Scottish Court of Session Decisions

The Greenock and Wemyss Bay Railway Company were the owners of a line of railway connected

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* Decided June 28, 1878.

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at a junction near Port-Glasgow with the Caledonian Railway Company. They had been incorporated by an Act of Parliament in 1862, and by an agreement scheduled to and confirmed by that Act it was provided that the line when completed should be worked by the Caledonian Railway Company. The traffic on the railway and piers in connection with it at Wemyss Bay, including the fixing of tolls, &c., was to be managed by a joint-committee of six persons, three to be named by the Board of Caledonian Railway directors, and three by the Greenock and Wemyss Bay directors, the chairman, who was to be appointed by the Caledonian, to have no casting vote. All differences were to be referred to arbitration. In return for the working of the line the Caledonian Company were to receive 50 per cent. of the gross receipts. Out of the other half of the receipts they were also to receive one-fourth of the balance left after payment of maintenance, public burdens, &c. This was in consideration of a sum of £30, 000 advanced by them for the construction of the line. The remaining three-fourths were to be divided among the other shareholders of the Wemyss Bay Company.

On 9th June 1875, in terms of the 11th section of the Regulation of Railways Act 1873, the Wemyss Bay Company served a notice upon the Caledonian Company requiring the passenger traffic passing along the Glasgow, Paisley, and Greenock Railway and the railway of the Wemyss Bay Company to and from the various stations on both those lines of railway, to be forwarded by the Caledonian Company at the various rates specified in the table thereto annexed. The Caledonian Company thereafter, by notice dated 17th June, acknowledged receipt of the Wemyss Bay Company's notice, and informed them that they objected to the rates and apportionment proposed therein. The Wemyss Bay Company subsequently, in terms of the 26th section of the above-mentioned Act, filed an application in the office of the Railway Commissioners, dated 1st July 1875, to which the Caledonian Company were made the sole respondents, in which, after setting out the notices of the 9th and 17th June respectively, they applied to the Railway Commissioners to pronounce an order allowing the several through rates and apportionment thereof proposed in the notice of 9th June and table appended thereto.

After hearing parties the Railway Commissioners, on 27th October 1875, gave a deliverance upon the question of through fares, but sent down, inter alia, the following question for the opinion of the Court of Session:—“(1) Whether or not the fact that the Wemyss Bay line of railway is worked by the Caledonian Company under the provisions of the said agreement of 1862 prevents the Wemyss Bay Company from applying under section 11 of the Regulation of Railways Act 1873 for the said through traffic to be forwarded at through rates?”

The Court after hearing parties pronounced an interlocutor by which they superseded consideration of the case, to enable the parties to apply to the Railway Commissioners to amend it so as to remove a difficulty they had in answering the question quoted (Jan. 16, 1877, 14 Scot. Law Rep. 235).

Application was thereafter made with that view to the Commissioners, who pronounced another deliverance, but the Court of Session on resuming consideration of the case still found themselves obliged to leave the question unanswered.

The Caledonian Railway Company then raised an action to have it declared that the deliverance of the Railway Commissioners as to the through fares was ultra vires of them.

They pleaded inter alia—“(1) The order of the Railway Commissioners foresaid was ultra vires and illegal in respect—1. The defenders had no title to make the application upon which it proceeded. 2. The Railway Commissioners were not entitled, in respect of the Greenock and Wemyss Bay Act and agreement therewith scheduled and incorporated, to grant the through rates referred to in said order, and to apportion the same, &c.

The Wemyss Bay Company pleaded inter alia—“(1) No jurisdiction. (2) The action is incompetent in respect that under section 26 of the Regulation of Railways Act 1873 an order of the Railway Commissioners can only be challenged or brought under review by appeal on a case stated, and on matters which in the opinion of the Commissioners are questions of law, and that the order complained of by the pursuers is now final and unchallengeable in terms of the said Act. (4) The proceedings and order of the Commissioners having been in all respects regular and within their statutory powers, the defenders should be assoilzied.”

The terms of the agreement of 1862 sufficiently appear from the Lord Ordinary's note and from the judgment of the Lord President, infra.

