Scottish Court of Session Decisions

The Railway Rates and Charges No. 19 (Caledonian Railway, &c.) Order Confirmation Act 1892 (55 and 56 Vict. cap. Ivii), Schedule of Maximum Rates and Charges, &c., enacts—Section 5—“The company may charge for the services hereunder mentioned, or any of them, when rendered to a trader at his request or for his convenience, a reasonable sum by way of addition to the tonnage rate. Any difference arising under this section shall be determined by an arbitrator to be appointed by the Board of Trade at the instance of either party: Provided that where before any service is rendered to a trader he has given notice in writing to the company that he does not require it, the service shall not be deemed to have been rendered at the trader's request or for his convenience. (i) Services rendered by the company at or in connection with sidings not belonging to the company. (ii) The collection or delivery of merchandise outside the terminal station. (iii) Weighing merchandise. (iv) The detention of trucks, or the use or occupation of any accommodation, before or after conveyance, beyond such period as shall be reasonably necessary for enabling the company to deal with the merchandise as carriers thereof, or the consignor or consignee to give or take delivery thereof; or, in cases in which the merchandise is consigned to an address other than the terminal station, beyond a reasonable period from the time when notice has been delivered at such address that the merchandise has arrived at the terminal station for delivery; and services rendered in connection with such use and occupation. (v) Loading or unloading, covering or uncovering merchandise. …” Section 25—“In this schedule, unless the context otherwise requires, … the term ‘trader’ includes

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any person sending or receiving or desiring to send merchandise by the railway…”

The Railway Rates and Charges No. 25 (North British Railway, &c.) Order Confirmation Act 1892 (55 and 56 Vict. cap. lxiii). Schedule of Maximum Rates and Charges, &c., makes similar enactments.

The Caledonian Railway Company, pursuers, brought an action against the Clyde Shipping Company, Limited, defenders, concluding for payment of £51, 15s. 9d. demurrage in respect of detention of waggons and sheets. The North British Railway Company, pursuers, brought a similar action for payment of £92, 15s. 3d. The averments and pleas-in-law of the parties in both actions, which were dealt with together, were substantially identical.

The averments in the action by the Caledonian Railway Company were as follows:—“(Cond. 1) … The pursuers have railways to General Terminus Station, thence to the General Terminus Quay belonging to them situated on the south side of the river Clyde and near to said General Terminus Station, and carry traffic over the said railways. (Cond. 2) The defenders are a Shipping Company, and in the course of their business, traffic consigned to them is carried over the railways of the pursuers and delivered to the defenders. The defenders, also in the course of their business, themselves consign traffic to be carried over the railways of the pursuers. In particular, the defenders have traffic consigned and sent to them to the General Terminus Station of the pursuers for shipment at General Terminus Quay. Said traffic is conveyed to the said General Terminus by the pursuers over their railways, and is there delivered by the pursuers to the defenders as the consignees thereof. The defenders also consign and send traffic by the pursuers' railway from the said General Terminus to the Partick Station of the pursuers. The defenders' explanation in answer is denied so far as not coinciding herewith. (Ans. 2) Admitted that the defenders are a shipping company, and that traffic carried over the pursuers' system of railways is handed over to them for transport by sea, while traffic already carried by the defenders is handed over to the pursuers for carriage by land. Admitted that the transfer of said traffic takes place at the said General Terminus Quay. Quoad ultra denied. Explained that the defenders are not traders, but are simply carriers like the pursuers, and handle the traffic as carriers on its way from the consignor to the consignee as ordered by the owners or merchants of the goods. Further explained that in all the cases of traffic hereinafter referred to with one exception, the goods carried by the pursuers and defenders were first carried by the pursuers and thereafter by defenders. (Cond. 3) By virtue of the Railway Rates and Charges No. 19 (Caledonian Railway, &c.) Order Confirmation Act 1892 (55 and 56 Vict. cap. lvii), and the Schedule of Maximum Rates and Charges contained therein, the pursuers are authorised to charge, inter alia, a reasonable sum by way of addition to the tonnage rate for the detention of trucks before or after conveyance, beyond such period as shall be reasonably necessary for enabling the company to deal with the merchandise as carriers thereof or the consignor or consignee to give or take delivery thereof.… (Ans. 3) The said Confirmation Act and table of charges are referred to.… Quoad ultra denied. It is explained that the provisions of the said Act give the pursuers no authority to charge against the defenders the accounts sued upon in the present action. (Cond. 4) Between 27th May 1910 and 23rd June 1914 the defenders, for their own convenience, detained waggons and sheets belonging to the pursuers beyond the free time before mentioned, and in consequence thereof incurred demurrage amounting to £51, 15s. 9d. The amount of the demurrage incurred in respect of each waggon, the number of each waggon, and the period of detention were set forth in detail in accounts which have been rendered by the pursuers to and are in the possession of the defenders. These accounts are referred to and copies will be produced. The traffic in said waggons was in the case of traffic sent to the General Terminus aforesaid consigned and delivered to the defenders as aforesaid, and in the case of traffic sent to Partick Station aforesaid it was consigned by the defenders anddelivered to consignees named by them. With reference to the defenders' explanations and averments in answer, it is admitted that the defenders run a line of coasting steamers from Glasgow to various ports.… (Ans. 4) Admitted that certain accounts for demurrage have been rendered by the pursuers to the defenders to the amount stated. It is explained that liability for said accounts was in all cases repudiated by the defenders when the accounts were rendered and was not attempted to be enforced by the pursuers, who have delayed from June 1910 until now in seeking to establish a claim against the defenders. The dispute between the pursuers and defenders as to said charges constituted a difference arising under section 5 of the Schedule of Maximum Rates and Charges of the Confirmation Act founded on, and fell to be settled by an arbitrator appointed under said section. Quoad ultra denied under reference to answer 2 hereof. Explained that the defenders run a regular line of coasting steamers from Glasgow to London, Waterford, Cork, Limerick, Plymouth, Southampton, and Dover, and they advertise for the carriage of passengers, goods, and live stock by regular sailings on certain advertised days and at certain hours each week….

