Scottish Court of Session Decisions

In the course of the period between April 1880 and the end of September 1880, William Francis Comber, residing in Huddersfield, had certain transactions in railway and mining shares with James Grant Maclean, stock and share broker in Stirling. These transactions were partly on his own account, and partly on joint-account with a Mr Gledhill, of Huddersfield. The contract-notes were headed “Stirling,” and the transactions were declared to be “subject to the rules of the Stock Exchange.” On the 2d October 1880, Maclean, who had previously intimated to Comber that he would require a certain deposit as “cover” on the transactions (which had previously been carried over from settling-day to settling-day), realised without orders, in consequence of the “cover” demanded not being provided, a number of stocks belonging to Comber, although that date was between settling-days. Comber thereupon, on the allegation that had Maclean closed the transactions according to his instructions on 12th October 1880, the making-up day for the next settlement, there would have been a balance due to him of £119, 17s., raised an action for that sum in the High Court of Justice (Queen's Bench Division) under the provision of order 11, rule 1 A, framed by the Judges of the High Court of Justice in pursuance of the Judicature Acts 1873, 1875, and 1877. That rule is in the following terms:—“Whenever any action is brought in respect of any contract which is sought to be enforced or rescinded, dissolved, annulled, or otherwise affected in any such action, or for the breach whereof damages or other relief are or is demanded in such action, when such contract is made or entered into within the jurisdiction, or whenever there has been a breach within the jurisdiction of any contract wherever made, the Judge, in exercising his discretion as to granting leave to serve such writ or notice on a defendant out of the jurisdiction, shall have regard to the amount or value of the property in dispute, or sought to be recovered, and to the existence in the place of residence of the defendant, if resident in Scotland or Ireland, of a local Court of limited jurisdiction in the matter in question, and to the comparative cost and convenience of proceeding in England or in the place of such defendant's residence; and in all the above-mentioned cases no such leave is to be granted without an affidavit stating the particulars necessary for enabling the Judge to exercise his discretion in manner aforesaid, and all such other particulars (if any) as he may require to be shown.”

Maclean admitted that he was indebted to Comber to the amount of £67, 9s. 8d.

The defendant Maclean being resident in Scotland, out of the jurisdiction of the High Court of Justice, it was necessary for the plaintiff to make affidavit that the case was one falling under the provisions of this rule. Comber, therefore, on 20th October 1881, swore an affidavit, of which the following are the material portions:—“I, William Francis Comber, of Huddersfield, in the county of York, manufacturer, make oath and say as follows — 1. That the above-named defendant, J Grant Maclean, is a stockbroker, and resides at Stirling, in Scotland, the same being a place out of the jurisdiction of this Honourable Court. 2. That the said J Grant Maclean is a British subject. 3. That I am advised and believe that I have a good cause of action against the said J Grant Maclean, arising within the jurisdiction, for money admitted by the said J Grant Maclean to be due on accounts stated between us, and no payment of which has been made or tendered to me, and also for breaches of certain contracts made between us for the delivery to me of stocks and shares dealt in on the London Stock Exchange, under

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the circumstances hereinafter stated…. 9. That there is no local Court of limited jurisdiction at Stirling having jurisdiction in the matter in question. 10. That the said contracts being made subject to the rules of the Stock Exchange, I am advised and believe that it will be necessary for me to call as witnesses on my behalf, at the trial of such action, stockbrokers and members of the London Stock Exchange familiar with such rules. The whole question to be tried in such action is, Whether the said J Grant Maclean was bound to deliver the said stocks and shares according to the said contracts, and what damages I have sustained by the nondelivery thereof? 11. That it would be inconvenient that this dispute should be tried in Scotland, and the expenses of such a trial, if the necessary witnesses were conveyed from London to Scotland, would be excessive. 12. That the amount which I intend to claim in this action is upwards of £100.”…

