Scottish Court of Session Decisions

The Workmen's Compensation Act 1906, sec. 1 (4) enacts—“If within the time hereinafter in this Act limited for taking proceedings an action is brought to recover damages independently of this Act for injury caused by any accident, and it is determined in such action that the injury is one for which the employer is not liable in such action but that he would have been liable to pay compensation under the provisions of this Act, the action shall be dismissed; but the court in which the action is tried shall, if the plaintiff so choose, proceed to assess such compensation, but may deduct from such compensation all or part of the costs which in its judgment have been caused by the plaintiff bringing the action instead of proceeding under this Act. In any proceeding under this sub-section when the court assesses the compensation it shall give a certificate of the compensation it has awarded and the directions it has given as to the deduction for costs, and such certificate shall have the force and effect of an award under this Act.”

The Perth General Station Committee, incorporated by Act of Parliament, pursuers, brought an action against James Stewart, labourer, Perth, defender, concluding for the reduction of certain interlocutors pronounced by the Sheriff-Substitute and the Sheriff of Perthshire between 1st July1921 and 10th August 1922 in an action at the instance of the defender for damages at common law resulting from an accident which happened to him while in the employment of the pursuers.

The following narrative is taken from the opinion ( infra) of the Lord Ordinary:—“There has been a very unfortunate series of litigations between these parties, which is all the more regrettable in that the sum involved in the merits of the dispute is altogether out of proportion to the legal expenses which have been incurred. The facts which are material to the decision of this action of reduction are not in dispute. On the 30th June 1919 the defender met with an accident in the course of his employment with the pursuers. They paid him two weeks' compensation, equivalent in amount to that which he might have claimed under the Workmen's Compensation Act, and then ceased the payments. On 12th July 1920 the defender raised an action at common law in the Sheriff Court at Perth against the pursuers to recover a sum of £200 damages on the

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ground that the accident was caused by the pursuers' negligence. They denied negligence on their part and pleaded in any case contributory negligence on defender's part, and that the claim was barred because the defender had elected to take and had in fact received compensation under the Workmen's Compensation Act.

On the 25th April 1921 the Sheriff-Substitute issued an interlocutor in which he found in fact that the accident happened as the defender alleged, that he did not agree to accept compensation under the Workmen's Compensation Act, and that the accident was caused by the joint fault of the pursuers and defender, and he assoilzied the pursuers from the prayer of the initial writ, finding the defender liable in expenses.

Before the process in the action came to an end, viz., on the 7th June, the defender lodged a motion asking the Sheriff-Substitute to allow it to proceed as a claim at his instance under the Workmen's Compensation Act, section 1 (4).

On the 17th June the Sheriff-Substitute approved of the Auditor's report on the pursuer's account of expenses allowed in is interlocutor of the 25th April.

On the first July thereafter the Sheriff-Substitute allowed the cause to proceed as a claim under the Workmen's Compensation Act. This interlocutor was appealed to the Sheriff, and he dismissed the appeal as incompetent.

On the motion of the pursuers—who, it is explained, were desirous of obtaining an appealable interlocutor—the Sheriff-Substitute allowed parties a proof.

The pursuers again appealed against this interlocutor to the Sheriff, who again dismissed the appeal as incompetent.

On the 8th day of June the pursuers presented a note of suspension and interdict directed both against the defender and the Sheriff-Substitute, in which they asked this Court to interdict further proceedings under a pretended arbitration under the Workmen's Compensation Act, and in particular from proceeding with the proof therein which the Sheriff-Substitute had allowed.

Answers were lodged to the note, and I heard parties in the Bill Chamber and refused the note as incompetent and premature.

I expressed no opinion on the respective contentions of the parties in regard to the meaning and effect of the provisions of the statute. As I explained in a note, I thought that they fell to be disposed of under and in terms of the Workmen's Compensation Act—that is to say, by the Sheriff-Substitute in the first instance, but subject to the provisions and to the schedules to the Act and the appeal therein enacted.

On 3rd August the Sheriff-Substitute found the defender entitled to compensation, and awarded it under deduction of one-half of the expenses which the pursuers incurred in defending the common law action.

On the 16th October the pursuers presented to the First Division of the Court of Session a Stated Case on appeal against the Sheriff-Substitute's award. On the 19th January 1923 the Court dismissed the case as incompetent.

