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Cite as: [1879] ScotLR 17_15, [1879] SLR 17_15

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SCOTTISH_SLR_Court_of_Session

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Court of Session Inner House First Division.

Friday, October 24. 1879.

Lord Rutherfurd Clark, Ordinary.

17 SLR 15

Addie & Sons

v.

Henderson & Dimmack.

Subject_1Arbitration
Subject_2Disqualification
Subject_3Where Arbiter also Referee.
Facts:

A & H entered into a minute of agreement in 1872, whereby, inter alia, H was allowed to work minerals within a certain area, subject always to the opinion of G, a civil engineer, as arbiter. In 1878 G (who acted as standing engineer to A) advised him in an action against H in regard to coal workings in a distinct but neighbouring area. H subsequently having objected in 1879 to G acting as arbiter under the agreement of 1872, held that G was not disqualified in the circumstances from so acting.

Headnote:

This was a suspension and interdict raised by Messrs Robert Addie & Sons, ironmasters at Langloan Iron — works, Coatbridge, against Messrs Henderson & Dimmack, coal and ironmasters, Drumpellier, Coatbridge, who were tenants under Mr Buchanan of Drumpellier of certain coal and other minerals situated in the vicinity of the Langloan Canal and basin.

On 10th May 1872 the parties to this cause had entered into a minute of agreement with a view of settling certain litigations then in dependence between them. The second article of the agreement was as follows:—“The respondents (Messrs Henderson & Dimmack) shall have right to work the coal and other minerals, if any, let to them by said lease, beyond said area, and within the red lines marked G H I K L M N O on said plan, being a portion of the area which forms the subject of the second of said processes of suspension and interdict, subject to this restriction only, that they shall not be entitled to remove any of said coal and other minerals which in the opinion of Mr John Geddes, mining engineer, Edinburgh, whom failing Mr James M'Creath, mining engineer, Glasgow, will have the effect of injuring the Langloan Canal and basin or banks thereof, delineated on said plan, so that the same, or any of them, cannot be restored to such a condition as to be as available for use by the complainers as they respectively
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are at present: It being hereby provided and declared that Mr Geddes, whom failing Mr M'Creath, and any assistants or others appointed by them, shall at all times have unrestricted access to the respondents' mineral workings, and to the working plans and surveys thereof, and Mr Geddes, whom failing Mr M'Creath, shall have power, by any writing under their hands, to prohibit the workings of such coal and other minerals, if any, within said area as will in his opinion have the effect foresaid.”

By the tenth article it was provided that—“Any questions arising under this agreement shall be referred to William Watson, Esq., advocate, whom failing to Alexander Asher, Esq., advocate.” Early in 1879 the complainers, having become seriously alarmed with the results of the respondents' workings under the area mentioned in article 2, appealed to Mr Geddes as referee under that article, and on 28th April 1879 Mr Geddes accordingly pronounced an order finding the proceedings complained of to be injurious, and prohibiting their continuance. Messrs Henderson & Dimmack notwithstanding carried on their works, and Messrs Addie & Sons raised this suspension and interdict accordingly to have them interdicted from working within the area mentioned in the second article, at least till they should receive Mr Geddes' permission so to do.

The respondents pleaded, inter alia, that “The second clause in the agreement founded on does not apply to the matters alleged”—the complaint alleging injury not to the Langloan Canal and its basin and banks, but merely to a tunnel through which the canal passes; and further that Mr Geddes was disqualified from acting as arbiter or referee, he having given professional advice and assistance to Messrs Addie during an action raised by them against the respondents on 2d December 1878, and founded on the said agreement, in which they sought to have certain underbuilding executed by the respondents within an area in the mineral field from which they had excavated coal, and to have payment for the coal so excavated.

On 17th June 1879 the Lord Ordinary ( Rutherfurd Clark) pronounced an interlocutor granting the interdict craved, to which his Lordship added the following note:—

“ Note.—1. The respondents maintained that the case stated by the complainers did not fall within the operation of the second article of the agreement, because they did not allege any apprehension of injury to the canal and basin and banks, but only to the tunnel through which the canal passes. The Lord Ordinary is of opinion that this argument is founded on too literal a construction of the agreement.

2. They further contended that Mr Geddes was disqualified from exercising the functions conferred upon him by the article above mentioned. The complainers answered that this question could not be tried in this process. The Lord Ordinary has felt some doubt upon the point; but considering that the authority of Mr Geddes is a quality of the interdict which is asked, he thinks that he is bound to decide it. It can be tried in this process as well as in any other, and without any inconvenience.