” The defenders pleaded—“1. In respect that the claim of the pursuers to make, and the refusal of the defenders to acknowledge liability for, the said charges raised a difference between the parties under section 5 of the Schedule of Maximum Rates and Charges attached to the Railway Rates and Charges Act founded upon, the matter fell to be determined by an arbitrator appointed under said section, and the Court has no jurisdiction to deal with the question in the present action. 2. The pursuers' averments being irrelevant and insufficient to support

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the conclusions of the summons, the action should be dismissed. 4. The pursuers having no power under the Railway Rates and Charges Order Confirmation Act or otherwise to impose on the defenders the charges sued for, the defenders ought to be assoilzied from the conclusions of the summons.”

On 9th December 1915 the Lord Ordinary ( Hunter) pronounced an interlocutor sustaining the first plea-in-law for the defenders and dismissing the action.

Opinion.—“This action is based entirely upon certain charges made under the Railway Rates and Charges Order Confirmation Act 1892 for demurrage claims which it is maintained that the defenders are liable to pay. The defenders dispute liability, and plead that the jurisdiction of the Court is excluded in respect of the provision in the 5th section of the schedule to the Act of 1892. That section provides that any difference arising shall be determined by an arbiter to be appointed by the Board of Trade at the instance of either party. One of the differences, as appears from the 4th sub-section of the section, is a claim with reference to the detention of waggons, which is the present case. The matter has been before the Court in England on more than one occasion, and quite recently the Divisional Court in England had occasion to consider the question in the London and North-Western Railway Company v. Jones, reported in [1915], 2 K.B., at p. 35. From the head-note in that case it appears that ‘the only case in which an action can be brought to recover charges for detention of trucks under an enactment in the above terms,’ that is to say, the terms of the section of the schedule which I have already read, ‘is where the defendant has agreed to pay the sum demanded and has failed to do so. If there is a refusal to pay and no agreement to pay can be proved, the case must be treated as one in which a “difference” has arisen within section 5, which must therefore be determined by an arbitrator and not by an action.’

“This statement of the law, which is in entire accordance with the opinions expressed by Mr Justice Rowlatt and Mr Justice Shearman, is, to my mind, conclusive of the present question. It was, however, maintained that I ought to keep the action alive and sist it, because it might conceivably be used for some purposes. One of the purposes was that if the defenders here successfully pled before the Commissioners that they were not traders the jurisdiction of the Commissioners might then be ousted. If such a situation as that arose an action might be a method of expiscating the difficulties between the parties; but such an action would not be the present action, which has no declaratory conclusion but an entirely different action. I might, by amendment, allow the pleadings to be altered so as to raise the question, but it does not appear to me that in view of such a remote contingency I should allow the action to remain in Court, especially when there is statute law interpreted by decisions of the Court to the contrary effect.