Section 11 of the Regulation of Railways Act 1873 provided—“Subject as hereinafter mentioned, the said facilities to be so afforded”(that is, the facilities provided by the Railway and Canal Traffic Act 1854) “are hereby declared to and shall include the due and reasonable receiving, forwarding, and delivering by every railway company and canal company and railway and canal company, at the request of any other such company, of through traffic to and from the railway or canal of any other such company at through rates, tolls, or fares (in this Act referred to as through rates): Provided as follows—(1) The company requiring the traffic to be forwarded shall give written notice of the proposed through rates to each forwarding company, stating both its amount and its apportionment, and the route by which the traffic is proposed to be forwarded. (2) Each forwarding company shall, within the prescribed period after the receipt of such notice, by written notice inform the company requiring the traffic to be forwarded whether they agree to the rate and route, and if they object to either, the grounds of the objection. (3) If at the expiration of the prescribed period no such objection has been sent by any forwarding company, the rate shall come into operation at such expiration. (4) If an objection to the rate or route has been sent within the prescribed period, the matter shall be referred to the Commissioners for their decision. (5) If an objection be made to the granting of the rate or to the route, the Commissioners shall consider whether the granting of the rate is a due and reasonable facility in the interest of the public, and whether, having regard to the circumstances, the route proposed is a reasonable route, and shall allow or refuse the rate accordingly, ”

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&c. [ Other provisions followed, which it is unnecessary to quote here.]

Section 26 of the Act provided—“26. Any decision or any order made by the Commissioners for the purpose of carrying into effect any of the provisions of this Act may be made a rule or order of any Superior Court, and shall be enforced either in the manner directed by section 3 of the Railway and Canal Traffic Act 1854 as to the writs and orders therein mentioned or in like manner as any rule or order of such Court… . The Commissioners shall … at the instance of any party to the proceedings before them, and upon such security being given by the appellant as the Commissioners may direct, state a case in writing for the opinion of any Superior Court determined by the Commissioners upon any question which in the opinion of the Commissioners is a question of law.” … …

The Lord Ordinary (Young) assoilzied the defenders, adding this note:—

“ Note.—The pursuers allege that in making a certain order the Railway Commissioners exceeded their jurisdiction, and conclude for declarator substantially to that effect. The defenders object to the jurisdiction of this Court, and, assuming that jurisdiction, maintain that in making the order referred to the Railway Commissioners did not exceed theirs.

I am of opinion that this Court has jurisdiction. The jurisdiction of the Railway Commissioners is defined and limited by the statute under which they act, and should they exceed it the party aggrieved must necessarily have a remedy in a court of law. It was not suggested that any other Court than this ought to have been, or indeed could have been, resorted to in this instance. The orders of the Commissioners acting within their jurisdiction are final, subject only to such review as may be had upon a case stated under the Act; but orders outwith their jurisdiction may, consistently with the finality, be set aside on application to the proper Court in England, Scotland, or Ireland, as the case may be. Had the statute made provision on the subject, it must have been followed, but, as it makes none, the matter is tacitly but necessarily left to the rules and procedure of the common law applicable to unauthorised orders or decrees. The question whether that which is alleged in any case as excess of jurisdiction is really of that character may be more or less difficult according to circumstances, but difficult or not must be determined by the Court to which it is submitted as a question on the merits of the action or proceeding brought to set aside the order. It is perhaps superfluous to remark that in general (and cases of an exceptional character need not now be considered) an error whether in law or in fact committed by the Commissioners within their jurisdiction would be no ground for setting aside their order as ultra vires.

Assuming the jurisdiction of this Court, the question on the merits of the case is, Was the order referred to pronounced by the Railway Commissioners acting within their jurisdiction or not? The objection alleged is that the order was made on the application of a party having no authority or right to make it, and depends on the effect of the defenders' Act 1862 and agreement incorporated therein, which the pursuers contend places the defenders in an exceptional position with respect to the right conferred by the Regulation of Railways Act 1873 on railway companies generally to require the traffic over their lines to be duly forwarded, and on a reasonable arrangement for through rates, over adjoining lines of railway, and if necessary to refer the matter to the decision of the Railway Commissioners.

The defenders are the owners of the railway, which for brevity I shall refer to as the Wemyss Bay Railway, and their position with respect to it is exceptional in this respect only, that it is not worked by themselves, but by the Caledonian Company, under the statutory agreement effected by the Act and agreement of 1862. The substance of the agreement (which is perpetual) so far as material to this case is, that the defenders shall provide and maintain the railway; that the pursuers (the Caledonian Company) shall have possession thereof, and work the same, providing the rolling stock and plant; that the traffic shall be managed and the rates of carriage fixed by a joint-committee of six—three appointed by each company; and that the gross receipts shall be divided equally or nearly so, as it happens, although the proportion is immaterial. It is, in short, a common working agreement confirmed by statute, and without any peculiarity that I can see; for there is nothing peculiar or unusual in the provision for a joint-committee to manage the traffic and fix the rates.