Thereafter on 7th March 1923 the pursuers raised this action of reduction, in which they seek to set aside all the orders of the Sheriff and Sheriff-Substitute pronounced in the proceedings for obtaining a certificate of compensation between 1st July 1920 and 10th August 1922.”

The parties averred, inter alia—“(Cond. 10) The whole interlocutors in the said action set forth in the summons are null and void. The defender having elected to claim damages from the pursuers at common law, and having brought the said action in which they were assoilzied with expenses, was not entitled to have compensation under the Workmen's Compensation Acts assessed therein in respect (1) that the said action was not brought within the time limited for taking proceedings under the Workmen's Compensation Act 1906, and (2) it had not been determined in said action that the injury sustained by the defender was one for which the defenders would have been liable to pay compensation under the provisions of the said Act. Further, the application by the defender to have compensation assessed was not made timeously. The said Sheriff-Substitute had issued a final interlocutor and had no jurisdiction, and was not entitled to proceed to the assessment of and to award compensation under the said Acts when the application was made. The whole proceedings and interlocutors since 1st July 1921 are ultra vires and null and void. With reference to the averments in answer, the proceedings in the action are referred to.… Quoad ultra the averments in answer so far as not coinciding herewith are denied.… ( Ans. 10) Denied. Explained that on a sound construction of the Workmen's Compensation Act the Sheriff-Substitute was entitled to follow the procedure he has adopted. It was admitted that the accident arose out of and in the course of the defender's employment, and it was established in the proof that the defender was at that date still incapacitated for work as a result of the injuries he had sustained. The pursuers had pleaded that the defender had accepted compensation under the Act, and while it was held that he had not received payments so as to bar a common law claim, the pursuers led evidence to establish, and they did not dispute their liability for, compensation. They never withdrew or qualified the assertion which they supported by proof, and the Sheriff-Substitute was well warranted without making any express finding to hold that there was common assent or judicial admission that the injury was one for which the employer would have been liable to pay compensation under the Act. That question was in fact determined in the action. The word ‘dismiss,’ as used in section 1 (1) ( a) of the 1906 Act, is not used technically but generally, and does not exclude an action in which in Scotland absolvitor is the appropriate judgment. In the circumstances averred there has been

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on the pursuers’ part art undue and excessive accumulation of actions. Explained that articles 1 to 6 inclusive and 9 of pursuers’ condescendence are taken verbatim from the condescendence annexed to the said note of suspension and interdict, and the media concludendi in both actions are the same.…”

The pursuers pleaded, inter alia—“1. The Sheriff-Substitute having no jurisdiction to proceed to the assessment of and to award compensation in the circumstances condescended on, and the interlocutors complained of being ultra vires and null and void, they should be reduced as concluded for.”

The defender pleaded, inter alia—“3. The action being incompetent both in general and in particular, because suspension and reduction as processes of review are not cumulative but alternative remedies, and because the pursuers have finally exhausted their remedy, if any, under the former process, should be dismissed. 6. Esto that the interlocutor of 1st July 1921 was ultra vires, the pursuers are barred personali exceptione from proponing such invalidity now ( a) by their failure to take timeous steps to suspend or reduce the said interlocutor so far as it allowed the cause to proceed as a compensation claim; ( b) by their failure to suspend or reduce the interlocutor of 20th April 1922; and ( c) by their actings in proceeding to proof and judgment in the said arbitration. 8. In any event, the pursuers not having availed themselves of their statutory rights of appeal, and having acquiesced in the interlocutors complained against, are barred from insisting in the present action.”

On 6th July 1923 the Lord Ordinary dismissed the action as incompetent.

Opinion.—[ After the above quoted narrative]—“The conclusions of the summons are supported by one general plea-in-law, in which the pursuers maintain that the Sheriff-Substitute had no jurisdiction to proceed to the assessment of and to award compensation to the defender.

The grounds of the action are set forth in condescendence 10, and are (1) that the defender's common law action was not brought within the time limited for taking proceedings under the Workmen's Compensation Act 1906, and (2) that the Sheriff-Substitute's interlocutor in that action of 25th April 1921 had not determined that the injury was one for which the pursuers would have been liable to pay compensation under the provisions of the Workmen's Compensation Act.