I shall therefore sustain the plea to the jurisdiction and dismiss the action with expenses.”

The pursuers reclaimed, and argued—The Lord Ordinary was wrong, and should have repelled the first and second pleas for the defenders. At common law the jurisdiction of the Courts was universal unless expressly excluded, and the onus was upon the defenders to show that jurisdiction was excluded in this case. It was a condition-precedent to arbitration (which was admittedly the only other possible method of dealing with the matter in dispute) that a difference in the sense of section 5 of the Schedule of the Maximum Rates and Charges of the Railway Rates and Charges No. 19 (Caledonian Railway, &c.) Order Confirmation Act 1892 (55 and 56 Vict. cap. lvii), and the corresponding schedule to the Railway Rates and Charges No. 25 (North British Railway, &c.) Order Confirmation Act 1892 (55 and 56 Vict. cap. lxiii), should have arisen between the parties— Great Western Railway v. Phillips & Co., [1908] AC 101, per Lord Loreburn, L.C., at p. 103, [1907], 2 K.B. 664. But no such difference had arisen. The only question which was a difference under that section was the question of reasonableness, i.e., the reasonableness of the charges made and of the free time allowed, and that was not a question of fact or law but of railway management—a question properly withdrawn by the Railway Statutes from the jurisdiction of the Courts. Further, the difference must be between a company and a trader in the sense of the schedule. Here the only questions were of fact and law, i.e., were the defenders traders or not, was the detention at their request and for their convenience or not, &c., while the reasonableness of the charges was not challenged and could not be now challenged— North British Railway Company v. North British Grain Storage and Transit Company, 1897, 24 R. 687, 34 S. L.R. 563. Such questions as these might, no doubt, be competently decided incidentally by an arbitrator properly seised with a reference— Ransohoff & Wissler v. Burrell, 1897, 25 R. 284, 35 S.L.R. 229; Caledonian Railway Company v. Greenock and Wemyss Bay Railway Company, 1873, 10 Macph. 892, per Lord Kinloch, at p. 898, 8 S.L.R. 634; but upon those questions he was not final, and as in this case these were the only questions in dispute, arbitration was out of the question, for the parties were at issue upon the very conditions that must be fulfilled to open the door to arbitration. It was not for the arbiter to decide as the sole question before him whether the conditions, upon which the reference to him became competent, were in existence— Sinclair v. Clyne's Trustees, 1887, 15 R. 185, 25 S.L.R. 172. Further, no question had arisen under this section. The section was one giving power to charge; if the circumstances were such that the power to charge was not or could not be exercised, then the section never applied and no question arose under it. But the defenders' case was that the detention was not in terms of the section, and that they were not persons chargeable under the section, i.e., that the power in the

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section had not been and could not be the basis upon which they could be charged. Assuming that the section did apply, the only question for the arbiter was that of reasonableness, which was not raised in the case. The question of trader or not turned upon the interpretation of section 25 of the schedule, and the other questions were of fact. In London and North-Western Railway v. Jones, [1915], 2 K.B. 35, the Court never considered whether a question of pure fact or law was a difference arising under section 5; the only question was whether a trader was overcharged. In the Lancashire and Yorkshire Railway v. Swann, 11916], 1 K.B. 263, the question of the reasonableness of the free time was considered by the Court but no objection was stated. In the Glasgow and South-Western Railway Company v. Polquhairn Coal Company, 1916 S.C. 36, 53 S.L.R. 73, the present defence was available but was not stated. In the London and North-Western Railway v. Billington, Limited, [1899], A.C. 79, [1898], 2 Q.B. 7, the jurisdiction of the Court was sustained as there was no difference under the section. In the Midland Railway v. Loseby and Carnley, [1899], A.C. 133 ( per Lord Macnaghten at p. 137, and Lord Shand at p. 139), the arbiter was held competent to deal with questions incidental to the question of reasonableness. Even questions of reasonableness were still open to the Court unless its jurisdiction was expressly excluded— Midland Railway Company v. Myers, Rose, & Company, [1909] AC 13, [1908] 2 KB 356. Further, the English cases did not form a safe guide, as in England at common law a clause of reference did not absolutely exclude the jurisdiction of the Courts, which still had a discretion to entertain the case or not, and considered whether the matter should be dealt with as a whole by themselves or by the arbitrator. The Scots Courts, on the other hand, entertained such parts of the case as were not excluded from their jurisdiction, and held themselves bound not to trench on what was appropriated to the arbitrator. Consequently, in England, when the jurisdiction of the Courts was excluded by statute, the tendency was to send the whole controversy to the arbitrator, and this explained the breadth of the dicta, particularly in the London and North-Western Railway Company v. Donellan, and v. Billington, [1898] 2 QB 7. Further, even if the whole controversy was for the arbitrator, the case ought to be kept in Court for executorial purposes. The Court had power to enforce the findings of an arbiter in railway cases—Railway and Canal Traffic Act 1854 (17 and 18 Vict. cap. 31), sec. 3; Regulation of Railways Act 1873 (36 and 37 Vict. cap. 48), secs. 6 and 26.