The Wemyss Bay Railway admittedly forms part of a continuous line of railway communication, the Caledonian Railway being that which immediately adjoins and connects with it, and as traffic does pass from the one to the other of these railways, it is obviously desirable that there should be a fair arrangement between the proper parties (whoever they may be) regarding it, and comprehending through rates and the apportionment of them among those having interest. Prior to the Regulation of Railways Act 1873 there was no legal provision for compelling an agreement on the subject of the amount and apportionment of through rates, but voluntary agreements on the subject were common, and it appears from a litigation between the present parties in 1871 that such an agreement subsisted with respect to the Wemyss Bay and Caledonian Railway which was terminated in that year by the Caledonian Company. I need make no other remark on the decision of the dispute then presented to the Court than this, that it was necessarily to the effect that, failing voluntary agreement, the power of each company was limited to fixing the rates for their own line—that through rates could only be made by adding the local rates together, and apportionment effected by separating them again. It was not disputed that the rates for the Wemyss Bay Railway were to be fixed by the joint-committee as representing and charged with the interest in that matter of the two companies who owned and worked it respectively according to their rights under the working agreement. I notice this to qualify the expression ‘each company’ as I have used it in the above remarks regarding the decision of 1871.

Had the law remained as it stood in 1871, the defenders could have taken no proceedings to force on the pursuers an arrangement respecting the amount and apportionment of through rates, and neither of course could the joint-committee under the Act and agreement of 1862, which contain

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no provisions on the subject. The law on the subject was changed, or a new law made, by the Regulation of Railways Act 1873, and whether or not this avails the defenders is the question now raised between the parties. In the view that the new law is available to them, the defenders in 1875 submitted to the pursuers a proposal under section 11 of the Act 1873 respecting the amount and apportionment of through rates, and this not being assented to, referred the matter to the Railway Commissioners for their decision. The Commissioners sustained the validity of the proceeding against the objections urged by the pursuers, and made the order now complained of.

The pursuers' objections, so far as necessary to be noticed at present, are alternative, and as follows:—

First.—The primary objection is that the defenders being by the Act and agreement of 1862 deprived of all power over the traffic and rates of carriage on the railway of which they are the owners, and having only a pecuniary interest in the receipts drawn from traffic conducted by the pursuers under the management of the joint-committee at rates fixed by them, are not a company which does or can require traffic to be forwarded within the meaning of section 11 of the Act 1873; that the provisions of the Act are only applicable when the traffic of at least two companies, each properly describable as a ‘forwarding company, ’ is concerned; and that here the defenders have no traffic, that on their railway being truly the traffic of the Caledonian Company, with nothing to distinguish it from the traffic of the Caledonian Railway itself except the management conferred on the joint-committee with a view to protect the common interest in the receipts therefrom. The result of this objection, as it was argued to me, and presumably to the Railway Commissioners, is that the provisions of the Act are altogether inapplicable to the case. To make sure of the scope and comprehension of it as urged I put the question to the pursuers' counsel whether it excluded proceedings under the Act, not only by the defenders, but also by the pursuers and the joint-committee, and was answered quite decidedly that it did. I may observe in passing that the legal question raised by this objection is apparently that which the Railway Commissioners intended to express in the first question of the case which they directed to be submitted to this Court.

Second.—The alternative objection is that, assuming the applicability of the Act of 1873, it is not for either company as interested in the traffic of the Wemyss Bay Railway, but for the joint-committee, as charged with the interest of both in that traffic, to put it in force. Upon this question the Railway Commissioners saw fit in the exercise of their discretion to refuse to state a question for the opinion of this Court.

These objections are now urged as going to the jurisdiction of the Railway Commissioners to make the order complained of. I am of opinion that they are both bad.

1st, I think the defenders are a railway company within the meaning of the Act of 1873, looking both to the interpretation clause and the import and intention of the provisions which expressly comprehend and apply to companies which are the owners of railways worked by others, as well as companies which work railways belonging to others. Their interest in the traffic on their railway is not extinguished, but only diminished, by the working agreement with the pursuers. Their share of the receipts gives them a substantial interest in the matter of through traffic and rates, and is precisely of the character contemplated and protected by the Act of 1873. Further, the interest of the public in the matter, which is prominently referred to in the statute and in the order of the Railway Commissioners, is obviously unaffected by the existence of a working agreement, or, to be quite precise, by the particular working agreement in question, which is indeed of a very ordinary character, and was made before the Legislature interposed provisions for the protection of the public and of companies against conduct which a new tribunal established for the purpose should condemn as unreasonable and prejudicial. It is true that the pursuers are equally interested with the defenders in the traffic of the Wemyss Bay Railway, but it is intelligible that they have or may have separate conflicting interests to which they may be disposed to sacrifice or subordinate this interest which they share with the defenders, regardless of the prejudice done to the defenders and the public interested in the Wemyss Bay line. There is nothing I can see in the Act and agreement of 1862 to render it impossible, or even prima facie improbable, that a case within the mischief contemplated and intended to be remedied by section 11 of the Act of 1873 should arise, and with this opinion I am unfavourable to an argument against the application of the Act and a resort to the Commissioners to ascertain whether or not the mischief when alleged exists, and their authority to provide a remedy if it does. I agree with the Commissioners in holding that the expressions ‘forwarding company’ and ‘company requiring the traffic to be forwarded’ apply to any company who, being interested in the traffic of a railway in pursuance of their legitimate interest and that of the public, require that it shall be forwarded by a continuous route on just and reasonable terms as provided by the statute, although the traffic is not under their immediate management. The expressions reasonably admit of this construction, which being consistent with the execution of the Act according to what I believe to be its plain meaning and intention, I should prefer to a more literal interpretation, which is not.