I think the decision of these questions involves investigation into the proceedings which took place before the Sheriff-Substitute, when the defender is alleged to have made his election, and raise questions of law arising solely on the construction of sections 1 (4) and section 2 of the Workmen's Compensation Act. The Sheriff-Substitute in his various interlocutors dealt with these matters, and disposed of them adversely to the pursuers. He issued a certificate of compensation bearing to be under section 1 (4) of the Act.

Although I had a full argument on these subjects, I do not think I should express any opinion on them, as it appears to me to be incompetent for a Lord Ordinary in the Court of Session to review any decision of the Sheriff-Substitute either on the facts which he held proved or on the construction of section 1 (4) of the Workmen's Compensation Act, by which a certificate of compensation may be awarded.

The Workmen's Compensation Act confers no express power on the Court of Session to review the Sheriff's findings in fact or in law made in any application under the statute, and I can see no reason for implying it. The review which the statute gives is a limited right of appeal on case stated to either Division of the Court of Session. The construction of the Workmen's Compensation Act is in my opinion confined to this tribunal, with a right of appeal to the House of Lords. There are, I think, two distinct cases in which an appeal by way of stated case is permitted by the Workmen's Compensation Act—(1) where the Sheriff is acting as arbitrator, and (2) where the statute enacts an appeal against the Sheriff's judgment though he is not sitting as arbitrator.

In the first case the appeal is expressly provided by rule 17 ( b) of the Second Schedule. The second case is illustrated by section 14 of the statute. When the workman raises proceedings under the Employers Liability Act or under that statute and at common law the proceedings are brought under the forms and in accordance with the provisions of the Sheriff Court Act 1907. But section 14 of the Workmen's Compensation Act gives a right of appeal against the Sheriff's decision in that class of action by way of stated case on a question of law. And although in that proceeding the Sheriff is not sitting as statutory arbiter, the concluding words of the section apply the provisions of the Second Schedule of the Act.to an appeal on a question of law in the form of a stated case as if he were.

When a workman raises an action of damages in the Sheriff Court under the Employers' Liability Act or under that Act and at common law, it is, I think, competent for him to exercise the right to claim compensation conferred under section 1 (4) of the statute.

In that event the words of section 14 of the statute in regard to an appeal appear to be sufficiently wide to give the parties a right to appeal to either Division of the Court of Session by way of stated case on any question of law which might arise in the application for a certificate of compensation under sub-section 4 of section 1.

The important consideration for the present question is to notice that every other mode of appeal to the Court of Session is expressly excluded by section 14. The leading purpose of this section was to abolish the right of appeal to the Court of Session for jury trial in cases where the Employers' Liability Act was invoked—the appeal, that is to say, under section 6 (1) of the Employers' Liability Act 1880 and section 9 of the Sheriff Courts Act 1877.

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But this right of appeal remains to the workman when his action of damages is exclusively laid at common law, and in that case the procedure for obtaining the certificate of statutory compensation is regulated exclusively by section 1 (4) of the statute.

When I considered the arguments of the parties in the note of suspension and interdict I had read the concluding words of this sub-section as having the same effect as the concluding words of section 14. It has now been authoritatively decided that an appeal to either Division of the Court of Session from the Sheriff's decision issuing or refusing a certificate of compensation under section 1 (4) of the statute is incompetent— Stewart, 1923 S.C. 556.

I am unable to find any provision of the statute which warrants the view that the Sheriff's decision on this subject can be reviewed by the Lord Ordinary in an action brought before him. My opinion is that the statute excludes all review of the Sheriff's judgment on the facts, and that review of his decision on points of law is confined to appeal by way of stated case to either Division of the Court of Session.

It was, however, strongly contended by the learned counsel for the pursuers that this action was competent at common law. It was argued that the statute gave the right to either party to obtain the opinion af either Division of the Court of Session on every question of law which the Sheriff decided, and that the present action was now the only form of process by which this could be accomplished.

I am not impressed with this argument. I think the statute makes provision for appeal where appeal is intended, and if the statute does not permit an appeal on a question of law arising in the proceeding for the issue of a certificate of compensation under section 1 (4), the presumption is that the exercise of this jurisdiction by the Sheriff or Lord Ordinary is intended to be privative.

