Scottish Court of Session Decisions

By minute of agreement dated 20th March 1882, the pursuers, the Savile Street Foundry and Engineering Company (Limited), carrying on business in Sheffield, undertook to make and supply to the defenders, the Rothesay Tramway Company (Limited), eight open and four closed tramway cars, conform to specification annexed to the said agreement. The price of the cars was to be £1120, and payment was to be made on delivery, or in the option of the defenders by bill at three months from the date of delivery. It was also specified by the minute of agreement that the whole of the eight cars were to be delivered on the tramway lines at Rothesay on the 29th May 1882 under a penalty of £1 per car per day in case of failure. The minute contained the following clause of reference:—“In the event of any difference of opinion arising as to the true intent and meaning of these presents, or as to the manner of construction of the foresaid cars, or the materials employed therein, or as regards the implementing or carrying into effect of the provisions herein contained, both parties hereby submit and refer such difference or differences to the determination of John Macrae, civil engineer, Edinburgh.” The minute of agreement provided that the defenders should have the right of inspecting the work during the building of the cars. After the cars had been delivered, a dispute arose between the parties as to whether or not they were conform to specification, and payment was withheld by the defenders, in consequence of which this action was raised, concluding for payment of a sum of £1301, 8s. 8d., the contract price of the cars and the price of certain “extras.” The pursuers also concluded for the price of iron-work and fittings supplied to two cars not embraced in the contract.

The defenders averred that the cars had not been delivered at the time agreed upon, and that when delivered they were found to be disconform to specification, the iron-work being defective and the castings having numerous flaws which were partially concealed by paint. The cars were also said to be too weak, and their condition was said to cause great dissatisfaction to the public.

The defenders further averred that in terms of the clause of reference above quoted, the matters in dispute were now depending before the arbiter, who had accepted the submission.

They pleaded, inter alia:—“(1) The action is excluded by the submission contained in the minute of agreement, and ought to be dismissed.

The Lord Ordinary repelled this plea-in-law, and before answer allowed the parties a proof of their averments.

The defenders reclaimed, and argued—The clause of reference contained in the minute of agreement applied to the present dispute. This case did not fall under the category of cases like M'Cord v. Adams, 24 D. 75, and Kirkwood v. Morrison, 5 R. 79, where the clause of reference was held to apply only to questions arising during the progress of the work contracted for. Here the clause included a reference upon all questions relating to the construction of the cars or the material used therein, and the present dispute having arisen upon those points an ordinary action was excluded.

Counsel for the pursuers were not called upon.

At advising—