Following on this affidavit, which came before Mr Justice Stephen as an ex parte application, there was at once issued a writ of summons calling on the defendant to enter appearance to defend the action within twelve days. The Judge also issued an order allowing this writ to be served on Maclean at Stirling. Maclean thereupon took out a writ of summons to set aside this writ, “on the ground that the alleged contract between the plaintiff and proposed defendant was not made or entered into within the jurisdiction, or wherever made, that there has been no breach of the alleged contract within the said jurisdiction; and also on the ground that there is a local Court of limited jurisdiction in Scotland where the proposed defendant resides, in which this action might with greater convenience and less cost be proceeded with.” On the day following the taking out of this summons by the defendant's solicitors, the defendant swore an affidavit, the material part of which is as follows:—“10. Referring to the tenth paragraph of the affidavit of the said William Francis Comber sworn and filed in this matter, I say that I am not a member of the London or any other Stock Exchange out of Stirling, and that none of the said contracts were made subject to the rules of the London Stock Exchange, as therein stated. Farther, I am advised and believe that the evidence of stockbrokers and members of the London Stock Exchange, as in the said paragraph suggested, would be altogether unnecessary and irrelevant in the question at issue, or as raised upon the affidavit of the said William Francis Comber. Moreover, I am informed and believe that the rules of the London and the leading Stock Exchanges are substantially, if not altogether, the same, so that if it became necessary to have the evidence of brokers and members of a Stock Exchange, as stated in the said affidavit, there are plenty of such brokers in Edinburgh and Glasgow, both about 30 miles distant from Stirling, who could give evidence upon the trial of such question in Scotland. 11. Save as stated above, and what is shown by the transactions hereinbefore referred to, there was no engagement, agreement, or other relationship between me and the said William Francis Comber. Whatever under that engagement is in any respect due by me to the said William Francis Comber, I submit is so due by me at Stirling aforesaid, and if there has been any breach—which I deny—of any agreement or engagement between us, I am advised that such breach has not occurred within the jurisdiction of this Honourable Court. 12. Referring to the ninth paragraph of the said affidavit, I say that there is a local or County Court held at Stirling aforesaid, which has jurisdiction to entertain the matters in question between me and the said William Francis Comber, such Court having unlimited jurisdiction in regard to amount for which actions may be brought, and also in questions affecting real estate to the extent of £1000 in value; and I further say that very great inconvenience and expense would be caused to me by leaving my business in Stirling, and attending in London, along with my books and clerks, if the said proposed action were to be permitted to proceed in this Honourable Court.”

With respect to this affidavit the plaintiff lodged an additional affidavit, of which the material portions were:—“12. With respect to the tenth paragraph of the said affidavit, I say that the question to be tried in this action is, Whether the defendant, having bought on my account stocks on the 28th September for the 14th October account, was justified in selling the same and closing the account on the 2d October without any orders from me to that effect? The question is entirely one of the construction of written documents, and of the rules and practice of the Stock Exchange. 13. With respect to the eleventh paragraph of the said affidavit, I say that the defendant is liable to pay to me the balance of the account due to me by the defendant in Huddersfield, and I was and am under no legal obligation to go to Stirling to obtain money which the defendant admittedly owes to me. I submit that part of the subject-matter of this action is money due and payable to me within the jurisdiction. 14. With regard to the twelfth paragraph of the said affidavit, I say that there is no local or County Court held at Stirling of limited jurisdiction competent to try the matters in dispute in this action, and as the matters in dispute are matters of law rather than matters of fact, and as the documents of contract which I sue are in my possession, there will be no necessity for the defendant to bring any books or papers, or any clerks, to London to the trial of this action.”

These writs and opposing affidavits came before Mr Justice Hawkins at Chambers on 23d November 1880, when that Judge pronounced an order that the writ dated the 27th day of October 1880 (the writ of summons), and the order giving the plaintiff leave to issue the writ for service out of the jurisdiction, and all other proceedings herein, be set aside unless the plaintiff confines his claim to the amount stated, for £67, 9s. 8d. admitted by the defendant to be due.

The plaintiff appealed against this order to the Divisional Court of Appeal. That Court—Grove & Bowen, J.J.—dismissed the appeal with costs. The opinion of the Court was delivered by Mr Justice Grove, and is recited in the opinion of the Lord Justice-Clerk.

The sum of £67, 9s. 8d., less the defendant's taxed costs in the appeal, was then paid to the plaintiff, who in accepting that sum reserved right (which defendant disputed) to bring the present action in Scotland for the balance of the £119, 17s. originally claimed. The present

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action was then brought in the Court of Session by Comber for £52, 7s. 4d., the balance of that amount, being the damages alleged by the pursuer to have been suffered by him through the defender's breach of contract.