In the opinion of the Lord Ordinary the respondents have stated no relevant case of disqualification. They say that the complainers have consulted Mr Geddes or his firm professionally. But the question on which he was consulted is not shown to have any relation to the present. Indeed, it appears to the Lord Ordinary to be entirely different.”

The respondents reclaimed, and urged the plea of disqualification.

The complainers replied that the area forming the subject of the proceedings of 1878 being distinct from that mentioned in article 2 of the agreement of 1872, Mr Geddes lay under no disqualification.

Authorities— Trousdale & Son v. North British Railway Company, 12th July 1864, 2 Macph. 1334, and 15th Nov. 1865, 4 Macph. 31; Mackenzie v. Clerk, 19th Dec. 1828, 7 S. 215; Dickson v. Grant, 17th Feb. 1870, 8 Macph. 566.

It was stated at the bar that in 1872 Mr Geddes was in the position of “standing engineer” to Messrs Addie, and Mr M'Creath was in a similar relation to Messrs Henderson & Dimmack.

Judgment:

At advising—

Lord President—In this case there seem to have been two pleas maintained in the Outer House by the reclaimers, who were the respondents there. The first was that the case of the complainers did not fall within article 2 of the agreement, but this was not urged before us. The other plea was that Mr Geddes, to whom an appeal was made to say whether the working of a certain portion of the minerals would or would not have the effect of injuring the Langloan Canal and basin, was disqualified from acting under what is called the “reference.” Now, it is necessary to look into the nature of the agreement, which was for the purpose of settling certain litigations pending between the parties. The second head provides—[ reads article 2, as quoted above]. Now, there were certain workings going on within this said second area, and the complainers resorted to Mr Geddes to know whether these workings could in his opinion be allowed to continue without injuring the canal and basin. Mr Geddes was quite clear that injury would be caused, and this note of suspension and interdict was presented to prevent Messrs Henderson & Dimmack from so working.

It is said that Mr Geddes was “referee” under this agreement, and perhaps it is true in one loose sense of the word; but he was not an arbiter for carrying out the purposes of the agreement generally. On the contrary, there is a clause of reference appointing two other gentlemen to settle “any questions arising under it.” All that is left to Mr Geddes, or failing him to Mr M'Creath, is to say whether the workings by Messrs Henderson & Dimmack under the area designed in article 2 will or will not be injurious to the canal. I think it is most natural that to a party making arrangements of this nature the opinion of his general adviser should be conclusive in a reference of that kind, and from the explanation which we have had given from the bar it is obvious that both parties were acting on this kind of understanding. Mr Geddes had been the general adviser of Messrs Addie, as Mr M'Creath had been of Messrs Henderson & Dimmack, and nothing could be more natural than for the parties to refer as they have done to the opinion of Mr Geddes, whom failing of Mr M'Creath. To say that because in another matter not necessarily connected with this one Mr Geddes has been working for Messrs Addie he is therefore disqualified here, is to say he was disqualified from the beginning because he was the consulting engineer of that party. I am therefore for adhering to the Lord Ordinary's interlocutor.

Lord Deas—I do not entertain any doubt that this question may be competently tried and decided in this action, and I have equally little that there is no disqualification. It is the most common thing in the world in questions of this sort for each party to name his own engineer as arbiter in case of dispute, and it is as competent as it is common so to do.

Lord Mure concurred.

Lord Shand—I am of the same opinion; I am so quite independent of the relations either of Mr Geddes or Mr M'Creath to the parties before the raising of this action. It was agreed that the workings in question were to be allowed only so far as Mr Geddes or Mr M'Creath thought they would not be injurious. Messrs Addie have called upon Mr Geddes to intervene; and what is the objection to his doing so? It is objected that since the agreement in 1872 a dispute has arisen between the parties as to another subject altogether. But why should not Mr Geddes give his decision? The area, it is true, is somewhat the same in each case, but the grounds of dispute are quite distinct, and I cannot see why because Mr Geddes has advised Messrs Addie on the one occasion he should be disqualified from acting as referee upon the other.

The Court adhered.

Counsel:

Counsel for Complainers (Respondents)— Asher— Mackintosh. Agents— Gibson-Craig, Dalziel, & Brodies, W.S.

Counsel for Respondents (Reclaimers)— Balfour— J. P. B. Robertson. Agent— T. J. Gordon, W.S.
1879