Argued for the defenders (respondents)—The Lord Ordinary was right, and should be adhered to. The difference between the parties was a difference arising under section 5 of the schedule, for the pursuers were suing for payment of sums due under that section, which, moreover, could not be claimed except in virtue of that section, for it alone was the warrant to charge—section 2. The language of the section was very wide, and was certainly co-extensive with the widest contractual clause that could be framed. Further, the Court never had jurisdiction in the present question, because section 5 first gave the right to make the charge and at the same time set up a special tribunal to deal with questions under it. The terms of the section were not limited to the question of reasonableness, and further, the section had been construed to cover cases such as the present where the questions were of fact and of law— Donellan's case ( cit.) ( per A. L. Smith, L.J., at p. 12, and per Chitty, L.J., at p. 17); Midland Railway Company v. Haigh, 1896, 13 T.L.R, 135 ( per Wills, J., at p. 136); Loseby's case ( cit.); London and North-Western Railway Company v. Jones ( cit.). In Spillers & Bakers, Limited v. The Great Western Railway Company, [1909] 1 KB 604, [1910] 1 K.B.778, a similar question to that raised here was sent to the Railway and Canal Commissioners. John Watson, Limited v. The Caledonian Railway Company, 1910 S.C. 1066 (per Lord President Dunedin at p. 1071), 17 S.L.R. 818, showed that the Railway and Canal Commissioners might go into a question of legal right. In the North British Railway Company v. Newburgh and North Fife Railway Company, 1911, S.C. 710 ( per Lord President Dunedin at p. 719), 48 S.L.R. 450, it was held that a question of law might go to the arbitrator if the reference was wide enough. In Charrington, Sells, Dale, & Company v. London and North-Western Railway Company, [1905] 2 KB 437 ( per Bigham, J., at p. 441), a question of law was decided. In the Polquhairn Coal Company's case ( cit.) the present defence was not stated. In Swann's case ( cit.) no objection was taken to the arbiter's jurisdiction to decide such a case as the present. Myer's case ( cit.) was not in point, for the question was expressly one for the Court. Billington's case ( cit.) was not in point, for there was no dispute under the section till after the case had come into Court. The Court would have to hold Jones's case ( cit.) was wrongly decided if they were to recal the Lord Ordinary. Phillips v. The Great Western Railway, [1906], 2 K.B. 426 ( per Lord Alverstone, C.-J., at p. 428, and Channell, J., at p. 431), [1907], 2 K.B. 664 ( per Fletcher Moulton, L.J., at p. 674), [1908] AC 101, did not decide the present question, but the dicta were to the effect that if the claim was under the section and it was resisted, then a dispute had arisen under the section. The same principle was laid down in the Caledonian Railway Company v. The Greenock and Wemyss Bay Railway Company, 1874 1 R. (H.L.) 8 ( per Lord Chancellor Cairns at p. 11 and p. 13), 11 S.L.R. 494, commented on in Crossfield & Sons, Limited v. Manchester Ship Canal Company, [1904] 2 Ch 123 ( per Vaughan Williams, L.J., at p. 135), [1905] AC 421. The difference between the English and Scots law as to jurisdiction in questions of arbitration was not of the essence, and was insufficient to invalidate the authority of the cases cited. Further,

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the case ought to be dismissed. The arbitration clause was statutory, and the tribunal to which the question was referred had power to enforce its findings. Hamlyn & Company v. Talisker Distillery, 1894, 21 R. (H.L.) 21, 31 S.L.R. 642, was not in point, for the clause in that case was a matter of contract, and the arbiter had no power to enforce his findings. The North British Railway Company v. The North British Grain Storage, &c., Company ( cit.) should be followed.

At advising—