The defender, besides disputing the validity of the claim on the writs, pleaded—“4. The pursuer having been allowed to obtain decree in the said English action, on condition of his abandonment of the balance of his claim, and having received payment of the sum contained in the decree, is not now entitled to sue for the said balance, and the present action is therefore barred.”

The Lord Ordinary, after a proof, found on the writs that the defender had been in breach of contract in selling as he did on the 2d October, “and would have been liable to the pursuer for the difference between the sale prices of the making-up prices of 12th October had the pursuer not been barred from insisting on this claim.” His Lordship then narrated, as findings in fact, the proceedings in the English Courts above detailed, and found in law “ that the said proceedings in the English Courts are a bar to the pursuer's insisting against the defender for the same claim of damages which he abandoned by confining his claims under said action to the amount of the account stated.” He therefore assoilzied the defender with expenses.

His Lordship in giving judgment pronounced this opinion— [After narrating the grounds for holding that the defender had been in breach of contract]—“If the case, therefore, had to be decided upon the facts as above stated, the claim for the pursuer for damages must have been sustained. But he has cut away the ground from beneath his feet by his own action. He instituted a suit in England in the High Court of Justice, in which he made the same claim for damages that he makes in this action, along with a claim for the balance in the defender's hands admitted by the latter. In order to obtain service on the defender out of England, the pursuer required to make affidavit so as to show to the English Court that it had the right to send its writs into Scotland, and to exercise jurisdiction in the matter; and for this purpose the pursuer made this amazing statement upon oath twice over—‘That there is no local Court of limited jurisdiction at Stirling having jurisdiction in the matter in question;’ that is to say, that there is no Court at Stirling which could entertain an action against a stockbroker resident in Stirling for breach of contract. In the second affidavit the matter is put more broadly, thus:—‘I say that there is no local or County Court held at Stirling of limited jurisdiction competent to try the matter in dispute in this action.’ Whether this deposition was believed by Mr Justice Hawkins does not appear, but the repetition of it in two affidavits seems to indicate that it was necessary to establish this matter before the learned Judge of the Queen's Bench Division sustained his jurisdiction. The Lord Ordinary is not called upon to determine whether the English Court had jurisdiction in the case. He assumes that it had jurisdiction, and he is certainly entitled to assume that as against the pursuer, who applied to the English Court. On that assumption the case stands thus—The pursuer was found entitled to a sum of £67 odds if he abandoned the remainder of his claim, viz., the claim for damages now insisted on in the present action. The English Court had as much right to determine the claim for damages as to order payment of the £67 upon the accounts stated; and the case therefore is now in the same position as if the pursuer in order to obtain decree for the £67 had put in a minute of abandonment of the rest of his claim. Whether that abandonment was made in England or in Scotland is of no moment. The abandonment was made, and it is binding on the pursuer.”

The pursuer reclaimed, and argued — The Lord Ordinary's interlocutor proceeded on the view that the pursuer was personally barred by having taken an English decree on a matter on which the English Courts must be held to have had jurisdiction. Now, there was no decree for a sum, but merely an order that the writ of summons should be set aside unless the pursuer confined his “claim” (a technical term of English pleading) to the admitted debt. The action was only a “proposed” action, and there had been no abandonment of any part of the sum demanded; on the contrary, the claim for it had been distinctly reserved at the time when the sum admitted to be due was paid. The whole case had been treated by the English Judges as a matter for the exercise of a discretion whether the case would be best tried there or no. What the pursuer did was only to yield to the view of the Court that the question of damages for breach of contract could best be tried in Scotland. He referred to 15 and 16 Vict. c. 76, sec. 18 (Common Law Procedure Act 1852), on restriction of conclusions of action— Stewart v. Greenock Harbour Trust, June 26, 1868, 6 Macph. 954.

Argued for defender—The pursuer had by the restriction of his claim barred himself by a judicial contract from demanding the sum now sued for. In order to save his whole case from being thrown out with costs, he had been content to take the sum admitted to be due. He was not entitled in these circumstances to separate the two claims. The English Court had, indeed, as much jurisdiction to deal with the one as with the other. The pursuer could not be heard to say that the case which according to his own affidavit could be best tried as a whole in England, should now be set up into two cases, one in the Supreme Court of each country.