the second plea-in-law for the defender ought to be repelled and the action allowed to proceed.”

The defender reclaimed, and argued—It was proved that the pursuer had received compensation under the statute, and he himself had so stated in the receipts which he had signed. He was therefore barred from raising the present action. The test under the Workmen's Compensation Act 1906 (6 Edw. VII, cap. 58) was the de facto receipt of compensation— Page v. Burtwell, [1908] 2 KB 758—and not the exercise of an option as under the Act of 1897— Oliver v. Nautilus Steam Shipping Company, Limited, [1903] 2 KB 639; Valenti v. William Dixon Limited, 1907 S.C. 695, 44 S.L.R. 532; Fowler v. Hughes, 1903, 5 F. 394, 40 S.L.R. 321. Valenti v. William Dixon Limited and Fowler v. Hughes were also distinguished from the present case by special circumstances. The present case was a fortiori of Mackay v. Rosie, 1908 S.C. 174, 46 S.L.R. 999. Machaffy v. Collen Brothers, 1902, 36 Ir. L. T. R., was also in point. Ignorance of statutory rights could not be pleaded—Ersk. i, 1, 13. The pursuer did not aver lesion, as in M'Feetridge v. Stewarts & Lloyds, Limited, 1913 S.C. 773, 50 S.L.R. 505. It must therefore be presumed that he acted in full knowledge of his rights. In Huckle v. London County Council, 1910, 4 B.W.C.C. 113, the Court held that if the workman did not understand that he was signing a receipt for compensation under the Act he might not be bound by its terms, but if the decision was that if he did not know the legal results of so signing he might not be bound the case was wrongly decided. Wright v. Lindsay, 1912 S.C. 189, 49 S.L.R. 210, was distinguishable from the present case, but in any event it was inconsistent with Mulligan v. Dick & Son, 1903, 6 F. 124, 41 S.L.R. 77, and Murray v. North British Railway Company, 1904, 6 F. 540, 41 S.L.R. 383, and should not be followed.

The respondent (pursuer) argued—The Lord Ordinary's statement of the pursuer's legal position was correct, and the present case was ruled by Wright v. Lindsay ( cit.). The ultimate test under the Act of 1906, as under the Act of 1897, was whether the workman had exercised his option and elected between compensation and damages. Under the Act of 1906 the workman had the additional advantage of ascertaining the value of two possible claims before choosing between them. The pursuer had not made an election, as he was ignorant of his rights and did not know a choice was open to him. Further, the evidence did not show an agreement to accept compensation under the Act.