I am therefore of opinion that the application of the Act 1873 to the case is not hindered by the Act and agreement of 1862.

2d, With respect to the alternative objection, viz., that assuming the Act to be applicable the enforcement of it must, with respect to the traffic of the Wemyss Bay Railway, be left to the joint-committee, I have to observe, that the grounds on which I think the Act applicable involves an opinion adverse to the pursuers on this objection, for these grounds are—1st, That the defenders, notwithstanding of the agreement of 1862, are a company within the meaning of the Act of 1873; 2d, that they have the precise interest which that Act requires to entitle a company to take proceedings under it; and 3d, that the agreement of 1862 makes no provision on the subject. The pursuers, however, think otherwise, and maintain that this opinion is not inconsistent with the proposition which they accordingly urge alternatively, that the Act can only, with respect to the Wemyss Bay

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Railway traffic, be enforced by the joint-committee as charged with the interests of both companies concerned with it, and that if they do not see fit to move in the matter the defenders have no remedy. I am not surprised that the Railway Commissioners should at first sight have thought this point so little worthy of serious consideration as to refuse a case to this Court upon it, although when the Judges of the First Division indicated that they thought it merited discussion, and invited the Railway Commissioners to include it in the case, I must think that the invitation had better have been complied with. Having now to deal with this point urged as an objection to the jurisdiction of the Railway Commissioners to proceed on the application of the defenders, I must repeat that I think the rejection of it is necessarily involved in the opinion which I have expressed as to the applicability of the Act of 1873. That Act creates the right to enforce proceedings which may be taken under it. The right itself did not previously exist. It is not inconceivable that a right may have been parted with, or the power and duty of enforcing it transferred, by an agreement made ten years before it was created, but this is prima facie improbable, and an agreement will not easily be so interpreted. There is, I think, nothing in the agreement of 1862 to warrant or even suggest such an interpretation. The Act of 1873 confers the power of enforcing the right which it creates with respect to through traffic and rates on the companies who own or work railways which form continuous lines of communication, and takes no account of the bodies in whom by statute or lawful agreement the management of local traffic and the fixing of local rates may happen in particular cases to be vested. Such power of management and fixing rates must exist somewhere with respect to every railway in the kingdom, but the Act of 1873 in every case supersedes it to the extent and effect of enabling through rates to be reasonably fixed and apportioned according to its provisions. It is therefore no more material to the present question that the power of managing the traffic and fixing the rates on the Wemyss Bay Railway is vested in this joint-committee than it is that the corresponding power with respect to the Caledonian Railway is vested (as I presume it is) in the directors of the Caledonian Company. The powers of both must yield to the extent of giving effect to the statutory provisions regarding through rates when duly resorted to and applied to the particular case.

It is prima facie probable that the legitimate interests of the Wemyss Bay Company and of the public—being such interests as the Act of 1873 contemplates and favours—require a reasonable system of through rates to be here established in terms of the Act, and I feel at liberty to refer to the order of the Railway Commissioners as showing that this prima facie probability is true in their opinion. I am therefore not disposed to be astute or ingenious in order to find an excuse for frustrating what has been done, and referring it to the joint-committee under the agreement of 1862, or to arbitration should they (as is most likely) be equally divided, to determine whether or not the Railway Commissioners should be resorted to. I should have listened with favour—certainly with no disfavour—to any argument tending to show that the case was not within the mischief which the Act was intended to remedy, or that the remedial proceedings might have been more fairly or conveniently resolved on and prosecuted by another party whose silence or abstinence was an argument that the alleged mischief had no existence. The arguments on which the pursuers rely are of a different and indeed opposite character, and I cannot regard them with favour consistently with the desire which I am bound to have to promote the remedy intended by the Legislature.

I find it unnecessary to notice the other objections stated by the pursuers on record, beyond saying that they do not, in my opinion, go to the jurisdiction of the Commissioners to make the order complained of. Should the Commissioners have committed any error in law or fact, acting within their jurisdiction, no remedy can be had in this action. I can only decide that in the matter referred to the Commissioners did or did not exceed their jurisdiction. I decide that they did not, by pronouncing decree of absolvitor, and of course with expenses to the defenders.”

The pursuers reclaimed.

At advising—