It was also argued that the proceeding for obtaining a certificate of compensation was tacked on to an action in the Sheriff Court at common law, and that an action to set aside a Sheriff Court decree on a review of the merits of the judgment was always competent, and that this view was supported by the opinion of Lord Kincairney in the case of Taylor v. M'Gavigan, 23 R. 945, and by the judgment of the Second Division in the case of Mathewson v. Yeaman, 2 F. 373. It seems to be very doubtful whether the decision in Mathewson's case supports the argument, because LordYoung definitely laid it down that an action for reduction of an interlocutor pronounced in the Sheriff Court in order to review the merits of the Sheriff's judgment would not be entertained.

However that may be, I think the argument does not aid the pursuers in this case. When the defender elected to claim compensation under section 1 (4) the common law action in the Sheriff Court automatically came to an end, and the proceedings thereafter for obtaining a certificate of compensation were conducted solely under the provisions of the Workmen's Compensation Act.

Lastly, the pursuers argued that this action for reduction was competent in this Court because the award of the Sheriff-Substitute was pronounced by the exercise of a jurisdiction not warranted by the Workmen's Compensation Act. It is in a sense true that the questions of law which are in issue here do raise a question of the Sheriff's jurisdiction to entertain the defender's application under section 1 (4), but in substance the points raised are only questions of law arising on the just construction of the sections of the Workmen's Compensation Act, and if this action is competent in this case, then an action of reduction in the Court of Session would arise in every case in which the Sheriff erroneously decided whether an action arose out of or in course of an employment, or who were the dependants of a deceased workman within the meaning of the Act.

There are many cases in which this Court in the exercise of the power which Lord President Inglis described as ‘its super-eminent jurisdiction’ will set aside the awards or decisions of arbiters or inferior judges which have been vitiated by a fundamental nullity or by some transgression of duty or by a refusal to perform it. But this Court has not, I think, ever set aside the judgment of an arbiter simply because he came to an erroneous decision on a question of law which it was his duty to determine. In my opinion it was the duty of the Sheriff to decide the questions raised in the condescendence, and this Court cannot set aside his judgment upon them in an action of reduction.

I ought in conclusion to notice that the defender submitted an argument in support of his plea of res judicata. I do not think this plea is well founded. In the case of Menzies (20 R. (H.L.) 110) Lord Watson, citing the case of Gillespie v. Russell (3 Macq. 759), said the dismissal of an action upon relevancy without any inquiry into the merits can never be res judicata. By a parity of reasoning the refusal of a note of suspension and interdict in the Bill Chamber on the ground of incompetency cannot in my opinion be res judicata of the merits of the question which it was brought to try in the Court of Session.

I shall accordingly find that it is incompetent upon the grounds set forth in the condescendence to set aside in the Court of Session the interlocutors of the Sheriff in granting the certificate of compensation under section 1 (4) of the Workmen's Compensation Act 1906 and mentioned in the conclusions of the summons, and therefore dismiss the action with expenses.”

The pursuers reclaimed, and argued—Pursuers had from the commencement of proceedings stated and maintained their objection to the workman's motion as being too late. Accordingly they were not barred from suing the present action. The Sheriff-Substitute being functus in the case when the motion was made had no jurisdiction to deal with it— King v. Edinburgh Collieries Company, Limited, 1924 S.C. 167, per Lord

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President at p. 173, 61 S.L.R. 148; Stewart v. Perth General Station Committee, 1923. S.C. 356, 60 S.L.R. 194.

Argued for defender—The pursuers were barred from suing the present action. Having elected to appeal to the Sheriff and not having proceeded further they were barred from starting a new remedy by reduction— Tough's Trustee v. Edinburgh Parish Council, 1918 S.C. 107, 55 S.L.R. 146. The application to the Sheriff was timeously and competently made in terms of section 1 (4) of the Act. The following authorities were referred to Henderson v. Glasgow Corporation, 1900, 2 F. 1127, 37 S.L.R. 857; Baird v. Higginbotham & Company, Limted, 3 F. 673, 38 S.L.R. 479; Quinn v. John Brown & Company, Limited, 1906, 8 F. 855, 43 S.L.R. 643; M'Kenna v. United Collieries, Limited, 1906, 8 F. 969, 43 S.L.R. 713; M'Gowan v. Smith, 1907 S.C. 548, 44 S.L.R. 384; Slavin v. Train & Taylor, 1912 S.C. 754, 49 S.L.R. 93; Page v. Burtwell, [190812 K.B. 758; Cribb v. Kynoch Limited, [1908] 2 KB 551; Elliot, Workmen's Compensation Act (7th ed.), p. 201.