Scottish Court of Session Decisions

Mr Jardine Henry, trustee on the sequestrated estate of the late John Graham, Esq., of Ballagan, in 1862 claimed from the Glasgow Corporation Water Works Commissioners the sum of £1071, 14s. 6d. as compensation in respect of the construction of their works through lands the minerals of which, as he alleged, belonged to him. The claim was referred to arbiters, one of whom was named by each party.

The findings in the decree-arbitral were as follows:—“First, we, the said arbiters, hereby find no damages or compensation due to the said Jardine Henry, as trustee foresaid, under or in respect of the said deed of nomination by him, and nomination of arbiter by the said commissioners, or subject-matter thereof; and, second, we, the said arbiters, hereby declare that the expenses of the arbitration, and incident thereto, shall be borne by the parties, in conformity with the provisions of the Lands Clauses Consolidation (Scotland) Act, 1845.”

By section 32 of the Lands Clauses Consolidation (Scotland) Act it is provided:—“All the expenses of any such arbitration, and incident thereto, to be settled by the arbiters or oversman, as the case may be, shall be borne by the promoters of the undertaking, unless the arbiters or oversman shall award the same sum as, or a less sum than, shall have been offered by the promoters of the undertaking, in which case each party shall bear his own expenses incident to the arbitration; and in all cases the expenses of the arbiters or oversman, as the case may be, and of recording the decree-arbitral or award in the books of Council and Session shall be borne by the promoters of the undertaking.”

The Water Commissioners having been called on to pay the account of Mr William Traquair, W. S., the clerk to the reference, amounting to £92, 10s., they did so under reservation of their right to recover

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one-half from Mr Henry, and then raised this action against him for relief to that extent.

They averred in Cond. 10.—“The account incurred to Mr Traquair, as clerk to the reference, before referred to, is, to the extent of one-half thereof, part of the defender's own expenses incident to the arbitration, and is payable by him, the arbiters having awarded him nothing. The pursuer not only repeatedly called upon the defender to pay his share of the said account before settling with Mr Traquair, but he has also since then required the defender to relieve him of the one-half of the said account. The defender refuses or delays to do so, and this action has therefore become necessary.”

The defender averred in Stat. 7.—“The account sued for consists entirely of the expenses of the arbiters and oversman. It embraces, inter alia, fees paid by them to counsel whom they consulted in the course of the reference on a question of law which arose between the parties, for their guidance; and of railway and coach fares, and hotel bill, and other personal expenses incurred by the arbiters in visiting the works; of stamps for the decree-arbitral; of postages, and the expenses paid, or for which they were liable to their clerk, for drawing the decree-arbitral; and attendances upon them during their deliberations. None of the items contained in said account were incurred by or on the employment of the defender, but are entirely expenses incurred by the arbiters themselves. The shorthand writer was not employed by the defender, nor with his consent or concurrence. The defender was not consulted as to his employment, nor did he procure from him a copy of the notes of evidence taken 11y him at the proof.”

The parties having renounced probation, the Lord Ordinary (Ormidale) found that the defender was liable in relief and payment to the pursuer of one-half of the foresaid account paid to Mr Traquair, in so far as the same consists of proper charges incurred to him as clerk to the foresaid reference; ant1 before further answer, remitted to the auditor of the Court of Session, as a man of business, to examine Mr Traquair's account, hear the parties thereon, tax the same, and report to the Lord Ordinary. He added the following

Note.—There neither was nor court be any dispute as to the o1,ligation of the parties in this case to bear their own expenses incident to the arbitration. Cut the defender denied that the charges of Mr Traquair, the clerk to the reference, were of the nature of expenses ‘incident to the arbitration,’ and maintained that they were rather of the nature of ‘expenses of the arbiters,’ which the Waterworks Commissioners, as promoters of the undertaking, were, in terms of section 32 of the Lands Clauses Consolidation Act, bound to defray themselves. There might be some difficulty in determining precisely what charges, if any, besides their fees, fall under the expression ‘expenses of the arbiters,’ but there can be no doubt that both parties were and are liable to the clerk to the reference in payment of his just charges, each having his relief against the other to the extent of one-half thereof. See Mr Bell's Treatise on the Law of Arbitration, and authorities cited by him, and particularly the case of Macfarlane, 29th June 1842, 4 D. 1459. If this be so, it appears to the Lord Ordinary that, in terms of the statutory provision, not disputed to be applicable to the present case, that ‘each party shall bear his own expenses incident to the arbitration,’ the liability of the defender as concluded for is clear.

The only point attempted to be made on the part of the defender to the contrary, was founded on the assumption that the arbiters being themselves the parties liable to the clerk for his charges, such charges must be held to be part of the ‘expenses of the arbiters;’ but no authority whatever was cited in support of the defender's assumption, which the Lord Ordinary holds to be unfounded. He does not suppose it was ever maintained by a clerk to a reference that the arbiters were personally responsible to him for his account. In appointing the clerk to a submission or reference, the arbiters act as mandatories or quasi-mandatories of the parties, and in virtue of the powers, express or implied, derived from them. This, as well as that the parties are liable for his just charges, must be assumed to be always known to the clerk, and therefore on their, and not the responsibility of the arbiters, it may be fairly held that the clerk has accepted of the appointment and performed its duties. The Lord Ordinary understood the counsel for both parties to say that they had no objection to such a remit as that now made to the auditor.

“It may be proper to add that the defender's counsel suggested rather than seriously maintained, that even supposing the principle on which the Lord Ordinary's interlocutor proceeds to be sound in itself, and applicable to the case of the same or a less sum of damages having been found due than what hat1 been offered by the promoters of the undertaking, it could have no application to the present case, where no damages at all were found to be clue, and no previous offer hat1 been made. The Lord Ordinary could not give effect to a plea so inequitable as this, and of which there is no indication in the record. It seems, besides, to have been substantially overruled in the case of the Queen v. Biram, 17 Ad. and Ellis, p. 969, cited on the part of the pursuer.”

The defender reclaimed.

Clark and Johnstone, for him, argued:—1. No tender was made in this case, and the arbiters awarded nothing. It is therefore not within the exception contained in section 32, and all the expenses of the arbitration fall to be paid by the promoters. In the case referred to by the Lord Ordinary this point was not urged upon the Court. 2. The clerk's account is a portion of the arbiters' expenses, which, in any case, fall to be paid by the promoters.

Young and Burnet, for the pursuers, replied— 1. There is no plea on record in regard to the first ground of non-liability; but to give effect to it would be violating the spirit of the statute. Reg. v. Biram is conclusive as to this and this is an a fortiori case. 2 The clerk's account is the expense of the parties, because in employing a clerk arbiters act as their quasi-mandatories.

At advising,